| CAPITAL                GROWTH SYSTEMS, INC.                                                        |
|----------------------------------------------------------------------------------------------------|
| (Name                of small business issuer in its charter)                                      |
|                                                                                               |   |   |
| Florida                                                                                            |   | 65-0953505 |
| (State                or other jurisdiction of incorporation or organization)                      |   | (I.R.S.                Employer Identification Number) |
|                                                                                               |
| 125                South Wacker Drive, Suite 300  Chicago, Illinois                60606 |
| (Address                of principal executive offices)                                            |
|                                                                                               |
| (312)                673-2400                                                                      |
| (Issuer's                telephone number)                                                         |

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**EXPLANATORY      NOTE**

**Item      11. Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters**

|   | · | each                person known to be the beneficial owner of more than five percent                (5%) of                each class of our capital; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                   |
|   | · | each                director and executive officer; and                                                                                                |
|   |   |                                                                                                                                                   |
|   | · | all                directors and executive officers, as a                group.                                                                        |

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| Robert                T. Geras                                                                     |   |   | 3,844,734  | (2  | )      |   | 17.18 | % |
|----------------------------------------------------------------------------------------------------|--------|--------|------------|-----|--------|--------|-------|---|
| Carl                C. Greer Trust                                                                 |   |   | 1,988,504  | (3  | )      |   | 8.89  | % |
| David                Lies                                                                          |   |   | 1,834,005  | (4  | )      |   | 8.20  | % |
| Balkin                Family Limited Partnership                                                   |   |   | 1,676,293  | (5  | )      |   | 7.49  | % |
| Philip                B. Kenny                                                                     |   |   | 275,000    | (6  | )      |   | 1.26  | % |
| David                A. Beamish                                                                    |   |   | 611,367    | (7  | )      |   | 2.79  | % |
| Derry                L. Behm                                                                       |   |   | 300,000    | (8  | )      |   | 1.36  | % |
| Douglas                Stukel(9)                                                                   |   |   | 1,325,182  | (10 | )      |   | 5.80  | % |
| Lee                Wiskowski(9)                                                                    |   |   | 1,057,907  | (11 | )      |   | 4.66  | % |
| Robert                Pollan                                                                       |   |   | 125,000    | (12 | )      |   | 0.57  | % |
| Thomas                Hudson                                                                       |   |   | 1,308,070  | (13 | )      |   | 5.68  | % |
| Patrick                Shutt                                                                       |   |   | 535,005    | (14 | )      |   | 2.41  | % |
| George                King                                                                         |   |   | 500,000    | (15 | )      |   | 2.25  | % |
| All                Current Directors and Executive Officers as a Group (10                persons) |   |   | 10,972,510 |     |   |   | 35.87 | % |

| (1) | Except                pursuant to applicable marital property laws or as indicated in the                footnotes to this table, to our knowledge, each stockholder identified                in                the table possesses sole voting and investment power with respect                to all                Common Stock shown as beneficially owned by the                stockholder. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                Geras is the chairman of the board. Includes 3,182,854 shares of                Common                Stock and warrants to purchase 661,880 shares of Common Stock, 111,111                of                which are exercisable at $1.35 per share, 450,000 at $0.70 per share                and                211,880 at $0.45 per share. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                Carl C. Greer Trust, of which Carl C. Greer is the sole trustee,                is an                estate planning trust established by Mr. Greer for the benefit of                his                family members. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes 1,086,613                shares of Common Stock and warrants to purchase 650,000 shares at                $0.45                per share held by Mr. Lies; it also includes 97,392 shares owned                by Mr.                Lies' wife. Mr. Lies disclaims beneficial ownership of shares held                by his                wife or issuable upon the exercise of warrants held by his                wife. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | The                Balkin Family Limited Partnership, of which Michael Balkin is the                sole                general partner, is an estate planning partnership established by                Mr.                Balkin for the benefit of himself and his immediate family members.                Includes 1,000,593 shares of Common Stock and warrants to purchase                25,700                shares at $0.70 per share and warrants to purchase 650,000 shares                at $0.45                per share |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Mr.                Kenny is a director. Includes 125,000 shares of Common Stock and                warrants                to purchase 150,000 shares at $0.70 per                share. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (7) | Mr.                Beamish is a director. Includes 435,667 shares of Common Stock and                warrants to purchase 175,700 shares at $0.70 per                share. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)    | Mr.                Behm was the former chief financial and accounting officer. Mr.                Behm holds options to purchase 300,000 shares of Common Stock, which                vest                over a period of four years exercisable at $1.35 per share. Of the                options                granted, 150,000 have vested. Mr. Behm also holds warrants to purchase                150,000 shares at $0.70 per share |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

| (9) | Messrs.                  Wiskowski and Stukel currently serve as directors of the                  Company. |
|-----|-------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10)   | Includes                184,482 shares of Common Stock, warrants to purchase 250,000 shares                at                $1.35 per share, warrants to purchase 740,700 shares at $0.70 per                share,                and warrants to purchase 150,000 shares at $0.50 per                share. |

| (11) | Includes                59,907 shares of Common Stock owned by Grander, L.L.C. of which Mr.                Wiskowski is the sole member, 15,000 shares owned by Mr. Wiskowski's                spouse, 3,000 shares owned by Mr. Wiskowski, individually, and also                includes warrants to purchase 250,000 shares at $1.35 per share and                warrants to purchase 730,000 shares at $0.70 per share, held by Mr.                Wiskowski. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Mr.                Pollan is the chief information & strategy officer. Mr. Pollan holds                options to purchase 1,000,000 shares of Common Stock exercisable                at $0.98                per share of which 125,000 have                vested. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13) | Mr.                Hudson is our chief executive officer and a director of the Company.                Includes options to purchase 2,800,000 shares at $0.70 per share                of which                1,200,000 have or will vest within the next 60 days, warrants to                purchase                37,557 shares at $0.70 per share and warrants to purchase 70,513                shares,                41,667 of which are exercisable at $0.45 per share and 28,846 of                which are                exercisable at $0.65 per share. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (14) | Mr.                Shutt is our president and a director. Includes 35,005 shares of                Common                Stock and vested options to purchase 500,000 shares at $0.70 per                share                (out of a total of 2,500,000                options). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (15) | Mr.                King is our president of global operations and development and a                director.                Includes vested options to purchase 500,000 shares at $0.70 per share                (out                of a total of 2,500,000 options). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Mellon                Enterprises                                                                 |   | 759.3781 |   | (2)    | 37.58 | % |
|---------------------------------------------------------------------------------------------------|--------|----------|--------|--------|-------|---|
| Michael                Balkin                                                                     |   | 135.0014 |   | (3)    | 6.68  | % |
| David                Lies                                                                         |   | 135.0014 |   | (3)    | 6.68  | % |
| Jerry                Rozek                                                                        |   | 135.0014 |   | (3)    | 6.68  | % |
| Scott                Mitchell                                                                     |   | 118.5150 |   | (4)    | 5.86  | % |
| Norm                Siegel                                                                        |   | 101.2510 |   | (5)    | 5.01  | % |
| Robert                Geras                                                                       |   | 89.9487  |   | (6)    | 4.45  | % |
| Thomas                Hudson                                                                      |   | 33.8016  |   | (7)    | 1.67  | % |
| All                Current Directors and Executive Officers as a Group (2                persons) |   | 123.7503 |   |   | 6.12  | % |

|   | (1) | Except                pursuant to applicable marital property laws or as indicated in the                footnotes to this table, to our knowledge, each stockholder identified                in                the table possesses sole voting and investment power with respect                to all                Series A Preferred Stock shown as beneficially owned by the                stockholder. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Series                A Preferred Stock owned by Mellon Enterprises totaled 759.3781 or                843,745                shares of the Company's Common Stock on an as converted                basis. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Series                A Preferred Stock owned by Messrs. Balkin, Lies and Rozek each totaled                135.0014 or 150,000 shares of the Company's Common Stock on an as                converted basis. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Series                A Preferred Stock owned by Mr. Mitchell totaled 118.5150 or 131,682                shares                of the Company's Common Stock on an as converted                basis. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Series                A Preferred Stock owned by Mr. Siegel totaled 101.2510 or 112,500                shares                of the Company's Common Stock on an as converted                basis. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Series                A Preferred Stock owned by Mr. Geras, chairman of the Company's board                of                directors, totaled 89.9487 or 99,942 shares of the Company's Common                Stock                on an as converted basis. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Series                A Preferred Stock owned by Mr. Hudson, the Company's chief executive                officer, totaled 33.8016 or 37,567 shares of the Company's Common                Stock on                an as converted basis. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Robert                Geras                                                                       |   | 668.5800 |   | (2)    | 26.57 | % |
|---------------------------------------------------------------------------------------------------|--------|----------|--------|--------|-------|---|
| Brocade                Communication Systems, Inc.                                                |   | 402.6656 |   | (3)    | 16.00 | % |
| Wanxiang                International Investment Corporation                                      |   | 338.8076 |   | (4)    | 13.47 | % |
| Michael                McGowan                                                                    |   | 271.0456 |   | (5)    | 10.77 | % |
| Patrick                Shutt                                                                      |   | 22.5869  |   | (6)    | 0.90  | % |
| All                Current Directors and Executive Officers as a Group (2                persons) |   | 691.1668 |   |   | 27.47 | % |

|   | (1) | Except                pursuant to applicable marital property laws or as indicated in the                footnotes to this table, to our knowledge, each stockholder identified                in                the table possesses sole voting and investment power with respect                to all                Series B Preferred Stock shown as beneficially owned by the                stockholder. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Series                B Preferred Stock owned by Mr. Geras, chairman of the Company's board                of                directors, totaled 668.5800 or 983,207 shares of the Company's Common                Stock on an as converted basis. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Series                B owned by Brocade Communication Systems, Inc. totaled 402.6656 or                592,156                shares of the Company's Common Stock on an as converted                basis. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Series                B owned by Wanxiang International Investment Corporation totaled                338.8076                or 498,247 shares of the Company's Common Stock on an as converted                basis. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Series                B owned by Mr. McGowan totaled 271.0456 or 398,597 shares of the                Company's                Common Stock on an as converted                basis. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Series                B owned by Mr. Shutt, the Company's chief operating officer, totaled                22.5869 or 33,216 shares of the Company's Common Stock on an as converted                basis. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Thomas                Hudson                                                                      |   | 3,264.6512 |   | (2)    | 14.26 | % |
|---------------------------------------------------------------------------------------------------|--------|------------|--------|--------|-------|---|
| George                King                                                                        |   | 522.5056   |   | (3)    | 2.50  | % |
| Douglas                Stukel                                                                     |   | 515.5309   |   | (4)    | 2.45  | % |
| Bob                Geras                                                                          |   | 464.6297   |   | (5)    | 2.20  | % |
| Lee                Wiskowski                                                                      |   | 374.4550   |   | (6)    | 1.78  | % |
| All                Current Directors and Executive Officers as a Group (5                persons) |   | 4,804.2679 |   |   | 18.20 | % |

|   | (1) | Except                pursuant to applicable marital property laws or as indicated in the                footnotes to this table, to our knowledge, each stockholder identified                in                the table possesses sole voting and investment power with respect                to all                Series AA Preferred Stock shown as beneficially owned by the                stockholder. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Mr.                Hudson is the Company's chief executive officer. Includes 1,012.6268                shares of Series AA Preferred Stock or 2,250,259 shares of Common                Stock on                an as converted basis and warrants to purchase 2,252.0244 shares                of Series                AA Preferred Stock or 5,004,449 shares of Common Stock on an as converted                basis. The above total does not include possible conversion to Common                from                $504,274 original principal amount of term loan which by its terms                is                convertible into Common Stock at a 20% discount to the fair market                value                of the Company’s Common Stock, subject to a floor of $0.65 per share and a                ceiling of $1.25 per share, the conversation amount of which is variable                from time to time. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Mr.                King is the Company's President - Global Operations and Development.                Includes 250.0027 shares of Series AA Preferred Stock or 555,556                shares of Common Stock on an as converted basis and warrants to purchase                272.5029 shares of Series AA Preferred Stock or 605,556 shares of                Common                Stock on an as converted basis. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Mr.                Stukel is on the Company's board of directors. Includes 67.5000 shares                of                Series AA Preferred Stock or 149,999 shares of Common Stock on an                as                converted basis and warrants to purchase 448.03090 shares of Series                AA                Preferred Stock or 995,614 shares of Common Stock on an as converted                basis. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Mr.                Geras is the Company's chairman of the board of directors. Represents                warrants to purchase 464.6297 shares of Series AA Preferred Stock                or                1,032,500 shares of Common Stock on an as converted                basis. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Mr.                Wiskowski is on the Company's board of directors. Represents warrants                to                purchase 374.4550 shares of Series AA Preferred Stock or 832,114                shares of                Common Stock on an as converted                basis. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

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

|   |                                                                                     |                                       |
|--------|------------------------------------------------------------------------------------------|--------------------------------------------|
|   |                                                  | /s/ Darin                P. McAreavey |
|   | Darin                P. McAreavey, Chief Financial and Accounting                Officer |

**Dated:      May 4, 2007**

| **SIGNATURE**                                       |   | **TITLE**                                             |   | **DATE**                   |
|-----------------------------------------------------|--------|-------------------------------------------------------|--------|----------------------------|
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Douglas Stukel              |   | Director                                              |   | May                4, 2007 |
| Douglas                Stukel                       |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Lee Wiskowski               |   | Director                                              |   | May                4, 2007 |
| Lee                Wiskowski                        |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                David A. Beamish                 |   | Director                                              |   | May                4, 2007 |
| David                A. Beamish                     |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Philip B. Kenny                  |   | Director                                              |   | May                4, 2007 |
| Philip                B. Kenny                      |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Patrick C. Shutt                 |   | Director                                              |   | May                4, 2007 |
| Patrick                C. Shutt                     |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Robert T. Geras             |   | Chairman                of the Board                  |   | May                4, 2007 |
| Robert                T. Geras                      |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Thomas G. Hudson            |   | Chief                Executive Officer                |   | May                4, 2007 |
| Thomas                G. Hudson                     |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
|                                                |   |                                                  |   |                       |
| /s/                Darin                P.McAreavey |   | Chief                Financial and Accounting Officer |   | May                4, 2007 |
| Darin                P.McAreavey                    |   |                                                  |   |                       |

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