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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      DC 20549**

**FORM      10-Q**

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**FORTRESS      INTERNATIONAL GROUP, INC.**

| **Delaware**                                                                                |   | **20-2027651**                                      |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| (State                or other jurisdiction ofincorporation                or organization) |   | (I.R.S.                Employer Identification No.) |
|                                                                                        |   |                                                |
| **9841                Broken Land Parkway****Columbia,                Maryland**            |   | **21046**                                           |
| (Address                of principal executive offices)                                     |   | (Zip                Code)                           |

**(410)      312-9988 **

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**FORTRESS      INTERNATIONAL GROUP, INC.**

**Table      of Contents**

|                                                                                                                                                                                                                                                                                                                                                                                             | **Page** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **PART                I - FINANCIAL INFORMATION**                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                1. Financial Statements**                                                                                                                                                                                                                                                                                                                                                  |     |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| Consolidated                Balance Sheets as of September 30, 2007 (unaudited) and as of December                31,                2006 (audited) (successor) and as of January 19, 2007 (predecessor)                (unaudited) and December 31, 2006 (predecessor) (audited)                                                                                                                | 1        |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| Consolidated                Statements of Operations (unaudited) for the three and nine months                ended                September 30, 2007 and 2006 (successor). Additionally, for the nine                months                ended September 30, 2006 (predecessor) and for the period from January                1,                2007 through January 19, 2007 (predecessor). | 3        |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| Consolidated                Statements of Cash Flows (unaudited) for the nine months ended September                30, 2007 and September 30, 2006 (successor) and for the period from                January 1, 2007 through January 19, 2007 and the nine months ended                September 30, 2006 (predecessor)                                                                        | 5        |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| Notes                to Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                        | 6        |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                2. Management’s Discussion and Analysis of Financial Condition and Results                of Operations**                                                                                                                                                                                                                                                            | 17       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                3. Quantitative and Qualitative Disclosures about Market                Risk**                                                                                                                                                                                                                                                                                             | 27       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                4. Controls and Procedures**                                                                                                                                                                                                                                                                                                                                               | 27       |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| **PART                II - OTHER INFORMATION**                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                1. Legal Proceedings**                                                                                                                                                                                                                                                                                                                                                     | 27       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                1A. Risk Factors**                                                                                                                                                                                                                                                                                                                                                         | 28       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds**                                                                                                                                                                                                                                                                                            | 28       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                3. Defaults upon Senior Securities**                                                                                                                                                                                                                                                                                                                                       | 28       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                4. Submission of Matters to a Vote of Security                Holders**                                                                                                                                                                                                                                                                                                    | 28       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                5. Other Information**                                                                                                                                                                                                                                                                                                                                                     | 28       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **Item                6. Exhibits**                                                                                                                                                                                                                                                                                                                                                              | 28       |
|                                                                                                                                                                                                                                                                                                                                                                                             |     |
| **SIGNATURES**                                                                                                                                                                                                                                                                                                                                                                                   | 29       |

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**PART      I - FINANCIAL INFORMATION**

**Fortress      International Group, Inc.**

|                                                                |   | **(Successor)**                    |       |  **(Predecessor)**           |   |
|---------------------------------------------------------------------|--------|------------------------------------|------------|-----------------------------------|--------|
|                                                                |   | **September                  30,** |       | **December                  31,** |   |  **January                  19,** |   | **December                  31,** |   |
|                                                                |   | **2007**                           |       | **2006**                          |   |  **2007** |   | **2006** |   |
|                                                                |   | **(unaudited)**                    |       | **(audited)**                     |   |  **(unaudited)** |   | **(audited)** |   |
| ***Assets***                                                        |   |                               |       |                              |   |    |   |   |   |
|                                                                |   |                               |       |                              |   |    |   |   |   |
| **Current                  Assets**                                 |   |                               |       |                              |   |    |   |   |   |
| Cash                  and cash equivalents                          |   | $                                  | 17,930,458 |                              | $      | 7,347 |   | $ | 1,322,317 |   | $ | 2,361,838 |   |
| Contract                  and other receivables, net                |   |                               | 9,021,636  |                              |   | — |   |   | 6,261,988 |   |   | 9,960,851 |   |
| Prepaid                  expenses and other current assets          |   |                               | 570,325    |                              |   | 3,750 |   |   | 233,894 |   |   | 125,276 |   |
| Costs                  and estimated earnings in excess of billings |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| on                  uncompleted contracts                           |   |                               | 4,225,316  |                              |   | — |   |   | 1,559,045 |   |   | 480,540 |   |
| Income                  taxes recoverable                           |   |                               | 840,000    |                              |   | — |   |   | — |   |   | — |   |
| Due                  from affiliated entities                       |   |                               | —    |                              |   | — |   |   | — |   |   | 201,670 |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Current Assets**                           |   |                               | 32,587,735 |                              |   | 11,097 |   |   | 9,377,244 |   |   | 13,130,175 |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Investments                  held in trust**                      |   |                               | —    |                              |   | 44,673,994 |   |   | — |   |   | — |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Property                  and equipment,**net                     |   |                               | 1,068,242  |                              |   | — |   |   | 904,689 |   |   | 810,747 |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Goodwill**                                                        |   |                               | 16,499,945 |                              |   | — |   |   | — |   |   | — |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Intangible                  assets,**net                          |   |                               | 18,503,881 |                              |   | — |   |   | — |   |   | — |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Deferred                  acquisition costs**                     |   |                               | 162,109    |                              |   | 869,853 |   |   | — |   |   | — |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Other                  assets**                                   |   |                               | 315,243    |                              |   | — |   |   | 64,158 |   |   | 21,190 |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Deferred                  tax assets**                            |   |                               | —    |                              |   | 490,675 |   |   | — |   |   | — |   |
|                                                                |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Assets**                                   |   | $                                  | 69,137,155 |                              | $      | 46,045,619 |   | $ | $10,346,091 |   | $ | 13,962,112 |   |

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**Fortress      International Group, Inc.**

|                                                                                                                                                                                                                                                                                                                                                                 |   | **(Successor)**                    |       |  **(Predecessor)**           |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|------------|-----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                 |   | **September                  30,** |       | **December                  31,** |   |  **January                  19,** |   | **December                  31,** |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   | **2007**                           |       | **2006**                          |   |  **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   | **(unaudited)**                    |       | **(audited)**                     |   |  **(unaudited)** |   | **(audited)** |   |
| ***Liabilities                  and Stockholders’ Equity***                                                                                                                                                                                                                                                                                                    |   |                               |       |                              |   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |    |   |   |   |
| **Current                  Liabilities**                                                                                                                                                                                                                                                                                                                             |   |                               |       |                              |   |    |   |   |   |
| Notes                  payable–current portion                                                                                                                                                                                                                                                                                                                 |   | $                                  | 121,692    |                              | $      | — |   | $ | 72,808 |   | $ | 76,934 |   |
| Accounts                  payable and accrued expenses                                                                                                                                                                                                                                                                                                               |   |                               | 11,617,131 |                              |   | 913,222 |   |   | 6,641,718 |   |   | 8,503,024 |   |
| Advances                  from stockholder                                                                                                                                                                                                                                                                                                                           |   |                               | —    |                              |   | 20,000 |   |   | — |   |   | — |   |
| Income                  taxes payable                                                                                                                                                                                                                                                                                                                                |   |                               | —    |                              |   | 586,283 |   |   | — |   |   | — |   |
| Billings                  in excess of costs and estitmated earnings                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| on                  uncompleted contracts                                                                                                                                                                                                                                                                                                                            |   |                               | 1,814,612  |                              |   | — |   |   | 1,662,718 |   |   | 1,243,042 |   |
| Deferred                  compensation payable                                                                                                                                                                                                                                                                                                                       |   |                               | —    |                              |   | — |   |   | — |   |   | 643,571 |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Current Liabilities**                                                                                                                                                                                                                                                                                                                       |   |                               | 13,553,435 |                              |   | 1,519,505 |   |   | 8,377,244 |   |   | 10,466,571 |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Notes                  payable**                                                                                                                                                                                                                                                                                                                                   |   |                               | 7,785,193  |                              |   | — |   |   | 79,524 |   |   | 81,679 |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Liabilities**                                                                                                                                                                                                                                                                                                                               |   |                               | 21,338,628 |                              |   | 1,519,505 |   |   | 8,456,768 |   |   | 10,548,250 |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| Common                  stock, subject to possible redemption 1,559,220 shares                                                                                                                                                                                                                                                                                       |   |                               | —    |                              |   | 8,388,604 |   |   | — |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| Interest                  income on common stock subject to possible redemption                                                                                                                                                                                                                                                                                      |   |                               | —    |                              |   | 541,735 |   |   | — |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  common stock subject to redemption**                                                                                                                                                                                                                                                                                                        |   |                               | —    |                              |   | 8,930,339 |   |   | — |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Commitments                  and Contingencies**                                                                                                                                                                                                                                                                                                                   |   |                               | —    |                              |   | — |   |   | — |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Stockholders’                  Equity**                                                                                                                                                                                                                                                                                                                      |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                      |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| Preferred                    stock- $.0001 par value; 1,000,000 shares authorized; no                    shares issued or outstanding                                                                                                                                                                                                                                |   |                               | —    |                              |   | — |   |   | — |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                      |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| Common                          stock-- $.0001 par value, 100,000,000 shares authorized;11,931,700                          and 9,550,000 issued; 11,931,700 and 9,550,000 outstanding,                          respectively (which includes 0 and 1,559,220 shares                          subject to possible redemption,                          respectively) |   |                               | 1,193      |                              |   | 955 |   |   | — |   |   | — |   |
| Additional                  paid-in capital                                                                                                                                                                                                                                                                                                                          |   |                               | 54,047,798 |                              |   | 34,819,062 |   |   | — |   |   | — |   |
| Treasury                  stock, at cost 158,075 and 0 shares (successor);                                                                                                                                                                                                                                                                                           |   |                               | (814,197   | )                                 |   | — |   |   | — |   |   | — |   |
| (Accumulated                  deficit) Retained earnings                                                                                                                                                                                                                                                                                                             |   |                               | (5,436,267 | )                                 |   | 775,758 |   |   | — |   |   | — |   |
| Members'                  equity                                                                                                                                                                                                                                                                                                                                     |   |                               | —    |                              |   | — |   |   | 1,889,323 |   |   | 3,732,115 |   |
| Note                  receivable from affiliate                                                                                                                                                                                                                                                                                                                      |   |                               | —    |                              |   | — |   |   | — |   |   | (318,253 | ) |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Stockholders’ Equity**                                                                                                                                                                                                                                                                                                                |   |                               | 47,798,527 |                              |   | 35,595,775 |   |   | 1,889,323 |   |   | 3,413,862 |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   |                               |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Liabilities and Stockholders’ Equity**                                                                                                                                                                                                                                                                                                |   | $                                  | 69,137,155 |                              | $      | 46,045,619 |   | $ | 10,346,091 |   | $ | 13,962,112 |   |

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

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**Fortress      International Group, Inc.**

|                                                                                                                              |   | **(Successor)**                                                                      |       |  **(Predecessor)**                                                              |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------|--------|
|                                                                                                                              |   | **For                    the Nine Months Ended****September                    30,** |       | **For                    the Nine Months Ended****September                    30,** |   |  **For                        the period** **from                        January 1,** **2007                        through** **January                        19,** |   | **For                    the Nine Months Ended****September                    30,** |   |
|                                                                                                                              |   | **2007**                                                                             |       | **2006**                                                                             |   |  **2007** |   | **2006** |   |
| **Revenue**                                                                                                                       |   | $                                                                                    | 32,232,016 |                                                                                 | $      | — |   | $ | 1,412,137 |   | $ | 47,300,017 |   |
| **Cost                  of Revenue**                                                                                              |   |                                                                                 | 27,378,926 |                                                                                 |   | — |   |   | 1,108,276 |   |   | 38,938,582 |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Gross                  Profit**                                                                                                 |   |                                                                                 | 4,853,090  |                                                                                 |   | — |   |   | 303,861 |   |   | 8,361,435 |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Operating                  costs and expenses**                                                                                 |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| Selling,                  general and administrative                                                                              |   |                                                                                 | 10,026,448 |                                                                                 |   | 427,778 |   |   | 555,103 |   |   | 4,952,927 |   |
| Depreciation                  and amortization                                                                                    |   |                                                                                 | 289,708    |                                                                                 |   | — |   |   | 33,660 |   |   | 194,318 |   |
| Amortization                  of intangible assets                                                                                |   |                                                                                 | 1,574,671  |                                                                                 |   | — |   |   | — |   |   | — |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Total                  operating costs and expenses**                                                                           |   |                                                                                 | 11,890,827 |                                                                                 |   | 427,778 |   |   | 588,763 |   |   | 5,147,245 |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Operating                  (loss) income**                                                                                      |   |                                                                                 | (7,037,737 | )                                                                                    |   | (427,778 | ) |   | (284,902 | ) |   | 3,214,190 |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Other                  Income (Expense)**                                                                                       |   |                                                                                 |            |                                                                                 |   |   |   |   |   |   |   |   |   |
| Interest                  income                                                                                                  |   |                                                                                 | 892,805    |                                                                                 |   | 1,217,406 |   |   | 4,117 |   |   | — |   |
| Interest                  expense                                                                                                 |   |                                                                                 | (416,417   | )                                                                                    |   | — |   |   | (368 | ) |   | (14,122 | ) |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **(Loss)                  Income Before Income Taxes**                                                                            |   |                                                                                 | (6,561,349 | )                                                                                    |   | 789,628 |   |   | (281,153 | ) |   | 3,200,068 |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Income                  Tax (Benefit) Expense**                                                                                 |   |                                                                                 | (349,325   | )                                                                                    |   | 268,474 |   |   | — |   |   | — |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Net                  (Loss) Income**                                                                                            |   | $                                                                                    | (6,212,024 | )                                                                                    | $      | 521,154 |   | $ | (281,153 | ) | $ | 3,200,068 |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Weighted                  average number of shares outstanding**                                                                |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |   |  |   |
| **-basic**                                                                                                                        |   |                                                                                 | 11,743,186 |                                                                                 |   | 9,550,000 |   |   | — |   |   | — |   |
| **-diluted**                                                                                                                      |   |                                                                                 | 11,743,186 |                                                                                 |   | 9,550,000 |   |   | — |   |   | — |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Weighted                  average shares outstanding exclusive of shares****subject                    to possible redemption** |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **-basic**                                                                                                                        |   |                                                                                 | 11,743,186 |                                                                                 |   | 7,990,800 |   |   | — |   |   | — |   |
| **-diluted**                                                                                                                      |   |                                                                                 | 11,743,186 |                                                                                 |   | 7,990,800 |   |   | — |   |   | — |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Basic                  net (loss) income per share**                                                                            |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **-Net                  income**                                                                                                  |   | $                                                                                    | (0.53      | )                                                                                    | $      | 0.05 |   | $ | — |   | $ | — |   |
|                                                                                                                              |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **Diluted                  net (loss) income per share**                                                                          |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |   |   |   |
| **-Net                  income**                                                                                                  |   | $                                                                                    | (0.53      | )                                                                                    | $      | 0.05 |   | $ | — |   | $ | — |   |

----

**Fortress      International Group, Inc.**

|                                                                         |   | **(Successor)**                                 |       | **(Predecessor)**                     |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|-------------------------------------------------|--------|
|                                                                         |   | **For                  the Three Months Ended** |       | **For                  the Three Months Ended** |   |  **For                  the Three Months Ended** |   |
|                                                                         |   | **September                  30,**              |       | **September                  30,**              |   |  **September                  30,** |   |
|                                                                         |   | **2007**                                        |       | **2006**                                        |   |  **2006** |   |
| **Revenue**                                                                  |   | $                                               | 12,692,772 |                                            | $      | — |   | $ | 12,573,856 |   |
| **Cost                  of Revenue**                                         |   |                                            | 10,749,331 |                                            |   | — |   |   | 10,219,318 |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Gross                  Profit**                                            |   |                                            | 1,943,441  |                                            |   | — |   |   | 2,354,538 |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Operating                  costs and expenses**                            |   |                                            |       |                                            |   |   |   |   |   |   |
| Selling,                  general and administrative                         |   |                                            | 3,964,468  |                                            |   | 129,823 |   |   | 1,744,983 |   |
| Depreciation                  and amortization                               |   |                                            | 137,032    |                                            |   | — |   |   | 68,318 |   |
| Amortization                  of intangible assets                           |   |                                            | 567,109    |                                            |   | — |   |   | — |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Total                  operating costs and expenses**                      |   |                                            | 4,668,609  |                                            |   | 129,823 |   |   | 1,813,301 |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Operating                  (loss) income**                                 |   |                                            | (2,725,168 | )                                               |   | (129,823 | ) |   | 541,237 |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Other                  Income (Expense)**                                  |   |                                            |            |                                            |   |   |   |   |   |   |
| Interest                  income                                             |   |                                            | 252,736    |                                            |   | 444,941 |   |   | — |   |
| Interest                  expense                                            |   |                                            | (148,620   | )                                               |   | — |   |   | (4,424 | ) |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **(Loss)                  Income Before Income Taxes**                       |   |                                            | (2,621,052 | )                                               |   | 315,118 |   |   | 536,813 |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Income                  Tax Expense**                                      |   |                                            | —    |                                            |   | 107,140 |   |   | — |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Net                  (Loss) Income**                                       |   | $                                               | (2,621,052 | )                                               | $      | 207,978 |   | $ | 536,813 |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Weighted                  average number of shares outstanding**           |   |                                            |            |                                            |   |  |   |   |  |   |
| **-basic**                                                                   |   |                                            | 11,715,512 |                                            |   | 9,550,000 |   |   | — |   |
| **-diluted**                                                                 |   |                                            | 11,715,512 |                                            |   | 9,550,000 |   |   | — |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Weighted                  average shares outstanding exclusive of shares** |   |                                            |       |                                            |   |   |   |   |   |   |
| **subject                  to possible redemption**                          |   |                                            |       |                                            |   |   |   |   |   |   |
| **-basic**                                                                   |   |                                            | 11,715,512 |                                            |   | 7,990,800 |   |   | — |   |
| **-diluted**                                                                 |   |                                            | 11,715,512 |                                            |   | 7,990,800 |   |   | — |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Basic                  net (loss) income per share**                  |   |                                            |       |                                            |   |   |   |   |   |   |
| **-Net                  income**                                             |   | $                                               | (0.22      | )                                               | $      | 0.02 |   | $ | — |   |
|                                                                         |   |                                            |       |                                            |   |   |   |   |   |   |
| **Diluted                  net (loss) income per share**                |   |                                            |       |                                            |   |   |   |   |   |   |
| **-Net                  income**                                             |   | $                                               | (0.22      | )                                               | $      | 0.02 |   | $ | — |   |

----

**Fortress      International Group, Inc.**

|                                                                                                                                                                                            |   | **(Successor)**                                |       | **(Predecessor)**                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|------------------------------------------------|--------|
|                                                                                                                                                                                            |   | **For                  the Nine Months Ended** |       | **For                  the Nine Months Ended** |   |  **For                  the period from January 1, 2007 through** |   | **For                  the Nine Months Ended** |   |
|                                                                                                                                                                                            |   | **September                  30,**             |       | **September                  30,**             |   | **January                  19,** |   | **September                  30,** |   |
|                                                                                                                                                                                            |   | **2007**                                       |       | **2006**                                       |   | **2007** |   | **2006** |   |
| **Cash                  Flows from Operating Activities**                                                                                                                                       |   |                                           |       |                                           |   |    |   |   |   |
| Net                  (loss) income                                                                                                                                                              |   | $                                              | (6,212,024 | )                                              | $      | 521,154 |   | $ | (281,153 | ) | $ | 3,200,068 |   |
| Adjustments                      to reconcile net income (loss) to net cash (used in) provided                      by operating                      activities: Depreciation and amortization |   |                                           | 289,708    |                                           |   | — |   |   | 33,660 |   |   | 194,318 |   |
| Amortization                  of intangibles                                                                                                                                                    |   |                                           | 1,891,419  |                                           |   | — |   |   | — |   |   | — |   |
| Deferred                  income taxes                                                                                                                                                          |   |                                           | 490,675    |                                           |   | (232,936 | ) |   | — |   |   | — |   |
| Stock                  and warrant-based compensation                                                                                                                                           |   |                                           | 999,196    |                                           |   | — |   |   | — |   |   | — |   |
| Interest                  income on treasury bills                                                                                                                                              |   |                                           | —    |                                           |   | (1,508,630 | ) |   | — |   |   | — |   |
| Changes                  in assets and liabilities, net of effects of acquisitions:                                                                                                             |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| Contracts                  and other receivables                                                                                                                                                |   |                                           | (2,293,228 | )                                              |   | — |   |   | 3,698,863 |   |   | (389,073 | ) |
| Costs                  and estimated earnings in excess of billings on uncompleted                  contracts                                                                                   |   |                                           | (2,443,158 | )                                              |   | — |   |   | (1,078,505 | ) |   | (69,277 | ) |
| Prepaid                  expenses                                                                                                                                                               |   |                                           | (294,911   | )                                              |   | 50,165 |   |   | (108,618 | ) |   | (505,493 | ) |
| Income                  taxes recoverable                                                                                                                                                       |   |                                           | (840,000   | )                                              |   |  — |   |   |   — |   |   |   — |   |
| Due                  from affiliates                                                                                                                                                            |   |                                           | —    |                                           |   | — |   |   | 519,923 |   |   | (34,978 | ) |
| Other                  assets                                                                                                                                                                   |   |                                           | (236,125   | )                                              |   | — |   |   | (42,968 | ) |   | 730 |   |
| Accounts                  payable and accrued expenses                                                                                                                                          |   |                                           | 3,464,210  |                                           |   | (19,227 | ) |   | (1,861,306 | ) |   | 158,657 |   |
| Billings                  in excess of costs and estitmated earnings on uncompleted contracts                                                                                                   |   |                                           | 151,894    |                                           |   | — |   |   | 419,676 |   |   | (681,524 | ) |
| Income                  taxes payable                                                                                                                                                           |   |                                           | (586,283   | )                                              |   | 190,410 |   |   | — |   |   | — |   |
| Deferred                  compensation payable                                                                                                                                                  |   |                                           | —    |                                           |   | — |   |   | (643,571 | ) |   | 50,500 |   |
| Interest                  income attributable to common stock subject to possible                  redemption                                                                                   |   |                                           | —    |                                           |   | 301,575 |   |   | — |   |   | — |   |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Net                  Cash (Used in) Provided by Operating Activities**                                                                                                                        |   |                                           | (5,618,627 | )                                              |   | (697,489 | ) |   | 656,001 |   |   | 1,923,928 |   |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Investing Activities**                                                                                                                                       |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| Purchase                  of property and equipment                                                                                                                                             |   |                                           | (338,547   | )                                              |   | — |   |   | (127,602 | ) |   | (67,011 | ) |
| Decrease                  in investments held in trust fund                                                                                                                                     |   |                                           | 44,673,994 |                                           |   | — |   |   | — |   |   | — |   |
| Purchase                  of TSS/Vortech, net of cash received                                                                                                                                  |   |                                           | (9,677,683 | )                                              |   | — |   |   | — |   |   | — |   |
| Purchase                  of Comm Site of South Florida, Inc. net of cash received                                                                                                              |   |                                           | (135,000   | )                                              |   | — |   |   | — |   |   | — |   |
| Purchase                  of Innovative, net of cash received                                                                                                                                   |   |                                           | (1,502,032 | )                                              |   | — |   |   | — |   |   | — |   |
| Acquisition                  costs                                                                                                                                                              |   |                                           | (1,031,472 | )                                              |   | (220,204 | ) |   | — |   |   | — |   |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Net                  Cash Provided by (Used in) Investing Activities**                                                                                                                        |   |                                           | 31,989,260 |                                           |   | (220,204 | ) |   | (127,602 | ) |   | (67,011 | ) |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Financing Activities**                                                                                                                                       |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| Payments                  on notes payable                                                                                                                                                      |   |                                           | (51,494    | )                                              |   | — |   |   | (6,281 | ) |   | (55,972 | ) |
| Payments                  on promissory note payable to officer                                                                                                                                 |   |                                           | (2,000,000 | )                                              |   | — |   |   | — |   |   | — |   |
| Advances                  from shareholder                                                                                                                                                      |   |                                           | (20,000    | )                                              |   | — |   |   | — |   |   | — |   |
| Member                  distributions                                                                                                                                                           |   |                                           | —    |                                           |   | — |   |   | (1,561,639 | ) |   | (2,624,447 | ) |
| Payment                  to shareholders electing to redeem their shares in connection                    with the TSS/Vortech acquisition                                                      |   |                                           | (4,340,013 | )                                              |   | — |   |   | — |   |   | — |   |
| Repurchase                  of treasury stock                                                                                                                                                   |   |                                           | (2,036,015 | )                                              |   |   — |   |   |   — |   |   |   — |   |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Net                  Cash (Used in) Provided by Financing Activities**                                                                                                                        |   |                                           | (8,447,522 | )                                              |   | — |   |   | (1,567,920 | ) |   | (2,680,419 | ) |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Net                  Increase (Decrease) in Cash**                                                                                                                                            |   |                                           | 17,923,111 |                                           |   | (917,693 | ) |   | (1,039,521 | ) |   | (823,502 | ) |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Cash,**beginning                  of period                                                                                                                                                   |   |                                           | 7,347      |                                           |   | 992,547 |   |   | 2,361,838 |   |   | 1,737,075 |   |
|                                                                                                                                                                                            |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Cash,**end                  of period                                                                                                                                                         |   | $                                              | 17,930,458 |                                           | $      | 74,854 |   | $ | 1,322,317 |   | $ | 913,573 |   |
|                                                                                                                                                                                                 |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| **Supplemental                  disclosure of cash flow information**                                                                                                                           |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| Cash                  paid for interest                                                                                                                                                         |   | $                                              | 416,417    |                                           | $      | — |   | $ | 368 |   | $ | (14,122 | ) |
| Cash                  paid for taxes                                                                                                                                                            |   |                                           | 593,166    |                                           |   | — |   |   | — |   |   | — |   |
| **Supplemental                  disclosure of non cash Investing Activities**                                                                                                                   |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock in connection with acquisition of                  TSS/Vortech                                                                                        |   | $                                              | 14,211,359 |                                           |   | — |   |   | — |   |   | — |   |
| Notes                  payable entered into in connection with acquisition of                  TSS/Vortech                                                                                      |   |                                           | 10,000,000 |                                           |   | — |   |   | — |   |   | — |   |
| Issuance                  of common stock in connection with acquisition of                  Innovative                                                                                         |   |                                           | 150,000    |                                           |   | — |   |   | — |   |   | — |   |
| Notes                  payable entered into in connection with acquisition of                  Innovative                                                                                       |   |                                           | 300,000    |                                           |   | — |   |   | — |   |   | — |   |
| **Supplemental                  disclosure of non cash Financing Activities**                                                                                                                   |   |                                           |       |                                           |   |   |   |   |   |   |   |   |   |
| Discount                  received on repayment of promissory note to officer                                                                                                                   |   | $                                              | 500,000    |                                           |   | — |   |   | — |   |   | — |   |

----

**Fortress      International Group, Inc.**

**Notes      to the Consolidated Financial Statements**

**NOTE      A**
**-**
**      BASIS OF PRESENTATION**

**NOTE      B**
**-**
**      RECENT ACCOUNTING PRONOUNCEMENTS**

*Fair      Value Measurements*
*.*
*.      *
*Accounting      for Derivative Instruments and Hedging Activities*

*The      Fair Value Option for Financial Assets and Financial Liabilities — Including an      amendment of FASB Statement No. 115*

----

**NOTE      C**
**      ACQUISITIONS**

**TSS/VORTECH**

*Business      Combinations*

|   | · | TSS/Vortech                has a broad range of experience, contacts and service offerings in                the                mission-critical facility industry. TSS/Vortech has a very experienced                and                committed management team with strong core competencies. TSS has                a                significant number of personnel with security clearances which is                important in the homeland security industry. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                belief in TSS/Vortech’s business model and potential for growth,                increasing demand in its industry and its complete service offering                when                compared to other similar companies. In addition TSS/Vortech can                provide a                platform to assist us in managing acquisitions in the                future. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | TSS/Vortech                has been building a national business development organization to                expand                beyond its current regional presence. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Comm      Site of South Florida, Inc.**

**Innovative      Power Systems, Inc. and Quality Power Systems, Inc**

*Business      Combinations*

----

|                                                 |   | **TSS/Vortech** |       | **Innovative** |   | **Comm                  Site** |   | **Total** |    |
|------------------------------------------------------|--------|-----------------|------------|----------------|--------|--------------------------------|--------|-----------|---------|
| Cash                                                 |   | $               | 11,000,000 |           |   | 1,747,000                      |   |      | 150,000 |   |   | 12,897,000 |   |
| Common                  stock                        |   |            | 14,211,359 |           |   | 150,000                        |   |      |    |   |   | 14,361,359 |   |
| Promissory                  notes payable to sellers |   |            | 10,000,000 |           |   | 300,000                        |   |      |    |   |   | 10,300,000 |   |
| Transaction                  costs                   |   |            | 1,773,068  |           |   | 75,000                         |   |      |    |   |   | 1,848,068 |   |
| Total                  purchase price                |   |            | 36,984,427 |           |   | 2,272,000                      |   |      | 150,000 |   |   | 39,406,427 |   |
| **Purchase                  price allocation:**      |   |            |       |           |   |                           |   |      |    |   |   |   |   |
| Current                  assets                      |   |            | 9,377,244  |           |   | 972,271                        |   |      | 5,200   |   |   | 10,354,715 |   |
| Property                  and equipment              |   |            | 904,689    |           |   | 114,714                        |   |      | 9,800   |   |   | 1,029,203 |   |
| Intangible                  assets                   |   |            | 20,395,300 |           |   | -                              |   |      | -       |   |   | 20,395,300 |   |
| Goodwill                                             |   |            | 14,713,572 |           |   | 1,651,373                      |   |      | 135,000 |   |   | 16,499,945 |   |
| Other                  assets                        |   |            | 64,158     |           |   | 14,960                         |   |      | -       |   |   | 79,118 |   |
| Total                  assets acquired               |   |            | 45,454,963 |           |   | 2,753,318                      |   |      | 150,000 |   |   | 48,358,281 |   |
| Current                  liabilities                 |   |            | 8,391,012  |           |   | 475,271                        |   |      | -       |   |   | 8,866,283 |   |
| Long-term                  liabilities               |   |            | 79,524     |           |   | 6,047                          |   |      | -       |   |   | 85,571 |   |
| Total                  liabilities assumed           |   |            | 8,470,536  |           |   | 481,318                        |   |      | -       |   |   | 8,951,854 |   |
| Net                  assets acquired                 |   | $               | 36,984,427 |           |   | 2,272,000                      |   |      | 150,000 |   |   | 39,406,427 |   |

|                                                    |   | **Estimated                  Value** |       | **Weighted-Average****Amortization                    Period** |   |
|---------------------------------------------------------|--------|--------------------------------------|------------|----------------------------------------------------------------|--------|
| Non-contractual                  customer relationships |   | $                                    | 16,100,000 |                                                           |   | 8 |   |   | years |   |
| Order                  Backlog                          |   |                                 | 456,300    |                                                           |   | 1 |   |   | years |   |
| Trade                  Name                             |   |                                 | 3,839,000  |                                                           |   | 15 |   |   | years |   |
|                                                    |   |                                 |       |                                                           |   |   |   |   |   |   |
| Total                                                   |   | $                                    | 20,395,300 |                                                           |   |   |   |   |   |   |

----

|                                                   |   | **Three                  months ended****September                  30,** |       |
|--------------------------------------------------------|--------|---------------------------------------------------------------------------|------------|
|                                                   |   | **2007**                                                                  |       | **2006** |   |
| Proforma                  revenue                      |   | $                                                                         | 12,692,772 |   | $ | 12,573,856 |   |
| Proforma                  operating (loss) income      |   |                                                                      | (2,725,168 | ) |   | (269,770 | ) |
| Proforma                  pretax (loss) income         |   |                                                                      | (2,621,052 | ) |   | 24,520 |   |
| Proforma                  net (loss) income            |   |                                                                      | (2,621,052 | ) |   | 16,183 |   |
| Net                  (loss) income per share (basic )  |   |                                                                      | (0.22      | ) |   | 0.00 |   |
| Net                  (loss) income per share (diluted) |   |                                                                      | (0.22      | ) |   | 0.00 |   |

|                                                        |   |   | **Nine                  months ended****September                  30,** |   |
|--------------------------------------------------------|--------|--------|--------------------------------------------------------------------------|--------|
|                                                   |   |   | **2007**                                                                 |   |   | **2006** |   |
| Proforma                  revenue                      |   | $      | 33,644,153                                                               |   | $ | 47,300,017 |   |
| Proforma                  operating (loss) income      |   |   | (7,322,639                                                               | )      |   | 894,993 |   |
| Proforma                  pretax (loss) income         |   |   | (6,842,502                                                               | )      |   | 1,684,253 |   |
| Proforma                  net (loss) income            |   |   | (6,842,502                                                               | )      |   | 1,111,607 |   |
| Net                  (loss) income per share (basic )  |   |   | (0.58                                                                    | )      |   | 0.12 |   |
| Net                  (loss) income per share (diluted) |   |   | (0.58                                                                    | )      |   | 0.12 |   |

**NOTE      D**
**-**
**      INVESTMENTS HELD IN TRUST**

----

**NOTE      E**
**-**
**      INCOME (LOSS) PER SHARE**

*Earnings      Per Share*

|                                             |   | **(Successor)**                                       |            |
|--------------------------------------------------|--------|-------------------------------------------------------|------------|
|                                             |   | **Three                  Months Ended September 30,** |            |
|                                             |   | **2007**                                              |       | **2006** |   |   |
| Net                  (loss) income allocable to  |   |                                                  |       |   |   |   |
| common                  stockholders not subject |   |                                                  |       |   |   |   |
| to                  possible redemption          |   | $                                                     | (2,621,052 | ) | $ | 207,978 |
| Weighted                  average number of      |   |                                                  |       |   |   |   |
| shares                  outstanding - basic      |   |                                                  | 11,715,512 |   |   | 9,550,000 |
| Weighted                  average number of      |   |                                                  |       |   |   |   |
| shares                  outstanding - diluted    |   |                                                  | 11,715,512 |   |   | 9,550,000 |
| Income                  (loss) per share - basic |   | $                                                     | (0.22      | ) | $ | 0.02 |
| Income                  (loss) per share -       |   |                                                  |       |   |   |   |
| diluted                                          |   | $                                                     | (0.22      | ) | $ | 0.02 |

|                                                  |   |   | **Nine                  Months Ended September 30,** |
|--------------------------------------------------|--------|--------|------------------------------------------------------|
|                                             |   |   | **2007**                                             |   |   | **2006** |
| Net                  (loss) income allocable to  |   |   |                                                 |   |   |   |
| common                  stockholders not subject |   |   |                                                 |   |   |   |
| to                  possible redemption          |   | $      | (6,212,024                                           | ) | $ | 521,154 |
| Weighted                  average number of      |   |   |                                                 |   |   |   |
| shares                  outstanding - basic      |   |   | 11,743,186                                           |   |   | 9,550,000 |
| Weighted                  average number of      |   |   |                                                 |   |   |   |
| shares                  outstanding - diluted    |   |   | 11,743,186                                           |   |   | 9,550,000 |
| Income                  (loss) per share - basic |   | $      | (0.53                                                | ) | $ | 0.05 |
| Income                  (loss) per share -       |   |   |                                                 |   |   |   |
| diluted                                          |   | $      | (0.53                                                | ) | $ | 0.05 |

**NOTE      F**
**-**
**      STOCK-BASED COMPENSATION**

----

*Share      Based Payment,*

 

**NOTE      G **
**-**
** **
**COMMON      STOCK REDEMPTION**

**NOTE      H**
**-**
**      INCOME TAXES **

----

*Accounting      for Uncertainty in Income Taxes*

**NOTE      I **
**-**
**      NOTES PAYABLE**

|                                                                |   |       |      |
|----------------------------------------------------------------|--------|------------|-----------|
| **Twelve                    months endingSeptember 30, ** |   | **Amount** |      |
| 2008                                                           |   |  $    | 121,692   |   |
| 2009                                                           |   |  $    | 1,345,193 |   |
| 2010                                                           |   |  $    | 2,138,335 |   |
| 2011                                                           |   |  $    | 3,468,332 |   |
| 2012                                                           |   |  $    | 833,333   |   |

----

**NOTE      J** **-****RELATED PARTY TRANSACTIONS**

**S3      Integration LLC.**

**Chesapeake      Systems, LLC**

**Chesapeake      Mission Critical, LLC**

**Chesapeake      Tower Systems, Inc**

**CTS      Services, LLC**

**L.H.      Cranston Acquisition Group, Inc**
***.***

**Telco      P&C, LLC.**

**Automotive      Technologies, Inc.**

**TPR      Group, LLC.**

**TPR      Group Re Three, LLC.**

----

|                                                              |   | **(Successor)**                                      |      | **(Predecessor)**                                    |   | **(Successor)** |   | **(Predecessor)** |      |
|-------------------------------------------------------------------|--------|------------------------------------------------------|-----------|------------------------------------------------------|--------|-----------------|--------|-------------------|-----------|
|                                                              |   | **Three                  Months Ended Sepember 30,** |      | **Nine                  Months Ended September 30,** |   |
|                                                              |   | **2007**                                             |      | **2006**                                             |   | **2007**        |   | **2006**          |      |
| **Revenue**                                                       |   |                                                 |      |                                                 |   |            |   |              |      |
| CTS                  Services, LLC                                |   | $                                                    | 78,885    |                                                 | $      | 113,736         |   | $                 | 147,711   |   | $ | 189,743 |   |
| Chesapeake                  Systems, LLC                          |   |                                                 | -         |                                                 |   | -               |   |              | 52,716    |   |   | - |   |
| Chesapeake                  Mission Critical, LLC                 |   |                                                 | 67,818    |                                                 |   | -               |   |              | 95,034    |   |   | - |   |
| Chesapeake                  Tower Systems, Inc.                   |   |                                                 | -         |                                                 |   | 1,766           |   |              | -         |   |   | 12,175 |   |
| S3                  Integration, LLC                              |   |                                                 | -         |                                                 |   | -               |   |              | -         |   |   | - |   |
| TPR                  Group, LLC                                   |   |                                                 | -         |                                                 |   | -               |   |              | -         |   |   | 1,772 |   |
| **Total**                                                         |   | $                                                    | 146,703   |                                                 | $      | 115,502         |   | $                 | 295,461   |   | $ | 203,690 |   |
|                                                              |   |                                                 |      |                                                 |   |            |   |              |      |   |   |   |   |
| **Cost                  of Revenue**                              |   |                                                 |      |                                                 |   |            |   |              |      |   |   |   |   |
| CTS                  Services, LLC                                |   | $                                                    | 2,292,792 |                                                 | $      | 1,056,765       |   | $                 | 2,763,184 |   | $ | 3,923,741 |   |
| Chesapeake                  Systems, LLC                          |   |                                                 | -         |                                                 |   | -               |   |              | 160,304   |   |   | - |   |
| Chesapeake                  Mission Critical, LLC                 |   |                                                 | 41,125    |                                                 |   | -               |   |              | 78,750    |   |   | - |   |
| Chesapeake                  Tower Systems, Inc.                   |   |                                                 | -         |                                                 |   | 40,197          |   |              | 56,501    |   |   | 576,818 |   |
| S3                  Integration, LLC                              |   |                                                 | -         |                                                 |   | 110,507         |   |              | 218,922   |   |   | 114,007 |   |
| LH                  Cranston & Sons, Inc.                     |   |                                                 | 90,800    |                                                 |   | 458,021         |   |              | 222,677   |   |   | 758,140 |   |
| Telco                  P&C, LLC                               |   |                                                 | 18,222    |                                                 |   | 12,412          |   |              | 29,174    |   |   | 17,268 |   |
| **Total**                                                         |   | $                                                    | 2,442,939 |                                                 | $      | 1,677,902       |   | $                 | 3,529,512 |   | $ | 5,389,974 |   |
|                                                              |   |                                                 |      |                                                 |   |            |   |              |      |   |   |   |   |
| **Selling,                  general and administrative**          |   |                                                 |      |                                                 |   |            |   |              |      |   |   |   |   |
| Management                  fees paid to TPR Group, LLC           |   | $                                                    | -         |                                                 | $      | 209,100         |   | $                 | -         |   | $ | 726,300 |   |
| Office                  rent paid on Chesapeake sublease agmt     |   |                                                 | 46,841    |                                                 |   | 40,473          |   |              | 131,782   |   |   | 120,668 |   |
| Office                  rent paid to TPR Group Re Three, LLC      |   |                                                 | 94,976    |                                                 |   | -               |   |              | 286,454   |   |   | - |   |
| Vehicle                  repairs to Automotive Technologies, Inc. |   |                                                 | -         |                                                 |   | 6,756           |   |              | 4,442     |   |   | 17,796 |   |
| **Total**                                                         |   | $                                                    | 141,817   |                                                 | $      | 256,329         |   | $                 | 422,678   |   | $ | 864,764 |   |

|                                                     |   |   | **September                  30,** |   |   | **December                  31,** |   |   |   |   |   |   |   |
|-----------------------------------------------------|--------|--------|------------------------------------|--------|--------|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                |   |   | **2007**                           |   |   | **2006**                          |   |   |   |   |   |   |   |
| **Accounts                  receivable/(payable):** |   |   |                               |   |   |                              |   |   |   |   |   |   |   |
| CTS                  Services, LLC                  |   | $      | 112,675                            |   | $      | 229,335                           |   |   |   |   |   |   |   |
| CTS                  Services, LLC                  |   |   | (2,337,579                         | )      |   | (405,091                          | )      |   |   |   |   |   |   |
| Chesapeake                  Systems, LLC            |   |   | 52,986                             |   |   | -                                 |   |   |   |   |   |   |   |
| Chesapeake                  Systems, LLC            |   |   | (159,279                           | )      |   | -                                 |   |   |   |   |   |   |   |
| Chesapeake                  Mission Critical, LLC   |   |   | 94,335                             |   |   | -                                 |   |   |   |   |   |   |   |
| Chesapeake                  Mission Critical, LLC   |   |   | (16,450                            | )      |   | -                                 |   |   |   |   |   |   |   |
| Chesapeake                  Tower Systems, Inc.     |   |   | -                                  |   |   | 2,802                             |   |   |   |   |   |   |   |
| Telco                  P&C, LLC                 |   |   | (18,222                            | )      |   | -                                 |   |   |   |   |   |   |   |
| LH                  Cranston & Sons, Inc.       |   |   | (86,410                            | )      |   | -                                 |   |   |   |   |   |   |   |
| S3                  Integration, LLC                |   |   | (61,187                            | )      |   |                              |   |   |   |   |   |   |   |
| **Total                  Accounts receivable**      |   | $      | 259,996                            |   | $      | 229,335                           |   |   |   |   |   |   |   |
|                                                |   |   |                               |   |   |                              |   |   |   |   |   |   |   |
| **Total                  Accounts (payable)**       |   | $      | (2,679,127                         | )      | $      | (405,091                          | )      |   |   |   |   |   |   |

----

**NOTE      K **
**-**
**      SEGMENT INFORMATION**

**NOTE      L**
**-**
**      COMMITMENTS**

***Employment      Agreements***

| · | if                the highest average share price of the Company’s common stock during any                60 consecutive trading day period between the closing of the acquisition                and July 13, 2008 exceeds $9.00 per share but is no more than $10.00                per share, each of the Chief Executive Officer and President will                be                entitled to $0.5 million worth of additional shares;                or |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | if                the highest average share price of Company’s common stock during any 60                consecutive trading day period between the closing of the acquisition                and                July 13, 2008 exceeds $10.00 per share but is no more than $12.00 per                share, each of the Chief Executive Officer and President will be                entitled                to $1.5 million worth of additional shares;                or |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | if                the highest average share price of Company’s common stock during any 60                consecutive trading day period between the closing of the acquisition                and                July 13, 2008 exceeds $12.00 per share but is no more than $14.00 per                share, each of the Chief Executive Officer and President will be                entitled                to $3.0 million worth of additional shares;                or |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | if                the highest average share price of Company’s common stock during any 60                consecutive trading day period between the closing of the acquisition                and                July 13, 2008 exceeds $14.00 per share, each of the Chief Executive                Officer and President will be entitled to $5.0 million worth of additional                shares. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NOTE      M**
**-**
**      MAJOR CUSTOMER**

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations.**

      and its      consolidated subsidiaries, unless otherwise indicated.

**Company      Overview**

----

**Contract      Backlog**

|                                   |   | (Successor) September                30,2007 |       |                  (Predecessor)December 31,2006 |   |
|----------------------------------------|--------|---------------------------------------------------|------------|-----------------------------------------------------|--------|
| Technology                consulting   |   | $                                                 | 2,100,000  |                                                | $      | 1,266,000 |   |
| Construction                management |   |                                              | 45,143,000 |                                                |   | 11,757,000 |   |
| Facilities                management   |   |                                              | 14,045,000 |                                                |   | 7,585,000 |   |
|                                   |   |                                              |       |                                                |   |   |   |
|                                   |   | $                                                 | 61,288,000 |                                                | $      | 20,608,000 |   |

----

**Critical      Accounting Policies **

***Revenue      Recognition***

***Goodwill      and Other Intangible Assets***

***Allowance      for Doubtful Accounts***

***Income      Taxes***

----

**Results      of Operations for the Successor Company **

***Three      months ended September 30, 2007 compared with the three months ended September      30, 2006***

*Revenue      and cost of revenue.*

*Selling,      general and administrative expenses.*
* *

*Depreciation      and amortization of intangible assets.*

*Interest      income. *

*Interest      expense.*

*Income      tax benefit (expense). *

----

***Nine      months ended September 30, 2007 compared with the nine months ended September      30, 2006***

*Revenue      and cost of revenue.*

*Selling,      general and administrative expenses.*
* *

*Depreciation      and amortization of intangible assets.*

*Interest      income. *

*Interest      expense.*

*Income      tax benefit (expense). *

**Results      of Operations on a Pro Forma Combined Basis for the Successor Company**

----

|                                                    |   |                                            |       |                                             |   |                                            |   | **Proforma**                                    |       |                                            |   |
|---------------------------------------------------------|--------|-------------------------------------------------|------------|-------------------------------------------------------|--------|-------------------------------------------------|--------|-------------------------------------------------|------------|-------------------------------------------------|--------|
|                                                    |   | **(Successor)**                                 |       |  **(Successor)**                                 |   | **(Predecessor)**                               |   | **Adjustments**                                 |       | **(Proforma)**                                  |   |
|                                                    |   | **For                  the Three Months Ended** |       |  **For                  the Three Months Ended** |   | **For                  the Three Months Ended** |   | **For                  the Three Months Ended** |       | **For                  the Three Months Ended** |   |
|                                                    |   | **September                  30,**              |       | **September                  30,**                    |   | **September                  30,**              |   | **September                  30,**              |       | **September                  30,**              |   |
|                                                    |   | **2007**                                        |       |  **2006**                                        |   | **2006**                                        |   | **2006**                                        |       | **2006**                                        |   |
|                                                    |   |                                            |       |                                             |   |                                            |   |                                            |       |                                            |   |
| **Revenue**                                             |   | $                                               | 12,692,772 |                                                  | $      | —                                         |   | $                                               | 12,573,856 |                                            | $      | — |   |   | 12,573,856 |   |
| **Cost                  of Revenue**                    |   |                                            | 10,749,331 |                                                  |   | —                                         |   |                                            | 10,219,318 |                                            |   | 114,075 |   |   | 10,333,393 |   |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Gross                  Profit**                       |   |                                            | 1,943,441  |                                                  |   | —                                         |   |                                            | 2,354,538  |                                            |   | (114,075 | ) |   | 2,240,463 |   |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Operating                  costs and expenses**       |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| Selling,                  general and administrative    |   |                                            | 3,964,468  |                                                  |   | 129,823                                         |   |                                            | 1,744,983  |                                            |   | — |   |   | 1,874,806 |   |
| Depreciation                  and amortization          |   |                                            | 137,032    |                                                  |   | —                                         |   |                                            | 68,318     |                                            |   | — |   |   | 68,318 |   |
| Amortization                  of intangible assets      |   |                                            | 567,109    |                                                  |   | —                                         |   |                                            | —    |                                            |   | 567,109 |   |   | 567,109 |   |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Total                  operating costs and expenses** |   |                                            | 4,668,609  |                                                  |   | 129,823                                         |   |                                            | 1,813,301  |                                            |   | 567,109 |   |   | 2,510,233 |   |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Operating                  (Loss) income**            |   |                                            | (2,725,168 | )                                                     |   | (129,823                                        | )      |                                            | 541,237    |                                            |   | (681,184 | ) |   | (269,770 | ) |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Other                  Income (Expense)**             |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| Interest                  income                        |   |                                            | 252,736    |                                                  |   | 444,941                                         |   |                                            | —    |                                            |   | — |   |   | 444,941 |   |
| Interest                  (expense)                     |   |                                            | (148,620   | )                                                     |   | —                                         |   |                                            | (4,424     | )                                               |   | (146,227 | ) |   | (150,651 | ) |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Income                  (Loss) Before Income Taxes**  |   |                                            | (2,621,052 | )                                                     |   | 315,118                                         |   |                                            | 536,813    |                                            |   | (827,411 | ) |   | 24,520 |   |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **As                  a Percentage of Revenue**         |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Revenue**                                             |   |                                            | 100.0      | %                                                     |   | —                                         |   |                                            | 100.0      | %                                               |   | — |   |   | 100.0 | % |
| **Cost                  of Revenue**                    |   |                                            | 84.7       | %                                                     |   | —                                         |   |                                            | 81.3       | %                                               |   | — |   |   | 82.2 | % |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Gross                  Profit**                       |   |                                            | 15.3       | %                                                     |   | —                                         |   |                                            | 18.7       | %                                               |   | — |   |   | 17.8 | % |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Operating                  costs and expenses**       |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| Selling,                  general and administrative    |   |                                            | 31.2       | %                                                     |   | —                                         |   |                                            | 13.9       | %                                               |   | — |   |   | 14.9 | % |
| Depreciation                  and amortization          |   |                                            | 1.1        | %                                                     |   | —                                         |   |                                            | 0.5        | %                                               |   | — |   |   | 0.5 | % |
| Amortization                  of intangible assets      |   |                                            | 4.5        | %                                                     |   | —                                         |   |                                            | 0.0        | %                                               |   | — |   |   | 4.5 | % |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Total                  operating costs and expenses** |   |                                            | 36.8       | %                                                     |   | —                                         |   |                                            | 14.4       | %                                               |   | — |   |   | 20.0 | % |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Operating                  (Loss) income**            |   |                                            | -21.5      | %                                                     |   | —                                         |   |                                            | 4.3        | %                                               |   | — |   |   | -2.1 | % |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Other                  Income (Expense)**             |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| Interest                  income                        |   |                                            | 2.0        | %                                                     |   | —                                         |   |                                            | 0.0        | %                                               |   | — |   |   | 3.5 | % |
| Interest                  (expense)                     |   |                                            | -1.2       | %                                                     |   | —                                         |   |                                            | 0.0        | %                                               |   | — |   |   | -1.2 | % |
|                                                    |   |                                            |       |                                                  |   |                                            |   |                                            |       |                                            |   |   |   |   |   |   |
| **Income                  (Loss) Before Income Taxes**  |   |                                            | -20.6      | %                                                     |   | —                                         |   |                                            | 4.3        | %                                               |   | — |   |   | 0.2 | % |

----

|                                                    |   | **(Successor)****For                    the Nine Months Ended****September                    30,****2007** |       | **(Predecessor)****For                  the period****from                  January 1,****2007                  through****January                  19,****2007** |   | **Proforma****combined****For                    the Nine Months Ended****September                    30,****2007** |   |  **(Successor)** **For                    the Nine Months Ended** **September                    30,** **2006** |       | **(Predecessor)****For                  the Nine Months Ended****September                  30,****2006** |   | **Proforma****Adjustments****For                    the Nine Months Ended****September                    30,****2006** |   | **Proforma****combined****For                    the Nine Months Ended****September                    30,****2006** |            |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|------------|
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                           |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |
| **Revenue**                                             |   | $                                                                                                           | 32,232,016 |                                                                                                                                                              | $      | 1,412,137                                                                                                            |   | $                                                                                                                                   | 33,644,153 |                                                                                                      | $      | —                                                                                                                 |   | $                                                                                                                    | 47,300,017 |   | $ | — |   |   | 47,300,017 |   |
| **Cost                  of Revenue**                    |   |                                                                                                        | 27,378,926 |                                                                                                                                                              |   | 1,108,276                                                                                                            |   |                                                                                                                                | 28,487,202 |                                                                                                      |   | —                                                                                                                 |   |                                                                                                                 | 38,938,582 |   |   | 316,748 |   |   | 39,255,330 |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Gross                  Profit**                       |   |                                                                                                        | 4,853,090  |                                                                                                                                                              |   | 303,861                                                                                                              |   |                                                                                                                                | 5,156,951  |                                                                                                      |   | —                                                                                                                 |   |                                                                                                                 | 8,361,435  |   |   | (316,748 | ) |   | 8,044,687 |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Operating                  costs and expenses**       |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| Selling,                  general and administrative    |   |                                                                                                        | 10,026,448 |                                                                                                                                                              |   | 555,103                                                                                                              |   |                                                                                                                                | 10,581,551 |                                                                                                      |   | 427,778                                                                                                                 |   |                                                                                                                 | 4,952,927  |   |   | — |   |   | 5,380,705 |   |
| Depreciation                  and amortization          |   |                                                                                                        | 289,708    |                                                                                                                                                              |   | 33,660                                                                                                               |   |                                                                                                                                | 323,368    |                                                                                                      |   | —                                                                                                                 |   |                                                                                                                 | 194,318    |   |   | — |   |   | 194,318 |   |
| Amortization                  of intangible assets      |   |                                                                                                        | 1,574,671  |                                                                                                                                                              |   | —                                                                                                              |   |                                                                                                                                | 1,574,671  |                                                                                                      |   | —                                                                                                                 |   |                                                                                                                 | —    |   |   | 1,574,671 |   |   | 1,574,671 |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Total                  operating costs and expenses** |   |                                                                                                        | 11,890,827 |                                                                                                                                                              |   | 588,763                                                                                                              |   |                                                                                                                                | 12,479,590 |                                                                                                      |   | 427,778                                                                                                                 |   |                                                                                                                 | 5,147,245  |   |   | 1,574,671 |   |   | 7,149,694 |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Operating                  (Loss) income**            |   |                                                                                                        | (7,037,737 | )                                                                                                                                                                 |   | (284,902                                                                                                             | )      |                                                                                                                                | (7,322,639 | )                                                                                                         |   | (427,778                                                                                                                | )      |                                                                                                                 | 3,214,190  |   |   | (1,891,419 | ) |   | 894,993 |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Other                  Income (Expense)**             |   |                                                                                                        |            |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| Interest                  income                        |   |                                                                                                        | 892,805    |                                                                                                                                                              |   | 4,117                                                                                                                |   |                                                                                                                                | 896,922    |                                                                                                      |   | 1,217,406                                                                                                               |   |                                                                                                                 | —    |   |   | — |   |   | 1,217,406 |   |
| Interest                  (expense)                     |   |                                                                                                        | (416,417   | )                                                                                                                                                                 |   | (368                                                                                                                 | )      |                                                                                                                                | (416,785   | )                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | (14,122    | ) |   | (414,024 | ) |   | (428,146 | ) |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Income                  (Loss) Before Income Taxes**  |   |                                                                                                        | (6,561,349 | )                                                                                                                                                                 |   | (281,153                                                                                                             | )      |                                                                                                                                | (6,842,502 | )                                                                                                         |   | 789,628                                                                                                                 |   |                                                                                                                 | 3,200,068  |   |   | (2,305,443 | ) |   | 1,684,253 |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **As                  a Percentage of Revenue**         |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Revenue**                                             |   |                                                                                                        | 100.0      | %                                                                                                                                                                 |   | 100.0                                                                                                                | %      |                                                                                                                                | 100.0      | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 100.0      | % |   | — |   |   | 100.0 | % |
| **Cost                  of Revenue**                    |   |                                                                                                        | 84.9       | %                                                                                                                                                                 |   | 78.5                                                                                                                 | %      |                                                                                                                                | 84.7       | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 82.3       | % |   | — |   |   | 83.0 | % |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Gross                  Profit**                       |   |                                                                                                        | 15.1       | %                                                                                                                                                                 |   | 21.5                                                                                                                 | %      |                                                                                                                                | 15.3       | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 17.7       | % |   | — |   |   | 17.0 | % |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Operating                  costs and expenses**       |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| Selling,                  general and administrative    |   |                                                                                                        | 31.1       | %                                                                                                                                                                 |   | 39.3                                                                                                                 | %      |                                                                                                                                | 31.5       | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 10.5       | % |   | — |   |   | 11.4 | % |
| Depreciation                  and amortization          |   |                                                                                                        | 0.9        | %                                                                                                                                                                 |   | 2.4                                                                                                                  | %      |                                                                                                                                | 1.0        | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 0.4        | % |   | — |   |   | 0.4 | % |
| Amortization                  of intangible assets      |   |                                                                                                        | 4.9        | %                                                                                                                                                                 |   | 0.0                                                                                                                  | %      |                                                                                                                                | 4.7        | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 0.0        | % |   | — |   |   | 3.3 | % |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Total                  operating costs and expenses** |   |                                                                                                        | 36.9       | %                                                                                                                                                                 |   | 41.7                                                                                                                 | %      |                                                                                                                                | 37.1       | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 10.9       | % |   | — |   |   | 15.1 | % |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Operating                  (Loss) income**            |   |                                                                                                        | -21.8      | %                                                                                                                                                                 |   | -20.2                                                                                                                | %      |                                                                                                                                | -21.8      | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 6.8        | % |   | — |  |   | 1.9 | % |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Other                  Income (Expense)**             |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| Interest                  income                        |   |                                                                                                        | 2.8        | %                                                                                                                                                                 |   | 0.3                                                                                                                  | %      |                                                                                                                                | 2.7        | %                                                                                                         |   | —                                                                                                                 |        |                                                                                                                 | 0.0        | % |   | — |   |   | 2.6 | % |
| Interest                  (expense)                     |   |                                                                                                        | -1.3       | %                                                                                                                                                                 |   | 0.0                                                                                                                  | %      |                                                                                                                                | -1.2       | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 0.0        | % |   | — |   |   | -0.9 | % |
|                                                    |   |                                                                                                        |       |                                                                                                                                                              |   |                                                                                                                 |   |                                                                                                                                |       |                                                                                                      |   |                                                                                                                    |   |                                                                                                                 |       |   |   |   |   |   |   |   |
| **Income                  (Loss) Before Income Taxes**  |   |                                                                                                        | -20.4      | %                                                                                                                                                                 |   | -19.9                                                                                                                | %      |                                                                                                                                | -20.3      | %                                                                                                         |   | —                                                                                                                 |   |                                                                                                                 | 6.8        | % |   | — |   |   | 3.6 | % |

***Three      months ended September 30, 2007 compared with the three months ended September      30, 2006***

*Revenue      and cost of revenue. *

** **

----

*Selling,      general and administrative expenses. *
* *

|                                                                               |   | **Three                  months** |          |
|------------------------------------------------------------------------------------|--------|-----------------------------------|---------------|
| ·Sales                  salaries and                  expenses                |   | $                                 | 461,000       |   |
| ·Public                  company                  costs                  |   |                              |  394,000 |   |
| ·Non                  cash compensation for restricted                  stock |   |                              | 321,000       |   |
| ·Rent                  and occupancy                  costs                   |   |                              | 256,000       |   |
|                                                                               |   |                              | 1,432,000     |   |

*Depreciation      and amortization of intangible assets. *

*Interest      income. *

*Interest      expense.*

***Nine      months ended September 30, 2007 compared with the nine months ended September      30, 2006***

*Revenue      and cost of revenue. *

----

** **

*Selling,      general and administrative expenses. *
* *

|                                                                               |   | **Nine                  months** |      |
|------------------------------------------------------------------------------------|--------|----------------------------------|-----------|
| ·Sales                  salaries and                  expenses                |   | $                                | 1,403,000 |   |
| ·Public                  company                  expenses                    |   |                             | 1,081,000 |   |
| ·Non                  cash compensation for restricted                  stock |   |                             | 786,000   |   |
| ·Rent                  and occupancy                  costs                   |   |                             | 657,000   |   |
| ·Marketing                  expenses                                          |   |                             | 313,000   |   |
|                                                                               |   |                             | 4,240,000 |   |

*Depreciation      and amortization of intangible assets. *

*Interest      income. *

*Interest      expense.*

**Financial      Condition, Liquidity and Capital Resources **

***Financial      Condition***

----

***Liquidity      and Capital Resources***

** **

***Off      Balance Sheet Arrangements***
* *

***Recent      Accounting Pronouncements***
*.*

*The      Fair Value Option for Financial Assets and Financial Liabilities — Including an      amendment of FASB Statement No. 115 *

----

**Item      3. Quantitative and Qualitative Disclosures About Market      Risk.**

**Item      4. Controls and Procedures.**

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Control Over Financial Reporting**

** **

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings.**

----

**Item      1A. Risk Factors**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds.**

|                                 |   |   |                                                          |   |   | **Total                  Number of**     |   |   | **Maximum                  Number**       |   |
|--------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                 |   |   |                                                          |   |   | **Shares                  Purchased as** |   |   | **of                  Shares (or Units)** |   |
|                                 |   |   | **Purchases                  of Equity Securities by Issuer** |   |   | **Part                  of Publicly**    |   |   | **that                  May Yet Be**      |   |
|                                 |   |   | **Total                  Number of**                          |   |   | **Average                  Price Paid**  |   |   | **Announced                  Plans or**   |   |   | **Purchased                  Under the** |   |
| **Period**                           |   |   | **Shares                  Purchased**                         |   |   | **per                  Share**           |   |   | **Programs**                              |   |   | **Plans                  or Programs** |   |
| January                  1-31, 2007  |   |   | 116,000                                                       |   | $      | 5.49                                     |   |   | 116,000                                   |   |   | 384,000 |   |
| February                  1-28, 2007 |   |   | 94,500                                                        |   | $      | 5.60                                     |   |   | 210,500                                   |   |   | 289,500 |   |
| March                  1-31, 2007    |   |   | 10,500                                                        |   | $      | 5.33                                     |   |   | 221,000                                   |   |   | 279,000 |   |
| April                  1-30, 2007    |   |   | 0                                                             |   |   | —                                  |   |   | 221,000                                   |   |   | 279,000 |   |
| May                  1-31, 2007      |   |   | 29,300                                                        |   | $      | 5.21                                     |   |   | 250,300                                   |   |   | 249,700 |   |
| June                  1-30, 2007     |   |   | 104,475                                                       |   | $      | 5.11                                     |   |   | 354,775                                   |   |   | 145,225 |   |
| July                  1-31, 2007     |   |   | 24,300                                                        |   | $      | 5.25                                     |   |   | 379,075                                   |   |   | 120,925 |   |
|                                 |   |   |                                                          |   |   |                                     |   |   |                                      |   |   |   |   |
| January                  1-31, 2007  |   |   | 756,100                                                       |   | $      | 5.38                                     |   |   | 1,135,175                                 |   |   | 0 |   |
|                                 |   |   |                                                          |   |   |                                     |   |   |                                      |   |   |   |   |
| Total                                |   |   | 1,135,175                                                     |   | $      | 5.38                                     |   |   | 1,135,175                                 |   |   |   |   |

**Recent      Sales of Unregistered Securities**

**Item      3. Defaults Upon Senior Securities.**

**Item      4. Submission of Matters to a Vote of Security Holders.**

**Item      5. Other Information.**

**Item      6. Exhibits. **

| 31.1   | Section                302 Certification by Principal Executive Officer                |
|--------|----------------------------------------------------------------------------------------|
|   |                                                                                   |
| 31.2   | Section                302 Certification by Principal Financial Officer                |
|   |                                                                                   |
| 32.1   | Section                906 Certification by Principal Executive                Officer |

|   |                                                                                   |
|--------|----------------------------------------------------------------------------------------|
| 32.2   | Section                906 Certification by Principal Financial                Officer |

----

**SIGNATURES      **

|                                   |                                                                                                                         |                              |
|----------------------------------------|------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
|                                   | **FORTRESS                INTERNATIONAL GROUP, INC.**                                                                        |
|                              |                                                                                                                    |                         |
| Date:                November 14, 2007 | By:                                                                                                                | /s/              Thomas P. Rosato |
|                                   | Thomas                P. Rosato                                                                                              |
|                                   | *Chief                Executive Officer**(Authorized                Officer and Principal Executive                Officer)* |

|         |                                                                                                                                                      |                            |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
|    |                                                                                                                                                 |                       |
|         | By:                                                                                                                                             | /s/              Timothy C. Dec |
|         | Timothy                C. Dec*Chief                Financial Officer**(Authorized                Officer and Principal Financial                Officer)* |

----