Capital Growth Systems, Inc.(fka CGSYQ)

[DavidKing]

From doing my own little DD i have found out that Pivotal has purchased Capital Growth systems using an Asset Purchase Agreement. It basically means that the buyer buys identified assets and liabilities from the seller. So Pivotal is buying assets and liabilities from Capital Growth.

as seen just below

11) 7.1 - Bankruptcy Court Approvals.
Title of Agreement: ASSET PURCHASE AGREEMENT
Agreement Type: Asset Purchase Agreement
Parties: CAPITAL GROWTH SYSTEMS INC /FL/ | 20/20 TECHNOLOGIES I, LLC | 20/20 TECHNOLOGIES, INC | CAPITAL GROWTH ACQUISITION, INC | Capital Growth Systems, Inc | CENTREPATH, INC | FFN Investments, LLC | FNS 2007, INC | GLOBAL CAPACITY DIRECT, LLC | Global Capacity Group, Inc | GLOBAL CAPACITY HOLDCO, LLC | NEXVU TECHNOLOGIES, LLC | Pivotal Capital Corporation | Pivotal Global Capacity LLC
Document Date: 02/01/2011
Governing Law: Delaware

http://agreements.realdealdocs.com/asset-purchase-agreement-clauses/bankruptcy-clause/


What this means is that Capital Growth, the seller will become a shell. Though what unusually happens in such agreements is that the shell will exist only long enough to disperse the purchase price to the shareholders and act as a housing against any financial claims that the buyer might have. So the shareholders stand to gain from an asset purchase agreement. Now if Pivotal had bought all the assets of Capital Growth they would have the ability to liquidate everything and the shareholders will lose. Since Pivotal only bought some of the assets using an Asset purchase agreement, we are safe.

http://asset-management.bestmanagementarticles.com/a-21321-what-is-an-asset-purchase-agreement.aspx

Now what makes this whole Pivotal and Capital growth business interesting is the fact that it seems like Najafi might have used a taxable asset purchase. Now he might do this to minimize the effect of future taxes on any gain on the sale of the assets he acquired from Capital growth.
Now to induce the seller ( capital growth) to an asset purchase, the buyer will often pay a higher purchase price relative to a STOCK ACQUISITION as compensation to the seller. This might explain why Najafi and pivotal has the outstanding shares of CGSYQ.

http://www.macabacus.com/accounting/types-of-acquisitions

In my opinion i don't believe cgsyq will ever hit 0.0001, i think there is a reason that Najafi has some shares.

Just My Opinion