----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      DC 20549**

**FORM      10-Q**

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

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

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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 June 30, 2007 (unaudited) and as of December                31, 2006                (audited) (successor) and as of January 19, 2007 (unaudited) and                December                31, 2006 (predecessor) (audited)                                                          |   |     | 1      |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| Consolidated                Statements of Operations (unaudited) for the three and six months                ended                June 30, 2007 (successor) and June 30, 2006 (predecessor). Additionally,                for the period from January 1, 2007 through January 19, 2007                (predecessor).                   |   |     | 3      |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| Consolidated                Statements of Cash Flows (unaudited) for the six months ended June                30,                2007 and June 30, 2006 (successor) and for the period from January                1, 2007                through January 19, 2007 and the six months ended June 30, 2006                (predecessor) |   |     | 5      |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| Notes                to Consolidated Financial Statements                                                                                                                                                                                                                                                                              |   |     | 6      |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                2. Management’s Discussion and Analysis of Financial Condition and Results                of Operations**                                                                                                                                                                                                  |   |     | 16     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                3. Quantitative and Qualitative Disclosures about Market                Risk**                                                                                                                                                                                                                                   |   |     | 26     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                4. Controls and Procedures**                                                                                                                                                                                                                                                                                     |   |     | 26     |   |
|                                                                                                                                                                                                                                                                                                                                   |
| **PART                II - OTHER INFORMATION**                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                1. Legal Proceedings**                                                                                                                                                                                                                                                                                           |   |     | 26     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                1A. Risk Factors**                                                                                                                                                                                                                                                                                               |   |     | 27     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds**                                                                                                                                                                                                                                  |   |     | 27     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                3. Defaults upon Senior Securities**                                                                                                                                                                                                                                                                             |   |     | 27     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                4. Submission of Matters to a Vote of Security                Holders**                                                                                                                                                                                                                                          |   |     | 27     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                5. Other Information**                                                                                                                                                                                                                                                                                           |   |     | 28     |   |
|                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |
| **Item                6. Exhibits**                                                                                                                                                                                                                                                                                                    |   |     | 28     |   |
|                                                                                                                                                                                                                                                                                                                                   |
| **SIGNATURES**                                                                                                                                                                                                                                                                                                                         |

----

**PART      I - FINANCIAL INFORMATION**

**Fortress      International Group, Inc.**

|                                                                  |   | **(Successor)**                 |       |  **(Predecessor)**             |   |
|-----------------------------------------------------------------------|--------|---------------------------------|------------|-------------------------------------|--------|
|                                                                  |   | **June                    30,** |       | **December                    31,** |   |  **January                    19,** |   | **December                    31,** |   |
|                                                                  |   | **2007**                        |       | **2006**                            |   |  **2007** |   | **2006** |   |
|                                                                  |   | **(unaudited)**                 |       | **(audited)**                       |   |  **(unaudited)** |   | **(audited)** |   |
|                                                                  |   |                            |       |                                |   |    |   |   |   |
| ***Assets***                                                          |   |                            |       |                                |   |    |   |   |   |
|                                                                  |   |                            |       |                                |   |    |   |   |   |
| **Current                    Assets**                                 |   |                            |       |                                |   |    |   |   |   |
| Cash                    and cash equivalents                          |   | $                               | 21,106,976 |                                | $      | 7,347 |   | $ | 1,322,317 |   | $ | 2,361,838 |   |
| Contract                    and other receivables, net                |   |                            | 8,977,676  |                                |   | — |   |   | 6,261,988 |   |   | 9,960,851 |   |
| Prepaid                    expenses and other current assets          |   |                            | 746,264    |                                |   | 3,750 |   |   | 233,894 |   |   | 125,276 |   |
| Costs                    and estimated earnings in excess of billings |   |                            | 1,400,868  |                                |   |   |   |   |   |   |   |   |   |
| on                    uncompleted contracts                           |   |                            |       |                                |   | — |   |   | 1,559,045 |   |   | 480,540 |   |
| Income                    tax recoverable                             |   |                            | 840,000    |                                |   | — |   |   | — |   |   | — |   |
| Due                    from affiliated entities                       |   |                            | —    |                                |   | — |   |   | — |   |   | 201,670 |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Total                    Current Assets**                           |   |                            | 33,071,784 |                                |   | 11,097 |   |   | 9,377,244 |   |   | 13,130,175 |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Investments                    held in trust**                      |   |                            | —    |                                |   | 44,673,994 |   |   | — |   |   | — |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Property                    and equipment, net**                    |   |                            | 924,363    |                                |   | — |   |   | 904,689 |   |   | 810,747 |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Goodwill**                                                          |   |                            | 14,912,946 |                                |   | — |   |   | — |   |   | — |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Intangible                    assets, net**                         |   |                            | 19,185,065 |                                |   | — |   |   | — |   |   | — |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Deferred                    acquisition costs**                     |   |                            | —    |                                |   | 869,853 |   |   | — |   |   | — |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Other                    assets**                                   |   |                            | 371,823    |                                |   | — |   |   | 64,158 |   |   | 21,190 |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Deferred                    tax assets**                            |   |                            | —    |                                |   | 490,675 |   |   | — |   |   | — |   |
|                                                                  |   |                            |       |                                |   |   |   |   |   |   |   |   |   |
| **Total                    Assets**                                   |   | $                               | 68,465,981 |                                | $      | 46,045,619 |   | $ | $10,346,091 |   | $ | 13,962,112 |   |

----

**Fortress      International Group, Inc.**

|                                                                             |   | **(Successor)**               |       |  **(Predecessor)**           |   |
|----------------------------------------------------------------------------------|--------|-------------------------------|------------|-----------------------------------|--------|
|                                                                             |   | **June                  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                             |   | $                             | 64,359     |                              | $      | — |   | $ | 72,808 |   | $ | 76,934 |   |
| Accounts                  payable and accrued expenses                           |   |                          | 7,909,827  |                              |   | 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                                        |   |                          | 1,072,911  |                              |   | — |   |   | 1,662,718 |   |   | 1,243,042 |   |
| Deferred                  compensation payable                                   |   |                          | —    |                              |   | — |   |   | — |   |   | 643,571 |   |
|                                                                             |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Current Liabilities**                                   |   |                          | 9,047,097  |                              |   | 1,519,505 |   |   | 8,377,244 |   |   | 10,466,571 |   |
|                                                                             |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| **Notes                  payable**                                               |   |                          | 10,055,523 |                              |   | — |   |   | 79,524 |   |   | 81,679 |   |
|                                                                             |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Liabilities**                                           |   |                          | 19,102,620 |                              |   | 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; |   |                          | 1,185      |                              |   |   |   |   |   |   |   |   |   |
| 11,856,545                  and 9,550,000 issued; 11,856,545 and 9,550,000       |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| outstanding,                  respectively (which includes 0 and 1,559,220       |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| shares                  subject to possible redemption, respectively             |   |                          |       |                              |   | 955 |   |   | — |   |   | — |   |
| Additional                  paid-in capital                                      |   |                          | 52,864,132 |                              |   | 34,819,062 |   |   | — |   |   | — |   |
| Treasury                  stock, at cost 133,775 and 0 shares (successor);       |   |                          | (686,743   | )                                 |   | — |   |   | — |   |   | — |   |
| Retained                  earnings                                               |   |                          | (2,815,213 | )                                 |   | 775,758 |   |   | — |   |   | — |   |
| Members'                  equity                                                 |   |                          | —    |                              |   | — |   |   | 1,889,323 |   |   | 3,732,115 |   |
| Note                  receivable from affiliate                                  |   |                          | —    |                              |   | — |   |   | — |   |   | (318,253 | ) |
|                                                                             |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Stockholders’ Equity**                            |   |                          | 49,363,361 |                              |   | 35,595,775 |   |   | 1,889,323 |   |   | 3,413,862 |   |
|                                                                             |   |                          |       |                              |   |   |   |   |   |   |   |   |   |
| **Total                  Liabilities and Stockholders’ Equity**            |   | $                             | 68,465,981 |                              | $      | 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 Three Months Ended****June                  30,****2007** |       | **For                  the Three Months Ended****June                  30,****2006** |   |  **For                  the Three Months Ended** **June                  30,** **2006** |   |
|                                                                         |   |                                                                                 |       |                                                                                 |   |    |   |
| **Revenue**                                                                  |   | $                                                                                    | 10,862,307 |                                                                                 | $      | — |   | $ | 18,445,839 |   |
| **Cost                  of Revenue**                                         |   |                                                                                 | 9,424,029  |                                                                                 |   | — |   |   | 15,507,437 |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Gross                  Profit**                                            |   |                                                                                 | 1,438,278  |                                                                                 |   | — |   |   | 2,938,402 |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Operating                  costs and expenses**                            |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| Selling,                  general and administrative                         |   |                                                                                 | 3,424,040  |                                                                                 |   | 121,753 |   |   | 1,681,169 |   |
| Depreciation                  and amortization                               |   |                                                                                 | 97,245     |                                                                                 |   | — |   |   |  |   |
| Amortization                  of intangible assets                           |   |                                                                                 | 567,108    |                                                                                 |   | — |   |   | — |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Total                  operating costs and expenses**                      |   |                                                                                 | 4,088,393  |                                                                                 |   | 121,753 |   |   | 1,681,169 |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Operating                  (loss) income**                                 |   |                                                                                 | (2,650,115 | )                                                                                    |   | (121,753 | ) |   | 1,257,233 |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Other                  Income (Expense)**                                  |   |                                                                                 |       |                                                                                 |   |  |   |   |  |   |
| Interest                  income                                             |   |                                                                                 | 423,898    |                                                                                 |   | 410,904 |   |   | — |   |
| Interest                  (expense)                                          |   |                                                                                 | (150,431   | )                                                                                    |   | — |   |   | (4,733 | ) |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Income                  (Loss) Before Income Taxes**                       |   |                                                                                 | (2,376,648 | )                                                                                    |   | 289,151 |   |   | 1,252,500 |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Income                  Tax (Benefit) Expense**                            |   |                                                                                 | 182,316    |                                                                                 |   | 98,312 |   |   | — |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Net                  (Loss) Income**                                       |   | $                                                                                    | (2,558,964 | )                                                                                    | $      | 190,839 |   | $ | 1,252,500 |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Weighted                  average number of shares outstanding**           |   |                                                                                 |       |                                                                                 |   |   |   |   |   |   |
| **-basic**                                                                   |   |                                                                                 | 12,013,491 |                                                                                 |   | 9,550,000 |   |   | — |   |
| **-diluted**                                                                 |   |                                                                                 | 12,013,491 |                                                                                 |   | 9,550,000 |   |   | — |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Weighted                  average shares outstanding exclusive of shares** |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **subject                  to possible redemption**                          |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **-basic**                                                                   |   |                                                                                 | 12,013,491 |                                                                                 |   | 7,990,800 |   |   | — |   |
| **-diluted**                                                                 |   |                                                                                 | 12,013,491 |                                                                                 |   | 7,990,800 |   |   | — |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Basic                  net income (loss) per share**                       |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **-Net                  income**                                             |   | $                                                                                    | (0.21      | )                                                                                    | $      | 0.02 |   | $ | — |   |
|                                                                         |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **Diluted                  net income (loss) per share**                     |   |                                                                                 |            |                                                                                 |   |  |   |   |  |   |
| **-Net                  income**                                             |   | $                                                                                    | (0.21      | )                                                                                    | $      | 0.02 |   | $ | — |   |

----

**Fortress      International Group, Inc.**

|                                                                             |   | **(Successor)**                                                                               |       | **(Predecessor)**                                                                             |   |
|----------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|--------|
|                                                                             |   |                                                                                          |       |                                                                                          |   |   |   |   |   |
|                                                                             |   | **For                      the Six Months****Ended****June                      30,****2007** |       | **For                      the Six Months****Ended****June                      30,****2006** |   | **For                      the period****from                      January 1,****2007                      through****January                      19,****2007** |   | **For                      the Six Months****Ended****June                      30,****2006** |   |
|                                                                             |   |                                                                                          |       |                                                                                          |   |    |   |   |   |
| **Revenue**                                                                      |   | $                                                                                             | 19,539,244 |                                                                                          | $      | — |   | $ | 1,412,137 |   | $ | 34,726,161 |   |
| **Cost                      of Revenue**                                         |   |                                                                                          | 16,629,595 |                                                                                          |   | — |   |   | 1,108,276 |   |   | 28,719,264 |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Gross                      Profit**                                            |   |                                                                                          | 2,909,649  |                                                                                          |   | — |   |   | 303,861 |   |   | 6,006,897 |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Operating                      costs and expenses**                            |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| Selling,                      general and administrative                         |   |                                                                                          | 6,061,980  |                                                                                          |   | 297,955 |   |   | 555,103 |   |   | 3,333,944 |   |
| Depreciation                      and amortization                               |   |                                                                                          | 152,676    |                                                                                          |   | — |   |   | 33,660 |   |   |  |   |
| Amortization                      of intangible assets                           |   |                                                                                          | 1,007,562  |                                                                                          |   | — |   |   | — |   |   | — |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Total                      operating costs and expenses**                      |   |                                                                                          | 7,222,218  |                                                                                          |   | 297,955 |   |   | 588,763 |   |   | 3,333,944 |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Operating                      (loss) income**                                 |   |                                                                                          | (4,312,569 | )                                                                                             |   | (297,955 | ) |   | (284,902 | ) |   | 2,672,953 |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Other                      Income (Expense)**                                  |   |                                                                                          |       |                                                                                          |   |  |   |   |  |   |   |  |   |
| Interest                      income                                             |   |                                                                                          | 640,069    |                                                                                          |   | 772,465 |   |   | 4,117 |   |   | — |   |
| Interest                      (expense)                                          |   |                                                                                          | (267,797   | )                                                                                             |   | — |   |   | (368 | ) |   | (9,698 | ) |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Income                      (Loss) Before Income Taxes**                       |   |                                                                                          | (3,940,297 | )                                                                                             |   | 474,510 |   |   | (281,153 | ) |   | 2,663,255 |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Income                      Tax (Benefit) Expense**                            |   |                                                                                          | (349,325   | )                                                                                             |   | 161,334 |   |   | — |   |   | — |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Net                      (Loss) Income**                                       |   | $                                                                                             | (3,590,972 | )                                                                                             | $      | 313,176 |   | $ | (281,153 | ) | $ | 2,663,255 |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Weighted                      average number of shares outstanding**           |   |                                                                                          |       |                                                                                          |   |   |   |   |   |   |   |   |   |
| **-basic**                                                                       |   |                                                                                          | 11,592,599 |                                                                                          |   | 9,550,000 |   |   | — |   |   | — |   |
| **-diluted**                                                                     |   |                                                                                          | 11,592,599 |                                                                                          |   | 9,550,000 |   |   | — |   |   | — |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Weighted                      average shares outstanding exclusive of shares** |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **subject                      to possible redemption**                          |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **-basic**                                                                       |   |                                                                                          | 11,592,599 |                                                                                          |   | 7,990,800 |   |   | — |   |   | — |   |
| **-diluted**                                                                     |   |                                                                                          | 11,592,599 |                                                                                          |   | 7,990,800 |   |   | — |   |   | — |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Basic                      net income (loss) per share**                       |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **-Net                      income**                                             |   | $                                                                                             | (0.31      | )                                                                                             | $      | 0.03 |   | $ | — |   | $ | — |   |
|                                                                             |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **Diluted                      net income (loss) per share**                     |   |                                                                                          |            |                                                                                          |   |  |   |   |  |   |   |  |   |
| **-Net                      income**                                             |   | $                                                                                             | (0.31      | )                                                                                             | $      | 0.03 |   | $ | — |   | $ | — |   |

----

**Fortress      International Group, Inc.**

|                                                                                                          |   | **(Successor)**                                                                    |       |  **(Predecessor)**                                                            |   |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|--------|
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |
|                                                                                                          |   | **For                  the Six Months Ended****June                  30,****2007** |       | **For                  the Six Months Ended****June                  30,****2006** |   | **For                  the period from January 1, 2007 through January 19,                  2007** |   | **For                  the Six Months Ended****June                  30,****2006** |   |
| **Cash                  Flows from Operating Activities**                                                     |   |                                                                               |       |                                                                               |   |    |   |   |   |
| Net                  income (loss)                                                                            |   | $                                                                                  | (3,590,972 | )                                                                                  | $      | 313,176 |   | $ | (281,153 | ) | $ | 2,663,255 |   |
| Adjustments                  to reconcile net income (loss) to net cash (used in)                             |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| provided                  by operating activities:                                                            |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Depreciation                  and amortization                                                                |   |                                                                               | 152,676    |                                                                               |   | — |   |   | 33,660 |   |   | 126,000 |   |
| Amortization                  of intangibles                                                                  |   |                                                                               | 1,210,235  |                                                                               |   | — |   |   | — |   |   | — |   |
| Deferred                  income taxes                                                                        |   |                                                                               | 490,675    |                                                                               |   | (156,078 | ) |   | — |   |   | — |   |
| Income                  tax recoverable                                                                       |   |                                                                               | (840,000   | )                                                                                  |   | — |   |   | — |   |   | — |   |
| Stock-based                  compensation                                                                     |   |                                                                               | 465,433    |                                                                               |   | — |   |   | — |   |   | — |   |
| Interest                  income on treasury bills                                                            |   |                                                                               | —    |                                                                               |   | (953,442 | ) |   | — |   |   | — |   |
| Changes                  in assets and liabilities, net of effects of acquisitions:                           |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Contracts                  and other receivables                                                              |   |                                                                               | (2,715,688 | )                                                                                  |   | — |   |   | 3,698,863 |   |   | (1,162,200 | ) |
| Costs                  and estimated earnings in excess of billings on uncompleted                  contracts |   |                                                                               | 158,177    |                                                                               |   | — |   |   | (1,078,505 | ) |   | (128,075 | ) |
| Prepaid                  expenses                                                                             |   |                                                                               | (508,619   | )                                                                                  |   | 38,915 |   |   | (108,618 | ) |   | (269,893 | ) |
| Due                  from affiliates                                                                          |   |                                                                               | —    |                                                                               |   | — |   |   | 519,923 |   |   | (22,909 | ) |
| Other                  assets                                                                                 |   |                                                                               | (307,665   | )                                                                                  |   | — |   |   | (42,968 | ) |   | — |   |
| Accounts                  payable and accrued expenses                                                        |   |                                                                               | 354,887    |                                                                               |   | (62,224 | ) |   | (1,861,306 | ) |   | 2,842,596 |   |
| Billings                  in excess of costs and estitmated earnings on uncompleted contracts                 |   |                                                                               | (589,807   | )                                                                                  |   | — |   |   | 419,676 |   |   | (889,545 | ) |
| Income                  taxes payable                                                                         |   |                                                                               | (586,283   | )                                                                                  |   | 6,412 |   |   | — |   |   | — |   |
| Deferred                  compensation payable                                                                |   |                                                                               | —    |                                                                               |   | — |   |   | (643,571 | ) |   | 25,500 |   |
| Interest                  income attributable to common stock subject to possible                  redemption |   |                                                                               | —    |                                                                               |   | 190,593 |   |   | — |   |   | — |   |
|                                                                                                          |   |                                                                               |            |                                                                               |   |  |   |   |  |   |   |  |   |
| **Net                  Cash (Used in) Provided by Operating Activities**                                      |   |                                                                               | (6,306,951 | )                                                                                  |   | (622,648 | ) |   | 656,001 |   |   | 3,184,729 |   |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Investing Activities**                                                     |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Purchase                  of property and equipment                                                           |   |                                                                               | (172,350   | )                                                                                  |   | — |   |   | (127,602 | ) |   | (38,427 | ) |
| 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   | )                                                                                  |   | — |   |   | — |   |   | — |   |
| Deferred                  acquisition costs                                                                   |   |                                                                               | (981,357   | )                                                                                  |   | (152,167 | ) |   | — |   |   | — |   |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Net                  Cash Provided by (Used in) Investing Activities**                                      |   |                                                                               | 33,707,604 |                                                                               |   | (152,167 | ) |   | (127,602 | ) |   | (38,427 | ) |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Financing Activities**                                                     |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Payments                  on notes payable                                                                    |   |                                                                               | (32,450    | )                                                                                  |   | — |   |   | (6,281 | ) |   | (37,156 | ) |
| Advances                  from shareholder                                                                    |   |                                                                               | (20,000    | )                                                                                  |   | — |   |   | — |   |   | — |   |
| Member                  distributions                                                                         |   |                                                                               | —    |                                                                               |   | — |   |   | (1,561,639 | ) |   | (1,918,500 | ) |
| Repurchase                  of common stock                                                                   |   |                                                                               | (6,248,574 | )                                                                                  |   | — |   |   | — |   |   | — |   |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Net                  Cash (Used in) Provided by Financing Activities**                                      |   |                                                                               | (6,301,024 | )                                                                                  |   | — |   |   | (1,567,920 | ) |   | (1,955,656 | ) |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Net                  Increase (Decrease) in Cash**                                                          |   |                                                                               | 21,099,629 |                                                                               |   | (774,815 | ) |   | (1,039,521 | ) |   | 1,190,646 |   |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Cash,**beginning                  of period                                                                 |   |                                                                               | 7,347      |                                                                               |   | 992,547 |   |   | 2,361,838 |   |   | 1,737,075 |   |
|                                                                                                          |   |                                                                               |       |                                                                               |   |   |   |   |   |   |   |   |   |
| **Cash,**end                  of period                                                                       |   | $                                                                                  | 21,106,976 |                                                                               | $      | 217,732 |   | $ | 1,322,317 |   | $ | 2,927,721 |   |

----

**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. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Cash                                                                               |   | $      | 11,000,000 |   |
|------------------------------------------------------------------------------------|--------|--------|------------|--------|
| Common                  stock (2,602,813 shares valued per the purchase agreement) |   |   | 14,211,359 |   |
| Convertible                  notes payable to sellers                              |   |   | 10,000,000 |   |
| Transaction                  costs                                                 |   |   | 1,773,068  |   |
| Total                  purchase price                                              |   |   | 36,984,427 |   |
| **Purchase                  price allocation:**                                    |   |   |       |   |
| Current                  assets                                                    |   |   | 9,377,244  |   |
| Property                  and equipment                                            |   |   | 904,689    |   |
| Intangible                  assets                                                 |   |   | 20,395,300 |   |
| Goodwill                                                                           |   |   | 14,713,572 |   |
| Other                  assets                                                      |   |   | 64,158     |   |
| Total                  assets acquired                                             |   |   | 45,454,963 |   |
| Current                  liabilities                                               |   |   | 8,391,012  |   |
| Long-term                  liabilities                                             |   |   | 79,524     |   |
| Total                  liabilities assumed                                         |   |   | 8,470,536  |   |
| Net                  assets acquired                                               |   | $      | 36,984,427 |   |

|                                                    |   |                                 |       | **Weighted-Average**                     |   |
|---------------------------------------------------------|--------|--------------------------------------|------------|------------------------------------------|--------|
|                                                    |   | **Estimated                  Value** |       | **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 June 30,** |       |
|--------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                   |   | **2007**                                         |       | **2006** |   |
| Proforma                  revenue                      |   | $                                                | 10,862,307 |   | $ | 18,445,839 |   |
| Proforma                  operating (loss) income      |   |                                             | (2,650,114 | ) |   | 454,297 |   |
| Proforma                  pretax (loss) income         |   |                                             | (2,376,647 | ) |   | 710,037 |   |
| Proforma                  net (loss) income            |   |                                             | (2,558,964 | ) |   | 468,624 |   |
| Net                  (loss) income per share (basic )  |   |                                             | (0.21      | ) |   | 0.05 |   |
| Net                  (loss) income per share (diluted) |   |                                             | -          |   |   | 0.05 |   |

|                                                   |   | **Six                  months ended June 30,** |       |
|--------------------------------------------------------|--------|------------------------------------------------|------------|
|                                                   |   | **2007**                                       |       | **2006** |   |
| Proforma                  revenue                      |   | $                                              | 20,951,381 |   | $ | 34,726,161 |   |
| Proforma                  operating (loss) income      |   |                                           | (4,597,471 | ) |   | 1,164,763 |   |
| Proforma                  pretax (loss) income         |   |                                           | (4,221,450 | ) |   | 1,661,228 |   |
| Proforma                  net (loss) income            |   |                                           | (3,872,125 | ) |   | 1,096,410 |   |
| Net                  (loss) income per share (basic )  |   |                                           | (0.33      | ) |   | 0.11 |   |
| Net                  (loss) income per share (diluted) |   |                                           | -          |   |   | 0.11 |   |

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

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

----

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

*Earnings      Per Share*

|                                             |   | **(Successor)**                                  |       | **(Predecessor)**                                |   |
|--------------------------------------------------|--------|--------------------------------------------------|------------|--------------------------------------------------|--------|
|                                             |   | **Three                  Months Ended June 30,** |       | **Three                  Months Ended June 30,** |   |
|                                             |   | **2007**                                         |       | **2006**                                         |   | **2007** |   | **2006** |   |
| Net                  (loss) income allocable to  |   |                                             |       |                                             |   |   |   |   |   |   |   |   |   |
| common                  stockholders not subject |   |                                             |       |                                             |   |   |   |   |   |   |   |   |   |
| to                  possible redemption          |   | $                                                | (2,558,964 | )                                                | $      | 190,839 |   | $ | - |   | $ | 1,252,500 |   |
| Weighted                  average number of      |   |                                             |       |                                             |   |   |   |   |   |   |   |   |   |
| shares                  outstanding - basic      |   |                                             | 12,013,491 |                                             |   | 9,550,000 |   |   | - |   |   | - |   |
| Weighted                  average number of      |   |                                             |       |                                             |   |   |   |   |   |   |   |   |   |
| shares                  outstanding - diluted    |   |                                             | 12,013,491 |                                             |   | 9,550,000 |   |   | - |   |   | - |   |
| Income                  (loss) per share - basic |   | $                                                | (0.21      | )                                                | $      | 0.02 |   |   | - |   |   | - |   |
| Income                  (loss) per share -       |   |                                             |       |                                             |   |   |   |   |   |   |   |   |   |
| diluted                                          |   | $                                                | (0.21      | )                                                | $      | 0.02 |   |   | - |   |   | - |   |

|                                             |   | **Six                  Months Ended** |       |     |   | **January                    1,****through** |   | **Six                  Months**     |     |
|--------------------------------------------------|--------|---------------------------------------|------------|----------|--------|----------------------------------------------|--------|-------------------------------------|----------|
|                                             |   | ** June                  30,**   |       |     |   | **January                  19,**             |   | **Ended                  June 30,** |     |
|                                             |   | **2007**                              |       | **2006** |   | **2007**                                     |   | **2006**                            |     |
| Net                  (loss) income allocable to  |   |                                  |       |     |   |                                         |   |                                |     |   |   |   |   |
| common                  stockholders not subject |   |                                  |       |     |   |                                         |   |                                |     |   |   |   |   |
| to                  possible redemption          |   | $                                     | (3,590,972 | )        | $      | 313,176                                      |   | $                                   | (281,153 | ) | $ | 2,663,255 |   |
| Weighted                  average number of      |   |                                  |       |     |   |                                         |   |                                |     |   |   |   |   |
| shares                  outstanding - basic      |   |                                  | 11,592,599 |     |   | 9,550,000                                    |   |                                | -        |   |   | - |   |
| Weighted                  average number of      |   |                                  |       |     |   |                                         |   |                                |     |   |   |   |   |
| shares                  outstanding - diluted    |   |                                  | 11,592,599 |     |   | 9,550,000                                    |   |                                | -        |   |   | - |   |
| Income                  (loss) per share - basic |   | $                                     | (0.31      | )        | $      | 0.03                                         |   |                                | -        |   |   | - |   |
| Income                  (loss) per share -       |   |                                  |       |     |   |                                         |   |                                |     |   |   |   |   |
| diluted                                          |   | $                                     | (0.31      | )        | $      | 0.03                                         |   |                                | -        |   |   | - |   |

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

----

*Share      Based Payment,*

 

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

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

*Accounting      for Uncertainty in Income Taxes*

----

**NOTE      I **
**-**
**      CONVERTIBLE PROMISSORY NOTES**

| **Period                  ending** |   |       |      |
|------------------------------------|--------|------------|-----------|
| **June                  30,**      |   | **Amount** |      |
|                               |   |       |      |
| 2008                               |   | $          | -         |   |
| 2009                               |   |       | 1,666,667 |   |
| 2010                               |   |       | 3,333,333 |   |
| 2011                               |   |       | 3,333,333 |   |
| 2012                               |   |       | 1,666,667 |   |

**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 June 30,** |    | **Six                  Months Ended June 30,** |   |
|                                                              |   | **2007**                                         |    | **2006**                                       |   | **2007**        |   | **2006**          |    |
| **Revenue**                                                       |   |                                             |    |                                           |   |            |   |              |    |
| CTS                  Services, LLC                                |   | $                                                | 30,986  |                                           | $      | 30,521          |   | $                 | 68,826  |   | $ | 76,007 |   |
| Chesapeake                  Systems, LLC                          |   |                                             | 52,287  |                                           |   | -               |   |              | 52,716  |   |   | - |   |
| Chesapeake                  Mission Critical, LLC                 |   |                                             | 27,216  |                                           |   | -               |   |              | 27,216  |   |   | - |   |
| Chesapeake                  Tower Systems, Inc.                   |   |                                             | -       |                                           |   | 5,028           |   |              | -       |   |   | 12,175 |   |
| S3                  Integration, LLC                              |   |                                             | -       |                                           |   | -               |   |              | -       |   |   | 1,468 |   |
| TPR                  Group, LLC                                   |   |                                             | -       |                                           |   | 1,030           |   |              |    |   |   | 1,772 |   |
|                                                              |   |                                             |    |                                           |   |            |   |              |    |   |   |   |   |
| **Cost                  of Revenue**                              |   |                                             |    |                                           |   |            |   |              |    |   |   |   |   |
| CTS                  Services, LLC                                |   | $                                                | 230,964 |                                           | $      | 2,082,432       |   | $                 | 470,392 |   | $ | 2,866,976 |   |
| Chesapeake                  Systems, LLC                          |   |                                             | 160,304 |                                           |   | -               |   |              | 160,304 |   |   | - |   |
| Chesapeake                  Mission Critical, LLC                 |   |                                             | 29,400  |                                           |   | -               |   |              | 37,625  |   |   | - |   |
| Chesapeake                  Tower Systems, Inc.                   |   |                                             | -       |                                           |   | 465,137         |   |              | 56,501  |   |   | 536,621 |   |
| S3                  Integration, LLC                              |   |                                             | 130,743 |                                           |   | 3,500           |   |              | 218,922 |   |   | 3,500 |   |
| LH                  Cranston & Sons, Inc.                     |   |                                             | 121,100 |                                           |   | 204,816         |   |              | 131,877 |   |   | 300,119 |   |
| Telco                  P&C, LLC                               |   |                                             | 4,519   |                                           |   | 3,281           |   |              | 10,952  |   |   | 4,856 |   |
|                                                              |   |                                             |    |                                           |   |            |   |              |    |   |   |   |   |
| Management                  fees paid to TPR Group, LLC           |   |                                             | -       |                                           |   | 308,100         |   |              | -       |   |   | 517,200 |   |
| Office                  rent paid on Chesapeake sublease agmt     |   |                                             | 53,641  |                                           |   | 41,053          |   |              | 100,951 |   |   | 80,195 |   |
| Office                  rent paid to TPR Group Re Three, LLC      |   |                                             | 90,494  |                                           |   | -               |   |              | 191,478 |   |   | - |   |
| Vehicle                  repairs to Automotive Technologies, Inc. |   |                                             | -       |                                           |   | 11,040          |   |              | 4,442   |   |   | 11,040 |   |
|                                                              |   |                                             |    |                                           |   |            |   |              |    |   |   |   |   |

|                                                |   | **June                  30,** |     | **December                  31,** |   |
|-----------------------------------------------------|--------|-------------------------------|----------|-----------------------------------|--------|
|                                                |   | **2007**                      |     | **2006**                          |   |
| **Accounts                  receivable/(payable):** |   |                          |     |                              |   |
| CTS                  Services, LLC                  |   | $                             | 53,976   |                              | $      | 229,335 |   |
| CTS                  Services, LLC                  |   |                          | (332,019 | )                                 |   | (405,091 | ) |
| Chesapeake                  Systems, LLC            |   |                          | 52,287   |                              |   | - |   |
| Chesapeake                  Systems, LLC            |   |                          | (159,279 | )                                 |   | - |   |
| Chesapeake                  Mission Critical, LLC   |   |                          | 27,216   |                              |   | - |   |
| Chesapeake                  Mission Critical, LLC   |   |                          | (19,890  | )                                 |   | - |   |
| Chesapeake                  Tower Systems, Inc.     |   |                          | -        |                              |   | 2,802 |   |
| Telco                  P&C, LLC                 |   |                          | (2,168   | )                                 |   | - |   |
| LH                  Cranston & Sons, Inc.       |   |                          | (68,000  | )                                 |   | - |   |
| S3                  Integration, LLC                |   |                          | (70,025  | )                                 |   |   |   |

----

**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)**                     | ** ** | **(Predecessor)**                       | ** ** |
|----------------------------------------|------------|-------------------------------------|------------|-----------------------------------------|------------|
|                                   | ** ** | **June                30,****2007** | ** ** | **December                31,****2006** |       |
| Technology                consulting   |       | $                                   | 2,666,000  |                                    | $          | 1,266,000 |   |
| Construction                management |       |                                | 37,376,000 |                                    |       | 11,757,000 |   |
| Facilities                management   |       |                                | 15,336,000 |                                    |       | 7,585,000 |   |
|                                   |       |                                |       |                                    |       |   |   |
|                                   |       | $                                   | 55,378,000 |                                    | $          | 20,608,000 |   |

----

**FORTRESS        INTERNATIONAL GROUP, INC.**

|                                                      |   | **(Successor)**                                                                          |       | **(Successor)**                                                                          |   | **(Predecessor)**                                                                        |   | **(Proforma)**                                                                           |       |
|-----------------------------------------------------------|--------|------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|------------|
|                                                      |   | **For                    the Three Months Ended****June                    30,****2007** |       | **For                    the Three Months Ended****June                    30,****2006** |   | **For                    the Three Months Ended****June                    30,****2006** |   | **For                    the Three Months Ended****June                    30,****2006** |       |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |
| **Revenue**                                               |   | $                                                                                        | 10,862,307 |                                                                                     | $      | —                                                                                  |   | $                                                                                        | 18,445,839 |   | $ | 18,445,839 |   |
| **Cost                    of Revenue**                    |   |                                                                                     | 9,424,029  |                                                                                     |   | 114,075                                                                                  |   |                                                                                     | 15,507,437 |   |   | 15,621,512 |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Gross                    Profit**                       |   |                                                                                     | 1,438,278  |                                                                                     |   | (114,075                                                                                 | )      |                                                                                     | 2,938,402  |   |   | 2,824,327 |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Operating                    costs and expenses**       |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| Selling,                    general and administrative    |   |                                                                                     | 3,424,040  |                                                                                     |   | 121,753                                                                                  |   |                                                                                     | 1,598,894  |   |   | 1,720,647 |   |
| Depreciation                    and amortization          |   |                                                                                     | 97,245     |                                                                                     |   | —                                                                                  |   |                                                                                     | 82,275     |   |   | 82,275 |   |
| Amortization                    of intangible assets      |   |                                                                                     | 567,108    |                                                                                     |   | 567,108                                                                                  |   |                                                                                     | —    |   |   | 567,108 |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Total                    operating costs and expenses** |   |                                                                                     | 4,088,393  |                                                                                     |   | 688,861                                                                                  |   |                                                                                     | 1,681,169  |   |   | 2,370,030 |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Operating                    income**                   |   |                                                                                     | (2,650,115 | )                                                                                        |   | (802,936                                                                                 | )      |                                                                                     | 1,257,233  |   |   | 454,297 |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Other                    Income (Expense)**             |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| Interest                    income                        |   |                                                                                     | 423,898    |                                                                                     |   | 410,904                                                                                  |   |                                                                                     | —    |   |   | 410,904 |   |
| Interest                    (expense)                     |   |                                                                                     | (150,431   | )                                                                                        |   | (150,431                                                                                 | )      |                                                                                     | (4,733     | ) |   | (155,164 | ) |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Income                    (Loss) Before Income Taxes**  |   |                                                                                     | (2,376,648 | )                                                                                        |   | (542,463                                                                                 | )      |                                                                                     | 1,252,500  |   |   | 710,037 |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **As                    a Percentage of Revenue**         |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Revenue**                                               |   |                                                                                     | 100.0      | %                                                                                        |   | —                                                                                  |   |                                                                                     | 100.0      | % |   | 100.0 | % |
| **Cost                    of Revenue**                    |   |                                                                                     | 86.8       | %                                                                                        |   | —                                                                                  |   |                                                                                     | 84.1       | % |   | 84.7 | % |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Gross                    Profit**                       |   |                                                                                     | 13.2       | %                                                                                        |   | —                                                                                  |   |                                                                                     | 15.9       | % |   | 15.3 | % |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Operating                    costs and expenses**       |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| Selling,                    general and administrative    |   |                                                                                     | 31.5       | %                                                                                        |   | —                                                                                  |   |                                                                                     | 8.7        | % |   | 9.3 | % |
| Depreciation                    and amortization          |   |                                                                                     | 0.9        | %                                                                                        |   | —                                                                                  |   |                                                                                     | 0.4        | % |   | 0.4 | % |
| Amortization                    of intangible assets      |   |                                                                                     | 5.2        | %                                                                                        |   | —                                                                                  |   |                                                                                     | 0.0        | % |   | 3.1 | % |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Total                    operating costs and expenses** |   |                                                                                     | 37.6       | %                                                                                        |   | 0.0                                                                                      | %      |                                                                                     | 9.1        | % |   | 12.8 | % |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Operating                    income**                   |   |                                                                                     | -24.4      | %                                                                                        |   | 0.0                                                                                      | %      |                                                                                     | 6.8        | % |   | 2.5 | % |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Other                    Income (Expense)**             |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| Interest                    income                        |   |                                                                                     | 3.9        | %                                                                                        |   | 100.0                                                                                    | %      |                                                                                     | 0.0        | % |   | 2.2 | % |
| Interest                    (expense)                     |   |                                                                                     | -1.4       | %                                                                                        |   | -36.6                                                                                    | %      |                                                                                     | 0.0        | % |   | -0.8 | % |
|                                                      |   |                                                                                     |       |                                                                                     |   |                                                                                     |   |                                                                                     |       |   |   |   |   |
| **Income                    (Loss) Before Income Taxes**  |   |                                                                                     | -21.9      | %                                                                                        |   | -132.0                                                                                   | %      |                                                                                     | 6.8        | % |   | 3.8 | % |

----

**FORTRESS        INTERNATIONAL GROUP, INC.**

|                                                    |   | **(Successor)**                                                                    |       | **(Predecessor)**                                                                                                                                |   | **Proforma**                                                                                   |   | **(Successor)**                                                                    |       | **(Predecessor)**                                                                  |   | **Proforma**                                                                                   |   |
|---------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|
|                                                    |   | **For                  the Six Months Ended****June                  30,****2007** |       | **For                  the period****from                  January 1,****2007                  through****January                  19,****2007** |   | **combined****For                  the Six Months Ended****June                  30,****2007** |   | **For                  the Six Months Ended****June                  30,****2006** |       | **For                  the Six Months Ended****June                  30,****2006** |   | **combined****For                  the Six Months Ended****June                  30,****2006** |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |
| **Revenue**                                             |   | $                                                                                  | 19,539,244 |                                                                                                                                             |   | 1,412,137                                                                                      |   |                                                                               | 20,951,381 |                                                                               | $      | —                                                                                        |   | $ | 34,726,161 |   | $ | 34,726,161 |   |
| **Cost                  of Revenue**                    |   |                                                                               | 16,629,595 |                                                                                                                                             |   | 1,108,276                                                                                      |   |                                                                               | 17,737,871 |                                                                               |   | 202,673                                                                                        |   |   | 28,719,264 |   |   | 28,921,937 |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Gross                  Profit**                       |   |                                                                               | 2,909,649  |                                                                                                                                             |   | 303,861                                                                                        |   |                                                                               | 3,213,510  |                                                                               |   | (202,673                                                                                       | )      |   | 6,006,897 |   |   | 5,804,224 |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Operating                  costs and expenses**       |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| Selling,                  general and administrative    |   |                                                                               | 6,061,980  |                                                                                                                                             |   | 555,103                                                                                        |   |                                                                               | 6,617,083  |                                                                               |   | 297,955                                                                                        |   |   | 3,207,944 |   |   | 3,505,899 |   |
| Depreciation                  and amortization          |   |                                                                               | 152,676    |                                                                                                                                             |   | 33,660                                                                                         |   |                                                                               | 186,336    |                                                                               |   | —                                                                                        |   |   | 126,000 |   |   | 126,000 |   |
| Amortization                  of intangible assets      |   |                                                                               | 1,007,562  |                                                                                                                                             |   | —                                                                                        |   |                                                                               | 1,007,562  |                                                                               |   | 1,007,562                                                                                      |   |   | — |   |   | 1,007,562 |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Total                  operating costs and expenses** |   |                                                                               | 7,222,218  |                                                                                                                                             |   | 588,763                                                                                        |   |                                                                               | 7,810,981  |                                                                               |   | 1,305,517                                                                                      |   |   | 3,333,944 |   |   | 4,639,461 |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Operating                  income**                   |   |                                                                               | (4,312,569 | )                                                                                                                                                |   | (284,902                                                                                       | )      |                                                                               | (4,597,471 | )                                                                                  |   | (1,508,190                                                                                     | )      |   | 2,672,953 |   |   | 1,164,763 |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Other                  Income (Expense)**             |   |                                                                               |            |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| Interest                  income                        |   |                                                                               | 640,069    |                                                                                                                                             |   | 4,117                                                                                          |   |                                                                               | 644,186    |                                                                               |   | 772,465                                                                                        |   |   | — |   |   | 772,465 |   |
| Interest                  (expense)                     |   |                                                                               | (267,797   | )                                                                                                                                                |   | (368                                                                                           | )      |                                                                               | (268,165   | )                                                                                  |   | (266,302                                                                                       | )      |   | (9,698 | ) |   | (276,000 | ) |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Income                  (Loss) Before Income Taxes**  |   |                                                                               | (3,940,297 | )                                                                                                                                                |   | (281,153                                                                                       | )      |                                                                               | (4,221,450 | )                                                                                  |   | (1,002,027                                                                                     | )      |   | 2,663,255 |   |   | 1,661,228 |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **As                  a Percentage of Revenue**         |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Revenue**                                             |   |                                                                               | 100.0      | %                                                                                                                                                |   | 100.0                                                                                          | %      |                                                                               | 100.0      | %                                                                                  |   | —                                                                                        |   |   | 100.0 | % |   | 100.0 | % |
| **Cost                  of Revenue**                    |   |                                                                               | 85.1       | %                                                                                                                                                |   | 78.5                                                                                           | %      |                                                                               | 84.7       | %                                                                                  |   | —                                                                                        |   |   | 82.7 | % |   | 83.3 | % |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Gross                  Profit**                       |   |                                                                               | 14.9       | %                                                                                                                                                |   | 21.5                                                                                           | %      |                                                                               | 15.3       | %                                                                                  |   |                                                                                           |   |   | 17.3 | % |   | 16.7 | % |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Operating                  costs and expenses**       |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| Selling,                  general and administrative    |   |                                                                               | 31.0       | %                                                                                                                                                |   | 39.3                                                                                           | %      |                                                                               | 31.6       | %                                                                                  |   |                                                                                           |   |   | 9.2 | % |   | 10.1 | % |
| Depreciation                  and amortization          |   |                                                                               | 0.8        | %                                                                                                                                                |   | 2.4                                                                                            | %      |                                                                               | 0.9        | %                                                                                  |   |                                                                                           |   |   | 0.4 | % |   | 0.4 | % |
| Amortization                  of intangible assets      |   |                                                                               | 5.2        | %                                                                                                                                                |   | 0.0                                                                                            | %      |                                                                               | 4.8        | %                                                                                  |   |                                                                                                |   |   | 0.0 | % |   | 2.9 | % |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Total                  operating costs and expenses** |   |                                                                               | 37.0       | %                                                                                                                                                |   | 41.7                                                                                           | %      |                                                                               | 37.3       | %                                                                                  |   |                                                                                                |   |   | 9.6 | % |   | 13.4 | % |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Operating                  income**                   |   |                                                                               | -22.1      | %                                                                                                                                                |   | -20.2                                                                                          | %      |                                                                               | -21.9      | %                                                                                  |   | 0.0                                                                                            | %      |   | 7.7 | % |   | 3.4 | % |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Other                  Income (Expense)**             |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| Interest                  income                        |   |                                                                               | 3.3        | %                                                                                                                                                |   | 0.3                                                                                            | %      |                                                                               | 3.1        | %                                                                                  |   | 100.0                                                                                          | %      |   | 0.0 | % |   | 2.2 | % |
| Interest                  (expense)                     |   |                                                                               | -1.4       | %                                                                                                                                                |   | 0.0                                                                                            | %      |                                                                               | -1.3       | %                                                                                  |   | -34.5                                                                                          | %      |   | 0.0 | % |   | -0.8 | % |
|                                                    |   |                                                                               |       |                                                                                                                                             |   |                                                                                           |   |                                                                               |       |                                                                               |   |                                                                                           |   |   |   |   |   |   |   |
| **Income                  (Loss) Before Income Taxes**  |   |                                                                               | -20.2      | %                                                                                                                                                |   | -19.9                                                                                          | %      |                                                                               | -20.1      | %                                                                                  |   | -129.7                                                                                         | %      |   | 7.7 | % |   | 4.8 | % |

**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 June 30, 2007 compared with the three months ended June 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). *

***Six      months ended June 30, 2007 compared with the six months ended June 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**

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

*Revenue      and cost of revenue. *

----

**.**

** **

*Selling,      general and administrative expenses. *
* *

|   |   |   |                                                        | **Three                  months** |   | **Six                  months** |   |
|--------|--------|--------|-------------------------------------------------------------|-----------------------------------|--------|---------------------------------|--------|
|   |   |   |                                                        |                              |   |                            |   |
| · |   |   | Sales                  salaries and expenses                |                              | $      | 511,000                         |   | $ | 942,000 |   |
| · |   |   | Marketing                  expenses                         |                              |   | 95,000                          |   |   | 325,000 |   |
| · |   |   | Non                  cash compensation for restricted stock |                              |   | 263,000                         |   |   | 465,000 |   |
| · |   |   | Public                  company costs                       |                              |   | 431,000                         |   |   | 841,000 |   |
| · |   |   | Rent                  and occupancy costs                   |                              |   | 223,000                         |   |   | 401,000 |   |

*Depreciation      and amortization of intangible assets. *

*Interest      income. *

*Interest      expense.*

***Six      months ended June 30, 2007 compared with the six months ended June 30,      2006***

*Revenue      and cost of revenue. *

----

**.**

** **

*Selling,      general and administrative expenses. *
* *

|   |   |   |                                                        | **Three                  months** |   | **Six                  months** |   |
|--------|--------|--------|-------------------------------------------------------------|-----------------------------------|--------|---------------------------------|--------|
|   |   |   |                                                        |                              |   |                            |   |
| · |   |   | Sales                  salaries and expenses                |                              | $      | 511,000                         |   | $ | 942,000 |   |
| · |   |   | Marketing                  expenses                         |                              |   | 95,000                          |   |   | 325,000 |   |
| · |   |   | Non                  cash compensation for restricted stock |                              |   | 263,000                         |   |   | 465,000 |   |
| · |   |   | Public                  company costs                       |                              |   | 431,000                         |   |   | 841,000 |   |
| · |   |   | Rent                  and occupancy costs                   |                              |   | 223,000                         |   |   | 401,000 |   |

*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***

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*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.**

**Changes      in Internal Control Over Financial Reporting**

** **

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings.**

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**Item      1A. Risk Factors.**

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

|                                   |   | **Purchases                    of Equity Securities by Issuer** |      |                                      |   |                                       |   |                                        |      |
|----------------------------------------|--------|-----------------------------------------------------------------|-----------|-------------------------------------------|--------|--------------------------------------------|--------|---------------------------------------------|-----------|
|                                   |   |                                                            |      |                                      |   | **Total                    Number of**     |   | **Maximum                    Number**       |      |   |   |
|                                   |   |                                                            |      |                                      |   | **Shares                    Purchased as** |   | **of                    Shares (or Units)** |      |   |   |
|                                   |   |                                                            |      |                                      |   | **Part                    of Publicly**    |   | **that                    May Yet Be**      |      |   |   |
|                                   |   | **Total                    Number of**                          |      | **Average                    Price Paid** |   | **Announced                    Plans**     |   | **Purchased                    Under the**  |      |   |   |
| **Period**                             |   | **Shares                    Purchased**                         |      | **per                    Share**          |   | **or                    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 |   |   | (1 | ) |
| 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 |   |   |   |   |
|                                   |   |                                                            |      |                                      |   |                                       |   |                                        |      |   |   |   |   |   |   |   |
|                                   |   |                                                            |      |                                      |   |                                       |   |                                        |      |   |   |   |   |   |   |   |
| January                    1-31, 2007  |   |                                                            | 756,100   |                                      | $      | 5.38                                       |   |                                        | 1,110,875 |   |   | 0 |   |   | (2 | ) |
|                                   |   |                                                            |      |                                      |   |                                       |   |                                        |      |   |   |   |   |   |   |   |
| Total                                  |   |                                                            | 1,110,875 |                                      | $      | 5.38                                       |   |                                        | 1,110,875 |   |   |   |   |   |   |   |

**Recent      Sales of Unregistered Securities**

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

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

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|                             | **For**          | **Withheld** |
|----------------------------------|------------------|--------------|
| Harvey                L. Weiss   | 10,857,851  | 155,191      |
| Donald                L. Nickles | 11,012,042       | 1,000        |
| William                L. Jews   | 11,012,042       | 1,000        |

| **Proposal**                                                                                                                                                                                                            |   | **For**    |   | **Against** |   | **Abstention                (other than Broker Non-Votes)** |   | **Broker                Non-Votes** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|-------------|--------|-------------------------------------------------------------|--------|-------------------------------------|
| Approval                of amendment to the certificate of incorporation to increase the                number of                authorized shares of common stock to 100,000,000 shares of common                stock |   | 10,627,196 |   | 385,846     |   | 0                                                           |   | 0                                   |
|                                                                                                                                                                                                                    |   |       |   |        |   |                                                        |   |                                |
| Ratify                the selection of Grant Thornton LLP, as registered public accounting                firm                for the year ending December 31, 2007                                                     |   | 11,012,042 |   | 1,000       |   | 0                                                           |   | 0                                   |

**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 and Principal Financial                Officer |

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**SIGNATURES      **

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

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