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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-KSB/A





(Mark One)

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

For the Fiscal Year ended December 31, 2007



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 0-30831





CAPITAL GROWTH SYSTEMS, INC.

(Name of registrant in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Florida                                                        |  | 65-0953505                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

500 W. Madison Street, Suite 2060, Chicago, Illinois 60661

(Address of principal executive offices)

(312) 673-2400

(Issuers telephone number)





Securities registered under Section 12(b) of the Exchange Act:

Title of
each class: None

Name of each exchange on which registered: None

Securities registered under Section 12(g) of the Exchange Act:

Title of
class: common stock, $.0001 par value





Check whether the issuer is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   ̈

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

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.   ̈

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

State issuers revenues for its most recent fiscal year: $17,228,050

The aggregate market value of
the registrants common stock held by non-affiliates of the registrant as of December 31, 2007 was $74,641,773 based on the closing sale price for the registrants common stock on that date as reported on the OTC Bulletin Board. For
purposes of determining such aggregate market value, all officers and directors of the registrant are considered to be affiliates of the registrant. The registrants preferred shares convertible to common shares were included for purposes of
determining the aggregate value.

As of March 17, 2008, the issuer had outstanding 146,795,709 shares of its $0.0001 par value common
stock.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format:    Yes   ̈    No  x









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Explanatory Note:

This Amendment No. 3 (this Amendment) on Form 10-KSB/A to the Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 and filed with the Securities and Exchange Commission on
August 19, 2009 is in response to comments raised by the Securities and Exchange Commission.

The information contained in this
Amendment amends or restates the following only:



| |  |  | PART II, Item 8A(T), Controls and Procedures;
| | - |  | ---------------------------------------------



| |  |  | Signatures; and
| | - |  | ---------------



| |  |  | Certifications from our Chief Executive Officer and Chief Financial Officer as required by Rules 13a-15(e) and 15d-15(e), included as exhibits.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



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|              |  |                                                                                                                         |  |     
|------------- |  | ----------------------------------------------------------------------------------------------------------------------- |  | ----
|              |  |                                                                                                                         |  | Page
|              | 
|PART II       |  |                                                                                                                        
|              |  |                                                                                                                        
|Item 8A(T).   |  | Controls and Procedures                                                                                                 |  |     
|              | 
|PART III      |  |                                                                                                                        
|              |  |                                                                                                                        
|Item 13.      |  | Exhibits                                                                                                                |  |     
|              | 
|SIGNATURES    |  |                                                                                                                        
|              |  |                                                                                                                        
|EXHIBIT 31.1. |  | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                         |  |     
|              |  |                                                                                                                        
|EXHIBIT 31.2. |  | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                         |  |     
|              |  |                                                                                                                        
|EXHIBIT 32.   |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  |     



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PART II



|Item 8A(T). | Controls and Procedures.
|----------- | ------------------------

Conclusion Regarding the Effectiveness
of Disclosure Controls and Procedures

The effectiveness of our or any system of disclosure controls and procedures is subject to
certain limitations, including the exercise of judgment in designing, implementing, and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events, and the inability to eliminate misconduct
completely. As a result, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. By their nature, our or any system of disclosure controls and procedures can provide only reasonable assurance regarding
managements control objectives.

Under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, we evaluated the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, or the Exchange Act) as of
December 31, 2007. On the basis of this review, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures are designed, and are effective, to give reasonable
assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and to ensure that
information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely
decisions regarding required disclosure.

Managements Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework in Internal Control over Financial Reporting  Guidance for Smaller Public Companiesissued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our
evaluation under that framework, management concluded that our internal control over financial reporting was not effective as of December 31, 2007.

As a result of the evaluation, management identified three material weaknesses with respect to internal control over financial reporting:



| |  |  | A majority of directors were not independent during 2007 as defined in Item 407(a) of Regulation S-K. No audit committee financial expert, as defined in
Item 407(d)(5) of Regulation S-B, was designated from the Board of Directors or served on its audit committee;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Management has not yet deployed staff and systems in a manner that allows for the desired level of segregation of duties to operate and be documented in a manner
sufficient to meet Sarbanes-Oxley standards that will need to be evidenced in the near term; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Management did not adequately analyze the contingent terms of previous financing transactions in light of the volume of increasingly complex accounting and
reporting standards issued by various promulgating bodies, resulting in a restatement of the consolidated financial statements for the fiscal years ended December 31, 2007 and 2006, respectively. The restatement required a balance sheet
reclassification of warrants and preferred stock from the consolidated statement of shareholders equity to a liability account. See Note 18 to the Consolidated Financial Statements included in Item 7, herein.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the Corporations annual or interim financial statements will not be prevented or detected on a timely basis.

In order to determine whether a control deficiency, or combination of control deficiencies, is a material weakness, management considers all relevant information and evaluates the severity of each control deficiency
that comes to its attention. Management also evaluates the effect of its compensating controls, which serve to accomplish the objective of another control that did not function properly, helping to reduce risk to an acceptable level. To have a
mitigating effect, the compensating control should operate at a level of precision that would prevent or detect a misstatement that could be material.



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Management is committed to continuing efforts aimed at improving the design adequacy and operational
effectiveness of its system of internal control. During 2008, the Company will implement the following remediation activities to improve the Companys internal control over financial reporting:



| |  |  | Continuation of our search for an independent director to fill the remaining vacancy on our seven member Board of Directors. We are also considering whether to add
two independent directors or to replace an inside director with an independent director, in both cases, in order to have a majority of our Board of Directors become independent. We will determine whether any of its current directors is a financial
expert and, if not, will ensure that one of the new directors is a financial expert. (See the Subsequent Events footnote to the financial statements for further information.) In addition, we will adopt audit committee best practices as
recommended by the Treadway Commission and the major stock exchanges;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Utilization of external consultants to assist in the implementation and design of policies and procedures to meet the required documentation and effectiveness
requirements for internal control over financial reporting under the Sarbanes-Oxley Act and to adequately address the lack of segregation of duties within the financial reporting process; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Utilization of external consultants to assist in the planning for, and in advance of the execution of, the accounting treatment of complex transactions and
financings given the unforeseen effects driven by complex accounting standards.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Even with these changes, due to the
increasing number and complexity of pronouncements, emerging issues and releases, and reporting requirements and regulations, we expect there will continue to be some risk related to financial disclosures. The process of identifying risk areas and
implementing the many facets of internal control over financial reporting as required under the Sarbanes-Oxley Act continues to be complex and subject to significant judgment and may result in the identification in the future of areas where we may
need additional resources.

As described below, there were changes in our internal control over financial reporting that occurred during
the fiscal quarter ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Late in 2006, we completed our acquisitions of 20/20, Magenta, CentrePath, and GCG. Since these entities had limited resources for processing accounting
information and financial reporting, we concluded a material weakness existed at that time related to proper segregation of duties at those locations. In the fourth quarter of 2007, we continued our integration of existing accounting systems and
processes by means of centralization and additional staffing. We also initiated new risk assessment and documentation standards.

This
annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys
registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report.

The certifications of our Chief Executive Officer and Chief Financial Officer attached as Exhibits 31.1 and 31.2 to this annual report on Form 10-KSB
include, in paragraph 4 of each certification, information concerning our disclosure controls and procedures and internal control over financial reporting.

These certifications should be read in conjunction with the information contained in this Item 8A(T) for a more complete understanding of the matters covered by the certifications.



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PART III



|Item 13. | Exhibits.
|-------- | ---------

See Exhibit Index below for a
description of the documents that are filed as Exhibits to this report on Form 10-KSB/A or incorporated by reference herein. We will furnish a copy of any Exhibit to a security holder upon request.



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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|                       |  |                              |  |                                                     
|---------------------- |  | ---------------------------- |  | ----------------------------------------------------
|                       |  | CAPITAL GROWTH SYSTEMS, INC.
|                       |  |                             
|                       |  | By:                          |  | /s/ Patrick C. Shutt                                
|                       |  |                              |  | Patrick C. Shutt, Chief Executive Officer           
|                       |  |                             
|                       |  |                              |  | /s/ Jim McDevitt                                    
|                       |  |                              |  | Jim McDevitt, Chief Financial and Accounting Officer
|                       |  |                             
|Dated: August 19, 2009 |  |                              |  |                                                     



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EXHIBIT INDEX



|               |  |                                                                                                                         
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Document                                                                                                 
|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.*

References



|* | Filed herewith.
|- | ---------------