EXHIBIT 99.2
PRO FORMA FINANCIAL INFORMATION
CAPITAL GROWTH SYSTEMS, INC.
PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 2003
(UNAUDITED)
NOTE 2 NOTE 3 NOTE 4
NEXVU PRO FORMA
CAPITAL GROWTH TECHNOLOGIES, PRO FORMA COMBINED
SYSTEM, INC. L.L.C. ADJUSTMENTS NOTES BALANCE
-------------- -------------- --------------- ---------- -----------
ASSETS
CURRENT ASSETS
Cash ...................................... $ - $ 616,880 $ - $ 616,880
Accounts Receivable ....................... - 61,270 61,270
Prepaid Expenses .......................... - 51,837 51,837
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Total Current Assets ...................... - 729,987 729,987
FIXED ASSETS .............................. 136,341 136,341
OTHER ASSETS
Software License Fees ..................... - 300,000 300,000
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TOTAL ASSETS .............................. $ - $ 1,166,328 $ - $ 1,166,328
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LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable .......................... $ 13,059 $ 160,971 $ - $ 174,030
Advance From Shareholder .................. 23,231 - 23,231
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Total Current Liabilities ................. 36,290 160,971 - 197,261
LONG TERM LIABILITIES ..................... - 735,000 (550,000) Note 4 185,000
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TOTAL LIABILITIES ......................... 36,290 895,971 (550,000) 382,261
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STOCKHOLDERS' EQUITY
COMMON STOCK ........................... 93 914 Note 4 1,007
ADDITIONAL PAID IN CAPITAL ............. 6,702 4,034,907 549,086 Note 4 4,590,695
RETAINED DEFICIT ....................... (43,085) (3,764,550) (3,807,635)
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STOCKHOLDERS' EQUITY ...................... (36,290) 270,357 550,000 784,067
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ 1,166,328 $ - $ 1,166,328
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SEE ACCOMPANYING NOTES
1
CAPITAL GROWTH SYSTEMS
PRO FORMA COMBINED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED, DECEMBER 31, 2003
(UNAUDITED)
NOTE 2 NOTE 3 NOTE 4
CAPITAL PRO FORMA
GROWTH NEXVU TECHNOLOGIES, PRO FORMA CONSOLIDATED
SYSTEM, INC. L.L.C. ADJUSTMENTS NOTES TOTAL
-------------- --------------------- --------------------- ------------ -------------------
REVENUES $ - $ 59,027 $ 59,027
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OPERATING EXPENSES:
SALARIES 1,654,513 1,654,513
EMPLOYEEBENEFITS 101,460 101,460
DEPRECIATION&AMORTIZATION 84,395 84,395
GENERAL AND ADMINISTRATIVE 1 84,466 84,467
PROFESSIONAL FEES 21,361 127,160 148,521
RENT AND OCCUPANCY COSTS 127,602 127,602
RESEARCH & DEVELOPMENT 132,613 132,613
TRAVEL, ENTERTAINMENT & PROMOTION 103,944 103,944
CONSULTING FEES 134,883 134,883
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TOTAL OPERATING EXPENSES 21,362 2,551,036 2,572,398
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OPERATING INCOME (LOSS) (21,362) (2,492,009) (2,513,371)
INTEREST EXPENSE 143,062 143,062
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NET LOSS $ (21,362) $(2,635,071) $ (2,656,433)
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Weighted Average Shares Outstanding 931,500 9,136,000 Note 4 10,067,500
NET LOSS PER SHARE $(0.02) N/A $ (0.26)
SEE ACCOMPANYING NOTES
2
CAPITAL GROWTH SYSTEMS, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited pro forma combined balance sheet and
unaudited combined statement of operations give effect to the merger of
Nexvu Technologies, L.L.C. ("Nexvu") and Capital Growth Systems, Inc. on
January 28, 2004.
The unaudited pro forma combined financial statements of Capital Growth
Systems, Inc. included herein have been prepared by management of
Capital Growth Systems, Inc. in accordance with the accounting
principles generally accepted in the United States of America. They have
been prepared from information derived from the May 31, 2003 (audited)
and December 31, 2003 (audited) financial statements of Capital Growth
Systems, Inc. and the December 31, 2003 (audited) financial statements
of Nexvu, together with other information available to the entities. In
the opinion of management of Capital Growth Systems, Inc., these
unaudited pro forma consolidated financial statements include all
adjustments necessary for the fair presentation of the merger between
Capital Growth Systems, Inc. and Nexvu, as described below.
The unaudited pro forma combined financial statements should be read in
conjunction with the historical financial statements and notes thereto
of Capital Growth Systems, Inc. and Nexvu, referred to above. The
Capital Growth Systems, Inc. unaudited pro forma combined balance sheet
gives effect to the merger of Nexvu as if it had occurred on December
31, 2003. The unaudited pro forma combined statements of operations
gives effect to the merger as if it had occurred at the start of the
fiscal period beginning on January 1, 2003. These unaudited pro forma
combined financial statements are not necessarily indicative of the
financial position or results of operations, which would have resulted
if the combination and related transactions had actually occurred on
those dates.
NOTE 2 CAPITAL GROWTH SYSTEMS, INC.
Capital Growth Systems, Inc. is a developmental stage company which had
no revenue through December 31, 2003. Through December 31, 2003, it
operated as a nontrading, privately held "shell" company conducting
virtually no business operations, other than efforts to seek a merger
partner or acquisition candidate. There were no full time employees nor
any assets of this company throughout the period.
NOTE 3 NEXVU TECHNOLOGIES, L.L.C.
Nexvu is engaged in the development and sale of application performance
management software to large and mid-sized companies for use in
connection with their computer network systems. Nexvu is a developmental
stage company with very limited revenues through the period presented.
NOTE 4 MERGER WITH NEXVU TECHNOLOGIES
On January 28, 2004, Capital Growth Systems, Inc. completed the merger
of Nexvu. This merger was completed by issuing 8,558,500 shares of
common stock in exchange for 100% of the membership interests in Nexvu.
In addition, under a loan conversion agreement, 577,500 shares of common
stock were issued to convert $500,000 of bridge loans into equity of
Capital Growth Systems, Inc.
3