----

----

|   | CAPITAL                GROWTH SYSTEMS, INC.                                                     |   |
|--------|-------------------------------------------------------------------------------------------------|--------|
|   | (Exact                name of small business issuer as                specified in its charter) |   |
|   |                                                                                            |   |

| Florida                                                                                          |   | 65-0953505                                                             |
|--------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|
| (State                  or other jurisdiction of incorporation                  or organization) |   | (I.R.S.                  Employer Identification                  No.) |
|                                                                                             |   |                                                                   |

|        | 50                East Commerce Drive, Schaumburg, Illinois                60173     |   |
|--------|--------------------------------------------------------------------------------------|--------|
|   | (Address                of principal executive                offices)               |   |
|   |                                                                                 |   |
|   | 630-872-5800                                                                         |   |
|   | (Issuer’s                telephone number, including area                code) |   |

----

----

**CAPITAL      GROWTH SYSTEMS, INC. AND SUBSIDIARIES**

|                         |                                                                                                       | Page                  No. |
|------------------------------|------------------------------------------------------------------------------------------------------------|---------------------------|
|                         |                                                                                                       |                      |
| PART                  I      | FINANCIAL                  INFORMATION                                                                     | 3                         |
|                         |                                                                                                       |                      |
| Item                  1.     | Financial                  Statements                                                                      | 3                         |
|                         |                                                                                                       |                      |
|                         | Interim                  Consolidated Condensed Balance Sheets as of                                       |                      |
|                         | September                  30, 2006 [Unaudited] and December 31, 2005 [Audited]                            | 4                         |
|                         |                                                                                                       |                      |
|                         | Consolidated                  Condensed Statements of Operations                                           |                      |
|                         | For                  the three and nine month periods ended September 30, 2006                             |                      |
|                         | and                  2005 [Unaudited]                                                                      | 5                         |
|                         |                                                                                                       |                      |
|                         | Consolidated                  Condensed Statement of Shareholders' Equity from                             |                      |
|                         | January                  1, 2006 to September 30, 2006 [Unaudited]                                         | 6                         |
|                         |                                                                                                       |                      |
|                         | Consolidated                  Condensed                  Statements of Cash Flows                          |                      |
|                         | For                  the nine month periods ended September 30, 2006 and 2005                  [Unaudited] | 7                         |
|                         |                                                                                                       |                      |
|                         | Notes                  to Interim Consolidated Condensed Financial Statements.                             | 8                         |
|                         |                                                                                                       |                      |
| Item                  2.     | Management's                  Discussion and Analysis or                                                   |                      |
|                         | Plan                  of Operations.                                                                       | 25                        |
|                         |                                                                                                       |                      |
| Item                  3.     | Controls                  and Procedures.                                                                  | 36                        |
|                         |                                                                                                       |                      |
| PART                  II.    | OTHER                  INFORMATION                                                                         | 36                        |
|                         |                                                                                                       |                      |
| Item                  1.     | Legal                  Proceedings                                                                         | 36                        |
|                         |                                                                                                       |                      |
| Item                  2.     | Unregistered                  Sales of Equity                                                         |                      |
|                         | Securities                  and Use of Proceeds.                                                           | 36                        |
|                         |                                                                                                       |                      |
| Item                  3.     | Defaults                  Upon Senior Securities.                                                          | 37                        |
|                         |                                                                                                       |                      |
| Item                  4.     | Submission                  of Matters to a Vote of Security Holders.                                      | 37                        |
|                         |                                                                                                       |                      |
| Item                  5.     | Other                  Information.                                                                        | 37                        |
|                         |                                                                                                       |                      |
| Item                  6.     | Exhibits.                                                                                                  | 37                        |
|                         |                                                                                                       |                      |
| Signatures                   |                                                                                                       | 38                        |
|                         |                                                                                                       |                      |
| Exhibit                Index |                                                                                                       | 39                        |

----

**PART      I - FINANCIAL INFORMATION**

**Item      1. Financial Statements**

----

| **CAPITAL                GROWTH SYSTEMS, INC.**                                                                                                                                                                                                           |   |                                  |        |                                 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|--------------------------------------|--------|
| **CONSOLIDATED                CONDENSED BALANCE SHEETS**                                                                                                                                                                                                  |   |                                  |        |
|                                                                                                                                                                                                                                                      |   | **(Unaudited)**                       |        | **(Audited)**                        |   |
|                                                                                                                                                                                                                                                      |   | **September                30, 2006** |        | **December                31, 2005** |   |
| **ASSETS:**                                                                                                                                                                                                                                               |   |                                  |        |                                 |   |
| Current                Assets:                                                                                                                                                                                                                            |   |                                  |        |                                 |   |
| Cash                                                                                                                                                                                                                                                      |   | $                                     | 344,637     |                                 | $      | 436,842 |   |
| Accounts                receivable, net                                                                                                                                                                                                                   |   |                                  | 1,914,910   |                                 |   | 1,232,606 |   |
| Inventories,                net                                                                                                                                                                                                                           |   |                                  | 1,197,325   |                                 |   | 1,537,908 |   |
| Prepaid                expenses                                                                                                                                                                                                                           |   |                                  | 116,402     |                                 |   | 121,466 |   |
| Other                current assets                                                                                                                                                                                                                       |   |                                  | 11,730      |                                 |   | 34,987 |   |
| Total                current assets                                                                                                                                                                                                                       |   |                                  | 3,585,004   |                                 |   | 3,363,809 |   |
|                                                                                                                                                                                                                                                      |   |                                  |        |                                 |   |  |   |
| Fixed                assets, net of accumulated depreciation                                                                                                                                                                                              |   |                                  | 871,560     |                                 |   | 947,203 |   |
| Customer                list acquired, net                                                                                                                                                                                                                |   |                                  | 2,389,859   |                                 |   | 2,812,334 |   |
| Goodwill                and other intangibles                                                                                                                                                                                                             |   |                                  | 17,373,365  |                                 |   | 3,965,543 |   |
| Other                assets                                                                                                                                                                                                                               |   |                                  | 257,041     |                                 |   | 45,321 |   |
| Total                Assets                                                                                                                                                                                                                               |   | $                                     | 24,476,829  |                                 | $      | 11,134,210 |   |
|                                                                                                                                                                                                                                                      |   |                                  |        |                                 |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Current                Liabilities:                                                                                                                                                                                                                       |   |                                  |        |                                 |   |   |   |
| Current                maturities of debt                                                                                                                                                                                                                 |   | $                                     | 10,686,772  |                                 | $      | 3,815,337 |   |
| Accounts                payable                                                                                                                                                                                                                           |   |                                  | 2,477,662   |                                 |   | 536,453 |   |
| Accrued                expenses                                                                                                                                                                                                                           |   |                                  | 2,301,945   |                                 |   | 1,389,514 |   |
| Deferred                revenues                                                                                                                                                                                                                          |   |                                  | 1,917,645   |                                 |   | 1,536,369 |   |
| Advance                billings                                                                                                                                                                                                                           |   |                                  | 459,805     |                                 |   | 964,734 |   |
| Other                current liabilities                                                                                                                                                                                                                  |   |                                  | 162,067     |                                 |   | 191,624 |   |
| Total                current liabilities                                                                                                                                                                                                                  |   |                                  | 18,005,896  |                                 |   | 8,434,031 |   |
|                                                                                                                                                                                                                                                      |   |                                  |        |                                 |   |   |   |
| Long-term                liabilities                                                                                                                                                                                                                      |   |                                  |        |                                 |   |   |   |
| Debt                                                                                                                                                                                                                                                      |   |                                  | 637,272     |                                 |   | 851,379 |   |
| Total                Liabilities                                                                                                                                                                                                                          |   |                                  | 18,643,168  |                                 |   | 9,285,410 |   |
| Stockholders’                Equity:                                                                                                                                                                                                                |   |                                  |        |                                 |   |   |   |
| Preferred                Stock, $.0001 par value, 5,000,000 authorized; 2,651.53 Series B                Convertible issued and outstanding as of September 30,                2006                                                                       |   |                                  | -           |                                 |   | - |   |
| Common                Stock, $.0001 par value, 25,000,000 authorized; 21,015,069 issued                and                outstanding as of September 30, 2006 and 17,015,754 issued and outstanding                as of December 31, 2005, respectively |   |                                  | 2,101       |                                 |   | 1,701 |   |
| Additional                paid-in capital                                                                                                                                                                                                                 |   |                                  | 21,597,829  |                                 |   | 12,831,414 |   |
| Retained                earnings, (deficit)                                                                                                                                                                                                               |   |                                  | (15,763,766 | )                                    |   | (10,984,315 | ) |
| Foreign                currency translation adjustment                                                                                                                                                                                                    |   |                                  | (2,503      | )                                    |   | - |   |
| Total                Stockholders’ Equity                                                                                                                                                                                                           |   |                                  | 5,833,661   |                                 |   | 1,848,800 |   |
| Total                Liabilities and Stockholders’ Equity                                                                                                                                                                                           |   | $                                     | 24,476,829  |                                 | $      | 11,134,210 |   |
|                                                                                                                                                                                                                                                      |   |                                  |        |                                 |   |   |   |

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

----

| **CAPITAL                GROWTH SYSTEMS, INC.**                    |   |                                            |                     |                                           |   |       |   |
|--------------------------------------------------------------------|--------|-------------------------------------------------|--------------------------|------------------------------------------------|--------|------------|--------|
| **CONSOLIDATED                CONDENSED STATEMENTS OF OPERATIONS** |   |                                            |                     |
| (Unaudited)                                                        |   |                                            |                     |                                           |   |       |   |   |   |
|                                                               |   | **Three                Months Ended Sept. 30,** |                     | **Nine                Months Ended Sept. 30,** |   |
|                                                               |   | **2006**                                        |                     | **2005**                                       |   | **2006**   |   | **2005** |   |
|                                                               |   |                                            |                     |                                           |   |       |   |   |   |
| **Revenue**                                                        |   | $                                               | 3,333,389                |                                           | $      | 4,547,244  |   | $ | 10,849,850 |   | $ | 12,080,090 |   |
| **Cost                of Goods Sold**                              |   |                                            | 1,732,882                |                                           |   | 2,631,914  |   |   | 5,571,472 |   |   | 6,451,411 |   |
| **Gross                Margin**                                    |   |                                            | 1,600,507                |                                           |   | 1,915,330  |   |   | 5,278,378 |   |   | 5,628,679 |   |
| **Operating                Expenses:**                             |   |                                            |                     |                                           |   |       |   |   |   |   |   |   |   |
| Compensation                                                       |   |                                            | 2,583,050                |                                           |   | 1,262,544  |   |   | 5,485,855 |   |   | 3,875,402 |   |
| Other                operating expenses                            |   |                                            | 1,547,532                |                                           |   | 942,996    |   |   | 3,495,906 |   |   | 2,873,258 |   |
|                                                               |   |                                            |      |                                           |   |       |   |   |    |   |   |     |   |
| **Total                Operating Expenses**                        |   |                                            | 4,130,582                |                                           |   | 2,205,540  |   |   | 8,981,761 |   |   | 6,748,660 |   |
| **Operating                Loss**                                  |   |                                            | (2,530,075               | )                                              |   | (290,210   | )      |   | (3,703,383 | ) |   | (1,119,981 | ) |
| **Interest                expense (income)**                       |   |                                            | 821,406                  |                                           |   | 85,686     |   |   | 1,030,917 |   |   | 261,718 |   |
| **Net                Loss Before Income Taxes**                    |   |                                            | (3,351,481               | )                                              |   | (375,896   | )      |   | (4,734,300 | ) |   | (1,381,699 | ) |
| **Income                taxes**                                    |   |                                            | 15,000                   |                                           |   | 15,000     |   |   | 45,151 |   |   | 38,216 |   |
| **Net                Loss**                                        |   | $                                               | (3,366,481               | )                                              | $      | (390,896   | )      | $ | (4,779,451 | ) | $ | (1,419,915 | ) |
| **Loss                per Share**                                  |   | $                                               | (0.18                    | )                                              | $      | (0.02      | )      | $ | (0.27 | ) | $ | (0.08 | ) |
| **Average                Shares Outstanding**                      |   |                                            | 19,065,412               |                                           |   | 17,015,754 |   |   | 17,737,537 |   |   | 16,974,148 |   |

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

----

| **CAPITAL                GROWTH SYSTEMS, INC.**                                            |
|--------------------------------------------------------------------------------------------|
| **CONSOLIDATED                CONDENSED STATEMENT OF SHAREHOLDERS'                EQUITY** |

| (Unaudited)                                            |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |
|--------------------------------------------------------|--------|----------------------------------------------|--------------|---------------------------------------------------------|--------|-------------------------------------|--------|---------------------------------|--------------|------------------------------------|--------|------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                   |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |
|                                                   |   | **Common                Shares Outstanding** |         | **Series                B Convertible Preferred Stock** |   | **Retained                Deficit** |   | **Common                Stock** |         | **Preferred                Stock** |   | **Foreign                Currency Translation Adjustment** |   | **Additional                Paid-in Capital** |   | **Total                Equity** |   |
|                                                   |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |
|                                                   |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |
| Balance,                January 1, 2006                |   |                                         | 17,015,754   |                                                    |   | -                                   |   | $                               | (10,984,315  | )                                  | $      | 1,701                                                      |   | $                                             | -      |   | $ | - |   | $ | 12,831,414 |   | $ | 1,848,800 |   |
|                                                   |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                |   |                                         | -            |                                                    |   |                                |   |                            | (4,779,451   | )                                  |   | -                                                          |   |                                          |   |   |   | - |   |   | - |   |   | (4,779,451 | ) |
| Stock                issued for consulting services    |   |                                         | 100,000      |                                                    |   |                                |   |                            | -            |                               |   | 10                                                         |   |                                          |   |   |   | - |   |   | 134,990 |   |   | 135,000 |   |
| Stock                issued for acquisition of 20/20   |   |                                         | 3,899,315    |                                                    |   | 2,651.53                            |   |                            |         |                               |   | 390                                                        |   |                                          | -      |   |   | - |   |   | 5,302,678 |   |   | 5,303,068 |   |
| Stock-based                compensation expense        |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   | - |   |   | 549,814 |   |   | 549,814 |   |
| Stock                warrants issued to employees      |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |   |   |   | 845,266 |   |   | 845,266 |   |
| Stock                warrants issued for consulting    |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |   |   |   | 45,691 |   |   | 45,691 |   |
| Stock                warrants issued for debt issuance |   |                                         |         |                                                    |   |                                |   |                            |         |                               |   |                                                       |   |                                          |   |   |   |   |   |   | 1,887,976 |   |   | 1,887,976 |   |
| Foreign                currency translation adjustment |   |                                         |         |                                                    |   |                                |   |                            | -            |                               |   | -                                                          |   |                                          |   |   |   | (2,503 | ) |   | - |   |   | (2,503 | ) |
|                                                   |   |                                         |    |                                                    |   |                           |   |                            |    |                               |   |                                                       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                September 30, 2006             |   |                                         | 21,015,069   |                                                    |   | 2,651.53                            |   |                            | ($15,763,766 | )                                  | $      | 2,101                                                      |   | $                                             | 0      |   |   | ($2,503 | ) | $ | 21,597,829 |   | $ | 5,833,661 |   |

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

----

| **CAPITAL                GROWTH SYSTEMS, INC.**                    |   |
|--------------------------------------------------------------------|--------|
| **CONSOLIDATED                CONDENSED STATEMENTS OF CASH FLOWS** |   |
| (Unaudited)                                                        |   |   |   |
|                                                               |   | Nine                Months Ended Sept. 30, |   |
|                                                               |   | 2006 |   | 2005 |   |
| Net                Cash Used in Operating Activities               |   | $ | (1,233,993 | ) | $ | (1,706,838 | ) |
|                                                               |   |   |   |   |   |   |   |
| Net                Cash Used In Investing Activities               |   |   | (260,361 | ) |   | (34,281 | ) |
|                                                               |   |   |   |   |   |   |   |
| Net                Cash Provided By (Used in) Financing Activities |   |   | 1,402,149 |   |   | (962,650 | ) |
| Increase                (Decrease) in Cash and Cash Equivalents    |   |   | (92,205 | ) |   | (2,703,769 | ) |
| Cash                and Cash Equivalents - Beginning of Period     |   |   | 436,842 |   |   | 3,660,894 |   |
| Cash                and Cash Equivalents - End of period           |   | $ | 344,637 |   | $ | 957,125 |   |
| SUPPLEMENTAL                CASH FLOW INFORMATION:                 |   |   |   |   |   |   |   |
| Cash                paid for interest                              |   | $ | 283,136 |   | $ | 304,240 |   |
| Cash                paid for income taxes                          |   | $ | 2,446 |   | $ | 8,216 |   |
| NONCASH                INVESTING AND FINANCING ACTIVITIES:         |   |   |   |
| Issuance                of stock for acquisitions                  |   | $ | 5,303,068 |   | $ | 101,250 |   |
| Stock                issued for consulting services                |   | $ | 135,000 |   | $ | - |   |
| Stock-based                compensation expense                    |   | $ | 1,395,080 |   | $ | - |   |
| Stock                warrants issued for consulting services       |   | $ | 45,691 |   | $ | - |   |
| Issuance                of stock warrants for debt issuance        |   | $ | 1,887,976 |   | $ | - |   |
|                                                               |   |   |   |   |   |   |   |

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

----

**CAPITAL      GROWTH SYSTEMS, INC.**

**Notes      to Interim Consolidated Condensed Financial Statements**

**September      30, 2006 (Unaudited)**

**NOTE      1 - Organization and Basis of Presentation**

**Acquisition      of 20/20**

** **

----

|                                         |   | At                Sept. 8, 2006 |       |
|----------------------------------------------|--------|---------------------------------|------------|
| Current                assets                |   | $                               | 130,111    |   |
| Property                & equipment      |   |                            | 9,904      |   |
| Other                asset                   |   |                            | 4,675      |   |
| Proprietary                software acquired |   |                            | -          |   |
| Goodwill                                     |   |                            | 13,407,823 |   |
| Total                assets acquired         |   |                            | 13,552,513 |   |
|                                         |   |                            |       |   |
| Liabilities,                excluding debt   |   |                            | 1,442,550  |   |
| Debt                                         |   |                            | 6,806,895  |   |
| Total                liabilities assumed     |   |                            | 8,249,445  |   |
| Net                assets acquired           |   | $                               | 5,303,068  |   |

|                            |   | Three                months ended September                30, 2006 |       | Twelve                months ended December                31, 2005 |    |
|---------------------------------|--------|---------------------------------------------------------------------|------------|---------------------------------------------------------------------|---------|
| Net                sales        |   | $                                                                   | 12,303,152 |                                                                | $       | 17,640,265 |   |
| Net                  loss       |   | $                                                                   | (6,065,152 | )                                                                   | $       | (7,477,969 | ) |
| Loss                  per share |   | $                                                                   | (.24       | )                                                                   | $  | (.30 | ) |
|                            |   |                                                                |       |                                                                |    |   |   |

----

**NOTE      2 - Summary of Significant Accounting Policies**

**Accounts      Receivable**

**Revenue      Recognition**

* *

----

**Product      Warranties**

**Research      and Development**

**Goodwill      and Purchased Intangible Assets**

----

**Stock-Based      Compensation**

*Accounting      for Stock Issued to Employees*
*Accounting      for *
*Stock-Based      Compensation*.      No      stock-based employee compensation cost was recognized in the Statement of      Operations for the nine month period ended September 30, 2005, as all      outstanding unvested options granted under those plans at that time had an      exercise price equal to the market value of the underlying common stock on      the      date of grant and no restricted stock grants were outstanding during that      period. Effective January 1, 2006, the Company adopted the fair value      recognition provisions of FASB Statement No. 123(R), *Share-Based      Payment*,      using      the modified-prospective-transition method. Under this transition method,      compensation cost recognized in fiscal 2006 includes: (a) compensation cost      for      all share-based payments granted prior to, but not yet vested as of January      1,      2006, based on the grant date fair value estimated in accordance with the      original provisions of Statement 123, and (b) compensation cost for all      share-based payments granted subsequent to January 1, 2006, based on the      grant-date fair value estimated in accordance with the provisions of Statement      123(R). Results for prior periods have not been restated. 

**Segment      Information**

**Intangible      assets**

| 2006   |   | $      | 134,533 |   |
|--------|--------|--------|---------|--------|
| 2007   |   |   | 529,160 |   |
| 2008   |   |   | 502,704 |   |
| 2009   |   |   | 477,568 |   |
| 2010   |   |   | 453,688 |   |
| 2011   |   |   | 292,206 |   |
|   |   |   |    |   |

----

|                                    |   | September                30,2006 |       | December                31,2005 |   |
|-----------------------------------------|--------|----------------------------------|------------|---------------------------------|--------|
| Customer                list costs      |   | $                                | 3,615,358  |                            | $      | 3,615,358 |   |
| Accumulated                amortization |   |                             | (1,225,499 | )                               |   | (803,024 | ) |
|                                    |   |                             |       |                            |   |   |   |
| Customer                list, net       |   | $                                | 2,389,859  |                            | $      | 2,812,334 |   |

**Use      of Estimates**

**Going      Concern**

----

**Reclassifications**

**NOTE      3 - Inventories**

|                                   |   | Sept.                30, 2006 |      | Dec.                31,2005 |   |
|----------------------------------------|--------|-------------------------------|-----------|-----------------------------|--------|
| Equipment                              |   | $                             | 1,314,360 |                        | $      | 1,459,357 |   |
| Work                in process         |   |                          | 467,562   |                        |   | 718,512 |   |
| Gross                Inventory         |   |                          | 1,781,922 |                        |   | 2,177,869 |   |
| Less:                Inventory reserve |   |                          | (584,597  | )                           |   | (639,961 | ) |
| Net                inventory           |   | $                             | 1,197,325 |                        | $      | 1,537,908 |   |

**NOTE      4 - Employee Benefit Plans**

**2003      Stock Option Plan**

----

|                                      |   | Number                of Shares |         | Price                Per Share |   | Weighted                Average Price per Share |   |
|-------------------------------------------|--------|---------------------------------|--------------|--------------------------------|--------|-------------------------------------------------|--------|
| Options                Outstanding:       |   |                       |         |                      |   |                                       |   |
| January                1, 2006            |   |                            | 1,524,557    |                           |   | 0.95                - 1.35                      |   | $ | 1.34 |   |
| Granted                                   |   |                            | -            |                           |   | -                                               |   |   | - |   |
| Terminated                                |   |                            | -            |                           |   | -                                               |   |   | - |   |
| September                30, 2006         |   |                            | 1,524,557    |                           |   | 0.95                - 1.35                      |   | $ | 1.34 |   |
|                                      |   |                            |         |                           |   |                                            |   |   |   |   |
| Vested                Shares:             |   |                            |    |                           |   |                                       |   |   |    |   |
| Vested,                September 30, 2006 |   |                            | 1,036,228    |                           | $      | 0.95                - 1.35                      |   | $ | 1.34 |   |

**Executive      Stock Option Agreement**

**Performance      Option Agreement**

----

|                                       |   |   | Nine                  months Ended                  Sept. 30,  |   |
|--------------------------------------------|--------|--------|---------------------------------------------------------------------|--------|
|                                       |   |   | 2006                                                                |   |   | 2005 |   |
|                                       |   |   |                                                                |   |   |   |   |
| Dividend                  yield            |   |   | 0                                                                   | %      |   | 0 | % |
| Estimated                  life (in years) |   |   | 5.0                                                                 |   |   | 5.0 |   |
| Expected                  volatility       |   |   | 100                                                                 | %      |   | N/A |   |
| Risk-free                  interest rate   |   |   | 5.17                                                                | %      |   | 3.85 | % |

|                                                                                                                                    |   | Nine                months ended September 30, |       |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|
|                                                                                                                                    |   | 2006                                           |       | 2005 |   |
| Reported                net loss                                                                                                        |   | $                                              | (4,779,451 | ) | $ | (1,419,915 | ) |
| Employee                stock-based compensation included in reported net loss                                                          |   |                                           | 1,395,080  |   |   | - |   |
| Employee                stock-based compensation as calculated under the fair value method                (SFAS                No. 123) |   |                                           | (1,395,080 | ) |   | 46,178 |   |
| Pro                forma net loss                                                                                                       |   | $                                              | (4,779,451 | ) | $ | (1,466,093 | ) |
|                                                                                                                                    |   |                                           |       |   |   |   |   |
| Loss                Per Share:                                                                                                          |   |                                           |       |   |   |   |   |
| As                reported                                                                                                              |   | $                                              | (0.27      | ) | $ | (0.08 | ) |
| Pro                forma                                                                                                                |   | $                                              | (0.27      | ) | $ | (0.09 | ) |

**NOTE      5 - Property and Equipment**

|                                      |   | Sept.                30, 2006 |      | Dec.                31, 2005 |   |
|-------------------------------------------|--------|-------------------------------|-----------|------------------------------|--------|
| Furniture                & fixtures   |   | $                             | 170,194   |                         | $      | 165,702 |   |
| Computer                equipment         |   |                          | 954,872   |                         |   | 921,611 |   |
| Leasehold                improvements     |   |                          | 130,493   |                         |   | 88,154 |   |
| Machinery                & equipment  |   |                          | 303,596   |                         |   | 285,946 |   |
|                                      |   |                          | 1,559,155 |                         |   | 1,461,413 |   |
| Accumulated                depreciation   |   |                          | (687,595  | )                            |   | (514,210 | ) |
| Net                property and equipment |   | $                             | 871,560   |                         | $      | 947,203 |   |

----

**NOTE        6 - Debt**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | September                30, 2006 |      | December                31, 2005 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|----------------------------------|--------|
| Secured                short term note payable to various parties, bearing interest at 18%,                secured by all of the assets of 20/20 and Nexvu, due 120 days from                issuance. The Company issued 4,791,875 stock warrants to purchase                the                common stock (or equivalent) of the Company. These stock warrants                allow                the holder to purchase shares of the common stock at an exercise                price                between $.45 and $.70 per share. Using the Black-Scholes model, the                Company estimated the fair value of the warrants and allocated 1,554,219                of the $5,582,367 proceeds to the warrants, which was recorded as                a                discount on the secured notes payable. As of September 30, 2006,                $1,256,327 was unamortized on this discount. |   | $                                 | 4,326,040 |                             | $      | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |      |                             |   |   |   |
| Demand                note payable to Harris Bank, plus interest at 1.50% above prime rate;                8.25% at June 30, 2006, until the loan is paid in full. Secured by                substantially all of the assets of Frontrunner and personal guarantee                by a                separate related party entity and three individuals (one of which                is a                related party).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                              | 2,805,943 |                             |   | 3,155,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |      |                             |   |   |   |
| Unsecured                note payable to various creditors of 20/20, past due, bearing interest                rates between 8% and 16%. All notes are in default                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                              | 1,610,000 |                             |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |      |                             |   |   |   |
| Unsecured                note payable to various creditors with interest rates at HSBC plus                4%,                principal payments commencing in January 2007, maturing December                2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                              | 1,257,992 |                             |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |      |                             |   |   |   |
| Promissory                note payable to Nortel Networks, payable in monthly payments of $27,776                through October 2009. Secured by certain assets of Frontrunner. Interest                on the note is fixed at 7.25%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                              | 918,462   |                             |   | 1,112,591 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |      |                             |   |   |   |
| Unsecured                note payable to Global Crossing North America, due in monthly installments                of $16,667 through May 2006. The note bears interest (imputed at                8%) and                is subordinated to the outstanding bank debt. As of March 31, 2006,                Frontrunner was in default under the terms of the                agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                              | 134,589   |                             |   | 178,070 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |      |                             |   |   |   |
| Unsecured                promissory note payable to Review Video, payable in monthly payments                of                $10,000 through September 2006. Interest on the note is fixed at                7.25%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              | 20,431    |                             |   | 87,926 |   |

----

|                                                                                                                                                                                                                                                                                               |   |                              |       |                             |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                               |   | September                30, 2006 |       | December                31, 2005 |   |
|                                                                                                                                                                                                                                                                                               |   |                              |       |                             |   |
| Unsecured                note payable to related party creditor, unsecured, payable in monthly                installments of $12,500, including interest at 8.25%, through December                2005. The Company is in default under the terms of this                note.                   |   |                              | 85,143     |                             |   | 96,976 |   |
|                                                                                                                                                                                                                                                                                               |   |                              |       |                             |   |   |   |
| Unsecured                installment payment agreement to New York State Department of Taxation                and                Finance, payable in monthly payments of $5,455 through June 2006.                Includes                principle and imputed interest and penalties at 16.67%. |   |                              | -          |                             |   | 36,153 |   |
|                                                                                                                                                                                                                                                                                               |   |                              |       |                             |   |   |   |
| Various                unsecured loans from employees of Magenta netLogic, bearing interest                at                8.43%, due upon demand                                                                                                                                                |   |                              | 165,444    |                             |   | - |   |
|                                                                                                                                                                                                                                                                                               |   |                              |       |                             |   |   |   |
| Total                debt                                                                                                                                                                                                                                                                          |   |                              | 11,324,044 |                             |   | 4,666,716 |   |
| Less:                current maturities                                                                                                                                                                                                                                                            |   |                              | 10,686,772 |                             |   | 3,815,337 |   |
| Long                term portion                                                                                                                                                                                                                                                                   |   | $                                 | 637,272    |                             | $      | 851,379 |   |

| 2006 |   | $      | 5,097,314 |   |
|------|--------|--------|-----------|--------|
| 2007 |   |   | 6,507,798 |   |
| 2008 |   |   | 947,651   |   |
| 2009 |   |   | 27,608    |   |

**NOTE      7 - Transactions with Related Parties**

----

----

**NOTE      8 - Product Warranties**

|                                        |   | Sept.                30, 2006 |     | Sept.                30, 2005 |   |
|---------------------------------------------|--------|-------------------------------|----------|-------------------------------|--------|
| Beginning                balance            |   | $                             | 191,624  |                          | $      | 115,030 |   |
| Additional                warranties issued |   |                          | 244,685  |                          |   | 258,225 |   |
| Claims                paid                  |   |                          | (214,470 | )                             |   | (177,361 | ) |
| Revisions                in estimates       |   |                          | (59,772  | )                             |   | 4,172 |   |
| Balance,                end of period       |   | $                             | 162,067  |                          | $      | 200,066 |   |

**NOTE 9      - Stock Warrants**

----

|                                            |   | **Issue                Date** |      | **Exp                Date** |   | **#                of Warrants** |   | **Exercise                Price** |      |
|-------------------------------------------------|--------|-------------------------------|-----------|-----------------------------|--------|----------------------------------|--------|-----------------------------------|-----------|
| Bridge                lenders to Nexvu          |   |                          | 1/28/2004 |                        |   | 12/31/2006                       |   |                              | 638,889   |   | $ | 1.35 |   |
| Advisory                services                |   |                          | 3/31/2004 |                        |   | 3/31/2007                        |   |                              | 500,000   |   |   | 1.35 |   |
| Separation                agreement             |   |                          | 1/28/2004 |                        |   | 12/31/2006                       |   |                              | 162,500   |   |   | 1.35 |   |
| Preliminary                bridge notes         |   |                          | 9/8/2006  |                        |   | 12/31/2011                       |   |                              | 678,766   |   |   | .50                - .70 |   |
| Secured                bridge notes             |   |                          | 9/8/2006  |                        |   | 9/8/2011                         |   |                              | 2,250,000 |   |   | .45 |   |
| Inducement                agreements            |   |                          | 9/8/2006  |                        |   | 12/31/2011                       |   |                              | 2,061,875 |   |   | .45 |   |
| Board                and executive warrants     |   |                          | 9/14/2008 |                        |   | 9/14/2011                        |   |                              | 2,330,000 |   |   | .70 |   |
| Consulting                Services              |   |                          | 9/14/2006 |                        |   | 9/14/2011                        |   |                              | 100,000   |   |   | .70 |   |
|                                            |   |                          |      |                        |   |                             |   |                              |      |   |   |   |   |
| Total                stock warrants outstanding |   |                          |      |                        |   |                             |   |                              | 8,722,030 |   | $ | .68 |   |

**NOTE 10      - Commitments and Contingencies**

**NOTE      11 - Segment Reporting**

----

**Results      of Operation: **

| (000's                omitted)                           |   |   |        |        |   |        |   |      |   |   |   |
|----------------------------------------------------------|--------|--------|-------------|-------------|--------|-------------|--------|-----------|--------|--------|--------|
| **Three                months ended September 30, 2006** |   |   |        |        |   |        |   |
|                                                     |   |   |        |        |   |        |   |      |   |   |   |
|                                                     |   | 20/20  |        | Frontrunner |   | Nexvu       |   | Corp/elim |   | Total  |   |
| Revenues                                                 |   | $      | 89          |        | $      | 2,802       |   | $         | 442    |   |   |   |   | $ | 3,333 |   |
| Gross                margin                              |   |   | 89          |        |   | 1,295       |   |      | 216    |   |   | - |   |   | 1,600 |   |
| Expenses                                                 |   |   | 139         |        |   | 1,270       |   |      | 370    |   |   | 2,351 |   |   | 4,130 |   |
| Operating                income                          |   |   | (50         | )           |   | 25          |   |      | (154   | )      |   | (2,351 | ) |   | (2,530 | ) |
| Interest                expense                          |   |   | 18          |        |   | 105         |   |      | -      |   |   | 698 |   |   | 821 |   |
| Loss                before taxes                         |   |   | (68         | )           |   | (80         | )      |      | (154   | )      |   | (3,049 | ) |   | (3,351 | ) |
| Depreciation/Amortization                                |   |   | 1           |        |   | 178         |   |      | 24     |   |   | - |   |   | 203 |   |
|                                                     |   |   |        |        |   |        |   |      |   |   |   |   |   |   |   |   |
| **Three                months ended September 30, 2005** |   |   |        |        |   |        |   |      |   |
|                                                     |   |   |        |        |   |        |   |      |   |   |   |   |   |   |   |   |
|                                                     |   |   | 20/20  |        |   | Frontrunner |   |      | Nexvu  |   |   | Corp/elim |   |   | Total |   |
| Revenues                                                 |   |   | -           |        | $      | 4,141       |   | $         | 406    |   |   | - |   | $ | 4,547 |   |
| Gross                margin                              |   |   | -           |        |   | 1,718       |   |      | 197    |   |   | - |   |   | 1,915 |   |
| Expenses                                                 |   |   | -           |        |   | 1,505       |   |      | 490    |   |   | 210 |   |   | 2,205 |   |
| Operating                income                          |   |   | -           |        |   | 213         |   |      | (293   | )      |   | (210 | ) |   | (290 | ) |
| Interest                expense                          |   |   | -           |        |   | 91          |   |      | (5     | )      |   | - |   |   | 86 |   |
| Loss                before taxes                         |   |   | -           |        |   | 122         |   |      | (288   | )      |   | (210 | ) |   | (376 | ) |
| Depreciation/Amortization                                |   |   | -           |        |   | 193         |   |      | 20     |   |   | - |   |   | 213 |   |
|                                                     |   |   |        |        |   |        |   |      |   |   |   |   |   |   |   |   |

----

| **Nine                months ended September 30, 2006** |   |   |   |        |   |   |   |
|---------------------------------------------------------|--------|--------|--------|-------------|--------|--------|--------|
|                                                    |   |   |   |        |   |   |   |   |   |   |   |
|                                                    |   | 20/20  |   | Frontrunner |   | Nexvu  |   | Corp/elim |   | Total |   |
| Revenues                                                |   | $      | 89     |        | $      | 9,532  |   | $ | 1,229 |   | $ | - |   | $ | 10,850 |   |
| Gross                margin                             |   |   | 89     |        |   | 4,560  |   |   | 629 |   |   | - |   |   | 5,278 |   |
| Expenses                                                |   |   | 139    |        |   | 4,521  |   |   | 1,310 |   |   | 3,011 |   |   | 8,981 |   |
| Operating                income                         |   |   | (50    | )           |   | 39     |   |   | (681 | ) |   | (3,011 | ) |   | (3,703 | ) |
| Interest                expense                         |   |   | 18     |        |   | 305    |   |   | - |   |   | 708 |   |   | 1,031 |   |
| Loss                before taxes                        |   |   | (68    | )           |   | (266   | )      |   | (681 | ) |   | (3,719 | ) |   | (4,734 | ) |
| Depreciation/Amortization                               |   |   | 1      |        |   | 539    |   |   | 71 |   |   | - |   |   | 611 |   |

| **Nine                months ended September 30, 2005**          |   |   |        |        |   |        |   |
|------------------------------------------------------------------|--------|--------|-------------|-------------|--------|-------------|--------|
|                                                             |   |   |        |        |   |        |   |   |   |   |   |
|                                                             |   | 20/20  |        | Frontrunner |   | Nexvu       |   | Corp/elim |   | Total |   |
| Revenues                                                         |   |   | -           |        | $      | 11,090      |   | $ | 990 |   | $ | - |   | $ | 12,080 |   |
| Gross                margin                                      |   |   | -           |        |   | 5,156       |   |   | 473 |   |   | - |   |   | 5,629 |   |
| Expenses                                                         |   |   | -           |        |   | 4,705       |   |   | 1,365 |   |   | 679 |   |   | 6,749 |   |
| Operating                income                                  |   |   | -           |        |   | 451         |   |   | (892 | ) |   | (679 | ) |   | (1,120 | ) |
| Interest                expense                                  |   |   | -           |        |   | 294         |   |   | (32 | ) |   | - |   |   | 262 |   |
| Loss                before taxes                                 |   |   | -           |        |   | 157         |   |   | (860 | ) |   | (679 | ) |   | (1,382 | ) |
| Depreciation/Amortization                                        |   |   | -           |        |   | 586         |   |   | 62 |   |   | - |   |   | 648 |   |
|                                                             |   |   |        |        |   |        |   |   |   |   |   |   |   |   |   |   |
|  **Segment                assets as of September 30, 2006** |   |   |        |        |   |        |   |   |   |
|                                                             |   |   |        |        |   |        |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   | 20/20  |        |   | Frontrunner |   |   | Nexvu |   |   | Corp/elim |   |   | Total |   |
| Tangible                assets                                   |   |   | 308         |        | $      | 2,370       |   | $ | 2,431 |   | $ | (395 | ) | $ | 4,714 |   |
| Intangible                assets                                 |   |   | 13,408      |        |   | 6,355       |   |   | - |   |   | - |   |   | 19,763 |   |
| Total                assets                                      |   |   | 13,716      |        | $      | 8,725       |   | $ | 2,431 |   | $ | (395 | ) | $ | 24,477 |   |
|                                                             |   |   |        |        |   |        |   |   |   |   |   |   |   |   |   |   |
|  **Segment                assets as of December 31, 2005**  |   |   |        |        |   |        |   |   |   |
|                                                             |   |   |        |        |   |        |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   | 20/20  |        |   | Frontrunner |   |   | Nexvu |   |   | Corp/elim |   |   | Total |   |
| Tangible                assets                                   |   |   | -           |        | $      | 2,927       |   | $ | 2,693 |   | $ | (1,264 | ) | $ | 4,356 |   |
| Intangible                assets                                 |   |   | -           |        |   | 6,778       |   |   | - |   |   | - |   |   | 6,778 |   |
| Total                assets                                      |   |   | -           |        | $      | 9,705       |   | $ | 2,693 |   | $ | (1,264 | ) | $ | 11,134 |   |
|                                                             |   |   |        |        |   |        |   |   |   |   |   |   |   |   |   |   |

----

**NOTE      12 - Subsequent Event**

----

**Item      2. Management’s Discussion and Analysis **

**Overview**

----

**Results      of Operations**

**Three      months ended September 30, 2006 compared to 2005**

----

|                                         |   | Three                months ended, |      |
|----------------------------------------------|--------|------------------------------------|-----------|
|                                         |   | Sept.                30, 2006      |      | Sept.30,                2005 |   |
| Compensation                                 |   | $                                  | 2,583,050 |   | $ | 1,262,544 |   |
| Travel                and entertainment      |   |                               | 51,778    |   |   | 69,802 |   |
| Occupancy                                    |   |                               | 138,085   |   |   | 122,735 |   |
| Professional                services         |   |                               | 826,230   |   |   | 197,671 |   |
| Insurance                                    |   |                               | 88,204    |   |   | 75,515 |   |
| Depreciation                and amortization |   |                               | 203,030   |   |   | 213,564 |   |
| Other                operating expenses      |   |                               | 240,205   |   |   | 263,709 |   |
| Total                operating expenses      |   | $                                  | 4,130,582 |   | $ | 2,205,540 |   |

**Three      months ended September 30, 2005 compared to 2004**

----

|                                         |   | Three                months ended, |      |
|----------------------------------------------|--------|------------------------------------|-----------|
|                                         |   | Sept.                30, 2005      |      | Sept.                30, 2004 |   |
| Compensation                                 |   | $                                  | 1,262,544 |   | $ | 788,864 |   |
| Travel                and entertainment      |   |                               | 69,802    |   |   | 70,932 |   |
| Occupancy                                    |   |                               | 122,735   |   |   | 145,828 |   |
| Professional                services         |   |                               | 197,671   |   |   | 267,567 |   |
| Insurance                                    |   |                               | 75,515    |   |   | 35,615 |   |
| Depreciation                and amortization |   |                               | 213,564   |   |   | 95,167 |   |
| Other                operating expenses      |   |                               | 263,709   |   |   | 143,693 |   |
| Total                operating expenses      |   | $                                  | 2,205,540 |   | $ | 1,547,666 |   |

----

**Nine      months ended September 30, 2006 compared to 2005**

----

|                                         |   | Nine                months ended, |      |
|----------------------------------------------|--------|-----------------------------------|-----------|
|                                         |   | Sept.                30 , 2006    |      | Sept.                30, 2005 |   |
| Compensation                                 |   | $                                 | 5,485,855 |   | $ | 3,875,402 |   |
| Travel                and entertainment      |   |                              | 164,055   |   |   | 187,225 |   |
| Occupancy                                    |   |                              | 410,344   |   |   | 375,579 |   |
| Professional                services         |   |                              | 1,368,535 |   |   | 551,366 |   |
| Insurance                                    |   |                              | 248,057   |   |   | 234,193 |   |
| Depreciation                and amortization |   |                              | 611,194   |   |   | 648,102 |   |
| Other                operating expenses      |   |                              | 693,721   |   |   | 876,793 |   |
| Total                operating expenses      |   | $                                 | 8,981,761 |   | $ | 6,748,660 |   |

**Nine      months ended September 30, 2005 compared to 2004**

----

|                                         |   | Nine                months ended, |      |
|----------------------------------------------|--------|-----------------------------------|-----------|
|                                         |   | Sept.                30, 2005     |      | Sept.                30, 2004 |   |
| Compensation                                 |   | $                                 | 3,875,402 |   | $ | 2,381,112 |   |
| Travel                and entertainment      |   |                              | 187,225   |   |   | 210,990 |   |
| Occupancy                                    |   |                              | 375,579   |   |   | 204,645 |   |
| Professional                services         |   |                              | 551,366   |   |   | 593,036 |   |
| Insurance                                    |   |                              | 234,193   |   |   | 62,195 |   |
| Depreciation                and amortization |   |                              | 648,102   |   |   | 147,542 |   |
| Other                operating expenses      |   |                              | 876,793   |   |   | 316,068 |   |
| Total                operating expenses      |   | $                                 | 6,748,660 |   | $ | 3,915,588 |   |

----

**Liquidity      and Capital Resources**

----

|                                         |   | OperatingLeases |    | Debt                Obligations |   | Minimum                Royalty Payments |   |
|----------------------------------------------|--------|-----------------|---------|---------------------------------|--------|-----------------------------------------|--------|
|                                         |   |            |    |                            |   |                                    |   |
| 2006                                         |   | $               | 293,910 |                            | $      | 5,097,314                               |   | $ | 100,000 |   |
| 2007                                         |   |            | 248,912 |                            |   | 6,507,798                               |   |   | 125,000 |   |
| 2008                                         |   |            | 187,913 |                            |   | 947,651                                 |   |   | 150,000 |   |
| 2009                                         |   |            | 137,916 |                            |   | 27,608                                  |   |   | - |   |
| 2010                and beyond               |   |            | 78,458  |                            |   | -                                       |   |   | - |   |
|                                         |   |            |    |                            |   |                                    |   |   |   |   |
| Total                contractual obligations |   | $               | 947,109 |                            | $      | 12,580,371                              |   | $ | 375,000 |   |
|                                         |   |            |    |                            |   |                                    |   |   |   |   |

**Critical      Accounting Policies**

----

**Revenue      Recognition**

* *

----

**Goodwill      and Purchased Intangible Assets**

**Stock-Based      Compensation**

*Accounting      for Stock Issued to Employees*
*Accounting      for Stock-Based Compensation*
*Share-Based      Payment*

**Inventory      **

**Off      -Balance Sheet Obligations**

----

**Item      3. Controls and Procedures**

**Evaluation      of Disclosure Controls and Procedure**

**Changes      in Internal Control Over Financial Reporting**

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings**

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

----

**Item      3. Defaults Upon Senior Securities**

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

**Item      5. Other Information**

**Item      6. Exhibits**

----

**SIGNATURES**

|         |                                                   |                                                |
|--------------|--------------------------------------------------------|-----------------------------------------------------|
|         | CAPITAL              GROWTH              SYSTEMS, INC. |
|    |                                              |                                           |
|         | By:                                          | /s/ Thomas              G.              Hudson |
|         | Thomas              G. Hudson, Chief Executive Officer |
|         |                                                   |

|                           |                                                                            |                                             |
|--------------------------------|---------------------------------------------------------------------------------|--------------------------------------------------|
|                      |                                                                       |                                        |
|                           | By:                                                                   | /s/ Derry              L.              Behm |
|                           | Derry              L. Behm, Chief Financial and Accounting              Officer |
|                           |                                                                            |
|                           |                                                                            |
| Dated: November 20, 2006  |                                                                            |

----

**EXHIBIT      INDEX**

|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit                     Number |   | Description                  of Document                                                                                                                                                                                                                                                                                                                                                                                              |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.i                                     |   | Amendment                  to Articles of Incorporation of Capital Growth Systems, Inc.                  (1)                                                                                                                                                                                                                                                                                                                     |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 2.1                                     |   | Agreement                  and Plan of Merger by and among the Company, 20/20 Merger Sub,                  Inc. and                  20/20 Technologies, Inc., dated September 8, 2006.                                                                                                                                                                                                                                               |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1                                    |   | Purchase                  Agreement by and among the Company, Augustine Fund, L.P., Michael                  Balkin                  and David Lies, dated July 28, 2006.                                                                                                                                                                                                                                                             |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2                                    |   | Warrant                  issued by Company to Augustine Capital Management, LLC, dated July                  28,                  2006.                                                                                                                                                                                                                                                                                               |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3                                    |   | Agreement                  by and among the Company, Michael Balkin and David Lies, dated                  July 28,                  2006.                                                                                                                                                                                                                                                                                            |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4                                    |   | Common                  Stock Warrant issued by the Company to Michael                  Balkin, dated July 28, 2006 together                  with a schedule of substantially identical documents omitted from                  filing                  pursuant to Rule 12b-31 promulgated under the Exchange                  Act.                                                                                                 |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5                                    |   | Bridge                    Note Purchase Agreement by and among the Company and a limited                    number of                    accredited investors, dated August 23, 2006, together with a                    schedule of                    substantially identical documents omitted from filing pursuant                    to Rule                    12b-31 promulgated under the Exchange Act.                       |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6                                    |   | First                  Amendment to Bridge Note Purchase Agreement by and among the Company                  and a                  limited number of accredited investors, dated August 24, 2006,                  together                  with a schedule of substantially identical documents omitted from                  filing                  pursuant to Rule 12b-31 promulgated under the Exchange                  Act. |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.7                                    |   | Agreement                  by and between Capital Growth Systems, Inc. and Mellon Enterprises,                  LLC,                  dated August 24, 2006.                                                                                                                                                                                                                                                                          |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.8                                    |   | Common                  Stock Warrant issued by the Company to Mellon Enterprises, LLC,                  dated                  August 24, 2006.                                                                                                                                                                                                                                                                                      |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.9                                    |   | Purchase                  Agreement by and between Capital Growth Systems, Inc. and LaSalle                  20/20                  Lender, LLC and certain other lenders, dated August 24,                  2006.                                                                                                                                                                                                                    |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.10                                   |   | Common                  Stock Warrant issued by the Company to LaSalle 20/20 Lender, dated                  August                  24, 2006.                                                                                                                                                                                                                                                                                         |

----

|                                    |   |                                     |
|-----------------------------------------|--------|------------------------------------------|
| Exhibit                     Number |   | Description                  of Document |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11  |   | Convertible                  Promissory Note issued by the Company to Michael Balkin, dated                  September 8, 2006, together with a schedule of substantially identical                  documents omitted from filing pursuant to Rule 12b-31 promulgated                  under                  the Exchange Act.                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.12  |   | Series                  A Convertible Preferred Stock Purchase Warrant issued by the Company                  to                  Michael Balkin, dated September 8, 2006, together with a schedule                  of                  substantially identical documents omitted from filing pursuant                  to Rule                  12b-31 promulgated under the Exchange Act. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.13  |   | Common                  Stock Warrant issued by the Company to David Beamish, dated September                  8,                  2006, together with a schedule of substantially identical documents                  omitted from filing pursuant to Rule 12b-31 promulgated under the                  Exchange                  Act.                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.14  |   | Mellon                  Inducement Agreement by and between Mellon Enterprises, Limited                  Partnership and the Company dated September 8, 2006.                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.15  |   | Series                  A Convertible Preferred Stock Warrant issued by the Company to                  Mellon                  Enterprises, Limited Partnership, dated September 8,                  2006.                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.16  |   | Inducement                  Agreement by and between Venture Equities Management, Inc., Mellon                  Enterprises, Limited Partnership, dated September 8,                  2006.                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.17  |   | Series                  A Convertible Preferred Stock Warrant issued by the Company to                  Venture                  Equities Management, Inc., dated September 8, 2006.                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.18  |   | Employment                  Agreement by and between Patrick C. Shutt and the Company, dated                  September                  8, 2006.                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.19  |   | Stock                  Option Agreement by and between Patrick C. Shutt and the Company,                  dated September 8, 2006.                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.20  |   | Performance                  Option Agreement by and between Patrick C. Shutt and the Company,                  dated                  September 8, 2006.                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.21  |   | Employment                  Agreement by and between George A. King and the Company, dated                  September 8, 2006.                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.22  |   | Stock                  Option Agreement by and between George A. King and the Company,                  dated                  September 8, 2006.                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.23  |   | Performance                  Option Agreement by and between George A. King and the Company,                  dated                  September 8, 2006.                                                                                                                                                                                                                                      |

----

| Exhibit                   Number |   | Description                  of Document                                                                                                                                                                                                                                                                                                  |
|---------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.24                                 |   | Amendment                  No. 1 to Employment Agreement by and between Thomas G. Hudson and                  the                  Company, dated September 8, 2006.                                                                                                                                                                      |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.25                                 |   | Amendment                    No. 1 to                    Stock                    Option Agreement by and between Thomas G. Hudson and the Company,                    dated                    September 8, 2006.                                                                                                                        |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.26                                 |   | Performance                  Option Agreement by and between Thomas G. Hudson and the Company,                  dated                  September 8, 2006.                                                                                                                                                                                 |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.27                                 |   | Common                  Stock Warrant issued by the Company to Robert Geras, dated September                  14,                  2006, together with a schedule of substantially identical documents                  omitted from filing pursuant to Rule 12b-31 promulgated under the                  Exchange                  Act. |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.28                                 |   | Separation                  Agreement by and between Rory Herriman and the Company, dated September                  30, 2006.                                                                                                                                                                                                            |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.29                                 |   | Consulting                  Agreement by and between Rory Herriman and the Company, dated September                  30, 2006.                                                                                                                                                                                                            |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.30                                 |   | Stock Option                Agreement                by and between Thomas G. Hudson and the Company, dated September                8,                2006.                                                                                                                                                                              |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 31.1                                  |   | Certification                  of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of                  2002.                                                                                                                                                                                                                         |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 31.2                                  |   | Certification                  of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of                  2002.                                                                                                                                                                                                                         |
|                                  |   |                                                                                                                                                                                                                                                                                                                                      |
| 32                                    |   | Certification                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                  906 of                  the Sarbanes-Oxley Act of 2002.                                                                                                                                                                |
| __________________________            |   |                                                                                                                                                                                                                                                                                                                                      |
| (1)                                   |   | Incorporated                by reference to Form 8-K filed with the Commission on September 14,                2006                (SEC File No. 0-30831).                                                                                                                                                                                |

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