**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**


(Mark
      One)




x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
      the
      quarterly period ended September 30, 2007




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT




For
      the
      transition period from __________________ to __________________





Commission
      file number: 001-33700




**GLOBALOPTIONS
                GROUP, INC**(Exact
                Name of Small Business Issuer as Specified in Its
                Charter)




Delaware
            
            30-0342273(State
                or Other Jurisdiction of
            
            (I.R.S.
                EmployerIncorporation
                or Organization)
            
            Identification
                No.)




75
                Rockefeller Plaza, 27thFloor
              New
                York, New York 10019
              (Address
                of Principal Executive Offices)
              
              (212)
                445-6262


( Issuer’s
      Telephone Number, Including Area Code)




___________________________________________________________________


(Former
      Name, Former Address, and Formal Fiscal Year, if changed since last
      report)





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




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





As
      of
      November 9, 2007, there were 9,660,269 shares of the issuer’s common stock
      outstanding.




Transitional
      Small Business Disclosure Format (Check one):  Yes o No x









**GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES**
 **Form
          10-QSB**
 **September
          30, 2007**
 **TABLE
          OF CONTENTS**
  PART
                    IFINANCIAL
                    INFORMATIONITEM
                    1. Condensed Consolidated Financial Statements
                    (unaudited):Condensed
                    Consolidated Balance Sheet as of September 30, 2007
                
                
                1Condensed
                    Consolidated Statements of Operations for the Three and Nine
                    Months Ended
                    September 30, 2006 and 2007
                
                
                2Condensed
                    Consolidated Statement of Stockholders’ Equity for the Nine Months Ended
                    September 30, 2007
                
                
                3Condensed
                    Consolidated Statements of Cash Flows for the Nine Months Ended
                    September
                    30, 2006 and 2007
                
                
                4Notes
                    to Condensed Consolidated Financial Statements
                
                
                8ITEM
                    2. Management’s Discussion and Analysis or Plan of
                    Operation
                
                
                38ITEM
                    3. Controls and Procedures
                
                
                51PART
                    IIITEM
                    1. Legal Proceedings
                
                
                52ITEM
                    2. Unregistered Sales of Equity Securities and Use of
                    Proceeds
                
                
                52ITEM
                    3. Defaults Upon Senior Securities
                
                
                52ITEM
                    4. Submission of Matters to a Vote of Security Holders
                
                
                52ITEM
                    5. Other Information
                
                
                52ITEM
                    6. Exhibits
                
                
                53Signatures
                
                
                55Exhibits
                    31.1 and 31.2Exhibits
                    32.1 and 32.2
  
 **Part
            I - Financial Information**
  **Item
            1. Condensed Consolidated Financial Statements**
  **GLOBALOPTIONS
                      GROUP, INC. AND SUBSIDIARIES****Condensed
                      Consolidated Balance Sheet****September
                      30, 2007****(Unaudited)**
 **ASSETS**Current
                        assets:Cash
                        and cash equivalents
                    
                    $
                    2,981,224Accounts
                        receivable, net of allowance for doubtfulaccounts
                        of $3,889,465
                    
                    
                    28,859,673Inventories
                    
                    
                    2,732,781Prepaid
                        expenses and other current assets
                    
                    
                    790,078Total
                        current assets
                    
                    
                    35,363,756Property
                        and equipment, net
                    
                    
                    5,226,386Intangible
                        assets, net
                    
                    
                    7,199,200Goodwill
                    
                    
                    24,108,834Deferred
                        offering costs
                    
                    
                    241,634Security
                        deposits and other assets
                    
                    
                    575,490Total
                        assets
                    
                    $
                    72,715,300**LIABILITIES
                        AND STOCKHOLDERS' EQUITY**Current
                        liabilities:Line
                        of credit
                    
                    $
                    7,828,237Obligation
                        to issue common stock
                    
                    
                    2,160,000Notes
                        payable
                    
                    
                    9,591,513Accounts
                        payable
                    
                    
                    5,043,339Deferred
                        revenues
                    
                    
                    406,021Accrued
                        compensation and related benefits
                    
                    
                    4,413,819Other
                        current liabilities
                    
                    
                    1,940,988Total
                        current liabilities
                    
                    
                    31,383,917Long
                        term liabilities:Notes
                        payable, less current portion
                    
                    
                    394,310Deferred
                        rent obligations
                    
                    
                    312,287Total
                        long term liabilities
                    
                    
                    706,597Total
                        liabilities
                    
                    
                    32,090,514CommitmentsStockholders'
                        equity:Preferred
                        stock, $0.001 par value, 14,840,000 shares authorized, no
                        sharesissued
                        or outstanding
                    
                    
                    -Series
                        C convertible preferred stock, voting, $0.001 par value,
                        60,000****shares
                        authorized,59,400
                        shares issued and outstanding, liquidation preference
                        $59,400,000
                    
                    
                    59Series
                        D convertible preferred stock, voting, $0.001 par value,
                        100,000****shares****authorized,19,706.52
                        shares issued and outstanding, liquidation preference $20
                    
                    
                    20Common
                        stock, $0.001 par value; 100,000,000 shares authorized;3,619,102
                        shares issued and outstanding
                    
                    
                    3,619Additional
                        paid-in capital
                    
                    
                    83,696,360Accumulated
                        deficit
                    
                    
                    (43,075,272
                    )Total
                        stockholders' equity
                    
                    
                    40,624,786Total
                        liabilities and stockholders' equity
                    
                    $
                    72,715,300
 See
            notes
            to these condensed consolidated financial statements.
  1
 **GLOBALOPTIONS
                      GROUP, INC. AND SUBSIDIARIES****Condensed
                      Consolidated Statements Of Operations****(Unaudited)**
  For
                        the Three Months Ended September 30,
                  
                  For
                        the Nine Months Ended September 30,2006
                  
                  2007
                  
                  2006
                  
                  2007Revenues
                  
                  $
                  21,017,262
                  
                  $
                  21,574,144
                  
                  $
                  44,611,876
                  
                  $
                  65,428,567Cost
                      of revenues
                  
                  
                  10,738,102
                  
                  
                  11,479,069
                  
                  
                  22,860,911
                  
                  
                  35,833,363Gross
                      profit
                  
                  
                  10,279,160
                  
                  
                  10,095,075
                  
                  
                  21,750,965
                  
                  
                  29,595,204Operating
                      expenses:Selling
                      and marketing
                  
                  
                  2,585,236
                  
                  
                  1,357,436
                  
                  
                  6,353,441
                  
                  
                  12,257,688General
                      and administrative
                  
                  
                  7,882,643
                  
                  
                  13,143,126
                  
                  
                  16,526,627
                  
                  
                  35,374,002Total
                      operating expenses
                  
                  
                  10,467,879
                  
                  
                  14,500,562
                  
                  
                  22,880,068
                  
                  
                  47,631,690Loss
                      from operations
                  
                  
                  (188,719
                  )
                  
                  (4,405,487
                  )
                  
                  (1,129,103
                  )
                  
                  (18,036,486
                  )Other
                      income (expense):Interest
                      income
                  
                  
                  193,980
                  
                  
                  15,702
                  
                  
                  210,517
                  
                  
                  267,673Interest
                      expense
                  
                  
                  (21,347
                  )
                  
                  (540,141
                  )
                  
                  (628,397
                  )
                  
                  (745,222
                  )Other
                      income
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  100,000Amortization
                      of debt discounts
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (7,522,602
                  )
                  
                  -Amortization
                      of deferred financing costs
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (2,694,500
                  )
                  
                  -Other
                      expense, net
                  
                  
                  172,633
                  
                  
                  (524,439
                  )
                  
                  (10,634,982
                  )
                  
                  (377,549
                  )Net
                      loss
                  
                  
                  (16,086
                  )
                  
                  (4,929,926
                  )
                  
                  (11,764,085
                  )
                  
                  (18,414,035
                  )Deemed
                      dividends to Series B convertiblepreferred
                      stockholders
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (24,413,362
                  )
                  
                  -Net
                      loss applicable to common stockholders
                  
                  $
                  (16,086
                  )
                  $
                  (4,929,926
                  )
                  $
                  (36,177,447
                  )
                  $
                  (18,414,035
                  )Basic
                      and diluted net loss per share
                  
                  $
                  (0.01
                  )
                  $
                  (1.45
                  )
                  $
                  (17.25
                  )
                  $
                  (6.21
                  )Weighted
                      average number of common sharesoutstanding
                      - basic and diluted
                  
                  
                  2,361,915
                  
                  
                  3,406,520
                  
                  
                  2,097,292
                  
                  
                  2,963,709
 See
            notes
            to these condensed consolidated financial statements.
  2
 **GLOBALOPTIONS
                        GROUP, INC. AND SUBSIDIARIES****Condensed
                        Consolidated Statement of Stockholders' Equity****For
                        the Nine Months Ended September 30, 2007****(Unaudited)**
 **Series
                        A****Convertible**
                    
                    **Series
                        B****Convertible**
                    
                    **Series
                        C****Convertible**
                    
                    **Series
                        D****Convertible**
                    
                    **Additional****Common
                        Stock**
                    
                    **Preferred
                        Stock**
                    
                    **Preferred
                        Stock**
                    
                    **Preferred
                        Stock**
                    
                    **Preferred
                        Stock**
                    
                    **Paid-in**
                    
                    **Accumulated****Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Capital**
                    
                    **Deficit**
                    
                    **Total**Balance,
                        January 1, 2007
                    
                    
                    2,678,059
                    
                    $
                    2,678
                    
                    
                    6,380
                    
                    $
                    6
                    
                    
                    53,073
                    
                    $
                    53
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    $
                    78,557,545
                    
                    $
                    (24,661,237
                    )
                    $
                    53,899,045Fractional shares
                        of common stock issued in connection with reverse split
                    
                    
                    42
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Adjustment
                        to Series B Convertible Preferred shares outstanding
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (3
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Issuance
                        of common stock in connection with the purchase of On Line
                        Consulting
                    
                    
                    84,375
                    
                    
                    84
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    1,349,916
                    
                    
                    -
                    
                    
                    1,350,000Issuance
                        of common stock in connection with purchase of Facticon
                    
                    
                    87,500
                    
                    
                    87
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    1,399,913
                    
                    
                    -
                    
                    
                    1,400,000Exercise
                        of stock options
                    
                    
                    88,236
                    
                    
                    88
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    47,912
                    
                    
                    -
                    
                    
                    48,000Cashless
                        exercise of stock options
                    
                    
                    39,706
                    
                    
                    40
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (317,684
                    )
                    
                    -
                    
                    
                    (317,644
                    )Stock
                        issued to employees pursuant to 2006 Long-Term Incentive
                        Plan
                    
                    
                    3,471
                    
                    
                    4
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    41,648
                    
                    
                    -
                    
                    
                    41,652Stock
                        issued to consultants for services
                    
                    
                    3,823
                    
                    
                    4
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    67,496
                    
                    
                    -
                    
                    
                    67,500Stock
                          based compensation - restricted stock vested
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    543,496
                    
                    
                    -
                    
                    
                    543,496Amortization
                        of consultant stock option costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    53,666
                    
                    
                    -
                    
                    
                    53,666Amortization
                        of employee stock options costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    1,953,106
                    
                    
                    -
                    
                    
                    1,953,106Issuance
                        of common stock in connection with the conversion of shares
                        of Series A
                        Convertible Preferred Stock
                    
                    
                    3,125
                    
                    
                    3
                    
                    
                    (50
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (3
                    )
                    
                    -
                    
                    
                    -Equity
                        restructuring (See Note 13)
                    
                    
                    630,765
                    
                    
                    631
                    
                    
                    (6,330
                    )
                    
                    (6
                    )
                    
                    (53,070
                    )
                    
                    (53
                    )
                    
                    59,400
                    
                    
                    59
                    
                    
                    19,706.52
                    
                    
                    20
                    
                    
                    (651
                    )
                    
                    -
                    
                    
                    -Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (18,414,035
                    )
                    
                    (18,414,035
                    )Balance,
                        September 30, 2007
                    
                    
                    3,619,102
                    
                    $
                    3,619
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    59,400
                    
                    $
                    59
                    
                    
                    19,706.52
                    
                    $
                    20
                    
                    $
                    83,696,360
                    
                    $
                    (43,075,272
                    )
                    $
                    40,624,786
 See
            notes
            to these condensed consolidated financial statements.
  3
 **GLOBALOPTIONS
                      GROUP, INC. AND SUBSIDIARIES****Condensed
                      Consolidated Statements of Cash Flows****(Unaudited)**
  For
                      the Nine Months EndedSeptember
                      30,2006
                  
                  2007Cash
                      flows from operating activities:Net
                      loss
                  
                  $
                  (11,764,085
                  )
                  $
                  (18,414,035
                  )Adjustments
                      to reconcile net loss to net cash used in operating
                      activities:Provision
                      for bad debts
                  
                  
                  187,532
                  
                  
                  1,991,556Depreciation
                      and amortization
                  
                  
                  1,356,707
                  
                  
                  2,916,559Deferred
                      rent
                  
                  
                  191,611
                  
                  
                  (20,870
                  )Amortization
                      of debt discounts
                  
                  
                  7,522,602
                  
                  
                  -Amortization
                      of deferred financing costs
                  
                  
                  2,694,500
                  
                  
                  -Impairment
                      of intangible asset
                  
                  
                  115,778
                  
                  
                  -Stock-based
                      compensation
                  
                  
                  2,043,092
                  
                  
                  2,659,420Changes
                      in operating assets:Accounts
                      receivable
                  
                  
                  (10,596,219
                  )
                  
                  (4,662,850
                  )Inventories
                  
                  
                  -
                  
                  
                  (103,392
                  )Prepaid
                      expenses and other current assets
                  
                  
                  (299,550
                  )
                  
                  (60,343
                  )Security
                      deposits and other assets
                  
                  
                  102,511
                  
                  
                  (261,045
                  )Changes
                      in operating liabilities:Accounts
                      payable
                  
                  
                  1,179,620
                  
                  
                  (85,500
                  )Deferred
                      revenues
                  
                  
                  (79,741
                  )
                  
                  259,324Accrued
                      compensation and related benefits
                  
                  
                  1,556,507
                  
                  
                  1,249,101Due
                      to former stockholder of CBR
                  
                  
                  (426,462
                  )
                  
                  -Due
                      to former members of JLWA for earnout
                  
                  
                  4,075,272
                  
                  
                  7,732,015Other
                      current liabilities
                  
                  
                  411,178
                  
                  
                  (634,502
                  )Total
                      adjustments
                  
                  
                  10,034,938
                  
                  
                  10,979,473Net
                      cash used in operating activities
                  
                  
                  (1,729,147
                  )
                  
                  (7,434,562
                  )Cash
                      flows from investing activities:Purchases
                      of property and equipment
                  
                  
                  (77,195
                  )
                  
                  (1,020,430
                  )Purchase
                      of client lists
                  
                  
                  (65,000
                  )
                  
                  -Acquisition
                      of On Line Consulting
                  
                  
                  -
                  
                  
                  (987,840
                  )Acquisition
                      of Facticon
                  
                  
                  -
                  
                  
                  (1,300,000
                  )Acquisition
                      of Bode, less cash acquired of $284,251
                  
                  
                  -
                  
                  
                  (12,215,749
                  )Acquisition
                      of JLWA
                  
                  
                  (6,003,540
                  )
                  
                  -Acquisition
                      of Safir, less cash acquired of $447,115
                  
                  
                  (1,693,534
                  )
                  
                  -Acquisition
                      Hyperion Risk
                  
                  
                  (2,281,626
                  )
                  
                  -Net
                      cash used in investing activities
                  
                  
                  (10,120,895
                  )
                  
                  (15,524,019
                  )
  See
            notes
            to these condensed consolidated financial statements.
  4
 **GLOBALOPTIONS
                      GROUP, INC. AND SUBSIDIARIES****Condensed
                      Consolidated Statements of Cash Flows,
                      continued****(Unaudited)**
 For
                        the Nine Months Ended
                      September
                        30,2006
                    
                    2007Cash
                        flows from financing activities:Net
                        (repayments of) proceeds from line of credit
                    
                    $
                    (543,453
                    )
                    $
                    7,828,237Proceeds
                        from convertible notes payable
                    
                    
                    45,050,000
                    
                    
                    -Repayment
                        of convertible notes payable
                    
                    
                    (8,105,519
                    )
                    
                    -Repayment
                        of notes payable
                    
                    
                    (819,132
                    )
                    
                    (3,402,996
                    )Proceeds
                        from exercise of stock options
                    
                    
                    -
                    
                    
                    48,000Deferred
                        financing costs
                    
                    
                    (1,933,500
                    )
                    
                    -Deferred
                        offering costs
                    
                    
                    -
                    
                    
                    (66,817
                    )Net
                        cash provided by financing activities
                    
                    
                    33,648,396
                    
                    
                    4,406,424Net
                        increase (decrease) in cash and cash equivalents
                    
                    
                    21,798,354
                    
                    
                    (18,552,157
                    )Cash
                        and cash equivalents - beginning of period
                    
                    
                    528,602
                    
                    
                    21,533,381Cash
                        and cash equivalents - end of period
                    
                    $
                    22,326,956
                    
                    $
                    2,981,224Supplemental
                        disclosure of cash flow information:Cash
                        paid during the period for interest
                    
                    $
                    100,131
                    
                    $
                    558,224Supplemental
                        disclosures of non-cash investing and financing
                        activities:Common
                        stock issued upon conversion ofSeries
                        A convertible prefered stock
                    
                    $
                    648
                    
                    $
                    3Issuance
                        of common stock ($631), Series C ($59) and Series D ($20)convertible
                        preferred stock in equity restructuring
                    
                    $
                    -
                    
                    $
                    710Issuance
                        of Series B convertible preferred stock upon exchange ofconvertible
                        notes payable and accrued interest
                    
                    $
                    46,150,731
                    
                    $
                    -Accrual
                        of deferred offering costs
                    
                    $
                    -
                    
                    $
                    174,817Common
                        stock issued ($40) and witholding tax accrued ($317,644)
                        inconnection
                        with a cashless exercise of stock options
                    
                    $
                    -
                    
                    $
                    317,684Deferred
                        financing costs incurred through the issuance of convertible
                        notespayable
                    
                    $
                    761,000
                    
                    $
                    -Obligation
                        to issue common stock and notes payableissued
                        to fund JLWA earnout liability
                    
                    $
                    -
                    
                    $
                    12,960,000Supplemental
                        non-cash investing and financing activity - acquisition of
                        JLWA:Assets
                        acquired and liabilities assumed:Current
                        assets
                    
                    $
                    4,345,154
                    
                    $
                    -Property
                        and equipment
                    
                    
                    185,235
                    
                    
                    -Intangible
                        assets
                    
                    
                    4,930,000
                    
                    
                    -Goodwill
                        recognized on purchase business combination
                    
                    
                    883,766
                    
                    
                    -Security
                        deposits and prepaid expenses
                    
                    
                    99,892
                    
                    
                    -Accounts
                        payable, accrued expenses and deferred revenues
                    
                    
                    (2,040,507
                    )
                    
                    -Total
                        purchase price
                    
                    
                    8,403,540
                    
                    
                    -Less:
                        Cash paid to acquire JLWA
                    
                    
                    (6,003,540
                    )
                    
                    -Non-cash
                        consideration to seller
                    
                    $
                    2,400,000
                    
                    $
                    -Non-cash
                        consideration, consisted of:Common
                        stock issued to acquire JLWA
                    
                    $
                    2,000,000
                    
                    $
                    -Note
                        payable issued to seller
                    
                    
                    400,000
                    
                    
                    -Total
                        non-cash consideration
                    
                    $
                    2,400,000
                    
                    $
                    -
 See
              notes
              to these condensed consolidated financial statements.
 5
 **GLOBALOPTIONS
                      GROUP, INC. AND SUBSIDIARIES****Condensed
                      Consolidated Statements of Cash Flows,
                      continued****(Unaudited)**
  For
                      the Nine Months EndedSeptember
                      30,2006
                  
                  2007Supplemental
                      non-cash investing and financial activity - acquisition of
                      Hyperion
                      Risk:Assets
                      acquired and liabilities assumed:Current
                      assets
                  
                  $
                  631,653
                  
                  $
                  -Property
                      and equipment
                  
                  
                  60,958
                  
                  
                  -Intangible
                      assets
                  
                  
                  687,690
                  
                  
                  -Goodwill
                      recognized on purchase business combination
                  
                  
                  2,963,894
                  
                  
                  -Other
                      assets
                  
                  
                  14,100
                  
                  
                  -Accounts
                      payable, accrued expenses and deferred revenues
                  
                  
                  (576,669
                  )
                  
                  -Total
                      purchase price
                  
                  
                  3,781,626
                  
                  
                  -Less:
                      Cash acquired
                  
                  
                  (79,952
                  )
                  
                  -Less:
                      Cash paid to acquire Hyperion Risk
                  
                  
                  (2,201,674
                  )
                  
                  -Non-cash
                      consideration to seller
                  
                  $
                  1,500,000
                  
                  $
                  -Non-cash
                      consideration consisted of:Common
                      stock issued to acquire Hyperion Risk
                  
                  
                  1,500,000
                  
                  
                  -Total
                      non-cash consideration
                  
                  $
                  1,500,000
                  
                  $
                  -Supplemental
                      non-cash investing and financing activity - acquisition of
                      Safir:Assets
                      acquired and liabilities assumed:Current
                      assets
                  
                  $
                  2,852,888
                  
                  $
                  -Property
                      and equipment
                  
                  
                  180,906
                  
                  
                  -Intangible
                      assets
                  
                  
                  1,770,000
                  
                  
                  -Goodwill
                      recognized on purchase business combination
                  
                  
                  11,534,765
                  
                  
                  -Security
                      deposits and prepaid expenses
                  
                  
                  156,525
                  
                  
                  -Accounts
                      payable, accrued expenses and deferred revenues
                  
                  
                  (1,179,435
                  )
                  
                  -Total
                      purchase price
                  
                  
                  15,315,649
                  
                  
                  -Less:
                      Cash acquired
                  
                  
                  (447,115
                  )Less:
                      Cash paid to acquire Safir
                  
                  
                  (1,493,534
                  )
                  
                  -Less:
                      Cash paid as finders fee
                  
                  
                  (200,000
                  )
                  
                  -Non-cash
                      consideration to seller
                  
                  $
                  13,175,000
                  
                  $
                  -Non-cash
                      consideration consisted of:Common
                      stock issued to acquire Safir
                  
                  $
                  6,000,000
                  
                  $
                  -Common
                      stock issued as finders fee
                  
                  
                  175,000
                  
                  
                  -Note
                      payable issued to seller
                  
                  
                  7,000,000
                  
                  
                  -Total
                      non-cash consideration
                  
                  $
                  13,175,000
                  
                  $
                  -Supplemental
                      non-cash investing and financing activity - acquisition of
                      Secure
                      Source:Assets
                      acquired and liabilities assumed:Property
                      and equipment
                  
                  $
                  101,459
                  
                  $
                  -Intangible
                      assets
                  
                  
                  1,111,000
                  
                  
                  -Goodwill
                      recognized on purchase business combination
                  
                  
                  2,070,366
                  
                  
                  -Other
                      assets
                  
                  
                  1,795
                  
                  
                  -Accounts
                      payable, accrued expenses and deferred revenues
                  
                  
                  (72,120
                  )
                  
                  -Non-cash
                      consideration to seller
                  
                  $
                  3,212,500
                  
                  $
                  -Non-cash
                      consideration consisted of:Common
                      stock issued to acquire Secure Source
                  
                  $
                  500,000
                  
                  $
                  -Note
                      payable issued to seller
                  
                  
                  2,712,000
                  
                  
                  -Total
                      non-cash consideration
                  
                  $
                  3,212,500
                  
                  $
                  -
 See
            notes
            to these condensed consolidated financial statements.
  6
 **GLOBALOPTIONS
                      GROUP, INC. AND SUBSIDIARIES****Condensed
                      Consolidated Statements of Cash Flows,
                      continued****(Unaudited)**
  For
                      the Nine Months Ended September
                      30,2006
                  
                  2007Supplemental
                      non-cash investing and financing activity - acquisition of
                      On Line
                      Consulting:Assets
                      acquired and liabilities assumed:Property
                      and equipment
                  
                  $
                  -
                  
                  $
                  96,589Intangible
                      assets
                  
                  
                  -
                  
                  
                  1,199,000Goodwill
                      recognized on purchase business combination
                  
                  
                  -
                  
                  
                  1,844,329Accounts
                      payable, accrued expenses and deferred revenues
                  
                  
                  -
                  
                  
                  (198,361
                  )Other
                      current liabilities
                  
                  
                  
                  
                  
                  (45,717
                  )Total
                      purchase price
                  
                  
                  -
                  
                  
                  2,895,840Less:
                      Cash paid to acquire On Line Consulting
                  
                  
                  -
                  
                  
                  (974,100
                  )Non-cash
                      consideration to seller
                  
                  $
                  -
                  
                  $
                  1,921,740Non-cash
                      consideration consisted of:Common
                      stock issued to acquire On Line Consulting
                  
                  $
                  -
                  
                  $
                  1,350,000Amount
                      due to seller
                  
                  
                  -
                  
                  
                  13,740Notes
                      payable issued to seller
                  
                  
                  -
                  
                  
                  558,000Total
                      non-cash consideration
                  
                  $
                  -
                  
                  $
                  1,921,740Supplemental
                      non-cash investing and financing activity - acquisition of
                      Bode:Assets
                      acquired and liabilities assumed:Accounts
                      receivable
                  
                  $
                  -
                  
                  $
                  5,510,441Inventories
                  
                  
                  -
                  
                  
                  2,629,389Other
                      current assets (including cash of $284,251)
                  
                  
                  -
                  
                  
                  560,372Property
                      and equipment
                  
                  
                  -
                  
                  
                  4,133,338Intangible
                      assets
                  
                  
                  -
                  
                  
                  310,000Goodwill
                      recognized on purchase business combination
                  
                  
                  -
                  
                  
                  1,267,063Accounts
                      payable, accrued expenses and deferred rent obligations
                  
                  
                  -
                  
                  
                  (1,218,790
                  )Total
                      purchase price
                  
                  
                  -
                  
                  
                  13,191,813Less:
                      Cash acquired
                  
                  
                  -
                  
                  
                  (284,251
                  )Less:
                      Cash paid to acquire Bode
                  
                  
                  -
                  
                  
                  (12,215,749
                  )Non-cash
                      consideration to seller
                  
                  $
                  -
                  
                  $
                  691,813Amount
                      due to seller
                  
                  $
                  -
                  
                  $
                  691,813Total
                      non-cash consideration
                  
                  $
                  -
                  
                  $
                  691,813Supplemental
                      non-cash investing and financing activity - acquisition of
                      Facticon:Assets
                      acquired and liabilities assumed:Accounts
                      receivable
                  
                  $
                  -
                  
                  $
                  759,147Property
                      and equipment
                  
                  
                  -
                  
                  
                  34,000Intangible
                      assets
                  
                  
                  -
                  
                  
                  120,000Goodwill
                      recognized on purchase business combination
                  
                  
                  -
                  
                  
                  2,420,181Accounts
                      payable, accrued expenses and deferred revenues
                  
                  
                  -
                  
                  
                  (533,328
                  )Total
                      purchase price
                  
                  
                  -
                  
                  
                  2,800,000-Less:
                      Cash paid to acquire Facticon
                  
                  
                  -
                  
                  
                  (1,300,000
                  )Non-cash
                      consideration to seller
                  
                  $
                  -
                  
                  $
                  1,500,000Non-cash
                      consideration consisted of :Note
                      payable issued to seller
                  
                  $
                  -
                  
                  $
                  100,000Common
                      stock issued to acquire Facticon
                  
                  
                  -
                  
                  
                  1,400,000Total
                      non-cash consideration
                  
                  $
                  -
                  
                  $
                  1,500,000
 See
            notes
            to these condensed consolidated financial statements.
  7
 GLOBALOPTIONS
            GROUP, INC. AND SUBSIDIARIES
 Notes
            to
            Condensed Consolidated Financial Statements
 (Unaudited)
 **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.
  In
            this
            report, the Company has renamed its business segments as follows:
 
 Currently
                      reported as:
                  
                  Formerly
                      reported as:Preparedness Services
                  
                  JLWA-Crisis
                      Management and Corporate GovernanceFraud and SIU Services
                  
                  CBR-Investigations
                      and Litigation SupportSecurity Consulting and Investigations
                  
                  Safir-Risk
                      Management
 
 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”). 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 (See Note 4).
 
 On
            February 28, 2007, GlobalOptions Group purchased the common stock of
            The Bode
            Technology Group, Inc. ("Bode"). Bode is a leading provider of forensic
            DNA
            analysis and proprietary DNA collection tools, based in Lorton, Virginia
            (See
            Note 4).
 
 On
            February 28, 2007, GlobalOptions Group acquired substantially all of
            the
            business and assets of Facticon, Inc. (“Facticon”). Facticon is a surveillance,
            investigative and business intelligence firm based in Chadds Ford, Pennsylvania
            (See Note 4).
 
 On
            March
            6, 2007 the Company executed a 1 for 8 reverse stock split and began
            trading
            under the symbol GOPG.OB. Accordingly, all share and per share information
            has
            been adjusted within this report for the three and nine months ended
            September
            30, 2007.
  8
  GLOBALOPTIONS
            GROUP, INC. AND SUBSIDIARIES
 Notes
            to
            Condensed Consolidated Financial Statements
 (Unaudited)
  **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-QSB. 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 nine months ended September 30, 2007 are not necessarily indicative
            of
            the results that may be expected for the year ending December 31, 2007.
             For further information, refer to the consolidated financial statements
            and footnotes thereto included in the Company’s Form 10-KSB filed on April 2,
            2007 for the year ended December 31, 2006.
 
 **3. 
            Summary of Significant Accounting Policies**
 
 ***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.
  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.
 
 ***Inventories***
  Inventories
            are stated at the lower of cost or market. Cost is determined by the
            first-in,
            first-out method. Reserves for obsolete inventories are provided for
            based on
            historical experience.
 
 The
            Company maintains inventories in connection with its DNA related services.
            Raw
            materials consist mainly of reagents, primers, enzymes, chemicals and
            plates
            used in genotyping and components to manufacture kits. Work in progress
            consists
            mainly of databanking and casework not yet completed and kits that are
            in the
            production process. Finished goods consist mainly of kits that have been
            produced, but have not been shipped.
  9
  GLOBALOPTIONS
            GROUP, INC. AND SUBSIDIARIES
 Notes
            to
            Condensed Consolidated Financial Statements
 (Unaudited)
  **3. 
            Summary of Significant Accounting Policies, continued**  ******
 
 ***Deferred
            Offering Costs***
  Costs
            incurred in connection with the Company’s underwritten public offering have been
            capitalized to deferred offering costs. Upon the closing of the offering,
            these
            costs were charged against the proceeds of the issuance (See Note 18).
 
 ***Research
            and Development***
 
 Costs
            incurred for research and product development, including salaries and
            related
            personnel costs, fees paid to consultants and outside service providers,
            material costs for prototypes and test units, are expensed as incurred.
            In
            addition, the Company recognizes research and development expenses in
            the period
            incurred and in accordance with the specific contractual performance
            terms of
            such research agreements. Costs incurred in obtaining technology licenses
            and
            development of software are charged to research and development expense
            if the
            technology licensed or the software has not reached technological feasibility.
            For the three and nine months ended September 30, 2006 and 2007, there
            were no
            research and development costs.
 
 ***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
            nine
            months ended September 30, 2006 and 2007, respectively, as a result of
            losses
            incurred during these periods.
 
 Deferred
            tax assets pertaining to windfall tax benefits on exercise of non-qualified
            stock options and the corresponding credit to additional paid-in capital
            are
            recorded if the related tax amount either reduces income taxes payable
            or
            results in an income tax refund. The Company has elected the “with and without
            approach” regarding ordering of windfall tax benefits to determine whether the
            windfall tax benefit did reduce income taxes payable or resulted in an
            income
            tax refund in the current year. Under this approach, the windfall tax
            benefits
            would be recognized in additional paid-in capital only if an incremental
            income
            tax benefit is realized after considering all other income tax benefits
            presently available to the Company.
 
 Effective
            January 1, 2007, the Company adopted the provisions of Financial Accounting
            Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in
            Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48
            clarifies the accounting for uncertainty in income taxes recognized in
            the
            Company’s condensed consolidated financial statements in accordance with FASB
            Statement 109, “Accounting for Income Taxes”, and prescribes a recognition
            threshold and measurement process for financial statement recognition
            and
            measurement of a tax position taken or expected to be taken in a tax
            return. FIN
            48 also provides guidance on derecognition, classification, interest
            and
            penalties, accounting in interim periods, disclosure and
            transition.
 
 Management
            has evaluated and concluded that there are no significant uncertain tax
            positions requiring recognition in the Company’s condensed consolidated
            financial statements as of January 1, 2007. The evaluation was performed
            for the
            tax years ended December 31, 2006, 2005, 2004 and 2003 which remain subject
            to
            examination for federal, state, and local income tax purposes by various
            taxing
            authorities as of September 30, 2007.
 
 The
            Company’s policy is to classify assessments, if any, for tax related interest
            as
            interest expense and penalties as general and administrative
            expenses.
  10
  GLOBALOPTIONS
            GROUP, INC. AND SUBSIDIARIES
 Notes
            to
            Condensed Consolidated Financial Statements
 (Unaudited)
  **3. 
            Summary of Significant Accounting Policies, continued**  ******
 
 ***Stock-Based
            Compensation***
  The
            Company accounts for equity instruments issued to non-employees in accordance
            with the provisions of SFAS No. 123R “Share-Based Payment” (“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 a that such equity instruments are recorded at their fair
            value on
            the measurement date, which is typically the date the services are
            performed. Stock based compensation for non-employees is accounted for
            under EITF 96-18 and is reflected within general and administrative
            expenses.
 
 The
            Company accounts for stock-based compensation issued to employees in
            accordance
            with the provisions of SFAS 123R.
 
 The
            Company recognizes compensation costs over the requisite service period
            of the
            award, which is generally the vesting term of the options associated
            with the
            underlying employment agreement, where applicable.
 
 ***Net
            Loss Per Common Share***
  Basic
            net
            loss per common share is computed based on the weighted average number
            of shares
            of common stock outstanding, as adjusted, during the years presented.
            Common
            stock equivalents, consisting of stock options, warrants and Series A
            and B, C
            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
            (See Note
            10). Potentially dilutive securities of 1,033,101 and 1,210,864 realizable
            from
            the exercise of options as well as 6,519,615 and 5,276,406 securities
            issuable
            upon the conversion of convertible preferred stock at September 30, 2006
            and
            2007, respectively, as well as restricted securities of 175,000 at September
            30,
            2007 and contingently returnable shares of 86,759 and 167,865 at September
            30,
            2006 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.
  ***Reclassifications***
 
 Certain
            prior period statements of operations amounts have been reclassified
            in order to
            conform to the current period presentations.
 
 ***Recent
            Accounting Pronouncements***
 
 In
            February 2006, the Financial Accounting Standards Board (“FASB”) issued
            SFAS No. 155 - Accounting for Certain Hybrid Financial Instruments (“SFAS 155”),
            which eliminates the exemption from applying SFAS 133 to interests in
            securitized financial assets so that similar instruments are accounted
            for
            similarly regardless of the form of the instruments. SFAS 155 also allows
            the
            election of fair value measurement at acquisition, at issuance, or when
            a
            previously recognized financial instrument is subject to a remeasurement
            event.
            Adoption is effective for all financial instruments acquired or issued
            after the
            beginning of the first fiscal year that begins after September 15, 2006.
            Early adoption is permitted. The adoption of SFAS 155 did not have a
            material
            effect on the Company’s consolidated financial position, results of operations
            or cash flows.
 
 In
            March 2006, the FASB issued SFAS No. 156 - Accounting for Servicing of
            Financial Assets (“SFAS 156”), which requires all separately recognized
            servicing assets and servicing liabilities be initially measured at fair
            value.
            SFAS 156 permits, but does not require, the subsequent measurement of
            servicing
            assets and servicing liabilities at fair value. Adoption is required
            as of the
            beginning of the first fiscal year that begins after September 15, 2006.
            Early adoption is permitted. The adoption of SFAS 156 did not have a
            material
            effect on the Company’s consolidated financial position, results of operations
            or cash flows.
  11
  GLOBALOPTIONS
            GROUP, INC. AND SUBSIDIARIES
 Notes
            to
            Condensed Consolidated Financial Statements
 (Unaudited)
  **3. 
            Summary of Significant Accounting Policies, continued**  ******
 
 ***Recent
            Accounting Pronouncements, continued***
 
 In
            September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS
            No.157”).  This Statement defines fair value, establishes a framework for
            measuring fair value and expands disclosure of fair value measurements. 
SFAS No. 157 applies under other accounting pronouncements that require
            or
            permit fair value measurements and accordingly, does not require any
            new fair
            value measurements.  SFAS No. 157 is effective for financial statements
            issued for fiscal years beginning after November 15, 2007.  The
            Company is in the process of evaluating the impact that the adoption
            of SFAS No.
            157 will have on its consolidated financial position results of operations
            and
            financial condition.
 
 In
            February 2007, the FASB issued Statement of Financial Accounting Standard
            159
“The Fair Value Option for Financial Assets and Financial Liabilities
            -
            Including an amendment of FASB Statement No. 115”, which permits entities to
            choose to measure many financial instruments and certain other items
            at fair
            value. The fair value option established by this Statement permits all
            entities
            to choose to measure eligible items at fair value at specified election
            dates. A
            business entity shall report unrealized gains and losses on items for
            which the
            fair value option has been elected in earnings at each subsequent reporting
            date. Adoption is required for fiscal years beginning after November
            15,
            2007.  Early adoption is permitted as of the beginning of a fiscal year
            that begins on or before November 15, 2007, provided the entity also
            elects to
            apply the provisions of FASB Statement No. 157, Fair Value Measurements.
            The
            Company is currently evaluating the expected effect of SFAS 159 on its
            consolidated financial statements and is currently not yet in a position
            to
            determine such effects.
 
 In
            September 2006, the staff of the SEC issued Staff Accounting Bulletin
            No. 108
            (“SAB 108”) which provides interpretive guidance on how the effects of the
            carryover or reversal of prior year misstatements should be considered
            in
            quantifying a current year misstatement. SAB 108 becomes effective in
            fiscal
            2007. Adoption of SAB 108 did not have a material impact on the Company’s
            consolidated financial position, results of operations or cash
            flows.
 
 In
            December 2006, the FASB issued FASB Staff Position (“FSP”) EITF 00-19-2
“Accounting for Registration Payment Arrangements” (“FSP EITF 00-19-2”) which
            specifies that the contingent obligation to make future payments or otherwise
            transfer consideration under a registration payment arrangement should
            be
            separately recognized and measured in accordance with SFAS No. 5,
“Accounting for Contingencies.”    Adoption of FSP EITF 00-19-02
            is required for fiscal years beginning after December 15, 2006. Adoption of
            FSP EITF 00-19-2 did not have a material impact on the Company's consolidated
            financial position, results of operations or cash flows.
  12
  GLOBALOPTIONS
            GROUP, INC. AND SUBSIDIARIES
 Notes
            to
            Condensed Consolidated Financial Statements
 (Unaudited)
  **4.**  **Acquisitions**
 
 ***Acquisition
            of On Line Consulting***
 
 On
            January 9, 2007, GlobalOptions Group purchased substantially all of the
            business
            and assets of On Line Consulting, a full service security and fire alarm
            consulting and design firm based in Oakland, California. The acquisition
            was
            made pursuant to a certain Asset Purchase Agreement dated January 9,
            2007 (the
“On Line Consulting Agreement”) between GlobalOptions Group and On Line
            Consulting. The aggregate purchase price for On Line Consulting’s business and
            assets was approximately $2,896,000 plus the assumption of certain liabilities,
            and consisted of $1,546,000 in cash and 84,375 shares of common stock
            of
            GlobalOptions Group valued at $16.00 per share for a total value of $1,350,000.
            At closing, the Company paid $750,000 of the cash portion of the purchase
            price,
            and issued promissory notes for $417,000 due January 9, 2008, and $141,000
            due
            January 9, 2009. On March 23, 2007, the Company paid cash of $224,000,
            and
            recorded an obligation of $14,000, which was paid on August 29, 2007.
            Further,
            at closing, the Company delivered to the seller 46,875 shares of GlobalOptions
            common stock, with 37,500 shares which were held in escrow and to be
            delivered
            to the seller, 18,750 shares on January 9, 2008, and 18,750 shares on
            January 9, 2009, respectively.
 
 All
            of
            the promissory notes issued in connection with the acquisition of On
            Line
            Consulting bear no stated interest rate. The promissory note obligations
            were
            discounted at a market interest rate of 6% per annum and are recorded
            at their
            discounted values, reflecting discounts of $33,000 and $9,000 for the
            notes due
            January 9, 2008 and 2009, respectively. The interest amortized for the
            three and
            nine months ended September 30, 2007 were $11,154 and $24,744,
            respectively.
 
 The
            assets and liabilities of On Line Consulting 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 On Line Consulting on January
            9, 2007,
            the Company acquired identifiable intangible assets of approximately
            $1,199,000.
            Of the identifiable intangibles acquired, $70,000 has been assigned to
            trade
            names, $59,000 to non-compete agreements, and $1,070,000 to client
            relationships. The
            amounts of these intangibles have been estimated based upon information
            available to management and is subject to change based upon an outside
            appraisal
            being performed. The
            acquired intangibles have been assigned definite lives and are subject
            to
            amortization, as described in the table below.
 
 The
            following details amortization periods for the identifiable, amortizable
            intangibles:
 
 Intangible
                      Asset Category
                  
                  Amortization
                      PeriodTrade
                      names
                  
                  5
                      yearsNon-compete
                      agreements
                  
                  3
                      yearsClient
                      relationships
                  
                  7
                      years
 
 The
            Company collected On Line Consulting’s accounts receivable in the amount of
            $63,000, the obligations for which have been included in other current
            liabilities at September 30, 2007.
  13
 GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (Unaudited)
 
 **4.**  **Acquisitions,
        continued**
 
 ***Acquisition
        of On Line Consulting, continued***
 ******
 The
        following details the allocation of the purchase price for the acquisition
        of On
        Line Consulting:
 
 Fair
                  ValueProperty
                  and equipment
              
              $
              96,589Intangible
                  asset - trade names
              
              
              70,000Intangible
                  asset - non-compete agreements
              
              
              59,000Intangible
                  asset - client relationships
              
              
              1,070,000Accounts
                  payable
              
              
              (75,000
              )Accrued
                  compensation and related benefits
              
              
              (83,536
              )Deferred
                  revenues
              
              
              (39,825
              )Capital
                  lease obligation
              
              
              (33,718
              )Other
                  liabilities
              
              
              (11,999
              )Net
                    fair values assigned to assets acquired and liabilities assumed
              
              
              1,051,511Goodwill
              
              
              1,844,329Total
              
              $
              2,895,840
 
 The
        following represents a summary of the purchase price consideration:
 
 Cash
              
              $
              974,100Common
                  stock
              
              
              1,350,000Amount
                  due to seller
              
              
              13,740Notes
                  payable
              
              
              558,000Total
                  purchase price consideration
              
              $
              2,895,840
  The
        results of operations for On Line Consulting for the period from January
        10,
        2007 to September 30, 2007, are reflected in the Company’s results for the three
        and nine months ended September 30, 2007 in the accompanying condensed
        consolidated statements of operations.
 
 ***Acquisition
        of Bode***
 
 ****** On
        February 28, 2007, the Company acquired the common stock of Bode. Bode provides
        forensic DNA analysis, proprietary DNA collection products, and related research
        services to law enforcement agencies, federal and state governments, crime
        laboratories and disaster management organizations and is based in Lorton,
        Virginia. Bode was a wholly-owned subsidiary of ChoicePoint Inc., a Georgia
        corporation ("ChoicePoint"). The acquisition was made pursuant to a certain
        Stock Purchase Agreement, dated February 28, 2007 (the "Bode Agreement"),
        between ChoicePoint Government Services Inc., ChoicePoint and the Company.
        On
        March 8, 2007, Bode was reincorporated in the state of Delaware. On September
        26, 2007, the Company finalized the working capital adjustment in connection
        with the acquisition of Bode in the amount of $691,813, resulting in an as
        adjusted total purchase price of $13,191,813. This adjustment amount was
        recorded as additional goodwill and was paid on October 1,
        2007.
  14
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (Unaudited)
 
 **4.**  **Acquisitions,
        continued**
 
 ***Acquisition
        of Bode, continued***
 
 The
        assets and liabilities of Bode have been recorded in the Company’s condensed
        consolidated balance sheet at their fair values at the date of
        acquisition.  As part of the purchase of Bode on February 28, 2007, the
        Company acquired identifiable intangible assets of approximately $310,000. 
Of the identifiable intangibles acquired, $200,000 has been assigned to trade
        names and $110,000 to developed technology. The amounts of these intangibles
        have been estimated based upon information available to management and is
        subject to change based upon an outside appraisal being performed. The acquired
        intangibles have been assigned definite lives and are subject to amortization,
        as described in the table below.
 
 The
        following details amortization periods for the identifiable, amortizable
        intangibles:
 
 Intangible
                  Asset Category
              
              Amortization
                  PeriodTrade
                  names
              
              10
                  yearsDeveloped
                  technology
              
              5
                  years
 
 The
        following details the allocation of the purchase price for the acquisition
        of
        Bode:
 
 Fair
                  ValueCash
                  and cash equivalents
              
              $
              284,251Accounts
                  receivable
              
              
              5,510,441Inventories
              
              
              2,629,389Other
                  current assets
              
              
              276,121Property
                  and equipment
              
              
              4,133,338Intangible
                  asset - trade names
              
              
              200,000Intangible
                  asset - development technology
              
              
              110,000Accounts
                  payable
              
              
              (545,401
              )Deferred
                  rent obligations
              
              
              (94,399
              )Accrued
                  expenses
              
              
              (578,990
              )Net
                  fair values assigned to assets acquired andliabilities assumed
              
              
              11,924,750Goodwill
              
              
              1,267,063Total
                  purchase price in cash
              
              $
              13,191,813
  The
        following represents a summary of the purchase price consideration:
 
 Cash
              
              $
              12,500,000Amount
                  due to seller
              
              
              691,813Total
                  purchase price consideration
              
              $
              13,191,813
  The
        results of operations for Bode for the period from March 1, 2007 to September
        30, 2007, are reflected in the Company’s results for the three and nine months
        ended September 30, 2007 in the accompanying condensed consolidated statements
        of operations.
 
 15
  GLOBALOPTIONS
        GROUP, INC. AND SUBSIDIARIES
 Notes
        to
        Condensed Consolidated Financial Statements
 (Unaudited)
 
 ***Acquisition
        of Facticon***
 
 On
        February 28, 2007, GlobalOptions Group purchased substantially all of the
        business and assets of Facticon, Inc.   Facticon is a
        surveillance, investigative and business intelligence firm located in Chadds
        Ford, Pennsylvania.
 
 The
        acquisition was made pursuant to a certain Asset Purchase Agreement, dated
        February 28, 2007 (the "Facticon Agreement"), between GlobalOptions Group
        and
        Facticon. The aggregate purchase price paid was $2,800,000, which consisted
        of
        $1,400,000 in cash and 87,500 shares of common stock in GlobalOptions
        Group, valued at $1,400,000 and the assumption of certain liabilities. Of
        the
        total purchase price, $1,300,000 of the cash portion and $1,000,000 of the
        stock
        portion have been placed into an escrow account and pursuant to the escrow
        agreement (“Facticon Escrow Agreement”) shall be disbursed in satisfaction of
        the claims of certain tax jurisdictions and creditors of the seller. The
        Facticon Agreement further provides after one year from closing, the sellers’
delivery of audited financial statements acceptable to the Company, pursuant
        to
        the terms of Facticon Agreement and the release of certain tax liens deemed
        acceptable to the Company, then escrowed cash funds and common stock not
        paid
        out of escrow in satisfaction of claims, shall be released to seller.
 
 Furthermore,
        subject to the terms of the Facticon Agreement, on February 28, 2008, $100,000
        of the cash portion and $200,000 in value of the stock portion of the purchase
        price shall be paid to or released from escrow to the seller. On February
        28,
        2009, $200,000 of the stock portion of the purchase price shall be paid to
        the
        seller.
 
 The
        assets and liabilities of Facticon have been recorded in the Company’s condensed
        consolidated balance sheet at their fair values at the date of
        acquisition.  As part of the purchase of Facticon on February 28, 2007, the
        Company acquired identifiable intangible assets of $120,000, consisting of
        $60,000 for a trade name and $60,000 for the value of client relationships.
         The amounts of these intangibles have been estimated based upon
        information available to management and is subject to change based upon an
        outside appraisal being performed. The acquired intangibles have been assigned
        definite lives and are subject to amortization, as described in the table
        below.
 
 The
        following details the amortization periods for the identifiable, amortizable
        intangibles:
 
 Intangible
                  Asset Category
              
              Amortization
                  PeriodTrade
                  name
              
              5
                  yearsClient
                  relationships
              
              3
                  years
  The
        following details the allocation of the purchase price for the acquisition
        of
        Facticon:
  Fair
                  ValueAccounts
                  receivable
              
              $
              759,147Property
                  and equipment
              
              
              34,000Intangible
                  assets - trade name
              
              
              60,000Intangible
                  assets - client relationships
              
              
              60,000Accounts
                  payable
              
              
              (185,463
              )Accrued
                  compensation and related benefits
              
              
              (237,026
              )Accrued
                  expenses
              
              
              (110,839
              )Net
                  fair values assigned to assets acquiredand
                  liabilities assumed
              
              
              379,819Goodwill
              
              
              2,420,181Total
              
              $
              2,800,000
  16
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **4.**  **Acquisitions,
        continued**
 
 ***Acquisition
        of Facticon, continued***
 
 The
        following presents a summary of the purchase price consideration for the
        purchase of Facticon:
 
 Cash
              
              $
              1,300,000Note
                  issued to seller
              
              
              100,000Value
                  of common stock issued
              
              
              1,400,000Total
                  purchase price consideration
              
              $
              2,800,000
  The
        results of operations for Facticon for the period from March 1, 2007 to
        September 30, 2007, are reflected in the Company’s results for the three and
        nine months ended September 30, 2007 in the accompanying condensed consolidated
        statements of operations.
  ***Unaudited
        Pro-Forma Financial Information***
 
 The
        following presents the unaudited pro-forma combined results of operations
        of the
        Company with the 2006 acquisitions, consisting of JLWA, Safir, Secure Source
        and
        Hyperion Risk, and the 2007 acquisitions, consisting of On Line Consulting,
        Bode
        and Facticon, included for the periods preceding the acquisition of their
        respective net assets or common stock. The respective acquisition dates are
        March 10, 2006 for JLWA, May 12, 2006 for both Safir and Secure Source, August
        10, 2006 for Hyperion Risk, January 9, 2007 for On Line Consulting and February
        28, 2007 for Bode and Facticon.
  For
                  the Three Months EndedSeptember 30,
              
              For
                  the Nine Months EndedSeptember 30,2006
              
              2007
              
              2006
              
              2007Revenues
              
              $
              26,742,614
              
              $
              21,574,144
              
              $
              74,838,411
              
              $
              68,620,323Net
                  loss
              
              $
              (10,409,938
              )
              $
              (4,929,926
              )
              $
              (46,751,778
              )
              $
              (20,208,206
              )Pro-forma
                  basic and diluted net loss per common share
              
              $
              (4.20
              )
              $
              (1.45
              )
              $
              (19.25
              )
              $
              (6.81
              )Pro-forma
                  weighted average common shares outstanding - basic and
                  diluted
              
              
              2,476,319
              
              
              3,406,520
              
              
              2,428,242
              
              
              2,966,191
  The
        pro
        forma combined results are not necessarily indicative of the results that
        actually would have occurred if the acquisitions of JLWA, Safir, Secure Source,
        Hyperion Risk, On Line Consulting, Bode and Facticon had been completed as
        of
        the beginning of 2006 or 2007, nor are they necessarily indicative of future
        consolidated results.
 
 17
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **5.
        Inventories**
 
 Inventories
        consisted of the following as of September 30, 2007:
 
 Raw
                  materials
              
              $
              1,278,596Work
                  in progress - DNA analysis
              
              
              864,563Finished
                  goods
              
              
              845,6222,988,781Less:
                  reserves for obsolescence
              
              
              (256,000
              )Inventories,
                  net
              
              $
              2,732,781
 
 **6.
        Intangible Assets and Goodwill**
 
 ***Intangible
        Assets***
  Intangible
        assets consist of amounts related to the 2006 acquisitions, consisting of
        JLWA,
        Safir, Secure Source and Hyperion Risk, and the 2007 acquisitions, consisting
        of
        On Line Consulting, Bode and Facticon. Intangible assets at September 30,
        2007
        consisted of the following:
 
 Amount
              
              Weighted
                  Average
                Amortization
                  PeriodTrade
                  names
              
              $
              2,820,000
              
              
              8.8Developed
                  technology
              
              
              439,690
              
              
              3.1Non-compete
                  agreements
              
              
              1,499,222
              
              
              3.0Client
                  relationships
              
              
              6,510,000
              
              
              4.211,268,912Less: accumulated amortization
              
              
              (4,069,712
              )Intangible
                  assets, net
              
              $
              7,199,200
 
 The
        estimated amortization of amortizable intangible assets for the five years
        ending September 30, 2012 is as follows:
  For
                  the Years Ending September 30,
              
              Total
              
              Trade
                  Names
              
              Developed
                  Technology
              
              Non-Compete
                  Agreements
              
              Client
                  Relationships2008
              
              $
              2,581,950
              
              $
              351,000
              
              $
              140,832
              
              $
              475,412
              
              $
              1,614,7062009
              
              
              1,710,342
              
              
              351,000
              
              
              61,957
              
              
              252,761
              
              
              1,044,6242010
              
              
              904,958
              
              
              348,940
              
              
              22,015
              
              
              5,442
              
              
              528,5612011
              
              
              674,146
              
              
              300,874
              
              
              22,015
              
              
              -
              
              
              351,2572012
              
              
              383,736
              
              
              221,838
              
              
              9,041
              
              
              -
              
              
              152,857Totals
              
              $
              6,255,132
              
              $
              1,573,652
              
              $
              255,860
              
              $
              733,615
              
              $
              3,692,005
  The
        Company recorded amortization expense related to the acquired amortizable
        intangibles of $586,000 and $1,350,000 for the three and nine months ended
        September 30, 2006, and $656,000 and $2,060,000 during the three and nine
        months
        ended September 30, 2007, respectively.
  18
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **6.
        Intangible Assets and Goodwill, continued**
 
 ***Goodwill***
  A
        summary
        of goodwill as of September 30, 2007 and for the nine months then ended is
        as
        follows:
  Preparedness
                  Services
              
              Fraud
                  and SIU Services
              
              Security
                  Consulting and Investigations
              
              TotalBalance
                  as of January 1, 2007
              
              $
              883,183
              
              $
              8,053,082
              
              $
              9,640,996
              
              $
              18,577,261Acquisition
                  of On Line Consulting
              
              
              -
              
              
              -
              
              
              1,844,329
              
              
              1,844,329Acquisition
                  of Bode
              
              
              -
              
              
              -
              
              
              1,267,063
              
              
              1,267,063Acquisition
                  of Facticon
              
              
              -
              
              
              2,420,181
              
              
              -
              
              
              2,420,181Balance
                  as of September 30, 2007
              
              $
              883,183
              
              $
              10,473,263
              
              $
              12,752,388
              
              $
              24,108,834
  **7. 
        Property and Equipment**
  **** At
        September 30, 2007, property and equipment is comprised of the
        following:
 
 Computer
                  equipment and software
              
              $
              2,318,251Laboratory
                  equipment
              
              
              1,091,991Furniture
                  and fixtures
              
              
              761,176Vehicles
              
              
              162,029Leasehold
                  improvements
              
              
              2,333,8646,667,311Less:
                  accumulated depreciation and amortization
              
              
              (1,440,925
              )Property
                  and equipment, net
              
              $
              5,226,386
  Depreciation
        and amortization of property and equipment for the three and nine months
        ended
        September 30, 2006 was $67,000 and $144,000, respectively, and for the three
        and
        nine months ended September 30, 2007 was $400,000 and $856,000, respectively.
        Included in property and equipment at September 30, 2007 are vehicles and
        equipment held under capital leases with a net book value of $67,000 .
 
 19
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **8.**  **Accrued
        Compensation and Related Benefits**
 
 At
        September 30, 2007, accrued compensation and related benefits is comprised
        of
        the following:
 
 Accrued
                  bonuses
              
              $
              1,806,438Accrued
                  payroll and commissions
              
              
              1,599,465Accrued
                  employee benefits
              
              
              1,007,916Total
                  accrued compensation and related benefits
              
              $
              4,413,819
 
 **9. 
        Line of Credit**
  On
        May 14, 2007, the financial institution that provides the Company’s line of
        credit increased the amount available under the line of credit to $15,000,000.
        Pursuant to the agreement, the Company granted the financial institution
        a
        security interest in, and pledged and assigned to the financial institution,
        substantially all of the current and future acquired personal property of
        GlobalOptions, Inc. Furthermore, the Company reaffirmed its unconditional
        guaranty originally made on March 8, 2006. Pursuant to the reaffirmation,
        the Company acknowledged that its guaranty of the loan provided to
        GlobalOptions, Inc. and the corresponding grant of a security interest in
        all of
        its property apply to the subject financial institution’s loan agreements and
        any other agreements, assignments or instruments relating to such indebtedness.
        In connection with the modification, Bode entered into an intellectual property
        security agreement with the financial institution pursuant to which Bode
        granted
        the financial institution a security interest in all of its rights, title
        and
        interests in, to and under its intellectual property, which consisted
        principally of patents. In connection with this line of credit, the Company
        must
        satisfy certain liquidity and earnings financial covenants. The interest
        rate on
        the line of credit at September 30, 2007 was 9.25%. The balance under the
        line
        of credit is $7,828,237 at September 30, 2007 leaving an amount available
        to
        draw of approximately $7,172,000. On October 29, 2007, the Company borrowed
        $5,400,000 under the line for the pre-payment of the JLWA $4,500,000 promissory
        note, pre-payment premium and accrued interest, and such amount which was
        borrowed under the line of credit was subsequently repaid (See Note 10 and
        Note
        18).
 
 **10.**  **Due
        to Former Members of JLWA for Earnout and JLWA Modification
        Agreement**
  On
        May 11, 2007, the Company reached an agreement with the former owners of
        JLWA (the “JLWA Sellers”) to enter into a second amendment to the
        January 13, 2006 JLWA asset purchase agreement, which was amended
        on February 28, 2006 (the “JLWA Modification Agreement”). Under the JLWA
        Modification Agreement, the Company agreed to make additional payments in
        the
        form of cash, promissory notes and common stock to the JLWA Sellers in exchange
        for eliminating the earnout provisions of the asset purchase agreement, which
        provided for a maximum additional payout of $15,400,000. The additional payments
        under the JLWA Modification Agreement consist of (i) a cash payment of
        $2,000,000, which was paid on May 14, 2007, (ii) a $4,500,000
        promissory note accruing interest at 5.65% per annum, due on
        January 15, 2008, subject to a 5% penalty fee if not paid on that due date,
        (iii) 300,000 shares of common stock to be issued on January 15, 2008,
        which will be registered prior to issuance, and (iv) a $4,300,000
        promissory note accruing interest at 11.0% per annum, due on
        August 11, 2008. The JLWA Sellers had the right to request acceleration of
        the $4,300,000 promissory note upon the consummation of a public
        offering.
 
 20
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **10.
        Due to Former Members of JLWA for Earnout and JLWA Modification Agreement,
        continued**
  Further,
        in connection with the execution of the JLWA Modification Agreement, the
        Company
        executed an amendment of the employment and non-competition agreement with
        James
        Lee Witt. Under the terms of the amendment, upon his voluntary termination
        of
        employment without good reason, Mr. Witt would be obligated to reimburse
        the Company in an amount equal to (i) 25% of the number of shares issued to
        the JLWA Sellers within 12 months prior to such termination and (ii) 25% of
        the base salary of Mr. Witt paid within 12 months prior to such
        termination.
  The
        JLWA
        Modification Agreement resulted in $12,960,000 of non-contingent consideration,
        of which approximately $6,630,000 was deemed as earnout accrued through
        May 10, 2007 and $6,330,000 was deemed to be accelerated earnout expense.
        Earnout expense under the JLWA Agreement (as amended) was $2,327,272 and
        $4,075,272 for the three and nine months ended September 30, 2006, respectively
        and $0 and $7,732,000 for the three and nine months ended September 30,
        2007.
 
 **11.
        Notes Payable**
 
 On
        March
        8, 2007, the Company repaid $400,000 related to a note payable for the JLWA
        acquisition.
 
 On
        May 10, 2007, the Company reached an agreement with the former owners of
        Secure Source to extend the maturity date of the 5% promissory notes in the
        principal amount of $750,000, which were issued as partial payment of the
        purchase price for the Secure Source acquisition, to May 31, 2007. On
        May 30, 2007, the Company paid the $750,000 note payable installment in
        full.
  On
        May 11, 2007, under the JLWA Modification Agreement (see Note 10), the
        Company agreed to make additional payments in the form of cash, promissory
        notes
        and common stock to the JLWA Sellers. The additional payments under the JLWA
        Modification Agreement include, but are not limited to, (i) 
a $4,500,000 promissory note accruing interest at 5.65% per annum, due
        on January 15, 2008, subject to a 5% penalty fee if not paid on that due
        date, and (ii) a $4,300,000 promissory note accruing interest at
        11.0% per annum, due on August 11, 2008.
 
 During
        the nine months ended September 30, 2007, the Company paid $280,295 in full
        satisfaction of the note payable to the former owners of Safir for the Safir
        acquisition.
 
 At
        September 30, 2007, notes payable consisted of the following:
  Note
                  payable to seller for Secure Source Acquisition
              
              $
              $
                  500,000Note
                  payable to seller for Facticon Acquisition (See Note 4)
              
              
              100,000Notes
                  payable to seller for On Line Consulting Acquisition (See Note
                  4)
              
              
              585,823Notes
                  payable - JLWA Modification Agreement (See Note 10)
              
              
              8,800,000Total
              
              
              9,985,823Less
                  - current portion
              
              
              9,591,513Long-term
                  portion
              
              $
              394,310
 
 The
        scheduled maturities of notes payable are shown in the following
        table:
 
 For
                  the YearsEnding
                  September 30,
              
              
              Amount2008
              
              $
              9,591,5132009
              
              
              394,310Total
              
              $
              9,985,823
  21
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **12. 
        Commitments**
  ***Employment
        Agreements***
  In
        January 2007, concurrently with the Company’s acquisition of On Line Consulting
        (See Note 4), GlobalOptions entered into a three year employment agreement
        with
        Sandor P. Zirulnik, the founder of On Line Consulting. Pursuant to the
        agreement, Mr. Zirulnik became the Senior Executive Officer of the Security
        Consulting and Investigations business unit and agreed to perform such other
        duties and responsibilities as the Chief Executive Officer of the Company
        or his
        designee shall from time to time reasonably assign to him. Mr. Zirulnik has agreed to devote his full time to GlobalOptions at a
        salary of $200,000 per annum for the first year; $210,000 per annum for the
        second year; and $225,000 for the third year and he shall be eligible for
        a
        discretionary bonus up to $100,000. The employment agreement may be terminated
        for cause by GlobalOptions, upon the death or disability of the executive,
        or
        upon 30-days’ notice by either party. In the event GlobalOptions terminates the
        employment agreement without cause during the initial term, it is required
        to
        pay Mr. Zirulnik his current base salary, bonus and certain benefits
        through January 31, 2010. The employment agreement also contains
        non-compete and non-solicitation provisions for 12 months following termination,
        as well as confidentiality provisions.
 
 In
        March
        2007, concurrently with the Company’s acquisition of Bode (See Note 4), Bode
        entered into a two year employment agreement with Maureen M. Loftus, Bode’s
        General Manager. Pursuant to the agreement, Ms. Loftus became a
        President of the Security Consulting and Investigations business unit and
        agreed
        to perform such other duties and responsibilities as the Chief Executive
        Officer
        of the Company or his designee shall from time to time reasonably assign
        to
        her. She has agreed to devote her full time to Bode at a salary
        of $190,992 per annum and she shall be eligible for a bonus based upon
        approved goals. The employment agreement may be terminated for cause by
        Bode, upon the death or disability of the executive, or upon 30-days’ notice by
        either party. In the event Bode terminates the employment agreement without
        cause during the initial term, it is required to pay Ms. Loftus her current
        base salary and certain benefits through March 2009. The employment agreement
        also contains non-compete and non-solicitation provisions for 12 months
        following termination, as well as confidentiality provisions.
 
 In
        March
        2007, concurrent with the Company’s acquisition of Bode (See Note 4), Bode
        entered into a two-year employment agreement with Phillip E. Crowther, Bode’s
        Controller. Pursuant to the agreement, Mr. Crowther became a Controller of
        the Security Consulting and Investigations business unit and agreed to perform
        such other duties and responsibilities as the Chief Financial Officer of
        the
        Company or his designee shall from time to time reasonably assign to him.
        He has
        agreed to devote his full time to Bode at a salary of $106,046 per annum,
        and is
        eligible for a bonus based upon approved goals. The employment agreement
        may be
        terminated for cause by Bode, upon the death or disability of the executive,
        or
        upon 30-days’ notice by either party. In the event Bode terminates the
        employment agreement without cause during the initial term, it is required
        to
        pay Mr. Crowther his current base salary and certain benefits through March
        2009. The employment agreement also contains non-compete and non-solicitation
        provisions for 12 months following termination, as well as confidentiality
        provisions.
 
 In
        March
        2007, concurrently with the Company’s acquisition of Facticon (See Note 4),
        GlobalOptions entered into a three year employment agreement with Jim Jensen,
        Facticon’s President. Pursuant to the agreement, Mr. Jensen became the
        Northeast Regional Vice President of the Fraud and SIU Services business
        unit
        and agreed to perform such other duties and responsibilities as the Board
        of
        Directors shall from time to time reasonably assign to him. Mr. Jensen has
        agreed to devote his full time to GlobalOptions at a salary of $100,000 per
        annum for the year 2007 (pro-rated), $110,000 per annum for the year 2008,
        and
        $120,000 per annum for the year 2009 and shall be eligible for a bonus
        based upon approved goals. The employment agreement may be terminated for
        cause by GlobalOptions, upon the death or disability of the executive, or
        upon
        30-days’ notice by either party. In the event GlobalOptions terminates the
        employment agreement without cause during the initial term, it is required
        to
        pay Mr. Jensen his current base salary and certain benefits through March
        2009. The employment agreement also contains non-compete and non-solicitation
        provisions for 12 months following termination, as well as confidentiality
        provisions.
 
 22
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **12. Commitments,
        continued**
  ***Employment
        Agreements, continued***
  In
        March
        2007, concurrently with the Company’s acquisition of
        Facticon, GlobalOptions entered into a three year employment agreement with
        John Bullock, Facticon’s CEO. Pursuant to the agreement, Mr. Bullock
        became the Northeast Regional Vice President of the Fraud and SIU Services
        business unit and agreed to perform such other duties and responsibilities
        as
        the Board of Directors shall from time to time reasonably assign to
        him. Mr. Bullock has agreed to devote his full time to GlobalOptions at a
        salary of $100,000 per annum for the year 2007 (pro-rated), $110,000 per
        annum
        for the year 2008, and $120,000 per annum for the year 2009 and shall be
        eligible for a bonus based upon approved goals. The employment agreement
        may be terminated for cause by GlobalOptions, upon the death or disability
        of
        the executive, or upon 30-days’ notice by either party. In the event
        GlobalOptions terminates the employment agreement without cause during the
        initial term, it is required to pay Mr. Bullock his current base salary and
        certain benefits through March 2009. The employment agreement also contains
        non-compete and non-solicitation provisions for 12 months following termination,
        as well as confidentiality provisions.
  On
        August 13, 2007, effective as of August 1, 2007, GlobalOptions Group,
        Inc. (the “Company”) terminated a consulting agreement (the “Consulting
        Agreement”) and entered into an employment agreement (the “Employment
        Agreement”) with Jeffrey O. Nyweide, the Company’s Chief Financial Officer,
        Treasurer, Secretary and Executive Vice President - Corporate Development,
        which
        sets forth the terms and provisions governing Mr. Nyweide’s employment with
        the Company.
 
 The
        Employment Agreement provides that Mr. Nyweide will report to the Chairman
        of the Company for an initial term commencing on August 1, 2007 and
        terminating on January 31, 2010, subject to one year extensions. Under the
        Employment Agreement Mr. Nyweide’s salary for the remainder of 2007 will be
        $27,083.33 per month and his annual base salary for 2008 will be $350,000
        and
        2009 will be $375,000. In addition, Mr. Nyweide shall receive $9,000 per
        month to help defray his cost of living in New York City. Mr. Nyweide shall
        also be entitled to annual bonuses payable 50% in cash and 50% in restricted
        stock subject to vesting according to mutually agreed goals, established
        by the
        Company’s Compensation Committee of its Board of Directors.
 
 The
        Employment Agreement provides that all options to purchase common stock and
        the
        75,000 shares of restricted stock subject to vesting as described above,
        granted
        to Mr. Nyweide pursuant to the Consulting Agreement, shall remain in full
        force and effect. Upon a change in control of the Company, all such options
        and
        restricted stock shall immediately vest, all performance conditions shall
        deemed
        to have been met and the exercise term of any stock options will equal the
        term
        of such options as originally granted. In addition, the Company has agreed
        to
        provide Mr. Nyweide with all employee benefit plans and programs offered by
        the Company to its senior management, including, but not limited to, 401(k)
        plans and group life, disability, health, medical and dental insurance plans.
 
 In
        the
        event that the Company terminates Mr. Nyweide’s employment with Cause (as
        defined in the Employment Agreement) or Mr. Nyweide resigns without Good
        Reason (as defined in the Employment Agreement), the Company’s obligations are
        limited generally to paying Mr. Nyweide his base salary through the
        termination date. In the event that the Company terminates Mr. Nyweide’s
        employment without Cause or Mr. Nyweide resigns with Good Reason, the
        Company is generally obligated to continue to pay 50% of Mr. Nyweide’s
        compensation for the remainder of the term of the Employment Agreement and
        his
        rights to his options and shares of restricted stock shall be determined
        in
        accordance with the plans pursuant to which such options or shares were granted.
 
 23
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **12. Commitments,
        continued**
  ***Operating
        Leases***
  On
        July
        19, 2007, the Company entered into an agreement to lease 15,294 rentable
        square
        feet of office space in Washington, D.C, which replaces the Company’s expiring
        Washington D.C. office lease. The lease is expected to commence on January
        1,
        2008 and expire on September 30, 2015. The Company has the option to extend
        the
        lease for an additional five years. Rent payments have been abated during
        the
        first nine months of the lease.
 
 Through
        the acquisition of On Line Consulting (See Note 4), the Company assumed the
        operating lease for office space located in Oakland,
        California.   The lease is for approximately $5,000 per month and
        extends through September 2011.
 ******
 Through
        the acquisition of Bode (See Note 4), the Company assumed the operating lease,
        located in Lorton, Virginia.   The lease is for approximately
        $59,000 per month and has a remaining term through August 2016.
 
 In
        connection with the acquisitions of CBR, JLWA, Safir, Secure Source, Hyperion
        Risk, On Line Consulting and Bode, GlobalOptions assumed the obligations
        for
        various office leases. Such lease obligations expire at various dates through
        August 2016.
 
 Future
        minimum lease payments under these and all of the Company’s operating leases for
        office space are as follows:
 
 For
                  the YearEnding
                  September 30,2008
              
              $
              2,493,0002009
              
              
              2,786,0002010
              
              
              2,741,0002011
              
              
              2,590,0002012
              
              
              2,122,000Thereafter
              
              
              6,605,000Total
              
              $
              19,337,000
 
 Rent
        expense charged to operations amounted to approximately $465,000 and $959,000,
        respectively, for the three and nine months ended September 30, 2006, and
        was
        approximately $903,000 and $2,208,000 for the three and nine months ended
        September 30, 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 obligations of $312,287
        represents the long term unamortized rent adjustment amount at September
        30,
        2007 and is reflected as deferred rent obligations in the condensed consolidated
        balance sheet. In addition, the current portion of deferred rent is $56,681
        at
        September 30, 2007 and is reflected within other current liabilities in the
        condensed consolidated balance sheet.
 
 24
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **12. 
        Commitments, continued**
 
 ***Advisory
        Agreements***
  On
        June
        12, 2007, the Company entered into an agreement with Burnham Hill Partners
        (“BHP”), a division of Pali Capital, Inc., to provide financial advisory
        services relating to the Equity Restructuring (see Note 13). In connection
        with
        this agreement, on July 26, 2007, the Company paid BHP a fee of
        $200,000.
 
 On
        August
        17, 2007, the Company entered into a financial advisory agreement with BHP
        to
        provide general advisory services including, but not limited to, identifying
        strategic transactions and providing capital market advice. The agreement
        commenced on September 1, 2007 and is for a term of four months and provides
        for
        compensation of $50,000 per month.
 
 **** **13.
          Stockholders’ Equity** ****
 
 ***Common
        Stock***
  During
        the nine months ended September 30, 2007, the Company issued 3,125, shares
        of
        common stock in connection with the conversion of 50 shares of Series A
        Convertible Preferred Stock.
 
 On
        January 1, 2007, under the 2006 Long Term Incentive Plan, the Company issued
        3,471 shares of common stock with a value of $41,652 to various
        employees.
  During
        the nine months ended September 30, 2007, the Company issued 88,236 shares
        of
        common stock in connection with the exercise of stock options resulting in
        proceeds of $48,000.
 
 During
        the nine months ended September 30, 2007, the Company issued 39,706 shares
        of
        common stock in connection with the cashless exercise of 110,294 options.
        Additional paid-in capital was charged $317,644 to reflect the impact of
        the
        shares that were not issued in order to satisfy payroll withholding tax
        obligations.
 
 The
        Company issued common stock in connection with the acquisitions of On Line
        Consulting and Facticon (See Note 4).
 
 Pursuant
        to a stock purchase agreement dated, March 1, 2007, the Company issued 850
        shares of common stock to Verus International Group valued at $15,000, 1,699
        shares of common stock to Athorn, Clark and Partners, Inc. valued at $30,000
        and
        1,274 shares of common stock to Lippert/Heilshorn and Associates, Inc. valued
        at
        $22,500 in connection with services provided to the Company.
 
 ***Warrants
        (Series B-1 and Series B-2)***
  During
        the nine months ended September 30, 2007, as a result of adjustments with
        regard
        to anti-dilution protection, the number of outstanding Series B-2 warrants
        was
        increased from 1,160,906 to 1,185,872, and the warrant exercise price was
        reduced from $22.48 to $ 22.32.
 
 On
        July
        25, 2007, these warrants were eliminated in connection with the Equity
        Restructuring.
 
 25
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **13.
        Stockholders’ Equity, continued**
 
 ***Equity
        Restructuring***
  On
        July
        25, 2007, the Company completed an equity restructuring (the “Equity
        Restructuring”) in which holders of its Series A Convertible Preferred Stock and
        Series B Convertible Preferred Stock received, in consideration of the
        cancellation of those shares and all Series A, B-1 and B-2 warrants held
        by
        them, (1) one share of the Company’s newly created Series C Convertible
        Preferred Stock for each share of Series A Convertible Preferred Stock and
        Series B Convertible Preferred Stock held by them and (2) 0.5 shares of
        common stock for each share into which the holder’s Series A Convertible
        Preferred Stock and Series B Convertible Preferred Stock was then convertible.
        In addition, holders of (a) the Company’s Series A warrants who did not
        also hold any shares of Series A Convertible Preferred Stock and
        (b) the Company’s Series B warrants, Series C warrants and certain
        placement agent warrants received, in consideration of the cancellation of
        those
        warrants, 0.2 shares of common stock for each share subject to those warrants.
        Each share of Series C Convertible Preferred Stock will automatically convert
        into 66.67 shares of common stock upon the consummation of a firm commitment
        underwritten public offering generating at least $20,000,000 in gross proceeds
        to the Company (a “Qualified Public Offering”). A limited number of holders
        whose receipt of common stock, whether in the Equity Restructuring or upon
        the
        conversion of the Series C Convertible Preferred Stock, would cause them
        to
        beneficially own in excess of 4.99% of the Company’s outstanding common stock,
        received in the Equity Restructuring, and will receive upon the conversion
        of
        the Series C Convertible Preferred Stock, in lieu of shares of common stock,
        shares of the Company’s newly created Series D Convertible Preferred
        Stock.
 
 In
        summary, as a result of the Equity Restructuring, (i) 6,330 shares of
        Series A Convertible Preferred Stock, (ii) 53,070 shares of Series B
        Convertible Preferred Stock and (iii) warrants to purchase an aggregate of
        2,913,041 shares of common stock have been restructured into (x) 630,765
        shares of common stock, (y) 59,400 shares of Series C Convertible Preferred
        Stock and (z) 19,706.52 shares of Series D Convertible Preferred Stock. On
        July 26, 2007, the Company filed certificates with the Secretary of the State
        of
        Delaware eliminating the Series A and B Convertible Preferred
        Stock.
 
 ***Registration
        Rights***
  The
        Company entered into a registration rights agreement, dated as of July 25,
        2007,
        with the participants in the Equity Restructuring in which the Company agreed
        to
        register for resale all of the shares of common stock issued or issuable
        upon
        the completion of the Equity Restructuring, the conversion of the Series
        C
        Convertible Preferred Stock and the conversion of the Series D Convertible
        Preferred Stock. The Company agreed to file a resale registration statement
        covering these shares by the earlier of 90 days following the closing of
        the
        Equity Restructuring and the filing date of a registration statement relating
        to
        a Qualified Public Offering and to use its best efforts to have the resale
        registration statement declared effective by the earlier of 150 days following
        the closing of the Equity Restructuring and the effective date of a registration
        statement relating to a Qualified Public Offering. The Company also agreed
        to
        use its best efforts to maintain the effectiveness of the resale registration
        statement until the earlier of the time when all of the registered shares
        have
        been sold or may be sold without restriction pursuant to Rule 144(k) under
        the
        Securities Act of 1933. The registration rights agreement obligates the Company
        to pay specified liquidated damages to the participants in the Equity
        Restructuring to the extent the Company does not meet these deadlines or
        maintain the effectiveness of the resale registration statement for the required
        time period, as well as for certain other events.
 
 FSP
        EITF
        00-19-2 specifies that the contingent obligation to make future payments
        or
        otherwise transfer consideration under a registration payment arrangement
        should
        be separately recognized and measured in accordance with SFAS No. 5,
“Accounting for Contingencies.” Although the registration rights agreement
        provides for the payment of liquidated damages under certain conditions,
        due to
        various factors, including the good filing history of the Company relating
        to
        the requirement by the Company to file the registration statement, to have
        the
        registration statement declared effective and remain effective, the imposition
        of a registration rights liquidated damages liability was deemed to be not
        probable and therefore non-accruable.
  ***Series
        C Convertible Preferred Stock***
  On
        July
        25, 2007, the Company filed a certificate of designation with the State of
        Delaware authorizing the designation of a total of 60,000 shares of Series
        C
        Convertible Preferred Stock (See Note 18).
  26
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **13.
          Stockholders’ Equity, continued**
  ***Optional
        Conversion***
  Subject
        to the beneficial ownership cap described below, holders of Series C Convertible
        Preferred Stock are entitled at any time to convert their shares of Series
        C
        Convertible Preferred Stock into common stock, without any further payment.
        Each
        share of Series C Convertible Preferred Stock is initially convertible into
        66.67 shares of common stock, based on a conversion price of $15.00 per share.
        The number of shares of common stock issuable upon conversion of the Series
        C
        Convertible Preferred Stock is subject to adjustment upon the occurrence
        of
        certain events, including, among others, stock dividends, subdivisions and
        combinations of the Company’s common stock. In the event that the Company issues
        any shares of common stock or common stock equivalents at an effective price
        less than $15.00 per share of common stock, the conversion price will be
        reduced
        based on weighted average anti-dilution protections, subject to customary
        carve-outs, but in no event will the conversion price be less than $7.50
        per
        share.
  ***Mandatory
        Conversion***
  Subject
        to an effective registration statement, beginning 12 months from the closing
        date of the Equity Restructuring, if the closing bid price of the Company’s
        common stock exceeds $22.50 for 20 consecutive trading days and the trading
        volume of the common stock is not less than 50,000 shares for at least 15
        of
        those 20 consecutive trading days, the Company may require the conversion
        of the
        Series C Convertible Preferred Stock into shares of common stock at the
        applicable conversion price. In the event a holder of Series C Convertible
        Preferred Stock is prohibited from converting into common stock under this
        provision due to the 4.99% beneficial ownership limitation discussed below,
        the
        excess portion of the Series C Convertible Preferred Stock will be converted
        into Series D Convertible Preferred Stock on a one-for-one basis.
 
 ***Automatic
        Conversion***
  The
        Series C Convertible Preferred Stock will automatically convert into common
        stock upon the consummation of a Qualified Public Offering. In the event
        a
        holder of Series C Convertible Preferred Stock is prohibited from converting
        into common stock under this provision due to the 4.99% beneficial ownership
        limitation discussed below, the excess portion of the Series C Convertible
        Preferred Stock will be converted into Series D Convertible Preferred Stock
        on a
        one-for-one basis. Participants in the Equity Restructuring who elected to
        receive solely Series D Convertible Preferred Stock in lieu of shares of
        common
        stock they would have otherwise received may also elect to receive solely
        Series
        D Convertible Preferred Stock upon any optional, mandatory or automatic
        conversion of the Series C Convertible Preferred Stock (See Note
        18).
  ***Limitations
        on Conversion***
  The
        Series C Convertible Preferred Stock is subject to a beneficial ownership
        cap
        providing that each holder of Series C Convertible Preferred Stock may not
        convert his shares into common stock such that the number of shares of common
        stock issued after the conversion would exceed, when aggregated with all
        other
        shares of common stock owned by such holder and its affiliates at such time,
        in
        excess of 4.99% of the then issued and outstanding shares of the Company’s
        common stock. A holder may at any time waive this 4.99% cap upon 61 days’
notice.
  ***Voting
        Rights***
  Subject
        to the beneficial ownership cap described above, holders of Series C Convertible
        Preferred Stock are entitled to vote their shares on an as-converted to common
        stock basis, and will vote together with the holders of the common stock,
        and
        not as a separate class. Provided that at least 25% of the Series C Convertible
        Preferred Stock remains outstanding, the consent of a majority of the
        outstanding Series C Convertible Preferred Stock is required for
        (1) amendments of the Series C Convertible Preferred Stock certificate of
        designation, (2) amendments of the Company’s certificate of incorporation
        or bylaws adversely affecting the Series C Convertible Preferred Stock and
        (3) the authorization or issuance of any equity securities ranking pari
        passu with or senior to the Series C Convertible Preferred Stock. Holders
        of
        Series C Convertible Preferred Stock will also have any voting rights to
        which
        they are entitled by law.
 
 27
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **13.
          Stockholders’ Equity, continued**
  ***Liquidation
        Rights***
  In
        the
        event of any voluntary or involuntary liquidation, dissolution or winding-up
        of
        the Company, holders of Series C Convertible Preferred Stock will be entitled
        to
        receive out of assets of the Company available for distribution to stockholders,
        before any distribution is made to holders of any junior preferred stock
        or
        common stock, liquidating distributions in an amount equal to $1,000 per
        share.
        Upon completion of the liquidating distributions required to be made to holders
        of the Company’s preferred stock, holders of the Series C Convertible Preferred
        Stock will be entitled to receive their pro rata share, on an as-converted
        to
        common stock basis, of any assets remaining available for distribution to
        stockholders.
  ***Dividends***
  Holders
        of Series C Preferred Stock are not entitled to receive any dividends.
  ***Series
        D Convertible Preferred Stock***
  On
        July
        25, 2007, the Company filed a certificate of designation with the State of
        Delaware authorizing the designation of a total of 100,000 shares of Series
        D
        Convertible Preferred Stock.
  ***Optional
        Conversion***
  Subject
        to the beneficial ownership cap described below, holders of Series D Convertible
        Preferred Stock are entitled at any time to convert their shares of Series
        D
        Convertible Preferred Stock into common stock, without any further payment.
        Each
        share of Series D Convertible Preferred Stock is initially convertible into
        66.67 shares of common stock, based on a conversion price of $15.00 per share.
        The number of shares of common stock issuable upon conversion of the Series
        D
        Convertible Preferred Stock is subject to adjustment in the event of a stock
        dividend, subdivision or combination of the Company’s common stock.
  ***Mandatory
        Conversion***
  To
        the
        extent that a holder of Series D Convertible Preferred Stock falls below,
        or
        elects to waive, the 4.99% beneficial ownership limitation discussed below,
        subject to limited exceptions, the Company may require the conversion of
        the
        Series D Convertible Preferred Stock into shares of common stock at the
        applicable conversion price.
  ***Limitations
        on Conversion***
  The
        Series D Convertible Preferred Stock is subject to a beneficial ownership
        cap
        providing that each holder of Series D Convertible Preferred Stock may not
        convert his shares into common stock such that the number of shares of common
        stock issued after the conversion would exceed, when aggregated with all
        other
        shares of common stock owned by such holder and its affiliates at such time,
        in
        excess of 4.99% of the then issued and outstanding shares of the Company’s
        common stock. A holder may at any time waive this 4.99% cap upon 61 days’
notice.
  ***Voting
        Rights***
  Holders
        of Series D Convertible Preferred Stock do not have any voting rights except
        to
        the extent required by law.
  ***Liquidation
        Rights***
  In
        the
        event of any voluntary or involuntary liquidation, dissolution or winding-up
        of
        the Company, holders of Series D Convertible Preferred Stock will be entitled
        to
        receive out of assets of the Company available for distribution to stockholders,
        after distributions are made to holders of the Series C Convertible Preferred
        Stock, but before distributions are made to holders of common stock, liquidating
        distributions in an amount equal to $0.001 per share. Upon completion of
        the
        liquidating distributions required to be made to holders of the Company’s
        preferred stock, holders of the Series D Preferred Stock will be entitled
        to
        receive their pro rata share, on an as-converted to common stock basis, of
        any
        assets remaining available for distribution to stockholders.
 28
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **13.****Stockholders’
Equity,
        continued**
 
 ***Dividends***
  To
        the
        extent that any dividends are declared on the Company’s common stock, holders of
        Series D Convertible Preferred Stock
        will be entitled to receive such dividends on an as-converted basis. Holders
        of
        Series D Convertible Preferred Stock are not otherwise entitled to receive
        any dividends.
 
 ***Nasdaq
        Capital Market Listing***
  On
        September 21, 2007, the Company was approved for listing on the Nasdaq Capital
        Market and on September 26, 2007, commenced trading on Nasdaq under the symbol
        “GLOI”.
  **14.
        Stock Options**
  ***2006
        Long-Term Incentive Plan***
  During
        the three and nine months ended September 30, 2007, in connection with expected
        performance under a bonus program for senior executives, stock-based
        compensation of $297,401 and $543,496, respectively, was recognized for the
        estimated pro rata vesting of restricted stock. Of the nine month amount,
        $390,911 is associated with the amortization over the derived service period
        of
        the $1,303,037 grant date value, as derived by a third party valuation firm,
        of
        a restricted stock award that is based on the achievement of certain common
        stock market price milestones. The remaining nine month amount of $152,585
        is
        associated with the amortization over the service period of the probable
        outcome
        at each reporting date of a restricted stock award that is based on the
        achievement of certain performance criteria.
  ***Stock-Based
        Compensation***
  On
        November 18, 2005, the Company granted an option Mr. Jeffrey Nyweide, the
        Company’s Chief Financial Officer, who served pursuant to a consulting agreement
        through July 31, 2007, to purchase 62,500 shares of common stock at $20.00
        per
        share. This option has a term of five years, is non-forteitable and vests
        over
        three years. This option was initially valued at approximately $867,000
        utilizing the Black-Scholes option pricing model and was amortized to
        stock-based compensation over the three year vesting period, through July
        31,
        2007, in accordance with Emerging Issues Task Force pronouncement
        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”). On a quarterly basis, the Company adjusted the unvested value on
        a mark-to-market basis, and the cumulative effect of the adjustment amount
        on
        amortization is reflected in current period amortization. During the three
        and
        nine months ended September 30, 2007, ($4,212) and ($2,591) was credited to
        stock-based compensation expense under EITF 96-18 related to this option
        and
        recorded within general and administrative expenses.
 
 On
        June
        12, 2006 the Company granted Mr. Nyweide an option to purchase 62,500 shares
        at
        $17.60 per share. This option has a term of five years, is non-forfeitable,
        vests over three years, and was initially valued at approximately $779,000,
        utilizing the Black-Scholes option pricing model. The value of the option
        was
        amortized to stock-based compensation over the three year vesting period,
        through July 31, 2007, in accordance with Emerging Issues Task Force
        pronouncement 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”). On a quarterly basis, the Company adjusted the
        unvested value of these options on a mark-to-market basis, and the cumulative
        effect of the adjustment amount on amortization has been reflected in current
        period amortization. For the three and nine months ended September 30, 2006,
        ($2,184) and $9,373 was amortized to stock based compensation under EITF
        96-18
        related to this option.
 
 On
        January 1, 2007, the Company granted, in the aggregate, options for the purchase
        of 18,750 shares of its common stock at an exercise price of $12.00 per share,
        with a value of approximately $159,000 under the 2006 Long Term Incentive
        Plan,
        to three members of the Board of Directors. The options have a five year
        term
        and vest ratably at the end of each of the four quarterly periods following
        the
        date of grant.
 
 29
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **14.
        Stock Options**
 
 ***Stock-Based
        Compensation, continued***
 
 On
        January 1, 2007, the Company issued stock options for the purchase of 13,750
        shares of its common stock at an exercise price of $12.00 per share, with
        a
        value of approximately $117,000, 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 and vest ratably at
        the end of each of the four quarterly periods following the date of
        grant.
 
 On
        January 9, 2007, the Company granted, in the aggregate, options for the purchase
        of 26,423 shares of its common stock at an exercise price of $11.36 per share
        with a value of approximately $212,000 under the 2006 Long-Term Incentive
        Plan
        to employees and officers of On Line Consulting.   The options
        have a five year term and vest ratably upon the first, second and third
        anniversaries of the date of grant.
 
 On
        February 28, 2007, the Company granted, in the aggregate, options for the
        purchase of 38,894 shares of its common stock at an exercise price of $10.80
        per
        share with a value of approximately $296,000 under the 2006 Long-Term Incentive
        Plan to employees and officers of Facticon.   The options have a
        five year term and vest ratably upon the first, second and third anniversaries
        of the date of grant.
 
 On
        February 28, 2007, the Company granted, in the aggregate, options for the
        purchase of 62,504 shares of its common stock at an exercise price of $10.80
        per
        share with a value of approximately $476,000 under the 2006 Long Term Incentive
        Plan to employees and officers of Bode.   The options have a five
        year term and vest ratably upon the first, second and third anniversaries
        of the
        date of grant.
 
 Effective
        August 1, 2007, the Company terminated its consulting agreement and entered
        into
        an employment agreement with Mr. Nyweide. The unvested portion of Mr. Nyweide’s
        options as of August 1, 2007 was valued at $125,447 and $143,381 respectively,
        and is being amortized to stock based compensation expense over the remaining
        vesting periods in accordance with SFAS 123R due to his change in status
        from
        consultant to employee. During the three months ended September 30, 2007,
        $28,932 was amortized to stock based compensation under SFAS 123R related
        to
        these options.
 
 On
        September 28, 2007, the Company granted, in the aggregate, options for the
        purchase of 300,000 shares of its common stock at an exercise price of $7.24
        to
        the Chief Executive Officers of the Preparedness Services Unit, the Fraud
        and
        SIU Services Unit, and the Security Consulting and Investigations Unit. The
        options were granted under the 2006 Long Term Incentive plan, and have a
        value
        of approximately $1,526,000. The options have a five year term, and vest
        ratably
        upon the first second and third anniversaries of the date of grant.
 
 At
        September 30, 2007, the unamortized value of employee stock options under
        SFAS
        123R was approximately $5,193,000. The unamortized portion will be expensed
        over
        a weighted average period of 1.82 years. For the three and nine months ended
        September 30, 2006 costs of approximately $646,000 and $1,627,000, respectively,
        and for the three and nine months ended September 30, 2007, approximately
        $548,000 and $1,953,000 were recognized in connection with the vesting of
        these
        employee stock options.
  Stock-based
        compensation for non-employees accounted for under EITF 96-18 was approximately
        $316,000 and $884,000, and approximately $8,000 and $54,000, respectively,
        for
        the three and nine months ended September 30, 2006 and 2007, respectively,
        and
        is reflected within general and administrative expenses.
 
 30
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **14.
        Stock Options, continued**
 
 ***Stock-Based
        Compensation, continued***
 
 The
        fair
        value of each option grant during the three months and nine months ended
        September 30, 2006 and 2007 was estimated on the date of grant using the
        Black-Scholes option pricing model with the following assumptions used.
 
 For
                  the Three MonthsEnded
                  September 30,
              
              For
                  the Nine MonthsEndedSeptember
                  30,2006
              
              2007
              
              2006
              
              2007Dividend
                  yield
              
              
              0
              %
              
              0
              %
              
              0
              %
              
              0
              %Expected
                  volatility
              
              
              87
              %
              
              87
              %
              
              87
              %
              
              87
              %Risk-free
                  interest rate
              
              
              4.8
              %
              
              4.2
              %
              
              4.9
              %
              
              4.34
              %Expected
                  lives
              
              
              5
                  years
              
              
              5
                  years
              
              
              5
                  years
              
              
              5
                  years
 
 The
        weighted average fair value of the options on the date of grant, using the
        fair
        value based methodology for the three and nine months ended September 30,
        2006
        was $10.88 and $12.16 and for the three and nine months ended September 30,
        2007
        was $5.09 and $6.05.
  A
        summary
        of options outstanding for the nine months ended September 30, 2007 is as
        follows:
 
 **Number
                  of Options**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**Options
                  outstanding at January 1, 2007
              
              
              1,030,628
              
              $
              13.67Granted
              
              
              460,321
              
              
              8.60Exercised
              
              
              (198,530
              )
              
              2.91Forfeited
              
              
              (81,555
              )
              
              10.64Options
                  outstanding at September 30, 2007
              
              
              1,210,864
              
              $
              13.71
  31
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **14.
        Stock Options, continued**
 
 ***Stock-Based
        Compensation***
 
 A
        summary
        of the Company’s stock options outstanding and exercisable at September 30, 2007
        is presented in the table below:
 
 TotalOption
                  Exercise
                Price
                  Range
              
              $
              4.80
              
              $
              5.44
              
              $
                $
              6.80
                  -
                7.24
              
              $
                $
              10.80
                  -
                12.00
              
              $
                $
              16.00
                  -
                20.00Outstanding
              
              
              18,644
              
              
              57,507
              
              
              307,353
              
              
              156,571
              
              
              670,789
              
              
              1,210,864Weighted
                  averageremainingcontractual
                  life ofoptions
                  outstanding(in
                  years)
              
              
              1.3
              
              
              2.5
              
              
              4.9
              
              
              4.4
              
              
              3.4Exercisable
              
              
              18,644
              
              
              38,461
              
              
              7,353
              
              
              21,563
              
              
              272,629
              
              
              358,650
  32
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **15.   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 are 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.
 
 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 (in thousands) about the
        Company’s business segments for the three and nine months ended September 30,
        2006 and 2007.
  **For
                  the Three Months Ended September 30, 2006**PreparednessServices
              
              Fraud
                  and SIUServices
              
              Security
                  Consulting andInvestigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              12,561
              
              $
              5,701
              
              $
              2,755
              
              $
              -
              
              $
              21,017Income
                  (Loss) from Operations
              
              $
              845
              
              $
              (804
              )
              $
              (230
              )
              $
              -
              
              $
              (189
              )Depreciation
                  and Amortization
              
              $
              372
              
              $
              175
              
              $
              106
              
              $
              -
              
              $
              653Interest
                  Expense
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              21
              
              $
              21
 
 33
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **15.   Segment
        Data, continued**
  **For
                  the Three Months Ended September 30, 2007**PreparednessServices
              
              Fraud
                  and SIUServices
              
              Security
                  Consulting andInvestigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              6,769
              
              $
              6,384
              
              $
              8,421
              
              $
              -
              
              $
              21,574Loss from
                  Operations
              
              $
              (
                  401
              )
              $
              (2,102
              )
              $
              (1,902
              )
              $
              -
              
              $
              (4,405
              )Depreciation
                  and Amortization
              
              $
              313
              
              $
              251
              
              $
              492
              
              $
              -
              
              $
              1,056Interest
                  Expense
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              540
              
              $
              540
  **For
                  the Nine Months Ended September 30, 2006**PreparednessServices
              
              Fraud
                  and SIUServices
              
              Security
                  Consulting andInvestigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              27,392
              
              $
              13,180
              
              $
              4,040
              
              $
              -
              
              $
              44,612Income
                  (Loss) from Operations
              
              $
              2,088
              
              $
              (2,699
              )
              $
              (518
              )
              $
              -
              
              $
              (1,129
              )Depreciation
                  and Amortization
              
              $
              696
              
              $
              493
              
              $
              168
              
              $
              -
              
              $
              1,357Interest
                  Expense
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              628
              
              $
              628Amortization
                  of Debt Discountson
                  Convertible Notes Payable
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              7,523
              
              $
              7,523Amortization
                  of DeferredFinancing
                  Costs
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              2,695
              
              $
              2,695
 
 34
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **15.
        Segment Data, continued**
 
 **For
                  the Nine Months Ended September 30, 2007**PreparednessServices
              
              Fraud
                  and SIUServices
              
              Security
                  Consulting andInvestigations
              
              Corporate
              
              ConsolidatedRevenues
              
              $
              24,032
              
              $
              18,249
              
              $
              23,148
              
              $
              -
              
              $
              65,429Loss
                  from Operations
              
              $
              (7,262
              )
              $
              (6,203
              )
              $
              (4,571
              )
              $
              -
              
              $
              (18,036
              )Depreciation
                  andAmortization
              
              $
              930
              
              $
              861
              
              $
              1,126
              
              $
              -
              
              $
              2,917Interest
                  Expense
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              745
              
              $
              745
 
 **16.
        Major Clients**
 
 Revenues
        from the Company’s services to a limited number of clients have accounted for a
        substantial percentage of the Company’s total revenues. For the three and nine
        months ended September 30, 2006, the Company’s largest client accounted for
        approximately 52% and 57% of total revenues, which was work performed under
        a
        government contract and the Company’s second largest client accounted for
        approximately 9% and 11% of total revenues. For the three and nine months
        ended
        September 30, 2007, the Company’s two largest clients accounted for
        approximately 27% and 32% for the largest account and 9% and 8% for the second
        largest account, respectively, of the Company’s revenues. The Company’s largest
        and second largest clients operate within the Preparedness Services and Fraud
        and SIU Services segments, respectively.
 
 For
        the
        three and nine months ended September 30, 2006, government contract clients
        represented 57% and 58% of the Company’s net revenues, the most significant of
        which for the three and nine months ended September 30, 2006, represented
        95%
        and 94% of the Company’s net revenue within Preparedness Service segment. For
        the three and nine months ended September 30, 2007, 50% and 42%, respectively,
        of the Company’s net revenues, the most significant of which for the three and
        nine months ended September 30, 2007, represented 96% and 98% of the Company’s
        net revenues within the Preparedness Services segment.
 
 35
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 **17.****Related
        Party Transactions** ******
 
 The
        Company had a rental agreement with the QuanStar Group which expired during
        2006. The Company incurred rent expense with the QuanStar Group for the
        Company’s administrative headquarters of approximately $0 and $27,100 for the
        three and nine months ended September 30, 2006, respectively. Harvey Schiller,
        Ph.D., the Company’s Chairman and Chief Executive Officer, is a partner in the
        QuanStar Group. Per Olof Lööf, the Company’s Vice Chairman of the Board is a
        former partner in the QuanStar Group.
 
 On
        July 25, 2007, upon the completion of the Company’s Equity Restructuring,
        (1) Dr. Schiller, the Company’s CEO, received 22 shares of Series C
        Preferred Stock and 688 shares of common stock in consideration of the
        cancellation of his shares of Series A Preferred Stock and related warrants,
        (2) Lööf Holdings received 11 shares of Series C Preferred Stock and 344
        shares of common stock in consideration of the cancellation of its shares
        of
        Series A Preferred Stock and related warrants, (3) Integris Funds Ltd.
        received 1,500 shares of Series C Preferred Stock and 46,875 shares of common
        stock in consideration of the cancellation of its shares of Series A Preferred
        Stock and related warrants and (4) Bayshore Merchant Services, Inc.
        received 2,344 shares of common stock in consideration of the cancellation
        of
        its Series B warrants. Lööf Holdings, LLC, is a limited liability company
        controlled by Mr. Lööf, the Company’s Vice Chairman of the Board of Directors;
        Bayshore Asset Management, Inc. is an affiliate of Bayshore Merchant Services,
        Inc., John Bujouves, a member of the company’s board of directors, is the
        President and a director of Bayshore Asset Management and he is also the
        Chief
        Executive Officer of Integris Funds, Ltd.
 
 **18.
        Subsequent Events**
  ***Underwritten
        Public Offering***
  On
        October 29, 2007, the Company completed an underwritten public offering of
        4,500,000 shares of its common stock receiving approximately $20.25 million
        in
        gross proceeds and, resulting in $18.2 million in net proceeds. In addition,
        the
        underwriters have an option for 30 days to purchase up to an additional 675,000
        shares of common stock to cover any over-allotments. The Company also registered
        approximately 8,000,000 shares of common stock for resale by existing
        stockholders under this registration statement.
 
 The
        Company used a portion of the net proceeds from the underwritten public offering
        to repay certain indebtedness and related accrued interest and intends to
        use
        the balance of the net proceeds for working capital, general corporate purposes,
        and potentially for strategic acquisitions and investments.
 
 In
        connection with this underwritten public offering, the Company entered into
        an
        October 29, 2007 agreement with Canaccord Adams Inc. and Morgan Keegan
& Company, Inc., as underwriters, who were paid aggregate fees of
        $1,418,000.
  The
        underwriters for the offering have a 30-day over-allotment option to purchase
        up
        to an additional 675,000 shares of common stock from GlobalOptions at the
        offering price pf $4.50 per share.
  36
 GLOBALOPTIONS
          GROUP, INC. AND SUBSIDIARIES
 Notes
          to
          Condensed Consolidated Financial Statements
 (Unaudited)
 
 **18.
        Subsequent Events, continued**
 
 ***Conversion
        of Series C Convertible Preferred Stock***
  Upon
        the
        closing of the underwritten public offering on October 29, 2007, the then
        outstanding 59,400 shares of Series C Convertible Preferred stock automatically
        converted into 1,541,167 shares of common stock and 36,282.8 shares of Series
        D
        Convertible Preferred Stock, which are convertible into 2,418,975 shares
        of
        common stock, subject to the 4.99% beneficial ownership cap.
  ***Modification
        to the Line of Credit Agreement***
 
 On
        November 6, 2007, GlobalOptions entered into an amendment to the agreement
        with
        the financial institution that provides the line of credit. The amendment
        increased to $20,000,000 the amount available under the line of credit and
        modified certain liquidity and financial earnings covenants.
 
 ***Amendments
        to Articles of Incorporation***
 
 On
        November 8, 2007, GlobalOptions filed a certificate with the Secretary of
        the
        State of Delaware eliminating all matters related to their Series C Convertible
        Preferred Stock. All formerly outstanding shares were converted to GlobalOptions
        Common Stock and in some cases Series D Convertible Preferred Stock.
  ***JLWA
        Modification Agreement***
 
 On
        October 20, 2007, the Company reached an agreement with the JLWA Sellers
        under which the JLWA Sellers agreed to the prepayment of the principal and
        accrued interest on a $4.5 million promissory note, originally due on
        January 15, 2008, that the Company had issued to them pursuant to the terms
        of the JLWA Modification Agreement. In connection with this acceleration,
        on
        October 29, 2007, the Company made a negotiated prepayment premium of $800,000
        to compensate the JLWA Sellers for, among other things, foregone interest
        and
        the cost of accelerated tax payments. The Company borrowed approximately
        $5.4
        million from its line of credit to fund these payments, plus interest of
        $121,475, prior to the completion of the underwritten public offering (See
        Note
        9).
 
 On
        October 29, 2007, pursuant to the terms of the JLWA Modification Agreement,
        the
        JLWA Sellers requested acceleration of the $4,300,000 promissory note, plus
        interest of $38,103, in connection with the October 29, 2007 completion of
        the
        Company’s underwritten public offering (see Notes 10 and 11).
 
 37


**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND**


**RESULTS
      OF OPERATION**




*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-QSB
      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**




We
      are 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 eight complementary risk mitigation businesses since August 2005
      that
      contributed an aggregate $21.1 million and $63.4 million in revenues to our
      business during the three and nine months ended September 30, 2007 and an
      aggregate $20.0 million and $41.8 million during the three and nine months
      ended
      September 30, 2006.




We
      believe our reputation, credentials and personal relationships provide us 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 (FEMA) 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).


·


38





·
              *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, and Joseph Rosetti, former Director of Worldwide
                  Security at IBM.





·
            *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.





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
                September 30,
            
            For
                the Nine Months
              Ended
                September 30,Segment
            
            2006
            
            2007
            
            2006
            
            2007Preparedness
                Services
            
            
            59.8
            %
            
            31.4
            %
            
            61.4
            %
            
            36.7
            %Fraud
                and SIU Services
            
            
            27.1
            
            
            29.6
            
            
            29.5
            
            
            27.9Security
                Consulting and Investigations
            
            
            13.1
            
            
            39.0
            
            
            9.1
            
            
            35.4100.0
            %
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %




**Growth
      Strategy**




Our
      strategy to grow our business includes the following:




·
            *Leverage
                Our Relationships and Expertise*.
                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.




·
            *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.




·
            *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.




·
            *Expand
                Internationally*.
                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.




**Corporate
      Developments**




***Nasdaq
      Capital Market Listing***




Our
      common stock has been approved for listing on the Nasdaq Capital Market as
      of
      September 21, 2007 and, on September 26, 2007, commenced trading on Nasdaq
      under
      the symbol “GLOI.”




39




***State
      of Louisiana Contract***




Following
      on the success of our post-Katrina response and recovery contract, in September
      2007, the State of Louisiana awarded us a two-year contract, with the State’s
      option for a third year, to be the lead provider of relief and recovery efforts
      related to all Louisiana disasters. Under this new contract, the State of
      Louisiana has chosen to expand our role to be the State’s lead disaster advisor
      and recovery manager. We will continue to provide recovery relief in the
      aftermath of Hurricanes Katrina and Rita, and will also provide these same
      services for other new and/or pre-existing disasters. In our enhanced role,
      we
      will provide programmatic and policy advice on FEMA and will assist with the
      development and dissemination of Louisiana’s disaster-related policies and
      procedures.




The
      contract renewal process, which coincided with a request by the State to bring
      in more contractors and locally-hired personnel, took more time than expected
      to
      complete. As a result, we expect our 2007 revenues will be adversely affected,
      as we anticipate a portion of the revenues we expected to recognize in 2007
      under this contract will be delayed until 2008.




***Recent
      Acquisitions***




In
      January 2007, we acquired On Line Consulting Services (On Line Consulting)
      to
      expand our Security Consulting and Investigations unit. The addition of On
      Line
      Consulting provides us with a full-service security and fire alarm consulting
      and design firm.




In
      February 2007, we acquired The Bode Technology Group, Inc. (Bode) to expand
      our
      Security Consulting and Investigations unit. The addition of Bode gives us
      the
      ability to provide forensic DNA analysis, proprietary DNA collection products
      and related research services to law enforcement agencies, federal and state
      governments, crime laboratories and disaster management organizations.




In
      February 2007, we acquired Facticon, Inc. (Facticon) to expand our Fraud and
      SIU
      Services unit. The addition of Facticon provides us with additional
      surveillance, investigative and business intelligence capabilities.




***Equity
      Restructuring***




On
      July
      25, 2007, we eliminated all of our outstanding Series A Convertible Preferred
      Stock, Series B Convertible Preferred Stock and warrants in an equity
      restructuring (Equity Restructuring).




As
      a
      result of the Equity Restructuring, all formerly outstanding Series A and B
      Convertible Preferred Stock and warrants convertible into 6,625,562 shares
      of
      common stock were restructured into a total of 5,904,556 shares, consisting
      of
      (1) newly-created Series C and D Preferred Stock convertible into 5,273,791
      shares and (2) 630,765 shares of common stock. Each share of Series C and D
      Preferred Stock is convertible into 66.67 shares of common stock. The Series
      C
      Preferred Stock automatically converted into common stock upon consummation
      of
      the October 29, 2007 underwritten public offering (see Underwritten Public
      Offering below).




As
      part
      of the Equity Restructuring, holders of our Series A Preferred Stock and Series
      B Preferred Stock received, in consideration of the cancellation of those shares
      and all of their warrants:




·
            
            one
                share of Series C Preferred Stock for each share of their Series
                A
                Preferred Stock and Series B Preferred Stock; and




·
            
            31.25
                shares of common stock for each share of their Series A Preferred
                Stock
                and Series B Preferred Stock.




In
      addition, all other warrant holders received, in consideration of the
      cancellation of their warrants, 0.2 shares of common stock for each share
      subject to those warrants.




In
      addition, to minimize the impact of concentrated voting power, a limited number
      of holders, whose receipt of common stock in the Equity Restructuring would
      have
      caused them to beneficially own in excess of 4.99% of our outstanding common
      stock, received shares of Series D Preferred Stock in lieu of shares of common
      stock. Similarly, some of these holders received one share of Series D Preferred
      Stock upon the automatic conversion of each share of their Series C Preferred
      Stock upon the consummation of the underwritten public offering. The Series
      D
      Preferred Stock is non-voting, has a nominal $0.001 per share liquidation
      preference and is convertible into common stock to the extent that a holder’s
      beneficial ownership of our common tock falls below the 4.99% threshold.




40




As
      required by a registration rights agreement with the participants in the Equity
      Restructuring, on October 24, 2007 we registered for resale a total of 5,904,556
      shares of our common stock issued or issuable upon the completion of the Equity
      Restructuring, the automatic conversion of the Series C Preferred Stock and
      the
      conversion of the Series D Preferred Stock. All of the holders who participated
      in the Equity Restructuring agreed to not sell any shares of common stock or
      securities convertible into common stock for a period of 90 days after the
      final
      prospectus related to the underwritten public offering.




***JLWA
      Note Prepayment***




On
      October 20, 2007, we reached an agreement with the former owners (JLWA
      Sellers) of James Lee Witt Associates, LLC (JLWA) under which the JLWA Sellers
      agreed to the prepayment of the principal and accrued interest on a $4.5 million
      promissory note, originally due on January 15, 2008, that we had issued to
      them in partial payment of the purchase price for our acquisition of JLWA.
      In
      connection with this acceleration, we will make a negotiated prepayment premium
      of $800,000 to compensate the JLWA Sellers for, among other things, foregone
      interest and the cost of accelerated tax payments. We borrowed approximately
      $5.4 million from our line of credit in order to fund these payments immediately
      prior to the completion of the underwritten public offering. In this document,
      we refer to this transaction as the JLWA Note Prepayment.




***Underwritten
      Public Offering***




On
      October 29, 2007, the Company completed an underwritten public offering of
      4,500,000 shares of its common stock receiving approximately $20.25 million
      in
      gross proceeds or $18.2 million in net proceeds. In addition, the underwriters
      have an option for 30 days to purchase up to an additional 675,000 shares of
      common stock to cover any over-allotments. The Company also registered
      approximately 8,000,000 shares of common stock (including the 5,904,556 shares
      in connection with our Equity Restructuring) for resale by existing stockholders
      under a registration statement.




The
      Company used a portion of the net proceeds from the proposed underwritten public
      offering to repay $4.3 million of notes and $38,000 of related accrued interest
      and intends to use the balance of the net proceeds for working capital, general
      corporate purposes, and potentially for strategic acquisitions and investments.





In
      connection with the underwritten public offering, the Company entered into
      an
      October 29, 2007 agreement with Canaccord Adams Inc. and Morgan Keegan
& Company, Inc., as underwriters, who were paid aggregate fees of
      $1,418,000.





The
      underwriters for the offering have a 30-day over-allotment option to purchase
      up
      to an additional 675,000 shares of common stock from GlobalOptions at the
      offering price.





***Conversion
      of Series C Convertible Preferred Stock***




Upon
      the
      closing of the underwritten public offering on October 29, 2007, the then
      outstanding 59,400 shares of Series C Convertible Preferred stock automatically
      converted into 1,541,167 shares of common stock and 36,282.8 shares of Series
      D
      Convertible Preferred Stock, currently convertible into 2,418,975 shares of
      common stock.




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





On
      November 6, 2007, GlobalOptions entered into an amendment to the agreement
      with
      the financial institution that provides the line of credit. The amendment
      increased to $20,000,000 the amount available under the line of credit and
      modified certain liquidity and financial earnings covenants.





41




**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 ranges
      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
      that 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
      is 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
      Expenses**




Our
      selling and marketing expenses primarily include salaries and commissions,
      as
      well as travel and other expenses, incurred by our employees who are involved
      in
      selling and promoting our services. The earnout expenses related to the
      acquisition of JLWA are also reflected in our selling and marketing expenses.
      Our general and administrative expenses consist primarily of salaries, bonuses
      and stock-based compensation for our employees not performing work directly
      for
      our clients. 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 salaries for members of our senior management team.




**Results
      of**  **Operations**


For
                  the Three Months Ended
              
              For
                  the Nine Months EndedSeptember
                  30,
              
              September
                  30,2006
              
              2007
              
              2006
              
              2007Revenues
              
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %Cost
                  of revenues
              
              
              51.1
              
              
              53.2
              
              
              51.2
              
              
              54.8Gross
                  profit
              
              
              48.9
              
              
              46.8
              
              
              48.8
              
              
              45.2Operating
                  expenses:Selling
                  and marketing expenses
              
              
              12.3
              
              
              6.3
              
              
              14.2
              
              
              18.7General
                  and administrative
              
              
              37.5
              
              
              60.9
              
              
              37.0
              
              
              54.1Total
                  operating expenses
              
              
              49.8
              
              
              67.2
              
              
              51.3
              
              
              72.8Loss
                  from operations
              
              
              (0.9
              )
              
              (20.4
              )
              
              (2.5
              )
              
              (27.6
              )Other
                  income (expense), net
              
              
              0.8
              
              
              (2.4
              )
              
              (23.8
              )
              
              (0.5
              )Net
                  loss
              
              
              (0.1
              )
              
              (22.9
              )
              
              (26.4
              )
              
              (28.1
              )Deemed
                  dividends to Series A and Bconvertible
                  preferred stockholders
              
              
              -
              
              
              -
              
              
              (54.7
              )
              
              -Net
                  loss available to common stockholders
              
              
              (0.1
              )%
              
              (22.9
              )%
              
              (81.1
              )%
              
              (28.1
              )%




42




**GlobalOptions’
      Three Months Ended September 30, 2006 Compared to Three Months Ended September
      30, 2007**




**Revenues**




We
      had
      overall revenues of $21,017,000 for the three months ended September 30, 2006,
      as compared to revenues of $21,574,000 for the three months ended September
      30,
      2007, for an overall increase of $557,000 or 2.7%. The increase in revenues
      for
      the three months ended September 30, 2007 was primarily attributable to our
      new
      client account relationships that we obtained through the execution of our
      acquisition plan, partially offset by a decline in revenues from the State
      of
      Louisiana, our largest customer.




Preparedness
      Services revenues were $12,561,000 for the three months ended September 30,
      2006, as compared to $6,769,000 for the three months ended September 30, 2007,
      for a decrease of $5,792,000 or 46.1%. 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 decrease of $5,792,000 was primarily attributable to the decline
      of revenues from the State of Louisiana. During the three months ended September
      30, 2006 we were at a fairly high level of our Katrina response efforts and
      generated Louisiana revenues of $ 10,842,000 .
      For the
      three months ended September 30, 2007, the scope of our work narrowed, we
      transferred certain of our personnel to Louisiana and we were asked to limit
      the
      hours worked per day, resulting in $5,768,000 of revenues from the State of
      Louisiana. Furthermore, the contract renewal process, which coincided with
      a
      request by the State to bring in more contractors and locally-hired personnel,
      took more time than expected to complete. As a result, we expect our 2007
      revenues will be adversely affected, as we anticipate a portion of the revenues
      we expected to recognize in 2007 under this contract will be delayed until
      2008.




Fraud
      and
      SIU Services revenues were $5,701,000 for the three months ended September
      30,
      2006, as compared to $6,384,000 for the three months ended September 30, 2007.
      The increase of $683,000 or 12.0% was primarily attributable to the expansion
      of
      our client base through the acquisitions of Hyperion Risk in August 2006 and
      Facticon on February 28, 2007, including the addition of a significant new
      third
      party insurance client, through whom we generated $647,000 of investigation
      related revenue for the three months ended September 30, 2007.





Security
      Consulting and Investigations revenues were $2,755,000 for the three months
      ended September 30, 2006, as compared to $8,421,000 for the three months ended
      September 30, 2007. The increase of $5,665,000 or 205.6% is attributable to
      the
      client base that we acquired in connection with the acquisitions of On Line
      Consulting in January 2007 for fire and other building security, and Bode in
      the
      end of February 2007 for DNA data banking and investigations. During the three
      months ended September 30, 2007, Bode generated total revenues of $4,386,000,
      with multiple large-scale investigations and data banking projects.





**Gross
      Profit**





Our
      consolidated gross profit for the three months ended September 30, 2006 and
      September 30, 2007 was $10,279,000 and $10,095,000 respectively, reflecting
      gross profit margins of 48.9% and 46.8%, respectively consistent with the
      variable nature of our cost of revenues. Preparedness Services gross profit
      was
      $6,173,000 or 49.1% of this segment’s revenues for the three months ended
      September 30, 2006, as compared to $2,830,000 or 41.8% of this segment’s
      revenues for the three months ended September 30, 2007. The reduction in gross
      profit percentage was attributable to certain price reductions that we provided
      to Louisiana in order to competitively position ourselves for the 2007 contract
      renewal. Fraud and SIU Services gross profit was $2,818,000 or 49.4% of this
      segment’s revenues for the three months ended September 30, 2006, as compared to
      $3,077,000 or 48.2% of this segment’s revenues for the three months ended
      September 30, 2007. The decrease in margin percentage relates to a change in
      client mix. Security Consulting and Investigations gross profit was $1,288,000
      or 46.7% of this segment’s revenues for the three months ended September 30,
      2006, as compared to $4,188,000 or 49.7% of this segment’s revenues for the
      three months ended September 30, 2007. Approximately
      2.5% of this margin difference is due to the conclusion of certain long term
      client projects in our Security Consulting business.




43





**Operating
      Expenses**




Selling
      and marketing expenses were $2,585,000 or 12.3% of revenues for the three months
      ended September 30, 2006, as compared to $1,357,000 or 6.3% of revenues for
      the
      three months ended September 30, 2007. The decrease of $1,228,000 or 47.5%
      is
      primarily attributable to the elimination of further JLWA acquisition earnout
      expense which in 2006 was $1,833,000. General and administrative expenses were
      $7,883,000 or 37.5% of revenues for the three months ended September 30, 2006,
      as compared to $13,143,000 or 60.9% of revenues for the three months ended
      September 30, 2007. The increase of $5,260,000 or 66.7% is attributable to
      increased personnel, our 2006 and 2007 acquisitions, legal, accounting and
      other
      professional fees incurred in order to fulfill our responsibilities as a public
      company, costs incurred for our equity restructuring and costs incurred for
      due
      diligence related to the execution of our acquisition plan.




**Other
      Income (Expense), Net**




Interest
      expense was $21,000 for the three months ended September 30, 2006, as compared
      to $540,000 for the three months ended September 30, 2007. The increase of
      $519,000 was attributable to the increase in the level of debt from prior
      acquisitions during 2007.




We
      recorded interest income of $194,000 and $16,000 for the three months ended
      September 30, 2006 and 2007, respectively. The decrease in interest income
      of
      $178,000 was due to a decrease in cash available for Company investments due
      to
      the acquisitions of Bode, Facticon and On Line Consulting during the first
      quarter of 2007.





**GlobalOptions’
      Nine Months Ended September 30, 2006 Compared to Nine Months Ended September
      30,
      2007**





**Revenues**





We
      had
      overall revenues of $44,612,000 for the nine months ended September 30, 2006,
      as
      compared to revenues of $65,429,000 for the nine months ended September 30,
      2007, for an overall increase of $20,817,000 or 46.7%. The increase in revenues
      for the nine months ended September 30, 2007 was primarily attributable to
      our
      new client account relationships that we obtained through the execution of
      our
      acquisition plan.




Preparedness
      Services revenues were $27,392,000 for the nine months ended September 30,
      2006,
      as compared to $24,032,000 for the nine months ended September 30, 2007. The
      decrease of $3,360,000 or 12.3 % was primarily attributable to a decrease in
      revenue from the State of Louisiana (principally in the third quarter of 2007),
      partially offset by JLWA’s revenues only being included since it’s March 10,
      2006 acquisition date. 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 $25,540,000 for the nine months ended September 30, 2006,
      as compared to $20,771,000 of revenues for the nine months ended September
      30,
      2007. The 2007 reduction in revenue of $4,769,000 or 18.7% for the State of
      Louisiana is due to the scope of our work being narrowed and the transfer of
      certain of our personnel to the State of Louisiana. Furthermore, the contract
      renewal process, which coincided with a request by the State to bring in more
      contractors and locally-hired personnel, took more time than expected to
      complete. As a result, we expect our 2007 revenues will be adversely affected,
      as we anticipate a portion of the revenues we expected to recognize in 2007
      under this contract will be delayed until 2008.




Fraud
      and
      SIU Services revenues were $13,180,000 for the nine months ended September
      30,
      2006, as compared to $18,248,000 for the nine months ended September 30, 2007.
      The increase of $5,068,000 or 38.5% was primarily attributable to the expansion
      of our client base through the acquisitions of Hyperion Risk in August 2006
      and
      Facticon on February 28, 2007, including the addition of a significant new
      third
      party administrator client, through whom we generated $1,705,000 of
      investigation related revenue for the nine months ended September 30,
      2007.





Security
      Consulting and Investigations revenues were $4,040,000 for the nine months
      ended
      September 30, 2006, as compared to $23,148,000 for the nine months ended
      September 30, 2007. The increase of $19,108,000 or 473.0% was attributable
      to
      the client base that we acquired in connection with the acquisitions of Safir
      in
      May 2006 for security consulting and investigations, Secure Source in May 2006
      for international risk mitigation and executive protection, On Line Consulting
      in January 2007 for fire and other building security, and Bode in the end of
      February 2007 for data banking and DNA investigations.





44





**Gross
      Profit**




Our
      consolidated gross profit for the nine months ended September 30, 2006 and
      September 30, 2007 was $21,751,000 and $29,595,000, reflecting gross profit
      margins of 48.7% and 45.2%, respectively, remaining fairly consistent with
      the
      variable nature of our cost of revenues. Preparedness Services gross profit
      was
      $13,581,000 or 49.6% of this segment’s revenues for the nine months ended
      September 30, 2006, as compared to $10,600,000 or 44.1% of this segment’s
      revenues for the nine months ended September 30, 2007. The reduction in gross
      profit percentage was attributable to certain price reductions that we provided
      to Louisiana in order to competitively position ourselves for the 2007 contract
      renewal. Fraud and SIU Services gross profit was $6,306,000 or 47.8% of this
      segment’s revenues for the nine months ended September 30, 2006, as compared to
      $8,451,000 or 46.3% of this segment’s revenues for the nine months ended
      September 30, 2007 due to changes in customer programs. Security Consulting
      and
      Investigations gross profit was $1,864,000 or 46.1% of this segment’s revenues
      for the nine months ended September 30, 2006, as compared to $10,544,000 or
      45.5% of this segment’s revenues for the nine months ended September 30,
      2007.




**Operating
      Expenses**




Selling
      and marketing expenses were $6,353,000 or 14.2% of revenues for the nine months
      ended September 30, 2006, as compared to $12,258,000 or 18.7% of revenues for
      the nine months ended September 30, 2007. The increase of approximately
      $5,905,000 or 92.9% is primarily attributable to the increase in the JLWA
      acquisition earnout expense of $3,657,000, from $4,075,000 for the nine months
      ended September 30, 2006 to $7,732,000 for the nine months ended September
      30,
      2007. The substantial increase in earnout expense is due to the acceleration
      of
      earnout expense of $6,330,000 incurred in connection with the May 11, 2007
      JLWA
      Modification Agreement. General and administrative expenses were $16,527,000
      or
      37.0% of revenues for the nine months ended September 30, 2006, as compared
      to
      $35,374,000 or 54.0% of revenues for the nine months ended September 30, 2007.
      The increase of $18,847,000 or 114.0% is attributable to increased personnel,
      our 2006 and 2007 acquisitions, legal, accounting and other professional fees
      incurred in order to fulfill our responsibilities as a public company, costs
      incurred for our equity restructuring and costs incurred for due diligence
      related to the execution of our acquisition plan.




**Other
      Income (Expense), Net**




Interest
      expense was $628,000 for the nine months ended September 30, 2006, as compared
      to $745,000 for the nine months ended September 30, 2007. The increase of
      $117,000 or 18.6% was attributable to higher balances on the Company’s line of
      credit as well as an increase in debt related to acquisitions during 2007.




Other
      income of $100,000 for the nine months ended September 30, 2007 is attributable
      to a gain resulting from a lease settlement.




We
      also
      incurred costs in conjunction with notes payable issued on March 10,
      2006, May 12, 2006 and June 28, 2006. These costs were
      capitalized to deferred financing costs, amortized over the term of the related
      debt and are presented as other income (expense), net. Additionally, in
      accordance with Emerging Issues Task Force Issue No. 00-27 “Application of Issue
      98-5 to Certain Convertible Instruments,” the notes issued on June 28, 2006
      were considered to have a beneficial conversion premium feature. For the nine
      months ended September 30, 2006, we recorded a debt discount of $6,922,000
      related to this conversion premium and we recorded a debt discount of $600,000
      as the value of the beneficial conversion feature related to the 8% promissory
      note issued in conjunction with the acquisition of Safir on May 12,
      2006.




The
      aggregate of $2,695,000 of deferred financing costs, as well as the aggregate
      of
      $7,523,000 of deferred debt discounts, were amortized through June 29,
      2006, the date the notes were exchanged for our Series B Convertible Preferred
      Stock.




45




**Deemed
      Dividends to Series B Convertible Preferred Stockholders**




At
      June 29, 2006, the date of issuance of our Series B Convertible Preferred
      Stock and related warrants, the fixed conversion price of the Series B
      Convertible Preferred Stock of $16.00 represented a discount to the market value
      of our common stock of $17.60 per share. In accordance with EITF 00-27 and
      EITF
      98-5, we determined the relative fair value of the Series B Convertible
      Preferred Stock and warrants and allocated the proceeds received on a relative
      fair value basis. Based upon this calculation, the effective conversion price
      of
      the Series B Convertible Preferred Stock was determined to be $10.24 per common
      share, resulting in a beneficial conversion feature for a deemed dividend of
      $24,413,000 for the three and nine months ended September 30, 2006.




**Liquidity
      and Capital Resources**




***For
      the Nine Months Ended September 30, 2007***




We
      had
      cash and cash equivalent balances of $2,981,000 as of September 30,
      2007.




Cash
      used
      in operating activities was $1,729,000 and $7,435,000 for the nine months ended
      September 30, 2006 and 2007, respectively. The use of funds in operations is
      primarily due to our net losses in 2006 and 2007, reduced by charges for
      non-cash items included in the operating losses, offset by the use of funds
      in
      financing accounts receivable. For the nine months ended September 30, 2006
      and
      2007, our net losses were $11,764,000 and $18,414,000, respectively. For the
      nine months ended September 30, 2006 and 2007, the non-cash charges included
      amounts for depreciation and amortization of $1,357,000 and $2,917,000, charges
      for stock-based compensation of $2,043,000 and $2,659,000, charges for
      amortization of debt discounts of $7,523,000 and $0, charges for amortization
      of
      deferred financing costs of $2,695,000 and $0, and bad debt provisions of
      $188,000 and $1,992,000, respectively. In addition, for the nine months ended
      September 30, 2006 and 2007, we utilized cash in funding working capital
      primarily to fund an increase in accounts receivable of $10,596,000 and
      $4,663,000, offset by increases in amounts due for the JLWA earnout of
      $4,075,000 and $7,732,000, respectively.




Cash
      used
      in investing activities for the nine months ended September 30, 2007 was
      $15,524,000, of which $14,504,000 related to our acquisitions of On Line
      Consulting, Bode and Facticon. Cash used in investing activities for the nine
      months ended September 30, 2006 was $10,121,000, of which $9,979,000 related
      to
      our acquisitions of JLWA, Safir and Hyperion Risk.




On
      January 9, 2007, we purchased substantially all of the business and assets
      of On Line Consulting to expand our Security Consulting and Investigations
      segment. Consideration for this transaction totaled $2,896,000 consisting of
      $974,000 of cash paid, 84,375 shares of common stock valued for purposes of
      the
      acquisition at $16.00 per share and the issuance of promissory notes for
      $417,000 due January 9, 2008 and $141,000 due January 9, 2009 and an
      amount due to seller of $14,000 which was paid on August 29, 2007.




On
      February 28, 2007, we acquired all of the outstanding stock of Bode to
      expand our Security Consulting and Investigations segment. Consideration for
      this transaction totaled $13.2 million in cash, with $12.5 million paid at
      closing and purchase price adjustments of $0.7 million paid on October 1, 2007.




On
      February 28, 2007, we acquired substantially all of the business and assets
      of Facticon to expand our Fraud and SIU Services segment. Consideration for
      this
      transaction totaled $2,800,000, consisting of $1,300,000 in cash, $100,000
      in
      notes payable to seller and 87,500 shares of common stock valued for purposes
      of
      the acquisition at $16.00 per share.




Financing
      activities provided net funds of $33,648,000 and $4,406,000 for the nine months
      ended September 30, 2006 and 2007, respectively. The cash provided for the
      nine
      months ended September 30, 2006 is primarily due to the proceeds from
      convertible notes payable of $45,050,000, less repayment of notes payable of
      $8,105,000. The net cash provided for the nine months ended September 30, 2007
      is primarily due to proceeds from the line of credit of $7,828,000 less
      repayment of notes payable of approximately $3,403,000




46




On
      May 11, 2007, we entered into the JLWA Modification Agreement with the JLWA
      Sellers. Under the modification, we agreed to make additional payments in the
      form of cash, promissory notes and common stock to the JLWA Sellers in exchange
      for eliminating the earnout provisions of the asset purchase agreement, which
      provided for a maximum additional payout of $15,400,000. The additional payments
      under the JLWA Modification Agreement consist of (i) a cash payment of
      $2,000,000, which was paid on May 14, 2007, (ii) a promissory note in
      the principal amount of $4,500,000, accruing interest at 5.65% per annum,
      due on January 15, 2008, subject to a 5% penalty fee if not paid on that
      due date, (iii) 300,000 shares of common stock to be issued on
      January 15, 2008, which will be registered prior to issuance, and
      (iv) a promissory note in the principal amount of $4,300,000, accruing
      interest at 11.0% per annum, due on August 11, 2008. The JLWA Sellers
      could request acceleration of the $4,300,000 promissory note upon the
      consummation of a Qualified Public Offering or any other qualified capital
      raise. Further, in connection with the execution of the JLWA Modification
      Agreement, we
      executed an amendment of the employment and non-competition agreement with
      Mr. Witt. Under the terms of the amendment, upon his voluntary termination
      of employment without good reason, Mr. Witt would be obligated to reimburse
      us in an amount equal to (i) 25% of the number of shares issued to the JLWA
      Sellers within 12 months prior to such termination and (ii) 25% of the base
      salary of Mr. Witt paid within 12 months prior to such
      termination.




As
      of
      September 30, 2007, our net borrowings were $7,828,000 under our line of credit,
      leaving an amount available to draw of $7,172,000. On May 14, 2007, the
      financial institution that provides our line of credit increased the amount
      available under the line of credit to $15,000,000. Pursuant to the agreement,
      we
      granted the financial institution a security interest in, and pledged and
      assigned to the financial institution, substantially all of the current and
      future acquired personal property of GlobalOptions, Inc. Furthermore, we
      reaffirmed our unconditional guaranty originally made on March 8, 2006.
      Pursuant to the reaffirmation, we acknowledged that our guaranty of the loan
      provided to GlobalOptions, Inc. and the corresponding grant of a security
      interest in all of its property apply to the subject financial institution’s
      loan agreements and any other agreements, assignments or instruments relating
      to
      such indebtedness. In connection with the modification, Bode entered into an
      intellectual property security agreement with the financial institution pursuant
      to which Bode granted the financial institution a security interest in all
      of
      its rights, title and interests in, to and under its intellectual property.
      The
      line of credit was increased to $20,000,000, as discussed above in Corporate
      Developments.




On
        October 29, 2007, the Company completed an underwritten public offering of
        4,500,000 shares of its common stock receiving approximately $20.25 million
        in
        gross proceeds or $18.2 million in net proceeds. The
        Company used a portion of the net proceeds from the proposed underwritten
        public
        offering to repay $4.3 million of notes and $38,000 of related accrued interest
        and intends to use the balance of the net proceeds for working capital, general
        corporate purposes, and potentially for strategic acquisitions and
        investments.




On
      October 29, 2007, the Company borrowed $5,400,000 under the line for the
      pre-payment of the JLWA $4,500,000 promissory note, pre-payment premium and
      accrued interest, and such amount was subsequently repaid under the line of
      credit.




We
      historically have met our operating cash needs by using borrowings under our
      line of credit arrangement and through private placements of equity and debt
      securities. At September 30, 2007, we had working capital of $3,980,000 We
      currently believe that cash on hand, approximately $18,833,000 of net proceeds
      from the October 29, 2007 completed underwritten public offering, operating
      improvements that we believe will result in cash flows from operations and
      our
      available borrowings ($7,828,000 at September 30, 2007) under our line of credit
      facility will be sufficient to finance our operations through September 30,
      2008, before consideration of the November 6, 2007 increase in the line of
      credit amount available to $20,000,000.




**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.




47




**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” as of and for the year ended December 31, 2006,
      included within our Form 10-KSB. 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.




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
      No. 141 (SFAS No. 141), “Business Combinations,” 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,” 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.




48




At
      December 31, 2006, we engaged an outside valuation specialist to assist
      with the evaluation of goodwill. We performed our annual impairment tests of
      goodwill for our reporting segments: Preparedness Services, Fraud and SIU
      Services and Security Consulting and Investigations, as required under SFAS
      No. 142. As a result of these tests, we determined that the remaining
      amount of goodwill recorded in connection with two of the three reporting
      segments was impaired or not fully recoverable, as the current performance
      and
      future expectations did not support the carrying value of goodwill for these
      reporting segments. The impairment affects Fraud and SIU Services and Security
      Consulting and Investigations. As a result, we recorded a $3,029,000 impairment
      charge for the year ended December 31, 2006 of which $1,135,000 is for
      Fraud and SIU Services and $1,894,000 is for Security Consulting and
      Investigations.




***Allowance
      for Doubtful Accounts***




The
      number of clients that comprise our client base, along with the different
      industries 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***




We
      account for equity instruments issued to non-employees in accordance with the
      provisions of Statement of Financial Accounting Standards No. 123R
“Share-Based Payment” (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.




We
      account for equity instruments issued to employees in accordance with the
      provisions of SFAS 123R.




We
      recognize 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.





**Recent
      Accounting Pronouncements**




In
      February 2006, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      155 “Accounting for Certain Hybrid Financial Instruments” (SFAS 155), which
      eliminates the exemption from applying SFAS 133 to interests in securitized
      financial assets so that similar instruments are accounted for similarly
      regardless of the form of the instruments. SFAS 155 also allows the election
      of
      fair value measurement at acquisition, at issuance or when a previously
      recognized financial instrument is subject to a remeasurement event. Adoption
      is
      effective for all financial instruments acquired or issued after the beginning
      of the first fiscal year that begins after September 15, 2006. Early adoption
      is
      permitted. The adoption of SFAS 155 did not have a material effect on our
      consolidated financial position, results of operations or cash flows.




In
      March
      2006, the FASB issued SFAS No. 156 “Accounting for Servicing of Financial
      Assets” (SFAS 156), which requires all separately recognized servicing
      assets and servicing liabilities be initially measured
      at fair value. SFAS 156 permits, but does not require, the subsequent
      measurement of servicing assets and servicing liabilities at fair value.
      Adoption is required as of the beginning of the first fiscal year that begins
      after September 15, 2006. Early adoption is permitted. The adoption of SFAS
      156
      did not have a material effect on our consolidated financial position, results
      of operations or cash flows.




In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48), which
      clarifies the accounting for uncertainty in tax positions. This interpretation
      requires that we recognize in our consolidated financial statements the impact
      of a tax position, if that position is more likely than not of being sustained
      on audit, based on the technical merits of the position. The provisions of
      FIN
      48 are effective as of the beginning of our 2007 fiscal year, with the
      cumulative effect of the change in accounting principle recorded as an
      adjustment to opening retained earnings. The adoption of FIN 48 did not
      have a material effect on our consolidated financial position, results of
      operations or cash flows.




49




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(SFAS No. 157). This statement defines fair value, establishes a framework
      for measuring fair value and expands disclosure of fair value
      measurements. SFAS No. 157 applies under other accounting
      pronouncements that require or permit fair value measurements and accordingly,
      does not require any new fair value measurements. SFAS No. 157 is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007. We are in the process of evaluating the impact that
      the adoption of SFAS No. 157 will have on our consolidated financial
      position results of operations and financial condition.




In
      September 2006, the staff of the SEC issued Staff Accounting Bulletin
      No. 108 (SAB 108) which provides interpretive guidance on how the effects
      of the carryover or reversal of prior year misstatements should be considered
      in
      quantifying a current year misstatement. SAB 108 becomes effective in fiscal
      2007. Adoption of SAB 108 did not have a material impact on our consolidated
      financial position, results of operations or cash flows.




In
      December 2006, the FASB issued FASB Staff Position (FSP) EITF 00-19-2
“Accounting for Registration Payment Arrangements” (FSP EITF 00-19-2) which
      specifies that the contingent obligation to make future payments or otherwise
      transfer consideration under a registration payment arrangement should be
      separately recognized and measured in accordance with SFAS No. 5,
“Accounting for Contingencies.” Adoption of FSP EITF 00-19-02 is required
      for fiscal years beginning after December 15, 2006, and did not have a
      material impact on our consolidated financial position, results of operations
      or
      cash flows.




In
      February 2007, the FASB issued Statement of Financial Accounting Standard 159
      “The Fair Value Option for Financial Assets and Financial Liabilities—Including
      an amendment of FASB Statement No. 115”, which permits entities to choose
      to measure many financial instruments and certain other items at fair value.
      The
      fair value option established by this statement permits all entities to choose
      to measure eligible items at fair value at specified election dates. A business
      entity shall report unrealized gains and losses on items for which the fair
      value option has been elected in earnings at each subsequent reporting date.
      Adoption is required for fiscal years beginning after November 15,
      2007. Early adoption is permitted as of the beginning of a fiscal year that
      begins on or before November 15, 2007, provided the entity also elects to
      apply the provisions of FASB Statement No. 157, Fair Value Measurements. We
      are currently evaluating the expected effect of SFAS 159 on our
      consolidated financial statements and are currently not yet in a position to
      determine its effects.




50




**Item
      3.     Controls and Procedures**





*Evaluation
      of our Disclosure Controls and Internal Controls*




As
      of the
      period covered by this quarterly report, we carried out an evaluation of the
      effectiveness of the design and operation of our disclosure controls and
      procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based
      upon
      that evaluation, our Principal Executive Officer (“PEO”) and Principal Financial
      Officer (“PFO”) concluded that as of the end of the period covered by this
      quarterly report on Form 10-QSB our disclosure controls and procedures were
      not
      effective.




*Officers’
      Certifications*




Appearing
      as exhibits to this quarterly report are “Certifications” of the PEO and the
      PFO. The Certifications are required pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of
      the quarterly report contains information concerning the Controls Evaluation
      referred to in the Section 302 Certifications and this information should be
      read in conjunction with the Section 302 Certifications for a more complete
      understanding of the topics presented.





*Disclosure
      Controls and Internal Controls*




Disclosure
      controls are procedures that are designed with the objective of ensuring that
      information required to be disclosed in our reports filed under the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), such as this quarterly
      report, is recorded, processed, summarized and reported within the time periods
      specified in the SEC’s rules and forms. Disclosure controls are also designed
      with the objective of ensuring that such information is accumulated and
      communicated to our management, including the PEO and PFO, as appropriate to
      allow timely decisions regarding required disclosure. Internal controls are
      procedures which are designed with the objective of providing reasonable
      assurance that (1) our transactions are properly authorized, recorded and
      reported; and (2) our assets are safeguarded against unauthorized or improper
      use, to permit the preparation of our condensed consolidated financial
      statements in conformity with United States generally accepted accounting
      principles.





We
      are not an accelerated filer (as defined in the Exchange Act) and are not
      required to deliver management’s report on internal controls over our financial
      reporting until our year ending December 31, 2007. We became a public company
      on
      June 24, 2005. In our efforts to comply with Section 404 of the Sarbanes-Oxley
      Act of 2002, during the first half of 2005, we initially identified certain
      matters that would constitute material weakness (as such term is defined under
      the Public Company Accounting Oversight Board Auditing Standard No. 2) in our
      internal controls over financial reporting that continue to apply as of the
      quarterly period covered by this report. The material weakness relates to the
      financial closing process, a lack of segregation of financial responsibilities
      and the need for additional qualified financial accounting
      personnel.




*Remediation
      of Material Weaknesses and Significant Deficiencies*





During
      the three months ended September 30, 2007, we have taken specific actions to
      remediate the reportable conditions and material weakness, including the
      continued training of financial personnel with regard to the quarterly closing
      process, the further development of standardized applications within our
      integrated general software applications. We intend to expand our accounting
      staff and continue to further strengthen our controls and procedures regarding
      the closing process. There is no assurance that this effort will be adequate.





*Changes
      in Internal Control Over Financial Reporting*





Other
      than expressly noted above in this Item 3, there were no significant changes
      in
      our internal controls over financial reporting that occurred during the
      quarterly period ended September 30, 2007 that have materially affected, or
      are
      reasonably likely to materially affect, our internal controls over financial
      reporting.





51




**PART
      II.**





**Other
      Information**




**Item
      1.     Legal Proceedings.**




None.




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





Pursuant
      to a Stock Purchase Agreement dated March 1, 2007, on September 19, 2007, the
      Company issued 850 shares of Common Stock to Verus International Group valued
      at
      $22,500, 1,699 shares of Common Stock to Athorn, Clark and Partners, Inc. valued
      at $30,000 and 1,274 shares of Common Stock to Lippert/Heilshorn and Associates,
      Inc. valued at $22,500 in connection with services provided to the
      Company.




All
      sales
      of securities described herein were deemed to be exempt from registration
      pursuant to Section 4(2) of the Securities Act of 1933, as amended, and
      Regulation D promulgated thereunder as transactions by an issuer not involving
      a
      public offering. The recipients of securities in each of these transactions
      represented their intention to acquire the securities for investment only and
      not with a view to or for sale in connection with any distribution thereof
      and
      appropriate legends were affixed to the share certificates and instruments
      issued in such transactions. All recipients either received adequate information
      about us or had adequate access, through their relationship with us, to
      information about us.




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




None.




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





The
      Company held its annual meeting of stockholders on July 25, 2007. At the meeting
      the stockholders took the following actions:




The
      proposal to elect Harvey W. Schiller, Ph.D. as a director of the Company was
      approved by a vote of 2,517,106 votes in favor of his election, with 635 votes
      withheld and no abstentions or broker non-votes.




The
      proposal to elect Daniel Burstein as a director of the Company was approved
      by a
      vote of 2,517,106 votes in favor of his election, with 635 votes withheld and
      no
      abstentions or broker non-votes.




The
      proposal to elect Ronald Starr as a director of the Company was approved by
      a
      vote of 2,517,116 votes in favor of his election, with 625 votes withheld and
      no
      abstentions or broker non-votes.




The
      proposal to elect Per-Olof Lööf as a director of the Company was approved by a
      vote of 2,517,116 votes in favor of his election, with 625 votes withheld and
      no
      abstentions or broker non-votes.




The
      proposal to elect John P. Bujouves as a director of the Company was approved
      by
      a vote of 2,517,106 votes in favor of his election, with 635 votes withheld
      and
      no abstentions or broker non-votes.




The
      proposal to ratify Marcum & Kliegman LLP as the independent registered
      public accounting firm for the Company for the year ending December 31, 2007
      was
      approved by 2,517,116 votes cast for, 625 votes cast against and no abstentions
      or broker non-votes.




**Item
      5.     Other Information.**





None.




52




**Item
      6.**  **Exhibits.**




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




**Exhibit
                No.**
            
            **Description**31.1
            
            Certification
                of Principal Executive Officer pursuant to Section 302 of The
                Sarbanes-Oxley Act of2002.31.2
            
            Certification
                of Principal Financial Officer pursuant to Section 302 of The
                Sarbanes-Oxley Act of2002.32.1
            
            Certification
                of Principal Executive Officer pursuant to Section 906 of The
                Sarbanes-Oxley Act of2002.32.2
            
            Certification
                of Principal Financial Officer pursuant to Section 906 of The
                Sarbanes-Oxley Act of2002.





53





EXHIBIT
      INDEX





**Exhibit
                No.**
            
            **Description**31.1
            
            Certification
                of Principal Executive Officer pursuant to Section 302 of The
                Sarbanes-Oxley Act of2002.31.2
            
            Certification
                of Principal Financial Officer pursuant to Section 302 of The
                Sarbanes-Oxley Act of2002.32.1
            
            Certification
                of Principal Executive Officer pursuant to Section 906 of The
                Sarbanes-Oxley Act of2002.32.2
            
            Certification
                of Principal Financial Officer pursuant to Section 906 of The
                Sarbanes-Oxley Act of2002.





54





**SIGNATURES**




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




GLOBALOPTIONS
                GROUP, INC.Dated:
                November 14, 2007
            By:
            /s/ Harvey
                W. Schiller
              Harvey
                W. Schiller
              Chairman
                of the Board and Chief Executive Officer
              (Principal
                Executive Officer)





Dated:
                November 14, 2007
            By:
            /s/ Jeffrey
                O. Nyweide
              Jeffrey
                O. Nyweide
              Chief
                Financial Officer, Executive Vice
              President,
                Corporate Developmentand
                Secretary (Principal Financial Officer and
              Principal
                Accounting Officer)




55