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

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

| 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      FloorNew York, New York        |   | 10019 |
| (Address      of Principal Executive Offices)                       |   | (Zip      Code) |

----

| Securities      registered pursuant to Section 12(b) of the Act: |
|------------------------------------------------------------------|
| Title of Each Class                                              |   | Name of Each Exchange on Which      Registered |
| Common      Stock, par value $0.001 per share                    |   | The      NASDAQ Stock Market LLC |

Nox

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

----

| PART      I   | 1                                                                                                                                                                                               |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          | FORWARD-LOOKING      STATEMENTS                                                                                                                                                                 | 1 |
|          | ITEM      1.         Business.                                                                                                                     | 1 |
|          | ITEM      1A.      Risk Factors.                                                                                                                                  | 10 |
|          | ITEM      1B.      Unresolved Staff      Comments.                                                                                                                | 18 |
|          | ITEM      2.         Properties.                                                                                                                   | 18 |
|          | ITEM      3.         Legal      Proceedings.                                                                                                       | 19 |
|          | ITEM      4.         Submission of      Matters to a Vote of Security Holders.                                                                     | 19 |
| PART      II  | 20                                                                                                                                                                                              |
|          | ITEM      5.         Market for      Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases of Equity Securities. | 20 |
|          | ITEM      6.         Selected Financial      Data.                                                                                                 | 22 |
|          | ITEM      7.         Management’s      Discussion and Analysis of Financial Condition and Results of      Operations.                        | 22 |
|          | ITEM      7A.      Quantitative and Qualitative      Disclosures About Market Risk.                                                                               | 33 |
|          | ITEM      8.         Financial      Statements and Supplementary Data.                                                                             |  33 |
|          | ITEM      9.         Changes in and      Disagreements with Accountants on Accounting and Financial      Disclosure.                               | 34 |
|          | ITEM      9A(T). Controls and Procedures.                                                                                                                                                       | 34 |
|          | ITEM      9B.      Other Information.                                                                                                                             | 35 |
| PART      III | 36                                                                                                                                                                                              |
|          | ITEM      10.       Directors, Executive Officers      and Corporate Governance.                                                                             |  36 |
|          | ITEM      11.       Executive      Compensation.                                                                                                             | 41 |
|          | ITEM      12.       Security Ownership of Certain      Beneficial Owners and Management and Related Stockholder      Matters.                                |  50 |
|          | ITEM      13.       Certain Relationships and      Related Transactions, and Director Independence.                                                          | 51 |
|          | ITEM      14.       Principal Accountant Fees and      Services.                                                                                             | 53 |
| PART      IV  | 55                                                                                                                                                                                              |
|          | ITEM      15.       Exhibits and Financial      Statement Schedules.                                                                                         | 55 |
|          | EXHIBIT      21.1                                                                                                                                                                               |   |
|          | EXHIBIT      23.1                                                                                                                                                                               |   |
|          | EXHIBIT      31.1                                                                                                                                                                               |   |
|          | EXHIBIT      31.2                                                                                                                                                                               |   |
|          | EXHIBIT      32.1                                                                                                                                                                               |   |
|          | EXHIBIT      32.2                                                                                                                                                                               |   |

----

| Item      1. | Business |
|--------------|----------|

GlobalOptionsOverview

----

|   | • |   | Investigations      and Background      Screening. Investigative services enable      insurance companies, law firms and other organizations to combat fraud,      substantiate suspicions of criminal acts and, ultimately, provide      protection against financial loss and fraudulent activity. Background      screening enables governments and corporations to implement effective      hiring practices through in-depth analysis of a broad range of criteria of      prospective employees, including work history, criminal offenses and drug      testing results. |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | Preparedness      and Continuity Planning. Preparedness and continuity      planning services enable governments and corporations to effectively      prepare for, respond to and recover from natural or man-made disasters.      Specifically, these services include the creation of emergency response      plans, business continuity planning and recovery services. We believe the      funding of preparedness and continuity planning initiatives continues to      be a priority for foreign, federal, state and local      governments. |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | Security      Consulting. Security consulting services      provide governments, corporations and individuals with increased      protection by analyzing and aiding in the implementation of security      measures. These services include executive protection, facility security      assessments and threatanalysis. |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | Litigation and      Compliance      Support. In an increasingly stringent      regulatory environment, governments and corporations have utilized      litigation and compliance support services to ensure compliance with      regulations and minimize the threat of litigation. Compliance support      services assist organizations in effectively managing compliance with      regard to financial reporting, government regulations and Securities and Exchange Commission      (“SEC”) requirements.      Litigation support services aid in the preparation for legal proceedings      and include document review, case preparation, targeted investigations and      witness interviewing. |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | • |   | Business continuity      plans |
|--------|---------|--------|--------------------------------|

|   | • |   | Emergency exercises and training      programs |
|--------|---------|--------|------------------------------------------------|

|   | • |   | Post-disaster crisis      communications assistance |
|--------|---------|--------|-----------------------------------------------------|

|   | • |   | Preparedness, response and      recovery services |
|--------|---------|--------|---------------------------------------------------|

|   | • |   | Strategic advisory      services |
|--------|---------|--------|----------------------------------|

|   | • |   | Threat and impact      assessments |
|--------|---------|--------|------------------------------------|

----

|   | • |   | Anti-fraud      training                    |
|--------|---------|--------|---------------------------------------------|
|   |    |   |                                        |
|   | • |   | Background      investigations              |
|   |    |   |                                        |
|   | • |   | Corporate      investigations for liability |
|   |    |   |                                        |
|   | • |   | Fraud      reporting                        |
|   |    |   |                                        |
|   | • |   | Insurance      claims investigations        |
|   |    |   |                                        |
|   | • |   | On-scene      accident investigations       |
|   |    |   |                                        |
|   | • |   | Regulatory      compliance                  |
|   |    |   |                                        |
|   | • |   | Surveillance                                |

----

|   | • |   | Business      intelligence |
|--------|---------|--------|----------------------------|

|   | • |   | Executive      protection |
|--------|---------|--------|---------------------------|

|   | • |   | Facility and IT      security |
|--------|---------|--------|-------------------------------|

|   | • |   | Forensic DNA analysis and      casework |
|--------|---------|--------|-----------------------------------------|

|   | • |   | Independent monitoring and      regulatory compliance |
|--------|---------|--------|-------------------------------------------------------|

|   | • |   | IT and accounting      forensics |
|--------|---------|--------|----------------------------------|

|   | • |   | Litigation      support |
|--------|---------|--------|-------------------------|

|   | • |   | Corporate governance      compliance |
|--------|---------|--------|--------------------------------------|

|   | • |   | Crisis      management |
|--------|---------|--------|------------------------|

|   | • |   | Emerging market      services |
|--------|---------|--------|-------------------------------|

|   | • |   | Facility  security |
|--------|---------|--------|--------------------|

|   | • |   | Global business      intelligence |
|--------|---------|--------|-----------------------------------|

|   | • |   | Investigation and litigation      support |
|--------|---------|--------|-------------------------------------------|

|   | • |   | Personal      protection |
|--------|---------|--------|--------------------------|

----

----

----

| Item      1A. | Risk      Factors |
|---------------|-------------------|

----

----

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

|   | • |   | the expenses that we might incur      and the delays and revenue loss that we might suffer if our competitors      protest or challenge contract awards made to us 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 awardedcontract. |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • |   | expand and enhance our      administrativeinfrastructure; |
|--------|---------|--------|-----------------------------------------------------------|

|   | • |   | continue to improve our      management, financial and information systems and controls;      and |
|--------|---------|--------|---------------------------------------------------------------------------------------------------|

|   | • |   | recruit, train, manage and retain      our employees effectively. |
|--------|---------|--------|-------------------------------------------------------------------|

----

|   | • |   | 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; |
|--------|---------|--------|------------------------------------------------------------------|

|   | • |   | 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 collectiontimes. |
|--------|---------|--------|-------------------------------------------------------------------------------|

----

----

|   | • |   | factors affecting demand for risk      mitigation services such as the domestic and global security environment,      competition and general economic  conditions; |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | fluctuation in government spending      that affects our contracts with government entities;      and |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------|

|   | • |   | changes in the laws and      regulations of different countries that affect our ability to perform the      services of a  risk mitigation and management services      company. |
|--------|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | • |   | 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;  and |
|--------|---------|--------|------------------------------------------------------------------------------------|

|   | • |   | we require advance notice for      stockholder proposals. |
|--------|---------|--------|-----------------------------------------------------------|

| Item      1B. | Unresolved      Staff Comments |
|---------------|--------------------------------|

| Item 2.  | Properties |
|--------------------|------------|

| Business    Unit                             |   | Location                            |   | Area    (sq.feet) |   | Year of Lease      Expiration           |
|----------------------------------------------|--------|-------------------------------------|--------|-------------------|--------|-----------------------------------------|
| Corporate      Headquarters:                 |   | New York, New      York             |   | 4,525             |   |       (1) |
|                                         |   |                                |   |              |   |                                    |
| Preparedness      Services:                  |   | Washington,      D.C.               |   | 15,294            |   | 2015                                    |
|                                         |   | Little Rock,      Arkansas          |   | 4,000             |   | 2009                                    |
|                                         |   |                                |   |              |   |                                    |
| Fraud and SIU      Services:                 |   | Orlando,      Florida               |   | 7,872             |   | 2011                                    |
|                                         |   | Nashville,      Tennessee           |   | 2,942             |   | 2012                                    |
|                                         |   |                                |   |              |   |                                    |
| Security Consulting and      Investigations: |   | Lorton,      Virginia               |   | 38,505            |   | 2016                                    |
|                                         |   | New York, New      York             |   | 9,179             |   | 2015                                    |
|                                         |   | Dallas,    Texas                    |   | 5,500             |   | 2012                                    |
|                                         |   | San Francisco, California |   | 5,042             |   | 2012                                    |

----

| Item 3. | Legal      Proceedings |
|---------|------------------------|

| Item      4.  | Submission      of Matters to a Vote of SecurityHolders. |
|--------------------|----------------------------------------------------------|

----

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

| Fiscal      Year 2007  |   | High   |   |   | Low    |   |
|------------------------|--------|--------|--------|--------|--------|--------|
| First      Quarter     |   | $      | 15.44  |   |   | $      | 8.75 |   |
| Second      Quarter    |   |   | 10.55  |   |   |   | 7.50 |   |
| Third      Quarter     |   |   | 8.30   |   |   |   | 3.02 |   |
| Fourth      Quarter    |   |   | 8.05   |   |   |   | 3.15 |   |
|                   |   |   |   |   |   |   |   |   |
| Fiscal      Year 2008  |   | High   |   |   | Low    |   |
| First      Quarter     |   | $      | 4.02   |   |   | $      | 1.47 |   |
| Second      Quarter    |   |   | 2.99   |   |   |   | 1.90 |   |
| Third      Quarter     |   |   | 2.36   |   |   |   | 1.25 |   |
| Fourth      Quarter    |   |   | 2.45   |   |   |   | 1.25 |   |
|                   |   |   |   |   |   |   |   |   |
| Fiscal      Year 2009  |   | High   |   |   | Low    |   |
| First      Quarter (1) |   | $      | 2.15   |   |   | $      | 1.22 |   |

We havenot declared or paid any cash dividends on our common stock and do notanticipate declaring or paying any cash dividends in the foreseeable future. Oursenior credit facility prohibits us from paying dividends.  Wecurrently expect to retain future earnings, if any, for the development of ourbusiness. Dividends may be paid on our common stock only if and when declared byour Board of Directors and paid on an as-converted basis to the holders of ourSeries D Convertible Preferred Stock.

----

| Plan      Category                                              | Number of securitiesto      be issued uponexercise      ofoutstanding      optionsand      upon vesting of RSUs(a)  |    | Weighted averageexercise      price ofoutstandingoptions(does      not include RSUs)(b) |           | Number of securitiesremaining      availablefor      future issuanceunder      equitycompensation      plans(excluding      securitiesreflected      incolumn (a))(c) |
|-----------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|--------------|----------------------------------------------------------------------------------------------|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                            |                                                                                                                               |         |                                                                                         |                |                                                                                                                                                                                 |   |   |
| Equity      compensation plans approved by security holders(1)  | 1,000,774                                                                                                                          |    | $                                                                                            | 3.62                |                                                                                                                                                                            | 3,373,994 |   (2) |
| Equity      compensation plans not approved by security holders | —                                                                                                                  |    |                                                                                         | —   |                                                                                                                                                                            | —   |   |
| Total                                                           | 1,000,774                                                                                                                          |    | $                                                                                            | 3.62                |                                                                                                                                                                            |  3,373,994 |   |

----

| (1)   | Our      2005 Stock Option Plan and 2006 Stock Option Plan were adopted by our      stockholders on August 8, 2005 and June 12, 2006,      respectively. On October 17, 2006, our Board of Directors approved,      and stockholders later ratified, that the remaining shares reserved, but      unissued, with respect to any awards under the 2005 Stock Option Plan and      2006 Stock Option Plan were unreserved and that no new awards were to be      issued under these plans. 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      1,396,112 under the Amended and Restated 2006 Long-Term Incentive Plan and      1,977,882 under the Amended and Restated 2006 Employee Stock Purchase      Plan. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    Period |   | (a)      Total Number of Shares      (or Units) Forfeited |   |   | (b)Average      Price Paid of      $1.80 per Share (or      Unit) |   |
|--------------------------|--------|-----------------------------------------------------------|--------|--------|-------------------------------------------------------------------|--------|
| 10/1/08-10/31/08         |   |                                                      | 0      |   |                                                              | $0     |   |
| 11/1/08-11/30/08         |   |                                                      | 0      |   |                                                              | $0     |   |
| 12/1/08-12/31/08         |   |                                                      | 87,500 |   |                                                              | $0     |   |
| Total                    |   |                                                      | 87,500 |   |                                                              | $0     |   |

----

| Item      6.  | Selected      Financial Data |
|--------------------|------------------------------|

            Notapplicable.

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

|   | • |   | Preparedness Services      develops and implements crisis management and emergency response      plans for disaster mitigation, continuity of operations and other      emergency management issues for governments, corporations and individuals.      This unit is comprisedof  JLWA. |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | Fraud and SIU Services      provides investigative surveillance, anti-fraud solutions and business      intelligence services to the insurance industry, law firms and      multinational organizations. This unit is comprised of the following      acquired companies: CBR; Hyperion Risk; Secure Source; Facticon and      FAIS. |
|--------|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | Security Consulting and      Investigations delivers specialized security and investigative      services, such as security assessments, threat analyses and forensic DNA      analysis and casework, to governments, corporations and individuals. This      unit is comprised of the following acquired companies: Safir; Bode; and On      Line Consulting. |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | International      Strategies provides a full range of security and risk management      services, such as global business intelligence, investigations and      litigation support, and personal protection, to foreign and domestic      governments, corporations and individuals. Our International Strategies      unit was our original corebusiness. |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                        |   |   | For      the Years EndedDecember      31, |   |
|---------------------------------------------|--------|--------|-------------------------------------------|--------|
| Segment                                     |   |   | 2008                                      |   | 2007 |   | 2006 |   |
|                                        |   |   |                                      |   |   |   |   |   |
| Preparedness      Services                  |   |   | 37.6                                      | %      | 35.4 | % | 60.7 | % |
| Fraud      and SIU Services                 |   |   | 30.1                                      |   | 28.1 |   | 26.7 |   |
| Security      Consulting and Investigations |   |   |      32.3        |   |      36.5 |   |  12.6 |   |
| Total                                       |   |   | 100.0                                     | %      |    100.0 | % |  100.0 | % |

----

----

|                                                                          |   |   | For the years ended December 31,                       |   |
|-------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|
|                                                                          |   |   | 2008                                                                            |   | 2007 |   | 2006 |   |
|                                                                          |   |   |                                                                            |   |   |   |   |   |
| Revenues                                                                      |   |   | 100                                                                             | %      | 100 | % |   |   | 100 | % |
| Cost      of revenues                                                         |   |   | 58                                                                              |   | 56 |   |   |   | 52 |   |
|                                                                          |   |   |                                                                            |   |   |   |   |   |   |   |
| Gross      profit                                                             |   |   | 42                                                                              |   | 44 |   |   |   | 48 |   |
|                                                                          |   |   |                                                                            |   |   |   |   |   |   |   |
| Operating      expenses:                                                      |   |   |                                                                            |   |   |   |   |   |   |   |
| Selling      and marketing                                                    |   |   | 11                                                                              |   | 17 |   |   |   | 14 |   |
| General      and administrative                                               |   |   | 39                                                                              |   | 52 |   |   |   | 41 |   |
| Impairment      loss on goodwill and intangibles                              |   |   |              - |   |              6 |   |   |   |          5 |   |
|                                                                          |   |   |                                                                            |   |   |   |   |   |   |   |
| Total      operating expenses                                                 |   |   | 50                                                                              |   | 75 |   |   |   | 60 |   |
|                                                                          |   |   |                                                                            |   |   |   |   |   |   |   |
| Loss      from operations                                                     |   |   | (8                                                                              | )      | (31 | ) |   |   | (12 | ) |
| Other      income (expense), net                                              |   |   | -                                                                               |   | (1 | ) |   |   | (17 | ) |
|                                                                          |   |   |                                                                            |   |   |   |   |   |   |   |
| Net      loss                                                                 |   |   | (8                                                                              | )      | (32 | ) |   |   | (29 | ) |
| Deemed      dividends to Series A and B convertible preferred    stockholders |   |   | -                                                                               |   | - |   |   |   | (39 | ) |
|                                                                          |   |   |                                                                            |   |   |   |   |   |   |   |
| Net      loss applicable to common stockholders                               |   |   | (8                                                                              | )%     | (32 | )% |   |   | (68 | )% |

----

----

----

----

----

 we executed anamendment of the employment and non-competition agreement with Mr. Witt.Under the terms of the amendment, upon his voluntary termination of employmentwithout good reason, Mr. Witt would be obligated to reimburse us in anamount equal to (i) 25% of the number of shares issued to the JLWA Sellerswithin 12 months prior to such termination and (ii) 25% of the base salaryof Mr. Witt paid within 12 months prior to suchtermination.

----

----

----

----

| Item 7A. | Quantitative and Qualitative      Disclosures About MarketRisk. |
|----------|-----------------------------------------------------------------|

| Item      8. | Financial      Statements and SupplementaryData. |
|--------------|--------------------------------------------------|

----

|                                                                                                            |   | Page(s) |   |
|-----------------------------------------------------------------------------------------------------------------|--------|---------|--------|
| Report of Independent Registered      Public Accounting Firm                                                    |   |    | F-1    |   |
|                                                                                                            |   |    |   |   |
| Consolidated Balance Sheets as of      December 31, 2008 and 2007                                               |   |    | F-2    |   |
|                                                                                                            |   |    |   |   |
| Consolidated Statements of      Operations for the Years Ended December 31, 2008,  2007 and      2006 |   |    | F-3    |   |
|                                                                                                            |   |    |   |   |
| Consolidated Statements of      Stockholders' Equity for the Years Ended December 2008, 2007 and      2006      |   |    | F-4    |   |
|                                                                                                            |   |    |   |   |
| Consolidated Statements of Cash      Flows for the Years Ended December 31, 2008, 2007 and      2006            |   |    | F-7    |   |
|                                                                                                            |   |    |   |   |
| Notes to Consolidated Financial      Statements                                                                 |   |    | F-12   |   |

----

----

| ASSETS                                                                                                           |   | December31, |    |
|------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|
|                                                                                                             |   | 2008        |    |   | 2007 |   |
|                                                                                                             |   |        |    |   |   |   |
| Current    assets:                                                                                               |   |        |    |   |   |   |
| Cash and cash      equivalents                                                                                   |   | $           | 5,276   |   |   | $ | 4,426 |   |
| Accounts receivable,      net                                                                                    |   |        | 27,485  |   |   |   | 25,213 |   |
| Inventories,      net                                                                                            |   |        | 2,522   |   |   |   | 2,326 |   |
| Prepaid expenses and other current      assets                                                                   |   |        | 862     |   |   |   | 792 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Total current      assets                                                                                        |   |        | 36,145  |   |   |   | 32,757 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Property and equipment,      net                                                                                 |   |        | 5,834   |   |   |   | 5,570 |   |
| Intangible assets,      net                                                                                      |   |        | 5,981   |   |   |   | 7,270 |   |
| Goodwill                                                                                                         |   |        | 19,968  |   |   |   | 19,768 |   |
| Security deposits and other      assets                                                                          |   |        | 553     |   |   |   | 578 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Totalassets                                                                                                      |   | $           | 68,481  |   |   | $ | 65,943 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS'      EQUITY                                                                        |   |        |    |   |   |   |   |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Current      liabilities:                                                                                        |   |        |    |   |   |   |   |   |
| Line of    credit                                                                                                |   | $           | 7,093   |   |   | $ | - |   |
| Notes    payable                                                                                                 |   |        | 400     |   |   |   | 800 |   |
| Obligation to issue common      stock                                                                            |   |        | -       |   |   |   | 2,160 |   |
| Accounts      payable                                                                                            |   |        | 6,199   |   |   |   | 5,723 |   |
| Deferred      revenues                                                                                           |   |        | 585     |   |   |   | 543 |   |
| Accrued compensation and related      benefits                                                                   |   |        | 3,155   |   |   |   | 3,740 |   |
| Other current      liabilities                                                                                   |   |        | 1,966   |   |   |   | 2,170 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Total current      liabilities                                                                                   |   |        | 19,398  |   |   |   | 15,136 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Long-term      liabilities:                                                                                      |   |        |    |   |   |   |   |   |
| Notes payable, less current      portion                                                                         |   |        | -       |   |   |   | 396 |   |
| Other long-term      obligations                                                                                 |   |        | 838     |   |   |   | 454 |   |
| Total long-term      liabilities                                                                                 |   |        | 838     |   |   |   | 850 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Total      liabilities                                                                                           |   |        | 20,236  |   |   |   | 15,986 |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Commitments and      contingencies                                                                               |   |        |    |   |   |   |   |   |
|                                                                                                             |   |        |    |   |   |   |   |   |
| Stockholders'  equity:                                                                                 |   |        |    |   |   |   |   |   |
| Preferred stock, $0.001 par value,      14,900,000 shares authorized, no shares issued or      outstanding       |   |        |    |   |   |
| Series D convertible preferred      stock, non-voting, $0.001 par value, 100,000 shares      authorized,         |   |        |    |   |   |
| dividends do not      accrue,  no anti-dilution protection, 55,388.37 and 55,989.52      shares        |   |        |    |   |   |   |   |   |
| issued and outstanding,      convertible into 3,692,743 and 3,732,821 shares of common      stock           |   |        |    |   |   |
| at December 31, 2008 and 2007,      respectively, liquidation preference of $0.001 per share or      $0.         |   |        | -       |   |   |   | - |   |
| Common stock, $0.001 par value;      100,000,000 shares authorized;                                              |   |        |    |   |   |   |   |   |
| 10,486,935 shares issued and      10,379,868 shares outstanding at December 31,      2008, and              |   |        |    |   |   |
| 9,660,269 shares issued and      outstanding at December 31, 2007                                                |   |        | 10      |   |   |   | 10 |   |
| Additional paid-in      capital                                                                                  |   |        | 108,989 |   |   |   | 102,537 |   |
| Accumulated      deficit                                                                                         |   |        | (60,546 | ) |   |   | (52,590 | ) |
| Treasury stock; at cost, 107,067      and 0 shares at December 31, 2008 and December 31, 2007,      respectively |   |        | (208    | ) |   |   | - |   |
| Total stockholders'      equity                                                                                  |   |        | 48,245  |   |   |   | 49,957 |   |
| Total liabilities and      stockholders' equity                                                                  |   | $           | 68,481  |   |   | $ | 65,943 |   |

----

|                                                                                |   | For the Years Ended December      31, |      |
|-------------------------------------------------------------------------------------|--------|---------------------------------------|-----------|
|                                                                                |   | 2008                                  |      |   | 2007 |   |   | 2006 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |
| Revenues                                                                            |   | $                                     | 104,187   |   |   | $ | 87,131 |   |   | $ | 61,924 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Cost of      revenues                                                               |   |                                  | 59,939    |   |   |   | 48,969 |   |   |   | 32,243 |   |
| Grossprofit                                                                         |   |                                  | 44,248    |   |   |   | 38,162 |   |   |   | 29,681 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                                                            |   |                                  |      |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Selling and      marketing                                                          |   |                                  | 11,504    |   |   |   | 14,821 |   |   |   | 8,635 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| General and      administrative                                                     |   |                                  | 40,348    |   |   |   | 44,908 |   |   |   | 25,355 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Impairment loss on goodwill and      intangibles                                    |   |                                  | -         |   |   |   | 5,144 |   |   |   | 3,144 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
|          Total      operating expenses |   |                                  | 51,852    |   |   |   | 64,873 |   |   |   | 37,134 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Loss from      operations                                                           |   |                                  | (7,604    | ) |   |   | (26,711 | ) |   |   | (7,453 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Other income      (expense):                                                        |   |                                  |      |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
|     Interest      income                                        |   |                                  | 27        |   |   |   | 297 |   |   |   | 477 |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
|     Interest      (expense)                                     |   |                                  | (379      | ) |   |   | (814 | ) |   |   | (653 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
|     Other      income                                           |   |                                  | -         |   |   |   | 100 |   |   |   | - |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Prepayment      premium                                                             |   |                                  | -         |   |   |   | (800 | ) |   |   | - |   |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Amortization of debt discounts on      convertible                                  |   |                                  |      |   |   |   |   |   |   |   |   |   |
|    notes      payable                                                |   |                                  | -         |   |   |   | - |   |   |   | (7,523 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Amortization of deferred financing      costs                                       |   |                                  | -         |   |   |   | - |   |   |   | (2,694 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
|          Other      expense, net       |   |                                  | (352      | ) |   |   | (1,217 | ) |   |   | (10,394 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Net loss                                                                            |   |                                  | (7,956    | ) |   |   | (27,928 | ) |   |   | (17,847 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Deemed dividends on Series A and B      convertible                                 |   |                                  |      |   |   |   |   |   |   |   |   |   |
| preferred    stock                                                                  |   |                                  | -         |   |   |   | - |   |   |   | (24,413 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Net loss applicable to common      stockholders                                     |   | $                                     | (7,956    | ) |   | $ | (27,928 | ) |   | $ | (42,259 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per      share                                           |   | $                                     | (0.81     | ) |   | $ | (6.69 | ) |   | $ | (19.36 | ) |
|                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |
| Weighted average number of common      shares                                       |   |                                  |      |   |   |   |   |   |   |   |   |   |
|     outstanding      - basic and diluted                        |   |                                  | 9,834,069 |   |   |   | 4,177,435 |   |   |   | 2,183,324 |   |

----

|                                                                                                         |   |              |       |                 |   |                 |   |    |    | Series      D |   |       |   |    |      |    |   |   |
|--------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|----------------------|--------|----------------------|--------|---------|---------|---------------|--------|------------|--------|---------|-----------|---------|--------|--------|
|                                                                                                         |   |              |       |                 |   |                 |   |    |    | Convertible   |   | Additional |   |    |      |    |   |   |
|                                                                                                         |   | Common      Stock |       | Treasury      Shares |   | Preferred      Stock |   | Paid-in |    | Accumulated   |   |       |   |    |
|                                                                                                         |   | Shares            |       | Amount               |   | Shares               |   | Amount  |    | Shares        |   | Amount     |   | Capital |      | Deficit |   |   | Total |   |
| Balance,      January 1, 2008                                                                                |   |              | 9,660,269  |                 | $      | 10                   |   |    | -       |          | $      | -          |   |    | 55,989.32 |    | $      | -      |   | $ | 102,537 |   | $ | (52,590 | ) |   | $ | 49,957 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      issued to consultants for services                                                                |   |              | 26,984     |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 167 |   |   | - |   |   |   | 167 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of treasury shares                                                                             |   |              | -          |                 |   | -                    |   |    | 107,067 |          |   | (208       | )      |    | -         |    |   | -      |   |   | - |   |   | - |   |   |   | (208 | ) |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to sellers of JLWA in                                                          |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| satisfaction      of $2,160 obligation to issue common stock                                            |   |              | 225,000    |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 2,160 |   |   | - |   |   |   | 2,160 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to sellers of JLWA                                                             |   |              | 75,000     |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 720 |   |   | - |   |   |   | 720 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      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 |   |   | - |   |   |   | 34 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      based compensation - restricted stock vested                                                      |   |              | -          |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 1,058 |   |   | - |   |   |   | 1,058 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      based compensation - employee stock purchase plan                                                 |   |              | -          |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 11 |   |   | - |   |   |   | 11 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of consultant stock option costs                                                           |   |              | -          |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 122 |   |   | - |   |   |   | 122 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of employee stock options costs                                                            |   |              | -          |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 1,650 |   |   | - |   |   |   | 1,650 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of consultant restricted stock unit costs                                                  |   |              | -          |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 4 |   |   | - |   |   |   | 4 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of employee restricted stock unit costs                                                    |   |              | -          |                 |   | -                    |   |    | -       |          |   | -          |   |    | -         |    |   | -      |   |   | 526 |   |   | - |   |   |   | 526 |   |
|                                                                                                         |   |              |       |                 |   |                 |   |    |    |          |   |       |   |    |      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      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 |   |

----

|                                                                                                                                            |   |              |      |                 |   | Series      A        |   | Series      B        |   | Series      C        |   | Series      D |   |        |    |   |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|----------------------|--------|----------------------|--------|----------------------|--------|----------------------|--------|---------------|--------|-------------|---------|--------|--------|--------|--------|--------|
|                                                                                                                                            |   |              |      |                 |   | Convertible          |   | Convertible          |   | Convertible          |   | Convertible   |   |        |    |   |   |   |   |   |
|                                                                                                                                            |   | Common      Stock |      | Preferred      Stock |   | Preferred      Stock |   | Preferred      Stock |   | Preferred      Stock |   | Paid-in       |   | Accumulated |    |   |   |   |
|                                                                                                                                            |   | Shares            |      | Amount               |   | Shares               |   | Amount               |   | Shares               |   | Amount        |   | Shares      |    | Amount |   | Shares |   | Amount |   | Capital |   | Deficit |   |   | Total |   |
| Balance,      January 1, 2007                                                                                                                   |   |              | 2,678,059 |                 | $      | 3                    |   |                 | 6,380  |                 | $      | -             |   |        | 53,073  |   | $      | -      |   |   | - |   | $ | - |   |   | - |   | $ | - |   | $ | 78,558 |   | $ | (24,662 | ) |   | $ | 53,899 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fractional shares      of common stock issued in connection with reverse split                                                             |   |              | 42        |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment      to Series B Convertible Preferred shares outstanding                                                                            |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | (3      | )      |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with the purchase of On Line      Consulting                                                   |   |              | 84,375    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,350 |   |   | - |   |   |   | 1,350 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with purchase of Facticon                                                                           |   |              | 87,500    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,400 |   |   | - |   |   |   | 1,400 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise      of stock options                                                                                                                  |   |              | 88,236    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 48 |   |   | - |   |   |   | 48 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cashless      exercise of stock options                                                                                                         |   |              | 39,706    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (318 | ) |   | - |   |   |   | (318 | ) |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      issued to employees pursuant to 2006 Long-Term Incentive    Plan                                                                     |   |              | 3,471     |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 41 |   |   | - |   |   |   | 41 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      issued to consultants for services                                                                                                   |   |              | 3,823     |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 67 |   |   | - |   |   |   | 67 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      based compensation - restricted stock vested                                                                                         |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 677 |   |   | - |   |   |   | 677 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of consultant stock option costs                                                                                              |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 64 |   |   | - |   |   |   | 64 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of employee stock options costs                                                                                               |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,480 |   |   | - |   |   |   | 2,480 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with the conversion of shares of Series A      Convertible Preferred Stock                          |   |              | 3,125     |                 |   | -                    |   |                 | (50    | )                    |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      restructuring (See Note 14)                                                                                                         |   |              | 630,765   |                 |   | -                    |   |                 | (6,330 | )                    |   | -             |   |        | (53,070 | )      |   | -      |   |   | 59,400 |   |   | - |   |   | 19,706.52 |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with qualified public offering net of      offering costs                                           |   |              | 4,500,000 |                 |   | 5                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 18,172 |   |   | - |   |   |   | 18,177 |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion      of Series C Convertible Preferred Stock into shares of common stock and      share of Series D Convertible Preferred Stock |   |              | 1,541,167 |                 |   | 2                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | (59,400 | ) |   | - |   |   | 36,283.00 |   |   | - |   |   | (2 | ) |   | - |   |   |   | - |   |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                                                                                   |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -       |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (27,928 | ) |   |   | (27,928 | ) |
|                                                                                                                                            |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2007                                                                                                                 |   |              | 9,660,269 |                 | $      | 10                   |   |                 | -      |                 | $      | -             |   |        | -       |   | $      | -      |   |   | - |   | $ | - |   |   | 55,989.52 |   | $ | - |   | $ | 102,537 |   | $ | (52,590 | ) |   | $ | 49,957 |   |

----

|                                                                                                                              |   |              |      |                 |   | Series      A        |   | Series      B        |   | Series      C        |   | Series      D |   |        |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|----------------------|--------|----------------------|--------|----------------------|--------|----------------------|--------|---------------|--------|-------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                              |   |              |      |                 |   | Convertible          |   | Convertible          |   | Convertible          |   | Convertible   |   | Additional  |   |   |   |   |   |   |
|                                                                                                                              |   | Common      Stock |      | Preferred      Stock |   | Preferred      Stock |   | Preferred      Stock |   | Preferred      Stock |   | Paid-in       |   | Accumulated |   |   |   |   |
|                                                                                                                              |   | Shares            |      | Amount               |   | Shares               |   | Amount               |   | Shares               |   | Amount        |   | Shares      |   | Amount |   | Shares |   | Amount |   | Capital |   | Deficit |   |   | Total |   |
| Balance,      January 1, 2006                                                                                                     |   |              | 1,811,323 |                 | $      | 2                    |   |                 | 7,750  |                 | $      | -             |   |        | -      |   | $      | -      |   |   | - |   | $ | - |   |   | - |   | $ | - |   | $ | 11,600 |   | $ | (6,815 | ) |   | $ | 4,787 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with the purchase of JLWA                                                             |   |              | 102,459   |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,000 |   |   | - |   |   |   | 2,000 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to executive employee for future services                                                           |   |              | 100,000   |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to consultant for future services                                                                   |   |              | 75,000    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock as finders fee in connection with the acquisition of      Safir                                     |   |              | 10,883    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 175 |   |   | - |   |   |   | 175 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to consultant for services                                                                          |   |              | 7,317     |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 117 |   |   | - |   |   |   | 117 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of deferred consulting fees                                                                                     |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 736 |   |   | - |   |   |   | 736 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of Series B convertible preferred stock upon exchange of convertible notes      payable and accrued interest        |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | 53,073 |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 46,151 |   |   | - |   |   |   | 46,151 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with purchase of Safir                                                                |   |              | 375,000   |                 |   | 1                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5,999 |   |   | - |   |   |   | 6,000 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection  with      purchase of Secure Source                                        |   |              | 26,371    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 500 |   |   | - |   |   |   | 500 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with purchase of Hyperion    Risk                                                     |   |              | 84,081    |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,500 |   |   | - |   |   |   | 1,500 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of debt discounts on  convertible notes payable                                                       |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 7,522 |   |   | - |   |   |   | 7,522 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of stock options costs                                                                                          |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,258 |   |   | - |   |   |   | 2,258 |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock in connection with the converstion of shares of Series A      convertible preferred      stock |   |              | 85,625    |                 |   | -                    |   |                 | (1,370 | )                    |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   | - |   |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                                                                     |   |              | -         |                 |   | -                    |   |                 | -      |                 |   | -             |   |        | -      |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (17,847 | ) |   |   | (17,847 | ) |
|                                                                                                                              |   |              |      |                 |   |                 |   |                 |   |                 |   |          |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2006                                                                                                   |   |              | 2,678,059 |                 | $      | 3                    |   |                 | 6,380  |                 | $      | -             |   |        | 53,073 |   | $      | -      |   |   | - |   | $ | - |   |   | - |   | $ | - |   | $ | 78,558 |   | $ | (24,662 | ) |   | $ | 53,899 |   |

----

|                                                                                  |   | For      the Years Ended December 31, |   |
|---------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                  |   | 2008                                  |   |   | 2007 |   |   | 2006 |   |
| Cash      flows from operating activities:                                            |   |                                  |   |   |   |   |   |   |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |
| Net      loss                                                                         |   | $                                     | (7,956 | ) |   | $ | (27,928 | ) |   | $ | (17,847 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Adjustments      to reconcile net loss to net cash used in operating      activities: |   |                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Provision      for bad debts                                                          |   |                                  | 148    |   |   |   | 1,699 |   |   |   | 654 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                    |   |                                  | 4,366  |   |   |   | 3,917 |   |   |   | 2,110 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Deferred      rent                                                                    |   |                                  | 448    |   |   |   | 38 |   |   |   | 136 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Non-cash      interest charges                                                        |   |                                  | 4      |   |   |   | 37 |   |   |   | 10,219 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Impairment      of goodwill and intangible assets                                     |   |                                  | -      |   |   |   | 5,144 |   |   |   | 3,144 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Stock-based      compensation                                                         |   |                                  | 4,258  |   |   |   | 3,330 |   |   |   | 3,110 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Loss      on disposition of equipment                                                 |   |                                  | 27     |   |   |   | - |   |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Changes      in operating assets and liabilities:                                     |   |                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                              |   |                                  | (1,219 | ) |   |   | (723 | ) |   |   | (11,051 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Inventories                                                                           |   |                                  | (196   | ) |   |   | 194 |   |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Prepaid      expenses and other current assets                                        |   |                                  | (70    | ) |   |   | (59 | ) |   |   | (12 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Security      deposits and other assets                                               |   |                                  | 25     |   |   |   | (264 | ) |   |   | (165 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Accounts      payable                                                                 |   |                                  | 459    |   |   |   | 769 |   |   |   | 495 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Deferred      revenues                                                                |   |                                  | 42     |   |   |   | 396 |   |   |   | (48 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Accrued      compensation and related benefits                                        |   |                                  | (585   | ) |   |   | 576 |   |   |   | 1,425 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Due      to former stockholder of CBR                                                 |   |                                  | -      |   |   |   | - |   |   |   | (442 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Due      to former members of JLWA for earnout                                        |   |                                  | -      |   |   |   | 7,732 |   |   |   | 5,228 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Other      current liabilities                                                        |   |                                  | (536   | ) |   |   | (432 | ) |   |   | 728 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Other      long-term obligations                                                      |   |                                  | (54    | ) |   |   | 108 |   |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Total      adjustments                                                                |   |                                  | 7,117  |   |   |   | 22,462 |   |   |   | 15,531 |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Net      cash used in operating activities                                            |   |                                  | (839   | ) |   |   | (5,466 | ) |   |   | (2,316 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                            |   |                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Purchases      of property and equipment                                              |   |                                  | (1,638 | ) |   |   | (1,520 | ) |   |   | (287 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Purchase      of intangible assets                                                    |   |                                  | (44    | ) |   |   | (920 | ) |   |   | (65 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      of FAIS                                                              |   |                                  | (2,548 | ) |   |   | - |   |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      of On Line Consulting                                                |   |                                  | (200   | ) |   |   | (988 | ) |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      of Facticon                                                          |   |                                  | -      |   |   |   | (1,300 | ) |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      of Bode, less cash acquired of $284                                  |   |                                  | -      |   |   |   | (12,907 | ) |   |   | - |   |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      of JLWA                                                              |   |                                  | -      |   |   |   | - |   |   |   | (6,004 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      of Safir, less cash acquired of $447                                 |   |                                  | -      |   |   |   | - |   |   |   | (1,693 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Acquisition      Hyperion Risk, less cash acquired of $79                             |   |                                  | -      |   |   |   | - |   |   |   | (2,202 | ) |
|                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Net      cash used in investing activities                                            |   |                                  | (4,430 | ) |   |   | (17,635 | ) |   |   | (10,251 | ) |

----

|                                                                                      |   | For      the Years Ended December 31, |   |
|-------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                      |   | 2008                                  |   |   | 2007 |   |   | 2006 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                |   |                                  |   |   |   |   |   |   |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |
| Net  proceeds      (repayments) under line of credit                            |   | $                                     | 7,093  |   |   | $ | - |   |   | $ | (543 | ) |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from issuance of common stock                                               |   |                                  |   |   |   |   |   |   |   |   |   |   |
|   in      connection with qualified public offering, net of offering      costs |   |                                  | -      |   |   |   | 18,177 |   |   |   | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from convertible notes payable                                              |   |                                  | -      |   |   |   | - |   |   |   | 45,050 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Repayment      of convertible notes payable                                               |   |                                  | -      |   |   |   | - |   |   |   | (8,182 | ) |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Repayment      of notes payable                                                           |   |                                  | (800   | ) |   |   | (12,231 | ) |   |   | (819 | ) |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from exercise of stock options                                              |   |                                  | -      |   |   |   | 48 |   |   |   | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from issuance of stock in connection with ESPP                              |   |                                  | 34     |   |   |   | - |   |   |   | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Repurchase      of common stock                                                           |   |                                  | (208   | ) |   |   | - |   |   |   | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Deferred      financing costs                                                             |   |                                  | -      |   |   |   | - |   |   |   | (1,934 | ) |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by financing activities                                            |   |                                  | 6,119  |   |   |   | 5,994 |   |   |   | 33,572 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease)  in cash and cashequivalents                       |   |                                  | 850    |   |   |   | (17,107 | ) |   |   | 21,005 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents - beginning of year                                        |   |                                  | 4,426  |   |   |   | 21,533 |   |   |   | 528 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents - end of year                                              |   | $                                     | 5,276  |   |   | $ | 4,426 |   |   | $ | 21,533 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of cash flow information:                                    |   |                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
|  Cash      paid during the year for interest                                         |   | $                                     | 353    |   |   | $ | 827 |   |   | $ | 100 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosures of non-cash investing and financingactivities:              |   |                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued to settle the obligation to issue commonstock                    |   | $                                     | 2,160  |   |   | $ | - |   |   | $ | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued upon the cashless exercise of stock options                      |   | $                                     | -      |   |   | $ | 318 |   |   | $ | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued upon conversion of Series A convertible                          |   |                                  |   |   |   |   |   |   |   |   |   |   |
|   preferred      stock                                                          |   | $                                     | -      |   |   | $ | 3 |   |   | $ | 86 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock ($1,541) and Series D convertible preferred stock    ($36)              |   |                                  |   |   |   |   |   |   |   |
|   issued      upon conversion of Series C convertible preferred stock           |   | $                                     | -      |   |   | $ | 1,577 |   |   | $ | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock ($631), Series C ($59) and Series D ($20)                   |   |                                  |   |   |   |   |   |   |   |
|   convertible      preferred stock in equity restructuring                      |   | $                                     | -      |   |   | $ | 1 |   |   | $ | - |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Issuance      of Series B convertible preferred stock upon exchange of                    |   |                                  |   |   |   |   |   |   |   |   |   |   |
|   convertible      notes payable and accrued interest                           |   | $                                     | -      |   |   | $ | - |   |   | $ | 46,151 |   |
|                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Deferred      financing costs paid through the issuance of convertible    notes           |   | $                                     | -      |   |   | $ | - |   |   | $ | 761 |   |

----

|                                                                                                  |   | For      the Years Ended December 31, |   |
|-------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                  |   | 2008                                  |   |   | 2007 |   |   | 2006 |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of      FAIS:               |   |                                  |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                                         |   |                                  |   |   |   |   |   |   |   |
| Accounts      receivable                                                                              |   | $                                     | 1,201  |   |   | $ | - |   |   | $ | - |   |
| Property      and equipment                                                                           |   |                                  | 61     |   |   |   | - |   |   |   | - |   |
| Intangible      assets                                                                                |   |                                  | 1,625  |   |   |   | - |   |   |   | - |   |
| Accounts      payable                                                                                 |   |                                  | (17    | ) |   |   | - |   |   |   | - |   |
| Other      current liabilities                                                                        |   |                                  | (322   | ) |   |   | - |   |   |   | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price, paid in cash                                                               |   | $                                     | 2,548  |   |   | $ | - |   |   | $ | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of On Line      Consulting: |   |                                  |   |   |   |
| Assets      acquired and liabilities assumed:                                                         |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Property      and equipment                                                                           |   | $                                     | -      |   |   | $ | 97 |   |   | $ | - |   |
| Intangible      assets                                                                                |   |                                  | -      |   |   |   | 1,199 |   |   |   | - |   |
| Goodwill      recognized on purchase business combination                                             |   |                                  | 200    |   |   |   | 1,845 |   |   |   | - |   |
| Accounts      payable, accrued expenses and deferred revenues                                         |   |                                  | -      |   |   |   | (199 | ) |   |   | - |   |
| Other      current liabilities                                                                        |   |                                  | -      |   |   |   | (46 | ) |   |   | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price                                                                             |   |                                  | 200    |   |   |   | 2,896 |   |   |   | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Less:      Cash paid to acquire On Line Consulting                                                    |   |                                  | -      |   |   |   | (988 | ) |   |   | - |   |
| Non-cash      consideration to seller                                                                 |   | $                                     | 200    |   |   | $ | 1,908 |   |   | $ | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration consisted of:                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued to acquire On Line Consulting                                                |   | $                                     | -      |   |   | $ | 1,350 |   |   | $ | - |   |
| Notes      payable issued to seller                                                                   |   |                                  | -      |   |   |   | 558 |   |   |   | - |   |
| Total      non-cash consideration                                                                     |   | $                                     | -      |   |   | $ | 1,908 |   |   | $ | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of      Bode:               |   |                                  |   |   |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                                         |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                              |   | $                                     | -      |   |   | $ | 5,510 |   |   | $ | - |   |
| Inventories                                                                                           |   |                                  | -      |   |   |   | 2,519 |   |   |   | - |   |
| Other      current assets (including cash of $284)                                                    |   |                                  | -      |   |   |   | 560 |   |   |   | - |   |
| Property      and equipment                                                                           |   |                                  | -      |   |   |   | 4,133 |   |   |   | - |   |
| Intangible      assets                                                                                |   |                                  | -      |   |   |   | 310 |   |   |   | - |   |
| Goodwill      recognized on purchase business combination                                             |   |                                  | -      |   |   |   | 1,377 |   |   |   | - |   |
| Accounts      payable, accrued expenses and deferred rent obligations                                 |   |                                  | -      |   |   |   | (1,217 | ) |   |   | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price                                                                             |   |                                  | -      |   |   |   | 13,192 |   |   |   | - |   |
|                                                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Less:      Cash acquired                                                                              |   |                                  | -      |   |   |   | (284 | ) |   |   | - |   |
| Less:      Cash paid to acquire Bode                                                                  |   |                                  | -      |   |   |   | (12,908 | ) |   |   | - |   |
| Non-cash      consideration to seller                                                                 |   | $                                     | -      |   |   | $ | - |   |   | $ | - |   |

----

|                                                                                        |   | For the Years Ended December 31, |   |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                                                        |   | 2008                                                      |   |   | 2007 |   |   | 2006 |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of      Facticon: |   |                                                      |   |   |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                               |   |                                                      |   |   |   |   |   |   |   |
| Accounts      receivable                                                                    |   | $                                                         | -      |   |   | $ | 759 |   |   | $ | - |   |
| Property      and equipment                                                                 |   |                                                      | -      |   |   |   | 34 |   |   |   | - |   |
| Intangible      assets                                                                      |   |                                                      | -      |   |   |   | 120 |   |   |   | - |   |
| Goodwill      recognized on purchase business combination                                   |   |                                                      | -      |   |   |   | 3,113 |   |   |   | - |   |
| Accounts      payable, accrued expenses and deferred revenues                               |   |                                                      | -      |   |   |   | (1,226 | ) |   |   | - |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price                                                                   |   |                                                      | -      |   |   |   | 2,800 |   |   |   | - |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Less:      Cash paid to acquire Facticon                                                    |   |                                                      | -      |   |   |   | (1,300 | ) |   |   | - |   |
| Non-cash      consideration to seller                                                       |   | $                                                         | -      |   |   | $ | 1,500 |   |   | $ | - |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration consisted of :                                                  |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Note      payable issued to seller                                                          |   | $                                                         | -      |   |   | $ | 100 |   |   | $ | - |   |
| Common      stock issued to acquire Facticon                                                |   |                                                      | -      |   |   |   | 1,400 |   |   |   | - |   |
|  Total      non-cash consideration                                                     |   | $                                                         | -      |   |   | $ | 1,500 |   |   | $ | - |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of      JLWA:     |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                               |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Current      assets                                                                         |   | $                                                         | -      |   |   | $ | - |   |   | $ | 4,345 |   |
| Property      and equipment                                                                 |   |                                                      | -      |   |   |   | - |   |   |   | 186 |   |
| Intangible      assets                                                                      |   |                                                      | -      |   |   |   | - |   |   |   | 4,930 |   |
| Goodwill      recognized on purchase business combination                                   |   |                                                      | -      |   |   |   | - |   |   |   | 883 |   |
| Security      deposits and prepaid expenses                                                 |   |                                                      | -      |   |   |   | - |   |   |   | 100 |   |
| Accounts      payable, accrued expenses and deferred revenues                               |   |                                                      | -      |   |   |   | - |   |   |   | (2,041 | ) |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price                                                                   |   |                                                      | -      |   |   |   | - |   |   |   | 8,403 |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Less:      Cash paid to acquire JLWA                                                        |   |                                                      | -      |   |   |   | - |   |   |   | (6,003 | ) |
| Non-cash      consideration to seller                                                       |   | $                                                         | -      |   |   | $ | - |   |   | $ | 2,400 |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration, consisted of:                                                  |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued to acquire JLWA                                                    |   | $                                                         | -      |   |   | $ | - |   |   | $ | 2,000 |   |
| Note      payable issued to seller                                                          |   |                                                      | -      |   |   |   | - |   |   |   | 400 |   |
| Total      non-cash consideration                                                           |   | $                                                         | -      |   |   | $ | - |   |   | $ | 2,400 |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of      Safir:    |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                               |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Current      assets (including cash of $447)                                                |   | $                                                         | -      |   |   | $ | - |   |   | $ | 2,853 |   |
| Property      and equipment                                                                 |   |                                                      | -      |   |   |   | - |   |   |   | 181 |   |
| Intangible      assets                                                                      |   |                                                      | -      |   |   |   | - |   |   |   | 1,770 |   |
| Goodwill      recognized on purchase business combination                                   |   |                                                      | -      |   |   |   | - |   |   |   | 11,535 |   |
| Security      deposits and prepaid expenses                                                 |   |                                                      | -      |   |   |   | - |   |   |   | 156 |   |
| Accounts      payable, accrued expenses and deferred revenues                               |   |                                                      | -      |   |   |   | - |   |   |   | (1,179 | ) |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price                                                                   |   |                                                      | -      |   |   |   | - |   |   |   | 15,316 |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Less:      Cash acquired                                                                    |   |                                                      | -      |   |   |   | - |   |   |   | (447 | ) |
| Less:      Cash paid to acquire Safir                                                       |   |                                                      | -      |   |   |   | - |   |   |   | (1,494 | ) |
| Less:      Cash paid as finders fee                                                         |   |                                                      | -      |   |   |   | - |   |   |   | (200 | ) |
| Non-cash      consideration to seller                                                       |   | $                                                         | -      |   |   | $ | - |   |   | $ | 13,175 |   |
|                                                                                        |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration consisted of:                                                   |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued to acquire Safir                                                   |   | $                                                         | -      |   |   | $ | - |   |   | $ | 6,000 |   |
| Common      stock issued as finders fee                                                     |   |                                                      | -      |   |   |   | - |   |   |   | 175 |   |
| Note      payable issued to seller                                                          |   |                                                      | -      |   |   |   | - |   |   |   | 7,000 |   |
|  Total      non-cash consideration                                                     |   | $                                                         | -      |   |   | $ | - |   |   | $ | 13,175 |   |

----

|                                                                                             |   | For      the Years Ended December 31, |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                             |   | 2008                                  |   |   | 2007 |   |   | 2006 |   |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financing activity - acquisition of Secure      Source: |   |                                  |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                                    |   |                                  |   |   |   |   |   |   |   |
| Property      and equipment                                                                      |   | $                                     | -      |   |   | $ | - |   |   | $ | 101 |   |
| Intangible      assets                                                                           |   |                                  | -      |   |   |   | - |   |   |   | 1,111 |   |
| Goodwill      recognized on purchase business combination                                        |   |                                  | -      |   |   |   | - |   |   |   | 2,108 |   |
| Other      assets                                                                                |   |                                  | -      |   |   |   | - |   |   |   | 2 |   |
| Accounts      payable, accrued expenses and deferred revenues                                    |   |                                  | -      |   |   |   | - |   |   |   | (109 | ) |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration to seller                                                            |   | $                                     | -      |   |   | $ | - |   |   | $ | 3,213 |   |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration consisted of:                                                        |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued to acquire Secure Source                                                |   | $                                     | -      |   |   | $ | - |   |   | $ | 500 |   |
| Note      payable issued to seller                                                               |   |                                  | -      |   |   |   | - |   |   |   | 2,713 |   |
|      Total      non-cash consideration                                  |   | $                                     | -      |   |   | $ | - |   |   | $ | 3,213 |   |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Supplemental      non-cash investing and financial activity - acquisition of Hyperion      Risk: |   |                                  |   |   |   |   |   |   |
| Assets      acquired and liabilities assumed:                                                    |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Current      assets (including cash of $80)                                                      |   | $                                     | -      |   |   | $ | - |   |   | $ | 878 |   |
| Property      and equipment                                                                      |   |                                  | -      |   |   |   | - |   |   |   | 61 |   |
| Intangible      assets                                                                           |   |                                  | -      |   |   |   | - |   |   |   | 688 |   |
| Goodwill      recognized on purchase business combination                                        |   |                                  | -      |   |   |   | - |   |   |   | 2,815 |   |
| Other      assets                                                                                |   |                                  | -      |   |   |   | - |   |   |   | 14 |   |
| Accounts      payable, accrued expenses and deferred revenues                                    |   |                                  | -      |   |   |   | - |   |   |   | (674 | ) |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Total      purchase price                                                                        |   |                                  | -      |   |   |   | - |   |   |   | 3,782 |   |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Less:      Cash acquired                                                                         |   |                                  | -      |   |   |   | - |   |   |   | (80 | ) |
| Less:      Cash paid to acquire Hyperion Risk                                                    |   |                                  | -      |   |   |   | - |   |   |   | (2,202 | ) |
| Non-cash      consideration to seller                                                            |   | $                                     | -      |   |   | $ | - |   |   | $ | 1,500 |   |
|                                                                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Non-cash      consideration consisted of:                                                        |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Common      stock issued to acquire Hyperion Risk                                                |   | $                                     | -      |   |   | $ | - |   |   | $ | 1,500,000 |   |

----

----

----

impairment test at least on an annual basisand whenever events or changes in circumstances indicate that the carrying valuemay not be recoverable. The testing for 
impairment of 
goodwill isperformed in two steps: (1) potential 
impairment is identified by comparing the fair value of a reportingunit (based on market capitalization, discounted cash flows, or other acceptablemethods) with its carrying amount; and (2) if fair value is less than thecarrying amount, an impairment loss is estimated as the excess of the carryingamount of the goodwill over its fair value. Goodwill must be written down whenimpaired. The Company has adopted December 31 as the annual date for preparingits impairment assessment, unless other triggering events occur during the yearwhich might indicate that an impairment has occurred.

Revenue Recognition and Related Costs

----

----

Basic net loss per common share is computed based on the weightedaverage number of shares of common stock outstanding, as adjusted, during theyears presented. Common stock equivalents, consisting of stock options,restricted stock units (“RSUs”), warrants, Series A, B, C and D convertiblepreferred stock were not included in the calculation of the diluted loss pershare because their inclusion would have been anti-dilutive.  The basicweighted average number of shares was reduced for non-vested restricted stockawards and contingently returnable escrowed shares issued in connection withacquisitions, and was increased for non-contingent shares to be issued inconnection with the JLWA modification agreement (See Note 10).

|                                                                                                                               |   | At December 31, |      |
|------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|-----------|
|                                                                                                                               |   | 2008            |      |   | 2007 |   |   | 2006 |   |
| Stock      Options                                                                                                                 |   |            | 634,687   |   |   |   | 1,191,665 |   |   |   | 1,028,793 |   |
| Restricted      Stock Units                                                                                                        |   |            | 366,087   |   |   |   | - |   |   |   | - |   |
| Preferred      Stock and Warrants                                                                                                  |   |            | 3,692,743 |   |   |   | 3,732,821 |   |   |   | 6,580,603 |   |
| Potentially      dilutive securities realizable from the    vesting      of performance based restricted stock |   |            | 558,063   |   |   |   | 175,000 |   |   |   | - |   |
| Contingently      returnable shares related to the   acquisitions      of Facticon and Hyperion                     |   |            | -         |   |   |   | 78,923 |   |   |   | 53,844 |   |
| Total      Potentially Dilutive Securities                                                                                         |   |            | 5,251,580 |   |   |   | 5,178,409 |   |   |   | 7,663,240 |

----

----

4.Acquisitions

Acquisition of JLWA

----

| Intangible Assets Category               |   | Amortization Period |
|------------------------------------------|--------|---------------------|
|                                     |   |                |
| Trade      names     |   | 10      years       |
| Client      relationships                |   | 3      years        |

|                                                 |   | Fair Value |      |
|------------------------------------------------------|--------|------------|-----------|
| Accounts      receivable                             |   | $          | 4,345     |   |
| Prepaid      expenses                                |   |       | 35        |   |
| Property      and equipment                          |   |       | 186       |   |
| Security      deposits                               |   |       | 65        |   |
| Intangible      asset - trade names                  |   |       | 1,870     |   |
| Intangible      asset - client relationships         |   |       | 3,060     |   |
| Accounts      payable                                |   |       | (1,831    | ) |
| Deferred      revenues                               |   |       | (117      | ) |
| Accrued      expenses                                |   |       |  (93 | ) |
|                                                 |   |       |      |   |
| Net      fair values assigned to assets acquired and |   |       |      |   |
|          liabilities assumed          |   |       | 7,520     |   |
| Goodwill                                             |   |       |  883 |   |
| Total                                                |   | $          | 8,403     |   |

| Cash                                                    |   | $      | 5,457 |   |
|---------------------------------------------------------|--------|--------|-------|--------|
| Note      payable                                  |   |   | 400   |   |
| Working      capital purchase price adjustment, in cash |   |   | 546   |   |
| Value      of common stock issued                       |   |   | 2,000 |   |
| Total      Purchase Price Consideration                 |   | $      | 8,403 |   |

----

4. Acquisitions,continued

| Intangible Asset Category   |   | Amortization Period |
|-----------------------------|--------|---------------------|
| Trade      names            |   | 10      years       |
| Non-compete      agreements |   | 3      years        |
| Client      relationships   |   | 3      years        |

----

|                                                  |   | Fair Value |         |
|-------------------------------------------------------|--------|------------|--------------|
| Cash                                                  |   | $          | 447          |   |
| Accounts      receivable                              |   |       | 2,406        |   |
| Prepaid      expenses                                 |   |       | 108          |   |
| Property      and equipment                           |   |       | 181          |   |
| Intangible      assets – trade name             |   |       | 420          |   |
| Intangible      assets – non-compete-agreements |   |       | 70           |   |
| Intangible      assets – client relationships   |   |       | 1,280        |   |
| Security      deposits and other assets               |   |       | 48           |   |
| Accounts      payable                                 |   |       | (487         | ) |
| Accrued      compensation and related benefits        |   |       | (394         | ) |
| Accrued      expenses                                 |   |       | (298         | ) |
|                                                  |   |       |         |   |
| Net      fair values assigned to assets acquired and  |   |       |         |   |
|          liabilities assumed           |   |       | 3,781        |   |
| Goodwill                                              |   |       |  11,535 |   |
|                                                  |   |       |         |   |
| Total                                                 |   | $          | 15,316       |   |

| Cash                                            |   | $      | 1,941  |   |
|-------------------------------------------------|--------|--------|--------|--------|
| Notes      payable                              |   |   | 7,000  |   |
| Common      stock                               |   |   | 6,000  |   |
| Finders      fee paid in cash                   |   |   | 200    |   |
| Finders      fee paid in shares of common stock |   |   | 175    |   |
| Total      Purchase Price Consideration         |   | $      | 15,316 |   |

----

| Intangible Asset Category   |   | Amortization Period |
|-----------------------------|--------|---------------------|
| Trade      names            |   | 10      years       |
| Non-compete      agreements |   | 3      years        |
| Client      relationships   |   | 3      years        |

|                                                 |   | Fair Value |        |
|------------------------------------------------------|--------|------------|-------------|
| Property      and equipment                          |   | $          | 101         |   |
| Other      assets                                    |   |       | 2           |   |
| Intangible      asset – trade names            |   |       | 60          |   |
| Intangible      asset – non-compete agreements |   |       | 801         |   |
| Intangible      asset – client relationships   |   |       | 250         |   |
| Capital      leases                                  |   |       | (73         | ) |
| Client      advances                                 |   |       |  (36   | ) |
| Net      fair values assigned to assets acquired and |   |       |        |   |
|          liabilities assumed          |   |       | 1,105       |   |
| Goodwill                                             |   |       |  2,108 |   |
|   Total                                    |   | $          | 3,213       |   |

| Notes      payable                      |   | $      | 2,713     |   |
|-----------------------------------------|--------|--------|-----------|--------|
| Value      of common stock issued       |   |   |  500 |   |
| Total      Purchase Price Consideration |   | $      | 3,213     |   |

----

| Intangible Asset Category   |   | Amortization Period |
|-----------------------------|--------|---------------------|
| Trade      names            |   | 5      years        |
| Developed      technology   |   | 3      years        |
| Client      relationships   |   | 5      years        |
| Non-compete      agreements |   | 3      years        |

|                                                 |   | Fair Value |        |
|------------------------------------------------------|--------|------------|-------------|
| Current      assets (including cash of $80)          |   | $          | 878         |   |
| Property      and equipment                          |   |       | 61          |   |
| Security      deposits and other assets              |   |       | 14          |   |
| Intangible      asset – non-compete agreements |   |       | 110         |   |
| Intangible      asset – trade names            |   |       | 60          |   |
| Intangible      asset – developed technology   |   |       | 278         |   |
| Intangible      asset – client relationships   |   |       | 240         |   |
| Accounts      payable                                |   |       | (335        | ) |
| Accrued      payroll and related benefits            |   |       | (78         | ) |
| Other      current liabilities                       |   |       | (219        | ) |
| Deferred      rent obligations                       |   |       |  (42   | ) |
|                                                 |   |       |        |   |
| Net      fair values assigned to assets acquired and |   |       |        |   |
|          liabilities assumed          |   |       | 967         |   |
| Goodwill                                             |   |       |  2,815 |   |
|   Total                                    |   | $          | 3,782       |   |

| Cash                                    |   | $      | 2,282  |   |
|-----------------------------------------|--------|--------|--------|--------|
| Value      of common stock issued       |   |   | 1,500  |   |
|                                    |   |   |   |   |
| Total      Purchase Price Consideration |   | $      | 3,782  |   |

----

| Intangible Asset Category   |   | Amortization Period |
|-----------------------------|--------|---------------------|
| Trade      names            |   | 5      years        |
| Non-compete      agreements |   | 3      years        |
| Client      relationships   |   | 7      years        |

----

|                                                 |   | Fair Value |   |
|------------------------------------------------------|--------|------------|--------|
| Property      and equipment                          |   | $          | 97     |   |
| Intangible      asset - trade names                  |   |       | 70     |   |
| Intangible      asset – non-compete agreements |   |       | 59     |   |
| Intangible      asset - client relationships         |   |       | 1,070  |   |
| Accounts      payable                                |   |       | (75    | ) |
| Accrued      compensation and related benefits       |   |       | (84    | ) |
| Deferred      revenues                               |   |       | (40    | ) |
| Capital      lease obligation                        |   |       | (34    | ) |
| Other      liabilities                               |   |       | (12    | ) |
|                                                 |   |       |   |   |
| Net      fair values assigned to assets acquired and |   |       |   |   |
| liabilities      assumed                             |   |       | 1,051  |   |
| Goodwill                                             |   |       | 2,045  |   |
| Total                                                |   | $          | 3,096  |   |

| Cash                                    |   | $      | 1,174 |   |
|-----------------------------------------|--------|--------|-------|--------|
| Common      stock                       |   |   | 1,350 |   |
| Amount      due to seller               |   |   | 14    |   |
| Notes      payable                      |   |   | 558   |   |
| Total      Purchase Price Consideration |   | $      | 3,096 |   |

----

| Intangible Asset Category |   | Amortization      Period |
|---------------------------|--------|--------------------------|
| Trade      names          |   | 10      years            |
| Developed      technology |   | 5  years       |

|                                                                                                |   | Fair Value |   |
|-----------------------------------------------------------------------------------------------------|--------|------------|--------|
| Cash      and cash equivalents                                                                      |   | $          | 284    |   |
| Accounts      receivable                                                                            |   |       | 5,510  |   |
| Inventories                                                                                         |   |       | 2,519  |   |
| Other      current assets                                                                           |   |       | 276    |   |
| Property      and equipment                                                                         |   |       | 4,133  |   |
| Intangible      asset – trade names                                                           |   |       | 200    |   |
| Intangible      asset – development technology                                                |   |       | 110    |   |
| Accounts      payable                                                                               |   |       | (545   | ) |
| Deferred      rent obligations                                                                      |   |       | (94    | ) |
| Accrued      expenses                                                                               |   |       | (578   | ) |
|                                                                                                |   |       |   |   |
| Net      fair values assigned to assets acquired  and  liabilities      assumed |   |       | 11,815 |   |
| Goodwill                                                                                            |   |       | 1,377  |   |
| Total      purchase price in cash                                                                   |   | $          | 13,192 |   |

----

| Intangible Asset Category |   | Amortization Period |
|---------------------------|--------|---------------------|
| Trade      name           |   | 5      years        |
| Client      relationships |   | 3      years        |

|                                                                                                  |   | Fair Value |   |
|-------------------------------------------------------------------------------------------------------|--------|------------|--------|
| Accounts      receivable                                                                              |   | $          | 759    |   |
| Property      and equipment                                                                           |   |       | 34     |   |
| Intangible      assets – trade name                                                             |   |       | 60     |   |
| Intangible      assets – client relationships                                                   |   |       | 60     |   |
| Accounts      payable                                                                                 |   |       | (185   | ) |
| Accrued      compensation and related benefits                                                        |   |       | (237   | ) |
| Accrued      expenses                                                                                 |   |       | (804   | ) |
| Net      fair values assigned to assets acquired and liabilities  assumed         |   |       | (313   | ) |
| Goodwill                                                                                              |   |       | 3,113  |   |
|                                                                                                  |   |       |   |   |
| Total                                                                                                 |   | $          | 2,800  |   |

----

| Cash                                    |   | $      | 1,300  |   |
|-----------------------------------------|--------|--------|--------|--------|
| Note      issued to seller              |   |   | 100    |   |
| Value      of common stock issued       |   |   | 1,400  |   |
|                                    |   |   |   |   |
| Total      Purchase Price Consideration |   | $      | 2,800  |   |

----

| Intangible Asset Category  |   | Amortization Period |
|-------------------------------------------|--------|--------------------------|
| Non-compete      agreements               |   |                     | 3      years |
| Client      relationships                 |   |                     | 7      years |

|                                                                       |   | Fair      Value |        |
|----------------------------------------------------------------------------|--------|-----------------|-------------|
| Accounts      receivable                                                   |   | $               | 1,201       |   |
| Property      and equipment                                                |   |            | 61          |   |
| Intangible      asset – non-complete agreements                      |   |            | 182         |   |
| Intangible      asset – client relationships                         |   |            | 1,443       |   |
| Accounts      payable                                                      |   |            | (17         | ) |
| Accrued      liabilities                                                   |   |            | (48         | ) |
| Cost      of exit activities                                               |   |            | (274        | ) |
|                                                                       |   |            |        |   |
| Net      fair value assigned to assets acquired and liabilities    assumed |   | $               |  2,548 |   |

|                                                                  |   | Fair      Value |     |
|-----------------------------------------------------------------------|--------|-----------------|----------|
| Cash                                                                  |   | $               | 2,164    |   |
| Broker      fee                                                       |   |            | 350      |   |
| Legal      fee                                                        |   |            |  34 |   |
|      Total      Purchase Price Consideration |   | $               | 2,548    |   |

----

|                                                                                                          |   | For      the Years Ended December 31, |                     |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------------------------|
|                                                                                                          |   | 2008                                  |                     |   | 2007 |   |   | 2006 |   |
| Revenues                                                                                                      |   | $                                     | 107,178                  |   |   | $ | 102,561 |   |   | $ |  98,442 |   |
|                                                                                                          |   |                                  |                     |   |   |   |   |   |   |   |   |   |
| Net      loss available to common  stockholders                                                     |   | $                                     | (9,112                   | ) |   | $ | (32,636 | ) |   | $ | (53,169 | ) |
|                                                                                                          |   |                                  |                     |   |   |   |   |   |   |   |   |   |
| Pro-forma      basic and diluted  net      loss per common share                                    |   | $                                     | (0.93                    | )  |   | $ | (7.81 | ) |   | $ |  (21.68 | ) |
|                                                                                                          |   |                                  |                     |   |   |   |   |   |   |   |   |   |
| Pro-forma      weighted average  common      shares outstanding  -      basic and diluted |   |                                  |     9,834 |   |   |   |    4,179 |   |   |   |    2,452 |   |

|                                           |   | December      31, |   |
|------------------------------------------------|--------|-------------------|--------|
|                                           |   | 2008              |   |   | 2007 |   |
| Raw      materials                             |   | $                 | 1,373  |   |   | $ | 900 |   |
| Work      in progress – DNA analysis     |   |              | 304    |   |   |   | 480 |   |
| Finished      goods                            |   |              | 900    |   |   |   | 946 |   |
|                                           |   | $                 | 2,577  |   |   | $ | 2,326 |   |
| Less:  Reserve      for obsolescence |   |              | (55    | ) |   |   | 0 |   |
| Total                                          |   | $                 | 2,522  |   |   | $ | 2,326 |   |

----

:

|                                                                                   |   | TradeNames |    |   | Developed Technology |   |    | Non-Compete Agreements |   |   | Client Relationships |   |   | Patents |   |   | Accumulated Amortization |   |    | Total     |   |
|----------------------------------------------------------------------------------------|--------|------------|---------|--------|----------------------|--------|---------|------------------------|--------|--------|----------------------|--------|--------|---------|--------|--------|--------------------------|--------|---------|-----------|--------|
| Balance      as of January 1, 2007                                                     |   |       | 2,490   |   |                 |   | 330     |                   |   |   | 1,440                |   |   |    | 5,380  |   |                     |   | -       |      |   |   | (2,010 | ) |   |   | 7,630 |   |
|                                                                                   |   |       |    |   |                 |   |    |                   |   |   |                 |   |   |    |   |   |                     |   |    |      |   |   |   |   |   |   |   |   |
| Acquisition      of On Line  Consulting                                      |   |       | 70      |   |                 |   | -       |                   |   |   | 59                   |   |   |    | 1,070  |   |                     |   | -       |      |   |   | - |   |   |   | 1,199 |   |
| Acquisition      of Bode                                                               |   |       | 200     |   |                 |   | 110     |                   |   |   | -                    |   |   |    | -      |   |                     |   | -       |      |   |   | - |   |   |   | 310 |   |
| Acquisition      of Facticon                                                           |   |       | 60      |   |                 |   | -       |                   |   |   | -                    |   |   |    | 60     |   |                     |   | -       |      |   |   | - |   |   |   | 120 |   |
| Costs      of patents                                                                  |   |       | -       |   |                 |   | -       |                   |   |   | -                    |   |   |    | -      |   |                     |   | 70      |      |   |   | - |   |   |   | 70 |   |
| Purchase      of customer relationships                                           |   |       | -       |   |                 |   | -       |                   |   |   | -                    |   |   |    | 850    |   |                     |   | -       |      |   |   | - |   |   |   | 850 |   |
| Abandonment      of trade names                                                   |   |       | (260    | )      |                 |   | -       |                   |   |   | -                    |   |   |    | -      |   |                     |   | -       |      |   |   | 260 |   |   |   | - |   |
| Amortization      expense                                                              |   |       | -       |   |                 |   | -       |                   |   |   | -                    |   |   |    | -      |   |                     |   | -       |      |   |   | (2,909 | ) |   |   | (2,909 | ) |
| Balance      as of December 31, 2007                                                   |   | $          | 2,560   |   |                 | $      | 440     |                   |   | $      | 1,499                |   |   | $       | 7,360  |   |                     | $      | 70      |      |   | $ | (4,659 | ) |   | $ | 7,270 |   |
|                                                                                   |   |       |    |   |                 |   |    |                   |   |   |                 |   |   |    |   |   |                     |   |    |      |   |   |   |   |   |   |   |   |
| Additions:                                                                             |   |       |    |   |                 |   |    |                   |   |   |                 |   |   |    |   |   |                     |   |    |      |   |   |   |   |   |   |   |   |
|   Acquisition      of FAIS                                                   |   |       | -       |   |                 |   | -       |                   |   |   | 290                  |   |   |    | 2,500  |   |                     |   | -       |      |   |   | - |   |   |   | 2,790 |   |
|   Costs      of patents                                                      |   |       | -       |   |                 |   | -       |                   |   |   | -                    |   |   |    | -      |   |                     |   | 45      |      |   |   | - |   |   |   | 45 |   |
|    Purchase      Price Adjustment - FAIS                                |   |       | -       |   |                 |   | -       |                   |   |   | (129                 | )      |   |    | (1,145 | )      |                     |   | -       |      |   |   | 109 |   |   |   | (1,165 | ) |
|   Amortization      Expense                                                  |   |       |  - |   |                 |   |  - |                   |   |   | -                    |   |   |    | -      |   |                     |   |  - |      |   |   |  (2,959 | ) |   |   | (2,959 | ) |
| Balance      as of  December 31, 2008                                        |   | $          | 2,560   |   |                 | $      | 440     |                   |   | $      | 1,660                |   |   | $       | 8,715  |   |                     | $      | 115     |      |   | $ | (7,509 | ) |   | $ | 5,981 |   |
|                                                                                   |   |       |    |   |                 |   |    |                   |   |   |                 |   |   |    |   |   |                     |   |    |      |   |   |   |   |   |   |   |   |
| Weighted      average amortization period      at December 31, 2008 in      years |   |       | 6.4     |   |                 |   | 0.9     |                   |   |   | 0 .5                 |   |   |    | 2.6    |   |                     |   | -       |  (1) |   |   |   |   |   |   |   |   |

----

| For the      Years Ending |   |   | Trade |   |   |   | Developed  |   |   |   | Non-Compete |   |   |   | Client        |   |   |   |    |   |   |   |   |   |
|-------------------------------------|--------|--------|-------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|--------|---------------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| December 31,                   |   |   | Names |   |   |   | Technology |   |   |   | Agreements  |   |   |   | Relationships |   |   |   | Patents |   |   |   | Total  |   |
| 2009                                |   | $      | 305   |   |   | $      | 35         |   |   | $      | 225         |   |   | $      | 1,148         |   |   | $      | -       |   |   | $      | 1,713  |   |
| 2010                                |   |   | 305   |   |   |   | 22         |   |   |   | 54          |   |   |   | 857           |   |   |   | -       |   |   |   | 1,238  |   |
| 2011                                |   |   | 251   |   |   |   | 22         |   |   |   | 13          |   |   |   | 639           |   |   |   | -       |   |   |   | 925    |   |
| 2012                                |   |   | 207   |   |   |   | 4          |   |   |   | -           |   |   |   | 509           |   |   |   | -       |   |   |   | 720    |   |
| 2013                                |   |   | 207   |   |   |   | -          |   |   |   | -           |   |   |   | 346           |   |   |   | -       |   |   |   | 553    |   |
| thereafter                          |   |   | 471   |   |   |   | -          |   |   |   | -           |   |   |   | 246           |   |   |   | 115     |   |   |   | 832    |   |
| Totals                              |   | $      | 1,746 |   |   | $      | 83         |   |   | $      | 292         |   |   | $      | 3,745         |   |   | $      | 115     |   |   | $      | 5,981  |   |

----

|                                                                                 |   |   | PreparednessServices |   |   |   | Fraud      andSIU Services  |   |   |   | SecurityConsulting andInvestigations |   |   |   | Consolidated |   |
|--------------------------------------------------------------------------------------|--------|--------|----------------------|--------|--------|--------|----------------------------------|--------|--------|--------|-------------------------------------------|--------|--------|--------|--------------|--------|
| Balance      as of  January 1, 2007                                        |   | $      | 883                  |   |   | $      | 8,053                            |   |   | $      | 9,641                                     |   |   | $      | 18,578       |   |
| Acquisition      of On Line Consulting                                               |   |   | —              |   |   |   | —                          |   |   |   | 1,320                                     |   |   |   | 1,320        |   |
| Acquisition      of Bode                                                             |   |   | —              |   |   |   | —                          |   |   |   | 575                                       |   |   |   | 575          |   |
| Acquisition      of Facticon                                                         |   |   | —              |   |   |   | 2,420                            |   |   |   | —                                   |   |   |   | 2,420        |   |
| Purchase      Price Adjustment - On Line                                             |   |   | —              |   |   |   | —                          |   |   |   | 524                                       |   |   |   | 524          |   |
| Purchase      price adjustment - Bode                                                |   |   | —              |   |   |   | —                          |   |   |   | 802                                       |   |   |   | 802          |   |
| Purchase      price adjustment - Facticon                                            |   |   | —              |   |   |   | 693                              |   |   |   | —                                   |   |   |   | 693          |   |
| Impairment      charge                                                               |   |   | —         |   |   |   | (5,144                           | )      |   |   | —                              |   |   |   | (5,144       | )      |
| Balance      as of  December 31, 2007                                      |   | $      | 883                  |   |   | $      | 6,022                            |   |   | $      | 12,862                                    |   |   | $      | 19,768       |   |
| Purchase      Price  Adjustment- On Line    Consulting |   |   | —              |   |   |   | —                          |   |   |   | 200                                       |   |   |   | 200          |   |
| Balance      as of December 31, 2008                                                 |   | $      | 883                  |   |   | $      | 6,022                            |   |   | $      | 13,062                                    |   |   | $      | 19,968       |   |

----

Property andEquipment

|                                                      |   | December 31, |   |
|-----------------------------------------------------------|--------|--------------|--------|
|                                                      |   | 2008         |   |   | 2007 |   |
| Computer      and equipment and software                  |   | $            | 3,453  |   |   | $ | 2,359 |   |
| Laboratory      equipment                                 |   |         | 1,648  |   |   |   | 1,505 |   |
| Furniture      and fixtures                               |   |         | 895    |   |   |   | 753 |   |
| Vehicles                                                  |   |         | 134    |   |   |   | 162 |   |
| Leasehold      improvements                               |   |         | 2,677  |   |   |   | 2,376 |   |
|                                                      |   |         | 8,807  |   |   |   | 7,155 |   |
| Less:      accumulated depreciation and amortization |   |         | (2,973 | ) |   |   | (1,585 | ) |
|                                                      |   |         |   |   |   |   |   |   |
| Property      and equipment, net                          |   | $            | 5,834  |   |   | $ | 5,570 |   |

|                           |   |   | December      31, |   |
|--------------------------------|--------|--------|-------------------|--------|
|                           |   |   | 2008              |   |   |   | 2007 |   |
| Performance      based bonuses |   | $      | 1,237             |   |   | $ | 1,942 |   |
| Payroll      and commissions   |   |   | 1,172             |   |   |   | 801 |   |
| Employee      benefits         |   |   |  746         |   |   |   |  997 |   |
|                           |   |   |              |   |   |   |   |   |
| Total                          |   | $      | 3,155             |   |   | $ | 3,740 |   |

----

----

----

|                                                                              |   | 2008   |      |   | 2007   |   |
|-----------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Note      payable to seller for Secure Source Acquisition (See Note    4)         |   | $      | $250      |   |   | $      | $500 |   |
| Note      payable to seller for Facticon Acquisition (See Note 4)                 |   |   | -         |   |   |   | 100 |   |
| Notes      payable to seller for On Line Consulting Acquisition (See      Note 4) |   |   |  150 |   |   |   |  596 |   |
|                                                                              |   |   |      |   |   |   |   |   |
| Total                                                                             |   |   | 400       |   |   |   | 1,196 |   |
| Less      – current portion                                                 |   |   | 400       |   |   |   | 800 |   |
| Long-term      portion                                                            |   | $      | 0         |   |   | $      | 396 |   |

----

|                                                                                   |   | December      31, |    |
|----------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                   |   | 2008              |    |   | 2007 |   |
|        Net operating loss carryforwards                                           |   | $                 | 5,846   |   |   | $ | 5,149 |   |
|        Stock-based compensation                                                   |   |              | 1,685   |   |   |   | 1,946 |   |
|        Allowance for doubtful accounts                                            |   |              | 995     |   |   |   | 984 |   |
|        Intangible assets                                                          |   |              | 2,306   |   |   |   | 1,545 |   |
|        Goodwill                                                                   |   |              | 6,104   |   |   |   | 7,105 |   |
|        Other accruals                                                             |   |              | 1,146   |   |   |   | 421 |   |
|            Total gross deferred tax assets                    |   |              | 18,082  |   |   |   | 17,150 |   |
| Deferred      tax liability:                                                           |   |              |    |   |   |   |   |   |
|        Excess of book over tax basis of property and equipment                    |   |              | (655    | ) |   |   | (597 | ) |
|            Net deferred tax assets before valuation allowance |   |              | 17,427  |   |   |   | 16,553 |   |
|        Less: valuation allowance                                                  |   |              | (17,427 | ) |   |   | (16,553 | ) |
|            Deferred tax assets, net                           |   | $                 | -       |   |   | $ | - |   |

|                               |   | For the Year Ended December    31, |   |
|------------------------------------|--------|------------------------------------|--------|
|                               |   | 2008                               |   |   | 2007 |   |   | 2006 |   |
| Income      tax benefit            |   | $                                  | 874    |   |   | $ | 10,693 |   |   | $ | 3,241 |   |
| Change      in valuation allowance |   |                               | (874   | ) |   |   | (10,693 | ) |   |   | (3,241 | ) |
| Net      income tax benefit        |   | $                                  | -      |   |   | $ | - |   |   | $ | - |   |

|                                              |   | As of December 31, |       |
|---------------------------------------------------|--------|--------------------|------------|
|                                              |   | 2008               |       |   | 2007 |   |   | 2006 |   |
| Tax      benefit at federal statutory rate        |   |               | (34.0      | )      % |   |   | (34.0 | )      % |   |   | (34.0)% | % |
| State      income taxes                           |   |               | (6.0       | ) |   |   | (6.0 | ) |   |   | (6.0 | ) |
| Permanent      differences:             |   |               |       |   |   |   |   |   |   |   |   |   |
|         Incentive stock option expense  |   |               | 7.1        |   |   |   | - |   |   |   | - |   |
|         Other                           |   |               | 3.7        |   |   |   | 1.7 |   |   |   | 21.9 |   |
| Adjustment      of deferred tax assets            |   |               |       |   |   |   |   |   |   |   |   |   |
|   Stock      based compensation expense |   |               | 12.0       |   |   |   | - |   |   |   | - |   |
| Net      operating loss carryovers           |   |               | 6.2        |   |   |   | - |   |   |   | - |   |
| Increase      in valuation allowance              |   |               |  11.0 |   |   |   | 38.3 |   |   |   | 18.1 |   |
| Effective      income tax rate                    |   |               | -          | % |   |   | - | % |   |   | - | % |

----

13.  CommitmentsandContingencies

----

| For      the Year Ending December 31,                                                                      |   | Amount |         |
|------------------------------------------------------------------------------------------------------------|--------|--------|--------------|
|                  2009 |   | $      | 2,978        |   |
|                  2010 |   |   | 2,808        |   |
|                  2011 |   |   | 2,543        |   |
|                  2012 |   |   | 2,129        |   |
|                  2013 |   |   | 2,119        |   |
|             Thereafter                         |   |   | 4,252        |   |
|                 Total      |   |   |  16,829 |   |

----

----

----

----

----

----

Series D Convertible Preferred Stock

----

----

----

----

| For      the Year Ended December 30, 2008                                                                   |   |
|-------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   | EITF96-18 |   |   | SFAS123R |   |   | Total |   |
| Stock      Options                                                                                          |   | $ | 121 |   |   | $ | 1,650 |   |   | $ | 1,771 |   |
| RSUs                                                                                                        |   |   | 4 |   |   |   | 526 |   |   |   | 530 |   |
| Stock      issued to consultants for services                                                               |   |   | 167 |   |   |   |   |   |   |   | 167 |   |
| Stock      purchase plan                                                                                    |   |   | - |   |   |   | 11 |   |   |   | 11 |   |
| Vesting      of restricted shares under performance based    executive      bonus award |   |   | - |   |   |   | 1,059 |   |   |   | 1,059 |   |
| Total                                                                                                       |   | $ | 292 |   |   | $ | 3,246 |   |   | $ | 3,538 |   |

|                                                                                                        |   |
|-------------------------------------------------------------------------------------------------------------|--------|
| For      the Year Ended December 30, 2007                                                                   |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   | EITF96-18 |   |   | SFAS123R |   |   | Total |   |
| Stock      Options                                                                                          |   | $ | 64 |   |   | $ | 2,480 |   |   | $ | 2,544 |   |
| Stock      issued to consultants for services                                                               |   |   | 67 |   |   |   |   |   |   |   | 67 |   |
| Bonus      shares issued to employees                                                                       |   |   |   |   |   |   | 42 |   |   |   | 42 |   |
| Vesting      of restricted shares under performance based    executive      bonus award |   |   | - |   |   |   | 677 |   |   |   | 677 |   |
| Total                                                                                                       |   | $ | 131 |   |   | $ | 3,199 |   |   | $ | 3,330 |   |

| For      the Year Ended December 30, 2006 |   |
|-------------------------------------------|--------|
|                                      |   |   |   |   |   |   |   |   |   |
|                                      |   | EITF96-18 |   |   | SFAS123R |   |   | Total |   |
| Stock      Options                        |   | $ | 853 |   |   | $ | 2,257 |   |   | $ | 3,110 |   |

----

|                         |   | Years      Ended December 31, |   |
|------------------------------|--------|-------------------------------|--------|
|                         |   | 2008                          |   |   | 2007 |   |   | 2006 |   |
| Dividend      yield          |   |  0%                      |   |   |  0% |   |   |  0% |   |
| Expected      volatility     |   |  87%                     |   |   |  87% |   |   |  87% |   |
| Risk-free      interest rate |   |  3.0%                    |   |   |  4.3% |   |   |  5.0% |   |
| Expected      lives          |   | 5      years                  |   |   | 5      years |   |   | 5      years |   |

----

----

----

----

|                                          | Number      of Options |   | Weighted      Average      Exercise      Price |             | Weighted      Average      remaining      contractual      life |
|-----------------------------------------------|------------------------|--------|------------------------------------------------|------------------|-----------------------------------------------------------------|
| Options      outstanding at January 1, 2006   | 621,268                |   | $                                              | 11.39            |                                                            |   |
| Granted                                       | 410,952                |   |                                           | 17.16            |                                                            |   |
| Forfeited                                     | (3,427)                |   |                                           | 16.20            |                                                            |   |
| Options      outstanding at December 31, 2006 | 1,028,793              |   |                                           |  13.68      |                                                            |   |
| Granted                                       |  460,321          |   |                                           |   8.60 |                                                            |   |
| Exercised                                     |  (198,530)        |   |                                           |   2.91 |                                                            |   |
| Forfeited                                     | (98,919)               |   |                                           | 11.24            |                                                            |   |
| Options      outstanding at December 31, 2007 | 1,191,665              |   | $                                              | 13.72            |                                                            |   |
| Granted                                       |  619,334          |   |                                           |   2.59 |                                                            |   |
| Forfeited                                     |  (71,124)         |   |                                           |   5.69 |                                                            |   |
| Canceled                                      | (1,105,188)            |   |                                           | 13.79            |                                                            |   |
| Options      outstanding at December 31, 2008 | 634,687                |   | $                                              | 3.62             |                                                            | 4.1 |
|                                          |                   |   |                                           |             |                                                            |   |
| Exercisable,      December 31, 2008           | 186,806                |   |                                           | 5.15             |                                                            | 3.9 |

----

|                                                                                        |   | Total  |    |   | WeightedAverage      GrantDate      Fair Value |   |
|---------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------------------------------------------|--------|
| Nonvested      at January 1, 2008                                                           |   |   | -       |   |                                           |   | - |   |
| RSUs      issued upon cancellation of options   tendered,      June 26, 2008 |   |   | 368,475 |   |                                           | $      | 2.12 |   |
| RSUs      vested                                                                            |   |   | -       |   |                                           |   |   |   |
| RSUs      forfeited                                                                         |   |   | (2,388  | )      |                                           |   |   |   |
| Nonvested      at December 31, 2008                                                         |   |   | 366,087 |   |                                           | $      | 2.12 |   |

----

----

| For the Year Ended December 31,      2008 |   |
|-------------------------------------------|--------|
|                                      |   |
|                                      |   |
|                                      |   | Preparedness Services |   |   | Fraud & SIU Services |   |   | Security Consulting & Investigations |   |   | Corporate |   |   | Consolidated |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                  |   | $ | 39,117 |   |   | $ | 31,388 |   |   | $ | 33,682 |   |   | $ |  - |   |   | $ |   104,187 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (Loss) from Operations   |   | $ | 1,712 |   |   | $ | ( 4,488 | ) |   | $ |   ( 4,828 | ) |   | $ | - |   |   | $ | ( 7,604 | ) |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Identifiable      Assets                  |   | $ | 17,331 |   |   | $ | 18,967 |   |   | $ | 32,183 |   |   | $ | - |   |   | $ | 68,481 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and Amortization   |   | $ | 1,267 |   |   | $ | 1,379 |   |   | $ | 1,720 |   |   | $ |  - |   |   | $ | 4,366 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense                     |   | $ | - |   |   | $ | - |   |   | $ |  - |   |   | $ | 379 |   |   | $ | 379 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Expenditures                 |   | $ | 144 |   |   | $ | 662 |   |   | $ | 832 |   |   | $ | - |   |   | $ | 1,638 |   |

| For the Year Ended December 31,      2007 |   |
|-------------------------------------------|--------|
|                                      |   |
|                                      |   | Preparedness Services |   |   | Fraud & SIU Services |   |   | Security Consulting & Investigations |   |   | Corporate |   |   | Consolidated |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                  |   | $ | 30,823 |   |   | $ | 24,493 |   |   | $ | 31,815 |   |   | $ |  - |   |   | $ |   87,131 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from Operations            |   | $ | (8,057 | ) |   | $ | (11,543 | ) |   | $ |   ( 7,111 | ) |   | $ | - |   |   | $ | (26,711 | ) |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Identifiable      Assets                  |   | $ | 13,882 |   |   | $ | 17,250 |   |   | $ | 34,811 |   |   | $ | - |   |   | $ | 65,943 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and Amortization   |   | $ | 1,244 |   |   | $ | 1,313 |   |   | $ | 1,360 |   |   | $ |  - |   |   | $ | 3,917 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense                     |   | $ | - |   |   | $ | - |   |   | $ |  - |   |   | $ | 814 |   |   | $ | 814 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income                         |   | $ | 100 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 100 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prepayment      Premium                   |   | $ | 800 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 800 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Expenditures                 |   | $ | 8 |   |   | $ | 1,055 |   |   | $ | 1,377 |   |   | $ | - |   |   | $ | 2,440 |   |

----

| For the Year Ended December 31,      2006                                                             |   |
|-------------------------------------------------------------------------------------------------------|--------|
|                                                                                                  |   |
|                                                                                                  |   | Preparedness Services |   |   | Fraud & SIU Services |   |   | Security Consulting & Investigations |   |   | Corporate |   |   | Consolidated |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                              |   | $ |  37,556 |   |   | $ |      17,901 |   |   | $ |    6,467 |   |   | $ |  - |   |   | $ | 61,924 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) from Operations                                                               |   | $ |  1,991 |   |   | $ | (5,805 | ) |   | $ | (3,639 | ) |   | $ | - |   |   | $ | (7,453 | ) |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Identifiable      Assets                                                                              |   | $ | 18,204 |   |   | $ | 36,462 |   |   | $ | 14,560 |   |   | $ | - |   |   | $ | 69,226 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and Amortization                                                               |   | $ | 1,024 |   |   | $ | 808 |   |   | $ | 278 |   |   | $ |  - |   |   | $ | 2,110 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense                                                                                 |   | $ | - |   |   | $ |  - |   |   | $ |   - |   |   | $ | 653 |   |   | $ |   653 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of Debt Discounts      on Convertible      Notes   Payable |   | $ | - |   |   | $ | - |   |   | $ |   - |   |   | $ | 7,523 |   |   | $ |  7,523 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of Deferred      Financing Costs                                          |   | $ | - |   |   | $ | - |   |   | $ |   - |   |   | $ | 2,695 |   |   | $ |  2,695 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Expenditures                                                                             |   | $ | 25 |   |   | $ | 301 |   |   | $ | 26 |   |   | $ | - |   |   | $ |   352 |   |

----

----

----

Item9.      Changes in and Disagreements with Accountantson Accounting and Financial Disclosure.

| ·   | 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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Name                                  |   | Age      |   | Position                                                                                                   |
|---------------------------------------|--------|----------|--------|------------------------------------------------------------------------------------------------------------|
|                                  |   |     |   |                                                                                                       |
| Executive      Officers and Directors |   |     |   |                                                                                                       |
| Harvey      W. Schiller, Ph.D.        |   | 69       |   | Chairman      of the Board of Directors and Chief Executive Officer                                        |
|                                  |   |     |   |                                                                                                       |
| Jeffrey      O. Nyweide               |   | 53       |   | Chief      Financial Officer, Executive Vice President-Corporate Development,      Treasurer and Secretary |
|                                  |   |     |   |                                                                                                       |
| Thomas      P. Ondeck                 |   | 62       |   | President,      International Strategies Unit                                                              |
|                                  |   |     |   |                                                                                                       |
| Halsey      Fischer                   |   | 60       |   | Chief      Executive Officer, Fraud and SIU Services Unit                                                  |
|                                  |   |     |   |                                                                                                       |
| James      Lee Witt                   |   | 65       |   | Chief      Executive Officer, Preparedness Services Unit                                                   |
|                                  |   |     |   |                                                                                                       |
| Howard      Safir                     |   | 67       |   | Chief      Executive Officer, Security Consulting and Investigations    Unit                               |
|                                  |   |     |   |                                                                                                       |
| Per-Olof      Lööf          |   | 58       |   | Vice      Chairman of the Board of Directors                                                               |
|                                  |   |     |   |                                                                                                       |
| John      P. Oswald                   |   | 49  |   | Director      and Chairman of the Compensation and the Nominating    Committees                            |
|                                  |   |     |   |                                                                                                       |
| Ronald      M. Starr                  |   | 39       |   | Director      and Chairman of the Audit Committee                                                          |
|                                  |   |     |   |                                                                                                       |
| John      P. Bujouves                 |   | 46       |   | Director                                                                                                   |

----

----

----

----

----

| Name and Principal      Position                                                                                            | Year     | Salary($) | Bonus($)                             | Stock Awards($)     | Option Awards($) |    All OtherCompensation($) | Total($) |
|-----------------------------------------------------------------------------------------------------------------------------|----------|-----------|--------------------------------------|---------------------|------------------|--------------------------------------------|----------|
|                                                                                                                        |     |      |                                 |                |             |                                       |     |
| Harvey      W. Schiller, Ph.D.    Chairman      and Chief    Executive      Officer | 20082007 | 400375    | 50(1) 100(4)                    | 163(2)-(5)          | ––)  | 16(3)16(6)                                 | 629491   |
| Jeffrey O.      NyweideChief Financial Officer and      Executive Vice President                                            | 20082007 | 350325    | 38(1)   75(4)         | 122(2) – | ––   | 136(7)71(8)                                | 645471   |
| James Lee WittChief Executive Officer of      Preparedness Services unit                                                    | 20082007 | 500500    |     55(9)100(11) | --(5)               | -572(12)         | 14(10)17(13)                               | 5691,189 |

| (1) | 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 September 5,      2008. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | 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,      which is subject to vesting in accordance with annual performance criteria      established by the Compensation Committee.    None of      this restricted stock was vested in 2007. On December 12, 2007, our      Compensation Committee determined that 6,250 shares and 4,687 shares of      restricted stock, valued at $78 and $58, held by Dr. Schiller and Mr.      Nyweide, respectively, effective on January 1, 2008, were no longer      subject to forfeiture. Dr. Schiller and Mr. Nyweide elected to have the      Company withhold 2,278 and 1,585 shares, respectively, in satisfaction of      their tax obligations in connection with the vesting of their restricted      stock. Such withheld shares are reflected as treasury shares in the      Company’s books and records. As a result of the withholding of shares, Dr.      Schiller and Mr. Nyweide received 3,972 and 3,102 shares,      respectively.    Effective on August 15, 2008, our      Compensation Committee determined that 25,000 shares and 18,500 shares of      restricted stock, valued at $163 and $122, held by Dr. Schiller and Mr.      Nyweide, respectively, were no longer subject to forfeiture. Dr. Schiller      and Mr. Nyweide elected to have the Company withhold 9,451 and 6,253      shares, respectively, in satisfaction of their tax obligations in      connection with the vesting of their restricted stock. Such withheld      shares are reflected as treasury shares in the Company’s books and      records. As a result of the withholding of shares, Dr. Schiller and Mr.      Nyweide received 15,549 and 12,247 shares,  respectively. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Amount      includes payment of $11 towards health, life and disability insurance      benefits. |
|-----|--------------------------------------------------------------------------------------------------|

| (4) | Amount      represents bonus earned in accordance with annual performance criteria      established by the Compensation Committee.  The bonus amount was      approved by the Compensation Committee on December 12, 2007, and was paid      on January 11, 2008. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | On      January 1, 2007, certain of our employees were awarded 13 shares of our      common stock under our 2006 long-term incentive plan, with a grant date      fair value of $12.00 per share. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Amount      includes payments of  $11 toward health, life and disability      insurance benefits. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (7) | Amount      includes payments of a $108 housing allowance for the rental of an      apartment in New York City, as well as $17 towards health, life and      disability insurance benefits. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (8) | Amount      includes payments of a $45 housing allowance for the rental of an      apartment in New York City, as      well as $17 towards health, life and disability insurance      benefits. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Amount      represents bonus earned in accordance with annual performance criteria      established by the CompensationCommittee. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (10) | Amount      includes payments of $12 towards health, life and disability insurance      benefits. |
|------|---------------------------------------------------------------------------------------------------|

| (11) | Amount      represents bonus earned in accordance with annual performance criteria      established by the CompensationCommittee. |
|------|-----------------------------------------------------------------------------------------------------------------------------------|

|  (12) | On      September 28, 2007, Mr. Witt was awarded options to purchase 112,500      shares of our common stock at an exercise price of $7.24 per share with a      grant date fair value of $572.  The options vest ratably upon      the first, second and third anniversaries of the date of      grant. |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13) | Amount      includes payments of $14 towards health, life and disability insurance      benefits. |
|------|---------------------------------------------------------------------------------------------------|

----

----

| ·   | materially      increase the benefits accruing to plan participants;  or |
|--------------------|--------------------------------------------------------------------------|

| ·   | materially      decrease the exercise price of any options;or |
|--------------------|---------------------------------------------------------------|

| ·   | extend      the term of any option. |
|--------------------|-------------------------------------|

----

| ·   | materially      increase the benefits accruing to plan participants;  or |
|--------------------|--------------------------------------------------------------------------|

| ·   | materially      decrease the exercise price of any options;or |
|--------------------|---------------------------------------------------------------|

| ·   | extend      the term of any option. |
|--------------------|-------------------------------------|

----

----

| Stock      Awards         |
|---------------------------|
|    Name    |   | Equity      Incentive Plan Awards: Number of Unearned Shares of restricted stock that      have not vested (1) (#) |   | Equity      Incentive Plan Awards: Market value at December 31, 2008 of Unearned      shares that have not vested(RSU      Awards) ($) |   | Number      of Securities Underlying Unvested RSUs (1)(#) |   | Market      Value of Securities Underlying Unvested RSUs($) |
|                      |   |   |   |   |   |   |   |   |
| Harvey      Schiller      |   | 318,750(2) |   | 634  |   | 95,737 |   | 191 |
| Jeffrey      O. Nyweide   |   | 239,313(2)  |   | 476 |   | 42,281 |   | 84 |
| James      Lee Witt  |   |                 - |   |    - |   | 37,500  |   | 75 |

| (1) | Pursuant      to the terms of their respective employment and consulting agreements, all      of Dr. Schiller’s and Mr. Nyweide’s restricted stock and RSUs will vest      immediately upon a change in control of the Company, and all performance      conditions for any restricted stock will be deemed to be    met. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) | Amount      represents shares of restricted stock subject to vesting in accordance      with performance criteria established by the Compensation      Committee.   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, which is subject to vesting in accordance with annual      performance criteria established by the Compensation      Committee.    None of this restricted stock was vested      in 2007. On December 12, 2007, our Compensation Committee determined that      6,250 shares and 4,687 shares of restricted stock, valued at $78 and $58,      held by Dr. Schiller and Mr. Nyweide, respectively, effective on January      1, 2008, were no longer subject to forfeiture. Dr. Schiller and Mr.      Nyweide elected to have the Company withhold 2,278 and 1,585 shares,      respectively, in satisfaction of their tax obligations in connection with      the vesting of their restricted stock. Such withheld shares are reflected      as treasury shares in the Company’s books and records. As a result of the      withholding of shares, Dr. Schiller and Mr. Nyweide received 3,972 and      3,102 shares, respectively.    Effective on August 15,      2008, our Compensation Committee determined that 25,000 shares and 18,500      shares of restricted stock, valued at $163 and $122, held by Dr. Schiller      and Mr. Nyweide, respectively, were no longer subject to forfeiture. Dr.      Schiller and Mr. Nyweide elected to have the Company withhold 9,451 and      6,253 shares, respectively, in satisfaction of their tax obligations in      connection with the vesting of their restricted stock. Such withheld      shares are reflected as treasury shares in the Company’s books and      records. As a result of the withholding of shares, Dr. Schiller and Mr.      Nyweide received 15,549 and 12,247 shares,  respectively |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                         |   | Fees      Earned($) |   |   | Option      Awards($) |   |   | All      Other Compensation($) |   |   | Total($) |   |
|------------------------------|--------|---------------------|--------|--------|-----------------------|--------|--------|--------------------------------|--------|--------|----------|--------|
| Per-Olof      Lööf |   |                | 45     |   |                  |   | 78     | (1)                            |   |   | -        |   |   |   | 123 |   |
|                         |   |                |   |   |                  |   |   |                           |   |   |     |   |   |   |   |   |
| Ronald      Starr            |   |                | -      |   |                  |   | -      |                           |   |   | -        |   |   |   | - |   |
|                         |   |                |   |   |                  |   |   |                           |   |   |     |   |   |   |   |   |
| John      Bujouves           |   |                | 33     |   |                  |   | 78     | (2)                            |   |   | -        |   |   |   | 111 |   |
|                         |   |                |   |   |                  |   |   |                           |   |   |     |   |   |   |   |   |
| John      P. Oswald (3)      |   |                | 48     |   |                  |   | -      | (4)                            |   |   | -        |   |   |   | 48 |   |

| (1) | On      January 1, 2008, an option to purchase 25,000 shares was granted to Mr.      Lööf under the 2006 Long Term IncentivePlan. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | On      January 1, 2008 an option to purchase 25,000 shares of our common stock      was granted to Mr. Bujouves under the 2006 Long-Term Incentive      Plan. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Mr.      Oswald was appointed to our Board of Directors on January 28,      2008. |
|-----|-----------------------------------------------------------------------------------|

| (4) | An      option to purchase 10,000 shares of our common stock granted to Mr. Oswald      on January 1, 2008, valued at $31, was for his service on our Senior      Advisory Board and is not included in this  table. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | • |   | 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. |
|--------|---------|--------|----------------------------------------------------------------|

| Name      and Address of Beneficial Owner                             |   | Common      StockBeneficially Owned (1) |      |
|-----------------------------------------------------------------------|--------|-----------------------------------------|-----------|
|                                                                  |   | Shares                                  |      |   | % |   |
| 5%      or Greater Stockholders:                                      |   |                                    |      |   |   |   |
|                                                                  |   |                                    |      |   |   |   |
| Vicis      Capital Master Fund(2)                                     |   |                                    | 3,299,749 |   |   |   | 25.0 |   |
| James      L. Witt Revocable Trust U/A/D 12/28/05(3)                  |   |                                    | 802,318   |   |   |   | 6.1 |   |
| Artio      Global Management LLC(4)                                   |   |                                    | 761,620   |   |   |   | 5.8 |   |
|                                                                  |   |                                    |      |   |   |   |   |   |
| Directors      and  Named Executive Officers:               |   |                                    |      |   |   |   |   |   |
|                                                                  |   |                                    |      |   |   |   |   |   |
| Harvey      W. Schiller, Ph.D.(5)                                     |   |                                    | 502,533   |   |   |   | 3.8 |   |
| Jeffrey      O. Nyweide(6)                                            |   |                                    | 269,262   |   |   |   | 2.0 |   |
| James      Lee Witt(7)                                                |   |                                    | 858,351   |   |   |   | 6.5 |   |
| Per-Olof      Lööf(8)                                       |   |                                    | 53,000    |   |   |   | * |   |
| Ronald      M. Starr(9)                                               |   |                                    | 5,555     |   |   |   | * |   |
| John      P. Bujouves(      10)                                       |   |                                    | 280,469   |   |   |   | 2.1 |   |
| John      P. Oswald(11)                                               |   |                                    | 112,742   |   |   |   | * |   |
|                                                                  |   |                                    |      |   |   |   |   |   |
| All      executive officers and directors as a group (10 persons)(12) |   |                                    | 2,415,332 |   |   |   | 18.2 |   |

| * | Less      than 1% of outstanding shares. |
|---|------------------------------------------|

----

| (1) | Based      upon 13,208,210 shares of our common stock outstanding on March 6, 2009      and, with respect to each individual holder, rights to acquire our common      stock exercisable within 60 days of March 6, 2009.  The number      of shares and ownership percentages do not include shares of common stock      issuable upon the conversion of our Series D Preferred Stock, as the      Series D Preferred Stock is non-voting and is subject to a beneficial      ownership limitation that restricts its conversion into common      stock. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Consists      of shares of our common stock.  Shares of our common stock held      by Vicis Capital Master Fund may be deemed to be controlled by Vicis      Capital LLC.  The business address of Vicis Capital LLC is 445      Park Avenue, 16th      Floor, New York, NewYork  10022. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Consists      of shares of our common stock.  Shares of our common stock held      by the James L. Witt Revocable Trust U/A/D 12/28/05 may be deemed to be      controlled by its trustee, Mr. James LeeWitt. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4) | Consists      of shares of common stock. The business address of Artio Global Management      (formerly Julius Baer Investment Management LLC) is 330 Madison Avenue,      Suite 12A, New York, NY 10017. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Consists      of  shares of our commonstock. |
|-----|--------------------------------------------------------|

| (6) | Consists      of shares of our common stock. |
|-----|----------------------------------------------|

| (7) | Consists      of 56,033 shares of our common stock held by Mr. Witt individually, and      802,318 shares of our common stock held by the James L. Witt Revocable      Trust U/A/D 12/28/05, of which Mr. Witt is the      trustee.  Mr. Witt may be deemed to be the beneficial owner of      the shares of our common stock held by the James L. Witt Revocable Trust      U/A/D 12/28/05. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Consists      of 31,250 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Consists      of 5,555 shares of our common stock held by Mr. Starr’s      spouse.  Mr. Starr may be deemed to be the beneficial owner of      the shares of our common stock held by his  spouse. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (10) | Consists      of 31,250 shares of our common stock issuable upon exercise of stock      options held by Mr. Bujouves individually, 2,344 shares of our common      stock held by Bayshore Merchant Services, Inc., 146,875 shares of our      common stock held by Integris Funds Ltd., and 100,000 shares of our common      stock held by Lauriston Nominees Inc.  Mr. Bujouves is the      President and a director of Bayshore Asset Management, Inc., which is an      affiliate of Bayshore Merchant Services, Inc., the Chief Executive Officer      of Integris Funds Ltd., and Lauriston Nominees Inc. is the nominee of      Bayshore Bank and Trust Corp., 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 Bayshore Merchant      Services, Inc., Integris Funds Ltd., and Lauriston Nominees      Inc.  Mr. Bujouves disclaims beneficial ownership of such      shares, except to the extent of his pecuniary interest      therein. |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (11) | Consists      of 7,032 shares of our common stock and 16,250 shares of our common stock      issuable upon exercise of stock options held by Mr. Oswald individually,      48,959 shares of our common stock held by Capital Trust Investments      Limited, of which Mr. Oswald is a director, and 40,501 shares of our      common stock held by Verus International Group, Ltd., of which Mr. Oswald      is Chief Executive Officer.  Mr. Oswald may be deemed to be the      beneficial owner of the shares of our common stock held by Capital Trust      Investments Limited and Verus International Group, Ltd.  Mr.      Oswald disclaims beneficial ownership of such shares, except to the extent      of his pecuniary interest therein. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Consists      of 2,333,249 shares of our common stock and 82,083 shares of our common      stock issuable upon exercise of stock options.  Included in the      above calculations are 330,087 shares of our common stock and 3,333 shares      of our common stock issuable upon exercise of stock options beneficially      owned by three executive officers who are not named executive officers and      are therefore not specifically identified in the above    table. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   | Stock      Options Exchangedand      Cancelled |    |   |  RSUs      Issued |   |
|--------------------------------|--------|------------------------------------------------|---------|--------|------------------------|--------|
| Harvey      W. Schiller, Ph.D. |   |                                           | 287,208 |   |                   |   | 95,737 |   |
| Jeffrey      O. Nyweide        |   |                                           | 126,839 |   |                   |   | 42,281 |   |
| James      Lee Witt            |   |                                           | 112,500 |   |                   |   | 37,500 |   |
| Howard      Safir              |   |                                           | 112,500 |   |                   |   | 37,500 |   |
| Halsey      Fisher             |   |                                           | 121,875 |   |                   |   | 40,625 |   |
| Thomas      P. Ondeck          |   |                                           | 29,412  |   |                   |   | 9,804 |   |
| Per-Olof      Lööf   |   |                                           | 24,375  |   |                   |   | 8,127 |   |
| John      P. Oswald            |   |                                           | 1,250   |   |                   |   | 417 |   |
| Ronald      M. Starr           |   |                                           | 23,108  |   |                   |   | 7,707 |   |
| John      P. Bujouves          |   |                                           | 24,375  |   |                   |   | 8,127 |   |
| Total                          |   |                                           | 863,442 |   |                   |   | 287,825 |   |

----

----

----

| Exhibit No. |   | Description                                                                                                                                                                                         |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                |
| 3.1         |   | Certificate      of Incorporation of GlobalOptions Group, Inc. (8)                                                                                                                                  |
|        |   |                                                                                                                                                                                                |
| 3.2         |   | Certificate      of Amendment to Certificate of Incorporation. (11)                                                                                                                                 |
|        |   |                                                                                                                                                                                                |
| 3.3         |   | Certificate      of Designations, Powers, Preferences and Other Rights and Qualifications      of Series D Convertible Preferred Stock. (15)                                                        |
|        |   |                                                                                                                                                                                                |
| 3.4         |   | Bylaws.      (8)                                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                |
| 3.5         |   | Amendment      to Bylaws. (14)                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                |
| 10.1        |   | Restructuring      Agreement, dated as of July 25, 2007, by and among GlobalOptions Group,      Inc. and certain holders of the Company’s securities.  (15)                                   |
|        |   |                                                                                                                                                                                                |
| 10.2        |   | Restructuring      Registration Rights Agreement, dated as of July 25, 2007, by and among      GlobalOptions Group, Inc. and certain holders of the Company’s securities.      (15)           |
|        |   |                                                                                                                                                                                                |
| 10.3        |   | 2005      Stock Option Plan. (2)                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                |
| 10.4        |   | 2006      Stock Option Plan. (7)                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                |
| 10.5        |   | Amended      and Restated 2006 Long-Term Incentive Plan. (21)                                                                                                                                       |
|        |   |                                                                                                                                                                                                |
| 10.6        |   | Amended      and Restated 2006  Employee Stock Purchase Plan.      (21)                                                                                                                   |
|        |   |                                                                                                                                                                                                |
| 10.7        |   | Asset      Purchase Agreement, dated as of January 13, 2006, by and between      GlobalOptions Group, Inc. and James Lee Witt Associates, LLC.      (3)                                             |
|        |   |                                                                                                                                                                                                |
| 10.8        |   | First      Amendment to Asset Purchase Agreement, dated as of February 28, 2006, by      and between GlobalOptions Group, Inc. and James Lee Witt Associates, LLC.      (5)                         |
|        |   |                                                                                                                                                                                                |
| 10.9        |   | Second      Amendment to Asset Purchase Agreement, dated as of May 11, 2007, by and      between GlobalOptions Group, Inc. and James Lee Witt Associates, LLC.      (16)                            |
|        |   |                                                                                                                                                                                                |
| 10.10       |   | Asset      Purchase Agreement, dated as of January 27, 2006, by and between      GlobalOptions Group, Inc. and Safir Rosetti, LLC. (4)                                                              |
|        |   |                                                                                                                                                                                                |
| 10.11       |   | First      Amendment to Asset Purchase Agreement, dated as of May 12, 2006, by and      between GlobalOptions Group, Inc. and Safir Rosetti, LLC.    (5)                                            |
|        |   |                                                                                                                                                                                                |
| 10.12       |   | Asset      Purchase Agreement, dated as of May 12, 2006, by and between GlobalOptions      Group, Inc., Secure Source, Inc., Marian E. Nicastro and David W.      Nicastro. (6)                     |
|        |   |                                                                                                                                                                                                |
| 10.13       |   | Asset      Purchase Agreement, dated as of January 9, 2007, by and between      GlobalOptions Group, Inc. and On Line Consulting Services, Inc.      (10)                                           |
|        |   |                                                                                                                                                                                                |
| 10.14       |   | Stock      Purchase Agreement, dated as of February 28, 2007, by and among      GlobalOptions Group, Inc., ChoicePoint Government Services, Inc. and      Choice Point Inc. (12)                    |
|        |   |                                                                                                                                                                                                |
| 10.15       |   | Asset      Purchase Agreement, dated February 28, 2007, by and between GlobalOptions      Group, Inc. and Facticon, Inc. (13)                                                                       |
|        |   |                                                                                                                                                                                                |
| 10.16       |   | Asset      Purchase Agreement, dated as of April 21, 2008, by and among GlobalOptions      Group, Inc., Omega Insurance Services, Inc., and First Advantage      Corporation. (20)                  |
|        |   |                                                                                                                                                                                                |
| 10.17       |   | 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. (19) |
|        |   |                                                                                                                                                                                                |
| 10.18       |   | Unconditional      Guaranty, dated as of March 31, 2008, by GlobalOptions Group, Inc. in      favor of Silicon Valley Bank.(19)                                                                     |

----

| 10.19  |   | Security      Agreement, dated March 31, 2008, by and between GlobalOptions Group, Inc.      and Silicon Valley Bank. (19)                                                                                                                                                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.20  |   | Intellectual      Property Security Agreement, dated March 31, 2008, by and between      GlobalOptions Group, Inc. and Silicon Valley Bank. (19)                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.21  |   | Employment      Agreement, dated as of January 29, 2004, between Harvey W. Schiller, Ph.D.      and GlobalOptions, Inc. (1)                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.22  |   | 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) |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.23  |   | Amendment      to Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions      Group, Inc., dated as of December 19, 2006. (9)                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.24  |   | Employment      Agreement, dated July 30, 2007, between Jeffrey O. Nyweide and      GlobalOptions Group, Inc. (17)                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.25  |   | Amended      and Restated Employment Agreement, dated as of May 11, 2007, by and      between GlobalOptions Group, Inc. and James Lee Witt.  (16)                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.26  |   | Employment      Agreement, dated as of May 12, 2006, by and between GlobalOptions Group,      Inc. and Howard Safir. (16)                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.27  |   | Employment      Agreement, dated as of  September 5, 2008,  by and      between GlobalOptions, Inc. and Halsey Fischer. (*)                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.28  |   | Employment      Agreement, dated as of January 24, 2002, by and between Thomas P. Ondeck      and GlobalOptions, Inc. (16)                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.29  |   | First      Amendment to Employment Agreement, dated September 20, 2002, by and      between Thomas P. Ondeck and GlobalOptions, Inc. (16)                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.30  |   | Amendment      to Employment Agreement of Thomas P. Ondeck, dated October 17, 2006.      (16)                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.31  |   | Consulting      Services Contract, dated as of August 29, 2007, between the State of      Louisiana Governor’s Office of Homeland Security and Emergency      Preparedness and GlobalOptions Group, Inc. (18)                                                                  |
|   |   |                                                                                                                                                                                                                                                                                 |
| 21.1   |   | Subsidiaries      of GlobalOptions Group, Inc.*                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                 |
| 23.1   |   | Consent      of Marcum & Kliegman, 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 of2002.*                                                                                                                                                     |

----

|                              | GLOBALOPTIONS      GROUP, INC. |                                                                           |
|-----------------------------------|--------------------------------|--------------------------------------------------------------------------------|
|                              |                           |                                                                           |   |
| Dated:   March 13,      2009 | By:                            | /s/ Harvey      W. Schiller                                               |   |
|                              |                           | Harvey      W. SchillerChairman,      Chief Executive Officerand      Director |   |
|                              |                           | (Principal      Executive Officer)                                             |   |
|                              |                           |                                                                           |   |

|                              |   |                                                                                                                |
|-----------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                                |   |
| Dated:   March 13,      2009 | By:    | /s/ Jeffrey      O. Nyweide                                                                                    |   |
|                              |   | Jeffrey      O. NyweideExecutive      Vice President-Corporate Development, Chief      Financial Officer, Secretary |   |
|                              |   | (Principal      Financial Officer andPrincipal      Accounting Officer)                                             |   |
|                              |   |                                                                                                                |   |

| Signatures                                          |   | Title                                                                                                                                                                     |   | Date                            |
|-----------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|
|                                                |   |                                                                                                                                                                      |   |                            |
| /s/      Harvey W. Schiller                         |   | Chairman,      Chief Executive Officerand      Director(Principal      Executive Officer)                                                                                 |   | March      13, 2009             |
| Harvey      W. Schiller                             |   |                                                                                                                                                                      |
|                                                |   |                                                                                                                                                                      |   |                            |
| /s/      Jeffrey O. Nyweide                         |   | Executive      Vice President ─ CorporateDevelopment,      Chief Financial Officer,Secretary(Principal      Financial Officer andPrincipal      Accounting Officer) |   | March      13, 2009             |
| Jeffrey      O. Nyweide                             |   |                                                                                                                                                                      |
|  /s/      Per-Olof Lööf              |   | Director                                                                                                                                                                  |   | March      13, 2009             |
| Per-Olof      Lööf                        |   |                                                                                                                                                                      |
|  /s/      John P. Oswald                       |   |  Director                                                                                                                                                            |   |  March      13, 2009       |
| John      P. Oswald /s/      Ronald M. Starr   |   |   Director                                                                                                                                                      |   |   March      13, 2009 |
| Ronald      M. Starr /s/      John P. Bujouves |   |   Director                                                                                                                                                      |   |   March      13, 2009 |
| John      P. Bujouves                               |   |                                                                                                                                                                      |   |                            |

----

| Exhibit No. |   | Description                                                                                                                                                                                         |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                |
| 3.1         |   | Certificate      of Incorporation of GlobalOptions Group, Inc. (8)                                                                                                                                  |
|        |   |                                                                                                                                                                                                |
| 3.2         |   | Certificate      of Amendment to Certificate of Incorporation. (11)                                                                                                                                 |
|        |   |                                                                                                                                                                                                |
| 3.3         |   | Certificate      of Designations, Powers, Preferences and Other Rights and Qualifications      of Series D Convertible Preferred Stock. (15)                                                        |
|        |   |                                                                                                                                                                                                |
| 3.4         |   | Bylaws.      (8)                                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                |
| 3.5         |   | Amendment      to Bylaws. (14)                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                |
| 10.1        |   | Restructuring      Agreement, dated as of July 25, 2007, by and among GlobalOptions Group,      Inc. and certain holders of the Company’s securities.  (15)                                   |
|        |   |                                                                                                                                                                                                |
| 10.2        |   | Restructuring      Registration Rights Agreement, dated as of July 25, 2007, by and among      GlobalOptions Group, Inc. and certain holders of the Company’s securities.      (15)           |
|        |   |                                                                                                                                                                                                |
| 10.3        |   | 2005      Stock Option Plan. (2)                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                |
| 10.4        |   | 2006      Stock Option Plan. (7)                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                |
| 10.5        |   | Amended      and Restated 2006 Long-Term Incentive Plan. (21)                                                                                                                                       |
|        |   |                                                                                                                                                                                                |
| 10.6        |   | Amended      and Restated 2006  Employee Stock Purchase Plan.      (21)                                                                                                                   |
|        |   |                                                                                                                                                                                                |
| 10.7        |   | Asset      Purchase Agreement, dated as of January 13, 2006, by and between      GlobalOptions Group, Inc. and James Lee Witt Associates, LLC.      (3)                                             |
|        |   |                                                                                                                                                                                                |
| 10.8        |   | First      Amendment to Asset Purchase Agreement, dated as of February 28, 2006, by      and between GlobalOptions Group, Inc. and James Lee Witt Associates, LLC.      (5)                         |
|        |   |                                                                                                                                                                                                |
| 10.9        |   | Second      Amendment to Asset Purchase Agreement, dated as of May 11, 2007, by and      between GlobalOptions Group, Inc. and James Lee Witt Associates, LLC.      (16)                            |
|        |   |                                                                                                                                                                                                |
| 10.10       |   | Asset      Purchase Agreement, dated as of January 27, 2006, by and between      GlobalOptions Group, Inc. and Safir Rosetti, LLC. (4)                                                              |
|        |   |                                                                                                                                                                                                |
| 10.11       |   | First      Amendment to Asset Purchase Agreement, dated as of May 12, 2006, by and      between GlobalOptions Group, Inc. and Safir Rosetti, LLC.    (5)                                            |
|        |   |                                                                                                                                                                                                |
| 10.12       |   | Asset      Purchase Agreement, dated as of May 12, 2006, by and between GlobalOptions      Group, Inc., Secure Source, Inc., Marian E. Nicastro and David W.      Nicastro. (6)                     |
|        |   |                                                                                                                                                                                                |
| 10.13       |   | Asset      Purchase Agreement, dated as of January 9, 2007, by and between      GlobalOptions Group, Inc. and On Line Consulting Services, Inc.      (10)                                           |
|        |   |                                                                                                                                                                                                |
| 10.14       |   | Stock      Purchase Agreement, dated as of February 28, 2007, by and among      GlobalOptions Group, Inc., ChoicePoint Government Services, Inc. and      Choice Point Inc. (12)                    |
|        |   |                                                                                                                                                                                                |
| 10.15       |   | Asset      Purchase Agreement, dated February 28, 2007, by and between GlobalOptions      Group, Inc. and Facticon, Inc. (13)                                                                       |
|        |   |                                                                                                                                                                                                |
| 10.16       |   | Asset      Purchase Agreement, dated as of April 21, 2008, by and among GlobalOptions      Group, Inc., Omega Insurance Services, Inc., and First Advantage      Corporation. (20)                  |
|        |   |                                                                                                                                                                                                |
| 10.17       |   | 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. (19) |
|        |   |                                                                                                                                                                                                |
| 10.18       |   | Unconditional      Guaranty, dated as of March 31, 2008, by GlobalOptions Group, Inc. in      favor of Silicon Valley Bank.(19)                                                                     |

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| 10.19  |   | Security      Agreement, dated March 31, 2008, by and between GlobalOptions Group, Inc.      and Silicon Valley Bank. (19)                                                                                                                                                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.20  |   | Intellectual      Property Security Agreement, dated March 31, 2008, by and between      GlobalOptions Group, Inc. and Silicon Valley Bank. (19)                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.21  |   | Employment      Agreement, dated as of January 29, 2004, between Harvey W. Schiller, Ph.D.      and GlobalOptions, Inc. (1)                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.22  |   | 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) |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.23  |   | Amendment      to Employment Agreement of Harvey W. Schiller, Ph.D. with GlobalOptions      Group, Inc., dated as of December 19, 2006. (9)                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.24  |   | Employment      Agreement, dated July 30, 2007, between Jeffrey O. Nyweide and      GlobalOptions Group, Inc. (17)                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.25  |   | Amended      and Restated Employment Agreement, dated as of May 11, 2007, by and      between GlobalOptions Group, Inc. and James Lee Witt.  (16)                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.26  |   | Employment      Agreement, dated as of May 12, 2006, by and between GlobalOptions Group,      Inc. and Howard Safir. (16)                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.27  |   | Employment      Agreement, dated as of  September 5, 2008,  by and      between GlobalOptions, Inc. and Halsey Fischer. (*)                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.28  |   | Employment      Agreement, dated as of January 24, 2002, by and between Thomas P. Ondeck      and GlobalOptions, Inc. (16)                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.29  |   | First      Amendment to Employment Agreement, dated September 20, 2002, by and      between Thomas P. Ondeck and GlobalOptions, Inc. (16)                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.30  |   | Amendment      to Employment Agreement of Thomas P. Ondeck, dated October 17, 2006.      (16)                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                 |
| 10.31  |   | Consulting      Services Contract, dated as of August 29, 2007, between the State of      Louisiana Governor’s Office of Homeland Security and Emergency      Preparedness and GlobalOptions Group, Inc. (18)                                                                  |
|   |   |                                                                                                                                                                                                                                                                                 |
| 21.1   |   | Subsidiaries      of GlobalOptions Group, Inc.*                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                 |
| 23.1   |   | Consent      of Marcum & Kliegman, 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.*                                                                                                                                                    |

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| * | Filed      herewith |
|---|---------------------|

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| (1) | Incorporated      by reference to the exhibits included with our Current Report on Form 8-K      filed with the SEC on June 30, 2005, asamended. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (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 January 18,2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated      by reference to the exhibits included with our Current Report on Form 8-K      filed with the SEC on February 1,2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated      by reference to the exhibits included with our Current Report on Form 8-K      filed with the SEC on March 16, 2006, as  amended. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Incorporated      by reference to the exhibits included with our Current Report on Form 8-K      filed with the SEC on May 16, 2006, asamended. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Incorporated      by reference to the exhibits included with our Current Report on Form 8-K      filed with the SEC on June 16,2006. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on December 11,2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on December 22,2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on January 10,2007. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (11) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on February 23,2007. |
|------|------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on March 1,2007. |
|------|--------------------------------------------------------------------------------------------------------------------------------------|

| (13) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on March 1,2007. |
|------|--------------------------------------------------------------------------------------------------------------------------------------|

| (14) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on May 16, 2007. |
|------|--------------------------------------------------------------------------------------------------------------------------------------|

| (15) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on July 26,2007. |
|------|--------------------------------------------------------------------------------------------------------------------------------------|

| (16) | 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. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (17) | Incorporated      by reference to the exhibits included with our quarterly report on Form      10-QSB filed with the SEC on August 14,2007. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------|

| (18) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on September 26,2007. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

| (19) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on      April 22, 2008. |   |
|------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|

| (20) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on      April 25, 2008. |  |
|------|---------------------------------------------------------------------------------------------------------------------------------------------|--|

| (21) | Incorporated      by reference to the exhibits included with our current report on Form 8-K      filed with the SEC on      July 30, 2008. |  |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|--|

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