**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**





(Mark
      One)




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




For
      the
      Quarterly Period Ended June 30, 2008




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




For
      the
      transition period from __________________ to __________________




Commission
      file number: 001-33700




**GLOBALOPTIONS
      GROUP, INC**


(Exact
      name of registrant as specified in its charter)





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





(212)
      445-6262


(Registrant’s
        telephone number, including area code)







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





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




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




Large
      accelerated filer o  Accelerated
      filer o




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




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




As
      of
      August 12, 2008, there were 10,460,954 shares of the issuer’s common stock
      outstanding.
















**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Form
      10-Q**


**June
      30, 2008**


**TABLE
      OF CONTENTS**





PART
                IFINANCIAL
                INFORMATIONITEM
                1. Financial Statements.Condensed
                Consolidated Balance Sheets as of June 30, 2008 (Unaudited) and December
                31, 2007
            1Condensed
                Consolidated Statements of Operations for the Three and Six Months
                Ended
                June 30, 2008 and 2007 (Unaudited)
            2Condensed
                Consolidated Statement of Stockholders’ Equity for the Six Months Ended
                June 30, 2008 (Unaudited)
            3Condensed
                Consolidated Statements of Cash Flows for the Six Months Ended June
                30,
                2008 and 2007 (Unaudited)
            4Notes
                to Condensed Consolidated Financial Statements (Unaudited)
            8ITEM
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations.
            27ITEM
                3. Quantitative and Qualitative Disclosures About Market
                Risk.
            38ITEM
                4T. Controls and Procedures.
            38PART
                IIOTHER
                INFORMATIONITEM
                1. Legal Proceedings.
            39ITEM
                1A. Risk Factors.
            39ITEM
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds.
            39ITEM
                3. Defaults Upon Senior Securities.
            39ITEM
                4. Submission of Matters to a Vote of Security Holders.
            40ITEM
                5. Other Information.
            40ITEM
                6. Exhibits.
            40SIGNATURES.
            41












**PART
      I - Financial Information**


**Item
      1. Condensed Consolidated Financial Statements**





**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**





**Condensed
      Consolidated Balance Sheets**


**(dollars
      in thousands, except share amount)**





**June 30,**
            
            **December 31,****2008**
            
            **2007****(unaudited)****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            4,861
            
            $
            4,426Accounts
                receivable, net of allowance for doubtfulaccounts
                of $2,857 at June 30, 2008 and $2,459 at December 31, 2007
            
            
            23,209
            
            
            25,213Inventories
            
            
            2,277
            
            
            2,326Prepaid
                expenses and other current assets
            
            
            796
            
            
            792Total
                current assets
            
            
            31,143
            
            
            32,757Property
                and equipment, net
            
            
            5,625
            
            
            5,570Intangible
                assets, net
            
            
            8,634
            
            
            7,270Goodwill
            
            
            19,768
            
            
            19,768Security
                deposits and other assets
            
            
            553
            
            
            578Total
                assets
            
            $
            65,723
            
            $
            65,943**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilities:Line
                of credit
            
            $
            3,581
            
            $
            —Notes
                payable
            
            
            498
            
            
            800Obligation
                to issue common stock
            
            
            —
            
            
            2,160Accounts
                payable
            
            
            5,867
            
            
            5,723Deferred
                revenues
            
            
            622
            
            
            543Accrued
                compensation and related benefits
            
            
            2,982
            
            
            3,740Other
                current liabilities
            
            
            2,236
            
            
            2,170Total
                current liabilities
            
            
            15,786
            
            
            15,136Long-term
                liabilities:Notes
                payable, less current portion
            
            
            —
            
            
            396Other
                long-term obligations
            
            
            1,918
            
            
            454Total
                long-term liabilities
            
            
            1,918
            
            
            850Total
                liabilities
            
            
            17,704
            
            
            15,986Commitments
                and contingenciesStockholders'
                equity:Preferred
                stock, $0.001 par value, 14,900,000 shares authorized; no shares
                issued or
                outstanding
            
            
            —
            
            
            —Series
                D convertible preferred stock, voting, $0.001 par value, 100,000
                shares
                authorized, 55,388.37 shares issued and outstanding, liquidation
                preference $ 0
            
            
            —
            
            
            —Common
                stock, $0.001 par value; 100,000,000 shares authorized; 10,027,317
                shares
                issued and 10,023,454 shares outstanding at June 30, 2008, and 9,660,269
                shares issued and outstanding at December 31, 2007
            
            
            10
            
            
            10Additional
                paid-in capital
            
            
            106,960
            
            
            102,537Accumulated
                deficit
            
            
            (58,934
            )
            
            (52,590
            )Treasury
                stock; at cost, 3,863 and 0 shares at June 30, 2008 and December
                31, 2007,
                respectively
            
            
            (17
            )
            
            —Total
                stockholders' equity
            
            
            48,019
            
            
            49,957Total
                liabilites and stockholders' equity
            
            $
            65,723
            
            $
            65,943




1


**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statements of Operations**


**(Unaudited)**


**(dollars
      in thousands, except share and per share amounts)**





**For the Three Months Ended**
            
            **For the Six Months Ended****June 30,**
            
            **June 30,****2008**
            
            **2007**
            
            **2008**
            
            **2007**Revenues
            
            $
            26,254
            
            $
            22,466
            
            $
            47,753
            
            $
            43,854Cost
                of revenues
            
            
            15,107
            
            
            12,578
            
            
            27,473
            
            
            24,354Gross
                profit
            
            
            11,147
            
            
            9,888
            
            
            20,280
            
            
            19,500Operating
                expenses:Selling
                and marketing
            
            
            2,718
            
            
            8,509
            
            
            5,220
            
            
            10,900General
                and administrative
            
            
            10,306
            
            
            12,194
            
            
            21,302
            
            
            22,231Total
                operating expenses
            
            
            13,024
            
            
            20,703
            
            
            26,522
            
            
            33,131Loss
                from operations
            
            
            (1,877
            )
            
            (10,815
            )
            
            (6,242
            )
            
            (13,631
            )Other
                income (expense):Interest
                income
            
            
            6
            
            
            14
            
            
            22
            
            
            252Interest
                (expense)
            
            
            (100
            )
            
            (179
            )
            
            (124
            )
            
            (205
            )Other
                income
            
            
            —
            
            
            —
            
            
            —
            
            
            100Other
                income (expense), net
            
            
            (94
            )
            
            (165
            )
            
            (102
            )
            
            147Net
                loss
            
            $
            (1,971
            )
            $
            (10,980
            )
            $
            (6,344
            )
            $
            (13,484
            )Basic
                and diluted net loss per share
            
            $
            (0.20
            )
            $
            (3.87
            )
            $
            (0.65
            )
            $
            (4.94
            )Weighted
                average number of common shares outstanding - basic and
                diluted
            
            
            9,665,991
            
            
            2,834,100
            
            
            9,697,337
            
            
            2,729,542




2





**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statement of Stockholders' Equity**


**For
      the Six Months Ended June 30, 2008**


**(Unaudited)**


**(dollars
      in thousands, except share amounts)**





**Series D****Convertible**
            
            **Additional****Common Stock**
            
            **Treasury Shares**
            
            **Preferred Stock**
            
            **Paid-in**
            
            **Accumulated****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            **Total**Balance,
                January 1, 2008
            
            
            9,660,269
            
            $
            10
            
            
            —
            
            $
            —
            
            
            55,989.32
            
            $
            —
            
            $
            102,537
            
            $
            (52,590
            )
            $
            49,957Stock
                issued to consultants for services
            
            
            26,984
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            167
            
            
            —
            
            
            167Purchase
                of treasury shares
            
            
            —
            
            
            —
            
            
            3,863
            
            
            (17
            )
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (17
            )Issuance
                of common stock to sellers of JLWA in satisfaction of obligation
                to issue
                common stock
            
            
            225,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            2,160
            
            
            —
            
            
            2,160Issuance
                of common stock to sellers of JLWA subject to drawback
            
            
            75,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —Issuance
                of common stock in connection with the conversion of Series D Convertible
                Preferred Stock
            
            
            40,064
            
            
            —
            
            
            —
            
            
            —
            
            
            (600.95
            )
            
            —
            
            
            —
            
            
            —
            
            
            —Stock
                based compensation - restricted stock vested
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            585
            
            
            —
            
            
            585Amortization
                of consultant stock option costs
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            70
            
            
            —
            
            
            70Amortization
                of employee stock options costs
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            1,425
            
            
            —
            
            
            1,425Amortization
                of employee restricted stock unit costs
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            16
            
            
            —
            
            
            16Net
                loss
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (6,344
            )
            
            (6,344
            )Balance,
                June 30, 2008
            
            
            10,027,317
            
            $
            10
            
            
            3,863
            
            $
            (17
            )
            
            55,388.37
            
            $
            —
            
            $
            106,960
            
            $
            (58,934
            )
            $
            48,019


3





**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows**


**(Unaudited)**


**(dollars
      in thousands, except share amounts)**





**For the Six Months Ended June 30,****2008**
            
            **2007**Cash
                flows from operating activities:Net
                loss
            
            $
            (6,344
            )
            $
            (13,484
            )Adjustments
                to reconcile net loss to net cash provided by (used in) operating
                activities:Provision
                for bad debts
            
            
            201
            
            
            1,326Depreciation
                and amortization
            
            
            2,127
            
            
            1,861Deferred
                rent
            
            
            295
            
            
            15Stock-based
                compensation
            
            
            2,263
            
            
            1,738Loss
                on disposition of equipment
            
            
            21
            
            
            —Changes
                in operating assets:Accounts
                receivable
            
            
            3,004
            
            
            (10,660
            )Inventories
            
            
            49
            
            
            94Prepaid
                expenses and other current assets
            
            
            (4
            )
            
            (112
            )Security
                deposits and other assets
            
            
            25
            
            
            (70
            )Changes
                in operating liabilities:Accounts
                payable
            
            
            127
            
            
            1,742Deferred
                revenues
            
            
            79
            
            
            585Accrued
                compensation and related benefits
            
            
            (758
            )
            
            (103
            )Due
                to former members of JLWA for earnout
            
            
            —
            
            
            7,732Other
                current liabilities
            
            
            (266
            )
            
            748Other
                long-term obligations
            
            
            (27
            )
            
            —Total
                adjustments
            
            
            7,136
            
            
            4,896Net
                cash provided by (used in) operating activities
            
            
            792
            
            
            (8,588
            )Cash
                flows from investing activities:Purchases
                of property and equipment
            
            
            (654
            )
            
            (563
            )Purchase
                of intangible assets
            
            
            (21
            )
            
            —Acquisition
                of FAIS
            
            
            (2,548
            )
            
            —Acquisition
                of On Line Consulting
            
            
            —
            
            
            (974
            )Acquisition
                of Facticon
            
            
            —
            
            
            (1,300
            )Acquisition
                of Bode, less cash acquired of $284
            
            
            —
            
            
            (12,216
            )Net
                cash used in investing activities
            
            
            (3,223
            )
            
            (15,053
            )




4





**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows, continued**


**(Unaudited)**


**(dollars
      in thousands, except share amounts)**





**For the Six Months Ended June 30,****2008**
            
            **2007**Cash
                flows from financing activities:Net
                proceeds from line of credit
            
            $
            3,581
            
            $
            7,489Repayment
                of notes payable for acquisitions
            
            
            (700
            )
            
            (3,413
            )Accretion
                of OCS discounted notes
            
            
            2
            
            
            —Proceeds
                from exercise of stock options
            
            
            —
            
            
            48Repurchase
                of common stock
            
            
            (17
            )
            
            —Net
                cash provided by financing activities
            
            
            2,866
            
            
            4,124Net
                increase (decrease) in cash and cash equivalents
            
            
            435
            
            
            (19,517
            )Cash
                and cash equivalents - beginning of year
            
            
            4,426
            
            
            21,533Cash
                and cash equivalents - end of period
            
            $
            4,861
            
            $
            2,016Supplemental
                disclosure of cash flow information:Cash
                paid during the period for interest
            
            $
            137
            
            $
            211Supplemental
                disclosures of non-cash investing and financing
                activities:Common
                stock issued to settle the obligation to issue common
                stock
            
            $
            2,160
            
            $
            —Common
                stock issued upon conversion of Series A convertible prefered
                stock
            
            $
            —
            
            $
            3Common
                stock issued upon the cashless exercise of stock options
            
            $
            —
            
            $
            40Obligation
                to issue common stock and notes payableissued to fund JLWA earnout liability
            
            $
            —
            
            $
            12,960




5





**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows, continued**


**(Unaudited)**


**(dollars
      in thousands, except share amounts)**





**For the Six Months Ended June 30,****2008**
            
            **2007**Supplemental
                non-cash investing and financing activity - acquisition of
                FAIS:Assets
                acquired and liabilities assumed:Accounts
                receivable
            
            $
            1,201
            
            $
            —Property
                and equipment
            
            
            102
            
            
            —Intangible
                assets
            
            
            2,790
            
            
            —Accounts
                payable
            
            
            (17
            )
            
            —Other
                current liabilities
            
            
            (322
            )
            
            —Earnout
                liability
            
            
            (1,206
            )
            
            —Total
                purchase price, paid in cash
            
            $
            2,548
            
            $
            —Supplemental
                non-cash investing and financing activity - acquisition of On Line
                Consulting:Assets
                acquired and liabilities assumed:Property
                and equipment
            
            $
            —
            
            $
            97Intangible
                assets
            
            
            —
            
            
            1,199Goodwill
                recognized on purchase business combination
            
            
            —
            
            
            1,844Accounts
                payable, accrued expenses and deferred revenues
            
            
            —
            
            
            (198
            )Other
                current liabilities
            
            
            —
            
            
            (46
            )Total
                purchase price
            
            
            —
            
            
            2,896Less:
                Cash paid to acquire On Line Consulting
            
            
            —
            
            
            (974
            )Non-cash
                consideration to seller
            
            $
            —
            
            $
            1,922Non-cash
                consideration consisted of:Common
                stock issued to acquire On Line Consulting
            
            $
            —
            
            $
            1,350Amount
                due to seller
            
            
            —
            
            
            14Notes
                payable issued to seller
            
            
            —
            
            
            558Total
                non-cash consideration
            
            $
            —
            
            $
            1,922




6





**GLOBALOPTIONS
      GROUP, INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows, continued**


**(Unaudited)**


**(dollars
      in thousands, except share amounts)**





**For the Six Months Ended June 30,****2008**
            
            **2007**Supplemental
                non-cash investing and financing activity - acquisition of
                Bode:Assets
                acquired and liabilities assumed:Accounts
                receivable
            
            $
            —
            
            $
            5,511Inventories
            
            
            —
            
            
            2,629Other
                current assets (including cash of $284)
            
            
            —
            
            
            561Property
                and equipment
            
            
            —
            
            
            4,133Intangible
                assets
            
            
            —
            
            
            310Goodwill
                recognized on purchase business combination
            
            
            —
            
            
            575Accounts
                payable, accrued expenses and deferred rent obligations
            
            
            —
            
            
            (1,219
            )Total
                purchase price
            
            
            —
            
            
            12,500Less:
                Cash acquired
            
            
            —
            
            
            (284
            )Less:
                Cash paid to acquire Bode
            
            
            —
            
            
            (12,216
            )Non-cash
                consideration to seller
            
            $
            —
            
            $
            —Supplemental
                non-cash investing and financing activity - acquisition of
                Facticon:Assets
                acquired and liabilities assumed:Accounts
                receivable
            
            $
            —
            
            $
            759Property
                and equipment
            
            
            —
            
            
            34Intangible
                assets
            
            
            —
            
            
            120Goodwill
                recognized on purchase business combination
            
            
            —
            
            
            2,420Accounts
                payable, accrued expenses and deferred revenues
            
            
            —
            
            
            (533
            )Total
                purchase price
            
            
            —
            
            
            2,800Less:
                Cash paid to acquire Facticon
            
            
            —
            
            
            (1,300
            )Non-cash
                consideration to seller
            
            $
            —
            
            $
            1,500Non-cash
                consideration consisted of :Note
                payable issued to seller
            
            $
            —
            
            $
            100Common
                stock issued to acquire Facticon
            
            
            —
            
            
            1,400Total
                non-cash consideration
            
            $
            —
            
            $
            1,500




7




GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **1. 
        Nature of Operations**
 
 GlobalOptions
        Group, Inc. and Subsidiaries (collectively the “Company” or “GlobalOptions
        Group”) is an integrated provider of risk mitigation and management services to
        government entities, Fortune 1,000 corporations and high net-worth and
        high-profile individuals. The Company delivers these services through four
        business units: Preparedness Services; Fraud and Special Investigative Unit
        (“SIU”) Services; Security Consulting and Investigations; and International
        Strategies. The Preparedness Services, Fraud and SIU Services, and Security
        Consulting and Investigations units represent the Company’s three financial
        reporting segments. The results of the International Strategies business
        unit,
        on the basis of its relative materiality, are included in the Fraud and SIU
        Services segment.
  References
        herein to “GlobalOptions” refer to GlobalOptions, Inc., an operating subsidiary
        of the Company.
 
 On
        August
        14, 2005, the Company acquired Confidential Business Resources,
        Inc. (“CBR”), a privately-held nationwide investigations firm based in
        Nashville, Tennessee.
  On
        March
        10, 2006, the Company acquired James Lee Witt Associates, LLC (“JLWA”), a
        nationwide crisis and emergency management consulting firm headquartered
        in
        Washington, D.C. with three additional offices nationwide.
  On
        May
        12, 2006 the Company acquired Safir Rosetti, LLC (“Safir”). Safir is a security
        consulting, investigative and intelligence firm headquartered in New York
        City.
 
 On
        May
        12, 2006, the Company acquired substantially all of the business and certain
        assets of Secure Source, Inc. (“Secure Source”), a Delaware corporation. Secure
        Source is an international risk consulting firm with offices in Washington,
        D.C.
        and Dallas, Texas.
 
 On
        August
        10, 2006, the Company acquired substantially all of the business and assets
        of
        Hyperion Risk, Inc. (“Hyperion Risk”). Hyperion Risk is a security consulting,
        investigative and intelligence firm with its central corporate office located
        in
        Orlando, Florida .
 
 On
        January 9, 2007, GlobalOptions Group purchased substantially all of the business
        and assets of SPZ Oakland Corporation, dba On Line Consulting Service, Inc.
        (“On
        Line Consulting”), a full service security and fire alarm consulting and design
        firm based in Oakland, California.
 
 On
        February 28, 2007, GlobalOptions Group acquired substantially all of the
        business and assets of Facticon, Inc. (“Facticon”), a Pennsylvania
        corporation. Facticon is a surveillance, investigative and intelligence firm
        based in Chadds Ford, Pennsylvania.
 
 On
        February 28, 2007, GlobalOptions Group purchased all of the common stock
        of The
        Bode Technology Group, Inc. ("Bode"), a Virginia corporation. Bode is a leading
        provider of forensic DNA analysis and proprietary DNA collection tools. Bode
        is
        based in Lorton, Virginia.
 
 On
        April
        21, 2008, GlobalOptions Group acquired substantially all of the business
        and net
        assets of Omega Insurance Services, Inc. (d/b/a First Advantage Investigative
        Services) (“FAIS”), a Florida corporation. FAIS is a surveillance, investigative
        and intelligence firm based in St. Petersberg, Florida.
  8
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **2.
        Basis of Presentation**
  The
        accompanying unaudited condensed consolidated financial statements have been
        prepared in accordance with United States generally accepted accounting
        principles for interim financial information and with the instructions to
        Form
        10-Q. Accordingly, they do not include all of the information and footnotes
        required by United States generally accepted accounting principles. In the
        opinion of management, all adjustments (consisting of normal accruals)
        considered for a fair presentation have been included. Operating results
        for the
        three and six months ended June 30, 2008 are not necessarily indicative of
        the
        results that may be expected for the year ending December 31, 2008.  For
        further information, refer to the consolidated financial statements and
        footnotes thereto included in the Company’s Form 10-K filed on March 28, 2008
        for the year ended December 31, 2007.
 
 **3. 
        Summary of Significant Accounting Policies**
  ***Income
        Taxes***
 
 The
        Company accounts for income taxes using the liability method as required
        by SFAS
        No. 109, “Accounting for Income Taxes” (“SFAS 109”). Under this method, deferred
        tax assets and liabilities are determined based on differences between their
        financial reporting and tax basis of assets and liabilities. The Company
        establishes a valuation allowance for deferred tax assets. The Company was
        not
        required to provide for a provision for income taxes for the three and six
        months ended June 30, 2008 and 2007, respectively, as a result of losses
        incurred during these periods.
 
 ***Net
        Loss Per Common Share***
 
 Basic
        net
        loss per common share is computed based on the weighted average number of
        shares
        of common stock outstanding, as adjusted, during the periods presented. Common
        stock equivalents, consisting of stock options, restricted stock units (“RSUs”),
        warrants and Series A, B and D convertible preferred stock were not included
        in
        the calculation of the diluted loss per share because their inclusion would
        have
        been anti-dilutive.  The basic weighted average number of shares was
        reduced for non-vested restricted stock awards and contingently returnable
        escrowed shares issued in connection with acquisitions, and was increased
        for
        non-contingent shares to be issued in connection with the JLWA modification
        agreement. Potentially dilutive securities of 680,617 and 936,787 realizable
        from the exercise of options, 368,475 and 0 realizable from the vesting of
        RSUs,
        3,692,743 and 6,594,311 securities issuable upon the conversion of Series
        A, B,
        and D convertible preferred stock and warrants, shares of restricted stock
        of
        120,563 and 175,000, as well as contingently returnable shares in the aggregate,
        from the Facticon, Hyperion Risk and JLWA acquisitions of 167,865 and 148,474
        at
        June 30, 2008 and 2007, respectively, have been excluded from the computation
        of
        diluted net loss per share, because the effect of their inclusion would have
        been anti-dilutive.
  9
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **3. 
        Summary of Significant Accounting Policies, continued**
 
 ***Reclassifications***
 
 Certain
        prior period statements of operations amounts have been reclassified in order
        to
        conform to the current period presentations.
 
 ***Recently
        Implemented Accounting Pronouncements***
 
 Effective
        January 1, 2008, the Company adopted the provisions of Statement of Financial
        Accounting Standards (“SFAS”) No. 157 ("SFAS 157"), “Fair Value Measurements”
for financial assets and liabilities, as well as any other assets and
        liabilities that are carried at fair value on a recurring basis in financial
        statements. SFAS 157 defines fair value, establishes a framework for measuring
        fair value and expands disclosures about fair value measurements. SFAS 157
        applies under other accounting pronouncements that require or permit fair
        value
        measurements, the Financial Accounting Standards Board ("FASB") having
        previously concluded in those accounting pronouncements that fair value is
        the
        relevant measurement attribute. Accordingly, SFAS 157 does not require any
        new
        fair value measurements. The Company applied the provisions of the FASB
        Staff Position (“FSP”) on FASB No. 157, "Effective Date of FASB Statement 157"
        (“FSP FAS 157-2”) which defers the provisions of SFAS 157 for nonfinancial
        assets and liabilities to the first fiscal period beginning after November
        15, 2008.  The deferred nonfinancial assets and liabilities include items
        such as goodwill. The Company is required to adopt SFAS 157 for nonfinancial
        assets and liabilities in the first quarter of fiscal 2009 and is still
        evaluating the impact on the condensed consolidated financial statements.
 
 Effective
        January 1, 2008, the Company adopted SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” ("SFAS 159"). SFAS 159 permits
        entities to choose to measure many financial instruments and certain other
        items
        at fair value. The Company did not elect the fair value reporting option
        for any
        assets and liabilities not previously recorded at fair value.
 
 ***Recent
        Accounting Pronouncements***
 
 In
        December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (“SFAS
        141R”), which establishes principles and requirements for how the acquirer
        recognizes and measures in its financial statements the identifiable assets
        acquired, the liabilities assumed, and any noncontrolling interest in the
        acquiree, goodwill acquired in the business combination or a gain from a
        bargain
        purchase. SFAS 141R
        is
        effective for business combinations with an acquisition date on or after
        the
        beginning of the first annual reporting period beginning on or after December
        15, 2008. The Company expects SFAS 141R
        to
        have an impact on the accounting for any future business acquisitions as
        of the
        effective date.
  10
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **3.** **Summary
            of Significant Accounting Policies, continued**
 
 ***Recent
        Accounting Pronouncements, continued***
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”).
        SFAS 160 establishes accounting and reporting standards for the noncontrolling
        interest (minority interest) in a subsidiary and for the deconsolidation
        of a
        subsidiary. SFAS 160 requires (a) the ownership interest in the subsidiary
        held
        by parties other than the parent to be clearly identified and presented in
        the
        consolidated balance sheet within equity, but separate from the parent’s equity,
        (b) the amount of consolidated net income attributable to the parent and
        to the
        noncontrolling interest to be clearly identified and presented on the face
        of
        the consolidated statement of operations and (c) changes in a parent’s ownership
        interest while the parent retains its controlling financial interest in its
        subsidiary to be accounted for consistently. Entities must provide sufficient
        disclosures that clearly identify and distinguish between the interests of
        the
        parent and the interests of the noncontrolling owners. SFAS 160 is effective
        for
        financial statements issued for fiscal years beginning on or after December
        15,
        2008, and interim periods within those fiscal years. The Company does not
        expect
        SFAS 160 to have a material impact on its consolidated financial statements.
 
 In
        March
        2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
        and Hedging Activities - an amendment of FASB Statement No. 133” (“SFAS 161”).
        SFAS 161 changes the disclosure requirements for derivative instruments and
        hedging activities. Entities are required to provide enhanced disclosures
        about
        (a) how and why an entity uses derivative instruments, (b) how derivative
        instruments and related hedged items are accounted for under SFAS No. 133
        and
        its related interpretations, and (c) how derivative instruments and related
        hedged items affect an entity’s financial position, financial performance and
        cash flow. The guidance in SFAS 161 is effective for financial statements
        issued
        for fiscal years and interim periods beginning after November 15, 2008, with
        early application encouraged. This Statement encourages, but does not require,
        comparative disclosures for earlier periods at initial adoption. At this
        time
        management is evaluating the implications of SFAS 161 and its impact on the
        financial statements has not yet been determined.
 
 In
        May
        2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally
        Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies a
        consistent framework, or hierarchy, for selecting accounting principles to
        be
        used in preparing financial statements that are presented in conformity with
        Generally Accepted Accounting Principles (“GAAP”) for nongovernmental entities.
        SFAS 162 is effective 60 days following the SEC’s approval of the
        Public Company Accounting Oversight Board amendments to AU Section 411,
“The Meaning of Present Fairly in Conformity with Generally Accepted Accounting
        Principles.” The Company is currently evaluating the impact of adoption of SFAS
        162 on its consolidated financial statements.
  **4.
          **Acquisitions****
  On
        April
        21, 2008, the Company purchased substantially all of the assets and business
        activities of FAIS. The aggregate purchase price paid for the assets and
        business was $2,548.
 
 The
        aggregate purchase price of $2,548 consisted of cash in the amount of $2,164,
        a
        broker fee of $350 acquisition and related legal expenses of $34.
 
 The
        agreement provides for the sellers to obtain up to an additional $2,000 upon
        the
        attainment of certain revenue goals subsequent to the closing of the
        transaction. The terms and conditions of this earnout are outlined
        below:
 FAIS Revenue for the Twelve Months
                  Ending April 20, 2009
                
                Amount to be Paid on the 90thDay from the First
                  Anniversary of the Closing DateLess
                    then $10,500
                
                $
                -Between
                    $10,500 and $12,500
                
                $
                250Between
                    $12,500 and $14,500
                
                $
                1,000Greater
                    than $14,500
                
                $
                2,000
  11
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **4.
        Acquisitions, continued**
 
 The
        assets and liabilities of FAIS were recorded in the Company’s condensed
        consolidated balance sheet at their fair values at the date of acquisition.
        As
        part of the purchase of FAIS on April 21, 2008, the Company acquired certain
        identifiable intangible assets valued in the aggregate at $2,790. Of the
        identifiable intangibles acquired, approximately $290 has been assigned to
        a
        non-compete agreement and $2,500 to client relationships.
 
 The
        calculated value of these intangible assets created an excess of the fair
        value
        of assets acquired over the purchase price. SFAS No. 141 - “Business
        Combinations” (“SFAS 141”), requires that when a business combination involves
        contingent consideration that might result in recognition of additional cost
        of
        the acquired entity when the consideration is resolved, an amount equal to
        the
        lesser of the maximum contingent consideration or the excess of fair value
        over
        the cost of the acquired entity shall be recognized as if it were a liability.
        When the contingency is resolved and the consideration is issued, any excess
        of
        consideration over the amount that was recognized as a liability shall be
        recognized as additional cost of the acquired entity. If the amount initially
        recognized as if it were a liability exceeds the consideration issued, that
        excess shall be allocated as a pro rata reduction of the amounts assigned
        to
        property and equipment and intangible assets acquired. In accordance with
        SFAS
        141, the Company has recorded a liability of $1,206 representing the difference
        between the fair value of the assets acquired and the consideration paid
        excluding contingent consideration. As such, the purchase price and allocation
        of the purchase price to the assets acquired is preliminary and will not
        be
        finalized until 90 days after the one year anniversary of the acquisition,
        when
        the contingent consideration is determinable. When the contingent consideration
        if any, is determined, the Company will account for the additional consideration
        as an adjustment to the purchase price and adjust the preliminary purchase
        price
        allocation appropriately. This may affect the preliminary allocation of the
        purchase price for assets that are depreciated and amortized thus having
        an
        impact on depreciation and amortization expense related to those assets.
        Any
        adjustment to depreciation and amortization expense will be recorded during
        the
        period that it becomes determinable.
  The
        Company also recorded a liability of approximately $274 as a reserve for
        exit
        activities pursuant to Emerging Issues Task Force (“EITF”) Issue No. 95-3 -
“Recognition of Liabilities in Connection With a Purchase Business Combination”
(“EITF 95-3"). Under EITF 95-3, the estimated costs of certain salary and
        severance expenses of transitional employees were accrued and accounted for
        as
        part of the purchase price.
 
 The
        following details amortization periods for the identifiable, amortizable
        intangibles:
 
 Intangible Asset Category
              
              Amortization Period
                in yearsNon-compete
                  agreements
              
              3
                  yearsClient
                  relationships
              
              7
                  years
  The
        following details the allocation of the purchase price for the acquisition
        of
        FAIS:
 
 Fair
                  ValueAccounts
                  receivable
              
              $
              1,201Property
                  and equipment
              
              
              102Intangible
                  asset – non-complete agreements
              
              
              290Intangible
                  asset – client relationships
              
              
              2,500Accounts
                  payable
              
              
              (17
              )Accrued
                  liabilities
              
              
              (48
              )Cost
                  of exit activities
              
              
              (274
              )Earnout
                  liability
              
              
              (1,206
              )Net
                  fair value assigned to assets acquired and liabilities
                  assumed
              
              $
              2,548
  12
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **4.**  **Acquisitions,
        continued**
 
 The
        following represents a summary of the purchase price consideration:
 
 Fair
                  ValueCash
              
              $
              2,164Broker
                  fee
              
              
              350Legal
                  fee
              
              
              34Total
                  Purchase Price Consideration
              
              $
              2,548
  The
        results of operations of FAIS for the period from April 21, 2008 to June
        30,
        2008 are reflected in the Company’s consolidated results for the three and six
        months ended June 30, 2008, in the accompanying condensed consolidated
        statements of operations.
  ***Unaudited
        Pro-Forma Financial Information***
 
 The
        following presents the unaudited pro-forma combined results of operations
        for
        the three and six months ended June 30, 2008 and 2007 of the Company with
        On
        Line Consulting, Bode, Facticon and FAIS, for the periods preceding the
        acquisition of their respective net assets or common stock. The respective
        acquisition dates are January 9, 2007 for On Line Consulting, February 28,
        2007
        for Bode and Facticon, and April 21, 2008 for FAIS.
 
 For
                  the Three
                Months
                  Ended
                June
                  30,
              
              For
                  the Three
                Months
                  Ended
                June
                  30,
              
              For
                  the Six
                Months
                  Ended
                June
                  30,
              
              For
                  the Six
                Months
                  Ended
                June
                  30,2008
              
              2007
              
              2008
              
              2007Revenues
              
              $
              26,798
              
              $
              25,526
              
              $
              50,744
              
              $
              53,165Net
                  loss
              
              $
              (2,181
              )
              $
              (11,708
              )
              $
              (7,500
              )
              $
              (16,735
              )Pro-forma
                  basic and diluted net loss per common share(not
                  rounded)
              
              $
              (0.23
              )
              $
              (4.13
              )
              $
              (0.77
              )
              $
              (6.12
              )Pro-forma
                  weighted average common shares outstanding - basic and
                  diluted
              
              
              9,665,991
              
              
              2,834,100
              
              
              9,697,337
              
              
              2,733,292
 
 The
        pro
        forma combined results of operations are not necessarily indicative of the
        results of operations that actually would have occurred if the acquisitions
        of
        On Line Consulting, Bode, Facticon and FAIS had been completed as of the
        beginning of 2007, nor are they necessarily indicative of future consolidated
        results.
  13
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **5.
        Inventories**
 
 Inventories
        are comprised of the following:
 As
                    ofJune
                  30,
                    2008
                
                December
                  31,
                    2007Raw
                    materials
                
                $
                1,026
                
                $
                900Work
                    in progress – DNA Analysis
                
                
                374
                
                
                480Finished
                    goods
                
                
                877
                
                
                946Total
                
                $
                2,277
                
                $
                2,326
 **6. 
        Intangible Assets and Goodwill**
 
 ***Intangible
        Assets***
  Intangible
        assets consist of amounts related to the 2005 acquisition of CBR, the 2006
        acquisitions, consisting of JLWA, Safir, Secure Source and Hyperion Risk,
        the
        2007 acquisitions, consisting of On Line Consulting, Bode and Facticon, and
        the
        2008 acquisition of FAIS (See Note 4).
 
 Intangible
        assets are comprised of the following :
 
 Trade
                Names
              
              Developed
                Technology
              
              Non-
                Compete
                Agreements
              
              Client
                Relationships
              
              Patents
              
              Gross
                Amounts
              
              Accumulated
                Amortization
              
              TotalBalance
                  as of January 1, 2008
              
              $
              2,560
              
              $
              440
              
              $
              1,499
              
              $
              7,360
              
              $
              70
              
              $
              11,929
              
              $
              (4,659
              )
              $
              7,270Additions
              
              
              —
              
              
              —
              
              
              290
              
              
              2,500
              
              
              21
              
              
              2,811
              
              
              (1,447
              )
              
              1,364Balance
                  as of June 30, 2008
              
              $
              2,560
              
              $
              440
              
              $
              1,789
              
              $
              9,860
              
              $
              91
              
              $
              14,740
              
              $
              (6,106
              )
              $
              8,634Weighted
                  average amortization period at June 30, 2008(in
                  years)
              
              
              7.4
              
              
              2.8
              
              
              1.8
              
              
              5.3
              
              
              —
              (1)
  (1)
        Patents not yet approved and as such, the amortization period has not yet
        begun
        as of June 30, 2008.
  14
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **6. 
        Intangible Assets and Goodwill, continued**
 
 ***Intangible
        Assets, continued***
 
 The
        estimated amortization of amortizable intangible assets are comprised of
        the
        following for the five years ending June 30, 2013:
 For
                    the Years Ending
                  June
                    30,
                
                Total
                
                Trade
                  Names
                
                Developed
                  Technology
                
                Non-Compete
                  Agreements
                
                Client
                  Relationships2009
                
                $
                2,643
                
                $
                305
                
                $
                90
                
                $
                422
                
                $
                1,8262010
                
                
                1,528
                
                
                305
                
                
                22
                
                
                111
                
                
                1,0902011
                
                
                1,343
                
                
                294
                
                
                22
                
                
                78
                
                
                9492012
                
                
                914
                
                
                214
                
                
                15
                
                
                —
                
                
                6852013
                
                
                794
                
                
                207
                
                
                —
                
                
                —
                
                
                587Totals
                
                $
                7,222
                
                $
                1,325
                
                $
                149
                
                $
                611
                
                $
                5,137
  During
        the three months ended June 30, 2008 and 2007, the Company recorded amortization
        expense related to the acquired amortizable intangibles of $767 and $698,
        and
        $1,448 and $1,404 for the three and six months ended June 30, 2008 and 2007,
        respectively.
 
 ***Goodwill***
 
 A
        summary
        of Goodwill is comprised of the following as of June 30, 2008 and December
        31,
        2007:
 
 Preparedness
                Services
              
              Fraud
                  and
                SIU
                  Services****
              
              Security
                Consulting and
                Investigations
              
              ConsolidatedBalance
                  as of June 30, 2008 and December 31, 2007
              
              $
              883
              
              $
              6,022
              
              $
              12,863
              
              $
              19,768
 
 **7.**  **Property
        and Equipment**
  A
        summary
        of property and equipment is comprised of the following:
 As
                    ofJune
                    30,
                  2008
                
                December
                    31,
                  2007Computer
                    and equipment and software
                
                $
                2,864
                
                $
                2,359Laboratory
                    equipment
                
                
                1,532
                
                
                1,505Furniture
                    and fixtures
                
                
                883
                
                
                753Vehicles
                
                
                134
                
                
                162Leasehold
                    improvements
                
                
                2,465
                
                
                2,3767,878
                
                
                7,155Less:
                    accumulated depreciation and amortization
                
                
                (2,253
                )
                
                (1,585
                )))Property
                    and equipment, net
                
                $
                5,625
                
                $
                5,570
 
 Depreciation
        and amortization of property and equipment for the three months ended June
        30,
        2008 and 2007 was $346 and $290, and for the six months ended June 30, 2008
        and
        2007 was $679 and $457, respectively.
  15
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **8.**  **Accrued
        Compensation and Related Benefits**
 
 A
        summary
        of accrued compensation and related benefits is comprised of the
        following:
 As
                    ofJune 30, 2008
                
                December 31,2007Accrued
                    bonuses
                
                $
                1,285
                
                $
                1,942Accrued
                    payroll and commissions
                
                
                795
                
                
                801Accrued
                    employee benefits
                
                
                902
                
                
                997Total
                
                $
                2,982
                
                $
                3,740
  **9. 
        Line of Credit**
 
 On
        April
        16, 2008, effective as of March 31, 2008, GlobalOptions and Bode entered
        into an
        amendment to the agreement with the financial institution that provides the
        line
        of credit, for which the Company has provided an unconditional guarantee
        (“Loan
        Agreement”).
 
 The
        Loan
        Agreement provides a working capital line of credit (the “Facility”) in an
        amount up to a maximum of $20,000, based upon eligible
        receivables.  The applicable interest rate with respect to the amount
        outstanding under the Facility consists of a base rate of the greater of
        6.25%
        per annum or the Bank’s most recently announced “prime rate,” plus a range from
        0.75% to 1.50% per annum, which is based upon the Company’s liquidity (as
        defined in the Loan Agreement).  The Loan Agreement also contains certain
        affirmative and negative covenants and grants to the financial institution
        a
        security interest in all of the Company’s property and security interest in all
        of the Company’s rights, titles and interests in, to and under the Company’s
        intellectual property.
 
 The
        interest rate on the line of credit at June 30, 2008 was 7.0%. The balance
        under
        the line of credit was $3,581 at June 30, 2008. Based upon the amount of
        eligible accounts receivable balances and the authorized line, the Company
        had
        the availability to draw $14,704 and $8,782 against the line of credit at
        June
        30, 2008 and December 31, 2007, respectively.
 
 **10. 
        Notes Payable**
 
 Notes
        payable consisted of the following:
 As
                    ofJune 30, 2008
                
                December 31, 2007Note
                    payable to seller for Secure Source Acquisition
                
                $
                250
                
                $
                500Note
                    payable to seller for Facticon Acquisition
                
                
                100
                
                
                100Notes
                    payable to seller for On Line Consulting Acquisition
                
                
                148
                
                
                596Total
                
                
                498
                
                
                1,196Less
                    - current portion
                
                
                498
                
                
                800Long-term
                    portion
                
                $
                0
                
                $
                396
  On
        May 6,
        2008, the Company repaid $275, consisting of $250 and $25 of principal and
        interest, respectively in satisfaction of a note payable issued in connection
        with the purchase of Secure Source.
  16
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **11.
        Commitments and Contingencies**
 
 ***Operating
        Leases***
 
 In
        connection with the acquisitions of CBR, JLWA, Safir, Secure Source, Hyperion
        Risk, On Line Consulting, Bode and Facticon, GlobalOptions assumed the
        obligations for various office leases. Such lease obligations expire at various
        dates through June 2015.
 
 On
        July
        19, 2007, the Company entered into an agreement to lease 15,294 rentable
        square
        feet of office space in Washington, D.C, to replace the Company’s expiring
        Washington D.C. office lease. The lease commenced on February 27, 2008 and
        expires on November 30, 2015. The Company has the option to extend the lease
        for
        an additional five years. Rent payments have been abated during the first
        six
        months of the lease.
 
 Future
        minimum lease payments under these operating leases are as follows:
 
 For
                  the Year Ending
                June
                  30,
              
              Amount2009
              
              $
              2,6612010
              
              
              2,7662011
              
              
              2,6212012
              
              
              2,3032013
              
              
              1,922Thereafter
              
              
              5,163Total
              
              $
              17,436
 
 Rent
        expense charged to operations amounted to $957 and $762, for the three months
        ended June 30, 2008 and 2007, and $1,886 and $1,305 for the six months ended
        June 2008 and 2007, respectively.
 
 The
        terms
        of certain of the Company’s lease obligations provide for scheduled escalations
        in the monthly rent. In accordance with SFAS No. 13, “Accounting for Leases,”
the non-contingent rent increases are being amortized over the life of the
        leases on a straight line basis. Deferred rent of $631 and $346 represents
        the
        long-term unamortized rent adjustment amount at June 30, 2008 and at December
        31, 2007 and was reflected as deferred rent obligations in the condensed
        consolidated balance sheet. In addition, the current portion of deferred
        rent
        was $40 and $30 as of June 30, 2008 and December 31, 2007, respectively,
        and is
        reflected within other current liabilities in the condensed consolidated
        balance
        sheets.
  17
 
 GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **11.
        Commitments**  **and
        Contingencies, continued**
 
 ***Litigation,
        Claims and Assessments***
 
 From
        time
        to time, in the normal course of business, the Company may be involved in
        litigation.  Except for certain claims as described below, the
        Company’s management has determined any asserted or unasserted claims to be
        immaterial to the condensed consolidated financial statements.
 
 We
        are
        currently defendants in federal
        and state litigation matters related to Facticon, which were filed prior
        to
        the Company’s acquisition of the assets
        of
        Facticon.
  In
        the
        federal matter, *Anchondo
        vs Facticon* *Inc.
        and GlobalOptions Group, Inc.* in the
        U.S. District Court for the Central District of California, Peter
        Anchondo ( the “Federal Plaintiff ”) ,
        in a
        class action, is alleging that Facticon failed to pay overtime wages. Subsequent
        to the acquisition of the
        assets of Facticon by the Company ,
        the
        Company was added as a defendant in said case, under the successor liability
        theory. A Motion for Summary Judgment was filed for the Court to contest
        the
        Company’s liability as a successor liable company. On March 7, 2008, the Court
        issued a ruling denying the Company’s Motion for Summary Judgment and issued a
        ruling granting a Motion for Summary Judgment in favor of the Federal
        Plaintiff ruling
        that the Company was in fact a successor party to the Plaintiffs actions.
        This
        ruling by the Court is in opposition to the Court’s original ruling dated
        March 3, 2008, wherein it granted the Company’s Motion for Summary Judgment. The
        Company filed a Motion for Reconsideration and the Judge reversed his opinion
        but ruled that the issue of successor liability must be litigated. In July
        2008,
        the Company reached a tentative agreement with the Federal Plaintiff
        to settle this matter with a cash payment of $ 635,
        subject to Court approval.
 
 The
        State
        Court case *Wonsch,
        et al. vs. Facticon* *Inc.
        and GlobalOptions Group, Inc.* ** was
        filed
        in the State Court for the Central District of California, wherein *Wonsch,* the
        plaintiffs in the class
        action (the "State Plaintiffs"), have alleged that Facticon failed to pay
        overtime wages under the California Civil Code. This action is similar to
        the *Anchondo* case,
        but is limited to the state laws of California. Subsequent to the acquisition,
        the Company was added as a defendant in said case, under the successor liability
        theory; however, the Company has not filed a response under the successor
        liability claim, since the Company filed a motion with the California State
        Court to remove such case from the California State Court and
        for
        such case to
        be
        merged with the *Anchondo* case ,
        and
        the California State Court
        has granted such motion. Although the cases have been merged, the C ompany
        must settle with each of the two plaintiff groups separately. Based upon
        preliminary discussions with the State Plaintiffs, the Company believes that
        it
        will be able to reasonably settle the *Wonsch* matter.
 
 Under
        the
        terms of an escrow agreement, as amended, entered into by and between
        GlobalOptions and Facticon, the escrow agreement provides that 85,700 shares
        of
        the Company’s common stock and $100 in cash funds shall be held to satisfy this
        and other pre-acquisition obligations of Facticon. The Company and the
        stockholders of Facticon have agreed that the Company will not distribute
        any
        funds or stock as provided under the asset purchase agreement until the *Anchondo*  case
        and
        the *Wonsch* cases
        are resolved ,
        and if
        necessary the Company shall use such stock and cash to resolve such matters.
        The
        Company has established a reserve in the amount of $ 626
        to
        cover the Company for any additional costs in connection with the  *Anchondo*  and *Wonsch* cases that are
        not recoverable through the escrow amounts.
  18
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **12.**  ******  **Stockholders’
        Equity**
 
 ***Common
        Stock***
 
 On
        December 19, 2006, the Company awarded 100,000 and 75,000 shares of unvested
        restricted stock to Dr. Harvey Schiller and Mr. Jeffrey Nyweide, respectively,
        in connection with the extension of their respective employment and consulting
        agreements. On December 12, 2007, the Compensation Committee determined that,
        effective January 1, 2008, 6,250 shares and 4,687 shares of restricted stock
        held by Dr. Schiller and Mr. Nyweide, respectively, were no longer subject
        to
        forfeiture. Dr. Schiller and Mr. Nyweide elected to have the Company withhold
        2,278 and 1,585 shares, respectively, in satisfaction of their tax obligations
        in connection with the vesting of their restricted stock. Such withheld shares
        valued at $10 and $7, respectively, are reflected as treasury shares in the
        Company’s books and records. (See Note 13, Stock Based Compensation - Vesting of
        Restricted Shares Under Executive Bonus Award).
  On
        January 30, 2008, the Company issued 300,000 shares of common stock to the
        former owners of JLWA (“JLWA Sellers”) including 225,000 shares of common stock,
        in full satisfaction of the $2,160 obligation to issue common stock. The
        cost of
        the remaining 75,000 shares shall be recorded as earn-out expense upon the
        expiration of the 12 months period for which the shares are subject to
        forfeiture.
  On
        February 14, 2008, the Company registered for resale a total of 1,223,565
        shares
        of its common stock, consisting of the 300,000 shares of common stock issued
        to
        the JLWA Sellers on January 30, 2008 and the remainder of which were held
        by the
        Company’s employees, directors, or their affiliates.
  On
        February 15, 2008, the Company issued 21,843 shares of common stock, valued
        at
        $153 for services rendered during the year ended December 31, 2007, and 5,141
        shares of common stock valued at $15 for services rendered during January
        and
        February 2008, to a group of the Company’s service providers including 1,567
        shares of common stock valued at $15 to Verus International Group, of which
        John
        Oswald, a director of the Company, is Chief Executive Officer.
  On
        May
        29, 2008, the Company issued 40,064 shares of its common stock upon the
        conversion of 600.95 shares of Series D convertible preferred
        stock.
 
 **13.
        Stock Based Compensation**
  Stock
        based compensation for non-employees accounted for under EITF Issue
        No. 96-18 “Accounting for Equity Instruments That Are Issued to Other
        Than Employees for Acquiring, or in Conjunction with Selling, Goods or
        Services” (“EITF 96-18”) was $42 and $70 for the three and six months ended June
        30, 2008 and $(14) and $46 for the three and six months ended June 30, 2007,
        respectively. Stock based compensation recognized under EITF 96-18 is reflected
        in general and administrative expenses.
 
 Stock
        based compensation for employees accounted for under Statement of Financial
        Accounting Standards No. 123R “Share-Based Payment” (“SFAS 123R”) was
        approximately $1,130 and $2,026 for the three and six months ended June 30,
        2008
        and $800 and $1,651 for the three and six months ended June 30, 2007,
        respectively. Stock based compensation recognized under SFAS 123R is reflected
        in general and administrative expenses.
  19
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **13.
        Stock Based Compensation, continued**
  The
          following table summarizes total stock based compensation costs recognized
          under
          EITF 96-18 and SFAS 123R for the three and six months ended June 30, 2008
          and
          2007, respectively. ******
 For
                  the Three Months Ended June 30,2008
              
              2007EITF
                96-18
              
              SFAS
                123R
              
              Total
              
              EITF
                96-18
              
              SFAS
                123R
              
              TotalStock
                  options
              
              $
              42
              
              $
              698
              
              $
              740
              
              $
              (14
              )
              $
              691
              
              $
              677RSUs
              
              
              —
              
              
              16
              
              
              16
              
              
              —
              
              
              —
              
              
              —Vesting
                  of restricted shares under performance based executive bonus
                  award
              
              
              —
              
              
              416
              
              
              416
              
              
              —
              
              
              109
              
              
              109Total
              
              $
              42
              
              $
              1,130
              
              $
              1,172
              
              $
              (14
              )
              $
              800
              
              $
              786
 
 For
                  the Six Months Ended June 30,2008
              
              2007EITF
                96-18
              
              SFAS
                123R
              
              Total
              
              EITF
                96-18
              
              SFAS
                123R
              
              TotalStock
                  options
              
              $
              70
              
              $
              1,425
              
              $
              1,495
              
              $
              46
              
              $
              1,405
              
              $
              1,451RSUs
              
              
              —
              
              
              16
              
              
              16
              
              
              —
              
              
              —
              
              
              —Vesting
                  of restricted shares underperformance
                  basedexecutive
                  bonus award
              
              
              —
              
              
              585
              
              
              585
              
              
              —
              
              
              246
              
              
              246Total
              
              $
              70
              
              $
              2,026
              
              $
              2,096
              
              $
              46
              
              $
              1,651
              
              $
              1,697
  ***Stock
        Options***
 
 The
        fair
        value of each option grant during the three and six months ended June 30,
        2008
        and the six months ended June 30, 2007 was estimated on the date of grant
        using
        the Black-Scholes option pricing model with the following assumptions
        used:
 
 For
                  the Three
                Months
                  Ended
                June
                  30,
              
              For
                  the Six Months Ended
                June
                  302008
              
              2008
              
              2007Dividend
                  yield
              
              
              0%
              
              
              0%
              
              
              0%Expected
                  volatility
              
              
              87%
              
              
              87%
              
              
              87.0%Risk-free
                  interest rate
              
              
              3.09%
              
              
              2.97%
              
              
              4.54%Expected
                  lives
              
              
              5
                  years
              
              
              5
                  years
              
              
              5
                  years
 
 The
        Company has determined that the expected life of options granted is the same
        as
        the contractual term. There were no grants of stock options during the three
        months ended June 30, 2007.
 
 The
        weighted average fair value of the options on the date of grant, using the
        fair
        value based methodology was $1.55 and $1.80, respectively, for the three
        and six
        months ended June 30, 2008, and for the six months ended June 30, 2007 was
        $7.86.
  20
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **13.
        Stock Based Compensation, continued**
 
 ***Stock
        Options, continued***
 
 Effective
        on January 1, 2008, the Company granted, in the aggregate, options for the
        purchase of 75,000 shares of its common stock at an exercise price of $4.50
        per
        share, under the 2006 Long-Term Incentive Plan, to three members of the Board
        of
        Directors. The options have a five year term, vest ratably at the end of
        each of
        the four quarterly periods following the date of grant and have a value of
        $235
        utilizing the Black Scholes option pricing model with the following assumptions
        used: expected life of five years, volatility of 87%, dividends of 0% and
        a risk
        free interest rate of 3.45%.
 
 Effective
        on January 1, 2008, the Company issued stock options for the purchase of
        100,000
        shares of its common stock at an exercise price of $4.50 per share, under
        the
        2006 Long-Term Incentive Plan to certain members of its advisory boards for
        their advisory services to the Company.   The options have a five
        year term, vest ratably at the end of each of the four quarterly periods
        following the date of grant and have a value of $314 utilizing the Black
        Scholes
        option pricing model with the following assumptions used: expected life of
        five
        years, volatility of 87%, dividends of 0% and a risk free interest rate of
        3.45%.
 
 On
        February 13, 2008, the Company granted, in the aggregate, options for the
        purchase of 295,000 shares of its common stock at an exercise price of $1.70
        per
        share under the 2006 Long-Term Incentive Plan to certain of its officers
        and
        employees.   The options have a five year term, vest ratably upon
        the first, second and third anniversaries of the date of grant and have a
        value
        of $347 utilizing the Black Scholes option pricing model with the following
        assumptions used: expected life of five years, volatility of 87%, dividends
        of
        0% and a risk free interest rate of 2.71%.
 
 On
        March
        5, 2008, the Company granted an option for the purchase of 50,000 shares
        of its
        common stock at an exercise price of $1.86 under the 2006 Long-Term Incentive
        Plan to an officer of Bode.   The option has a five year term,
        vests ratably upon the first, second, third, and fourth anniversaries of
        the
        date of grant, certain vesting is accelerated upon the achievement of certain
        performance based criteria and upon a change in control all such options
        vest
        immediately. The options have a value of $64 utilizing the Black Scholes
        option
        pricing model with the following assumptions used: expected life of five
        years,
        volatility of 87%, dividends of 0% and a risk free interest rate of
        2.59%.
 
 On
        May 7,
        2008, the Company granted stock options for the purchase of an aggregate
        of
        7,000 shares of its common stock at an exercise price of $2.23 to certain
        employees. The options have a five year term, vest ratably on the first,
        second
        and third anniversaries of the date of grant and have a value of $11 utilizing
        the Black Scholes option pricing model with the following assumptions used;
        expected life of fives years, volatility of 87%, dividends of 0% and a risk
        free
        interest rate of 3.09%.
 
 On
        May 7,
        2008 the Company granted, in the aggregate, options for the purchase of 90,000
        shares of common stock at an expense price of $2.23 to employees of FAIS.
        The
        options have a five year term, vest ratably on the first, second and third
        anniversaries of the date of grant and have a value of $139 utilizing the
        Black
        Sholes option pricing model with the following assumptions used; expected
        life
        of five years, volatility of 87%, dividends of 0% and a risk free interest
        rate
        of 3.09%.
 
 On
        June
        26, 2008, options for the purchase of 1,105,188 shares of Company’s common stock
        were accepted for exchange and cancellation, and the Company thereupon issued
        368,475 RSUs (See Restricted Stock Units below).
  21
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **13.
        Stock Based Compensation, continued**
 
 ***Stock
        Options, continued***
 
 At
        June
        30, 2008, the unamortized value of employee stock options under SFAS 123R
        was
        approximately $1,067. The unamortized portion will be expensed over a weighted
        average period of 1.9 years. For the three and six months ended June 30,
        2008,
        costs of $698 and $1,425, and for the three and six months ended June 30,
        2007,
        cost of $690 and $1,405, respectively, were recognized in connection with
        the
        vesting of these employee stock options.
 
 A
        summary
        of the status of the Company’s stock option plans and the changes during the six
        months ended June 30, 2008, is presented in the table below:
 Number
                    of
                  Options
                
                Weighted
                  Average
                  Exercise
                  Price
                
                Weighted
                  Average
                  Remaining
                  Contractual
                  Life(per
                    share)
                
                (in
                    years)Options
                    outstanding at December 31, 2007
                
                
                1,191,665
                
                $
                13.72
                
                
                3.6Granted
                
                
                617,000Forfeited
                
                
                (22,860
                )Canceled
                
                
                (1,105,188
                )Options
                    outstanding at June 30, 2008
                
                
                680,617
                
                $
                3.52
                
                
                4.5Exercisable
                    June 30, 2008
                
                
                67,217
                
                $
                7.39
                
                
                4.1
 
 A
        summary
        of the Company’s stock options outstanding and exercisable by range of exercise
        price at June, 2008 is presented in the table below:
  Options
                  Outstanding
              
              Options
                  ExercisableRange
                  of
                Exercise
                  Price
                (per
                  share)
              
              Number
                  of
                Options
              
              Weighted
                Average
                Remaining
                Life
                (in
                  years)
              
              Number
                  of Options
              
              Weighted
                Average
                Remaining
                Life
                (in
                  years)$1.70
                  - $2.23
              
              
              441,867
              
              
              4.7
              
              
              —$4.50
              
              
              175,000
              
              
              4.5
              
              
              43,750
              
              
              4.5$10.80
                  - $11.36
              
              
              50,221
              
              
              3.6
              
              
              16,741
              
              
              3.6$16.08
                  - $16.40
              
              
              5,387
              
              
              2.9
              
              
              2,628
              
              
              2.9$18.40
              
              
              8,142
              
              
              2.7
              
              
              4,098
              
              
              2.7680,617
              
              
              
              
              
              67,217
  22
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **13.
        Stock Based Compensation, continued**
 
 ***Restricted
        Stock Units (“RSUs”)***
 
 On
        May
        28, 2008, the Company issued a tender offer to holders of outstanding stock
        options issued prior to January 1 2008 (“Eligible Options”), to exchange their
        Eligible Options for RSUs on a 3 for 1 basis. Each RSU represents one share
        of
        the Company’s common stock to be issued in the future, based on certain vesting
        requirements. The offer expired on June 25, 2008. As result of this offer,
        as of
        June 26, 2008, 1,105,188 stock options were accepted for exchange and
        cancellation, and the Company issued 368,475 RSUs with a grant date fair
        value
        of $2.12 per share to participants in the offer. The grant date fair value
        of
        the restricted stock units was determined by using the closing price of the
        Company’s common stock on the day immediately preceding the grant date.
 
 All
        of
        the Company’s executive officers and directors participated in the tender offer,
        as a group accounting for approximately 78% of the stock options exchanged
        and
        cancelled and RSUs issued in the offer.
  The
        excess of the aggregate grant date fair value of the RSUs of $781 over the
        fair
        value of the stock options canceled of $672, has been added to the unamortized
        value of the canceled options of $2,863 and will be amortized over the vesting
        period of the RSUs.
 
 As
        of
        June 30, 2008, there was $2,957 of unamortized compensation expense related
        to
        RSUs, which is expected to be recognized over a weighted average period of
        2.8
        years.
 
 RSUs
        held
        by executive officers and directors vest ratably on each of the first, second
        and third anniversaries of the grant date. RSUs held by all other employees
        and
        consultants vest ratably on the first and second anniversaries of the grant
        date.
 
 A
        summary
        of the activity related to RSUs for the six months ended June 30, 2008 is
        presented below:
  Total
              
              Weighted
                Average Grant
                Date Fair ValueNonvested
                  at January 1, 2008
              
              
              —
              
              
              —RSUs
                  issued upon cancelation of optionstendered,
                  June 26, 2008
              
              
              368,475
              
              $
              2.12RSUs
                  vested
              
              
              —RSUs
                  forfeited
              
              
              —Nonvested
                  at June 30, 2008
              
              
              368,475
              
              $
              2.12
 
 ***Vesting
        of Restricted Shares under Performance Based Executive Bonus
        Award***
 
 During
        the three and six months ended June 30, 2008, in connection with expected
        performance under a bonus program for senior executives, stock-based
        compensation of approximately $416 and $585 was recognized for the estimated
        pro
        rata vesting of restricted shares. During the three and six months ended
        June
        30, 2007, $109, and $246, respectively was recognized for the estimated pro
        rata
        vesting of these restricted shares.
  23
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **14.   Client
        and Segment Data**
 
 The
        Company’s reportable operating segments consist of the following three
        business segments: Preparedness Services, Fraud and SIU Services, and Security
        Consulting and Investigations. The Company’s reportable segments are
        organized, managed and operated along key product and service lines. These
        product and service lines provided to similar clients are offered together
        as
        packaged offerings, generally produce similar margins and are managed under
        a
        consolidated operations management.
 
 The
        Preparedness Services segment develops and implements crisis management and
        emergency response plans for disaster mitigation, continuity of operations
        and
        other emergency management issues for governments, corporations and individuals.
 
 The
        Fraud
        and SIU Services segment provides investigative surveillance, anti-fraud
        solutions and business intelligence services to the insurance industry, law
        firms and multinational organizations. The results of the Company’s
        International Strategies business unit, on the basis of its relative
        materiality, are included in the Fraud and SIU Services segment.
 
 The
        Security Consulting and Investigations segment delivers specialized security
        and
        investigative services to governments, corporations and individuals.
 
 The
        names
        of the Company’s reportable segments have changed from the prior year. See the
        Company’s Form 10-K for the year ended December 31, 2007, filed on March 28,
        2008, for additional information.
 
 Total
        revenues by segment include revenues to unaffiliated clients. The Company
        evaluates performance based on income (loss) from operations. Operating
        income (loss) is gross profit less operating expenses.
 
 The
        following tables summarize financial information about the Company’s business
        segments for the three and six months ended June 30, 2008 and 2007.
 
 For
        the Three Months Ended June 30, 2008
 
 Preparedness
                Services
              
              Fraud
                  & SIU
                Services-
              
              Security
                Consulting
                  &
                Investigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              8,108
              
              $
              9,276
              
              $
              8,870
              
              $
              —
              
              $
              26,254Income
                  (loss) from Operations
              
              $
              204
              
              $
              (883
              )
              $
              (1,198
              )
              $
              —
              
              $
              (1,877
              )Depreciation
                  and Amortization
              
              $
              316
              
              $
              370
              
              $
              426
              
              $
              —
              
              $
              1,112Interest
                  Expense
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              100
              
              $
              100
  24
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **14.   Client
        and Segment Data, continued**
 
 For
        the Three Months Ended June 30, 2007
 
 Preparedness
                Services
              
              Fraud
                  & SIU
                Services-
              
              Security
                Consulting
                  &
                Investigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              6,948
              
              $
              6,574
              
              $
              8,944
              
              $
              —
              
              $
              22,466Income
                  (loss) from Operations
              
              $
              (6,840
              )
              $
              (2,004
              )
              $
              (1,971
              )
              $
              —
              
              $
              (10,815
              )Depreciation
                  and Amortization
              
              $
              312
              
              $
              295
              
              $
              381
              
              $
              —
              
              $
              988Interest
                  Expense
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              179
              
              $
              179
 
 For
        the Six Months Ended June 30, 2008
 
 Preparedness
                Services
              
              Fraud
                  & SIU
                Services-
              
              Security
                Consulting
                  &
                Investigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              15,250
              
              $
              15,516
              
              $
              16,987
              
              $
              —
              
              $
              47,753Income
                  (loss) from Operations
              
              $
              (232
              )
              $
              (2,341
              )
              $
              (3,669
              )
              $
              —
              
              $
              (6,242
              )Depreciation
                  andAmortization
              
              $
              628
              
              $
              653
              
              $
              845
              
              $
              —
              
              $
              2,126Interest
                  Expense
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              124
              
              $
              124
 
 For
        the Six Months Ended June 30, 2007
 
 Preparedness
                Services
              
              Fraud
                  & SIU
                Services-
              
              Security
                Consulting
                  &
                Investigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              17,263
              
              $
              11,864
              
              $
              14,727
              
              $
              —
              
              $
              43,854Income
                  (loss) from Operations
              
              $
              (6,973
              )
              $
              (3,947
              )
              $
              (2,711
              )
              $
              —
              
              $
              (13,631
              )Depreciation
                  and Amortization
              
              $
              617
              
              $
              609
              
              $
              635
              
              $
              —
              
              $
              1,861Interest
                  Expense
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              205
              
              $
              205Other
                  Income
              
              $
              100
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              100
  25
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (In
        thousands except share and per share amounts)
  **15.
        Major Clients/Customers**
  Revenues
        from the Company’s services to a limited number of clients have accounted for a
        substantial percentage of the Company’s total revenues. The Company’s largest
        client, which is within the Preparedness Services segment and was work performed
        under government contracts, accounted for approximately 24% and 26% of the
        Company’s revenues for the three months ended June 30, 2008 and 2007, and 25%
        and 32% for the six months ended June 30, 2008 and 2007
        respectively.
 
 For
        the
        three months ended June 30, 2008 and 2007, work performed under government
        contracts represented 43% and 33% of the Company’s revenues, respectively, the
        most significant of which, in 2008 and 2007, represented 79% and 86%,
        respectively, of the Company’s revenues within the Preparedness Services
        segment.
 
 For
        the
        six months ended June 30, 2008 and 2007, work performed under government
        contracts represented 44% and 42% of the Company’s revenues, respectively, the
        most significant of which, in 2008 and 2007, represented 77% and 88%,
        respectively, of the Company’s revenues within the Preparedness Services
        segment.
  **16.
        Subsequent Events**
  ***Amended
        and Restated 2006 Long-Term Incentive Plan***
  On
        July
        24, 2008, at the Company’s 2008 Annual Meeting of Stockholders (the “Annual
        Meeting”), stockholders approved the Amended and Restated 2006 Long-Term
        Incentive Plan (the “Incentive Plan”), which became effective immediately
        following its approval and replaced the Company’s original 2006 Long-Term
        Incentive Plan. The Incentive Plan provides for the issuance of up to 3,000,000
        shares of the Company’s common stock, increased from 1,500,000 under the
        Company’s original 2006 Long-Term Incentive Plan. As of July 24, 2008, 1,346,632
        shares of common stock remain eligible to be issued under the Incentive Plan.
        The Compensation Committee has the authority to determine the amount, type
        and
        terms of each award, but may not grant awards under the Incentive Plan, in
        any
        combination, for more than 625,000 shares of the Company’s common stock to any
        individual during any calendar year, increased from 312,500 under the Company’s
        original 2006 Long-Term Incentive Plan.
  ***Amended
        and Restated 2006 Employee Stock Purchase Plan***
  At
        the
        Annual Meeting, stockholders approved the Amended and Restated 2006 Employee
        Stock Purchase Plan (the “Stock Purchase Plan”), which became effective
        immediately following its approval and replaced the Company’s original 2006
        Employee Stock Purchase Plan. The Stock Purchase Plan permits eligible employees
        of the Company to automatically purchase at the end of each month at a
        discounted price, a certain number of shares of the Company’s common stock by
        having the effective purchase price of such shares withheld from their base
        pay.
        The Stock Purchase Plan provides for the issuance of up to 2,000,000 shares
        of
        the Company’s common stock, increased from 250,000 under the Company’s original
        2006 Employee Stock Purchase Plan. As of July 24, 2008 all 2,000,000 shares
        of
        common stock remain unissued under the Stock Purchase Plan.
  ***Restricted
        Stock Awards***
  On
        July
        24, 2008, the Compensation Committee awarded 437,500 shares of unvested
        restricted stock to the Company’s two senior officers under the Company’s 2007
        Executive Compensation Plan as revised in 2008.
  26


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


**(Amounts
      contained in this Item 2 are in thousands, except share and per share
      amounts).**





*The
      following discussion of results of operations and financial condition is based
      upon, and should be read in conjunction with, our condensed consolidated
      financial statements and accompanying notes thereto included elsewhere
      herein.*





**Forward-Looking
      Statements**





Information
      included or incorporated by reference in this Quarterly Report on Form 10-Q
      may
      contain forward-looking statements. This information may involve known and
      unknown risks, uncertainties and other factors which may cause our actual
      results, performance or achievements to be materially different from the future
      results, performance or achievements expressed or implied by any forward-looking
      statements. Forward-looking statements, which involve assumptions and describe
      our future plans, strategies and expectations, are generally identifiable by
      use
      of the words "may," "should," "expect," "anticipate," "estimate," "believe,"
      "intend" or "project" or the negative of these words or other variations on
      these words or comparable terminology.




**Overview**




GlobalOptions
      Group, Inc. and Subsidiaries (collectively the “Company” or “GlobalOptions
      Group”) is an integrated provider of risk mitigation and management services to
      government entities, Fortune 1,000 corporations and high net-worth and
      high-profile individuals. We enable clients to identify, assess and prevent
      natural and man-made threats to the well-being of individuals and the operations
      of governments and corporations. In addition, we assist our clients in
      recovering from the damages or losses resulting from the occurrence of acts
      of
      terror, natural disasters, fraud and other risks. Our vision is to continue
      to build a comprehensive risk mitigation solutions company through both organic
      growth and acquisitions. In pursuit of our strategy, we have acquired and
      integrated nine complementary risk mitigation businesses since August 2005
      that
      contributed an aggregate of approximately $25,900 and $47,000 in revenues to
      our
      business during the three and six months ended June 30, 2008 and an aggregate
      of
      approximately $21,700 and $42,300 during the three and six months ended June
      30,
      2007.




We
      believe our reputation, credentials and personal relationships provide us with
      a
      competitive advantage in securing new business. Our senior management team
      and
      advisory boards have extensive industry backgrounds and include former generals
      in the military, top government officials and corporate officers, intelligence
      and law enforcement officers, professional investigators and legal and crisis
      communications specialists.




We
      deliver risk mitigation and management services through the following four
      business units:




•
              *Preparedness
                  Services*develops and implements crisis management and emergency response
                  plans for
                  disaster mitigation, continuity of operations and other emergency
                  management issues for governments, corporations and individuals.
                  Services
                  we provide include preparedness, response and recovery services,
                  threat
                  and impact assessments, business continuity plans and emergency
                  exercises
                  and training programs. The Preparedness Services unit is led by
                  former
                  Federal Emergency Management Agency Director James Lee Witt, General
                  Wesley Clark (ret.) and Rodney Slater, former U.S. Secretary of
                  Transportation.
  •
              *Fraud
                  and Special Investigative Unit (“SIU”) Services*provides investigative surveillance, anti-fraud solutions and business
                  intelligence services to the insurance industry, law firms and
                  multinational organizations. Services we provide include fraud
                  reporting,
                  anti-fraud training, insurance claims investigations, surveillance,
                  background investigations, corporate investigations for liability,
                  on-scene accident investigations and regulatory compliance. The
                  Fraud and
                  SIU Services unit is led by Halsey Fischer, an 18-year industry
                  veteran
                  and former President and Chief Executive Officer of Confidential
                  Business
                  Resources (“CBR”).
  •
              *Security**Consulting
                  and Investigations*delivers specialized security and investigative services to governments,
                  corporations and individuals. Services we provide include forensic
                  DNA
                  analysis, facilities and IT security, litigation support, business
                  intelligence, IT and accounting forensics, executive protection,
                  independent monitoring and regulatory compliance. The Security
                  Consulting
                  and Investigations unit is led by Howard Safir, former New York
                  City
                  Police Commissioner.
  •
              *International
                  Strategies*provides multidisciplinary, international risk management and business
                  solutions to foreign and domestic governments, corporations and
                  individuals. Services we provide include crisis management, facilities
                  security, investigations and litigation support, global business
                  intelligence, corporate governance compliance, personal protection
                  and
                  emerging market services. The International Strategies unit is
                  led by
                  Thomas Ondeck, a founder of GlobalOptions
                  Group.
  27





Our
      Preparedness Services, Fraud and SIU Services, and Security Consulting and
      Investigations units represent our three financial reporting segments. Our
      International Strategies business unit, on the basis of its relative
      materiality, is included in our Fraud and SIU Services segment.





The
      following table represents the revenue contribution by each of these three
      reporting segments as a percentage of our total revenues:





For the Three Months
              Ended June 30,
            
            For the Six Months
              Ended June 30,Segment
            
            2008
            
            2007
            
            2008
            
            2007Preparedness
                Services
            
            
            30.9
            %
            
            30.9
            %
            
            31.9
            %
            
            39.4
            %Fraud
                and SIU Services
            
            
            35.3
            
            
            29.3
            
            
            32.5
            
            
            27.1Security
                Consulting and Investigations
            
            
            33.8
            
            
            39.8
            
            
            35.6
            
            
            33.5Total
            
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %




**Growth
      Strategy**




Our
      goal
      is to build a company with the risk mitigation industry’s most comprehensive
      solutions offering through a balance of organic growth and acquisitions. We
      intend to grow our business in the following manner:




*Leverage
      Our Relationships and Expertise* .
      Our
      highly trained professionals have deep domain expertise and exceptional
      credentials. Further, our advisory boards are comprised of thought leaders
      in
      their respective fields. Since our industry relies heavily on reputation and
      trust, we believe our senior management team’s and advisory boards’ experience
      and relationships will help us gain access to an increasing number of
      opportunities.




*Cross-sell
      and Integrate Businesses* .
      We
      intend to continue our aggressive efforts to integrate the operations of
      companies we have acquired and will acquire, providing the framework necessary
      for our senior managers to focus on identifying, prospecting and winning new
      opportunities across all business units. We believe our operational expertise
      and comprehensive service offerings enable us to cross-sell over industry
      verticals as well as leverage our existing client base, thereby enhancing our
      ability to execute on our organic growth initiatives.




*Selectively
      Acquire Companies* .
      We will
      continue to pursue complementary acquisitions of companies that enable us to
      increase our share of those markets in which we already operate and to enter
      new
      markets and service segments. We believe there are numerous opportunities to
      acquire quality companies because of the fragmented nature of our industry
      and
      that our past acquisitions track record will assist us in executing this
      strategy. We expect these acquisitions to be geographically diverse, provide
      synergies within units and allow for cross-selling opportunities across all
      of
      our business units. We structure our acquisitions to ensure that key selected
      individuals from the acquired company are retained and integrated after the
      transaction is consummated.




*Develop
      New Solutions* .
      We will
      continue to develop and seek solutions to meet unique client and dynamic market
      segment needs by expanding and bundling our product and service offerings.
      As we
      continue to grow both organically and through acquisitions, we expect to meet
      additional needs of our clients. Evidence of this strategy is our
      enterprise-oriented solution, GlobalTrak, and the DNA technology service we
      offer as a result of our acquisition of The Bode Technology Group, Inc.
      (“Bode”).




*Expand
      Internationally* .
      We
      intend to pursue additional opportunities to offer our services outside the
      United States. We believe international markets provide a substantial
      opportunity for growth given the increasing  risks
      that businesses and governments face around the world. We expect that by
      expanding our offerings to other countries we will also enhance our ability
      to
      compete in the United States for the business of global organizations.




28




**Corporate
      Developments**




***Modification
      to the Line of Credit Agreement***





On
      April
      16, 2008, effective as of March 31, 2008, GlobalOptions, Inc., an operating
      subsidiary of the Company, and Bode entered into an amendment to the agreement
      with the financial institution that provides the line of credit, for which
      we
      provided an unconditional guarantee (“Loan Agreement”).





The
      Loan
      Agreement provides a working capital line of credit (the “Facility”) in an
      amount up to a maximum of $20,000, based upon eligible
      receivables.  The applicable interest rate with respect to the amount
      outstanding under the Facility consists of a base rate of the greater of 6.25%
      per annum or the Bank’s most recently announced “prime rate,” plus a range from
      0.75% to 1.50% per annum, which is based upon our liquidity (as defined in
      the
      Loan Agreement).  The Loan Agreement also contains certain affirmative and
      negative covenants and grants to the financial institution a security interest
      in all of our property and security interest in all of our rights, titles and
      interests in, to and under our intellectual property.





***Acquisition***





On
      April
      21, 2008, we purchased substantially all of the assets and business activities
      of First Advantage Investigative Services, a Florida corporation (“FAIS”),
      related to our investigation and surveillance businesses.





The
      acquisition was made pursuant to an Asset Purchase Agreement (the “Purchase
      Agreement”), dated April 21, 2008 by and among FAIS, First Advantage
      Corporation, a Delaware corporation and parent company of FAIS (“FAC”), and the
      Company.  The aggregate purchase price under the Purchase Agreement
      was (i) $2,164 in cash, (ii) a broker fee of $350, (iii) acquisition related
      legal expenses of $34 and (iv) an earnout payment (the “Earnout”) to be paid on
      the twelve-month anniversary of the transaction.  In addition, in the
      Purchase Agreement, FAC and FAIS covenanted that they will not compete with
      or
      solicit the employees or customers of ours for a period of two years from the
      date of the transaction.  In a separate license agreement dated April
      21, 2008 by and between FAIS and the Company, we also obtained the non-exclusive
      perpetual right to use FAIS’s RiskminderTM software.




The
      amount of the Earnout will be based on the revenues during the twelve months
      following the transaction that are generated by the assets purchased under
      the
      Purchase Agreement, as well as the revenues generated under an alliance
      agreement that are directly related to FAIS's previous investigation and
      surveillance business. The earnout amount will range from $0 to
      $2,000.  The business alliance agreement dated April 21, 2008,
      outlines our agreement with FAC to further develop the alliance relationship
      between the two companies in the future.





The
      calculated value of the FAIS intangible assets created an excess of the fair
      value of assets acquired over the purchase price. SFAS No. 141 - “Business
      Combinations” (“SFAS 141”), requires that when a business combination involves
      contingent consideration that might result in recognition of additional cost
      of
      the acquired entity when the consideration is resolved, an amount equal to
      the
      lesser of the maximum contingent consideration or the excess of fair value
      over
      the cost of the acquired entity shall be recognized as if it were a liability.
      When the contingency is resolved and the consideration is issued, any excess
      of
      consideration over the amount that was recognized as a liability shall be
      recognized as additional cost of the acquired entity. If the amount initially
      recognized as if it was a liability exceeds the consideration issued, that
      excess shall be allocated as a pro rata reduction of the amounts assigned to
      property and equipment and intangible assets acquired. In accordance with SFAS
      141, the Company has recorded a liability of $1,206 representing the difference
      between the fair value of the assets acquired and the consideration paid
      excluding contingent consideration. As such, the purchase price and allocation
      of the purchase price to the assets acquired is preliminary and will not be
      finalized until 90 days after the one year anniversary of the acquisition,
      when
      the contingent consideration is determinable. When the contingent consideration
      if any, is determined, the Company will account for the additional consideration
      as an adjustment to the purchase price and adjust the preliminary purchase
      price
      allocation appropriately. This may affect the preliminary allocation of the
      purchase price for assets that are depreciated and amortized thus having an
      impact on depreciation and amortization expense related to those assets. Any
      adjustment to depreciation and amortization expense will be recorded during
      the
      period that it becomes determinable.


29


***Registration
      of Additional Shares for Resale***




On
      February 14, 2008, we registered for resale a total of 1,223,565 shares of
      our
      common stock, 300,000 shares of which were required to be registered pursuant
      to
      the second amendment, dated May 11, 2007, to our asset purchase agreement with
      WSFM, LLC (f/k/a James Lee Witt Associates, LLC (“JLWA”)) and the remainder of
      which were held by our employees, directors, or their affiliates, including
      certain shares purchased in our underwritten public offering.




***Conversion
      of Series D Convertible Preferred Stock***





On
      May
      29, 2008, we issued 40,064 shares of common stock upon the conversion of 600.95
      shares of Series D convertible preferred stock.




***Stock
      Options Exchanged for Restricted Stock***





On
      May
      28, 2008, the Company issued a tender offer to holders of outstanding stock
      options issued prior to January 1, 2008 (“Eligible Options”), to exchange their
      Eligible Options for Restricted Stock Units (“RSUs”) on a 3 for 1 basis. Each
      RSU represents one share of the Company’s common stock to be issued in the
      future, based on certain vesting requirements. The offer expired on June 25,
      2008. As a result of this offer, on June 26, 2008, 1,105,188 stock options
      were
      accepted for exchange and cancellation, and the Company issued 368,475 RSUs.
      RSUs held by executive officers and directors vest ratably on each of the first,
      second and third anniversaries of the grant date. RSUs held by all other
      employees and consultants vest ratably on the first and second anniversaries
      of
      the grant date.





***Amended
      and Restated 2006 Long-Term Incentive Plan***





On
      July
      24, 2008, at the Company’s 2008 Annual Meeting of Stockholders (the “Annual
      Meeting”), stockholders approved the Amended and Restated 2006 Long-Term
      Incentive Plan (the “Incentive Plan”), which became effective immediately
      following its approval and replaced the Company’s original 2006 Long-Term
      Incentive Plan. The Incentive Plan provides for the issuance of up to 3,000,000
      shares of the Company’s common stock, increased from 1,500,000 under the
      Company’s original 2006 Long-Term Incentive Plan. The Compensation Committee has
      the authority to determine the amount, type and terms of each award, but may
      not
      grant awards under the Incentive Plan, in any combination, for more than 625,000
      shares of the Company’s common stock to any individual during any calendar year,
      increased from 312,500 under the Company’s original 2006 Long-Term Incentive
      Plan. For shares remaining under the Incentive Plan, see Note 16.




***Amended
      and Restated 2006 Employee Stock Purchase Plan***





At
      the
      Annual Meeting, stockholders approved the Amended and Restated 2006 Employee
      Stock Purchase Plan (the “Stock Purchase Plan”), which became effective
      immediately following its approval and replaced the Company’s original 2006
      Employee Stock Purchase Plan. The Stock Purchase Plan permits eligible employees
      of the Company to automatically purchase at the end of each month at a
      discounted price, a certain number of shares of the Company’s common stock by
      having the effective purchase price of such shares withheld from their base
      pay.
      The Stock Purchase Plan provides for the issuance of up to 2,000,000 shares
      of
      the Company’s common stock, increased from 250,000 under the Company’s original
      2006 Employee Stock Purchase Plan. As of July 24, 2008, all 2,000,000 shares
      of
      common stock remain unissued under the Stock Purchase Plan.





***Election
      of Directors***





At
      the
      Annual Meeting, stockholders elected Harvey W. Schiller, Ph.D., Per-Olof Lööf,
      John P. Oswald, Ronald M. Starr and John P. Bujouves to the Company’s Board of
      Directors, to serve until their successors have been duly elected and
      qualify.





***Ratification
      of Independent Registered Public Accounting Firm***





At
      the
      Annual Meeting, stockholders ratified the appointment of Marcum & Kliegman
      LLP as the Company’s independent registered public accounting firm for the
      fiscal year ending December 31, 2008.


30


***Restricted
      Stock Awards***





On
      July
      24, 2008, the Compensation Committee awarded 437,500 shares of unvested
      restricted stock to the Company’s two senior officers under the Company’s 2007
      Executive Compensation Plan, as revised in 2008.




**Statements
      of Operations**




***Revenues***




Principally,
      we generate our revenues through providing risk mitigation solutions to our
      clients. For our Preparedness Services and Security Consulting and
      Investigations engagements, we typically invoice on a time and materials basis.
      For most of our Fraud and SIU Services engagements, we invoice on a fixed fee
      basis. We enter into contractual arrangements with most of our clients, on
      both
      an exclusive and non-exclusive basis. The duration of our engagements range
      from
      one week to two or more years. Over half of our revenues are generated from
      repeat client relationships that we have had for more than one year. In addition
      to our services, we also generate revenues from the sale of kits and supplies
      principally used by law enforcement to collect DNA materials. Generally, we
      must
      compete in the market for our clients based upon our reputation, service history
      and relationships. There are limited cases within all of our business segments
      in which we are considered by our clients to be the sole source provider, based
      principally upon the experience of our personnel or, in the case of Bode and
      certain DNA investigations, our technical expertise. Our clients consist of
      government entities, corporations and high net-worth and high-profile
      individuals. We provide our services domestically through our own employees
      and
      through a network of approved subcontractors to achieve scale, geographic
      coverage or a specialized expertise. Currently, a small portion of our revenues
      are generated by services provided outside the United States.




***Gross
      Profit*** ****




Our
      gross
      profit represents our revenues less the costs of revenues incurred to provide
      services to our clients. The most significant components of our costs of
      revenues are the costs of our direct labor, our third-party consultants and
      our
      reimbursable costs, which principally consist of travel expenses. For the most
      part, our costs of revenues are variable and based upon the type of services
      performed or the amount of revenues generated. Where possible, we structure
      our
      personnel arrangements to compensate our employees and our consultants on the
      basis of work performed. This enables us to maintain a variable cost structure
      and relatively consistent gross margins in our business segments from year
      to
      year. The variability in our gross margins results primarily from changes in
      our
      client mix. For our DNA analysis business, we incur fixed costs for our
      equipment and dedicated personnel.




***Operating
      Expense*** **s**




Our
      selling and marketing expenses primarily include salaries, commissions, stock
      based compensation, as well as travel and other expenses, incurred by our
      employees who are involved in selling and promoting our services. The accrued
      earnout expenses related to the acquisition of JLWA were also reflected in
      our
      selling and marketing expenses for the three and six months ended June 30,
      2007.
      Our general and administrative expenses consist primarily of salaries, bonuses
      and stock-based compensation for our employees not performing work directly
      for
      our clients, as well as depreciation expense of facilities and amortization
      of
      intangible assets. Also included in general and administrative expenses are
      corporate support expenses such as legal and professional fees, investor
      relations, human resources, facilities, telecommunication support services,
      information technology, and impairment losses recognized on goodwill and
      intangibles.


31




**Results
      of Operations**




The
      following is a summary of our operating
      results as a percentage of our total condensed consolidated revenues for the
      periods indicated:


For the Three Months
                Ended June 30,
              
              For the Six Months
                Ended June 30,2008
              
              2007
              
              2008
              
              2007Revenues
              
              
              100%
              
              
              100%
              
              
              100%
              
              
              100%Cost
                  of revenues
              
              
              58
              
              
              56
              
              
              58
              
              
              56Gross
                  profit
              
              
              42
              
              
              44
              
              
              42
              
              
              44Operating
                  expenses:Selling
                  and marketing expenses
              
              
              10
              
              
              38
              
              
              11
              
              
              25General
                  and administrative
              
              
              39
              
              
              54
              
              
              44
              
              
              50Total
                  operating expenses
              
              
              49
              
              
              92
              
              
              55
              
              
              75Loss
                  from operations
              
              
              (7)
              
              
              (48)
              
              
              (13)
              
              
              (31)Other
                  income (expense), net
              
              
              —
              
              
              (1)
              
              
              —
              
              
              —Net
                  loss
              
              
              (7)%
              
              
              (49)%
              
              
              (13)%
              
              
              (31)%




**GlobalOptions
      Group Three Months Ended June 30, 2008 Compared to the Three Months Ended June
      30, 2007**




**Revenues**




We
      had
      overall revenues of $26,254 for the three months ended June 30, 2008, as
      compared to revenues of $22,466 for the three months ended June 30, 2007, for
      an
      overall increase of $3,788 or 17%.





Preparedness
      Services revenues were $8,108 for the three months ended June 30, 2008, as
      compared to $6,948 for the three months ended June 30, 2007. Of the $1,160
      or
      17% increase in revenues, $448 is due to an increase in revenue from the State
      of Louisiana, from $5,940 for the three months ended June 30, 2007 to $6,388
      for
      the three months ended June 30, 2008. In the aftermath of Hurricane Katrina,
      JLWA was retained by the State of Louisiana to provide advice on the state’s
      overall response and recovery efforts. Subsequently, JLWA was retained to
      establish and manage the State’s relief program related to Hurricanes Katrina
      and Rita. The increase in revenue from the State of Louisiana was due to
      Louisiana’s request for increased staffing in connection with this project. The
      remaining increase in revenues is attributable to an increase in the level
      of
      activity for our other client relationships.





Fraud
      and
      SIU Services revenues were $9,276 for the three months ended June 30, 2008,
      as
      compared to $6,574 for the three months ended June 30, 2007. The increase of
      $2,702 or 41% consisted of $1,822 attributable to the expansion of our client
      base through the acquisition of FAIS on April 21, 2008, with the remainder
      primarily attributable to growth in our client contract account
      relationships.




Security
      Consulting and Investigations revenues were $8,870 for the three months ended
      June 30, 2008, as compared to $8,944 to the three months ended June 30,
      2007.


32




**Gross
      Profit**




Our
      consolidated gross profit for the three months ended June 30, 2008 and 2007
      was
      $11,147 and $9,888, respectively, reflecting an increase of $1,259. This
      increase was principally due to an increase in revenue, as discussed above.
      For
      the three months ended June 30, 2008 and 2007, our gross profit margins were
      42%
      and 44%, respectively. The decrease in gross profit margin was primarily
      attributable to changes in product mix at our Security Consulting and
      Investigations Segment.




Preparedness
      Services gross profit was $3,574 or 44% of this segment’s revenues for the three
      months ended June 30, 2008, as compared to $3,145 or 45% of this segment’s
      revenues for the three months ended June 30, 2007. The decrease in gross profit
      percentage was attributable to changes in the labor mix associated with the
      Louisiana contract. Fraud and SIU Services gross profit was $4,084 or 44% of
      this segment’s revenues for the three months ended June 30, 2008, as compared to
      $2,986 or 45% of this segment’s revenues for the three months ended June 30,
      2007. Security Consulting and Investigations gross profit was $3,489 or 39%
      of
      this segment’s revenues for the three months ended June 30, 2008, as compared to
      $3,757 or 42% of this segment’s revenues for the three months ended June 30,
      2007. The decrease in profit margin is primarily a result of changes in product
      mix during the period.




**Operating
      Expenses**




Selling
      and marketing expenses were $2,718 or 10% of revenues for the three months
      ended
      June 30, 2008, as compared to $8,509 or 38% of revenues for the three months
      ended June 30, 2007. Selling expenses during the three months ended June 30,
      2007 included $6,512 related to earnout expense in connection with the May
      11,
      2007 modification of the JLWA agreement. This benefit was offset by an increase
      in selling expenses for the three months ended June 30, 2008 related to the
      acquisition of FAIS and an increased emphasis on our selling and marketing
      activities. General and administrative expenses were $10,306 or 39% of revenues
      for the three months ended June 30, 2008, as compared to $12,194 or 54% of
      revenues for the three months ended June 30, 2007. The decrease of $1,888 or
      16%
      is attributable to reductions in professional and advisory fees related to
      the
      equity restructuring and the acquisitions of three companies during 2007, as
      well as the improved efficiencies resulting from the integration of
      operations.




**GlobalOptions
      Group Six Months Ended June 30, 2008 Compared to the Six Months Ended June
      30,
      2007**




**Revenues**




We
      had
      overall revenues of $47,753 for the six months ended June 30, 2008, as compared
      to revenues of $43,854 for the six months ended June 30, 2007, for an overall
      increase of $3,899 or 9%.





Preparedness
      Services revenues were $15,250 for the six months ended June 30, 2008, as
      compared to $17,263 for the six months ended June 30, 2007. The decrease of
      $2,013 or 12% was attributable to a decrease in revenue from the State of
      Louisiana. In the aftermath of Hurricane Katrina, JLWA was retained by the
      State
      of Louisiana to provide advice on the state’s overall response and recovery
      efforts. Subsequently, JLWA was retained to establish and manage the State’s
      relief program related to Hurricanes Katrina and Rita. The State of Louisiana
      represented $11,718 of revenues for the six months ended June 30, 2008, as
      compared to $14,026 of revenues for the six months ended June 30, 2007. The
      reduction in revenue in 2008 of $2,308 or 16% from the State of Louisiana was
      due to the scope of our work being narrowed and a price reduction that we
      provided to Louisiana in order to competitively position ourselves for the
      2007
      contract renewal.





Fraud
      and
      SIU Services revenues were $15,516 for the six months ended June 30, 2008,
      as
      compared to $11,864 for the six months ended June 30, 2007. The increase of
      $3,652 or 31% was primarily attributable to the expansion of our client base
      through the acquisitions of Facticon, Inc., a Pennsylvania corporation
      (“Facticon”), on February 28, 2007, FAIS on April 21, 2008, and revenues from
      our purchased customer list and newly acquired customer contracts.




Security
      Consulting and Investigations revenues were $16,987 for the six months ended
      June 30, 2008, as compared to $14,727 to the six months ended June 30, 2007.
      The
      increase of $2,260 or 15% was primarily attributable to the client base that
      we
      acquired in connection with the acquisition of Bode at the end of February
      2007
      for data banking and DNA investigations.


33




**Gross
      Profit**




Our
      consolidated gross profit for the six months ended June 30, 2008 and 2007 was
      $20,280 and $19,500, reflecting an increase of $780, or 4%. This increase was
      principally due to an increase in revenues as discussed above. Gross profit
      margin percentages for the six months ended June 30, 2008 and 2007 were 42%
      and
      44%, respectively. The decrease in profit margin was primarily attributable
      to
      the effect of the acquisition of Bode, whose operations carried a lower gross
      profit percentage.




Preparedness
      Services gross profit was $6,825 or 45% of this segment’s revenues for the six
      months ended June 30, 2008, as compared to $7,770 or 45% of this segment’s
      revenues for the six months ended June 30, 2007. Fraud and SIU Services gross
      profit was $6,833 or 44% of this segment’s revenues for the six months ended
      June 30, 2008, as compared to $5,374 or 45% of this segment’s revenues for the
      six months ended June 30, 2007. Security Consulting and Investigations gross
      profit was $6,622 or 39% of this segment’s revenues for the six months ended
      June 30, 2008, as compared to $6,356 or 43% of this segment’s revenues for the
      six months ended June 30, 2007. Of the decrease in gross profit percentage
      within this segment, 5% of the 6% decrease in profit margin was attributable
      to
      the effect of the acquisition of Bode, whose operations carried a lower gross
      profit.




**Operating
      Expenses**




Selling
      and marketing expenses were $5,220 or 11% of revenues for the six months ended
      June 30, 2008, as compared to $10,900 or 25% of revenues for the six months
      ended June 30, 2007. Of the $5,680 decrease in selling and marketing expenses,
      $7,732 is attributable to earnout expenses incurred during the six months ended
      June 30, 2007, in connection with the May 11, 2007 JLWA modification agreement.
      This benefit was offset by an increase in selling expenses related to the
      acquisition of FAIS on April 21, 2008, as well as an increased emphasis on
      selling and marketing activities. General and administrative expenses were
      $21,302 or 45% of revenues for the six months ended June 30, 2008, as compared
      to $22,231 or 51% of revenues for the six months ended June 30, 2007. The
      decrease of $928 or 4% is attributable to a reduction in professional and
      advisory fees related to the equity restructuring and the acquisition of three
      companies during 2007, as well as improved efficiencies resulting from the
      integration of operations.




**Liquidity
      and Capital Resources**




***For
      the Six Months Ended June 30, 2008***




We
      had a
      cash and cash equivalent balance of $4,861 as of June 30, 2008.




Cash
      provided by (used in) operating activities was approximately $792 and $(8,588)
      for the six months ended June 30, 2008 and 2007, respectively. For the six
      months ended June 30, 2008 and 2007, our net losses were $6,344 and $13,484,
      respectively. For the six months ended June 30, 2008 and 2007, the non-cash
      charges included amounts for depreciation and amortization of $2,127 and $1,861,
      charges for stock-based compensation of $2,263 and $1,738, and bad debt
      provision of $201 and $1,326, respectively. In addition, for the six months
      ended June 30, 2008 and 2007, cash was impacted by working capital requirements
      with funds provided by (used in) operations of $3,004 and ($10,660) for accounts
      receivable, funds provided by operations of $127 and $1,742 for accounts
      payable, and increases in amounts due for the JLWA earnout of $0 and $7,732,
      respectively. Improvements in net cash provided by operating activities
      benefited principally from improved collections of accounts receivable of
      $13,664, offset by due to former members of JLWA for earnout of
      $7,732.




On
      April 21, 2008, we acquired substantially all of the business and net
      assets of FAIS, to expand our investigation and surveillance business. The
      aggregate purchase price for this transaction was $2,164 in cash, a $350
      broker’s fee, $34 in acquisition related legal expenses, and an earnout
      obligation.




Cash
      used
      in investing activities for the six months ended June 30, 2008 was $3,223,
      of
      which $654 represented purchases of property and equipment. Cash used in
      investing activities for the six months ended June 30, 2007 was $15,053, of
      which $14,490, related to our acquisitions of Bode, Facticon and SPZ Oakland
      Corporation, dba On Line Consulting Service, Inc.




Financing
      activities provided net funds of $2,866 and $4,124 for the six months ended
      June
      30, 2008 and 2007, respectively. The net cash provided for the six months ended
      June 30, 2008 is primarily due to proceeds from the line of credit of $3,581,
      less repayment of notes payable for acquisitions of $700. The net cash provided
      for the six months ended June 30, 2007 is primarily due to proceeds from the
      line of credit of $7,489, less repayment of notes payable for acquisitions
      of
      $3,413.


34


On
      April
      16, 2008, effective as of March 31, 2008, GlobalOptions, Inc. and Bode entered
      into the Loan Agreement for which the Company provided an unconditional
      guarantee.





The
      Loan
      Agreement provides a Facility in an amount up to a maximum of $20,000, based
      upon eligible receivables.  The applicable interest rate with respect
      to the amount outstanding under the Facility consists of a base rate of the
      greater of 6.25% per annum or the Bank’s most recently announced “prime rate”,
      plus a range from 0.75% to 1.50% per annum, which is based upon our liquidity
      (as defined in the Loan Agreement).  The Loan Agreement also contains
      certain affirmative and negative covenants and grants to the financial
      institution a security interest in all of our property and security interest
      in
      all of our rights, titles and interests in, to and under our intellectual
      property.




We
      have
      historically met our operating cash needs by using borrowings under our line
      of
      credit arrangement and through private placements of equity and debt securities
      and an underwritten public offering. At June 30, 2008, we had working capital
      of
      $15,357. We currently believe the cash on hand, cash flows from operations
      of
      $792, operating improvements that we believe will result in additional cash
      flows from operations, and our current available borrowing level of $14,704
      at
      June 30, 2008 under our line of credit facility will be sufficient to finance
      our operations through June 30, 2009.




**Off-Balance
      Sheet Arrangements**




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





**Critical
      Accounting Policies**




Our
      significant accounting policies, including the assumptions and judgments
      underlying them, are more fully described in our “Notes to Consolidated
      Financial Statements” included in the Annual Report on Form 10-K for the year
      ended December 31, 2007. Some of our accounting policies require the application
      of significant judgment by management in the preparation of the consolidated
      financial statements and, as a result, they are subject to a greater degree
      of
      uncertainty. In applying these policies, management uses its judgment to
      determine the appropriate assumptions to be used in calculating estimates that
      affect the reported amounts of assets, liabilities, revenues and expenses.
      Management bases its estimates and assumptions on historical experience and
      on
      various other factors that are believed to be reasonable under the
      circumstances. We have identified certain of our accounting policies as the
      ones
      that are most important to the portrayal of our consolidated financial condition
      and results of operations and which require management to make its most
      difficult and subjective judgments, often as a result of the need to make
      estimates of matters that are inherently uncertain. Our critical accounting
      policies include the following:




***Revenue
      Recognition and Related Costs***




For
      investigation, crisis management and non-DNA related security, revenue is
      recognized on a time and materials or fixed price arrangement and is recognized
      as the services are performed pursuant to the applicable contractual
      arrangements. Revenue related to time and materials arrangements is recognized
      in the period in which the services are performed. Revenue related to fixed
      price arrangements is recognized based upon the achievement of certain
      milestones or progress points within the project plan. The impact of any
      revisions in estimated total revenue and direct contract costs is recognized
      in
      the period in which they become known. Expenses incurred by professional staff
      in the generation of revenue are billed to the client and recorded as revenue
      when incurred.




For
      DNA
      related revenues, revenue is recognized when it is realized or realizable and
      earned. The Company considers revenue realized or realizable and earned when
      it
      has persuasive evidence that an agreement exists, prices are fixed or
      determinable, services and products are provided to the client, and
      collectibility is reasonably assured. The Company reduces revenue for estimated
      discounts and other allowances.




Revenues
      earned on DNA related services are derived from the following sources:
      (1) forensic DNA analysis; (2) research and development projects; and
      (3) sales of DNA collection products. The Company recognizes revenues from
      forensic DNA analysis at the time tests are completed and the results are
      reported to the client. Revenues from research and development projects are
      recognized as the related research is completed and when the Company has
      satisfied specific obligations under the terms of the respective agreements.
      Revenues from the sales of DNA collection products are recognized upon delivery
      of the products to the client.


35




Forensic
      DNA analysis is billed on a per sample fixed fee arrangement. Research and
      development projects are billed on a cost plus fixed fee
      arrangement.




Costs
      incurred in the performance of forensic DNA analysis are recorded as inventories
      and charged to cost of revenues upon the completion of the project, which
      generally ranges from one to three months. Costs related to research and
      development projects are expensed as incurred and costs related to DNA
      collection products are maintained as inventory and charged to operations when
      the products are delivered.




***Intangible
      Assets, Goodwill and Impairment***




In
      accordance with the requirements of Statement of Financial Accounting Standards
      (“SFAS”) No. 141 “Business Combinations” (“SFAS  141”), we
      recognize certain intangible assets acquired in acquisitions, primarily
      goodwill, trade names, covenants not to compete and client relationships. In
      accordance with the provisions of SFAS No. 142, “Goodwill and Other
      Intangible Assets” (“SFAS 142”), on a regular basis, we perform impairment
      analysis of the carrying value of goodwill and certain other intangible assets
      by assessing the recoverability when there are indications of potential
      impairment based on estimates of undiscounted future cash flows.




***Allowance
      for Doubtful Accounts***




The
      number of clients that comprise our client base, along with the different
      industries, governmental entities and geographic regions, including foreign
      countries, in which our clients operate, limits concentrations of credit risk
      with respect to accounts receivable. We do not generally require collateral
      or
      other security to support client receivables, although we do require retainers,
      up-front deposits or irrevocable letters of credit in certain situations. We
      have established an allowance for doubtful accounts based upon facts surrounding
      the credit risk of specific clients and past collections history. Credit losses
      have been within management’s expectations.




***Stock-Based
      Compensation***




The
      Company has adopted the fair value recognition provisions of SFAS No. 123R,
      “Share Based Payment” (“SFAS123R”).  Stock-based compensation expense for
      all share-based payment awards granted after December 31, 2005 is based on
      the
      grant-date fair value estimated in accordance with the provisions of SFAS 123R.
      The Company recognizes these compensation costs over the requisite service
      period of the award, which is generally the vesting term of the options
      associated with the underlying employment agreement, where
      applicable.




SFAS 123R
      also requires forfeitures to be estimated at the time of grant and revised,
      if
      necessary, in subsequent periods if actual forfeitures differ from those
      estimates. Forfeitures were estimated based on historical experience. Prior
      to
      the adoption of SFAS  123R, the Company accounted for forfeitures as they
      occurred.




We
      account for equity instruments issued to non-employees in accordance with the
      provisions of SFAS 123R and the Emerging Issues Task Force (“EITF”) Issue
      No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than
      Employees for Acquiring, or In Conjunction with Selling, Goods or Services”
(“EITF 96-18”) which require that such equity instruments be recorded at their
      fair value on the measurement date, which is typically the date the services
      are
      performed. Stock-based compensation for non-employees is accounted for under
      EITF 96-18 and is reflected within general and administrative
      expenses.


36




**Recently
      Implemented Accounting Pronouncements**





Effective
      January 1, 2008, we adopted SFAS No. 159, “The Fair Value Option for Financial
      Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits entities to
      choose to measure many financial instruments and certain other items at fair
      value. We did not elect the fair value reporting option for any assets and
      liabilities not previously recorded at fair value.





Effective January
      1, 2008, we adopted the provisions of SFAS No. 157, “Fair Value Measurements”
(“SFAS
      157”), for financial assets and liabilities, as well as any other assets and
      liabilities that are carried at fair value on a recurring basis in financial
      statements. SFAS 157 defines fair value, establishes a framework for measuring
      fair value and expands disclosures about fair value measurements.
      SFAS
      157 applies under other accounting pronouncements that require or permit fair value measurements,
      the
      Financial Accounting Standards Board ("FASB") having previously concluded in
      those accounting pronouncements that fair value is the relevant measurement
      attribute. Accordingly, SFAS 157 does not require any new fair value measurements. We
      applied the provisions of the FASB Staff Position ("FSP") on FASB No. 157,
      "Effective Date of FASB Statement 157" ("FSP FAS 157-2"), which defers the
      provisions of SFAS 157 for nonfinancial assets and liabilities to the first
      fiscal period beginning after November 15, 2008.  The deferred nonfinancial
      assets and liabilities include items such as goodwill. We are required to adopt
      SFAS 157 for nonfinancial assets and liabilities in the first quarter of fiscal
      2009 and are
      still
      evaluating the impact on our condensed consolidated financial statements.





**Recent
      Accounting Pronouncements**




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS
      160”). SFAS 160 establishes accounting and reporting standards for the
      noncontrolling interest in a subsidiary (previously referred to as minority
      interests). SFAS 160 also requires that a retained noncontrolling interest
      upon
      the deconsolidation of a subsidiary be initially measured at its fair value.
      Upon adoption of SFAS 160, the Company will be required to report its
      noncontrolling interests as a separate component of stockholders’ equity. The
      Company will also be required to present net income allocable to the
      noncontrolling interests and net income attributable to the stockholders of
      the
      Company separately in its statements of income. Currently, minority interests
      are reported as a liability or temporary equity in the Company’s balance sheets
      and the related income attributable to the minority interests is reflected
      as an
      expense in arriving at net income (loss). SFAS 160 is effective for fiscal
      years, and interim periods within those fiscal years, beginning on or after
      December 15, 2008. SFAS 160 requires retroactive adoption of the presentation
      and disclosure requirements for existing minority interests. All other
      requirements of SFAS 160 shall be applied prospectively. The Company does not
      expect SFAS 160 to have a material impact on its consolidated financial
      statements.




In
      December 2007, the FASB issued SFAS No. 141R, “Business Combinations”
(“SFAS 141R”), which replaces SFAS No. 141, “Business Combinations.” SFAS 141R
      establishes principles and requirements for determining how an enterprise
      recognizes and measures the fair value of certain assets and liabilities
      acquired in a business combination, including noncontrolling interests,
      contingent consideration, and certain acquired contingencies. SFAS 141R also
      requires acquisition-related transaction expenses and restructuring costs be
      expensed as incurred rather than capitalized as a component of the business
      combination. SFAS 141R will be applicable prospectively to business combinations
      for which the acquisition date is on or after the beginning of the first annual
      reporting period beginning on or after December 15, 2008. SFAS 141R would have
      an impact on accounting for any businesses acquired after the effective date
      of
      this pronouncement.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities - an amendment of FASB Statement No. 133” (“SFAS 161”).
      SFAS 161 changes the disclosure requirements for derivative instruments and
      hedging activities. Entities are required to provide enhanced disclosures about
      (a) how and why an entity uses derivative instruments, (b) how derivative
      instruments and related hedged items are accounted for under SFAS No. 133 and
      its related interpretations, and (c) how derivative instruments and related
      hedged items affect an entity’s financial position, financial performance and
      cash flow. The guidance in SFAS 161 is effective for financial statements issued
      for fiscal years and interim periods beginning after November 15, 2008, with
      early application encouraged. This Statement encourages, but does not require,
      comparative disclosures for earlier periods at initial adoption. At this time
      management is evaluating the implications of SFAS 161 and its impact on the
      financial statements has not yet been determined.





In
      May
      2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally
      Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies a
      consistent framework, or hierarchy, for selecting accounting principles to
      be
      used in preparing financial statements that are presented in conformity with
      Generally Accepted Accounting Principles for nongovernmental entities.
      SFAS 162 is effective 60 days following the Securities and Exchange
      Commission (“SEC”) approval of the Public Company Accounting Oversight Board
      amendments to AU Section 411, “The Meaning of Present
      Fairly in Conformity with Generally Accepted Accounting Principles.” The Company
      is currently evaluating the impact of adoption of SFAS 162 on its consolidated
      financial statements.


37




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




Not
      applicable.





**Item
      4T. Controls and Procedures.**





*Disclosure
      Controls and Procedures*





Disclosure
      controls and procedures (as defined in Rule 13(a)-15(e)) are controls and other
      procedures that are designed to ensure that information required to be disclosed
      by a public company in the reports that it files or submits under the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms. Disclosure controls and procedures include, without limitation, controls
      and procedures designed to ensure that information required to be disclosed
      by a
      public company in the reports that it files or submits under the Exchange Act
      is
      accumulated and communicated to the company’s management, including its
      principal executive and principal financial officers, or persons performing
      similar functions, as appropriate to allow for timely decisions regarding
      required disclosure. Disclosure controls and procedures include many aspects
      of
      internal control over financial reporting.





In
      connection with the preparation of this Quarterly Report on Form 10-Q for the
      three and six months ended June 30, 2008, management, with the participation
      of
      our Chief Executive Officer and Chief Financial Officer, has evaluated the
      effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15
      under the Exchange Act.





In
      their
      evaluation, our Chief Executive Officer and Chief Financial Officer have
      identified the following matters that would constitute a material weakness
      (as
      that term is defined under the Public Company Accounting Oversight Board
      Auditing Standard No. 5): our financial closing process, a lack of segregation
      of financial responsibilities and the need for additional qualified financial
      accounting personnel.




To
      address these issues, we have taken the following remediation measures during
      the fiscal quarterly period ended June 30, 2008:


·
              In
                  connection with the filing of this Form 10-Q, we have been utilizing
                  a more formal disclosure process for the Board and management resulting
                  in
                  a more detailed chronology and more detailed documentation of the
                  discussions and analyses taking place, including a checklist of
                  items we
                  routinely consider, such as variances between financial results
                  and
                  forecasts, changes in relationships with key vendors, customers,
                  lenders
                  etc., company-wide initiatives, transactions not previously disclosed
                  in
                  prior filings, related party issues, new/emerging risks, credit
                  agreement
                  covenant adherence, tax, accounting, internal controls, governmental
                  or
                  other investigations, Management Discussion and Analysis discussions,
                  and
                  other matters. In addition, sub-certifications have been adopted
                  to ensure
                  accountability by the controllers and executives of each of our
                  business
                  units; and
 
 ·
              Management
                  has continued to retain an independent third-party consulting firm
                  to
                  assist with our preparation, documentation and testing of our compliance
                  efforts with Section 404 of the Sarbanes Oxley Act.  We performed
                  testing to sustain compliance that both expanded the depth of our
                  coverage
                  in complex areas (e.g. intangibles, equity, revenue and financial
                  reporting) and breadth by incorporating acquisitions such as Bode,
                  which
                  were exempted from the disclosure controls and procedures analysis
                  in
                  2007.




As
      a
      result of the material weaknesses identified above, our Chief Executive Officer
      and Chief Financial Officer have concluded that the design and operation of
      our
      disclosure controls and procedures are not effective as of June 30, 2008.
      Management believes, however, that as a result of the remediation measures
      described above, we have made significant improvement over prior periods and
      believe we will continue to improve and refine our internal controls processes
      over the next fiscal period.





*Changes
      in Internal Control over Financial Reporting*




There
      were no changes in our internal control over financial reporting during the
      fiscal quarter ended June 30, 2008.


38


**PART
      II**




**OTHER
      INFORMATION**




**Item
      1. Legal Proceedings.**




**(Amounts
      contained in this Item 1 are in thousands, except for share
      amounts).**





From
      time
      to time, in the normal course of business, the Company may be involved in
      litigation.  Except for certain claims as described below, the
      Company’s management has determined any asserted or unasserted claims to be
      immaterial to the condensed consolidated financial statements.





We
      are
      currently defendants in federal
      and state litigation matters related to Facticon, which were filed
      prior to the Company’s acquisition of the assets
      of
      Facticon (February 28, 2007).




In
      the
      federal matter, *Anchondo
      vs Facticon* *Inc.
      and GlobalOptions Group, Inc.* in the
      U.S. District Court for the Central District of California, Peter
      Anchondo ( the “Federal Plaintiff ”) ,
      in a
      class action, is alleging that Facticon failed to pay overtime wages. Subsequent
      to the acquisition of the
      assets of Facticon by the Company ,
      the
      Company was added as a defendant in said case, under the successor liability
      theory. A Motion for Summary Judgment was filed for the Court to contest the
      Company’s liability as a successor liable company. On March 7, 2008, the Court
      issued a ruling denying the Company’s Motion for Summary Judgment and issued a
      ruling granting a Motion for Summary Judgment in favor of the Federal
      Plaintiff ruling
      that the Company was in fact a successor party to the Plaintiffs actions. This
      ruling by the Court is in opposition to the Court’s original ruling dated
      March 3, 2008, wherein it granted the Company’s Motion for Summary Judgment. The
      Company filed a Motion for Reconsideration and the Judge reversed his opinion
      but ruled that the issue of successor liability must be litigated. In July
      2008,
      the Company reached a tentative agreement with the Federal Plaintiff
      to settle this matter with a cash payment of $ 635,
      subject to Court approval.





The
        State
        Court case *Wonsch,
        et al. vs. Facticon* *Inc.
        and GlobalOptions Group, Inc.* ** was
        filed
        in the State Court for the Central District of California, wherein *Wonsch,* the
        plaintiffs in the class
        action (the "State Plaintiffs"), have alleged that Facticon failed to pay
        overtime wages under the California Civil Code. This action is similar to
        the *Anchondo* case,
        but is limited to the state laws of California. Subsequent to the acquisition,
        the Company was added as a defendant in said case, under the successor liability
        theory; however, the Company has not filed a response under the successor
        liability claim, since the Company filed a motion with the California State
        Court to remove such case from the California State Court and
        for
        such case to
        be
        merged with the *Anchondo* case ,
        and
        the California State Court
        has granted such motion. Although the cases have been merged, the C ompany
        must settle with each of the two plaintiff groups separately. Based upon
        preliminary discussions with the State Plaintiffs, the Company believes that
        it
        will be able to reasonably settle the *Wonsch* matter.
 
 Under
        the
        terms of an escrow agreement, as amended, entered into by and between
        GlobalOptions and Facticon, the escrow agreement provides that 85,700 shares
        of
        the Company’s common stock and $100 in cash funds shall be held to satisfy this
        and other pre-acquisition obligations of Facticon. The Company and the
        stockholders of Facticon have agreed that the Company will not distribute
        any
        funds or stock as provided under the asset purchase agreement until the *Anchondo*  case
        and
        the *Wonsch* cases
        are resolved ,
        and if
        necessary the Company shall use such stock and cash to resolve such matters.
        The
        Company has established a reserve in the amount of $ 626
        to
        cover the Company for any additional costs in connection with the  *Anchondo*  and *Wonsch* cases that are
        not recoverable through the escrow amounts.


**Item
      1A. Risk Factors.**




None.





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




None.




**Item
      3. Default Upon Senior Securities.**




None.


39




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




None.




**Item
      5. Other Information.**




There
      are
      no items required to be disclosed on Current Report on Form 10-Q during the
      three months ended June 30, 2008 that were not so reported.




**Item
      6. Exhibits.**




The
      exhibits listed in the following Exhibit Index are filed as part of this
      Report.




**EXHIBIT
      INDEX**


**Exhibit**
                **No.**
              
              **Description**31.1
              
              Certification
                  of Principal Executive Officer pursuant to Section 302 of The
                  Sarbanes-Oxley Act of 200231.2
              
              Certification
                  of Principal Financial Officer pursuant to Section 302 of The
                  Sarbanes-Oxley Act of 200232.1
              
              Certification
                  of Principal Executive Officer pursuant to Section 906 of The
                  Sarbanes-Oxley Act of 200232.2
              
              Certification
                  of Principal Financial Officer pursuant to Section 906 of The
                  Sarbanes-Oxley Act of 2002




40




**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.





GLOBALOPTIONS
                GROUP, INC.Dated:August 12, 2008
            By:
            /s/
                Harvey W. SchillerHarvey
                W. Schiller
              Chairman,
                Chief Executive Officer
              and
                Director
              (Principal
                Executive Officer)Dated:August 12, 2008
            By:
            /s/
                Jeffrey O. NyweideJeffrey
                O. Nyweide
              Executive
                Vice President-Corporate Development,
              Chief
                Financial Officer, Secretary
              (Principal
                Financial Officer and Principal Accounting
                Officer)




41