UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 10, 2007
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GlobalOptions Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-136468 73-1703260
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
75 Rockefeller Plaza, 27th Floor
New York, New York 10019
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 445-6262
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N/A
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
SILICON VALLEY BANK
On May 14, 2007, GlobalOptions, Inc., a Delaware corporation ("Global
Sub") and The Bode Technology Group, Inc., a Delaware corporation ("Bode" and
with Global Sub, the "Borrowers"), both wholly-owned subsidiaries of
GlobalOptions Group, Inc. (the "Company"), entered into a Third Amended and
Restated Loan and Security Agreement (the "Loan Agreement") with Silicon Valley
Bank, a California chartered bank (the "Bank"). The Loan Agreement effectively
permits a loan balance of up to $15,000,000 at any given time and includes a
facility fee, finance charges and a collateral handling fee.
Pursuant to the Loan Agreement, the Borrowers granted the Bank a security
interest in, and pledged and assigned to the Bank, substantially all of the
Borrowers' current and future acquired personal property (the "Borrowers'
Collateral").
On May 14, 2007, 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 the Borrowers and
corresponding grant of a security interest in all of its property apply to the
Loan Agreement and any other agreements, assignments or instruments relating to
the indebtedness evidenced by the Loan Agreement. In connection with the Loan
Agreement and Unconditional Guaranty, Bode entered into an Intellectual Property
Security Agreement with the Bank (the "IP Security Agreement") pursuant to which
Bode granted the Bank a security interest in all of its rights, titles and
interests in, to and under its intellectual property.
The foregoing description of the Loan Agreement is not complete and is
qualified in its entirety by reference to the full text of such Agreement, a
copy of which is filed herewith and is incorporated herein by reference.
JLWA PURCHASE AGREEMENT AND EARNOUT MODIFICATION
On May 11, 2007, the Company reached an agreement with the sellers of
James Lee Witt Associates ("JLWA Sellers") to enter into a second amendment to
the January 13, 2006 asset purchase agreement, which was amended February 28,
2006 ("Seller Modification Agreement"). Under the modification, the Company has
agreed to make additional payments in the form of cash and common stock and to
eliminate entirely the obligations under the earnout provisions of the agreement
(which provided for a maximum additional payout of $15,400,000).
The additional payments under the agreement consist of (i) a cash payment
of $2,000,000 paid on May 14, 2007, (ii) a cash payment of principal of
$4,500,000 plus interest at 5.65% per annum under a promissory note which will
be due on January 15, 2008, subject to a 5% penalty fee if not paid on such due
date, (iii) the issuance of 300,000 shares of common stock on January 15, 2008,
which have been previously registered at the time of issuance and (iv) a cash
payment of principal of $4,300,000 plus interest at 11.0% per annum under a
promissory note which will be due on August 11, 2008, The JLWA Sellers may
demand acceleration of this $4,300,000 cash payment upon the Company completing
a qualifying capital raise, pursuant to the promissory note agreement.
Further, in connection with the execution of the Seller Modification
Agreement, the Company executed an amendment of the employment and
non-competition agreement with James Lee Witt. Under the terms of the
modification, upon termination of employment without good reason, Mr. Witt would
be obligated to reimburse the Company in an amount equal to (i) twenty five
percent (25%) of the number of shares issued to JLWA Sellers within twelve
months prior to such termination and (ii) twenty five percent (25%) of the base
salary of Mr. Witt paid within the twelve months prior to such termination.
SECURE SOURCE
On May 10, 2007, the Company extended until May 31, 2007 the due date of
two promissory notes issued to Secure Source, Inc. ("Secure") in connection with
the Company's purchase of Secure on May 12, 2006.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
See the disclosure set forth under Item 1.01, which is incorporated by
reference into this Item 2.03.
ITEM 8.01. OTHER EVENTS.
On May 10, 2007, the Company's Board of Directors approved an amendment to
the Company's bylaws (the "Bylaws") to provide for the issuance of
uncertificated shares of Common Stock. A copy of the amended Article Four,
Section 4.1 of Bylaws is filed herewith and is incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) EXHIBITS
The exhibits listed in the following Exhibit Index are filed as part of
this Report.
Exhibit No. Description
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3.1 Amendment to Article Four, Section 4.1 of the Company's
Bylaws.
10.1 Third Amended and Restated Loan and Security Agreement,
entered into May 14, 2007, by and between GlobalOptions,
Inc., a Delaware corporation, The Bode Technology Group,
Inc. and Silicon Valley Bank.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 16, 2007 GLOBALOPTIONS GROUP, INC.
By: /s/ Harvey W. Schiller, Ph.D.
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Harvey W. Schiller, Ph.D.
Chairman and Chief Executive Officer
