UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K


(Mark
One)




x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
Fiscal Year Ended December 31,
2010




 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from __________________ to __________________




Commission
file number: 001-33700




GLOBALOPTIONS GROUP,
INC


(Exact
Name of Registrant as Specified in Its Charter)





Delaware
                    
                    30-0342273(State
      or Other Jurisdiction of Incorporation or Organization)
                    
                    (I.R.S.
      Employer Identification No.)75
      Rockefeller Plaza, 27th
      Floor
                      New York, New York
                    
                    10019(Address
      of Principal Executive Offices)
                    
                    (Zip
      Code)





Registrant’s
telephone number, including area code: (212) 445-6262





(Former
name and former address, if changed since last report)




Securities
registered pursuant to Section 12(b) of the Act:




Title of Each Class
                        
                        Name of Each Exchange on Which RegisteredCommon
      Stock, par value $0.001 per share
                        
                        The
      NASDAQ Stock Market LLCPreferred
      Stock Purchase Rights, par value $0.001 per share
                        
                        The
      NASDAQ Stock Market
LLC





Securities
registered pursuant to Section 12 (g) of the Act:  None




Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.




Yes  ̈   No
x




Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.




Yes  ̈  No
x




Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.  Yes x  No
 ̈




Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.   ̈




Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See definitions of "large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.  (Check one):




Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈
      (Do not check if a smaller reporting company)
              Smaller
      reporting company x




Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act):  Yes  ̈  No
x




The aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the
registrant’s most recently completed second fiscal quarter ($2.29) was
$20,670,524.  Solely for the purposes of this calculation, shares held
by directors, executive officers and 10% owners of the registrant have been
excluded.  Such exclusion should not be deemed a determination or an
admission by the registrant that such individuals are, in fact, affiliates of
the registrant.




As of February 9, 2011, there were
13,381,153 shares of the registrant’s common stock outstanding.





GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Form
10-K


December
31, 2010


TABLE
OF CONTENTS





PART
      I
                                      
                                      
                                      1FORWARD-LOOKING
      STATEMENTS
                                      
                                      1ITEM
      1.
                                      Business.
                                      
                                      1ITEM
      1A.
                                      Risk
      Factors.
                                      
                                      5ITEM
      1B.
                                      Unresolved
      Staff Comments.
                                      
                                      11ITEM
      2.
                                      Properties.
                                      
                                      11ITEM
      3.
                                      Legal
      Proceedings.
                                      
                                      11ITEM
      4.
                                      (Removed
      and Reserved)
                                      
                                      11PART
      II
                                      
                                      
                                      12ITEM
      5.
                                      Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
                                      
                                      12ITEM
      6.
                                      Selected
      Financial Data.
                                      
                                      14ITEM
      7.
                                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.
                                      
                                      14ITEM
      7A.
                                      Quantitative
      and Qualitative Disclosures About Market Risk.
                                      
                                      18ITEM
      8.
                                      Financial
      Statements and Supplementary Data.
                                      
                                      18ITEM
      9.
                                      Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.
                                      
                                      19ITEM
      9A
                                      Controls
      and Procedures.
                                      
                                      19ITEM
      9B.
                                      Other
      Information.
                                      
                                      19PART
      III
                                      
                                      
                                      20ITEM
      10.
                                      Directors,
      Executive Officers and Corporate Governance.
                                      
                                      20ITEM
      11.
                                      Executive
      Compensation.
                                      
                                      25ITEM
      12.
                                      Security Ownership
      of Certain Beneficial Owners and Management and Related Stockholder Matters.
                                      
                                      33ITEM
      13.
                                      Certain
      Relationships and Related Transactions, and Director
      Independence.
                                      
                                      34ITEM
      14.
                                      Principal
      Accountant Fees and Services.
                                      
                                      35PART
      IV
                                      
                                      
                                      36ITEM
      15.
                                      Exhibits,
      Financial Statement Schedules.
                                      
                                      36EXHIBIT
      10.18EXHIBIT
      10.22EXHIBIT
      21.1EXHIBIT
      23.1EXHIBIT
      31.1EXHIBIT
      31.2EXHIBIT
      32.1EXHIBIT
      32.2







PART
I


(Dollar
amounts in thousands, except per share amounts)


FORWARD-LOOKING
STATEMENTS





This
Annual Report on Form 10-K contains forward-looking statements (as defined in
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).  To the extent that any
statements made in this Annual Report on Form 10-K contain information that is
not historical, these statements are essentially
forward-looking.  Forward-looking statements may be identified by the
use of words such as “expects,” “plans,” “will,” “may,” “anticipates,”
“believes,” “should,” “intends,” “estimates” and other words or phrases of
similar meaning.  Although we believe that the expectations reflected
in these forward-looking statements are reasonable and achievable, these
statements are subject to a number of risks and uncertainties discussed under
the headings “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and elsewhere in this Annual
Report on Form 10-K.  All forward-looking statements attributable to
us are expressly qualified by these and other factors.  We cannot
assure you that actual results will be consistent with these forward-looking
statements.




The
forward-looking statements made in this Annual Report on Form 10-K relate only
to events as of the date on which the statements are made.  We do not
undertake any obligation to publicly update any forward-looking
statements.  As a result, you should not place undue reliance on these
forward-looking statements.





Item
1. Business




Overview




GlobalOptions
Group, Inc. and its subsidiaries (collectively we, us, the “Company” or
“GlobalOptions Group”) was an integrated provider of risk mitigation and
management services. References herein to “GlobalOptions” refer to
GlobalOptions, Inc., an operating subsidiary of the Company.




During the year ended December 31,
2010, we sold or closed all of our operating businesses. We completed the
sale of our SafirRosetti business unit (“SafirRosetti”) on April 30, 2010, our
Preparedness Services business unit (“Preparedness Services”) on July 16, 2010,
our Fraud and SIU Services business unit (“Fraud and SIU Services”) on July 20,
2010, our subsidiary, The Bode Technology Group, Inc. which represented our
Forensic DNA Solutions and Products Services business unit (“Bode”) on November
30, 2010 and on December 31, 2010, we closed our International Strategies
business unit (“International Strategies”).




As a result of our sales of
SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode and the
closure of International Strategies, the results and accounts of these business
units are shown as discontinued operations in our financial statements. As of
December 31, 2010 and February 15, 2011, continuing operations consist solely of
executive and general corporate operations.  These executive and
general corporate operations include services provided by the Company in support
of the business units sold in connection with (i) transition service agreements,
including services provided for cash and treasury management, information
technology, employee benefits, general insurance and general transition
services, and (ii) marketing and business development support that is intended
to help drive sales revenues of the business units sold.   In
addition, executive and general corporate operations include the monitoring and
managing of the Company’s receipt of notes receivable, working capital
adjustments, escrowed purchase price amounts and earnouts, the collection of
which the Company expects will extend through approximately April
2012.




Prior to
our sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and
Bode, we reported operating results in three financial reporting segments:
Preparedness Services; Fraud and SIU Services; and Security Consulting and
Investigations (which was re-named Forensic DNA Solutions and Products following
the sale of SafirRosetti).  The Preparedness Services segment
consisted of the operations of Preparedness Services, which implemented crisis
management and emergency response plans and other emergency management issued
for governments, corporations and individuals.  The Fraud and SIU
Services segment consisted of the operations of Fraud and SIU Services and the
International Strategies business unit, which provided multidisciplinary,
international risk management and business solutions.  The Security
Consulting and Investigations segment consisted of the operations of
SafirRosetti, which provided security and investigative services, and Bode,
which provided forensic DNA analysis services.  As a result of the
sales and closure of these business units, we no longer report operating results
in separate segments.


1





We have
publicly announced that we currently intend to return the net proceeds from the
sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode to
our stockholders, after satisfying existing contractual obligations and
establishing appropriate reserves for contingencies and ongoing operating
costs.  In connection with this intention, on December 1, 2010, we
commenced a partial tender offer to purchase for cash up to 10,000,000 shares of
our common stock at a price of $2.40 per share. The tender offer closed on
December 29, 2010, after which we purchased a total of 1,119,978 shares at a
cost of $2,688. In addition, during the year ended December 31, 2010, just prior
to the aforementioned tender offer, we repurchased in the open market 16,627
shares of our common stock at a cost of $39.   On February 7,
2011, our board of directors approved a new program to purchase up to $3,000 of
our common stock over a period of 18 months, at such times, amounts and prices
as the Company shall deem appropriate.  We continue to explore the
most efficient form of the distribution of the remaining proceeds from the sales
of these units and have also explored alternative uses of the net proceeds from
the sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and
Bode in the event that we determine not to further distribute these proceeds to
our stockholders.




Market
Opportunity




Although we have publicly announced
that we currently intend to return the remaining net proceeds from the sales of
the SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode to our
stockholders after satisfying existing contractual and banking obligations and
establishing appropriate reserves for contingencies and ongoing operating costs,
there is no guaranty that we will do so.  In the event that we decide
to retain the proceeds from such sales, we may pursue a business combination or
other type of corporate transaction.  We currently do not have any
arrangement, agreement or understanding with respect to engaging in a business
combination with a specific entity or within any specific industry and there can
be no assurance that we will be successful in identifying and evaluating or in
concluding any such business combination.




Corporate
History





GlobalOptions,
Inc., our wholly-owned operating subsidiary, was initially formed as a limited
liability company in the state of Delaware in November 1998 and converted into a
Delaware corporation on January 24, 2002. On June 24, 2005, we became
a public company by completing a reverse merger transaction, in which
GlobalOptions Acquisition Corp., a Delaware corporation and our newly created,
wholly owned subsidiary, merged with and into GlobalOptions, Inc. As a result of
the reverse merger, GlobalOptions, Inc. became our wholly owned operating
subsidiary, with GlobalOptions, Inc.’s former security holders acquiring a
majority of the outstanding shares of our common stock. At the time of the
reverse merger, our corporate name was Creative Solutions with Art, Inc., a
Nevada corporation. Following the reverse merger, we changed our name to
GlobalOptions Group, Inc.  On December 8, 2006, we completed a
reincorporation merger whereby we changed our state of incorporation from Nevada
to Delaware.





Descriptions
of and Sales or Closing of our Former Operating Businesses





Preparedness
Services





The
Preparedness Services unit developed and implemented crisis management and
emergency response plans for disaster mitigation, continuity of operations and
other emergency management issues for governments, corporations and
individuals. The Preparedness Services unit was comprised of James Lee Witt
Associates, LLC.




On July
16, 2010, pursuant to the Board of Directors approval on May 6, 2010 we
completed the sale of Preparedness Services in accordance with an asset purchase
agreement dated May 13, 2010 (the “Preparedness Services Purchase Agreement”),
by and among us, GlobalOptions  and Witt Group Holdings, LLC, (“Witt
Holdings”), of which James Lee Witt, Chief Executive Officer, Mark Merritt,
Co-President, Barry Scanlon, Co-President, and Pate Felts, Senior Advisor,
respectively, of Preparedness Services, are principals.




Pursuant
to the terms of the Preparedness Services Purchase Agreement, we sold
Preparedness Services to Witt Holdings for aggregate consideration of (i)
$10,006 in cash, of which $1,000 is to be held in escrow for 12 months following
the closing; (ii) an earnout payment equal to 40% of any revenues over $15,000
earned during the 12-month period following the closing, which payment may not
exceed $12,000; and (iii) the assumption of all of Preparedness Services’
liabilities, including all termination and severance payments due to James Lee
Witt, Mark Merritt, Barry Scanlon and Pate Felts upon the sale of Preparedness
Services under their respective employment agreements, less $286, representing a
payment in connection with Witt Holding’s, assumption of the lease for
Preparedness Services’ Washington DC facility. The maximum total consideration
payable to the Sellers under the Preparedness Services Purchase Agreement is
$22,000.


2





In
addition, on January 14, 2011, Witt Holdings paid us $1,652 representing the
final closing date adjustment for working capital.  We also agreed to pay
Witt Holdings (i) a “true-up” of up to $1,000 based on accounts receivable
(other than accounts receivable originating from the State of Louisiana or its
agencies) that remain uncollected as of six months following the closing, and
(ii) the face amount of any uncollected receivables arising from the bankruptcy
or dissolution of any non-governmental entity.  Witt Holdings has
agreed that upon such “true-up” payment to transfer to the Sellers all rights
with respect to such uncollected receivables.  On January 28, 2011,
Witt Holdings notified us that they would not make a claim for either a
“true-up” or bankrupt amount as described in (i) or (ii), herein..





Additionally,
in connection with the Preparedness Services Purchase Agreement, we entered into
(i) a license agreement pursuant to which we granted Witt Holdings a world-wide,
perpetual, irrevocable, exclusive, royalty free, fully paid-up right and license
to use our software in the field of emergency preparedness and disaster relief
recovery, and we agreed not to license the Preparedness Services application of
the software to any other business in such field, and (ii) a transition service
agreement pursuant to which we provided Witt Holdings with certain specified
transition services following the closing, including but not limited to certain
information technology services.  The transition services agreement
terminated on September 30, 2010.





The sale
of Preparedness Services was subject to the approval of our stockholders, which
approval was obtained at a special meeting of our stockholders held on July 15,
2010.




Fraud
and SIU Services




The Fraud
and SIU Services unit provided investigative surveillance, anti-fraud solutions
and business intelligence services to the insurance industry, law firms and
multinational organizations. These services were provided to clients nationally
and regionally through licensed investigators in all 50 states.  Our
investigators provided reports and intelligence on subjects such as workman’s
compensation surveillance, unfair trade practices, political trends, economic
forecasts, mortgage insurance fraud, profiles on competitors and satellite
reconnaissance.  The Fraud and SIU Services unit was comprised of the
following acquired companies: Confidential Business Resources; Hyperion Risk,
Inc.; Secure Source, Inc; Facticon, Inc.; and First Advantage Investigative
Services.





On July
20, 2010, we completed the sale of all assets used in Fraud and SIU
Services in accordance with an asset purchase agreement dated June 11, 2010 (the
“Fraud and SIU Services Purchase Agreement”), by and among us, GlobalOptions and
GlobalOptions Services, Inc., a non-related third party (“Global Services”), of
which Frank Pinder, the President of Fraud and SIU Services, together with
David Finney, James Buscarini, Kevin McGinn and Mike Brantley, respectively the
Vice Presidents of Operations, Business Development, Finance and IT, are
officers and shareholders.  Balmoral Advisors, LLC, Private Equity
Partners LLC and the North Atlantic Value LLP unit of JO Hambro Capital
Management Ltd were the private equity sponsors.





Pursuant
to the terms of the Fraud and SIU Services Purchase Agreement, we sold Fraud and
SIU Services to Global Services for aggregate consideration of (i) $8,340 in
cash at closing, inclusive of $34 for an estimated adjustment for working
capital and $56 for the purchase real estate lease deposits, of which
$825 is to be held in escrow for 15 months following the closing, (ii) an
additional final post closing working capital adjustment of $275 which we
received on December 30, 2010, and (iii) the assumption of substantially all of
the liabilities of Fraud and SIU Services.





In connection with Fraud and SIU
Services being classified as held for sale, during the three months ended June
30, 2010, we recorded a charge to discontinued operations of $4,475 to write
down the carrying value of the assets of Fraud and SIU Services to fair
value.





In
connection with the Fraud and SIU Services Purchase Agreement, we entered into
(i) certain license agreements with Global Services pursuant to which we granted
Global Services worldwide, perpetual, irrevocable, exclusive, royalty-free,
fully paid-up rights and licenses to certain of our intellectual property,
including but not limited to the “GlobalOptions” corporate name, logo and
websites (all of which Global Services has the right to purchase in the future
for nominal consideration), and our Rapid Data Module and Rapid Video Module
software and related source materials that are embedded within the GlobalTrak
system for the Fraud and SIU Services business only and (ii) a transition
service agreement pursuant to which we and Global Services will provide each
other with certain transition services following the closing.  The
term of such transition services agreement was extended until March 31,
2011.


3




Security
Consulting and Investigations




The
Security Consulting and Investigations unit delivered specialized security and
investigative services to governments, corporations and individuals as well as
forensic DNA analysis and casework, consisting of SafirRosetti and
Bode. Our Security Consulting and Investigations unit was comprised of the
following acquired companies: SafirRosetti, LLC; Bode and SPZ Oakland
Corporation, dba On Line Consulting Services, Inc.




On April
30, 2010, we completed the sale of all of the assets of SafirRosetti in
accordance with an asset purchase agreement dated April 23, 2010 (the
“SafirRosetti Purchase Agreement”), by and among us, GlobalOptions and Guidepost
Solutions LLC (“Guidepost”), a subsidiary of
SolutionPoint International, Inc. (“SolutionPoint”), of which Joseph
Rosetti, a former officer of SafirRosetti, is a principal.




Pursuant
to the terms of the SafirRosetti Purchase Agreement, SafirRosetti was sold for
aggregate consideration of (i) $3,500 in cash, subject to certain adjustments,
of which $525 will be held in escrow for a period of 17 months; (ii) a secured
promissory note (the “SafirRosetti Note”) in the aggregate face amount of
$1,750, with an interest rate of 0.79% per annum of which principal of $875 and
interest of $8 was received on December 17, 2010 and principal of $875 and
related interest is payable to us on June 30, 2011; and (iii) contingent
consideration based on 70% of the purchased accounts receivable in excess of
$1,750 collected by Guidepost between the closing and the one year
anniversary of the closing.  Contingent consideration received and
recognized through December 31, 2010 was $705.  Through February 9,
2011, an additional $373 in contingent consideration was received.




The
SafirRosetti Note provided a first priority lien against the sold accounts
receivable of SafirRosetti and the post-closing accounts receivable
of Guidepost arising from the customer accounts purchased, and a second
priority lien against the remaining property of SafirRosetti transferred to
Guidepost.  Guidepost will transfer all uncollected account
receivables back to us on June 30, 2011, subject to a purchase right by
Guidepost.




In
connection with the SafirRosetti Purchase Agreement, we entered into a
transition service agreement pursuant to which we provided Guidepost with
certain specified transition services following the closing, including but not
limited to certain information technology services.  The transition
services agreement terminated on July 31, 2010.




On
November 30, 2010, we completed the sale of Bode in accordance with a stock
purchase agreement dated August 11, 2010 (“the Bode Purchase Agreement”) by and
among, us, GlobalOptions, Bode and LSR Acquisition Corp. (which following a
corporate reorganization, became SolutionPoint).




Pursuant
to the terms of the Bode Purchase Agreement, we sold all of the equity
securities and stock of Bode to SolutionPoint for an aggregate consideration of
(i) $24,500 in cash, of which $2,450 will be held in escrow until December 31,
2011,  (ii) an earnout payment equal to 30% of any revenues over
$27,000 earned by Bode during the 12-month period following the closing of the
sale, which payment may not exceed $5,500, and (iii) a cash payment of $500 in
connection with SolutionPoint’s tax election under Section 338(h)(10) of the
Internal Revenue Code of 1986, as amended.




In
addition, SolutionPoint has agreed to pay us the amount by which the working
capital of Bode at closing exceeds $5,600, and we have agreed to pay
SolutionPoint the amount by which the working capital of Bode at closing is less
than $5,600, provided that in either case no such payment will be required
unless it is in excess of $150.  At December 31, 2010, we have
estimated that SolutionPoint will pay to us a working capital adjustment of
$2,192.  As set forth in the Bode Purchase Agreement, there are a
series of steps in which SolutionPoint and ourselves determine, review and
approved the computation of the working capital adjustment.  These
steps have not yet been completed.  Accordingly, this estimate of the
working capital adjustment is subject to change.




We have
also agreed to pay SolutionPoint a “true-up” of up to $1,000, based on accounts
receivable that remain uncollected 180 days after the closing and SolutionPoint
has agreed to transfer to us all rights with respect to such uncollected
receivables after SolutionPoint’s receipt of such “true-up”
payment.




In
connection with the Bode Purchase Agreement, we entered into a transition
service agreement pursuant to which we provided Bode with certain specified
transition services following the closing, including but not limited to certain
information technology services.  Unless otherwise extended by the
parties, the transition services agreement will terminate on February 28,
2011.




The sale
of Bode was subject to approval by our stockholders, which approval was obtained
at a special meeting of our stockholders held on November 11, 2010.





International
Strategies




The
International Strategies unit provided multidisciplinary, international risk
management and business solutions to foreign and domestic governments,
corporations and individuals. The International Strategies unit was our
original core business.  International Strategies was not a separate
reporting segment and as such we attributed its revenues to the Fraud and SIU
Services unit.


4




Effective
on December 31, 2010, we closed International Strategies.




Employees




As of
February 9, 2011 the Company had 4 full-time employees. We enjoy good employee
relations. None of our employees are members of any labor union, and we are not
a party to any collective bargaining agreement.





Item
1A. Risk Factors





Any
investment in our common stock involves a high degree of risk. You should
consider carefully the specific risk factors described below in addition to the
other information contained in this Annual Report on Form 10-K,, including our
consolidated financial statements and related notes included elsewhere in this
Annual report on Form 10-K, before making a decision to invest in our common
stock. If any of these risks actually occurs, our business, financial condition,
results of operations or prospects could be materially and adversely affected.
This could cause the trading price of our common stock to decline and a loss of
all or part of your investment.




Risks
Related to Our Business and Industry




We
currently have no business revenues or operations.




In the
past year, we have sold SafirRosetti, Preparedness Services, Fraud and SIU
Services and Bode and the closure of International Strategies and our continuing
operations consist solely of our executive and general corporate
operations.  We currently have no plans to resume or acquire any
additional business operations.  We may never establish additional
revenues in the future other than future cash flows from earnouts, escrows and
working capital adjustments as a result of the sales of SafirRosetti,
Preparedness Services, Fraud and SIU Services and Bode.




We will
continue to incur operating expenses for SEC reporting, auditing and similar
functions, as well as normal operating expenses associated with any ongoing
business, such as rent, annual taxes, filing fees, and the
like.  Accordingly, in the absence of revenues, the Company will incur
losses.




We
have limited financial resources.





Other
than (i) the cash proceeds received upon the closings of the sales of
SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode, (ii)
earnouts from the sales of Preparedness and Bode, (iii) the receipt of payment
from a promissory note issued in connection with the sale of SafirRosetti, (iv)
the receipt of payment of a percentage of account receivables collected by the
purchaser of SafirRosetti, (v) potential working capital adjustments from the
sales of Preparedness Services and Bode, and (vi) payments from escrow accounts
established in connection with the sales of SafirRosetti, Preparedness, FSIU and
Bode, we may have no future cash flows and may not receive any of the payments
set forth in (ii) through (vi) above.





We have
stated our current intention that we currently intend to return the net proceeds
from these sales to our stockholders after satisfying existing contractual and
banking obligations and establishing appropriate reserves for contingencies and
ongoing operating costs. During the year ended December 31, 2010, we
repurchased in the open market 16,627 shares of our common stock at a cost of
$39.  On December 1, 2010, we commenced a partial tender offer to
purchase for cash up to 10,000,000 shares of our common stock at a price of
$2.40 per share. The tender offer closed on December 29, 2010, in which we
purchased a total of 1,119,978 shares at a cost of $2,688.  If we make
additional distributions or commence additional buybacks, there is no guaranty
that the amount of such cash that we decide to maintain will be enough to
cover our future expenses, including, (i) reporting obligations under the
Exchange Act, (ii) other general and administrative expenses in connection with
the continued operations of our business, and/or (iii) the repayment of certain
of the proceeds received from the sales either pursuant to a working capital
adjustment, a guaranty of receivables or any other claim by a purchaser of any
of the units.





We
are highly dependent on the release of funds from escrow accounts.





In
connection with the sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services and Bode, a portion of the proceeds from each sale was placed into
escrow to protect against indemnification claims brought by the purchasers of
such business units.  If such purchasers bring any claims pursuant to
the agreements, such claims will first be against such escrow amounts, but could
be brought in excess of such escrow amounts.  If such claims are
proven successful, we may not receive the anticipated amounts from the escrow
accounts or may have to pay claims in excess of the escrow amounts directly from
the Company, and the receipt of funds in the escrow account may be delayed
pending the final outcome of such claims.





We
are highly dependent on earnout payments.





In
connection with the sales of Preparedness Services and Bode, a substantial part
of the purchase price from the sale of Preparedness Services and a portion of
the purchase price from the sale of Bode, consists of an earnout
payment.  Depending on the revenue actually earned by Preparedness
Services and Bode during the earnout period, there could be no earnouts received
by us.


5




We
are dependent on the collection of Accounts Receivable.





In
connection with the sales of SafirRosetti, Preparedness Services and Bode, part
of the proceeds of each transaction is dependent upon the ability of the
purchasers of each such unit to collect the accounts receivable existing at the
time of closing of the respective units.  The purchasers of
SafirRosetti are collecting the accounts receivable of SafirRosetti from which
we will receive a portion of the proceeds of such collection.  The
respective purchasers of Bode have the right to have us pay them up to a certain
amount if they are unable to collect the accounts receivable for such unit
within a given period of time.  If the purchasers of SafirRosetti or
Bode do not collect the accounts receivable existing on the books of each such
unit at the time of closing of the respective transactions, we may receive no
additional proceeds from the sale of SafirRosetti or we may have to return a
portion of the proceeds received from the Bode sale.





We
may be unable to realize the benefits of our net operating loss (“NOL”) and
capital loss carryforwards.





The
amount of NOL and capital loss carryforwards that we have claimed have not been
audited or otherwise validated by the U.S. Internal Revenue Service (the
“IRS”).  The IRS could challenge our calculation of the amount of our NOL
and capital loss or our determinations as to when a prior change in ownership
occurred and other provisions of the Code may limit our ability to utilize our
NOL and capital loss to offset taxable income and capital gains.  If the
IRS was successful with respect to any such challenge, the tax benefit of our
NOL and capital loss carryforwards to us could be substantially
reduced.





Our
arrangements with members of our senior management team, or our failure to
retain or recruit key personnel, could negatively impact our ability to sell our
products and services and grow our business.




Our
future success will depend to a significant extent upon the abilities, level of
service, reputation and relationships of our Chairman and Chief Executive
Officer and Chief Financial Officer, the members of senior management of our
former business units (with respect to the maintenance and growing of their
respective business units in order to maximize our potential earnouts and to
collect the outstanding accounts receivable) and our Board of Directors. Some
members of our senior management team work on a part-time basis. These
arrangements, or any reduction or loss of these individuals’ services, could
have a material adverse effect upon our business.




We are subject to the risk of
possibly becoming an investment company.




Under
Section 3(a)(1)(C) of the Investment Company Act of 1940 (the “1940 Act”), an
issuer is deemed to be an investment company if it is engaged in the business of
investing, reinvesting, owning, holding, or trading in securities, and owns or
proposes to acquire "investment securities" having a value exceeding 40% of the
value of the issuer’s total assets (exclusive of U.S. government securities and
cash items) on an unconsolidated basis. The 1940 Act defines “investment
securities” broadly to include virtually all securities except U.S. government
securities and securities issued by majority-owned subsidiaries that are not
themselves regulated or exempt investment companies. Rule 3a-1 under the 1940
Act exempts an issuer if no more than 45% of its total assets consist of, and
not more than 45% of its net income (for the last four fiscal quarters combined)
is derived from, securities other than U.S. government securities, securities
issued by employees’ securities companies, securities of majority-owned
subsidiaries and primarily controlled companies.




We
currently have no plans to invest the proceeds of the sales of SafirRosetti,
Preparedness Services, Fraud and SIU Services and Bode. If we do invest the
proceeds in investment securities, it is possible that we could inadvertently be
deemed to be an investment company under the 1940 Act. If we were to
inadvertently become an investment company, we would have one year to divest of
a sufficient amount of investment securities and/or acquire other assets
sufficient to cause us to no longer be an investment company. Registered
investment companies are subject to extensive, restrictive and potentially
adverse regulation relating to, among other things, operating methods,
management, capital structure, dividends and transactions with affiliates. If it
were established that we are an unregistered investment company, there would be
a risk, among other material adverse consequences, that we could become subject
to monetary penalties or injunctive relief, or both, in an action brought by the
SEC, that we would be unable to enforce contracts with third parties or that
third parties could seek to obtain rescission of transactions with us undertaken
during the period it was established that we were an unregistered investment
company.




We do not
believe that our planned principal activities will subject us to the Investment
Company Act. If we are deemed to be subject to the Investment Company Act,
compliance with these additional regulatory burdens would increase our operating
expenses.




We
have limited management and other resources.





If we do
have any future operations, our ability to manage such future operations
effectively will require us to hire new employees, to integrate new management
and employees into any future operations, financial and management systems,
controls and facilities. Our failure to handle the issues we face effectively,
including any failure to integrate new management controls, systems and
procedures, could materially adversely affect our company, results of operations
and financial condition.


6





Because
a small number of clients account for a substantial portion of our former
Preparedness Services unit’s revenues, the loss of any of these clients, or a
decrease in their use of services, could cause the amount of our anticipated
earnout to decline.




Revenues
from our former Preparedness Services unit’s largest client, the State of
Louisiana, accounted for 63% and 68% of the revenues generated by it during the
years ended December 31, 2009 and 2008, respectively.  Its current
contract with the State of Louisiana is a time and materials contract under
which the State is not required to purchase a minimum amount of its services.
Therefore, this contract could cease producing revenues at any time with little
or no notice and significantly reduce or eliminate the amount of earnout
we may receive.




The
State of Louisiana can terminate its engagement with short notice or with no
notice.





The
engagement by the State of Louisiana is a project-based engagement and is
terminable by it on short-term notice. As a result, it is not obligated to
continue using our former Preparedness Services unit’s services at historical
levels or at all, and may cancel its arrangement without penalty. Identifying
and engaging new clients can be a lengthy and difficult process. Therefore, this
contract could be terminated at any time with little or no notice and
significantly reduce or eliminate the amount of earnout we may
receive.





Bode
is vulnerable to fluctuations in government spending and subject to additional
risks as a result of the government contracting process, which often involves
risks not present in the commercial contracting process.




Because
many of Bode’s contracts are with government entities, its business is subject
to a number of risks, including global economic developments, wars, political
and economic instability, election results, changes in the tax and regulatory
environments, foreign exchange rate volatility and fluctuations in government
spending. Because many of its clients are federal, state or municipal government
agencies with variable and uncertain budgets, the amount of business that Bode
might receive from them may vary from year to year, regardless of the perceived
quality of its business.




Moreover,
competitive bidding for government contracts presents a number of risks that are
not typically present in the commercial contracting process,
including:




•
            the
      need to devote substantial time and attention of its management team and
      key personnel to the preparation of bids and proposals for contracts that
      may not be awarded to Bode; and




•
            the
      expenses that Bode might incur and the delays and revenue loss that it
      might suffer if its competitors protest or challenge contract awards made
      to it pursuant to competitive bidding. Such a protest or challenge could
      result in the resubmission of bids based on modified specifications, or in
      the termination, reduction or modification of the awarded
      contract.




If Bode
is unable to consistently win new government contract awards over an extended
period, or if it fails to anticipate all of the costs and resources that will be
required to secure such contract awards, it may significantly reduce or
eliminate the amount of earnout we may receive.





Preparedness
Services and Bode’s professional reputations, which are critical to their
businesses, are vulnerable to circumstances outside of their
control.





Both Bode
and Preparedness Services depend upon the reputation and the individual
reputations of members of their respective senior management teams to obtain new
client engagements. Each of Bode and Preparedness Services also obtain a
substantial number of new engagements from existing clients or through referrals
from existing clients. Anything that diminishes their respective reputations may
make it more difficult to compete for new engagements or to retain existing
clients and, therefore, could materially adversely affect their respective
business. Any circumstances, including those where Preparedness Services or Bode
are not at fault, and including any repercussions from events, that might
publicly damage either of their goodwill, injure their reputation or damage
their business relationships may lead to a broader material adverse effect on
their respective business or prospects through loss of business, goodwill,
clients, agents or employees, significantly reducing or eliminate the amount of
earnout we may receive.





Bode
is a worldwide business and is therefore influenced by factors and regulations
in many countries.





Bode
undertakes its business worldwide. The occurrence of any of the following risks
relating to the conduct of Bode’s business in foreign countries could have a
material adverse effect on the market for its services, their value to its
clients or its ability to provide them:





•
            changes
      in, and difficulty in complying with, laws and regulations of the
      different countries, including authority to trade or perform our existing
      and future services;





•
            nullification,
      modification and renegotiation of
contracts;


7





•
            reversal
      of current policies, including favorable tax policies, encouraging foreign
      investment or foreign trade, or relating to the use of local
      agents;





•
            restrictive
      actions by local governments, including tariffs and limitations on imports
      and exports;





•
            adverse
      economic conditions which might impact the generation and flow of capital;
      and





•
            difficulty
      in collecting accounts receivable and longer collection
    times.





The
occurrence of any of these risks could significantly reduce or eliminate the
amount of earnout we may receive.





Failure
to maintain effective internal controls in accordance with Section 404 of the
Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business
and operating results. In addition, current and potential stockholders could
lose confidence in our financial reporting, which could cause our stock price to
decline.





Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. If we cannot provide reliable financial reports or
prevent fraud, our business could be harmed.





As a
public company, we are required to document and test our internal control
procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, which requires annual management assessments of the
effectiveness of our internal control over financial reporting.





Failure
to maintain an effective internal control environment could cause us to face
regulatory action, result in delays or inaccuracies in reporting financial
information or cause investors to lose confidence in our reported financial
information, any of which could cause our stock price to decline.





We
may become subject to significant legal proceedings.




We are
subject from time to time to litigation and other adverse claims related to our
former businesses, some of which may be substantial.  These claims
have in the past been, and may in the future be, asserted by persons who are
screened by us, regulatory agencies, former clients or other third parties.
Matters such as these, in which we may become defendants, may negatively impact
our cash flows





Our
exposure in a future liability action could exceed our insurance
coverage.




Some of
our former service offerings involved high risk activities. We may not be able
to maintain insurance at levels of risk coverage or policy limits that we deem
adequate for any of our former activities and cannot guarantee that every
contract contains or will contain limitations on our liability below these
policy limits. Because of the increasing cost of liability insurance, purchasing
sufficient amounts of insurance coverage, or additional insurance when needed,
could be prohibitively expensive. If we are sued for any injury caused by our
any of our former business offerings, our liability could exceed our total
assets. Any claims against us for our former service offerings, regardless of
their merit or eventual outcome, could have a detrimental effect upon our
financial condition.




Risks
Related To Our Stock




Our
shares may be delisted from the Nasdaq Capital Market.




On
January 18, 2011, the staff of The NASDAQ Stock Market, Inc. (“NASDAQ”)
delivered a determination letter (the “Determination Letter”) to us indicating
its belief that we no longer meet its listing standards as that we are not in
compliance with Listing Rule 5101 and may be a “public shell” with no operating
business following the sales of SafirRosetti, Preparedness Services, Fraud and
SIU Services and Bode and the discontinuation of International
Strategies.  Marketplace Rule 5100 provides NASDAQ with discretionary
authority to apply more stringent criteria for continued listing and can
terminate the inclusion of particular securities based on any event that occurs
that in the opinion of NASDAQ makes inclusion of the securities in the NASDAQ
inadvisable or unwarranted.





The
Determination Letter stated that we have the right to appeal the delisting
decision and that absent such an appeal, trading in our common stock will be
suspended at the opening of business on January 27, 2011.  On January
25, 2011, we sent a letter to NASDAQ stating that in accordance with the NASDAQ
Listing Rule 5800 Series, we would appeal the determination.  As of
the date hereof, our appeal is pending.




If our
shares are delisted from the Nasdaq Capital Market, it would be our intention
that our securities would be eligible for quotation on the OTC Bulletin Board,
but there could be a smaller market for our shares and this may increase our
shares’ volatility.  Accordingly an investor may find it difficult to
sell our securities.


8





Our
common stock price has fluctuated considerably and stockholders may not be able
to resell their shares at or above the price at which their shares were
purchased.




Since our
reverse merger in June 2005, the high and low bid price for our common stock has
been $32.00 and $1.14 per share, respectively. The market price of our common
stock may still fluctuate significantly in response to a number of factors, some
of which are beyond our control, including the following:





·
            Change
      in financial estimates by securities
analysts




·
            Changes
      is market valuation of comparable
companies




·
            Additions
      or departures of key personnel




·
            Future
      sales of our common stock




·
            Changes
      in the national and global economic
outlook.




Some or
all of which may affect us or our former business units and the amount of the
earnouts and receipt of payments from escrow, so these factors still apply to
us.





The stock
market in general has experienced extreme price
fluctuations.  Continued market fluctuations could result in extreme
volatility in the price of our common stock, which could cause a decline in the
value of our common stock.  Price volatility might be worse if the
trading volume of our common stock continues to be low, as we expect it to
be.




The
volume of trading of our stock will remain low and the market for selling our
shares may be limited.





Our
common stock has historically been sporadically or thinly traded.  As
a result of the sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services and Bode, our trading volume may decrease even further. As a result,
the number of persons interested in purchasing our common stock at or near ask
prices at any given time may be relatively small or non-existent. In addition to
the sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and
Bode, this situation is attributable to a number of factors, including the fact
that stock analysts, stock brokers, institutional investors and others in the
investment community that generate or influence sales volume may be reluctant to
follow a company with limited, if any, operations, or purchase or recommend the
purchase of our common stock until we demonstrate that we can consistently
operate profitably. As a consequence, there may be periods of several days or
more when trading activity in our shares is low and a stockholder may be unable
to sell his shares of common stock at an acceptable price, or at all. We cannot
give stockholders any assurance that a broader or more active public trading
market for our common stock will develop or be sustained, that current trading
levels will be sustained or that we will continue to meet the requirements for
listing on Nasdaq.  If we are removed from Nasdaq, this issue of
limited volume of trading and market for selling our shares could be
exacerbated.





Our
stockholders may no longer be allowed to use the exception under Rule 144 of the
Securities Act.




Selling
stockholders may not be able rely upon Rule 144 under the Securities Act (“Rule
144”) to sell their shares in open market transactions if we are determined to
be a “public shell.”  Under Rule 144(i), Rule 144 is not available to
companies that have no or nominal operations and the company’s assets consist
solely of cash and cash equivalents and nominal other assets.




If
we are delisted from Nasdaq we may be deemed a “penny stock.”




If we are
delisted from Nasdaq we may be considered a “penny stock” as defined in the
Exchange Act and the rules thereunder, unless the price of our shares of common
stock is at least $5.00. We expect that our share price will be less than $5.00.
Unless our common stock is otherwise excluded from the definition of “penny
stock”, the penny stock rules apply. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its sales person in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer’s account. In
addition, the penny stock rules require that the broker-dealer, not otherwise
exempt from such rules, must make a special written determination that the penny
stock is suitable for the purchaser and receive the purchaser’s written
agreement to the transaction. These disclosure rules have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. So long as our common stock is subject to the
penny stock rules, the level of trading activity could be limited and it may be
difficult for investors to sell our common stock.


9




We
may never pay any dividends to stockholders.




We have
never declared or paid any cash dividends or distributions on our capital
stock.  We do not anticipate paying any cash dividends on our Common
Stock in the foreseeable future.




The
declaration, payment and amount of any future dividends will be made at the
discretion of the board of directors, and will depend upon, among other things,
cash flows and financial condition, operating and capital requirements, and
other factors as the board of directors considers relevant. There is no
assurance that future dividends will be paid, and, if dividends are paid, there
is no assurance with respect to the amount of any such dividend.




We
may not make additional distributions of net proceeds to our
stockholders.





We have
stated our current intention that we currently intend to return the net proceeds
from the sales of SafirRosetti, Preparedness Services, Fraud and SIU Services
and Bode, to our stockholders after satisfying existing contractual and banking
obligations and establishing appropriate reserves for contingencies and ongoing
operating costs.   During the year ended December 31, 2010, we
repurchased in the open market 16,627 shares of our common stock at a cost of
$39.  On December 1, 2010, we commenced a partial tender offer to
purchase for cash up to 10,000,000 shares of our common stock at a price of
$2.40 per share. The tender offer closed on December 29, 2010, in which we
purchased a total of 1,119,978 shares at a cost of $2,688.




Following
the completion of the tender we continue to explore the most efficient form of
the distribution of the remaining proceeds from the sales of these units, and
have also explored alternative uses of the net proceeds from the sales of
SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode in the
event that we determine not to further distribute these proceeds to our
stockholders.




In the
event that we decide to retain the proceeds from the sales of SafirRosetti,
Preparedness Services, Fraud and SIU Services and Bode, we may pursue a business
combination or other type of corporate transaction.  We currently do
not have any arrangement, agreement or understanding with respect to engaging in
a business combination with a specific entity and there can be no assurance that
we will be successful in identifying and evaluating or in concluding a business
combination.




Our
executive officers, directors and 10% stockholders have significant voting power
and may vote their shares in a manner that is not in the best interest of other
stockholders.




Our
executive officers, directors and 10% stockholders control approximately 80% of
the voting power represented by our outstanding common stock.  If
these stockholders act together, they may be able to exert significant control
over our management and affairs requiring stockholder approval, such as the
election of directors or the dissolution of the company.  This
concentration of ownership may have the effect of delaying or preventing a
change in control and might adversely affect the market price of our common
stock. This concentration of ownership may not be in the best interests of all
our stockholders.





Provisions
in our certificate of incorporation and by-laws may deter third parties from
acquiring us and could lead to the entrenchment of our Board of
Directors.




Our
certificate of incorporation and by-laws contain provisions that may make the
acquisition of our company more difficult without the approval of our Board of
Directors, including the following:




·
            we
      have authorized undesignated preferred stock, the terms of which may be
      established and shares of which may be issued without stockholder
      approval;




·
            stockholder
      action by written consent must be
unanimous;




·
            stockholders
      may only remove directors for
cause;




·
            vacancies
      on the Board of Directors may be filled only by the
    directors;




·
            we
      have a stockholder rights plan in place;
and




·
            we
      require advance notice for stockholder
  proposals.




These
provisions could also discourage proxy contests and make it more difficult for
you and other stockholders to elect directors of your choosing and cause us to
take other corporate actions that you desire. The anti-takeover defenses in our
certificate of incorporation and by-laws could discourage, delay or prevent a
transaction involving a change in control of our company.  These
deterrents could adversely affect the price of the Company’s common stock and
make it difficult to remove or replace members of the Board of Directors or
management of the Company.  See “Description of Capital Stock” below
for a discussion of some of these provisions that make the acquisition of the
company more difficult.


10





Item
1B. Unresolved Staff Comments





Not applicable





Item
2.    Properties




Our
administrative headquarters is located in New York, New York.  This
office is leased on a month to month basis and we do not consider such leased
facility to be material to our operations. We believe that equally suited
facilities are otherwise available to us, if needed.





Item
3.    Legal Proceedings




On April
22, 2010 a case was filed against us stating that we conspired to divert work
from the plaintiff.  The claims are for $2,400 in this
case.  We believe that the suit is completely without merit and intend
to vigorously defend our position.




On
October 2, 2010, we along with others were notified that we are a defendant in a
lawsuit filed by a third party for alleged conversion of assets, tortuous
interference and defamation, among other claims.  The suit asks for
actual and punitive damages totaling $4.2 billion.  We believe that
the suit is completely without merit and intend to vigorously defend our
position.




On
November 4, 2010, we entered into a settlement agreement with each of Howard
Safir, the former Chief Executive Officer of the Company’s Security Consulting
and Investigations unit and Adam Safir, Howard Safir’s son and a former officer
of the Company’s Security Consulting and Investigations unit (the “Safirs”), in
order to resolve and settle disputes regarding alleged payments owing to the
Safirs under their respective consulting agreements, employment agreements and
any further obligation to issue our common stock to the
Safirs.  Furthermore, we received an indemnification from the Safirs
for any claims that may be made against us for legal issues arising from the
actions of SafirRosetti, LLC.  The settlement agreement provides a
cash payment to the Safirs in the amount of $375 and release from the Safirs for
any future claims against us and our receiving a full release and
indemnification of any claims or legal matters arising from SafirRosetti,
LLC.  On November 9, 2010, the $375 settlement was deposited into an
escrow account, and on December 3, 2010, the $375 amount was fully disbursed out
of escrow after our receipt of full releases for certain potential claims
against us and SafirRosetti, LLC.





Item
4.    (Removed and Reserved)


11





PART
II


(Dollar
amounts in thousands, except per share amounts)


Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.





Market
for Common Equity





Our
common stock is quoted on the NASDAQ Capital Market under the symbol “GLOI”.
Based upon information furnished by our transfer agent, as of February 9, 2011,
we had 214 holders of record of our common stock.




The
following table sets forth the high and low sales prices for our common stock
for the periods indicated as reported by NASDAQ Capital Market:





Fiscal
      Year 2009
                            
                            High
                            
                            
                            LowFirst
      Quarter
                            
                            $
                            2.15
                            
                            
                            $
                            1.14Second
      Quarter
                            
                            
                            2.15
                            
                            
                            
                            1.25Third
      Quarter
                            
                            
                            2.10
                            
                            
                            
                            1.55Fourth
      Quarter
                            
                            
                            2.08
                            
                            
                            
                            1.30Fiscal
      Year 2010
                            
                            High
                            
                            
                            LowFirst
      Quarter
                            
                            $
                            1.92
                            
                            
                            $
                            1.37Second
      Quarter
                            
                            
                            2.50
                            
                            
                            
                            1.53Third
      Quarter
                            
                            
                            3.07
                            
                            
                            
                            1.95Fourth
      Quarter
                            
                            
                            2.57
                            
                            
                            
                            1.80Fiscal Year 2011
                            
                            High
                            
                            
                            LowFirst
      Quarter through February 9, 2011
                            
                            $
                            2.65
                            
                            
                            $
                            2.37





We
have not paid any cash dividends on our common stock during the periods
presented above. We currently do not anticipate paying any cash dividends in the
foreseeable future on our common stock.





On
January 18, 2011, the staff of NASDAQ delivered the Determination Letter to us
indicating its belief that we no longer meet its listing standards as that we
are not in compliance with Listing Rule 5101 and may be a “public shell” with no
operating business following the sales of SafirRosetti, Preparedness Services,
Fraud and SIU Services and Bode and the discontinuation of International
Strategies.  Marketplace Rule 5100 provides NASDAQ with discretionary
authority to apply more stringent criteria for continued listing and can
terminate the inclusion of particular securities based on any event that occurs
that in the opinion of NASDAQ makes inclusion of the securities in the NASDAQ
inadvisable or unwarranted.





The
Determination Letter stated that we have the right to appeal the delisting
decision and that absent such an appeal, trading in our common stock will be
suspended at the opening of business on January 27, 2011.  On January
25, 2011, we sent a letter to NASDAQ stating that in accordance with the NASDAQ
Listing Rule 5800 Series, we would appeal the determination.  As of
the date hereof, our appeal is pending.  If our appeal fails and our
stock is delisted by NASDAQ, it would be our intention that our securities would
be eligible for quotation on the OTC Bulletin Board.


12


Securities
Authorized for Issuance Under Equity Compensation Plans




The
following table contains information about our common stock that may be issued
upon the exercise of options and upon the vesting of restricted stock units
(“RSUs”) under all of our equity compensation plans as of December 31, 2010. See
“Executive Compensation—Benefit Plans” for a description of our stock option and
incentive plans.




Plan Category
                          
                          Number of securities
                            to be issued upon
                            exercise of
                            outstanding options
                            and upon vesting of RSUs
                            (a)
                          
                          
                          Weighted average
                            exercise price of
                            outstanding
                            options
                            (does not include
                            RSUs)
                            (b)
                          
                          
                          Number of securities
                            remaining available
                            for future issuance
                            under equity
                            compensation plans
                            (excluding securities
                            reflected in
                            column (a))
                            (c)Equity
      compensation plans approved by security holders(1)
                          
                          
                          573,983
                          
                          
                          $
                          2.64
                          
                          
                          
                          3,246,529
                          (2)Equity
      compensation plans not approved by security holders
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Total
                          
                          
                          573,983
                          
                          
                          $
                          2.64
                          
                          
                          
                          3,246,529




(1) Our
Amended and Restated 2006 Long-Term Incentive Plan and Amended and Restated 2006
Employee Stock Purchase Plan were adopted by our stockholders on July 24,
2008.
  (2)The
number of securities remaining available for future issuances includes 1,368,917
under the Amended and Restated 2006 Long-Term Incentive Plan and 1,877,612 under
the Amended and Restated 2006 Employee Stock Purchase Plan.


Purchases
of Securities by the Company





The
following table provides information about shares of our common stock purchased
by the Company during the quarter ended December 31, 2010:





Period
                    
                    (a)
                        Total Number
                        of Shares
                        (or Units)
                        Purchased
                    
                    
                    (b)
                      Average
                        Price Paid
                        per Share
                        (or Unit)
                    
                    
                    (c)
                        Maximum Number (or
                        Approximate Dollar Value) of
                        Shares (or Units) that May Yet Be
                        Withheld Under the Plans or
                        Programs10/1/10
      – 10/31/1011/1/10
      – 11/30/10(1)
                    
                    
                    16,627
                    
                    
                    $
                    2.30
                    
                    
                    
                    -12/1/10
      – 12/31/10(2)
                    
                    
                    1,119,978
                    
                    
                    $
                    2.40
                    
                    
                    
                    -Total
                    
                    
                    1,136,605
                    
                    
                    $
                    2.40
                    
                    
                    
                    -





(1)  On
October 28, 2010, we announced that our Board of Directors authorized the
repurchase of up to $3,000 of our common stock over a period of 18 months, at
such times, amounts and prices as we shall deem appropriate.  During
the year ended December 31, 2010, just prior to the aforementioned tender offer,
we repurchased in the open market 16,627 shares of our common stock at a cost of
$39.   The stock repurchase program terminated on December 1,
2010, upon the commencement of our tender offer.





(2) On
December 1, 2010, we commenced a partial tender offer to purchase for cash up to
10,000,000 shares of our common stock at a price of $2.40 per share. The tender
offer closed on December 29, 2010, after which we purchased and canceled a total
of 1,119,978 shares at a cost of $2,688.  This purchase represented
approximately 7.7% of the outstanding shares of our common stock.





On
February 7, 2011 the Board of Directors authorized the repurchase of up to
$3,000 of our common stock over a period of six months, at such times, in such
amounts and at such prices as we deem appropriate.  As of February 9,
2011 no shares have been purchased under the repurchase
program.


13


Item
6.  Selected Financial Data




Not
applicable.





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.




The
following discussion of results of operations and financial condition is based
upon, and should be read in conjunction with, our consolidated financial
statements and accompanying notes thereto included elsewhere in this Form 10-K.
This discussion contains forward-looking statements. Actual results could differ
materially from the results discussed in the forward-looking statements. Please
see “Forward-Looking Statements” and “Risk Factors” for a discussion of some of
the uncertainties, risks and assumptions associated with these
statements.




Overview




We were
an integrated provider of risk mitigation and management services to government
entities, Fortune 1,000 corporations and high net-worth and high-profile
individuals.  Prior to the sale of our business operations, our
strategy was to develop a comprehensive risk mitigation solutions company.




During
the year ended December 31, 2010, we sold or closed all of our operating
businesses. We completed the sale of SafirRosetti on April 30, 2010,
Preparedness Services on July 16, 2010 Fraud and SIU Services on July 20, 2010,
Bode on November 30, 2010 and on December 31, 2010, we closed International
Strategies.




Prior to
our sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and
Bode and the closure of International Strategies, we reported operating results
in three financial reporting segments: Preparedness Services; Fraud and SIU
Services; and Security Consulting and Investigations (which was re-named
Forensic DNA Solutions and Products following the sale of
SafirRosetti).  The Preparedness Services segment consisted of the
operations of Preparedness Services, which implemented crisis management and
emergency response plans and other emergency management issued for governments,
corporations and individuals.  The Fraud and SIU Services segment
consisted of the operations of Fraud and SIU Services and our International
Strategies business unit, which provided multidisciplinary, international risk
management and business solutions.  The Security Consulting and
Investigations segment consisted of the operations of SafirRosetti, which
provided security and investigative services, and Bode, which provided forensic
DNA analysis services.  As a result of the sales of these business
units, we no longer report operating results in separate segments.




Return
of Proceeds to Stockholders




We have
publicly announced that we currently intend to return the net proceeds from the
sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode to
our stockholders, after satisfying existing contractual obligations and
establishing appropriate reserves for contingencies and ongoing operating
costs.  In connection with this intention, on December 1, 2010, we
commenced a partial tender offer to purchase for cash up to 10,000,000 shares of
our common stock at a price of $2.40 per share. Through December 29, 2010, the
closing date of the tender offer, we accepted for purchase a total of 1,119,978
shares which were tendered and not withdrawn. In connection therewith, through
December 31, 2010, we returned a total of $2,688 to our
stockholders.  In addition, during the year ended December 31, 2010,
just prior to the aforementioned tender offer, we repurchased in the open market
16,627 shares of our common stock at a cost of $39.  On February 7,
2011, our board of directors approved a new program to purchase up to $3,000 of
our common stock over a period of 18 months, at such times, amounts and prices
as the Company shall deem appropriate.  Following the completion of
the tender we continue to explore the most efficient form of the distribution of
the remaining proceeds from the sales of these units and have also explored
alternative uses of the net proceeds from the sales of SafirRosetti,
Preparedness Services, Fraud and SIU Services and Bode in the event that we
determine not to further distribute these proceeds to our
stockholders.


14





Results
of Operations




Continuing
Operations




Our
continuing operations consist of executive and general corporate functions,
consisting principally of salaries and professional fees. These executive and
general corporate operations include the services provided and being provided by
the Company in connection with transition service
agreements.  Transition services in support of the business units sold
include services provided for financial services, information technology,
marketing and business development, employee benefits, general insurance and
general transition services.   In addition, significant executive
and general corporate attention is focused upon monitoring and managing the
Company’s collection of the post business unit cash receipts, including notes
receivable, working capital adjustments, escrowed purchase price amounts and
earnouts.




Operating
Expenses




Our
selling and marketing expenses primarily include salaries, stock based
compensation, as well as travel and other expenses. Our general and
administrative expenses consist primarily of salaries, bonuses and stock-based
compensation, as well as corporate support expenses such as legal and
professional fees, investor relations, human resources, facilities,
telecommunication support services and information technology.





Discontinued
Operations





As a
result of our sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services, Bode, and our closing of International Strategies, the results and
accounts of these business units are now presented in our financial statements
as discontinued operations for the year ended December 31, 2010 and all prior
periods. As of December 31, 2010, continuing operations consist solely of our
executive and general corporate operations.





GlobalOptions’
Year Ended December 31, 2010 Compared to the Year Ended December 31,
2009




Operating
Expenses




Selling
and marketing expenses were $1,755 for the year ended December 31, 2010, as
compared to $2,266 for the year ended December 31, 2009, representing a $511
decrease, related to decreased selling activities related to sale of business
units and discontinuation of operations.  General and administrative
expenses were $14,138 for the year ended December 31, 2010, as compared to
$8,882 for the year ended December 31, 2009.  The increase of $5,256
is attributable to an increase in costs related to evaluating strategic
alternatives and the sales of our business units, as well as approximately
$4,400 in compensation costs, principally related to contractual compensation
for our chief executive officer and chief financial officer incurred
contractually in connection with the sale of Preparedness Services.




Results
of Discontinued Operations




Income
from discontinued operations, net of tax, was $840 and $6,369 for the years
ended December 31, 2010 and 2009 respectively.  The decrease in the
income from discontinued operations for the year ended December 31, 2010 is
primarily due to an impairment charge of $4,475 taken with respect to Fraud and
SIU Services and lack of a full year of operations for the year ended December
31, 2010.





Net
Loss





Net loss for the years ended December
31, 2010 and 2009 was $15,274 and $5,311, respectively.  Net loss for
the year ended December 31, 2010 was comprised of a loss from continuing
operations of $16,114 and income from discontinued operations, net of tax, of
$840.  Net loss for the year ended December 31, 2009 was comprised of
a loss from continuing operations of $11,680 and income from discontinued
operations, net of tax, of $6,369.  The increase in net loss is
principally the result of a $4,475 goodwill impairment charge taken with respect
to Fraud and SIU Services upon our entering into an agreement to sell that unit,
the elimination of operating margins from sold business units and executive
compensation costs incurred in connection with the sale of Preparedness
Services.




GlobalOptions’
Year Ended December 31, 2009 Compared to the Year Ended December 31,
2008




Operating
Expenses





Selling
and marketing expenses were $2,266 for the year ended December 31, 2009, as
compared to $1,876 for the year ended December 31, 2008, representing a $390
increase principally from the executive forum and marketing
expenses.  General and administrative expenses were $8,882 for the
year ended December 31, 2009, as compared to $8,329 for the year ended December
31, 2008.  The increase of $553 is principally attributable to an
increase in costs related to evaluating strategic alternatives for the
company.


15




Results
of Discontinued Operations




Income
from discontinued operations, net of tax, was $6,369 and $2,570 for the years
ended December 31, 2009 and 2008 respectively.  The increase in the
income from discontinued operations for the year ended December 31, 2009 is
primarily due to an improvement in the operating results of Bode.




Net
Loss




Net loss
for the years ended December 31, 2009 and 2008 was $5,311 and $7,956,
respectively.  Net loss for the year ended December 31, 2009 was
comprised of a loss from continuing operations of $11,680 and income from
discontinued operations, net of tax, of $6,369.  Net loss for the year
ended December 31, 2008 was comprised of a loss from continuing operations of
$10,526 and income from discontinued operations, net of tax, of
$2,570.  The decrease in net loss is principally the result of a
decrease in headcount and professional fees.





Liquidity
and Capital Resources





We had a
cash and cash equivalent balance of $26,126 as of December 31,
2010.





Cash
(used in) provided by operating activities was approximately $(7,839) and $6,082
for the year ended December 31, 2010 and 2009, respectively.  Cash
used in operating activities for the year ended December 31, 2010 resulted
primarily from our net loss from continuing operations of $15,274, offset by
stock based compensation of $2,325, as well as a goodwill impairment charge of
$4,475 in connection with the Fraud and SIU business unit.





Cash
provided by (used in) investing activities was $36,060 and $(2,865) for the
years ended December 31, 2010 and 2009, respectively.  Of the cash
provided by investing activities for the year ended December 31, 2010, $39,897
related to the proceeds received upon the disposition of our business units,
offset by investments of the rabbi trust holding our nonqualified deferred
compensation plan assets in connection with the compensation earned by our chief
executive officer and chief financial officer upon the sale of Preparedness
Services.





Cash used
in financing activities by continuing operations was $5,316 and $5,272 for the
year ended December 31, 2010 and 2009, respectively.  The net cash
used in financing activities for the year ended December 31, 2010 was primarily
due to the tender offer of shares in which we repurchased a total of 1,119,978
shares at a cost of $2,688, repayments from the line of credit of $2,163, as
well as our stock buy-back program, in which we purchased 16,627 shares of our
common stock at a cost of $39.





On
November 30, 2010, in connection with the sale of Bode, our line of credit
facility was terminated with a balance of $0.





For the
year ended December 31, 2010, we have met our cash needs through cash generated
by the sales of SafirRosetti, Preparedness Services, Fraud and SIU Services and
Bode. At December 31, 2010, we had working capital of $29,721.





Subject to our satisfaction of and
compliance with existing contractual and banking obligations, and the
establishment of appropriate reserves, wecurrentlyintend to distribute the remaining net
proceeds from the sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services and Bode to our stockholders.  We returned $2,688 to our
stockholders in connection with the tender of 1,119,978 shares of our common
stock in connection with our tender offer, which concluded in December
2010.  We expect that any later distributions, to the extent that no
earnouts are achieved and no proceeds are released from escrow, would be in an
aggregate amount between $20,000, to as much as $22,000.There is no guarantee,
however, that we will make this later distribution or any other
distribution.  In the event that we decide to retain the proceeds from
such sales, we may pursue a business combination or other type of combination
with a specific entity or within any specific industry.  There can be
no assurance, however, that we would be successful in identifying, evaluating or
concluding any such business combination if we chose to retain such
proceeds.


We also
note that these distribution amounts are net of our current estimates of the
amounts needed for required reserves,  for contingencies and for
financial and operating costs, but do not consider the effects of working
capital adjustments, guarantees of receivables sold, tax or other reserves which
we may later conclude are necessary.





We
believe that the cash generated by the sales of SafirRosetti, Preparedness
Services, Fraud and SIU Services and Bode, the cash that we expect to receive
from the release of escrow amounts, the earnouts, and the payment of the
remaining balance on the SafirRosetti Note, less any distributions to our
stockholders, will be sufficient to finance our operations through December 31,
2011.


16




In
addition to the fixed portion of the purchase price for SafirRosetti,
Preparedness Services, Fraud and SIU Services and Bode, each agreement provides
for contingent proceeds in the form of earnouts and/or the return of an escrow
deposit. The following table represents the minimum and maximum aggregate
contingent proceeds that may be realized from the sales of SafirRosetti, Fraud
and SIU Services, Preparedness Services, and Bode.
 
 SafirRosetti
                      
                      
                      Fraud and SIU Services
                      
                      
                      Preparedness Services
                      
                      
                      Bode
                      
                      
                      TotalMin
                      
                      
                      Max
                      
                      
                      Min
                      
                      
                      Max
                      
                      
                      Min
                      
                      
                      Max
                      
                      
                      Min
                      
                      
                      Max
                      
                      
                      Min
                      
                      
                      MaxEarnout
                      
                      $
                      1,077
                      
                      
                      $
                      1,600
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      12,000
                      
                      
                      $
                      -
                      
                      
                      $
                      5,500
                      
                      
                      $
                      1,077
                      
                      
                      $
                      19,100Return
      of escrow
                      
                      
                      -
                      
                      
                      
                      525
                      
                      
                      
                      -
                      
                      
                      
                      825
                      
                      
                      
                      -
                      
                      
                      
                      1,000
                      
                      
                      
                      -
                      
                      
                      
                      2,450
                      
                      
                      
                      -
                      
                      
                      
                      4,800Totals
                      
                      $
                      1,077
                      
                      
                      $
                      2,125
                      
                      
                      $
                      -
                      
                      
                      $
                      825
                      
                      
                      $
                      -
                      
                      
                      $
                      13,000
                      
                      
                      $
                      -
                      
                      
                      $
                      7,950
                      
                      
                      $
                      1,077
                      
                      
                      $
                      23,900
 
 The minimum amount in connection with
the sale of SafirRosetti includes $1,077 of contingent consideration that was
realized and recognized through February 9, 2011.  There is no
assurance that any of these contingent proceeds in excess of amounts already
received will be realized.  Accordingly, in each case the future
minimum amount is $0. Neither the maximum nor the minimum amounts represent
management’s expectation of the amount of contingent proceeds to be
realized.  Additionally, these contingent proceeds do not reflect
certain potential working capital adjustments and accounts receivable guarantees
that we provided for with respect to the above mentioned
transactions.


If we
receive the contingent proceeds discussed above, we intend to distribute them to
stockholders, less deductions comparable to those described above with respect
to the distribution of the other proceeds of the
transactions.  However, we have not made a final decision as to, and
continue to explore the most efficient form of, any such distribution and any
alternative uses of the net proceeds from the sales of SafirRosetti,
Preparedness Services, Fraud and SIU Services and Bode in the event that we
determine not to further distribute these proceeds to our
stockholders.




Off-Balance
Sheet Arrangements




We have
not entered into any transactions with unconsolidated entities in which we have
financial guarantees, subordinated retained interests, derivative instruments or
other contingent arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations under a variable interest in an
unconsolidated entity that provides us with financing, liquidity, market risk or
credit risk support.





Critical
Accounting Policies





Our
significant accounting policies, including the assumptions and judgments
underlying them, are more fully described in our “Notes to Consolidated
Financial Statements” included elsewhere within this Annual Report on Form 10-K.
Some of our accounting policies require the application of significant judgment
by management in the preparation of the consolidated financial statements and,
as a result, they are subject to a greater degree of uncertainty. In applying
these policies, management uses its judgment to determine the appropriate
assumptions to be used in calculating estimates that affect the reported amounts
of assets, liabilities, revenues and expenses. Management bases its estimates
and assumptions on historical experience and on various other factors that are
believed to be reasonable under the circumstances. We have identified certain of
our accounting policies as the ones that are most important to the portrayal of
our consolidated financial condition and results of operations and which require
management to make its most difficult and subjective judgments, often as a
result of the need to make estimates of matters that are inherently uncertain.
Our critical accounting policies include the following:





Intangible
Assets, Goodwill and Impairment





In
accordance with accounting standards, we recognize certain intangible assets
acquired in acquisitions, primarily goodwill, trade names, covenants not to
compete and client relationships.  On a regular basis, we perform
impairment analysis of the carrying value of goodwill and certain other
intangible assets by assessing the recoverability when there are indications of
potential impairment based on estimates of undiscounted future cash
flows.




Funds held in escrow related to the
sales of business units
  A portion of the proceeds from the sale
of each of the business units has been held in escrow, to cover potential
post-closing indemnification obligations. Funds held in escrow are recorded
at net realizable value.
  Amounts
due from buyers related to the sales of business units.
  Amounts due from buyers in connection
with the sales of the business units include a note receivable and amounts due
in connection with working capital adjustments, and are recorded at net
realizable value.  Contingent consideration is recognized when
realized due to the uncertainty of realization.
  Income Taxes
  Certain contingent consideration that
was not recorded on our books as of December 31, 2010, due to the uncertainty of
realization was included in income for income tax purposes.  The
effect of this contingent consideration, which is included in our determination
of taxable income at fair value, is treated as a temporary difference in
the calculation of our deferred tax asset at December 31, 2010.


Stock-Based
Compensation





We have
adopted the fair value recognition provisions Accounting Standards Codification
718 “Compensation—Stock Compensation” (“ASC 718”).  Stock-based
compensation expense for all share-based payment awards granted after December
31, 2005 is based on the grant-date fair value estimated in accordance with the
provisions ASC 718. We recognize these compensation costs over the requisite
service period of the award, which is generally the vesting term of the options
associated with the underlying employment agreement, where
applicable.


17




ASC 718
also requires forfeitures to be estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ from those
estimates. Forfeitures were estimated based on historical experience. Prior to
the adoption of ASC 718, we accounted for forfeitures as they
occurred.




We
account for equity instruments issued to non-employees in accordance with the
provisions of ASC 718 which requires that such equity instruments be recorded at
their fair value on the measurement date, which is typically the date the
services are performed. Stock-based compensation for non-employees is accounted
for under ASC 718 and is reflected within general and administrative
expenses.





Discontinued
Operations





We
account for our discontinued operations under the provisions of ASC 205-20
“Presentation of Financial Statements – Discontinued Operations”. Accordingly,
the results of operations and related charges for discontinued operations with
respect to the sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services and Bode and the closure of International Strategies, are reflected in
net loss discontinued operations.  Assets and liabilities of the
discontinued operations have been reclassified and are reflected on our
Consolidated Balance Sheet as “Current assets of discontinued operations”,
“Assets of discontinued operations”, “Current liabilities of discontinued
operations” and “Liabilities of discontinued operations”. Additionally,
certain corporate overhead costs that were clearly identifiable as costs of the
disposed business units were attributed to discontinued operations under the
provisions of ASC 205-20.




Item 7A. Quantitative and Qualitative
Disclosures About Market Risk.





Not applicable.





Item 8. Financial Statements
and Supplementary Data.





Our
consolidated financial statements and the related notes to the financial
statements called for by this item appear under the caption “Index to
Consolidated Financial Statements” beginning on Page F-1 attached hereto of this
Annual Report on Form 10-K.


18





GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Table
of Contents to Consolidated Financial Statements





Page(s)Report
      of Independent Registered Public Accounting Firm
                F-2Consolidated
      Balance Sheets as of December 31, 2010 and 2009
                F-3Consolidated
      Statements of Operations for the Years Ended December 31,
      2010,  2009 and 2008
                F-4Consolidated
      Statements of Stockholders' Equity for the Years Ended December 2010, 2009
      and 2008
                F-5Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and
      2008
                F-8Notes
      to Consolidated Financial Statements
                F-10


F-1


REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM





To the
Audit Committee of the Board of Directors and Stockholders


Of
GlobalOptions Group, Inc. and Subsidiary





We have
audited the accompanying consolidated balance sheets of GlobalOptions Group,
Inc. and Subsidiaries (the “Company”) as of December 31, 2010 and 2009 and the
related consolidated statements of operations, stockholders’ equity, and cash
flows for the years ended December 31, 2010, 2009 and 2008. These consolidated
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of GlobalOptions Group,
Inc. and Subsidiaries as of December 31, 2010 and 2009 and the consolidated
results of their operations and their cash flows for the years ended December
31, 2010, 2009 and 2008 in conformity accounting principles generally accepted
in the United States of America.





/s/
Marcum LLP





New York,
New York




February
15, 2011


F-2




GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 
 Consolidated
Balance Sheets
 (dollars
in thousands, except per share amounts)
 
 December 31,
                    
                    
                    December 31,2010
                    
                    
                    2009ASSETSCurrent
      assets:Cash
      and cash equivalents
                    
                    $
                    26,126
                    
                    
                    $
                    3,221Restricted
      cash equivalents - deferred compensation
                    
                    
                    2,506
                    
                    
                    
                    -Funds
      held in escrow related to the sales of business units
                    
                    
                    4,800
                    
                    
                    
                    -Amounts
      due from buyers related to the sales of business units
                    
                    
                    5,002
                    
                    
                    
                    -Prepaid
      expenses and other current assets
                    
                    
                    426
                    
                    
                    
                    350Current
      assets of discontinued operations
                    
                    
                    12
                    
                    
                    
                    23,476Total
      current assets
                    
                    
                    38,872
                    
                    
                    
                    27,047Property
      and equipment, net
                    
                    
                    -
                    
                    
                    
                    36Other
      assets of discontinued operations
                    
                    
                    -
                    
                    
                    
                    31,731Total
      assets
                    
                    $
                    38,872
                    
                    
                    $
                    58,814LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Line
      of credit
                    
                    $
                    -
                    
                    
                    $
                    2,163Accounts
      payable
                    
                    
                    570
                    
                    
                    
                    358Accrued
      compensation and related benefits
                    
                    
                    896
                    
                    
                    
                    195Deferred
      compensation
                    
                    
                    2,506
                    
                    
                    
                    -Other
      current liabilities
                    
                    
                    1,614
                    
                    
                    
                    795Current
      liabilities of discontinued operations
                    
                    
                    3,565
                    
                    
                    
                    8,180Total
      current liabilities
                    
                    
                    9,151
                    
                    
                    
                    11,691Long-term
      liabilities of discontinued operations
                    
                    
                    -
                    
                    
                    
                    1,300Total
      long-term liabilities
                    
                    
                    -
                    
                    
                    
                    1,300Total
      liabilities
                    
                    
                    9,151
                    
                    
                    
                    12,991Commitments
      and contingenciesStockholders'  equity:Preferred
      stock, $0.001 par value, 14,880,000 shares authorized, no shares issued or
      outstanding;
                    
                    
                    -
                    
                    
                    
                    -Series
      D convertible preferred stock, non-voting, $0.001 par value, 100,000
      shares authorized, no shares issued or outstanding;
                    
                    
                    -
                    
                    
                    
                    -Series
      A junior participating preferred stock, $0.001 par value, 20,000 shares
      authorized, no shares issued or outstanding;
                    
                    
                    -
                    
                    
                    
                    -Common
      stock, $0.001 par value, 100,000,000 shares authorized; 13,716,794 shares
      issued and 13,372,819 shares outstanding at December 31, 2010,and
      14,472,363 shares issued and 14,348,469 shares outstanding at December 31,
      2009
                    
                    
                    14
                    
                    
                    
                    14Additional
      paid-in capital
                    
                    
                    111,525
                    
                    
                    
                    111,909Accumulated
      deficit
                    
                    
                    (81,131
                    )
                    
                    
                    (65,857
                    )Treasury
      stock; at cost, 343,975 and 123,894 shares at December 31, 2010 and
      December 31, 2009, respectively
                    
                    
                    (687
                    )
                    
                    
                    (243
                    )Total
      stockholders' equity
                    
                    
                    29,721
                    
                    
                    
                    45,823Total
      liabilities and stockholders' equity
                    
                    $
                    38,872
                    
                    
                    $
                    58,814
  See notes
to these consolidated financial statements.
 F-3
 
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 Consolidated
Statements of Operations
 (dollars
in thousands, except share and per share amounts)
 
 For the Years Ended December
      31,2010
                    
                    
                    2009
                    
                    
                    2008Operating
      expenses:Selling
      and marketing
                    
                    $
                    1,755
                    
                    
                    $
                    2,266
                    
                    
                    $
                    1,876General
      and administrative
                    
                    
                    14,138
                    
                    
                    
                    8,882
                    
                    
                    
                    8,329Total
      operating expenses
                    
                    
                    15,893
                    
                    
                    
                    11,148
                    
                    
                    
                    10,205Loss
      from operations
                    
                    
                    (15,893
                    )
                    
                    
                    (11,148
                    )
                    
                    
                    (10,205
                    )Other
      income (expense):Interest
      income
                    
                    
                    2
                    
                    
                    
                    1
                    
                    
                    
                    24Interest
      expense
                    
                    
                    (223
                    )
                    
                    
                    (533
                    )
                    
                    
                    (345
                    )Other
      expense, net
                    
                    
                    (221
                    )
                    
                    
                    (532
                    )
                    
                    
                    (321
                    )Loss
      from continuing operations
                    
                    
                    (16,114
                    )
                    
                    
                    (11,680
                    )
                    
                    
                    (10,526
                    )Discontinued
      Operations:Income
      from discontinued operations, including tax benefit
                    
                    
                    959
                    
                    
                    
                    6,369
                    
                    
                    
                    2,570Loss on
      disposals, net of tax
                    
                    
                    (119)
                    
                    
                    
                    -
                    
                    
                    
                    -Income
      from discontinued operations, net of tax
                    
                    
                    840
                    
                    
                    
                    6,369
                    
                    
                    
                    2,570Net
      loss
                    
                    $
                    (15,274
                    )
                    
                    $
                    (5,311
                    )
                    
                    $
                    (7,956
                    )Basic
      and diluted net loss (income) per share:Continuing
      operations
                    
                    
                    (1.13
                    )
                    
                    
                    (0.91
                    )
                    
                    
                    (1.07
                    )Discontinued
      operations, net of tax
                    
                    
                    0.06
                    
                    
                    
                    0.49
                    
                    
                    
                    0.26Net
      loss per share
                    
                    
                    (1.07
                    )
                    
                    
                    (0.42
                    )
                    
                    
                    (0.81
                    )Weighted
      average number of common shares outstanding - basic and
      diluted
                    
                    
                    14,320,505
                    
                    
                    
                    12,870,729
                    
                    
                    
                    9,834,069
  See notes
to these consolidated financial statements.
 F-4
 
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 Consolidated
Statement of Stockholders' Equity
 For
the Year Ended December 31, 2010
 (dollars
in thousands)
 
 AdditionalCommon
      Stock
                    
                    
                    Treasury
      Shares
                    
                    
                    Paid-in
                    
                    
                    AccumulatedShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    TotalBalance,
      January 1, 2010
                    
                    
                    14,472,363
                    
                    
                    $
                    14
                    
                    
                    
                    123,894
                    
                    
                    $
                    (243
                    )
                    
                    $
                    111,909
                    
                    
                    $
                    (65,857
                    )
                    
                    $
                    45,823Issuance
      of shares to consultants for services provided
                    
                    
                    26,309
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    45
                    
                    
                    
                    -
                    
                    
                    
                    45Issuance
      of common stock in connection with vesting of restricted stock
      units
                    
                    
                    155,561
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Purchase
      of treasury shares in connection with cashless vesting of restricted stock
      units
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    33,654
                    
                    
                    
                    (69
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (69
                    )Purchase
      of treasury shares in connection with cashless vesting of restricted
      stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    169,800
                    
                    
                    
                    (336
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (336
                    )Purchase
      of treasury shares under stock repurchase program
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    16,627
                    
                    
                    
                    (39
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (39
                    )Purchase
      and cancellation of shares in connection with tender offer
                    
                    
                    (1,119,978
                    )
                    
                    
                    (1
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (2,687
                    )
                    
                    
                    -
                    
                    
                    
                    (2,688
                    )Issuance
      of common stock upon exercise of stock options
                    
                    
                    151,250
                    
                    
                    
                    1
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    272
                    
                    
                    
                    -
                    
                    
                    
                    273Issuance
      of common stock under employee stock purchase plan
                    
                    
                    31,289
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    45
                    
                    
                    
                    -
                    
                    
                    
                    45Stock-based
      compensation - restricted stock vested
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,468
                    
                    
                    
                    -
                    
                    
                    
                    1,468Repurchase
      of stock-based compensation award
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (339
                    )
                    
                    
                    -
                    
                    
                    
                    (339
                    )Stock
      based compensation - employee stock purchase plan
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    16
                    
                    
                    
                    -
                    
                    
                    
                    16Amortization
      of consultant stock option costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    132
                    
                    
                    
                    -
                    
                    
                    
                    132Amortization
      of employee stock option costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    82
                    
                    
                    
                    -
                    
                    
                    
                    82Amortization
      of consultant restricted stock unit costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    7
                    
                    
                    
                    -
                    
                    
                    
                    7Amortization
      of employee restricted stock unit costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    575
                    
                    
                    
                    -
                    
                    
                    
                    575Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (15,274
                    )
                    
                    
                    (15,274
                    )Balance,
      December 31, 2010
                    
                    
                    13,716,794
                    
                    
                    $
                    14
                    
                    
                    
                    343,975
                    
                    
                    $
                    (687
                    )
                    
                    $
                    111,525
                    
                    
                    $
                    (81,131
                    )
                    
                    $
                    29,721
  See notes
to these consolidated financial statements.
 F-5
 
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 Consolidated
Statement of Stockholders' Equity
 For
the Year Ended December 31, 2009
 (dollars
in thousands)
 
 Series
      DConvertible
                    
                    
                    AdditionalCommon
      Stock
                    
                    
                    Treasury
      Shares
                    
                    
                    Preferred
      Stock
                    
                    
                    Paid-in
                    
                    
                    AccumulatedShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    TotalBalance,
      January 1, 2009
                    
                    
                    10,486,935
                    
                    
                    $
                    10
                    
                    
                    
                    107,067
                    
                    
                    $
                    (208
                    )
                    
                    
                    55,388.37
                    
                    
                    $
                    -
                    
                    
                    $
                    108,989
                    
                    
                    $
                    (60,546
                    )
                    
                    $
                    48,245Stock
      issued to consultants for services
                    
                    
                    89,577
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    165
                    
                    
                    
                    -
                    
                    
                    
                    165Shares
      issued upon the exercise of stock options
                    
                    
                    44
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Shares
      issued in connection with the vesting of RSUs
                    
                    
                    134,274
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Treasury
      shares acquired in satisfaction of income tax withoholding
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    16,827
                    
                    
                    
                    (35
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (35
                    )Issuance
      of common stock in connection with the conversion of Series D Convertible
      Preferred Stock
                    
                    
                    3,692,552
                    
                    
                    
                    4
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (55,388.37
                    )
                    
                    
                    -
                    
                    
                    
                    (4
                    )
                    
                    
                    -
                    
                    
                    
                    -Issuance
      of common stock under employee stock purchase plan
                    
                    
                    68,981
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    93
                    
                    
                    
                    -
                    
                    
                    
                    93Stock
      based compensation - restricted stock vested
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,041
                    
                    
                    
                    -
                    
                    
                    
                    1,041Stock
      based compensation - employee stock purchase plan
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    31
                    
                    
                    
                    -
                    
                    
                    
                    31Amortization
      of consultant stock option costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    96
                    
                    
                    
                    -
                    
                    
                    
                    96Amortization
      of employee stock option costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    394
                    
                    
                    
                    -
                    
                    
                    
                    394Amortization
      of consultant restricted stock unit costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4
                    
                    
                    
                    -
                    
                    
                    
                    4Amortization
      of employee restricted stock unit costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,100
                    
                    
                    
                    -
                    
                    
                    
                    1,100Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (5,311
                    )
                    
                    
                    (5,311
                    )Balance,
      December 31, 2009
                    
                    
                    14,472,363
                    
                    
                    $
                    14
                    
                    
                    
                    123,894
                    
                    
                    $
                    (243
                    )
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    111,909
                    
                    
                    $
                    (65,857
                    )
                    
                    $
                    45,823
  See notes
to these consolidated financial statements.
 F-6
 
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 Consolidated
Statement of Stockholders' Equity
 For
the Year Ended December 31, 2008
 (dollars
in thousands)
 
 Series
      DConvertible
                    
                    
                    AdditionalCommon
      Stock
                    
                    
                    Treasury
      Shares
                    
                    
                    Preferred
      Stock
                    
                    
                    Paid-in
                    
                    
                    AccumulatedShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    TotalBalance,
      January 1, 2008
                    
                    
                    9,660,269
                    
                    
                    $
                    10
                    
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    
                    55,989.32
                    
                    
                    $
                    -
                    
                    
                    $
                    102,537
                    
                    
                    $
                    (52,590
                    )
                    
                    $
                    49,957Stock
      issued to consultants for services
                    
                    
                    26,984
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    167
                    
                    
                    
                    -
                    
                    
                    
                    167Treasury
      shares acquired in satisfaction of income tax withoholding
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    19,567
                    
                    
                    
                    (50
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (50
                    )Treasury
      shares acquired in connection with settlement of Facticon
      matters
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    87,500
                    
                    
                    
                    (158
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (158
                    )Issuance
      of common stock in connection with the purchase of Preparedness
      Services
                    
                    
                    300,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,880
                    
                    
                    
                    -
                    
                    
                    
                    2,880Issuance
      of common stock in connection with the conversion of Series D Convertible
      Preferred Stock
                    
                    
                    40,064
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (600.95
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Issuance
      of common stock to executive employees for future services
                    
                    
                    437,500
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Issuance
      of common stock under employee stock purchase plan
                    
                    
                    22,118
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    34
                    
                    
                    
                    -
                    
                    
                    
                    34Stock
      based compensation - restricted stock vested
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,058
                    
                    
                    
                    -
                    
                    
                    
                    1,058Stock
      based compensation - employee stock purchase plan
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    11
                    
                    
                    
                    -
                    
                    
                    
                    11Amortization
      of consultant stock option costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    122
                    
                    
                    
                    -
                    
                    
                    
                    122Amortization
      of employee stock option costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,650
                    
                    
                    
                    -
                    
                    
                    
                    1,650Amortization
      of consultant restricted stock unit costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4
                    
                    
                    
                    -
                    
                    
                    
                    4Amortization
      of employee restricted stock unit costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    526
                    
                    
                    
                    -
                    
                    
                    
                    526Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (7,956
                    )
                    
                    
                    (7,956
                    )Balance,
      December 31, 2008
                    
                    
                    10,486,935
                    
                    
                    $
                    10
                    
                    
                    
                    107,067
                    
                    
                    $
                    (208
                    )
                    
                    
                    55,388.37
                    
                    
                    $
                    -
                    
                    
                    $
                    108,989
                    
                    
                    $
                    (60,546
                    )
                    
                    $
                    48,245
  See notes
to these consolidated financial statements.
 F-7
 
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 Consolidated
Statements of Cash Flows
 (dollars
in thousands)
 
 For
      the Years Ended December 31,2010
                  
                  
                  2009
                  
                  
                  2008Cash
      flows from operating activities:Net
      loss
                  
                  $
                  (15,274
                  )
                  
                  $
                  (5,311
                  )
                  
                  $
                  (7,956
                  )Adjustments
      to reconcile net loss to net cash (used in) provided by operating
      activities:Provision
      for bad debts
                  
                  
                  445
                  
                  
                  
                  (259
                  )
                  
                  
                  148Depreciation
      and amortization
                  
                  
                  2,158
                  
                  
                  
                  3,352
                  
                  
                  
                  4,366Deferred
      rent
                  
                  
                  (398
                  )
                  
                  
                  28
                  
                  
                  
                  448Non-cash
      interest charges
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4Reserve
      for restructuring
                  
                  
                  -
                  
                  
                  
                  420
                  
                  
                  
                  517Reserve
      for litigation
                  
                  
                  15
                  
                  
                  
                  65
                  
                  
                  
                  -Reserve
      for obsolete inventory
                  
                  
                  (20
                  )
                  
                  
                  (5
                  )
                  
                  
                  -Impairment
      of goodwill and intangible assets
                  
                  
                  4,475
                  
                  
                  
                  66
                  
                  
                  
                  -Stock-based
      compensation
                  
                  
                  2,325
                  
                  
                  
                  2,831
                  
                  
                  
                  4,258Deferred
      income taxes
                  
                  
                  (511
                  )
                  
                  
                  511
                  
                  
                  
                  -(Gain)
      / loss on disposition of business units
                  
                  
                  119
                  
                  
                  
                  -
                  
                  
                  
                  -Loss
      on disposition of equipment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  27Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  (6,221
                  )
                  
                  
                  8,112
                  
                  
                  
                  (1,219
                  )Inventories
                  
                  
                  307
                  
                  
                  
                  (827
                  )
                  
                  
                  (196
                  )Prepaid
      expenses and other current assets
                  
                  
                  (269
                  )
                  
                  
                  22
                  
                  
                  
                  (70
                  )Security
      deposits and other assets
                  
                  
                  220
                  
                  
                  
                  16
                  
                  
                  
                  25Accounts
      payable
                  
                  
                  (622
                  )
                  
                  
                  (2,634
                  )
                  
                  
                  459Deferred
      revenues
                  
                  
                  359
                  
                  
                  
                  5
                  
                  
                  
                  42Accrued
      compensation and related benefits
                  
                  
                  408
                  
                  
                  
                  488
                  
                  
                  
                  (585
                  )Deferred
      compensation
                  
                  
                  2,506
                  
                  
                  
                  -
                  
                  
                  
                  -Other
      current liabilities
                  
                  
                  1,743
                  
                  
                  
                  (751
                  )
                  
                  
                  (1,053
                  )Other
      long-term obligations
                  
                  
                  396
                  
                  
                  
                  (47
                  )
                  
                  
                  (54
                  )Total
      adjustments
                  
                  
                  7,435
                  
                  
                  
                  11,393
                  
                  
                  
                  7,117Net
      cash (used in) provided by operating activities
                  
                  
                  (7,839
                  )
                  
                  
                  6,082
                  
                  
                  
                  (839
                  )Cash
      flows from investing activities:Purchases
      of property and equipment
                  
                  
                  (1,275
                  )
                  
                  
                  (2,797
                  )
                  
                  
                  (1,638
                  )Purchase
      of intangible assets
                  
                  
                  (56
                  )
                  
                  
                  (68
                  )
                  
                  
                  (44
                  )Investment
      in restricted cash equivalents
                  
                  
                  (2,506
                  )
                  
                  
                  -
                  
                  
                  
                  -Acquisition
      of FAIS
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,548
                  )Acquisition
      of On Line Consulting
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (200
                  )Disposition
      of SafirRosetti
                  
                  
                  4,189
                  
                  
                  
                  -
                  
                  
                  
                  -Disposition
      of Preparedness Services
                  
                  
                  7,991
                  
                  
                  
                  -
                  
                  
                  
                  -Disposition
      of Fraud and SIU Services
                  
                  
                  7,035
                  
                  
                  
                  -
                  
                  
                  
                  -Disposition
      of Bode
                  
                  
                  20,682
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      cash provided by (used in) investing activities
                  
                  
                  36,060
                  
                  
                  
                  (2,865
                  )
                  
                  
                  (4,430
                  )
  See notes
to these consolidated financial statements.
 F-8
 
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES
 Consolidated
Statements of Cash Flows
 (dollars
in thousands)
 
 For
      the Years Ended December 31,2010
                  
                  
                  2009
                  
                  
                  2008Cash
      flows from financing activities:Net
      repayments under line of credit
                  
                  
                  (2,163
                  )
                  
                  
                  (4,930
                  )
                  
                  
                  7,093Repayment
      of notes payable
                  
                  
                  -
                  
                  
                  
                  (400
                  )
                  
                  
                  (800
                  )Proceeds
      from issuance of stock in connection with options
exercised
                  
                  
                  273
                  
                  
                  
                  -
                  
                  
                  
                  -Proceeds
      from issuance of stock in connection with ESPP
                  
                  
                  45
                  
                  
                  
                  93
                  
                  
                  
                  34Repurchase
      of stock-based compensation award
                  
                  
                  (339
                  )
                  
                  
                  -
                  
                  
                  
                  -Repurchase
      of common stock
                  
                  
                  (444
                  )
                  
                  
                  (35
                  )
                  
                  
                  (208
                  )Repurchase
      of stock in connection with tender offer
                  
                  
                  (2,688
                  )
                  
                  
                  -
                  
                  
                  
                  -Net
      cash (used in) financing activities
                  
                  
                  (5,316
                  )
                  
                  
                  (5,272
                  )
                  
                  
                  6,119Net
      increase (decrease)  in cash and cash
equivalents
                  
                  
                  22,905
                  
                  
                  
                  (2,055
                  )
                  
                  
                  850Cash
      and cash equivalents - beginning of period
                  
                  
                  3,221
                  
                  
                  
                  5,276
                  
                  
                  
                  4,426Cash
      and cash equivalents - end of period
                  
                  $
                  26,126
                  
                  
                  $
                  3,221
                  
                  
                  $
                  5,276Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
                  
                  $
                  253
                  
                  
                  $
                  631
                  
                  
                  $
                  353Supplemental
      disclosure of non-cash investing and financing activities:Common
      stock issued to settle the obligation to issue common
stock
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  2,160Purchases
      of equipment under capital lease
                  
                  $
                  679
                  
                  
                  $
                  -
                  
                  
                  $
                  -Non-cash
      consideration from buyer - sale of SafirRosetti
                  
                  $
                  1,381
                  
                  
                  $
                  -
                  
                  
                  $
                  -Non-cash
      consideration from buyer - sale of Preparedness Services
                  
                  $
                  2,952
                  
                  
                  $
                  -
                  
                  
                  $
                  -Non-cash
      consideration from buyer - sale of Fraud and SIU Services
                  
                  $
                  825
                  
                  
                  $
                  -
                  
                  
                  $
                  -Non-cash
      consideration from buyer - sale of Bode
                  
                  $
                  4,642
                  
                  
                  $
                  -
                  
                  
                  $
                  -
  See notes
to these consolidated financial statements.
  F-9


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





1. 
Business Organization and Nature of Operations





GlobalOptions,
LLC was formed in November 1998 as a limited liability company (“LLC”) in the
state of Delaware.  On January 24, 2002, the LLC was recapitalized as a
Delaware corporation with the name GlobalOptions, Inc. (“GlobalOptions”). 
On June 24, 2005, GlobalOptions consummated a “reverse merger” transaction with
a non operating public company accounted for as a recapitalization, with the
result that on June 24, 2005, GlobalOptions became the subsidiary of a public
company.  Following the  merger, the public company changed
its name to GlobalOptions Group, Inc. (“GlobalOptions Group” or the “Company”)
and began trading on the OTC (over the counter) Bulletin
Board.





The
Company was an integrated provider of risk mitigation and management services to
government entities, Fortune 1,000 corporations and high net-worth and
high-profile individuals throughout the world. The Company’s risk
mitigation services included (1) risk management and security, (2)
investigations and litigation support, and (3) crisis management and corporate
governance. Prior to selling its operating businesses, the Company delivered
these services through four business units: Preparedness Services; Fraud and
Special Investigative Unit (“SIU”) Services; Security Consulting and
Investigations; and International Strategies.





The
Company sold its SafirRosetti business unit (“SafirRosetti”) on April 30, 2010,
its Preparedness Services business unit (“Preparedness Services”) on July 16,
2010, its Fraud and SIU Services business unit (“Fraud and SIU Services”) on
July 20, 2010,  and its Forensic DNA Solutions and Products business
unit (“Bode”) on November 30, 2010 and closed its International Strategies
business unit (“International Strategies”) on December 31, 2010 (See Note 2 -
Basis of Presentation).


Although
the Company has publicly announced that it currently intends to return the
remaining net proceeds from the sales of the SafirRosetti, Preparedness
Services, Fraud and SIU Services and Bode to its stockholders after satisfying
existing contractual and banking obligations and establishing appropriate
reserves for contingencies and ongoing operating costs, there is no guaranty
that it will do so.  In the event that the Company decides to retain
the proceeds from such sales, it may pursue a business combination or other type
of corporate transaction.  There is currently no arrangement,
agreement or understanding with respect to engaging in a business combination
with a specific entity or within any specific industry, and there can be no
assurance that the Company will be successful in identifying and evaluating or
in concluding any such business combination. Management expects that the
Company, under the current plan, will sustain the operations of the business
using its available liquidity through at least January 1, 2012.


As of
December 31, 2010, continuing operations consist solely of executive and general
corporate operations (See Note 5 – Discontinued Operations).  These
executive and general corporate operations include services provided by the
Company in support of the business units sold in connection with (i) transition
service agreements, including services provided for cash and treasury
management, information technology, employee benefits, general insurance and
general transition services, and (ii) marketing and business development support
that is intended to help drive sales revenues of the business units
sold.   In addition, executive and general corporate operations
include the monitoring and managing of the Company’s receipt of notes
receivable, working capital adjustments, escrowed purchase price amounts and
earnouts, the collection of which the Company expects will extend through
approximately April 2012.




2.  Basis of
Presentation




As a
result of the sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services, Bode and the closing of International Strategies, the Consolidated
Balance Sheet as of December 31, 2010, the Consolidated Statement of Operations
for the year ended December 31, 2010 and the Consolidated Statement of Cash
Flows for the year ended December 31, 2010, present the results and accounts of
these business units as discontinued operations.  All prior periods
presented in the Consolidated Balance Sheets, the Consolidated Statements of
Operations, and the Consolidated Statements of Cash Flows discussed herein have
been restated to conform to such presentation.





Prior to
the Company’s sales of SafirRosetti and entry into agreements to sell
Preparedness Services, Fraud and SIU Services and Bode, the Company reported its
operating results in three financial reporting segments: Preparedness Services;
Fraud and SIU Services; and Security Consulting and Investigations (which was
re-named Forensic DNA Solutions and Products following the sale of
SafirRosetti).  The Preparedness Services segment consisted of the
operations of Preparedness Services, which provided emergency response plans for
disaster mitigation, continuity of operations and other emergency management
issues for governments, corporations and individuals.  The Fraud and
SIU Services segment consisted of the operations of Fraud and SIU Services and
our International Strategies business unit, which provided multidisciplinary,
international risk management and business solutions.  The Security
Consulting and Investigations segment consisted of the operations of
SafirRosetti and Bode, which provided forensic DNA analysis
services.  As a result of the sale of SafirRosetti and the entry into
agreements to sell Preparedness Services and Fraud and SIU Services as of June
30, 2010, the Company determined to cease reporting its operating results in
separate segments.





3.  Principles
of Consolidation




The
consolidated financial statements of the Company include the consolidated
financial statements of GlobalOptions, Inc. and up until its sale on November
30, 2010, its former wholly-owned subsidiary, The Bode Technology Group, Inc.,
or Bode. All material intercompany accounts and transactions are eliminated in
consolidation.




F-10




GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





4. 
Summary of Significant Accounting Policies





Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. Such estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses. Actual results could differ from
estimated amounts. Significant
estimates and assumptions with regard to continuing operations include the
carrying value of escrows, notes receivable and working capital adjustment
amounts due from the sales of the business units, contingent consideration
recognized, accruals related to performance based compensation plans, deferred
taxes and related valuation allowances, and valuation of equity instruments.Significant estimates and assumptions related to discontinued operations
include reserves related to receivables and inventories, the recoverability of
long-term assets, amortizable lives of intangible assets, and purchase
accounting.  Global and other economic risks could affect the
Company’s estimates.  The Company’s management monitors these risks
and assesses its business and financial risks on a quarterly basis.





Concentrations
of Credit Risk





Cash: The Company maintains
its cash with high credit quality financial institutions. At times, our cash and
cash equivalents may be uninsured or in deposit accounts that exceed the Federal
Deposit Insurance Corporation (“FDIC”) insurance limit.  As of
December 31, 2010 substantially all of the Company’s funds are held at one
financial institution.





Cash Equivalents: The Company
considers all short-term investments with a maturity of three months or less
when purchased to be cash equivalents.





Restricted
Cash Equivalents – Deferred Compensation





Restricted
cash equivalents – deferred compensation - includes cash and money market funds
held in a rabbi trust under a nonqualified deferred compensation arrangement
(the “Deferred Compensation Arrangement”) established in connection with
compensation earned by the Company’s chief executive officer and chief financial
officer upon the sale of Preparedness Services.  Each plan
participant’s account is comprised of the Company’s contribution to the trust on
behalf of the participant and share of earnings or losses in the
plan.  The restricted cash held in the rabbi trust is considered an
asset available for sale and is reported at fair value with an offsetting
liability included in deferred compensation in our Consolidated Balance
Sheet.  The earnings on the investments are recorded in interest
income with an offsetting amount recorded in general and administrative expenses
in our Consolidated Statements of Operations.  During the year ended
December 31, 2010, earnings on these investments were immaterial.  The
fair value of the investments of the Deferred Compensation Arrangement was
$2,506 and $0 at December 31, 2010 and December 31, 2009,
respectively.


F-11


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





4. 
Summary of Significant Accounting Policies, continued





Fair
Value Measurements




Fair
value is defined as an exit price, representing the amount that would be
received upon the sale of an asset or payment to transfer a liability in an
orderly transaction between market participants. Fair value is a market-based
measurement that is determined based on assumptions that market participants
would use in pricing an asset or liability. A three-tier fair value hierarchy is
used to prioritize the inputs in measuring fair value as follows:





•
            Level
      1.Observable inputs
      such as quoted prices in active
markets;





•
            Level
      2. Inputs, other
      than quoted prices in active markets, that are observable either directly
      or indirectly; and





•
            Level
      3. Unobservable
      inputs for which there is little or no market data, which require the
      reporting entity to develop its own
  assumptions.




Assets
and liabilities measured at fair value are based on one or more of three
valuation techniques identified in the tables below. The valuation techniques
are as follows:





(a)
              Market
      approach. Prices and
      other relevant information generated by market transactions involving
      identical or comparable assets or
  liabilities;




(b)
            Cost
      approach.Amount
      that would be required to replace the service capacity of an asset
      (replacement cost); and




(c)
              Income
      approach.Techniques
      to convert future amounts to a single present amount based on market
      expectations (including present value techniques, option-pricing and
      excess earnings
models).




Assets
(Liabilities) Measured at Fair Value on a Recurring Basis


December
                    31,
                    2010
                  
                  
                  Quoted
                    Prices
                    in
                    Active
                    Markets
                  
                  
                  Significant
                    Other
                    Observable
                    Inputs
                  
                  
                  Significant
                    Unobservable
                    Inputs
                  
                  
                  Unobservable
                    Valuation
                    Technique(Level 1)
                  
                  
                  (Level 2)
                  
                  
                  (Level 3)Restricted
      CashEquivalents
                  
                  $
                  2,506
                  
                  
                  $
                  2,506
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -


F-12


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)




4. 
Summary of Significant Accounting Policies, continued





Operating
Expenses




Selling
and marketing expenses primarily include salaries, stock based compensation, as
well as travel and other expenses. General and administrative expenses consist
primarily of salaries, bonuses and stock-based compensation, as well as
corporate support expenses such as legal and professional fees, investor
relations, human resources, facilities, telecommunication support services and
information technology.




Income
Taxes





The
Company accounts for income taxes using the liability method. Under this method,
deferred tax assets and liabilities are determined based on differences between
the financial reporting and tax bases of such assets and liabilities. The
Company establishes a valuation allowance for certain deferred tax
assets.





Deferred
tax assets pertaining to windfall tax benefits on exercise of non-qualified
stock options and the corresponding credit to additional paid-in capital are
recorded if the related tax amount either reduces income taxes payable or
results in an income tax refund. The Company has elected the “with and without
approach” regarding ordering of windfall tax benefits to determine whether the
windfall tax benefit did reduce income taxes payable or resulted in an income
tax refund in the current year. Under this approach, the windfall tax benefits
would be recognized in additional paid-in capital only if an incremental income
tax benefit is realized after considering all other income tax benefits
presently available to the Company.





The Company accounts for uncertain tax
positions based upon authoritative guidance that prescribes a recognition
threshold and measurement process for financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. The
guidance also provides direction on derecognition, classification, interest and
penalties, accounting in interim periods and related disclosure.





Management
has evaluated and concluded that there were no material uncertain tax positions
requiring recognition in the Company’s consolidated financial statements for the
years ended December 31, 2010, December 31, 2009 and December 31, 2008. The tax
years ended December 31, 2009 through 2003 remain subject to examination for
federal, state, and local income tax purposes by various taxing authorities as
of December 31, 2010.





The
Company’s policy is to classify assessments, if any, for tax related interest as
interest expense and penalties as general and administrative
expenses.


F-13


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





4.  Summary of Significant
Accounting Policies, continued





Stock-Based
Compensation




The
Company accounts for equity instruments issued to non-employees in accordance
with accounting guidance which requires that such equity instruments are
recorded at their fair value on the measurement date, which is typically
the date the services are performed.  Stock based compensation for
non-employees is reflected within general and administrative
expenses.




The
Company accounts for equity instruments issued to employees in accordance with
accounting guidance which requires that awards are recorded at their fair value
on the date of grant and are amortized over the vesting period of the
award.  The Company recognizes compensation costs over the requisite
service period of the award, which is generally the vesting term of the options
associated with the underlying employment agreement, where
applicable.




Discontinued
Operations





The
results of operations, including impairment charges, as applicable for
SafirRosetti, Preparedness Services, Fraud and SIU Services and Bode, which were
sold on April 30, 2010, July 16, 2010, July 20, 2010 and November 30, 2010,
respectively, and for International Strategies which was closed on December 31,
2010, are included in “Income from discontinued operations, net of tax” in the
accompanying Consolidated Statements of Operations. Assets and liabilities of
the discontinued operations have been reclassified and are reflected in the
accompanying Consolidated Balance Sheets as “Current assets of discontinued
operations,” “Other assets of discontinued operations,” “Current liabilities of
discontinued operations” and “Long-term liabilities of discontinued operations.”
Additionally, certain corporate overhead costs which were clearly identifiable
as costs of the disposed business units were attributed to discontinued
operations.





Net Loss per
Common Share





Basic net
loss per common share is computed based on the weighted average number of shares
of common stock outstanding, as adjusted, during the years presented. Common
stock equivalents, consisting of stock options, restricted stock units (“RSUs”)
and Series D convertible preferred stock were not included in the calculation of
the diluted loss per share because their inclusion would have been
anti-dilutive.  The basic weighted average number of shares was reduced for
non-vested performance based restricted stock awards, where
applicable.




Potentially
dilutive securities outlined in the table below have been excluded from the
computation of diluted net loss per share, because the effect of their inclusion
would have been anti-dilutive.





At December 31,2010
                    
                    
                    2009
                    
                    
                    2008Stock
      Options
                    
                    
                    565,158
                    
                    
                    
                    967,781
                    
                    
                    
                    634,687Restricted
      Stock Units
                    
                    
                    8,825
                    
                    
                    
                    228,819
                    
                    
                    
                    366,087Convertible
      Preferred Stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,692,743Potentially
      dilutive securities realizable from the vesting of performance based
      restricted stock
                    
                    
                    -
                    
                    
                    
                    470,563
                    
                    
                    
                    558,063Total
      Potentially Dilutive Securities
                    
                    
                    573,983
                    
                    
                    
                    1,667,163
                    
                    
                    
                    5,251,580





Subsequent
Events




The
Company evaluates events that have occurred after the balance sheet date but
before the financial statements are issued. Based upon the evaluation, the
Company did not identify any recognized or non-recognized subsequent events that
would have required adjustment or disclosure in the consolidated financial
statements.


F-14


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations





Introduction




On April
30, 2010, July 16, 2020, July 20, 2010 and November 30, 2010, the Company
completed the sales of SafirRosetti, Preparedness Services, Fraud and SIU
Services and Bode, respectively.  On December 31, 2010, the Company
closed International Strategies. Prior to approving the Company’s entry into the
purchase agreements with respect to each such transaction, the Company’s Board
of Directors, acting with the advice and assistance of its legal advisors,
evaluated the respective purchase agreements and, acting with the advice and
assistance of its legal and financial advisors, evaluated the consideration
negotiated with the buyers and their representatives.  In such
evaluations, the Board of Directors considered a number of substantive factors,
both positive and negative, and potential benefits and detriments of the
specific transaction, including but not limited to the consideration offered,
likelihood of consummation, prospects for the business unit going forward,
opinion of financial advisors (when provided), and effect on the Company’s cash
flows.  After careful consideration, the Board of Directors determined
that each of the transactions was advisable and in the best interests of the
Company and its stockholders and that the form, terms and provisions of the
respective transaction documents were expedient and in the best interests of the
Company and its stockholders.




As a
result of the Company’s sales of SafirRosetti, Preparedness Services, Fraud and
SIU Services and Bode, and the Company’s closing of International Strategies,
the results and accounts of each of these business operating units are shown as
discontinued operations in the Company’s financial statements.





Sale
of SafirRosetti





On April
30, 2010, pursuant to the Board of Directors’ approval on April 21, 2010, the
Company and GlobalOptions (the “Sellers”) completed the sale of all of the
assets used in SafirRosetti in accordance with an asset purchase agreement dated
April 23, 2010 (the “SafirRosetti Purchase Agreement”), by and among the
Sellers and Guidepost Solutions LLC (“Guidepost”), a subsidiary of
SolutionPoint International, Inc. (“SolutionPoint”), of which Joseph
Rosetti, a former officer of SafirRosetti, is a principal.





SafirRosetti
delivered specialized security and investigative services to governments,
corporations and individuals, and reported the results of its operations as part
of the Company’s Security Consulting and Investigations reporting segment, which
was re-named Forensic DNA Solutions and Products following the sale of
SafirRosetti.





Pursuant to the terms of the
SafirRosetti Purchase Agreement, the Sellers sold SafirRosetti to Guidepost
for aggregate consideration of (i) $3,500 in cash, subject to certain
adjustments, of which $525 is being held in escrow for a period of 17
months through September 30, 2011, (ii) a secured promissory note (the
“SafirRosetti Note”) in the aggregate face amount of $1,750, with an interest
rate of 0.79% per annum of which principal of $875 and interest of $8 was
received on December 17, 2010 and principal of $875 and related interest is
payable to us on June 30, 2011 and (iii) contingent consideration based on 70%
of the purchased accounts receivable in excess of $1,750 collected
by Guidepost between the closing and June 30, 2011.  Contingent
consideration is being recognized when realized due to the uncertainty of
realization.  Contingent consideration of $705 was received and
recognized throughDecember 31, 2010.Through February 9, 2011,the Company received $373of additional contingent
consideration.





The
SafirRosetti Note provides a first priority lien against the sold accounts
receivable of SafirRosetti and the post-closing accounts receivable
of Guidepost arising from the customer accounts purchased and a second
priority lien against the remaining property of SafirRosetti transferred to
Guidepost.  Guidepost will transfer all uncollected accounts
receivable back to the Sellers on June 30, 2011, subject to a purchase right by
Guidepost.


F-15


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations, continued





Sale
of SafirRosetti, continued





In
connection with the SafirRosetti Purchase Agreement, the Company entered into a
transition service agreement pursuant to which the Company
provided Guidepost with certain specified transition services following the
closing, including but not limited to certain information technology
services.  In connection with this agreement, during the year ended
December 31, 2010, the Company recorded fees of $58, which were recorded as an
offset to general and administrative expenses.   The transition
services agreement terminated on July 31, 2010. The Company recorded a
cumulative loss of $1,269 on the sale of SafirRosetti, pursuant to the
following:





Cash
      selling price (of which $525 was held in escrow)
                      
                      $
                      3,500Note
      receivable, net
                      
                      
                      1,670Contingent
      cash consideration received
                      
                      
                      705Total
      consideration from sale
                      
                      
                      5,875Less:
      expenses of sale
                      
                      
                      (380
                      )Net consideration
      from sale
                      
                      
                      5,495Less:
      net book value of assets sold to buyer or written off in connection with
      the sale
                      
                      
                      (6,764
                      )Net
      (loss) on the sale of SafirRosetti
                      
                      $
                      (1,269
                      )





The net
loss amount above reflects the benefit of $705 in contingent consideration
received through December 31, 2010.  This loss does not reflect the
full benefit of contingent consideration on the sale, which will be
recorded when realized.





Sale
of Preparedness Services




On July
16, 2010, pursuant to the Board of Directors’ approval on May 6, 2010, and the
Company’s stockholders’ approval on July 15, 2010, the Sellers completed the
sale of all assets used in Preparedness Services in accordance with an asset
purchase agreement dated May 13, 2010 (the “Preparedness Services Purchase
Agreement”), by and among the Sellers and Witt Group Holdings, LLC, (“Witt
Holdings”), of which James Lee Witt, Chief Executive Officer, Mark Merritt,
Co-President, Barry Scanlon, Co-President, and Pate Felts, Senior Advisor,
respectively, of Preparedness Services are principals.





Preparedness
Services developed and implemented crisis management and emergency response
plans for disaster mitigation, continuity of operations and other emergency
management issues for governments, corporations and individuals, and reported
the results of its operations in the Company’s Preparedness Services reporting
segment.





Pursuant
to the terms of the Preparedness Services Purchase Agreement, the Sellers
sold Preparedness Services to Witt Holdings for aggregate consideration of
(i) $10,006 in cash, of which $1,000 is to be held in escrow for 12 months
following the closing, (ii) an earnout payment equal to 40% of any revenues over
$15,000 earned during the 12-month period following the closing, which payment
may not exceed $12,000, (iii) the assumption of all of the Preparedness Services
liabilities, including all termination and severance payments due to James Lee
Witt, Mark Merritt, Barry Scanlon and Pate Felts under their respective
employment agreements, upon the sale of Preparedness Services, less $286,
representing a payment in connection with Witt Holdings’ assumption of the lease
for Preparedness Services’ Washington D.C. facility and (iv) a working capital
adjustment of $1,652 paid on January 14, 2011.  The maximum total
consideration payable to the Sellers under the Preparedness Services Purchase
Agreement is $22,000.





The
Sellers had also agreed to pay Witt Holdings (i) a “true-up” of up to $1,000
based on accounts receivable (other than accounts receivable originating from
the State of Louisiana or its agencies) that remain uncollected as of six months
following the closing, and (ii) the face amount of any uncollected receivables
arising from the bankruptcy or dissolution of any non-governmental
entity.  Witt Holdings had agreed upon such “true-up” payment to
transfer to the Sellers all rights with respect to such uncollected receivables.
 On January 28, 2011, Witt Holdings notified the Company that it would not
make a claim for either a “true-up” or bankrupt amount as described in (i) or
(ii), herein.


F-16





GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations, continued





Sale
of Preparedness Services, continued





Additionally,
in connection with the Preparedness Services Purchase Agreement, the Company
entered into (i) a license agreement pursuant to which it granted Witt Holdings
a world-wide, perpetual, irrevocable, exclusive, royalty free, fully paid-up
right and license to use the Company’s software in the field of emergency
preparedness and disaster relief recovery, and the Company agreed not to license
the Preparedness Services application of software to any other business in such
field, and (ii) a transition service agreement pursuant to which the Company
provided Witt Holdings with certain specified transition services following the
closing, including but not limited to certain information technology
services.  In connection with this agreement, during the year ended
December 31, 2010, the Company recorded fees of $72, which were recorded as an
offset to general and administrative expenses.  The transition
services agreement terminated on September 30, 2010. The
Company recognizes the contingent consideration for the earnout as realized, due
to the uncertainty of realization.





The
Company recorded a gain of $0 on the sale of Preparedness Services, pursuant to
the following:





Cash
      selling price (of which $1,000 was held in escrow)
                  
                  $
                  10,006Working
      capital adjustment
                  
                  
                  1,652Other
      consideration receivable
                  
                  
                  301Liabilities
      assumed by purchaser
                  
                  
                  3,225Gross
      proceeds from sale
                  
                  
                  15,184Less:
      expenses of sale
                  
                  
                  (1,154
                  )Net
      proceeds from sale
                  
                  
                  14,030Less:
      net book value of assets sold to buyer or written off in connection with
      the sale
                  
                  
                  (14,030
                  )Net
      gain on the sale of Preparedness Services
                  
                  $
                  -


F-17


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations, continued





Sale
of Fraud and SIU Services




On July
20, 2010, pursuant to the Board of Directors’ approval on June 10, 2010,
the Sellers completed the sale of all assets used in Fraud and SIU Services in
accordance with an asset purchase agreement dated June 11, 2010 (the “Fraud and
SIU Services Purchase Agreement”), by and among the Sellers and GlobalOptions
Services, Inc., a non-related third party (“Global Services”), of
which Frank Pinder, the President of Fraud and SIU Services, together with
David Finney, James Buscarini, Kevin McGinn and Mike Brantley, respectively the
Vice Presidents of Operations, Business Development, Finance and IT, are
officers and shareholders.  Balmoral Advisors, LLC, Private Equity
Partners LLC and the North Atlantic Value LLP unit of JO Hambro Capital
Management Ltd were the private equity sponsors.





Fraud and
SIU Services provided investigative surveillance, anti-fraud solutions and
business intelligence services to the insurance industry, law firms and
multinational organizations, and reported the results of its operations in the
Company’s Fraud and SIU Services reporting segment.




Pursuant
to the terms of the Fraud and SIU Services Purchase Agreement, the Sellers sold
Fraud and SIU Services to Global Services for aggregate consideration of (i)
$8,340 in cash at closing, inclusive of $34 for an estimated adjustment for
working capital and $56 for the purchase real estate lease deposits, of which
$825 is to be held in escrow for 15 months following the closing, (ii) an
additional final post closing working capital adjustment of $275 which the
Sellers received on December 30, 2010, and (iii) the assumption of substantially
all of the liabilities of Fraud and SIU Services aggregating
$2,978.





In connection with Fraud and SIU
Services being classified as held for sale, during the three months ended June
30, 2010, the Company recorded a charge to discontinued operations of $4,475 to
write down the carrying value of the assets of Fraud and SIU Services to fair
value.





In
connection with the  Fraud and SIU Services Purchase Agreement, the Sellers
and Global Services entered into (i) certain license agreements pursuant to
which the Sellers granted Global Services worldwide, perpetual, irrevocable,
exclusive, royalty-free, fully paid-up rights and licenses to certain of the
Seller’s intellectual property, including but not limited to the “GlobalOptions”
corporate name, logo and websites (all of which Global Services has the right to
purchase in the future for nominal consideration), and the Company’s Rapid Data
Module and Rapid Video Module software and related source materials that are
embedded within the GlobalTrak system for the  Fraud and SIU Services
business only,  and (ii) transition service agreement pursuant to
which the Sellers and Global Services will provide each other with certain
transition services following the closing. The Company recorded fees of $0
in connection with this agreement during the year ended December 31,
2010.   The term of such transition services agreement was
extended until March 31, 2011.





The
Company recorded a loss of $409 on the sale of Fraud and SIU Services, pursuant
to the following:





Cash
      selling price (of which $825 was held in escrow)
                        
                        $
                        8,615Liabilities
      assumed by purchaser
                        
                        
                        2,978Gross consideration
      from sale
                        
                        
                        11,593Less:
      expenses of sale
                        
                        
                        (1,111
                        )Net
      consideration from sale
                        
                        
                        10,482Less:
      net book value of assets sold to buyer or written off in connection with
      the sale
                        
                        
                        (10,891
                        )Net
      loss on the sale of Fraud and SIU Services
                        
                        $
                        (409
                        )


F-18


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations, continued




Sale
of Bode




On
November 30, 2010, pursuant to the Board of Directors’ approval on August 10,
2010, and the Company’s stockholders’ approval on November 11, 2010, the Sellers
completed the sale of the stock of Bode in accordance with a stock purchase
agreement dated August 11, 2010 (“Bode Purchase Agreement”) by and among the
Sellers, Bode and LSR Acquisition Corp. (which following a corporate
reorganization, became SolutionPoint).




Pursuant
to the terms of the Bode Purchase Agreement, the Sellers sold the equity
securities and stock of  Bode, which constitutes the Company’s
Forensic DNA Solutions and Products business unit, to SolutionPoint for
aggregate consideration of (i) $24,500 in cash, of which $2,450 will be held in
escrow until December 31, 2011,  (ii) an earnout payment equal to 30%
of any revenues over $27,000 earned by Bode during the 12-month period following
the closing of the sale, which payment may not exceed $5,500, and (iii) a cash
payment of $500 received on December 17, 2010 in connection
with SolutionPoint’s tax election under Section 338(h)(10) of the Internal
Revenue Code of 1986, as amended (the “Internal Revenue Code”).




In
addition, SolutionPoint has agreed to pay the Sellers the amount by which the
working capital of Bode at closing exceeds $5,600, and the Sellers have agreed
to pay SolutionPoint the amount by which the working capital of Bode at closing
is less than $5,600, provided that in either case no such payment will be
required unless it is in excess of $150.  At December 31, 2010, the
Company has estimated that SolutionPoint will pay to Sellers a working capital
adjustment of approximately $2,192.  As set forth in the Bode Purchase
Agreement, there are a series of steps in which SolutionPoint and the Company
determine, review and approve the computation of the working capital
adjustment.  These steps have not yet been
completed.  Accordingly, this estimate of the working capital
adjustment is subject to change. The Sellers have also agreed to pay
SolutionPoint a “true-up” of up to $1,000, based on accounts receivable that
remain uncollected 180 days after the closing and SolutionPoint has agreed to
transfer to the Sellers all rights with respect to such uncollected receivables
after SolutionPoint’s receipt of such “true-up” payment.





In
connection with the Bode Purchase Agreement, we entered into a transition
service agreement pursuant to which we provided Bode with certain specified
transition services following the closing, including but not limited to certain
information technology services.  In connection with this agreement,
during the year ended December 31, 2010, the Company recorded fees of $19, which
were recorded as an offset to general and administrative
expenses.  Unless otherwise extended by the parties, the transition
services agreement will terminate on February 28, 2011.




In future
periods, the Company will record contingent consideration as realized, due to
the uncertainty of realization.





The
Company recorded a gain, net of tax, of $1,559 on the sale of Bode, pursuant to
the following:





Cash
      selling price (of which $2,450 was held in escrow)
                    
                    $
                    25,000Estimate
      of working capital adjustment
                    
                    
                    2,192Liabilities
      assumed
                    
                    
                    2,327Gross
      consideration from sale
                    
                    
                    29,519Less:
      expenses of sale
                    
                    
                    (2,617
                    )Net
      consideration from sale
                    
                    
                    26,902Less:
      net book value of assets sold to buyer or written off in connection with
      the sale
                    
                    
                    (24,268
                    )Gain
      on the sale of Bode, before tax effect
                    
                    
                    2,634Income
      tax on the sale of Bode
                    
                    
                    (1,075
                    )Gain
      on the sale of Bode, net of tax
                    
                    $
                    1,559




F-19


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations, continued





Funds
held in escrow related to the sales of business units





As of
December 31, 2010, a portion of the proceeds from the sale of each of the
business units has been held in escrow, to cover potential post-closing
indemnification obligations, as follows:





SafirRosetti
                  
                  
                  Preparedness
                    Services
                  
                  
                  Fraud and SIU
                    Services
                  
                  
                  Bode
                  
                  
                  TotalFunds
      held in escrow related to the sales of business units
                  
                  $
                  525
                  
                  
                  $
                  1,000
                  
                  
                  $
                  825
                  
                  
                  $
                  2,450
                  
                  
                  $
                  4,800





Amounts due from buyers related to the
sales of business units





As of
December 31, 2010, amounts due from buyers related to the sales of business
units include a note receivable, amounts due in connection with working capital
adjustments and contingent consideration recognized, as shown in the table
below:





SafirRosetti
                    
                    
                    Preparedness
                      Services
                    
                    
                    Fraud and SIU
                      Services
                    
                    
                    Bode
                    
                    
                    TotalNote
      receivable
                    
                    $
                    857
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    857Working
      capital adjustment
                    
                    
                    -
                    
                    
                    
                    1,652
                    
                    
                    
                    -
                    
                    
                    
                    2,192
                    
                    
                    
                    3,844Other
      consideration receivable
                    
                    
                    -
                    
                    
                    
                    301
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    301$
                    857
                    
                    
                    $
                    1,953
                    
                    
                    $
                    -
                    
                    
                    $
                    2,192
                    
                    
                    $
                    5,002


Gains (losses) on sale of business
units
 
 For the
year ended December 31, 2010, the Company has recorded the following gains and
losses in connection with the sales of its business units:
  SafirRosetti
                        
                        
                        Preparedness
                          Services
                        
                        
                        Fraud and SIU
                          Services
                        
                        
                        Bode
                        
                        
                        TotalGain
      (loss) on sale, net of tax
                        
                        $
                        (1,269
                        )
                        
                        $
                        -
                        
                        
                        $
                        (409
                        )
                        
                        $
                        1,599
                        
                        
                        $
                        (119
                        )
 F-20


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





5.
Discontinued Operations, continued





Results
of Discontinued Operations





Results and net income from
discontinued operations are as follows, reflecting the results of SafirRosetti,
Preparedness Services, Fraud and SIU Services, Bode and International
Strategies:





Fortheyearsended
                        December31,2010
                      
                      
                      2009
                      
                      
                      2008Revenues
                      
                      $
                      64,760
                      
                      
                      $
                      102,130
                      
                      
                      $
                      104,187Income
      from operations
                      
                      $
                      402
                      
                      
                      $
                      7,015
                      
                      
                      $
                      2,601Loss
      on disposal, net of tax
                      
                      $
                      (119
                      )
                      
                      $
                      -
                      
                      
                      $
                      -Income,
      before tax
                      
                      $
                      329
                      
                      
                      $
                      6,888
                      
                      
                      $
                      2,570Income,
      net of tax
                      
                      $
                      840
                      
                      
                      $
                      6,369
                      
                      
                      $
                      2,570





Assets
and liabilities included in discontinued operations as of December 31, 2010 and
December 31, 2009 are as follows:





As ofDecember 31, 2010
                          
                          
                          December 31, 2009AssetsAccounts
      receivable, net
                          
                          $
                          -
                          
                          
                          $
                          19,632Inventories,
      net
                          
                          
                          -
                          
                          
                          
                          3,354Prepaid
      expenses and other current assets
                          
                          
                          12
                          
                          
                          
                          490Property
      and equipment, net
                          
                          
                          -
                          
                          
                          
                          6,958Goodwill
      and intangible assets, net
                          
                          
                          -
                          
                          
                          
                          24,236Deposits
      and other assets
                          
                          
                          -
                          
                          
                          
                          537Total
      assets of discontinued operations
                          
                          $
                          12
                          
                          
                          $
                          55,207LiabilitiesAccounts
      payable
                          
                          $
                          63
                          
                          
                          $
                          3,207Accrued
      compensation
                          
                          
                          214
                          
                          
                          
                          3,449Deferred
      Revenues
                          
                          
                          -
                          
                          
                          
                          590Accrued
      expenses and other current  liabilities
                          
                          
                          3,288
                          
                          
                          
                          934Other
      long term liabilities
                          
                          
                          -
                          
                          
                          
                          1,300Total
      liabilities of discontinued operations
                          
                          $
                          3,565
                          
                          
                          $
                          9,480


F-21


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)




6.   Accrued Compensation and Related
Benefits





A summary of accrued compensation and
related benefits is comprised of the following:





December 31,2010
                              
                              
                              2009Accrued
      performance based bonuses
                              
                              $
                              644
                              
                              
                              $
                              150Accrued
      payroll and commissions
                              
                              
                              223
                              
                              
                              
                              30Accrued
      employee benefits
                              
                              
                              29
                              
                              
                              
                              15Total
                              
                              $
                              896
                              
                              
                              $
                              195





7. 
Deferred Compensation





The Company has established a Deferred
Compensation Arrangement for the benefit of its Chief Executive Officer and its
Chief Financial Officer (See Note 10 – Commitments and Contingencies -
Employment Agreements). The deferred compensation is held in a separate trust
account, established by the Company to administer the Deferred Compensation
Arrangement. The assets of the trust are subject to the claims of the Company’s
creditors in the event that the Company becomes insolvent. The trust qualifies
as a grantor trust for income tax purposes (known as a “rabbi trust”). The
assets and liabilities of the Deferred Compensation Arrangement are valued at
$2,506 as of December 31, 2010.





8. 
Line of Credit





The
Company had maintained a working capital line of credit (the “Facility”), which
was terminated on November 30, 2010, with a balance of $0.  The
Facility was secured by accounts receivable, was subject to a liquidity
financial covenant and certain positive and negative covenants and in connection
therewith, the Company had granted a first priority security interest in
substantially all of its assets to the financial institution that provided this
Facility.




9.
Income Taxes




Significant
components of the Company’s net deferred tax assets and liability at December
31, 2010 and 2009 are as follows:




2010
                            
                            
                            2009Deferred
      tax assets:Net
      operating loss carryforwards
                            
                            $
                            15,962
                            
                            
                            $
                            7,358Stock-based
      compensation
                            
                            
                            383
                            
                            
                            
                            3,127Property
      and equipment
                            
                            
                            119Allowance
      for doubtful accounts
                            
                            
                            183
                            
                            
                            
                            550Intangible
      assets
                            
                            
                            -
                            
                            
                            
                            2,277Goodwill
                            
                            
                            -
                            
                            
                            
                            5,235Earnout
      in connection with the sales of business units
                            
                            
                            3,471Other
      accruals
                            
                            
                            1,244
                            
                            
                            
                            1,286Total
      gross deferred tax assets
                            
                            
                            21,362
                            
                            
                            
                            19,833Deferred
      tax liability:Excess
      of book over tax basis of:Property
      and equipment
                            
                            
                            -
                            
                            
                            
                            (216
                            )Goodwill
                            
                            
                            -
                            
                            
                            
                            (511
                            )Net
      deferred tax assets before valuation allowance
                            
                            
                            21,362
                            
                            
                            
                            19,106Less:
      valuation allowance
                            
                            (21,362
                            )
                            
                            
                            (19,617
                            )Deferred
      tax assets, net
                            
                            $
                            -
                            
                            
                            $
                            (511
                            )




F-22


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)




9.
Income Taxes, continued




The
increase in the deferred tax asset for net operating loss
carryforwards includes the income tax effect of the differences in the book
and tax bases of goodwill, that was part of the net assets of the
business units that were sold during the year ended December 31,
2010.  The valuation allowances related to the Company’s deferred tax
asset increased by approximately $1,745 and $10 for the years ended
December 31, 2010 and 2009, respectively.





As of
December 31, 2010, the Company had approximately $41,200 and $39,100 of
federal and state net operating losses (“NOL”), respectively, available for
income tax purposes that may be carried forward to offset future taxable income,
if any. The federal carryforwards expire in years 2022 through 2030. The Company
conducted a change in ownership study in accordance with Section 382 of the
Internal Revenue Code (“IRC”) and determined that its ability to use
approximately $13,900 of its federal and state NOL carryforwards generated prior
to October, 2008 is subject to an annual limitation.




A
reconciliation of the statutory federal income tax rate to the Company’s
effective tax rate for the loss from continuing operations is as
follows:





FortheyearsendedDecember31,2010
                    
                    
                    2009
                    
                    
                    2008Tax
      benefit at federal statutory rate
                    
                    
                    (34.0
                    )%
                    
                    
                    (34.0
                    )%
                    
                    
                    (34.0
                    )%State
      income taxes
                    
                    
                    (5.0
                    )
                    
                    
                    (5.0
                    )
                    
                    
                    (6.0
                    )Permanent
      differences:Stock-based
      compensation
                    
                    
                    19.5
                    
                    
                    
                    13.1
                    
                    
                    
                    3.0Compensation
                    
                    
                    4.1
                    
                    
                    
                    0.0
                    
                    
                    
                    0.0Adjustments
      of deferred tax assets:Net
      operating loss carry forwards
                    
                    
                    (0.8
                    )
                    
                    
                    2.1
                    
                    
                    
                    4.6Stock
      - based compensation
                    
                    
                    0.0
                    
                    
                    
                    0.0
                    
                    
                    
                    (6.8
                    )Increase
      in valuation allowance
                    
                    
                    16.2
                    
                    
                    
                    23.8
                    
                    
                    
                    39.2Effective
      income tax rate
                    
                    
                    0.0
                    %
                    
                    
                    0.0
                    %
                    
                    
                    0.0
                    %




During
the years ended December 31, 2010 and 2009, as a result of the vesting of
restricted stock units and certain other share based payment awards, the
ultimate tax deduction realized by the Company at the vesting date was
substantially lower than the cumulative compensation expense recorded for
financial reporting purposes, which is commonly referred to as a “shortfall”.
 Accordingly, the effective tax rate reconciliation for the years ended
December 31, 2010 and 2009 include the effect of derecognizing the gross
deferred tax asset and the related valuation allowance associated with the book
compensation expense of these vested awards and correspondingly, the set-up of
the gross deferred tax asset and the corresponding valuation allowance
associated with the final tax deduction.


The
Company files a consolidated federal income tax return as well as consolidated
or separate company income tax returns in 32 state and 2 local jurisdictions in
the United States.  Currently no income tax returns are under
examination.  For a substantial number of these jurisdictions, the Company
will be filing final income tax returns, since it no longer does business in
these jurisdictions due to the disposals of its business units.


In 2009,
the Company re-evaluated its effective state tax rate as a result of
significant operations in new state jurisdictions and a reduction of operations
in the previously filed state jurisdictions.


F-23


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)




10.  Commitments and Contingencies




Employment
Agreements





Harvey
W. Schiller, Ph.D.




The
Company entered into a three-year employment agreement with Dr. Schiller,
its Chairman and Chief Executive Officer, in January 2004.  The
agreement was initially amended on December 19, 2006 to extend the term through
January 31, 2010; subsequently on August 13, 2009 the term was extended through
January 31, 2011 and on January 31, 2010 pursuant to its terms was extended to
January 31, 2012.  Effective May 11, 2010, the Company modified its
employment agreement with Dr. Schiller to induce him to remain with the Company
to ensure continuity of corporate operations in the event that he became
entitled to terminate his employment agreement as a result of the occurrence of
a “change of control,” as defined under his employment agreement, which the
Compensation Committee of the Board determined would result from the completion
of the sale of Preparedness Services.  On December 14, 2010 the
Company further modified its agreement with Dr. Schiller, principally, to extend
the term of Dr. Schiller’s employment with the Company through April 30, 2012 to
ensure the continuity of corporate operations during the period which earnout
payments and escrow amounts are expected to be received in connection with the
sales of the business units.   Pursuant to the terms of the
modified employment agreement, Dr. Schiller continues to have the right to
terminate his employment agreement if a “change of control” event occurs prior
to the end of the term of his employment agreement. A change of control event
could occur if more than fifty percent of the combined voting power of the
outstanding securities of the Company changes from the present stockholders.




The sale
of Preparedness Services was completed on July 16, 2010.  As a result
of this sale, the Company’s employment agreement with Dr. Schiller, as
modified (the “Schiller Employment Agreement”), provides that Dr. Schiller
will continue to serve as the Company’s Chairman and Chief Executive Officer
through April 30, 2012, and devote the necessary working time and efforts, but
less than substantially all of his working time and efforts to the business of
GlobalOptions Group.  The Schiller Employment Agreement provides for a
base salary of $180 per annum, plus certain living expenses through December 31,
2010 and then reduced to $150 per annum for the duration of the
term.  In addition to his base salary, in December 2010, Dr. Schiller
was awarded a cash bonus of $150 and Dr. Schiller became eligible for a
discretionary cash bonus on or before the end of the term.  Following
the completion of the term of the Schiller Employment Agreement, the Company
will have the option to continue to employ Dr. Schiller on a month-to-month
basis for $20 per month.




Additionally,
pursuant to the terms of the Schiller Employment Agreement, upon the sale of
Preparedness Services, 268,750 shares of restricted stock granted under the 2006
Executive Compensation Performance Bonus Plan (the “Performance Bonus Plan”) and
31,912 restricted stock units (“RSUs”) held by Dr. Schiller became fully vested
and non-forfeitable, and the target cash bonus award for the year 2010 was
deemed to be earned. Out of the amount of the 2010 award that was deemed earned
through the date of the sale of Preparedness Services, $270 was paid on August
13, 2010, and the remaining $230 will be paid in March 2011.  In
addition, $1,685 was paid into a “rabbi trust” on August 20, 2010 and will be
disbursed to Dr. Schiller six months after his separation of service for any
reason (for purposes of Section 409A of the Internal Revenue Code, the
deferred compensation rules, which may include a point in time when
Dr. Schiller works part-time) representing: (i) salary that would have been
earned for the period August 1, 2010 through January 31, 2012; (ii) the target
cash bonus for the period January 1, 2011 through January 31, 2012; and (iii)
cash in lieu of additional shares of stock, for the number of shares of stock
deemed earned upon the vesting of the target stock bonus awards that were in
excess of the number of shares of restricted stock previously granted to Dr.
Schiller.  The Compensation Committee has determined that December 31,
2010 is the date of such separation of service for purposes of Section 409A of
the Internal Revenue Code.




Dr.
Schiller elected to have 113,650 shares, valued at $225, withheld in
satisfaction of his tax obligation in connection with the vesting of the
restricted stock and RSUs.


F-24


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)




10.  Commitments and Contingencies




Employment
Agreements





Jeffrey
O. Nyweide




Effective
as of August 1, 2007, Mr. Nyweide and the Company terminated his consulting
agreement and entered into an employment agreement providing for
Mr. Nyweide’s service as the Company’s Chief Financial Officer, Executive
Vice President—Corporate Development, Treasurer and Secretary, reporting to the
Chairman of the Board.  The employment agreement, which had an initial
term through January 31, 2010, was amended on August 13, 2009 to extend its term
through January 31, 2011, and pursuant to its terms, on January 31, 2010, was
further extended to January 31, 2012.  Effective May 11, 2010, the
Company modified its employment agreement with Mr. Nyweide to induce him to
remain with the Company to ensure the continuity of corporate operations in the
event that he became entitled to terminate his employment agreement as a result
of the occurrence of a “change of control,” as defined under his employment
agreement, which the Compensation Committee determined would result from the
sale of Preparedness Services. On December 14, 2010, the Company further
modified its agreement with Mr. Nyweide to extend the term of his employment
agreement to July 31, 2012 to ensure the continuity of corporate operations
during the period which earnout payments and escrow amounts are expected to be
received in connection with the sales of the business units.  Pursuant
to the terms of the modified employment agreement, Mr. Nyweide continues to have
the right to terminate his employment agreement if a “change of control” event
occurs prior to the end of the term of his employment agreement. A change of
control event could occur if more than fifty percent of the combined voting
power of the outstanding securities of the Company changes from the present
stockholders.




The sale
of Preparedness Services was completed on July 16, 2010.  As a result
of this sale, the Company’s employment agreement with Mr. Nyweide, as
modified (the “Nyweide Employment Agreement”), provides that Mr. Nyweide
will continue to serve as its Chief Financial Officer and Executive Vice
President through July 31, 2012.   Mr. Nyweide will receive a
base salary of $375 per annum for the first eighteen month period of such term
and a reduced base salary of $180 per annum for the remaining six months, during
which period Mr. Nyweide’s responsibilities are intended to be
reduced.  In addition to his base salary, Mr. Nyweide earned a
performance bonus of $150 in connection with the sale of Preparedness Services
($75 paid on August 11, 2010 and the remainder paid on October 15, 2010), on
November 30, 2010, Mr. Nyweide earned a performance bonus of $250 in connection
with the sale of Bode ($125 paid on December 10, 2010 and the remainder payable
on January 31, 2012.  Following the completion of the term of the
Nyweide Employment Agreement, the Company will have the option to continue to
employ Mr. Nyweide on a month-to-month basis for $20 per
month.




Additionally,
pursuant to the terms of the Nyweide Employment Agreement, upon the sale of
Preparedness Services, 201,813 shares of restricted stock granted under the
Performance Bonus Plan and 14,093 RSUs held by Mr. Nyweide became fully vested
and non-forfeitable, and the target cash bonus award for the year 2010 was
deemed to be earned. Out of the amount of the 2010 award that was deemed earned
through the sale of Preparedness Services, $202 was paid on August 13, 2010, and
the remaining $173 will be paid in March 2011.  In addition, $821 was
paid into a “rabbi trust” on August 23, 2010 and will be disbursed to Mr.
Nyweide six months after his separation of service for any reason (for purposes
of Section 409A of the Internal Revenue Code, the deferred compensation rules,
which may include a point in time when Mr. Nyweide works part-time),
representing: (i) 50% of the salary and 100% of benefits, including a housing
allowance, that would have been earned for the period August 1, 2010 through
January 31, 2012; (ii) 50% of the target cash bonus for the period January 1,
2011 through January 31, 2012 ; and (iii) cash in lieu of additional shares of
stock for 50% of the number of shares of stock deemed earned upon the vesting of
the target stock bonus awards that were in excess of the number of shares of
restricted stock previously granted to Mr.  Nyweide. The Compensation
Committee has determined that January 31, 2012 is the date of such separation of
service for purposes of Section 409A of the Internal Revenue Code.





Mr.
Nyweide elected to have 72,977 shares, valued at $144, withheld in satisfaction
of his tax obligations in connection with the vesting of the restricted stock
and RSUs.





Operating
Leases




Rent
expense charged to continuing operations amounted to approximately $198, $194
and $206 for the years ended December 31, 2010, 2009 and 2008,
respectively.


F-25


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





10.  Commitments and Contingencies,
continued




Litigation,
Claims and Assessments




On April
22, 2010 a case was filed against the Company stating that the Company conspired
to divert work from the plaintiff.  The claims are for $2,400 in this
case.  The Company believes that the suit is completely without merit
and intends to vigorously defend its position.




On
October 2, 2010, the Company, along with others, was notified that it is a
defendant in a lawsuit filed by a third party for alleged conversion of assets,
tortuous interference and defamation, among other claims.  The suit
asks for actual and punitive damages totaling 4,200,000.  The Company
believes that the suit is completely without merit and intends to vigorously
defend its position.On November 4, 2010, the Company entered into a settlement
agreement with each of Howard Safir, the former Chief Executive Officer of the
Company’s Security Consulting and Investigations unit and Adam Safir, Howard
Safir’s son and a former officer of the Company’s Security Consulting and
Investigations unit (the “Safirs”), in order to resolve and settle disputes
regarding alleged payments owing to the Safirs under their respective consulting
agreements, employment agreements and any further obligation to issue the
Company’s common stock to the Safirs.  Furthermore, the Company
received an indemnification from the Safirs for any claims that may be made
against the Company for legal issues arising from the actions of SafirRosetti,
LLC.  The settlement agreement provides a cash payment to the Safirs
in the amount of $375 and release from the Safirs for any future claims against
the Company and the Company receiving a full release and indemnification of any
claims or legal matters arising from SafirRosetti, LLC.  On November
9, 2010, the $375 settlement was deposited into an escrow account, and on
December 3, 2010, the $375 amount was fully disbursed from escrow after the
Company’s receipt of full releases for certain potential claims against itself
and SafirRosetti, LLC.





11. 
Stockholders’
Equity





Description
of Authorized Capital




The
Company is authorized to issue up to 100,000,000 shares of common stock. The
holders of the Company’s common stock are entitled to one vote per share. The
holders of common stock are entitled to receive ratably such dividends, if any,
as may be declared by the Board of Directors out of legally available funds.
Upon liquidation, dissolution or winding-up of the Company, the holders of
common stock are entitled to share ratably in all assets of the Company that are
legally available for distribution. The holders of common stock have no
preemptive, subscription, redemption or conversion rights.




The
Company is authorized to issue 15,000,000 of preferred stock, of which 100,000
shares have been designated as Series D convertible preferred stock, and 20,000
shares have been designated as Series A junior participating preferred stock.
Shares previously issued for other classes of preferred stock, for which shares
are no longer outstanding, have been canceled and returned to undesignated
preferred stock that is available for future issuance.




Common
Stock Issued




On
January 30, 2008, the Company issued 300,000 shares of common stock in
connection with its purchase of Preparedness Services.




On
February 15, 2008, the Company issued 21,843 shares of common stock, valued at
$153 for services rendered during the year ended December 31, 2007, and 5,141
shares of common stock valued at $15  for services rendered during
January and February 2008, to a group of the Company’s service providers
including 1,567 shares of common stock valued at $15 to Verus International
Group.




On July
23, 2009, the Company issued 44 shares of its common stock in connection with
the exercise of a stock option.




During
the years ended December 31, 2009 and 2008, the Company issued 3,692,552 and
40,064 shares of common stock upon the conversion of 55,388 and 601 shares of
Series D convertible preferred stock, respectively.  No shares of
Series D convertible preferred stock remained outstanding at December 31,
2010.


F-26


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





11. 
Stockholders’ Equity,
continued




Common
Stock Issued, continued




During
the year ended December 31, 2009, the Company issued 134,274 shares of its
common stock pursuant to the vesting of RSUs under the 2006 Long Term Incentive
Plan (the “Incentive Plan”).  Of the 134,274 shares issued, 31,912 and
14,094 shares were issued to the Chief Executive Officer and Chief Financial
Officer, respectively.  The Chief Executive Office and Chief Financial
Officer elected to have the Company withhold 12,063 and 4,764 shares,
respectively, in satisfaction of their tax obligations in connection with the
vesting of these RSUs.  Such withheld shares valued at $25 and $10,
respectively are reflected as treasury shares in the Company’s books and
records.




During
the year ended December 31, 2010, the Company issued 155,561 shares of its
common stock pursuant to the vesting of RSUs under the 2006 Long Term Incentive
Plan (the “Incentive Plan”).  Of the 155,561 shares issued, 63,825 and
28,187 shares were issued to the Chief Executive Officer and Chief Financial
Officer, respectively.  The Chief Executive Office and Chief Financial
Officer elected to have the Company withhold 24,126 and 9,528 shares,
respectively, in satisfaction of their tax obligations in connection with the
vesting of these RSUs.  Such withheld shares valued at $49 and $20,
respectively are reflected as treasury shares in the Company’s books and
records.During the years ended December 31, 2010 and 2009, the Company issued
26,309 and 89,577 shares of its common stock, respectively to Lippert/Heilshorn
and Associates for services.  Of the 89,577 shares issued during the
year ended December 31, 2009, 36,900 shares valued at $75 were issued for
services rendered during 2008, and 52,677 shares valued at $90 were issued for
services rendered during 2009.  The 26,309 shares issued during the
year ended December 31, 2010 were valued at $45 for services rendered during
2010.




During
the years ended December 2010, and 2009, the Company issued 151,250 and 44
shares of its common stock, respectively, in connection with the exercise of
stock options. During the years ended December 31, 2010, 2009 and 2008, the
Company issued 31,289, 68,981 and 22,118 shares of its common stock,
respectively under the Amended and Restated 2006 Employee Stock Purchase Plan
(the “Stock Purchase Plan”).  The Company realized proceeds of $45,
$92 and $35 and recognized stock based compensation of $16, $32 and $11,
respectively in connection with the issuance of these shares.




Restricted
Stock Issued Under Performance Based Executive Bonus Plan




On
December 19, 2006, the Company awarded 100,000 and 75,000 shares of unvested
restricted stock to its Chief Executive Officer and Chief Financial Officer,
respectively, in connection with the extension of their respective employment
and consulting agreements. On July 24, 2008, the Company awarded an additional
250,000 and 187,500 shares of unvested restricted stock to its Chief Executive
Officer and Chief Financial Officer, respectively, in connection with the
Performance Bonus Plan.




As a
result of the sale of Preparedness,  the remaining 268,750 and 201,813
unvested shares held by Dr. Schiller and Mr. Nyweide, respectively, were no
longer subject to forfeiture, and 31,912 and 14,094 RSUs became vested,
respectively.  Dr. Schiller and Mr. Nyweide elected to have the
Company withhold 101,588 and 68,212 shares, respectively, in
satisfaction of their tax obligations in connection with the vesting of their
restricted stock and 12,063 and 4,764 Shares, respectively, in satisfaction of
their tax obligations in connection with the vesting of their
RSUs.  Such withheld shares, valued at $225 and $145, respectively,
are reflected as treasury shares in the Company’s books and
records.  As of September 30, 2010 Dr. Schiller and Mr. Nyweide have
no more non-vested shares of restricted stock.  (See Note 10 –
Commitments and Contingencies – Employment Agreements, for additional discussion
regarding these shares.)





Common
Stock Buyback Program





On October 28, 2010, the Company’s
board of directors authorized the repurchase of up to $3,000 of the Company’s
common stock over a period of 18 months, at such times, amounts and prices as
the Company shall deem appropriate.  This program terminated when the
Company announced its tender offer (See next Note).  During December
2010, the Company purchased 16,627 shares of its common stock through this
common stock buyback program, to be held in treasury, at an aggregate cost of
$39   (See Note 14 Subsequent Events – Common Stock Buyback
Program).


F-27


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





11. 
Stockholders’ Equity,
continued





Tender
Offer





On
December 1, 2010, the Company commenced a partial tender offer to purchase up to
10,000,000 shares of its common stock at a price of $2.40 per share, net to the
seller in cash, without interest.  The tender offer expired on
December 29, 2010.  During the year ended December 31, 2010, the
Company purchased and canceled 1,119,978 shares of common stock at an aggregate
cost of $2,688.





Stockholder
Rights Plan




On
September 7, 2010, the Company entered into a stockholder rights plan, dated as
of September 7, 2010 (the “Rights Agreement”), with Continental Transfer &
Trust Company, as rights agent.




On
September 7, 2010, in connection with the Company’s entry into the Rights
Agreement, the Board of Directors authorized the issuance of one right (a
“Right”) to purchase one one-thousandth of a share of the Company’s Series A
Junior Participating Preferred Stock, par value $0.001 per share (“Series A
Preferred Stock”), at a purchase price of $4.10 (as may be adjusted from time to
time as provided in the Rights Agreement) for each share of the Company’s
outstanding common stock  to stockholders of record as of the close of
business on September 17, 2010.  The Rights will expire on September
7, 2013.





Limited
Waiver of Rights Agreement and Stockholder Support Agreement





On
October 27, 2010, the Company waived the provisions of the Rights Agreement for
a certain large stockholder (the “Stockholder”) of the Company.  On
the close of business as of that day, the Stockholder owned an aggregate of
5,766,324 shares of the Company’s stock, or approximately 40% of the common
stock outstanding.  In connection with this purchase, the Company
entered into a support agreement with the Stockholder, the principal term of
which required the Stockholder to vote in favor of the sale of
Bode.




Series
A Junior Participating Preferred Stock





On
September 7, 2010, the Company filed a certificate of designation with the State
of Delaware authorizing the designation of a total of 20,000 shares of Series A
Preferred Stock.





Voting
Rights





No voting
rights shall attach to the Series A Preferred Stock.




Liquidation
Rights





In the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company, holders of Series A Preferred Stock, no distribution shall be made
to the holders of any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock.




Dividends





Subject
to the superior rights of the holders of shares of any other series of preferred
stock or other class of capital stock of the Company ranking superior to the
shares of Series A Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the Company legally
available therefor, dividends payable in cash on the payment date for each cash
dividend declared on the shares of common stock (currently 1,000) of the Company
in an amount per whole share (rounded to the nearest cent) equal to the Formula
Number then in effect times the cash dividends then to be paid on each share of
common stock.


F-28


GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





12.
Stock Based Compensation




On July
24, 2008, at the Company’s 2008 Annual Meeting of Stockholders (the “2008 Annual
Meeting”), stockholders approved the Amended and Restated 2006 Long-Term
Incentive Plan (the “Incentive Plan”), which became effective immediately
following its approval and replaced the Company’s original 2006 Long-Term
Incentive Plan. The Incentive Plan provides for the issuance of up to 3,000,000
shares of the Company’s common stock, increased from 1,500,000 under the
Company’s original 2006 Long-Term Incentive Plan. The Compensation Committee has
the authority to determine the amount, type and terms of each award, but may not
grant awards under the Incentive Plan, in any combination, for more than 625,000
shares of the Company’s common stock to any individual during any calendar year,
increased from 312,500 under the Company’s original 2006 Long-Term Incentive
Plan.




As of
December 31, 2010, 1,368,917 shares of common stock remain eligible to be issued
under the Incentive Plan.




At the
2008 Annual Meeting, stockholders approved the Amended and Restated Employee
Stock Purchase Plan (the “Stock Purchase Plan”), which became effective
immediately following its approval and replaced the Company’s original 2006
Employee Stock Purchase Plan. The Stock Purchase Plan permits eligible employees
of the Company to automatically purchase at the end of each month at a
discounted price, a certain number of shares of the Company’s common stock by
having the effective purchase price of such shares withheld from their base pay.
The Stock Purchase Plan provides for the issuance of up to 2,000,000 shares of
the Company’s common stock, increased from 250,000 under the Company’s original
2006 Employee Stock Purchase Plan. On August 20, 2008, the Company filed a
registration statement on Form S-8 under the Securities Act covering 1,750,000
shares reserved for issuance under the Stock Purchase Plan.




As of
December 31, 2010, 1,877,612 shares of common stock remain unissued under the
Stock Purchase Plan.




Equity
instruments issued to employees are recorded at their fair value on the date of
grant and are amortized over the vesting period of the award.  Stock
based compensation for employees and directors was approximately $2,141, $2,566
and $3,246 for the years ended December 31, 2010, 2009 and 2008,
respectively.  For the years ended December 31, 2010, 2009 and 2008,
respectively, stock based compensation for employees of $205, $418 and $222 were
reflected in selling and marketing expenses, and $1,936, $2,148 and $3,024
respectively, were reflected in general and administrative
expenses.





Equity
instruments issued to non-employees are recorded at their fair value on the
grant date. The non-vested portions of the award are adjusted based on
market value on a quarterly basis and the adjusted value of award is amortized
over the expected service period.  Stock based compensation for
non-employees was approximately $184, $265 and $292 for the years ended December
31, 2010, 2009 and 2008, respectively. For the years ended December 31, 2010,
2009 and 2008, respectively, stock based compensation for non-employees of $0,
$120 and $0 were reflected in selling and marketing expenses, and $184, $145 and
$292, respectively, were reflected in general and administrative
expenses.


F-29
 GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





12.
Stock Based Compensation, continued





The
following table summarizes total stock based compensation costs for the years
ended December 31, 2010, 2009 and 2008.




For the Year Ended December 31, 2010Advisors
                              and
                              Consultants
                            
                            
                            Employees
                              and
                              Directors
                            
                            
                            TotalStock
      Options
                            
                            $
                            132
                            
                            
                            $
                            82
                            
                            
                            $
                            214RSUs
                            
                            
                            7
                            
                            
                            
                            575
                            
                            
                            
                            582Stock
      issued to consultants for services
                            
                            
                            45
                            
                            
                            
                            
                            
                            
                            
                            45Stock
      purchase plan
                            
                            
                            -
                            
                            
                            
                            16
                            
                            
                            
                            16Vesting
      of restricted shares under performance basedexecutive
      bonus award
                            
                            
                            -
                            
                            
                            
                            1,468
                            
                            
                            
                            1,468Total
                            
                            $
                            184
                            
                            
                            $
                            2,141
                            
                            
                            $
                            2,325For the Year Ended December 31,
      2009Advisors
                              and
                              Consultants
                            
                            
                            Employees
                              and
                              Directors
                            
                            
                            TotalStock
      Options
                            
                            $
                            96
                            
                            
                            $
                            394
                            
                            
                            $
                            490RSUs
                            
                            
                            4
                            
                            
                            
                            1,100
                            
                            
                            
                            1,104Stock
      issued to consultants for services
                            
                            
                            165
                            
                            
                            
                            
                            
                            
                            
                            165Stock
      purchase plan
                            
                            
                            -
                            
                            
                            
                            31
                            
                            
                            
                            31Vesting
      of restricted shares under performance based executive bonus
      award
                            
                            
                            -
                            
                            
                            
                            1,041
                            
                            
                            
                            1,041Total
                            
                            $
                            265
                            
                            
                            $
                            2,566
                            
                            
                            $
                            2,831For the Year Ended December 31, 2008Advisors
                              and
                              Consultants
                            
                            
                            Employees
                              and
                              Directors
                            
                            
                            TotalStock
      Options
                            
                            $
                            121
                            
                            
                            $
                            1,650
                            
                            
                            $
                            1,771RSUs
                            
                            
                            4
                            
                            
                            
                            526
                            
                            
                            
                            530Stock
      issued to consultants for services
                            
                            
                            167
                            
                            
                            
                            -
                            
                            
                            
                            167Stock
      purchase plan
                            
                            
                            -
                            
                            
                            
                            11
                            
                            
                            
                            11Earnout
      (JLWA acquisition)
                            
                            
                            720
                            
                            
                            
                            -
                            
                            
                            
                            720Vesting
      of restricted shares under performance based executive bonus
      award
                            
                            
                            -
                            
                            
                            
                            1,059
                            
                            
                            
                            1,059Total
                            
                            $
                            1,012
                            
                            
                            $
                            3,246
                            
                            
                            $
                            4,258




F-30




GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





12.  Stock
Based Compensation, continued





Stock
Options





The fair
value of each option grant during the years ended December 31, 2010, 2009 and
2008 was estimated on the date of grant using the Black-Scholes option pricing
model. The weighted average of the assumptions used to compute the grant date
value of the options granted during the years ended December 31, 2010, 2009 and
2008 were as follows:




Years Ended December 31,2010
                                      
                                      
                                      2009
                                      
                                      
                                      2008Dividend
      yield
                                      
                                      0%
                                      
                                      
                                      0%
                                      
                                      
                                      0%Expected
      volatility
                                      
                                      103.2%
                                      
                                      
                                      104%
                                      
                                      
                                      87%Risk-free
      interest rate
                                      
                                      2.69%
                                      
                                      
                                      1.86%
                                      
                                      
                                      3.0%Expected
      lives
                                      
                                      3.0
      years
                                      
                                      
                                      3.6
      years
                                      
                                      
                                      5
      years





The
expected life of options granted after June 30, 2008 was calculated using the
simplified method set out in SEC Staff Accounting Bulleting No. 110 using the
vesting term of 3 years and the contractual term of 5 years. The simplified
method defines the expected life as the average of the contractual term and the
vesting period.





The
weighted average fair value of the options on the date of grant, using the fair
value based methodology for years ended December 31, 2010, 2009 and 2008 was
$1.06, $1.24 and $1.80 per share, respectively.




On
January 1, 2009, the Company granted, in the aggregate, options for the purchase
of 75,000 shares of its common stock at an exercise price of $1.99 per share,
under the Incentive Plan, to three members of the Board of Directors. The
options have a five year term and vest ratably at the end of each of the four
quarterly periods following the date of grant. In the aggregate, these options
have a value of approximately $96 utilizing the Black-Scholes option pricing
model with the following assumptions used: expected life of three years,
volatility of 104%, dividends of 0%, and a risk free interest rate of
1.55%.




On
January 1, 2009, the Company granted, in the aggregate, options for the purchase
of 100,000 shares of its common stock at an exercise price of $1.99 per share,
under the Incentive Plan, to certain members of its advisory boards in exchange
for their advisory services to the Company. The options have a five year term
and vest ratably at the end of each of the four quarterly periods following the
date of grant. The options have a grant date value of approximately $128
utilizing the Black-Scholes option pricing model with the following assumptions
used: expected life of three years, volatility of 104%, dividends of 0%, and a
risk free interest rate of 1.55%. On February 25, 2009, the Company
granted, in the aggregate, options for the purchase of 267,500 shares of its
common stock at an exercise price of $1.70 per share, under the Incentive Plan,
to certain officers and employees.  The options have a five year term and
vest ratably upon the first, second and third anniversaries of the date of
grant. In the aggregate, these options have a value of approximately $325
utilizing the Black-Scholes option pricing model with the following assumptions
used: expected life of four years, volatility of 104%, dividends of 0%, and a
risk free interest rate of 2.06%.




On
January 1, 2010, the Company granted, in the aggregate, options for the purchase
of 75,000 shares of its common stock at an exercise price of $1.65 per share,
under the Incentive Plan, to three members of the Board of Directors. The
options have a five year term and vest ratably at the end of each of the four
quarterly periods following the date of grant.  In the aggregate,
these options have a fair value of approximately $80 utilizing the Black-Scholes
option pricing model and the following assumptions: expected life of three
years; volatility of 103.2%; dividends of 0%; and a risk free interest rate of
2.69%.




On
January 1, 2010, the Company granted, in the aggregate, options for the purchase
of 100,000 shares of its common stock at an exercise price of $1.65 per share,
under the Incentive Plan, to certain members of its advisory boards in exchange
for their advisory services to the Company. The options have a five year term
and vest ratably at the end of each of the four quarterly periods following the
date of grant. The options have a grant date value of approximately $106
utilizing the Black-Scholes option pricing model with the following assumptions
used: expected life of three years; volatility of 103.2%; dividends of 0%; and a
risk free interest rate of 2.69%.




F-31




GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





12.  Stock
Based Compensation, continued





Stock
Options, continued





At
December 31, 2010, 2009 and 2008 the unamortized value of employee stock options
outstanding under SFAS 123R was approximately $29, $406 and $353, respectively.
The unamortized portion at December 31, 2010 will be expensed over a weighted
average period of .3 years. For the years ended December 31, 2010, 2009 and 2008
costs of approximately $82, $394 and $1,650 respectively, were recognized in
connection with the vesting of these employee stock options.





A summary
of the status of the Company’s stock option plans and the changes during the
years ended December 31, 2010, 2009 and 2008, respectively, is presented in the
table below:





Number of
                                                    Options
                                                  
                                                  
                                                  Weighted
                                                    Average
                                                    Exercise
                                                    Price
                                                  
                                                  Weighted
                                                    Average
                                                    remaining
                                                    contractual
                                                    life
                                                  
                                                  Intrinsic
                                                    ValueOptions
      outstanding at January 1, 2008
                                                  
                                                  
                                                  1,191,665
                                                  
                                                  
                                                  $
                                                  13.72Granted
                                                  
                                                  
                                                  619,334Forfeited
                                                  
                                                  
                                                  (71,124
                                                  )Canceled
                                                  
                                                  
                                                  (1,105,188
                                                  )Options
      outstanding at December 31, 2008
                                                  
                                                  
                                                  634,687
                                                  
                                                  
                                                  $
                                                  3.62Granted
                                                  
                                                  
                                                  442,500Exercised
                                                  
                                                  
                                                  (44
                                                  )Forfeited
                                                  
                                                  
                                                  (109,362
                                                  )Options
      outstanding at December 31, 2009
                                                  
                                                  
                                                  967,781
                                                  
                                                  
                                                  $
                                                  2.57Granted
                                                  
                                                  
                                                  175,000
                                                  
                                                  
                                                  $
                                                  1.65Exercised
                                                  
                                                  
                                                  (151,250
                                                  )
                                                  
                                                  $
                                                  1.80Forfeited
                                                  
                                                  
                                                  (426,373
                                                  )
                                                  
                                                  $
                                                  2.38Options
      outstanding at December 31, 2010
                                                  
                                                  
                                                  565,158
                                                  
                                                  
                                                  $
                                                  2.64
                                                  
                                                  2.9
      years
                                                  
                                                  $
                                                  283Exercisable,
      December 31, 2010
                                                  
                                                  
                                                  511,558
                                                  
                                                  
                                                  $
                                                  2.73
                                                  
                                                  2.9
      years
                                                  
                                                  $
                                                  240Options
      vested during the year ended December 31, 2010
                                                  
                                                  
                                                  210,475
                                                  
                                                  
                                                  $
                                                  2.05





Restricted
Stock Units (“RSUs”)





On
May 28, 2008, the Company issued an offer to holders of outstanding stock
options issued prior to January 1, 2008 (“Eligible Options”), to exchange their
Eligible Options for RSUs on a 3 for 1 basis. Each RSU represented one share of
the Company’s common stock to be issued in the future, based on certain
time-based vesting requirements. The offer expired on June 25, 2008. As result
of this offer, on June 26, 2008, 1,105,188 stock options were accepted for
exchange and cancellation, and the Company issued 368,475 RSUs with a grant date
fair value of $2.12 per share to participants in the offer. The grant date fair
value of the restricted stock units was determined by using the closing price of
the Company’s common stock on the day immediately preceding the grant
date.





All of
the Company’s executive officers and directors participated in the exchange
offer, and as a group, accounted for approximately 78% of the stock options
exchanged and cancelled and RSUs issued in the offer.




F-32




GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





12.  Stock
Based Compensation, continued





Restricted
Stock Units (“RSUs”), continued





The
excess of the aggregate grant date fair value of the RSUs of $781 over the fair
value of the stock options canceled of $672 was added to the unamortized value
of the options canceled on May 28, 2008, which amounted to $2,863 and is being
amortized over the vesting period of the RSUs.





RSUs held
by executive officers and directors vest ratably on each of the first, second
and third anniversaries of the grant date. RSUs held by all other employees and
consultants vested ratably on the first and second anniversaries of the grant
date and as of December 31, 2010, were fully vested.





At
December 31, 2010, the unamortized value of RSUs was approximately $3. The
unamortized portion will be expensed over a weighted average period of 0.5
years. For the year ended December 31, 2010, a cost of $575 was recognized in
connection with the vesting of these employee RSUs.





A summary
of the activity related to RSUs for the year ended December 31, 2010, 2009 and
2008 are presented below:





Total
                            
                            
                            Weighted
                              Average Grant
                              Date Fair ValueNonvested
      at January 1, 2008
                            
                            
                            -
                            
                            
                            
                            -RSUs
      issued upon cancellation of optionstendered,
      June 26, 2008
                            
                            
                            368,475
                            
                            
                            $
                            2.12RSUs
      vested
                            
                            
                            -RSUs
      forfeited
                            
                            
                            (2,388
                            )Nonvested
      at December 31, 2008
                            
                            
                            366,087RSUs
      vested
                            
                            
                            (134,274
                            )RSUs
      forfeited
                            
                            
                            (2,994
                            )Nonvested
      at December 31, 2009
                            
                            
                            228,819RSUs
      vested
                            
                            
                            (155,561
                            )RSUs
      forfeited
                            
                            
                            (64,433
                            )Nonvested
      at December 31, 2010
                            
                            
                            8,825
                            
                            
                            $
                            2.12





Stock
Purchase Plan





The Stock
Purchase Plan was established for eligible employees to purchase shares of the
Company’s common stock on a monthly basis at 85% of the lower of the market
value of the Company’s common stock on the first or last business day of each
month. Under the Stock Purchase Plan, employees may authorize the Company to
withhold up to 15% of their compensation during any monthly offering period for
common stock purchases, subject to certain limitations. The Stock Purchase Plan
was implemented during July 2008 and is qualified under Section 423 of the
Internal Revenue Code.  For the years ended December 31, 2010, 2009
and 2008, 31,289, 68,981 and 22,118 shares respectively, were issued under the
Stock Purchase Plan, resulting in total proceeds of $45, $93 and $34,
respectively. Stock based compensation recognized in connection with the
issuance of these shares was $16, $31 and $11 for the years ended December 31,
2010, 2009 and 2008 respectively.




F-33




GLOBALOPTIONS
GROUP, INC. AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


(Dollars
in thousands except share and per share amounts)





12.
Stock Based Compensation, continued





Restricted
Stock Issued Under Performance Based Executive Bonus Plan




On
December 19, 2006, the Company awarded 175,000 shares of restricted stock to two
senior officers under the terms of the renewal of their respective employment
and consulting agreements.




On July
24, 2008 the Company awarded 250,000 and 187,500 shares of unvested restricted
stock to its Chief Executive Office and Chief Financial Officer, respectively,
in connection with the 2006 Executive Compensation Performance Bonus
Plan.




On
December 14, 2009, the Compensation Committee determined that 50,000 shares and
37,500 shares of restricted stock held by its Chief Executive Officer and Chief
Financial Officer, respectively, were no longer subject to
forfeiture.




During
the year ended December 31, 2009, in connection with expected performance under
a bonus program for senior executives, stock-based compensation of approximately
$1,041 was recognized for the estimated pro rata vesting of restricted
stock.  Of this amount, $946 is associated with the amortization over
the derived service period of the $975 grant date value of a restricted stock
award that is based on the achievement of certain common stock market price
milestones. The remaining amount of $95 is associated with the amortization over
the service period of the probable outcome at each reporting date of a
restricted stock award that is based on the achievement of certain performance
criteria.





During
the year ended December 31, 2010, in connection with expected performance under
a bonus program for senior executives, stock-based compensation of approximately
$1,468 was recognized for the vesting of restricted stock (See Note 10 –
Commitments and Contingencies – Employment Agreements, for additional discussion
regarding these shares).





13. 
Defined Contribution Plan





The
Company has a 401(k) profit sharing plan (the “401(k) Plan”), covering employees
who have completed three months of service and meet certain other eligibility
requirements. The 401(k) Plan provides for a discretionary matching contribution
by the Company, based on employee elective deferrals, determined each payroll
period. The 401(k) Plan also provides for an employer discretionary profit
sharing contribution. Employees vest at a rate of 25% per year in discretionary
employer contributions. The 401(k) Plan expense attributable to continuing
operations amounted to approximately $37, $37 and $28 for the years ended
December 31, 2010, 2009 and 2008, respectively.





14.  Subsequent
Events





During
January 2011, the Company received $373 of contingent consideration in
connection with its sale of SafirRosetti.




During
January, 2011 the Company issued 8,334 shares of its common stock in connection
with the exercise of stock options. The Company realized proceeds of $14 in
connection with the issuance of these shares.




On
January 18, 2011, the staff of the NASDAQ Stock Market, Inc. (“NASDAQ”)
delivered a determination letter (the “Determination Letter”) to the Company
indicating its belief that the Company no longer meets its listing standards as
that the Company may be a “public shell” with no operating business following
the sales of SafirRosetti, Preparedness Services, Fraud and SIU Services, and
Bode and the discontinuation of International Strategies.  The
Determination Letter stated that the Company has the right to appeal the
delisting and that absent such an appeal, trading in the Company’s common stock
would be suspended at the opening of business on January 27, 2011.  On
January 25, 2011, the Company sent a letter to NASDAQ stating that the Company
would appeal the determination.  As of the date hereof, the Company’s
appeal is pending.




On
February 7, 2011, the Company’s board of directors authorized the repurchase of
up to $3,000 of the Company’s common stock over a period of 18 months, at such
times, amounts and prices as the Company shall deem appropriate.




F-34




Item
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.





None.





Item
 9A Controls and Procedures.





Disclosure
Controls and Procedures




Disclosure
controls and procedures (as defined in Rule 13(a) -15(e)) are controls and other
procedures that are designed to ensure that information required to be disclosed
by a public company in the reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by a public company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to the
company’s management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure. Disclosure controls and
procedures include many aspects of internal control over financial
reporting.




Based on
their evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures were effective at December
31, 2010.




Management’s
Report on Internal Control over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) under the Exchange
Act. Internal control over financial reporting refers to a process designed by,
or under the supervision of, our Chief Executive Officer and Chief Financial
Officer and effected by our Board, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, including those policies and
procedures that:




·
            pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of our
      assets;




·
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of our management and
      directors; and




·
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on our consolidated financial
  statements.




It should
be noted, however, that because of its inherent limitations, internal control
over financial reporting cannot provide absolute assurance of the prevention or
detection of misstatements.  In addition, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.




In
connection with the preparation of this Annual Report on Form 10-K for the year
ended December 31, 2010, management, with the participation of our Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of our disclosure controls and procedures and internal controls over financial
reporting, pursuant to Rule 13a-15 under the Exchange Act, based on criteria for
effective internal control over financial reporting described in Internal
Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based on their evaluation,
our Chief Executive Officer and Chief Financial Officer have concluded that our
internal control over financial reporting was effective as of December 31,
2010.




Changes in Internal Control Over
Financial Reporting




During the fourth quarter ended
December 31, 2010, we sold our remaining operating business units, which
resulted in the elimination of personnel and related various controls that we
utilized at the business units to safeguard the assets of the business units.
Accordingly, we reassessed our critical risks and have modified our internal
controls to address the proper controls within our remaining corporate
operations, and to ensure the appropriate control over financial
reporting.  In addition, we have implemented other controls in order
to monitor the assets related to the sales of our business units, and to ensure
that the information that we have presented with respect to both continuing and
discontinued operations is accurate and complete.




Item
9B.  Other Information





There are
no items required to be disclosed on Current Report on Form 8-K during the
fourth quarter of the year ended December 31, 2010 that were not so
reported.




19




PART
III





Item 10.   Directors, Executive Officers and
Corporate Governance.





The
following table sets forth information regarding the members of our Board of
Directors and our executive officers. Harvey W. Schiller, Ph.D. and Per-Olof
Lööf became directors and officers on June 24, 2005. John P. Bujouves was
subsequently appointed to the Board of Directors on June 27, 2005, John P.
Oswald on January 28, 2008 and John D. Chapman on December 14,
2010.  All directors hold office until the next annual meeting of
shareholders and the election and qualification of their successors. Officers
are elected annually by the Board of Directors and serve at the discretion of
the Board.





Name
              
              Age
              
              PositionExecutive
      Officers and DirectorsHarvey
      W. Schiller, Ph.D.
              
              71
              
              Chairman
      of the Board of Directors and Chief Executive OfficerJeffrey
      O. Nyweide
              
              55
              
              Chief
      Financial Officer, Executive Vice President-Corporate Development,
      Treasurer and SecretaryBarry
      S. Watson
              
              56
              
              Former
      Chief Executive Officer and President of The Bode Technology Group,
      Inc.*Per-Olof
      Lööf
              
              60
              
              Vice
      Chairman of the Board of DirectorsJohn
      P. Oswald
              
              51
              
              Director
      and Chairman of the Audit, Compensation and the Nominating
      CommitteesJohn
      P. Bujouves
              
              48
              
              DirectorJohn
      D. Chapman
              
              54
              
              Director





*Effective November 30, 2010,
following the closing of the sale of Bode, Barry Watson continued to serve as an
executive officer of Bode and as such ceased serving as an executive officer of
GlobalOptions.





We
believe that the collective skills, experiences and qualifications of our
directors provide our Board with the expertise and experience necessary to
advance the interests of our stockholders.  While the Nominating
Committee of our Board has not established any specific, minimum qualifications
that must be met by each of our directors, it uses a variety of criteria to
evaluate the qualifications and skills necessary for each member of the
Board.  In addition to the individual attributes of each of our
current directors described below, we believe that having the highest
professional and personal ethics and values, consistent with our longstanding
values and standards is an important characteristic for our
directors.  They should have broad experience at the policy-making
level in business, exhibit commitment to enhancing shareholder value and have
sufficient time to carry out their duties and to provide insight and practical
wisdom based on their past experience.





The
business experience for the past five years (and, in some instances, for prior
years) of each of our directors, officers and key employees are as
follows:




20






Harvey W.
Schiller, Ph.D. has been our Chairman of the Board and Chief Executive
Officer since June 2005.  Additionally, he recently accepted an
appointment to the newly-created position of Vice Chairman and President of the
Sports, Media, and Entertainment Practice of Diversified Search Odgers
Berndtson, one of the top executive search firms in the U.S.  Dr.
Schiller had been Chairman of the Board of privately-held GlobalOptions, Inc.
since February 2004. Prior to joining GlobalOptions, Dr. Schiller served as
Chairman of Assante U.S., a provider of financial and life management products
and services, from 2002 to 2004.  Prior to joining Assante, he was
Chairman and Chief Executive Officer of YankeeNets from 1999 to
2002.  His previous experience includes President of Turner Sports,
Inc., Executive Director and Secretary General of the United States Olympic
Committee and Commissioner of the Southeastern Conference.  Prior to
joining the United States Olympic Committee, Dr. Schiller served for more than
25 years in the United States Air Force, achieving the rank of Brigadier
General.  Dr. Schiller is a former partner in QuanStar Group, a
management consulting firm in New York, and a former advisory partner of
Millennium Technology Value Partners, L.P.





Jeffrey O.
Nyweide has been our Chief Financial Officer, Executive Vice
President-Corporate Development, Treasurer and Secretary since June
2005.  Mr. Nyweide had been Chief Financial Officer and Executive Vice
President-Corporate Development of privately-held GlobalOptions, Inc. since
April 2003.  Mr. Nyweide has been a successful entrepreneur and
executive for the past 20 years.  Mr. Nyweide has been a Venture
Partner with Millennium Technology Ventures, L.P., a New York-based venture
capital firm, since 2001.  From 1987 to 2000, he co-founded and then
grew Dataware Technologies, Inc., a software and services company, as Director,
President and Chief Operating Officer, and took the company
public.  In 1995, he helped found Northern Light Technology
LLC.  Mr. Nyweide has significant experience in mergers and
acquisitions, finance and operations, as well as with establishing international
business in Europe and Asia from prior experience as a founder and managing
director of Quantum Management in Greenwich, Connecticut and Munich,
Germany.  In this role he worked with European and United States
investment banks and corporations developing merger and acquisition strategies
as well as strategic alliances.  His previous experience in the
services and solutions business also includes sales, marketing and operating
experience as an executive with The Service Bureau Company, a subsidiary of
Control Data Corporation, in Chicago, Atlanta and Greenwich.





Per-Olof
Lööf has been our Vice Chairman of the Board since June
2005.  Mr. Lööf had been Vice Chairman of the Board of privately-held
GlobalOptions, Inc. since August 2004.  Mr. Lööf has been the Chief
Executive Officer and a director of Kemet Corporation, a global manufacturer of
electronic components/capacitors supplier, since April 2005, and a director of
Devcon International Corp., a company with operating divisions in security
services, materials and construction, from 2004 to 2009.  Prior to
joining Kemet, Mr. Lööf was Managing Partner of QuanStar Group from 2003 to
2004.  Mr. Lööf has significant experience in acquisition integration
efforts through past positions at Sensormatic Electronics Corporation, a
manufacturer and provider of electronic article surveillance systems and
accessories, where he was President and Chief Executive Officer from 1999 until
its acquisition by Tyco International, Ltd. in 2002.  Prior to
Sensormatic, Mr. Lööf was Senior Vice President at NCR Corporation and Chief
Executive Officer of AT&T ISTEL.  Mr. Lööf also worked for 12
years at Digital Equipment Corporation as Vice President of Sales and
Marketing.




21




John P.
Oswald has been a director since January 2008 and has been appointed
Chairman of the Audit Committee, the Compensation Committee and the Nominating
Committee.  Mr. Oswald has been the President and Chief Executive
Officer of the Capital Trust Group, an international merchant/investment bank
with offices in London, New York, Washington, D.C. and Beirut, since
1993.  Mr. Oswald is responsible for the U.S. operations of Capital
Trust Group and its worldwide investment banking operations.  His
responsibilities have included managing a number of private equity funds, both
in U.S. and European markets, which have focused on mezzanine and equity
investments ranging from approximately $10 million to $100 million in middle
market, private and public companies with revenues from $20 billion to $1
billion.  Since 1993, Mr. Oswald has also managed an extensive
portfolio of U.S. real estate comprised of office/retail space primarily in
suburban areas in the U.S. and Europe.  The investment
banking/advisory function of Capital Trust Group includes advising clients with
respect to mergers and acquisitions, financings and dispositions of holdings in
the oil and gas, real estate, entertainment, education, construction, media and
communications areas.  Mr. Oswald has also been responsible for
completing numerous public debt offerings and public issuances of stock for the
Capital Trust Group’s portfolio companies and clients.  From December
1, 2006 to 2009, Mr. Oswald was the President and Chief Executive Officer of
Verus International Group, Ltd., an international merchant bank with offices in
New York and Barbados.  From 1996 to 2005, Mr. Oswald served as a
director of Kirkland’s Inc.  From 1986 to 1996, Mr. Oswald was a
partner in the international law firm of Lord Day & Lord.  He
began his career as an accountant at Arthur Andersen & Co. and he is a
certified public accountant.  Mr. Oswald serves as a director for
Preem Holdings AB, the largest downstream refining operation in Europe, Samir,
the third largest public company and the only downstream oil refinery in
Morocco, and numerous privately held companies.





John P.
Bujouves has been a director since June 2005.  Mr. Bujouves
serves as Chairman of Globacor Capital Inc., a Canadian private equity
investment firm that invests and holds interests in a wide range of companies,
since 1996.  From 2003 to 2010, Mr. Bujouves was the President and a
director of Bayshore Asset Management Inc., a provider of asset management
services, and from 1999 to 2010 was the Chief Executive Officer of Integris
Funds Ltd., a Cayman Islands based mutual fund company.  From 1998 to
2010 Mr. Bujouves served as Chairman of J&T Bank and Trust, Inc. (formerly
known as Bayshore Bank & Trust Corp.), one of Barbados’ largest private
banks.  Mr. Bujouves is also a director of Safe Storage Depot, a
real-estate development company, Numeric Answers Inc., a corporate accounting
firm, DLK on Avenue, a cosmetic medical clinic, and the former Chairman of the
Ontario Arthritis Society.  Mr. Bujouves’ former experience includes
directing CIBC’s International Private Banking group in Canada from 1993 to
1996.  Prior to that, in 1990, as Managing Partner for Royal Trust
International, Mr. Bujouves worked globally and launched Royal Trust
Corporation’s first two international offices located in the United
States.





John D. Chapmanwas appointed as a director in 2010.  Mr. Chapman has served as
the Chairman of the Board of ACP Capital Limited since July 2008, and the
Chairman of the Board of ACP Mezzanine Limited from July 2008 to June 2010, when
it was placed in voluntary liquidation.  ACP Capital Limited invests
primarily in the equity of small and mid-cap European companies, and ACP
Mezzanine Limited invested primarily in mezzanine debt.  Mr. Chapman
also has served as the Chairman of the Board of each of the Ottoman Fund Limited
and the Black Sea Property Fund Ltd since November 2008 and November 2007,
respectively, companies investing in Turkish and Bulgarian
properties.  In addition, Mr. Chapman has been an Executive Director
of the South African Property Opportunities Plc since March 2009, a company
investing in South African properties, and a member of the Board of Trinity
Capital Plc since December 2010, a company investing in Indian
properties.  Previously, Mr. Chapman was an Executive Director of the
Kazakhstan Investment Fund Ltd from June 2000 to January 2006, a company that
invested in Kazakhstan, when it was placed in voluntary liquidation, an
Executive Director of the Central Asia Regional Growth Fund Plc, a company that
invested in the central Asia region, from March 2001 to December 2009, when it
was placed in voluntary liquidation, and an Executive Director of the Ukraine
Fund Ltd from June 2002 to June 2006, a company that invested in Ukraine, when
it was placed in voluntary liquidation.  Additionally, Mr. Chapman was
Chairman of the Board of Principle Capital Investment Trust Plc from March 2009
to April 2009, a company investing in special situations in the United Kingdom,
Chairman of the Board of Momentum Energy International Inc, a Canadian energy
company investing in Ukraine, from March 2004 to March 2006 when it was sold,
and a director of Muni Funding Corporation of America LLC, a company investing
in high yield municipal debt, from June 2008 to February 2009.  Mr.
Chapman’s previous employment also includes consulting work for the World Bank,
US governmental and foreign entities on securities regulation and financial
sector development in the Middle East, Africa, Asia and emerging Europe, a
Senior Manager resident in eastern Europe for Price Waterhouse, an international
audit and consulting firm, and Trial Attorney with the U.S. Department of
Justice.  Mr. Chapman received a Bachelor of Arts degree in Philosophy
from Bates College and a Juris Doctor degree from the University of Texas at
Austin.  He is a Chartered Financial Analyst.




22




Barry S.
Watson was the Chief Executive Officer and President of Bode from May 19,
2010 until Bode was sold on November 30, 2010.   Mr. Watson
joined Bode as President in February 2008, bringing more than thirty years of
executive experience in government management, research and program
development.  Prior to joining Bode, Mr. Watson founded aBear
Solutions, LLC, in May 2006, an executive consulting firm offering expert advice
in executive management, strategic planning, bid preparation, and mergers and
acquisitions in the federal government services arena. Mr. Watson has also held
management positions at Alion Science and Technology Corporation (“Alion”),
formerly IIT Research Institute, from April 1977 to April 2006 including Chief
Strategic Officer and Sector Senior Vice President.  Mr. Watson's
management experience includes defense operational support services, IT,
engineering solutions, environmental, homeland security and weapons research and
development.






Director
Qualifications




We
believe that the collective skills, experiences and qualifications of our
directors provide our Board with the expertise and experience necessary to
advance the interests of our stockholders.  While the Nominating
Committee of the Board has not established any specific, minimum qualifications
that must be met by each of our directors, it uses a variety of criteria to
evaluate the qualifications and skills necessary for each member of the
Board.  In general, the Nominating Committee expects directors to have
broad experience at the policy-making level in business, exhibit commitment to
enhancing shareholder value, have sufficient time to carry out their duties and
provide insight and practical wisdom based on their past
experience.  Additionally, we believe that having the highest
professional and personal ethics and values, consistent with our longstanding
values and standards, is an essential characteristic for our
directors.




A brief
discussion of the experiences and skills that led to the conclusion is provided
below:




·
            Harvey W. Schiller,
      Ph.D.  The Board believes that, from his military career
      and as an executive of numerous entities, Dr. Schiller brings to the Board
      strong leadership and organizational skills and a deep commitment to
      integrity and excellence.




·
            Per-Olof Lööf.The Board believes
      that, as a result of his experiences serving in the role of Chief
      Executive Officer for multiple companies, Mr. Lööf possesses significant
      senior management experience and provides the Board with valuable insight
      on strategic initiatives.




·
            John P.
      Oswald.  The Board believes that Mr. Oswald’s in-depth
      knowledge of numerous industries, international business experience and
      service on the board of directors of several companies provides the Board
      with important knowledge and perspective on the evaluation of business
      opportunities.




·
            John P. Bujouves.The
      Board believes that Mr. Bujouves provides the Board with extensive
      business and finance knowledge earned through his significant experience
      in banking and his service as a member of the board of directors of
      numerous entities.




·
            John D. Chapman. The Board believes that, as a
      result of his extensive experience working with investment funds and his
      legal background, Mr. Chapman provides the Board with valuable finance and
      legal knowledge and boardroom
experience.






Family
Relationships




There are no family relationships among
our executive officers and directors.




23




Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities and Exchange Act of 1934, as amended, requires our
directors, executive officers and holders of more than 10% of our common stock
to file with the SEC initial reports of ownership and reports of changes in the
ownership of our common stock and other equity securities of
ours.  Such persons are required to furnish us copies of all Section
16(a) filings.





Based solely upon a review of the
copies of the forms furnished to us, we believe that our officers and directors
complied with all applicable filing requirements during the 2010 fiscal year
except as set forth below:




On August
6, 2010, Mr. Nyweide filed a Statement of Changes in Beneficial Ownership of
Securities covering one transaction that occurred on July 16, 2010.




On August
6, 2010, Dr. Schiller filed a Statement of Changes in Beneficial Ownership of
Securities covering one transaction that occurred on July 16, 2010.




On
September 8, 2010, Mr. Nyweide filed a Statement of Changes in Beneficial
Ownership of Securities covering one transaction that occurred on June 26,
2010.




On
September 8, 2010, Dr. Schiller filed a Statement of Changes in Beneficial
Ownership of Securities covering one transaction that occurred on June 26,
2010.




On
January 20, 2011, Vicis Capital, LLC filed a Statement of Changes in Beneficial
Ownership of Securities covering one transaction that occurred on October 27,
2010.







Board
Committees




Our Board of Directors has three
standing committees to assist it with its responsibilities. These committees are
described below.





The Audit Committee, which is
comprised solely of directors who satisfy the SEC audit committee membership
requirements, is governed by a Board-approved charter that contains, among other
things, the committee’s membership requirements and responsibilities. The Audit
Committee oversees our accounting, financial reporting process, internal
controls and audits, and consults with management and our independent registered
public accounting firm on, among other items, matters related to the annual
audit, the published financial statements and the accounting principles applied.
As part of its duties, the Audit Committee appoints, evaluates and retains our
independent registered public accounting firm. It maintains direct
responsibility for the compensation, termination and oversight of our
independent registered public accounting firm and evaluates its qualifications,
performance and independence. The committee also monitors compliance with our
policies on ethical business practices and reports on these items to the Board.
The Audit Committee has established policies and procedures for the pre-approval
of all services provided by our independent registered public accounting firm.
Our Audit Committee is comprised of Messrs. Oswald, Bujouves and Lööf, and Mr.
Oswald is the Chairman of the committee.





The Board has determined that Mr.
Oswald, who currently is a member of the Board and chairman of the Audit
Committee, is the Audit Committee financial expert, as defined under the
Exchange Act, and is independent as defined by the rules of NASDAQ. The Board
made a qualitative assessment of Mr. Oswald’s level of knowledge and experience
based on a number of factors, including his experience as a certified public
accountant for a major accounting firm and financial sophistication from his
years managing private investment funds.





The Compensation Committee,
which is comprised solely of independent directors, determines all compensation
for our Chief Executive Officer; reviews and approves corporate goals relevant
to the compensation of our Chief Executive Officer and evaluates our Chief
Executive Officer’s performance in light of those goals and objectives; reviews
and approves objectives relevant to other executive officer compensation;
reviews and approves the compensation of other executive officers in accordance
with those objectives; administers our stock option plans; approves severance
arrangements and other applicable agreements for executive officers; and
consults generally with management on matters concerning executive compensation
and on pension, savings and welfare benefit plans where Board or stockholder
action is contemplated with respect to the adoption of or amendments to such
plans. The committee makes recommendations on organization, succession, the
election of officers, consultantships and similar matters where Board approval
is required. Our Compensation Committee is comprised of Messrs. Oswald,
Bujouves, Lööf and Chapman (as of February 7, 2011). Mr. Oswald is the Chairman
of the committee.




24




The Nominating Committee
considers and makes recommendations on matters related to the practices,
policies and procedures of the Board and takes a leadership role in shaping our
corporate governance. As part of its duties, the committee assesses the size,
structure and composition of the Board and its committees, coordinates
evaluation of Board performance and reviews Board compensation. The committee
also acts as a screening and nominating committee for candidates considered for
election to the Board. In this capacity it concerns itself with the composition
of the Board with respect to depth of experience, balance of professional
interests, required expertise and other factors. The committee evaluates
prospective nominees identified on its own initiative or referred to it by other
Board members, management, stockholders or external sources and all
self-nominated candidates.  The committee uses the same criteria for
evaluating candidates nominated by stockholders and self-nominated candidates as
it does for those proposed by other Board members, management and search
companies. Our Nominating Committee is comprised of Messrs. Oswald, Bujouves and
Lööf. Mr. Oswald is the chairman of the committee.





Code
of Business Conduct and Ethics





We have
adopted a Code of Ethics applying to all of our directors, officers and
employees. The Code of Ethics is reasonably designed to deter wrongdoing and
promote (i) honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships, (ii) full, fair, accurate, timely and understandable disclosure
in reports and documents filed with, or submitted to, the SEC and in other
public communications made by us, (iii) compliance with applicable governmental
laws, rules and regulations, (iv) the prompt internal reporting of violations of
the Code of Ethics to appropriate persons identified in the Code of Ethics, and
(v) accountability for adherence to the Code of Ethics.





A copy of
the Code of Ethics is available in the Investor Relations; Corporate Governance,
portion of our website, www.globaloptionsgroup.com.  Additional copies
of the Code of Ethics may be obtained without charge, from us by writing or
calling: 75 Rockefeller Plaza, 27th Floor, New York, New York
10019, Attn: Chief Financial Officer, tel: (212) 445-6261.




Item 11.  Executive
Compensation





(Dollar
amounts in thousands, except per share amounts)





Summary
Compensation Table





The
following table sets forth information with respect to compensation earned by
the named executive officers:





NameandPrincipal
                        Position
                      
                      Year
                      
                      Salary
                        ($)
                      
                      
                      Bonus
                        ($)
                      
                      
                      Stock
                        Awards
                        ($)(1)
                      
                      
                      Option
                        Awards
                        ($)
                      
                      
                      AllOther
                        Compensation
                        ($)
                      
                      
                      Total
                        ($)Harvey
      W. Schiller, Ph.D.
                      
                      2010
                      
                      
                      331
                      
                      
                      
                      150
                      (2)
                      
                      
                      200
                      (3)
                      
                      
                      -
                      
                      
                      
                      2,484
                      (4)
                      
                      
                      3,159Chairman
      and Chief Executive Officer
                      
                      2009
                      
                      
                      425
                      
                      
                      
                      100
                      (5)
                      
                      
                      423
                      (6)
                      
                      
                      -
                      
                      
                      
                      5
                      (7)
                      
                      
                      953Jeffrey
      O. Nyweide
                      
                      2010
                      
                      
                      375
                      
                      
                      
                      400
                      (8)
                      
                      
                      150
                      (3)
                      
                      
                      -
                      
                      
                      
                      1,509
                      (9)
                      
                      
                      2,420Chief
      Financial Officer and Executive Vice President
                      
                      2009
                      
                      
                      375
                      
                      
                      
                      75
                      (5)
                      
                      
                      317
                      (6)
                      
                      
                      -
                      
                      
                      
                      131
                      (10)
                      
                      
                      889Barry
      S. Watson
                      
                      2010
                      
                      
                      271
                      (11)
                      
                      
                      200
                      (12)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      350
                      (13)
                      
                      
                      821Former
      Chief Executive Officer of Forensic DNA Solutions and Products
      unit*.
                      
                      2009
                      
                      
                      239
                      
                      
                      
                      262
                      (14)
                      
                      
                      -
                      
                      
                      
                      6
                      (15)
                      
                      
                      1
                      (16)
                      
                      
                      595




25




*
Effective November 30, 2010, following the closing of the sale of Bode, Barry
Watson continued to serve as an executive officer of Bode and as such ceased
serving as an executive officer of GlobalOptions.





(1)
            The
      amounts listed in this column are performance-based compensation and
      reflect the probable outcome award value at the date of grant in
      accordance with FASB ASC Topic 718.  The stock awards for each
      of Dr. Schiller and Mr. Nyweide are provided under the terms of a
      performance bonus program pursuant to the terms outlined by the
      Compensation Committee of the Board of Directors (the “Performance Bonus
      Plan”) established on December 5, 2006, and as outlined in the Executive
      Compensation Plan.  The performance measures, as determined by
      the Compensation Committee, include components for operations and business
      integration improvements, achieving revenue goals, overall performance of
      the company’s stock price and for 2010, incorporates contractual
      performance deemed earned on July 16, 2010 upon the sale of Preparedness
      Services.





Summary of
Awards.  On December 5, 2006, the Compensation Committee
awarded to each of Dr. Schiller and Mr. Nyweide performance based awards
covering performance for the period January 6, 2006 through December 31, 2009,
under which they could earn vested shares of our Company stock.  In
April, 2008, these awards were modified, on August 13, 2009 were extended to the
year 2010 and on January 31, 2010, extended to the year 2011.





Seeding of Restricted Shares Under
the Plan.  In order to seed shares of non-vested restricted
stock under the Performance Bonus Plan, on December 19, 2006, Dr. Schiller
and Mr. Nyweide were granted 100,000 shares and 75,000 shares and on July
24, 2008 were granted 250,000 and 187,500 shares of restricted stock,
respectively, under the Long Term Incentive Plan which was subject to vesting
upon the achievement of performance criteria.  As of December 31,
2010, there remain no unvested shares.





Vesting Of Shares from Inception of
Plan. (a) On December 12, 2007, our Compensation Committee determined
that 6,250 shares and 4,687 shares of restricted stock, valued on date of grant
at $78 and $58, held by Dr. Schiller and Mr. Nyweide, respectively, effective on
January 1, 2008, were no longer subject to forfeiture. (b) Effective on August
15, 2008, our Compensation Committee determined that 25,000 shares and 18,500
shares of restricted stock, valued on date of grant at $163 and $122, held by
Dr. Schiller and Mr. Nyweide, respectively, were no longer subject to
forfeiture. (c) Effective on December 14, 2009, our Compensation Committee
determined that 50,000 shares and 37,500 shares of restricted stock, valued on
date of grant at $107 and $80, held by Dr. Schiller and Mr. Nyweide,
respectively, were no longer subject to forfeiture. (d) Effective on July 15,
2010, in connection with the sale of Preparedness Services, our Compensation
Committee determined that 268,750 shares and 201,813 shares of restricted stock,
valued on date of grant at $765 and $574, held by Dr. Schiller and Mr. Nyweide,
respectively, were no longer subject to forfeiture.





(2)
            Amount
      represents a cash bonus earned in recognition for services provided in the
      year 2010 and paid on December 15,
2010.





(3)
            On
      January 31, 2010, pursuant to the renewal terms of their respective
      agreements, the Compensation Committee extended the eligibility period to
      January 31, 2012 for the performance awards available to be earned by Dr.
      Schiller and Mr. Nyweide under the Performance Bonus Plan, resulting in a
      new award effective on January 31, 2010.  Pursuant to the terms
      of the Performance Bonus Plan, we have estimated the probable values at
      January 31, 2009 of those modifications to be $200 and $150,
      respectively.  Incorporated into this award was the continuation
      of uncapped performance measures.  Accordingly, the effective
      limitation for this award on the date of the award would have been 839,245
      and 628,687 shares valued at $ 1,174 and $880 for Dr. Schiller and Mr.
      Nyweide respectively, representing the remaining shares that would have
      been available under the Long-term Incentive Plan as of the date of this
      award.





(4)
            Amount
      represents cash awards paid and accrued and stock-based awards vested in
      connection with the occurrence of a “change of control” as defined in the
      employment agreements of Dr. Schiller, which the Compensation Committee of
      the Board determined resulted upon the completion of the sale of
      Preparedness Services, including: (a) the probable grant date value of
      $233 for restricted stock awards deemed earned by Dr. Schiller upon the
      sale of Preparedness Services and not paid in cash in lieu of shares and
      not otherwise included in the “stock awards” column in this
      table.  (b) the target cash bonus award for the year 2010 was
      deemed to be earned. Out of the amount of the 2010 cash bonus award that
      was deemed earned through the date of the sale of Preparedness Services,
      $270 was paid on August 13, 2010, and the remaining $230 will be paid in
      March 2011, or before.  (c) $1,685 was paid into a “rabbi trust”
      on August 20, 2010 and will be disbursed to Dr. Schiller six months after
      his separation of service for any reason (for purposes of
      Section 409A of the Internal Revenue Code, the deferred compensation
      rules, which may include a point in time when Dr. Schiller works
      part-time) which date of separation of service has been determined to be
      December 31, 2010, representing: (i) salary that would have been earned
      for the period August 1, 2010 through January 31, 2012; (ii) the target
      cash bonus for the period January 1, 2011 through January 31, 2012; and
      (iii) cash in lieu of additional shares of stock, for the number of shares
      of stock deemed earned upon the vesting of the target stock bonus awards
      that were in excess of the number of shares of restricted stock previously
      granted to Dr. Schiller.




26




The other
amount also includes cash payments of $53 for the rental of an apartment in New
York City, $7 for the reimbursement of professional fees, and payments toward
travel to and from Dr. Schiller’s home, and life insurance
benefits.





(5)
            Amount
      represents bonus earned in accordance with achievement of performance
      criteria established by the Compensation Committee. The bonus amount, as
      approved by the Compensation Committee, was paid on December 24,
      2009.





(6)
            On
      August 13, 2009 the Compensation Committee extended the eligibility period
      to December 31, 2011 for the performance awards available to be earned by
      Dr. Schiller and Mr. Nyweide under the Performance Bonus Plan, resulting
      in a new award effective on August 13, 2009.  Pursuant to the
      terms of the Performance Bonus Plan, we have estimated the probable value
      at August 13, 2009 of that modification to be $423 and $317,
      respectively.  Incorporated into this award is the continuation
      of uncapped performance measures.  Accordingly, the effective
      limitation for this award would be 888,065 and 665,304 shares valued at $
      1,598 and $1,198 for Dr. Schiller and Mr. Nyweide respectively,
      representing the remaining shares available under the Long-term Incentive
      Plan as of the date of this award.





(7)
            Amount
      includes payments toward parking and life insurance
    benefits.





(8)
            Amount
      represents bonus of $150 earned in connection with the sale of
      Preparedness Services and paid $75 on August 11, 2010 and $75 on October
      15, 2010, and bonus of $250 earned in connection with the sale of Bode
      with $125 paid on December 10, 2010 and $125 to be paid on or about
      January 31, 2012.





(9)
            Amount
      represents cash awards paid and accrued and stock-based awards vested in
      connection with the occurrence of a “change of control” as defined in the
      employment agreements of Mr. Nyweide, which the Compensation Committee of
      the Board determined resulted upon the completion of the sale of
      Preparedness Services, including: (a) the probable grant date value of
      $175 for restricted stock awards deemed earned by Mr. Nyweide upon the
      sale of Preparedness Services and not paid in cash in lieu of shares and
      not otherwise included in the “stock awards” column in this
      table.  (b) the target cash bonus award for the year 2010 was
      deemed to be earned. Out of the amount of the 2010 award that was deemed
      earned through the date of the sale of Preparedness, $202 was paid on
      August 13, 2010, and the remaining $173 will be paid in March 2011, or
      before. (c) $821was paid into a “rabbi trust” on August 20, 2010 and will
      be disbursed to Mr. Nyweide six months after his separation of service for
      any reason (for purposes of Section 409A of the Internal Revenue
      Code, the deferred compensation rules, which may include a point in time
      when Mr. Nyweide works part-time) which date of separation of service has
      been determined to be January 31, 2012, representing: (i) salary that
      would have been earned for the period August 1, 2010 through January 31,
      2012; (ii) the target cash bonus for the period January 1, 2011 through
      January 31, 2012; and (iii) cash in lieu of additional shares of stock,
      for the number of shares of stock deemed earned upon the vesting of the
      target stock bonus awards that were in excess of the number of shares of
      restricted stock previously granted to Mr.
  Nyweide.





Amount
also includes cash payments of $108 for the rental of an apartment in New York
City, $18 for the reimbursement of professional fees, parking in New York City,
401(k) and life insurance.





(10)
            Amount
      includes payments of a housing allowance of $108 for the rental of an
      apartment in New York City, parking, life insurance, 401(k), and
      reimbursement of professional fees of
$10.





(11)
            Amount
      represents compensation earned through November 30, 2010, the date of the
      Bode sale.





(12)
            Amount
      represents bonus earned through October 31, 2010, one moth prior to the
      date of the sale of Bode, in accordance with annual performance criteria,
      and paid during November, 2010.





(13)
            Amount
      represents $150 retention bonus earned upon the sale of Bode and paid in
      November 2010, and $200 of salary continuation earned upon the sale of
      Bode and to be paid to Mr. Watson by the purchaser of Bode after the
      consummation of the sale of Bode out of funds accrued and recorded by
      Global upon the closing of the sale of
Bode.




27




(14)
            Amount
      represents bonus earned in accordance with annual performance criteria and
      paid in 2010.





(15)
            Amount
      represents the probable value of the award of an option to purchase 5,000
      shares of common stock, with an exercise price of $1.70, scheduled vesting
      over three years and a term of five
years.





(16)
            Amount
      represents life insurance benefits.





Employment
Agreements and Payments upon a Change of Control





Harvey
W. Schiller, Ph.D.





We
entered into a three-year employment agreement with Dr. Schiller, our
Chairman and Chief Executive Officer, in January 2004.  The agreement
was initially amended on December 19, 2006 to extend the term through January
31, 2010; subsequently on August 13, 2009 the term was extended through January
31, 2011 and on January 31, 2010 pursuant to its terms was extended to January
31, 2012.  Effective May 11, 2010, the Company again modified its
employment agreement with Dr. Schiller to induce him to remain with the Company
in the event that he became entitled to terminate his employment agreement as a
result of the occurrence of a “change of control,” as defined under his
employment agreement, which the Compensation Committee of the Board determined
would result from the completion of the sale of Preparedness
Services.  On December 14, 2010 we further modified our agreement with
Dr. Schiller, principally, to extend the term of Dr. Schiller’s employment with
us through April 30, 2012.   Pursuant to the terms of the
modified employment agreement, Dr. Schiller continues to have the right to
terminate his employment agreement if a “change of control” event occurs prior
to the end of the term of his employment agreement. A change of control event
could occur if more than fifty percent of the combined voting power of the
outstanding securities of the Company changes from the present stockholders.





The sale
of Preparedness Services was completed on July 16, 2010.  As a result
of this sale, the Company’s employment agreement with Dr. Schiller, as
modified (the “Schiller Employment Agreement”), provides that Dr. Schiller
will continue to serve as our Chairman and Chief Executive Officer through April
30, 2012, and devote the necessary working time and efforts, but less than
substantial working time and efforts, to the business of GlobalOptions
Group.  The Schiller Employment Agreement provides for a base salary
of $180 per annum, plus certain living expenses through December 31, 2010 and
then reduced to $150 per annum for the duration of the term.  In
addition to his base salary, in December 2010, Dr. Schiller was awarded a cash
bonus of $150 and Dr. Schiller became eligible for a discretionary cash
bonus on or before the end of the term.  Following the completion of
the term of the Schiller Employment Agreement, the Company will have the option
to continue to employ Dr. Schiller on a month-to-month basis for $20 per
month.





Additionally,
pursuant to the terms of the Schiller Employment Agreement, upon the sale of
Preparedness Services, 268,750 shares of restricted stock granted under the 2006
Executive Compensation Performance Bonus Plan (the “Performance Bonus Plan”) and
31,912 restricted stock units (“RSUs”) held by Dr. Schiller became fully vested
and non-forfeitable, and the target cash bonus award for the year 2010 was
deemed to be earned. Out of the amount of the 2010 award that was deemed earned
through the date of the sale of Preparedness Services, $269,863 was paid on
August 13, 2010, and the remaining $230,137 will be paid in March
2011.  In addition, $1,684,932 was paid into a “rabbi trust” on August
20, 2010 and will be disbursed to Dr. Schiller six months after his separation
of service for any reason (for purposes of Section 409A of the Internal
Revenue Code, the deferred compensation rules, which may include a point in time
when Dr. Schiller works part-time) representing: (i) salary that would have
been earned for the period August 1, 2010 through January 31, 2012; (ii) the
target cash bonus for the period January 1, 2011 through January 31, 2012; and
(iii) cash in lieu of additional shares of stock, for the number of shares of
stock deemed earned upon the vesting of the target stock bonus awards that were
in excess of the number of shares of restricted stock previously granted to Dr.
Schiller.  The Compensation Committee has determined that December 31,
2010 is the date of such separation of service for purposes of Section 409A of
the Internal Revenue Code.





Dr.
Schiller elected to have 113,650 shares, valued at $225,027, withheld in
satisfaction of his tax obligation in connection with the vesting of the
restricted stock and RSUs.




28





Jeffrey
O. Nyweide





Effective
as of August 1, 2007, Mr. Nyweide and ourselves terminated his consulting
agreement and entered into an employment agreement providing for
Mr. Nyweide’s service as our Chief Financial Officer, Executive Vice
President—Corporate Development, Treasurer and Secretary, reporting to the
Chairman of the Board.  The employment agreement, which had an initial
term through January 31, 2010, was amended on August 13, 2009 to extend its term
through January 31, 2011, and pursuant to its terms, on January 31, 2010, was
further extended to January 31, 2012.  Effective May 11, 2010, the
Company again modified its employment agreement with Mr. Nyweide to induce him
to remain with the Company in the event that he became entitled to terminate his
employment agreement as a result of the occurrence of a “change of control,” as
defined under his employment agreement, which the Compensation Committee
determined would result from the sale of Preparedness Services. On December 14,
2010, we further modified our agreement with Mr. Nyweide to extend the term of
his employment agreement to July 31, 2012.  Pursuant to the terms of
the modified employment agreement, Mr. Nyweide continues to have the right to
terminate his employment agreement if a “change of control” event occurs prior
to the end of the term of his employment agreement. A change of control event
could occur if more than fifty percent of the combined voting power of the
outstanding securities of the Company changes from the present stockholders.





The
sale of Preparedness Services was completed on July 16, 2010.  As a
result of this sale, the Company’s employment agreement with Mr. Nyweide,
as modified (the “Nyweide Employment Agreement”), provides that Mr. Nyweide
will continue to serve as its Chief Financial Officer and Executive Vice
President through July 31, 2012.   Mr. Nyweide will receive a
base salary of $375 per annum for the first eighteen month period of such term
and a reduced base salary of $180 per annum for the remaining six months, during
which period Mr. Nyweide’s responsibilities are intended to be
reduced.  In addition to his base salary, Mr. Nyweide earned a
performance bonus of $150,000 in connection with the sale of Preparedness
Services ($75 paid on August 11, 2010 and the remainder paid on October 15,
2010), on November 30, 2010, Mr. Nyweide earned a performance bonus of $250 in
connection with the sale of Bode ($125 paid on December 10, 2010 and the
remainder payable on January 31, 2012).  Following the completion of
the term of the Nyweide Employment Agreement, the Company will have the option
to continue to employ Mr. Nyweide on a month-to-month basis for $20 per
month.





Additionally,
pursuant to the terms of the Nyweide Employment Agreement, upon the sale of
Preparedness Services, 201,813 shares of restricted stock granted under the
Performance Bonus Plan and 14,093 RSUs held by Mr. Nyweide became fully vested
and non-forfeitable, and the target cash bonus award for the year 2010 was
deemed to be earned. Out of the amount of the 2010 award that was deemed earned
through the sale of Preparedness Services, $202,397 was paid on August 13, 2010,
and the remaining $172,603 will be paid in March 2011.  In addition,
$821,474 was paid into a “rabbi trust” on August 23, 2010 and will be disbursed
to Mr. Nyweide six months after his separation of service for any reason (for
purposes of Section 409A of the Internal Revenue Code, the deferred compensation
rules, which may include a point in time when Mr. Nyweide works part-time),
representing: (i) 50% of the salary and 100% of benefits, including a housing
allowance, that would have been earned for the period August 1, 2010 through
January 31, 2012; (ii) 50% of the target cash bonus for the period January 1,
2011 through January 31, 2012 ; and (iii) cash in lieu of additional shares of
stock for 50% of the number of shares of stock deemed earned upon the vesting of
the target stock bonus awards that were in excess of the number of shares of
restricted stock previously granted to Mr.  Nyweide. The Compensation
Committee has determined that January 31, 2012 is the date of such separation of
service for purposes of Section 409A of the Internal Revenue Code.





Mr.
Nyweide elected to have 72,977 shares, valued at $144,494, withheld in
satisfaction of his tax obligations in connection with the vesting of the
restricted stock and RSUs.





Barry S. Watson





Bode
entered into a two year employment agreement with Barry S. Watson, its then
President on February 7, 2008. The employment agreement provided, among
other things, for annual compensation of $225 per annum, an annual performance
bonus and for the payment of up to six months of contractual compensation for
termination under certain circumstances.




29




On May
15, 2008, Mr. Watson’s employment agreement was amended to clarify certain of
its termination provisions.   Effective on June 1, 2009, Mr.
Watson’s annual compensation was increased to $250 per annum.  On
October 26, 2009, Mr. Watson’s employment agreement was amended to modify its
termination provisions, including providing for compensation in the event of a
change of control of Bode.  On April 1, 2010, Bode amended the
employment agreement with Mr. Watson to reflect Mr. Watson’s promotion to
Chief Executive Officer and President of Bode. This amendment extended the term
of the employment agreement to July 31, 2011, and provided for an increase
in annual salary, effective February 1, 2010, to $300 per
annum.  Effective November 30, 2010, following the closing of the sale
Bode, Mr. Watson will continue to serve as an executive officer of Bode and as
such will cease serving as an executive officer of the GlobalOptions, and any
obligations owed to him by GlobalOptions under his employment agreement also
ceased.







Benefit
Plans





Amended
and Restated 2006 Long-Term Incentive Plan





Our 2006
Long-Term Incentive Plan was originally adopted on December 5,
2006.  On July 24, 2008, our stockholders approved the Amended and
Restated 2006 Long-Term Incentive Plan (the “Incentive Plan”), which became
effective immediately following its approval and replaced the original 2006
Long-Term Incentive Plan.




The
Incentive Plan provides for the issuance of up to 3,000,000 shares of our common
stock, increased from 1,500,000 under the original 2006 Long-Term Incentive
Plan.  As of February 9, 2011 there are options to purchase 564,491
shares of our common stock and 8,825 shares of common stock underlying
restricted stock units outstanding under this plan.  The Compensation
Committee has the authority to determine the amount, type and terms of each
award, but may not grant awards under the Incentive Plan, in any combination,
for more than 625,000 shares of our common stock to any individual during any
calendar year, increased from 312,500 under the original 2006 Long-Term
Incentive Plan.  As of February 9, 2011, 1,368,917 shares remain
eligible to be issued under the Incentive Plan.





The
Incentive Plan is administered by the Compensation Committee, or in the absence
of the Compensation Committee, the entire Board.  The Compensation
Committee has sole authority to interpret the Incentive Plan and set the terms
of all awards, including, without limitation, determining the performance goals
associated with performance-based awards, determining the recipients of awards,
determining the types of awards to be granted, and the making policies and
procedures relating to administration of the Incentive Plan.





The
purpose of the Incentive Plan is to allow us to continue to provide incentives
to such participants who are responsible for our success and growth, assist us
in attracting, rewarding and retaining employees of experience and ability,
facilitate the completion of strategic acquisitions, link incentives with
increases in stockholder value and to further align participants’ interests with
those of other stockholders.  In general, the Incentive Plan empowers
us to grant stock options and stock appreciation rights, and performance-based
cash and stock and other equity based awards, including restricted stock and
restricted stock units.  The Incentive Plan will also continue to
allow us to grant performance-based compensation awards that meet the
requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), thereby preserving our ability to receive tax deductions for the
awards.





The
Incentive Plan may be amended, suspended or terminated by the Board, except that
(a) no amendment shall be made that would impair the rights of any participant
under any award theretofore granted without the participant’s consent, and (b)
no amendment shall be made which, without the adoption of our stockholders,
would (i) materially increase the number of shares that may be issued under the
Incentive Plan, except as the Compensation Committee may appropriately make
adjustments; (ii) materially increase the benefits accruing to the participants
under the Incentive Plan; (iii) materially modify the requirements as to
eligibility for participation in the Incentive Plan; (iv) decrease the exercise
price of an option to less than 100% of the Fair Market Value (as defined under
the Incentive Plan) per share of common stock on the date of grant thereof; or
(v) extend the term of any option beyond ten years.





No award
may be granted under the Incentive Plan after the tenth anniversary of the
Incentive Plan’s effective date, December 5, 2006.




30




Amended
and Restated 2006 Employee Stock Purchase Plan




Our 2006
Stock Purchase Plan was originally adopted on December 5, 2006.  On
July 24, 2008, our stockholders approved the Amended and Restated 2006 Employee
Stock Purchase Plan (the “Stock Purchase Plan”), which became effective
immediately following its approval and replaced the original 2006 Employee Stock
Purchase Plan.





The Stock
Purchase Plan permits eligible employees to automatically purchase at the end of
each month at a discounted price, a certain number of shares of our common stock
by having the effective purchase price of such shares withheld from their base
pay.  The Stock Purchase Plan provides for the issuance of up to
2,000,000 shares of our common stock, increased from 250,000 under the original
2006 Employee Stock Purchase Plan.  As of February 9, 2011, 1,877,612
shares remain eligible to be issued under the Stock Purchase Plan.





The Stock
Purchase Plan is administered by the Compensation Committee.  Pursuant
to the terms of the Stock Purchase Plan, the Compensation Committee has the
authority to make rules and regulations for the administration of the Stock
Purchase Plan.





The
purpose of the Stock Purchase Plan is to encourage eligible employees to acquire
or increase their proprietary interests in our company through the purchase of
shares of our common stock, thereby creating a greater community of interest
between our stockholders and our employees.





The Stock
Purchase Plan may be amended or terminated by the Board, provided that, without
stockholder approval, no such amendment may (a) increase the maximum number of
shares that may be issued under the Stock Purchase Plan, (b) amend the
requirements as to the class of employees eligible to purchase stock under the
Stock Purchase Plan, or (c) permit the members of the Compensation Committee to
purchase stock under the Stock Purchase Plan.  No termination,
modification, or amendment of the Stock Purchase Plan may adversely affect the
rights of an employee with respect to an option previously granted to him or her
under such option without his or her written consent.





Unless
the Stock Purchase Plan is previously terminated by the Board, no additional
stock will be available for purchase under the Stock Purchase Plan at the
earlier of (a) October 17, 2016, or (b) the point in time when no shares of
stock appropriately reserved for issuance are available.





Executive
Compensation Plan





On
December 5, 2006, the Compensation Committee approved the establishment of our
Executive Compensation Plan (“Executive Compensation Plan”), which links base
salary, benefits and short-term and long-term incentives within the total
compensation framework. The committee also extended the agreements with Dr.
Schiller and Mr. Nyweide until April 30, 2012 and July 31, 2012 respectively.
The Executive Compensation Plan provided for cash awards and vesting of
restricted stock, based on the achievement of performance targets set by the
Compensation Committee.





Bonus
awards granted under the Executive Compensation Plan had two components: an
annual (single-year) incentive plan component, which is 20% of the bonus target,
and a multi-year incentive plan component, which is 80% of the bonus target.
Single-year performance targets were established at the end of the immediately
preceding year and were monitored throughout the year. The annual incentive plan
provided upside potential when organizational goals were exceeded and less when
goals were missed. Multi-year performance metrics included components that
related to increasing stockholder value.





On July
16, 2010, as a result of the sale of Preparedness Services, all of the
performance targets established under the compensation plan were deemed to have
been achieved, and the cash and stock awards were deemed to have been
earned.  No further cash or stock awards are available to be earned
under the Executive Compensation Plan.





Outstanding
Equity Awards at Fiscal Year-End





There are
no unexercised options, stock that has not vested, or equity incentive plan
awards for the named executive officers as of the end of the fiscal year ended
December 31, 2010.




On July
16, 2010, as a result of the sale of Preparedness Services, all of the
performance targets established under the compensation plan were deemed to have
been achieved, and the cash and stock awards were deemed to have been
earned.  No further cash or stock awards are available to be earned
under the Executive Compensation Plan.  Pursuant to the terms of their
respective employment agreements, all of Dr. Schiller’s and Mr. Nyweide’s RSUs
have vested.




31





DIRECTOR
COMPENSATION





The
following table sets forth information with respect to compensation earned by or
awarded to each Director of the Corporation who is not a named executive officer
and who served on the Board of Directors during the fiscal year ended December
31, 2010:




Name
                  
                  Fees Earned
                    ($)
                  
                  
                  Option
                    Awards
                    ($)
                  
                  
                  All Other
                    Compensation
                    ($)
                  
                  
                  Total
                    ($)Per-Olof
      Lööf
                  
                  
                  40
                  
                  
                  
                  27
                  (1)
                  
                  
                  -
                  
                  
                  
                  67Ronald Starr (2)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -John
      Bujouves
                  
                  
                  37
                  
                  
                  
                  27
                  (1)
                  
                  
                  -
                  
                  
                  
                  64John
      P. Oswald
                  
                  
                  69
                  
                  
                  
                  27
                  (1)
                  
                  
                  -
                  
                  
                  
                  96John D. Chapman
      (3)(4)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -




(1)
            On
      January 1, 2010, an option to purchase 25,000 shares was granted to each
      of Mr. Lööf, Mr. Bujouves and Mr. Oswald under the 2006 Long Term
      Incentive Plan.





(2)
            On
      June 21, 2010, Mr. Starr resigned from the Board of
    Directors.





(3)
            On
      December 14, 2010, Mr. Chapman was appointed as a member of the Board of
      Directors.





(4)
            On
      February 7, 2011, Mr. Chapman became a member of the Compensation
      Committee.




2010
Director’s Plan







A
compensation plan for our Board of Directors is in place for
2010.  Following the Directors Plan, each non-employee member of our
Board of Directors is entitled to receive cash compensation consisting of an
annual cash retainer of $10,000, a fee of $2,500 for attending each board
meeting, $2,500 for attending each committee meeting (the committee chair
receives a supplement fee), an annual stock option grant for attending board
meetings and serving on and chairing board committees.  Mr. Starr, a
former director, declined the cash compensation and the stock option
grant.  All stock options were made exercisable at the then prevailing
market price on the date immediately prior to the date of grant.




On
January 1, 2010, we granted options to purchase 75,000 shares, in the aggregate,
to three of the four independent members of the then Board of Directors, to
purchase shares of our common stock under the Amended and Restated 2006
Long-Term Incentive Plan.  These options were granted at an exercise
price based upon the closing price of the common stock on the date immediately
prior to the date of grant, have a term of five years and vest in equal
installments, 25% at March 31, 2010, 25% at June 30, 2010, 25% at September 30,
2010 and 25% at December 31, 2010.





2011
Director’s Plan





A
compensation plan for our Board of Directors is in place for
2011.  Following the Directors Plan, each non-employee member of our
Board of Directors is entitled to receive cash compensation consisting of an
annual cash retainer of $20,000 a fee of $2,500 for attending each board
meeting, a fee of $2,500 for attending each committee meeting and a fee of $500
for participating via telephone at each board and committee meeting (the
committee chair receives a supplemental fee).




32




Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.







The following table sets forth
information regarding the number of shares of our common stock beneficially
owned on February 9, 2011 by:






•
            each
      person who is known by us to beneficially own 5% or more of our common
      stock;




•
            each
      of our directors and named executive officers;
  and




•
            all
      of our directors and executive officers, as a
  group.




Except as
otherwise set forth below, the address of each of the persons listed below is
GlobalOptions Group, Inc., 75 Rockefeller Plaza, 27th Floor,
New York, New York 10019. Unless otherwise indicated, the common stock
beneficially owned by a holder includes shares owned by a spouse, minor children
and relatives sharing the same home, as well as entities owned or controlled by
the named person, and also includes options to purchase shares of our common
stock exercisable within 60 days that have been granted under our incentive
stock plans.





Name and Address of Beneficial Owner
                        
                        Common Stock
                          Beneficially Owned(1)Shares
                        
                        
                        %5%
      or Greater Stockholders:Weiss
      Asset Management LP (2)
                        
                        
                        5,792,397
                        
                        
                        
                        43.3Brookdale
      Global Opportunity Fund(3)
                        
                        
                        4,054,679
                        
                        
                        
                        30.3Eric
      S. Weinstein (4)
                        
                        
                        750,821
                        
                        
                        
                        5.6Artio
      Global Management LLC (5)
                        
                        
                        718,026
                        
                        
                        
                        5.4Directors
      and Named Executive Officers:Harvey
      W. Schiller, Ph.D.
                        
                        
                        460,494
                        
                        
                        
                        3.4Jeffrey
      O. Nyweide
                        
                        
                        229,038
                        
                        
                        
                        1.7Per-Olof
      Lööf (6)
                        
                        
                        102,168
                        
                        
                        
                        *John
      P. Bujouves (7)
                        
                        
                        180,418
                        
                        
                        
                        1.3John
      P. Oswald (8)
                        
                        
                        116,269
                        
                        
                        
                        *John
      D. Chapman
                        
                        
                        10,450
                        
                        
                        
                        *Barry
      S. Watson
                        
                        
                        156,667
                        
                        
                        
                        1.2All executive officers and
      directors as a group (6 persons) (9)
                        
                        
                        1,255,504
                        
                        
                        
                        9.2




*
Represents holdings of less than 1% of shares outstanding.





(1)
            Based upon 13,381,153 shares
      of our common stock outstanding on February 9, 2011 and, with respect to
      each individual holder, rights to acquire our common stock exercisable
      within 60 days of February 9,
2011.





(2)
            Based solely on information
      contained in a Schedule 13D filed with the SEC on January 13, 2011 by
      Weiss Asset Management LP, Andrew M. Weiss, BIP GP LLC and WAM GP
      LLC.  Represents (i) 4,054,679 shares of common stock held by
      Brookdale International Partners, LP (“BIP”) and (ii) 1,737,718 shares of
      common stock held by Brookdale Global Opportunity Fund
      (“BGO”).  Weiss Asset Management LP is the Investment Manager of
      BIP and BGO, and in such capacity has the power to vote and dispose of the
      shares of common stock held by BIP and BGO.  The business
      address of Weiss Asset Management LP is 222 Berkeley St., 16thFloor, Boston, MA
      02116.





(3)
            Based
      solely on information contained in a Schedule 13D filed with the SEC on
      January 13, 2011 by BGO.  The business address of BGO is 222
      Berkeley St., 16th
      Floor, Boston, MA 02116.





(4)
            Based solely on information
      contained in a Schedule 13G filed with the SEC on November 19,
      2009 by Mr. Weinstein. Mr. Weinstein’s address is 46 Maddock
      Road, Titusville, NJ 08560.




33




(5)
            Based solely on information
      contained in a report on Amendment 2 to the Schedule 13G/A filed with
      the SEC on February 2, 2010. The business address of Artio Global
      Management LLC is 330 Madison Avenue, Suite 12A, New York, NY
      10017.





(6)
            Represents 5,418 shares of common
      stock and 75,000 shares of our common stock issuable upon exercise of
      stock options held by Mr. Lööf individually, and 21,750 shares of our
      common stock held by Lööf Holdings, LLC, a limited liability company
      controlled by Mr. Lööf. Mr. Lööf may be deemed to be the beneficial owner
      of the shares of our common stock held by Lööf Holdings,
      LLC.





(7)
            Represents 5,418 shares of common
      stock and 75,000 shares of our common stock issuable upon exercise of
      stock options held by Mr. Bujouves individually, and 100,000 shares of our
      common stock held by Globacor Capital Inc., of which Mr. Bujouves is
      Chairman. Mr. Bujouves may be deemed to be the beneficial owner of the
      shares of our common stock held by Globacor Capital Inc. Mr. Bujouves
      disclaims beneficial ownership of such shares, except to the extent of his
      pecuniary interest therein.





(8)
            Represents 7,310 shares of our
      common stock and 60,000 shares of our common stock issuable upon exercise
      of stock options held by Mr. Oswald individually, and 48,959 shares of our
      common stock held by Capital Trust Investments Limited, of which Mr.
      Oswald is a director. Mr. Oswald may be deemed to be the beneficial owner
      of the shares of our common stock held by Capital Trust Investments
      Limited. Mr. Oswald disclaims beneficial ownership of such shares, except
      to the extent of his pecuniary interest
  therein.





(9)
            Consists
      of 1,086,005 shares of our common stock and 210,000 shares of our common
      stock issuable upon exercise of stock
options.





Equity
Compensation Plan Information




See Part II, Item 5, “Securities
Authorized for Issuance Under Equity Compensation Plans” for information
regarding our equity compensation plans.





Item
13.  Certain Relationships and Related Transactions, and Director
Independence.




(Dollar amounts in thousands)




Transactions
with Related Persons, Promoters and Certain Control Persons







Sale
of Preparedness Services Business Unit




On July 16, 2010, we completed the sale
of Preparedness Services in accordance with the Preparedness Services Purchase
Agreement, by and among us, GlobalOptions, Inc. and Witt Holdings, of which
James Lee Witt, Chief Executive Officer, Mark Merritt, Co-President, Barry
Scanlon, Co-President, and Pate Felts, Senior Advisor, respectively, of
Preparedness are principals.  Messrs. Witt, Merritt, Scanlon and Felts
ceased serving as officers and employees of the Company and its subsidiaries
concurrent with the closing of the sale of Preparedness.




Pursuant to the terms of the
Preparedness Services Purchase Agreement, we sold Preparedness Services to Witt
Holdings for aggregate consideration of (i) $10,000 in cash, of which
$1,000 is to be held in escrow for 12 months following the closing; (ii) an
earnout payment equal to 40% of any revenues over $15,000 earned during the
12-month period following the closing, which payment may not exceed $12,000; and
(iii) the assumption of all of Preparedness’ liabilities, including all
termination and severance payments due to James Lee Witt, Mark Merritt, Barry
Scanlon and Pate Felts upon the sale of Preparedness under their respective
employment agreements, less $286, representing a payment in connection with Witt
Holdings’ assumption of the lease for Preparedness’ Washington DC
facility.  The maximum total consideration payable to us under the
Preparedness Purchase Agreement is $22,000.








In addition, Witt Holdings on May 14,
2010, paid to us a working capital adjustment of approximately $1.6
million.




34





In
connection with the Preparedness Purchase Agreement, we entered into (i) a
license agreement pursuant to which it granted Witt Holdings a world-wide,
perpetual, irrevocable, exclusive, royalty free, fully paid-up right and license
to use our software in the field of emergency preparedness and disaster relief
recovery, and we agreed not to license the Preparedness application of the
software to any other business in such field, and (ii) a transition service
agreement pursuant to which we provided Witt Holdings with certain specified
transition services following the closing, including but not limited to certain
information technology services.




The sale of Preparedness was subject to
the approval of our stockholders, which approval was obtained at a special
meeting of our stockholders held on July 15, 2010.






Consulting
Agreements




On March
9, 2010, effective as of April 1, 2010, we entered into consulting agreements
with each of Howard Safir, then the Chief Executive Officer of the our Security
Consulting and Investigations unit, and Adam Safir, Howard Safir’s son and then
an officer of our Security Consulting and Investigations
unit.  Pursuant to the terms of their respective consulting
agreements, as of April 1, 2010, Howard Safir and Adam Safir ceased serving as
employees of the Company, but were available to provide consulting services to
the Security Consulting and Investigations business unit, including being
available to assist in our exploration of strategic alternatives and provide
certain marketing assistance.  The terms of the consulting agreements
were 12 months, provided, however, that we had the right to terminate each of
the consulting agreements after three months and/or each month
thereafter.  Howard Safir and Adam Safir received $30 per month and
$20 per month, respectively, under the consulting agreements.  In
addition, if we were to sell our Security Consulting and Investigations segment
or any assets thereof during the term of the respective consulting agreements,
each of Howard Safir and Adam Safir could have received up to $600 and $300,
respectively, based upon certain aggregate sales price levels received for the
business or such assets.   On June 24, 2010, Howard Safir and Adam
Safir were notified that their consulting agreements were terminated, effective
on June 30, 2010.




Following
the sale of our SafirRosetti business unit on April 30, 2010 and the
announcement of our entry into an agreement to sell all of the equity securities
of Bode, constituting the Company’s Forensic DNA Solutions and Products Services
business unit, to SolutionPoint, Howard Safir and Adam Safir informed us they
believed they had earned their respective payments of $600 and $300 under their
consulting agreements.  We believed that the payments were not owed
because the consulting agreements were terminated prior to our entry into the
definitive agreement to sell Bode.







On
November 4, 2010, we entered into a Settlement and Release Agreement (the
“Settlement Agreement”) with Howard Safir and Adam Safir regarding (a) a default
judgment in the original amount of approximately $482 against Safir Rosetti, LLC
in the Circuit Court for Miami-Dade County, Florida (the “Florida Litigation”)
as well as any potential or threatened claims arising out of the Florida
Litigation, and (b) Howard Safir and Adam Safir’s respective consulting
agreements with the Company.  Pursuant to the Settlement Agreement,
the parties settled any and all past, present, future, potential or threatened
disputed legal claims between them arising from the Florida Litigation and
Consulting Agreements.  The default judgment in the Florida Litigation
was a result of a case for breach of contract against Safir Rosetti, LLC that
pre-dated our acquisition of Safir Rosetti, LLC in May 2006, and the plaintiff
previously threatened to seek to recover the default judgment from
us.  In consideration for the settlement, we deposited $375 into an
escrow account on November 9, 2010, and on December 3, 2010, the $375 amount was
fully disbursed out of escrow after our receipt of full releases for certain
potential claims against us and SafirRosetti, LLC.




Director
Independence





The Board has determined that each of
our directors, except for Dr. Schiller, is “independent” under the independence
standards of The NASDAQ Stock Market LLC (“NASDAQ”) and applicable SEC
rules




ITEM 14.   Principal Accountant Fees and
Services




(Dollar amounts in thousands)




Audit
Fees. The aggregate fees billed for professional services rendered was
$447 and $433 for the audits of the Company’s annual financial statements for
the fiscal years ended December 31, 2010 and 2009, respectively, which services
included the cost of the reviews of the condensed consolidated financial
statements for the years ended December 31, 2010 and 2009, and other periodic
reports for each respective year.





Audit-Related
Fees. The aggregate fees billed for professional services categorized as
Audit-Related Fees rendered was $0 and $0 for the years ended December 31, 2010
and 2009, respectively.




35




Tax
Fees.For the
years ended December 31, 2010 and 2009, the principal accountant billed $103 and
$125, respectively, for tax compliance.





All Other
Fees. Other than
the services described above, the aggregate fees billed for services rendered by
the principal accountant which were $3 and $21, respectively, for the fiscal
years ended December 31, 2010 and 2009.





Audit Committee
Policies and Procedures. The Audit Committee must pre-approve all
auditing services and permitted non-audit services (including the fees and terms
thereof) to be performed for the Company by its independent auditors, subject to
the de-minimus exceptions for non-audit services described in Section
10A(i)(1)(B) of the Securities Exchange Act of 1934, which should be nonetheless
be approved by the Board of Directors prior to the completion of the audit. Each
year the independent auditor’s retention to audit our financial statements,
including the associated fee, is approved by the Audit Committee before the
filing of the previous year’s Annual Report on Form 10-K. At the beginning of
the fiscal year, the Audit Committee will evaluate other known potential
engagements of the independent auditor, including the scope of work proposed to
be performed and the proposed fees, and approve or reject each service, taking
into account whether the services are permissible under applicable law and the
possible impact of each non-audit service on the independent auditor’s
independence from management. At each such subsequent meeting, the auditor and
management may present subsequent services for approval. Typically, these would
be services such as due diligence for an acquisition, that would not have been
known at the beginning of the year.





Since May
6, 2003, the effective date of the SEC rules stating that an auditor is not
independent of an audit client if the services it provides to the client are not
appropriately approved, each new engagement of Marcum, LLP, has been approved in
advance by the Board of Directors, and none of those engagements made use of the
de-minimums exception to the pre-approval contained in Section 10A(i)(1)(B) of
the Securities Exchange Act of 1934.





Part
IV





ITEM
15.  Exhibits, Financial Statement Schedules





Exhibit
      No.
            Description2.1
            Asset
      Purchase Agreement, dated as of April 23, 2010, by and among GlobalOptions
      Group, Inc., GlobalOptions, Inc. and Guidepost Solutions LLC.
      (15)2.2
            Asset
      Purchase Agreement, dated May 13, 2010, by and among GlobalOptions Group,
      Inc., GlobalOptions, Inc. and Witt Group Holdings, LLC.
    (17)2.3
            Asset
      Purchase Agreement, dated June 11, 2010, by and among GlobalOptions Group,
      Inc., GlobalOptions, Inc. and GlobalOptions Services, Inc.
      (18)2.4
            Stock
      Purchase Agreement, dated August 11, 2010, by and among GlobalOptions
      Group, Inc., GlobalOptions, Inc., The Bode Technology Group, Inc. and LSR
      Acquisition Corp. (now known as SolutionPoint International,
      Inc.)(19)3.1
            Certificate
      of Incorporation of GlobalOptions Group, Inc. (4)3.2
            Certificate
      of Amendment to Certificate of Incorporation. (6)3.3
            Certificate
      of Designations, Powers, Preferences and Other Rights and Qualifications
      of Series D Convertible Preferred Stock. (8)3.4
            Certificate
      of Designations, Powers, Preferences and Other Rights and Qualifications
      of Series A Junior Participating Preferred Stock. (21)3.5
            Bylaws.
      (4)3.6
            Amendment
      to Bylaws. (7)4.1
            Rights
      Agreement, dated as of September 7, 2010, between GlobalOptions Group,
      Inc. and Continental Transfer & Trust Company.
  (21)




36




10.1
            2005
      Stock Option Plan. (2)10.2
            2006
      Stock Option Plan. (3)10.3
            Amended
      and Restated 2006 Long-Term Incentive Plan. (12)10.4
            Amended
      and Restated 2006 Employee Stock Purchase Plan. (12)10.5
            Fourth
      Amended and Restated Loan and Security Agreement, dated as of March 31,
      2008, by and among GlobalOptions, Inc., The Bode Technology Group, Inc.
      and Silicon Valley Bank. (11)10.6
            First
      Loan Modification Agreement, dated as of March 30, 2009, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (13)10.7
            Fifth
      Loan Modification Agreement, dated July 12, 2010, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (20)10.8
            Sixth
      Loan Modification Agreement, dated July 16, 2010, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (20)10.9
            Seventh
      Loan Modification Agreement, dated September 27, 2010, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (22)10.10
            Unconditional
      Guaranty, dated as of March 31, 2008, by GlobalOptions Group, Inc. in
      favor of Silicon Valley Bank. (11)10.11
            Security
      Agreement, dated March 31, 2008, by and between GlobalOptions Group, Inc.
      and Silicon Valley Bank. (11)10.12
            Intellectual
      Property Security Agreement, dated March 31, 2008, by and between
      GlobalOptions Group, Inc. and Silicon Valley Bank. (11)10.13
            Employment
      Agreement, dated as of January 29, 2004, between Harvey W. Schiller, Ph.D.
      and GlobalOptions, Inc. (1)10.14
            Letter
      Agreement among GlobalOptions Group, Inc., GlobalOptions, Inc. and Harvey
      W. Schiller, Ph.D., dated January 29, 2004, pursuant to which
      GlobalOptions Group, Inc. assumed Dr. Schiller’s original employment
      agreement with GlobalOptions, Inc. (1)10.15
            Amendment
      to Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Group, Inc., dated as of December 19, 2006. (5)10.16
            Modification
      of Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Groups, Inc., dated as of August 13, 2009. (14)10.17
            Modification
      of Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Group, Inc., dated as of May 13, 2010. (20)10.18
            Amendment
      of Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Group, Inc., dated as of December 14, 2010. *10.19
            Employment
      Agreement, dated July 30, 2007, between Jeffrey O. Nyweide and
      GlobalOptions Group, Inc. (10)10.20
            Modification
      of Employment Agreement of Jeffrey O. Nyweide with GlobalOptions Groups,
      Inc., dated as of August 13, 2009. (14)10.21
            Modification
      of Employment Agreement of Jeffrey O. Nyweide with GlobalOptions Group,
      Inc., dated as of May 13, 2010.
(20)




37




10.22
            Amendment
      of Employment Agreement of Jeffrey O. Nyweide with GlobalOptions Group,
      Inc., dated as of December 14, 2010.*10.23
            Secured
      Promissory Note, dated April 30, 2010, by and between Guidepost Solutions
      LLC and GlobalOptions Group, Inc. (16)10.24
            Security
      Agreement, dated April 30, 2010, by and between Guidepost Solutions LLC
      and GlobalOptions Group, Inc. (16)10.25
            Intercreditor
      Agreement, dated April 30, 2010, by and among Guidepost Solutions LLC,
      GlobalOptions Group, Inc., Bart M. Schwartz, Joseph Rosetti and 3-DRS
      International, Ltd. (16)10.26
            License
      Agreement, dated July 16, 2010, by and between GlobalOptions Group, Inc.
      and Witt Group Holdings, LLC. (20)10.27
            License
      Agreement, dated July 19, 2010, by and between GlobalOptions Group, Inc.
      and GlobalOptions Services, Inc. (20)10.28
            Rapid
      Data License Agreement, dated July 19, 2010, by and between GlobalOptions
      Group, Inc. and GlobalOptions Services, Inc. (20)10.29
            Intellectual
      Property Assignment, dated July 19, 2010, between GlobalOptions Group,
      Inc., GlobalOptions, Inc. and GlobalOptions Services, Inc.
      (20)10.30
            Support
      Agreement, dated October 27, 2010, by and between Weiss Asset Management
      LP and GlobalOptions Group, Inc. (23)21.1
            Subsidiaries
      of GlobalOptions Group, Inc.*23.1
            Consent
      of Marcum LLP.*31.1
            Certification
      of Principal Executive Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.*31.2
            Certification
      of Principal Financial Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.*32.1
            Certification
      of Principal Executive Officer of Periodic Report Pursuant to Section 906
      of Sarbanes-Oxley Act of 2002.*32.2
            Certification
      of Principal Financial Officer of Periodic Report Pursuant to Section 906
      of Sarbanes-Oxley Act of 2002.*





*
                Filed
      herewith
 
 **
                Schedules
      and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The
      Company agrees to furnish supplementally a copy of any omitted schedule to
      the SEC upon request.
 
 (1)
                Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K
      filed with the SEC on June 30, 2005, as
amended.
 
 (2)
                Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K
      filed with the SEC on August 11,
2005.
 
 (3)
                Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K
      filed with the SEC on June 16,
2006.
 
 (4)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on December 11,
2006.
 
 (5)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on December 22,
2006.
  38
  (6)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on February 23,
2007.
 
 (7)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on May 16, 2007.
 
 (8)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on July 26,
2007.
 
 (9)
                Incorporated
      by reference to the exhibits included with our registration statement on
      Form SB-2, as amended, originally filed with the SEC on August 2,
      2007.
 
 (10)
                Incorporated
      by reference to the exhibits included with our quarterly report on Form
      10-QSB filed with the SEC on August 14,
2007.
 
 (11)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on April 22,
2008.
 
 (12)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on July 30,
2008.
 
 (13)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on April 6,
2009.
 
 (14)
                Incorporated
      by reference to the exhibits included with our quarterly report on Form
      10-Q filed with the SEC on August 14,
2009.
 
 (15)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on April 29,
2010.
 
 (16)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on May 6, 2010.
 
 (17)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on May 13, 2010.
 
 (18)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on June 11,
2010.
 
 (19)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on August 12,
2010.
 
 (20)
                Incorporated
      by reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on August 16,
2010.
 
 (21)
                Incorporated by
      reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on
      September 8,
2010.
  (22)
                Incorporated
      by reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on September 29,
2010.
 
 (23)
                Incorporated
      by reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on October 28,
2010.




39




SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





GLOBALOPTIONS
      GROUP, INC.Dated: February 15,
      2011
                                          By:
                                          /s/
      Harvey W. SchillerHarvey
      W. Schiller
                                            Chairman,
      Chief Executive Officer
                                            and
      Director
                                            (Principal
      Executive Officer)Dated: February 15,
      2011
                                          By:
                                          /s/
      Jeffrey O. NyweideJeffrey
      O. Nyweide
                                            Executive
      Vice President-Corporate Development,
                                            Chief
      Financial Officer, Secretary
                                            (Principal
      Financial Officer and
                                            Principal
      Accounting
Officer)





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.




Signatures
                                      
                                      Title
                                      
                                      DateChairman,
      Chief Executive Officerand
      Director/s/ Harvey W. Schiller
                                      
                                      (Principal
      Executive Officer)
                                      
                                      February
      15, 2011Harvey
      W. SchillerExecutive
      Vice President – CorporateDevelopment,
      Chief Financial Officer,Secretary(Principal
      Financial Officer and/s/ Jeffrey O. Nyweide
                                      
                                      Principal
      Accounting Officer)
                                      
                                      February
      15, 2011Jeffrey
      O. Nyweide/s/ Per-Olof Lööf
                                      
                                      Director
                                      
                                      February
      15, 2011Per-Olof
      Lööf/s/ John P. Oswald
                                      
                                      Director
                                      
                                      February
      15, 2011John
      P. Oswald/s/ John P. Bujouves
                                      
                                      Director
                                      
                                      February
      15, 2011John
      P. Bujouves/s/ John D. Chapman
                                      
                                      Director
                                      
                                      February
      15, 2011John
      D. Chapman
  40






Exhibit
      IndexExhibit
    No.
            Description2.1
            Asset
      Purchase Agreement, dated as of April 23, 2010, by and among GlobalOptions
      Group, Inc., GlobalOptions, Inc. and Guidepost Solutions LLC.
      (15)2.2
            Asset
      Purchase Agreement, dated May 13, 2010, by and among GlobalOptions Group,
      Inc., GlobalOptions, Inc. and Witt Group Holdings, LLC.
    (17)2.3
            Asset
      Purchase Agreement, dated June 11, 2010, by and among GlobalOptions Group,
      Inc., GlobalOptions, Inc. and GlobalOptions Services, Inc.
      (18)2.4
            Stock
      Purchase Agreement, dated August 11, 2010, by and among GlobalOptions
      Group, Inc., GlobalOptions, Inc., The Bode Technology Group, Inc. and LSR
      Acquisition Corp. (now known as SolutionPoint International, Inc.)
      (19)3.1
            Certificate
      of Incorporation of GlobalOptions Group, Inc. (4)3.2
            Certificate
      of Amendment to Certificate of Incorporation. (6)3.3
            Certificate
      of Designations, Powers, Preferences and Other Rights and Qualifications
      of Series D Convertible Preferred Stock. (8)3.4
            Certificate
      of Designations, Powers, Preferences and Other Rights and Qualifications
      of Series A Junior Participating Preferred Stock. (21)3.5
            Bylaws.
      (4)3.6
            Amendment
      to Bylaws. (7)4.1
            Rights
      Agreement, dated as of September 7, 2010, between GlobalOptions Group,
      Inc. and Continental Transfer & Trust Company. (21)10.1
            2005
      Stock Option Plan. (2)10.2
            2006
      Stock Option Plan. (3)10.3
            Amended
      and Restated 2006 Long-Term Incentive Plan. (12)10.4
            Amended
      and Restated 2006 Employee Stock Purchase Plan. (12)10.5
            Fourth
      Amended and Restated Loan and Security Agreement, dated as of March 31,
      2008, by and among GlobalOptions, Inc., The Bode Technology Group, Inc.
      and Silicon Valley Bank. (11)10.6
            First
      Loan Modification Agreement, dated as of March 30, 2009, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (13)10.7
            Fifth
      Loan Modification Agreement, dated July 12, 2010, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (20)10.8
            Sixth
      Loan Modification Agreement, dated July 16, 2010, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (20)10.9
            Seventh
      Loan Modification Agreement, dated September 27, 2010, by and among
      GlobalOptions, Inc., The Bode Technology Group, Inc. and Silicon Valley
      Bank. (22)10.10
            Unconditional
      Guaranty, dated as of March 31, 2008, by GlobalOptions Group, Inc. in
      favor of Silicon Valley Bank. (11)




41




10.11
            Security
      Agreement, dated March 31, 2008, by and between GlobalOptions Group, Inc.
      and Silicon Valley Bank. (11)10.12
            Intellectual
      Property Security Agreement, dated March 31, 2008, by and between
      GlobalOptions Group, Inc. and Silicon Valley Bank. (11)10.13
            Employment
      Agreement, dated as of January 29, 2004, between Harvey W. Schiller, Ph.D.
      and GlobalOptions, Inc. (1)10.14
            Letter
      Agreement among GlobalOptions Group, Inc., GlobalOptions, Inc. and Harvey
      W. Schiller, Ph.D., dated January 29, 2004, pursuant to which
      GlobalOptions Group, Inc. assumed Dr. Schiller’s original employment
      agreement with GlobalOptions, Inc. (1)10.15
            Amendment
      to Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Group, Inc., dated as of December 19, 2006. (5)10.16
            Modification
      of Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Groups, Inc., dated as of August 13, 2009. (14)10.17
            Modification
      of Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Group, Inc., dated as of May 13, 2010. (20)10.18
            Amendment
      of Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions
      Group, Inc., dated as of December 14, 2010. *10.19
            Employment
      Agreement, dated July 30, 2007, between Jeffrey O. Nyweide and
      GlobalOptions Group, Inc. (10)10.20
            Modification
      of Employment Agreement of Jeffrey O. Nyweide with GlobalOptions Groups,
      Inc., dated as of August 13, 2009. (14)10.21
            Modification
      of Employment Agreement of Jeffrey O. Nyweide with GlobalOptions Group,
      Inc., dated as of May 13, 2010. (20)10.22
            Amendment
      of Employment Agreement of Jeffrey O. Nyweide with GlobalOptions Group,
      Inc., dated as of December 14, 2010.*10.23
            Secured
      Promissory Note, dated April 30, 2010, by and between Guidepost Solutions
      LLC and GlobalOptions Group, Inc. (16)10.24
            Security
      Agreement, dated April 30, 2010, by and between Guidepost Solutions LLC
      and GlobalOptions Group, Inc. (16)10.25
            Intercreditor
      Agreement, dated April 30, 2010, by and among Guidepost Solutions LLC,
      GlobalOptions Group, Inc., Bart M. Schwartz, Joseph Rosetti and 3-DRS
      International, Ltd. (16)10.26
            License
      Agreement, dated July 16, 2010, by and between GlobalOptions Group, Inc.
      and Witt Group Holdings, LLC. (20)10.27
            License
      Agreement, dated July 19, 2010, by and between GlobalOptions Group, Inc.
      and GlobalOptions Services, Inc. (20)10.28
            Rapid
      Data License Agreement, dated July 19, 2010, by and between GlobalOptions
      Group, Inc. and GlobalOptions Services, Inc. (20)10.29
            Intellectual
      Property Assignment, dated July 19, 2010, between GlobalOptions Group,
      Inc., GlobalOptions, Inc. and GlobalOptions Services, Inc.
      (20)10.30
            Support
      Agreement, dated October 27, 2010, by and between Weiss Asset Management
      LP and GlobalOptions Group, Inc.
(23)




42






21.1
            Subsidiaries
      of GlobalOptions Group, Inc.*23.1
            Consent
      of Marcum LLP.*31.1
            Certification
      of Principal Executive Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.*31.2
            Certification
      of Principal Financial Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.*32.1
            Certification
      of Principal Executive Officer of Periodic Report Pursuant to Section 906
      of Sarbanes-Oxley Act of 2002.*32.2
            Certification
      of Principal Financial Officer of Periodic Report Pursuant to Section 906
      of Sarbanes-Oxley Act of 2002.*




*
                Filed
      herewith
 
 **
                Schedules
      and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The
      Company agrees to furnish supplementally a copy of any omitted schedule to
      the SEC upon request.
 
 (1)
                Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K
      filed with the SEC on June 30, 2005, as
amended.
 
 (2)
                Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K
      filed with the SEC on August 11,
2005.
 
 (3)
                Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K
      filed with the SEC on June 16,
2006.
 
 (4)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on December 11,
2006.
 
 (5)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on December 22,
2006.
 
 (6)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on February 23,
2007.
 
 (7)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on May 16, 2007.
 
 (8)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on July 26,
2007.
 
 (9)
                Incorporated
      by reference to the exhibits included with our registration statement on
      Form SB-2, as amended, originally filed with the SEC on August 2,
      2007.
 
 (10)
                Incorporated
      by reference to the exhibits included with our quarterly report on Form
      10-QSB filed with the SEC on August 14,
2007.
 
 (11)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on April 22,
2008.
 
 (12)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on July 30,
2008.
 
 (13)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on April 6,
2009.
 
 (14)
                Incorporated
      by reference to the exhibits included with our quarterly report on Form
      10-Q filed with the SEC on August 14,
2009.
 
 (15)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on April 29,
2010.
 
 (16)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on May 6, 2010.
  43
  (17)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on May 13, 2010.
 
 (18)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on June 11,
2010.
 
 (19)
                Incorporated
      by reference to the exhibits included with our current report on Form 8-K
      filed with the SEC on August 12,
2010.
 
 (20)
                Incorporated
      by reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on August 16,
2010.
 
 (21)
                Incorporated by
      reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on
      September 8,
2010.
 
 
 (22)
                Incorporated
      by reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on September 29,
2010.
 
 (23)
                Incorporated
      by reference to the exhibits included with our current report on Form 10-Q
      filed with the SEC on October 28,
2010.




44