Capital Growth Systems Signs Business Development and Licensing Agreement with Magenta netLogic.

SCHAUMBURG, Ill. -- Capital Growth Systems, Inc. (OTCBB:CGSY), announced today that it has signed a business development and licensing agreement with Magenta netLogic, Ltd. This agreement allows the company to utilize Magenta's proprietary software to provide a comprehensive supply chain management solution to customers in provisioning of telecommunications connectivity, a $200 billion per year market.

"This is another step in redefining the company into a worldwide provider of complete voice and data communication solutions," said Tom Hudson, CEO of CGSY. "The managed networks market is a very large, growing industry; of which a subset, VOIP is expected to double in 2006 to about $10 billion, in Europe alone. Companies have needs for local access, end-to-end circuits between cities, as well as diverse corporate VPN's for mission critical applications. It is complex for companies today to build solutions themselves across multiple carriers and geographies. Having Magenta as a strategic business partner will help us to do this efficiently and cost effectively for our clients."

Patrick Shutt, CEO of Magenta stated, "We are excited about the opportunity to work with Tom Hudson and his team. We are confident that our software and database solution will assist Capital Growth Systems to provide bundled solutions to its customers."

Hudson added, "I have firsthand experience with Magenta and value their leadership and assistance. At a former company, we created a unit for providing end-to-end solutions for SAN/WAN applications for Global 1000 companies. In just 18 months, it became one of the fastest growing and most profitable business units."

About Capital Growth Systems, Inc.

Capital Growth Systems, Inc. is a public reporting company under the Securities Exchange Act of 1934 and is based in Schaumburg, Ill. The company currently has two wholly-owned subsidiaries: NexVU Technologies, LLC (www.nexvu.com) and Frontrunner Network Systems Inc. (www.frontrunnernetworks.com). The company's common stock is currently quoted on the Bulletin Board under the stock symbol CGSY.

Forward-Looking Statements 

Certain information discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements.

Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the company's inability to accurately forecast its operating results; the company's potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the company's business. For further information on factors which could impact the company and the statements contained herein, reference should be made to the company's filings with the Securities and Exchange Commission, including annual reports on Form 10-KSB, quarterly reports on Form 10-QSB and current reports on Form 8-K. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.