SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Consonus Technologies, Inc. – IPO: ‘S-1’ on 5/4/07

On:  Friday, 5/4/07, at 4:25pm ET   ·   Accession #:  1047469-7-3697   ·   File #:  333-142635

Previous ‘S-1’:  None   ·   Next:  ‘S-1/A’ on 8/9/07   ·   Latest:  ‘S-1/A’ on 8/12/08   ·   2 References:   By:  SEC – ‘UPLOAD’ on 9/10/07 By:  SEC – ‘UPLOAD’ on 6/8/07 

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/04/07  Consonus Technologies, Inc.       S-1                   28:5.2M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)               HTML   1.42M 
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws   HTML     42K 
 3: EX-3.2      Articles of Incorporation/Organization or By-Laws   HTML     70K 
 4: EX-4.1      Instrument Defining the Rights of Security Holders  HTML     89K 
 5: EX-4.2      Instrument Defining the Rights of Security Holders  HTML    119K 
 6: EX-4.3      Instrument Defining the Rights of Security Holders  HTML     50K 
 7: EX-10.1     Material Contract                                   HTML    302K 
15: EX-10.10    Material Contract                                   HTML     71K 
16: EX-10.11    Material Contract                                   HTML     62K 
17: EX-10.12    Material Contract                                   HTML     46K 
18: EX-10.13    Material Contract                                   HTML    138K 
19: EX-10.14    Material Contract                                   HTML     56K 
20: EX-10.15    Material Contract                                   HTML     56K 
21: EX-10.16    Material Contract                                   HTML     37K 
22: EX-10.17    Material Contract                                   HTML     77K 
23: EX-10.18    Material Contract                                   HTML     35K 
24: EX-10.19    Material Contract                                   HTML    103K 
 8: EX-10.2     Material Contract                                   HTML    268K 
25: EX-10.20    Material Contract                                   HTML     57K 
 9: EX-10.3     Material Contract                                   HTML    798K 
10: EX-10.4     Material Contract                                   HTML     39K 
11: EX-10.5     Material Contract                                   HTML     96K 
12: EX-10.7     Material Contract                                   HTML    102K 
13: EX-10.8     Material Contract                                   HTML     74K 
14: EX-10.9     Material Contract                                   HTML     54K 
26: EX-21.1     Subsidiaries of the Registrant                      HTML     11K 
27: EX-23.1     Consent of Experts or Counsel                       HTML     11K 
28: EX-23.2     Consent of Experts or Counsel                       HTML     10K 

As filed with the Securities and Exchange Commission on May 4, 2007

Registration Statement No. 333-           

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

CONSONUS TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)

       Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

       If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.    o

       If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

       If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

       If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

       If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.    o

CALCULATION OF REGISTRATION FEE

(1)

Estimated solely for the purposes of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. Includes the shares available for purchase by the underwriters to cover over-allotments, if any.

(2)

Calculated pursuant to Rule 457(o) under the Securities Act of 1933, as amended, based on an estimate of the proposed maximum aggregate offering price.

       The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PART I
INFORMATION REQUIRED IN PROSPECTUS

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated May 4, 2007.

PROSPECTUS

                        Shares

CONSONUS TECHNOLOGIES, INC.

Common Stock

We are offering for sale                        shares of our common stock. This is an initial public offering of shares of common stock of Consonus Technologies, Inc. No public market currently exists for our common stock.

It is currently estimated that the initial public offering price per share will be between $                        and $                        .

Investing in our common stock involves risks. See "Risk Factors" beginning on page 9.

Neither the Securities and Exchange Commission nor any other state or foreign securities commission or regulatory authority has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The selling stockholders referred to under "Principal and Selling Stockholders" have granted the underwriters an over-allotment option, exercisable for a period of 30 days from the date of the closing of this offering, to purchase up to an aggregate of                        additional shares of common stock (being 15% of the number of shares offered hereby) on the same terms as set forth above, solely to cover over-allotments, if any. If the over-allotment option is exercised in full, the total price to the public will be $                        , the commissions payable to the underwriters will be $                        and the net proceeds to the selling stockholders will be $                        . We will not receive any proceeds from the sale of the shares of common stock by the selling stockholders. The expenses associated with the over-allotment option, together with the underwriters' and commissions, will be paid by the selling stockholders. See "Principal and Selling Stockholders" and "Underwriting."

The underwriters expect to deliver the shares in Toronto, Ontario on or about                        , 2007.

Prospectus dated                        , 2007.

TABLE OF CONTENTS

        No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares of common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, unless otherwise indicated.

        Through and including                        , 2007 (the 40^th day after the date of this prospectus), all dealers effecting transactions in shares of common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

        For investors outside the United States and Canada, neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States and Canada. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

i

INFORMATION ABOUT THIS PROSPECTUS

        Unless the context otherwise requires, any references in this prospectus to "Consonus," "CTI," "we," "our," "us" and the "Company" refer to Consonus Technologies, Inc. and its subsidiaries, being Strategic Technologies, Inc., or "STI," and Consonus Acquisition Corp., or "CAC". Unless the context otherwise requires, financial information that relates to periods prior to the STI Merger is presented on a pro forma consolidated basis.

        Unless otherwise specified, references to "dollars" or "$" in this prospectus are to United States dollars and references to "Cdn $" in this prospectus are to Canadian dollars.

        Unless otherwise specified, all Canadian dollar values have been translated to U.S. dollars, or vice versa, using a convenience translation of $1.00 = Cdn $                        .

THIRD PARTY AND MANAGEMENT INFORMATION

        Industry and market data used throughout this prospectus was obtained through our research, surveys and studies conducted by third parties and industry and general publications. We have not independently verified market and industry data from third party sources. While we believe internal company surveys are reliable and market definitions are appropriate, neither these surveys nor these definitions have been verified by any independent sources.

ii

PROSPECTUS SUMMARY

        This summary highlights information contained in this prospectus. Because it is a summary, it does not contain all of the information you should consider before investing in our common stock. You should carefully read the entire prospectus. In particular, you should read the section entitled "Risk Factors" and our financial statements and the notes thereto included elsewhere in this prospectus.

Our Company

        We are a leading provider of IT infrastructure, data center solutions and related managed services to the growing small and medium size business market in the United States. Our highly secure and reliable data centers combined with our ability to offer a comprehensive suite of related IT infrastructure services gives us an ability to offer our clients customized solutions to address their critical needs of data center availability, data manageability, disaster recovery and data center consolidation as well as a variety of other related managed services.

        Our data center related services and solutions primarily enable business continuity, back-up and recovery, capacity-on-demand, regulatory compliance (such as email archiving), virtualization, and offer data center best practice methodologies and software as a service. Additionally, we provide managed hosting, maintenance and support for all of our solutions, as well as related professional and consulting services. We have a large and diverse customer base comprised of over 650 active customers in 33 states in the United States.

        We have chosen to focus on small and medium size business clients in under-served geographic markets. We define small and medium size businesses as (i) companies having between $50 million and $1 billion in annual revenue, or (ii) companies with 300 to 2,000 employees, as well as regional and department-level offices of large enterprises.

        Our company is the result of a merger with Strategic Technologies, Inc. which occurred on January 22, 2007. For a further description of the STI Merger, see "Our Business — Our History."

Merger Rationale

        We believe that our merger with STI has created, or will create, benefits and synergies, including:

•

Margin expansion: owning our data centers allows us to operate independently from third party data center providers and will increase our data center utilization by integrating both customer bases.



•

Broader service and solution offerings: our IT expertise enables us to provide end-to-end solutions to new and existing customers.



•

New services and solutions: our broad operational platform enables the development of new services and solutions designed specifically for small and medium size businesses.

        By combining our data centers with STI-provided IT solutions, we have created a comprehensive platform to serve the small and medium size business market and meet an increasing demand for a single-source provider of data center services and solutions. In addition, the STI Merger provides us with cross-selling opportunities over a larger suite of products.

Our Services and Solutions

        We provide IT infrastructure and data center services and solutions to the growing small and medium size business market. Through CAC's and STI's combined 18 year history, we have developed a comprehensive set of data center-centric skills and capabilities. As a result of the STI Merger, we are now able to leverage this significant combined expertise through our two complementary business lines to deliver customized solutions to our clients on their premises or on a managed basis in our facilities.

1

        We provide our services and solutions through our two business lines:

•

Data center services and solutions: Our data center services and solutions include managed infrastructure, managed services, maintenance manager and managed bandwidth.



•

IT Infrastructure services and solutions: Our IT infrastructure services and solutions include professional and consulting services, hardware and software procurement and provisioning and IT training services.

Business Strengths

        We believe our strengths can be attributed to several distinguishing factors, including:

•

Broad Service Offering:  Our comprehensive offering of IT infrastructure and data center services and solutions, which are packaged into "solution" sets, and our single-source service approach, distinguish us in the small and medium-sized business market.



•

Diverse and Loyal Customer Base:  Our large and diverse customer base consists of over 650 active customers in 33 states in the United States across several industries. No customer exceeded 6% of our consolidated pro forma revenue for the year ended December 31, 2006. We offer managed and hosting services to over 450 of our customers and historically experience very high renewal rates. Specifically, our renewal rate for 2006 was 95%.



•

Strategic Geographic Presence:  We focus on small to medium size businesses in underserved geographic markets where a local presence, broad resources and thought leadership are in demand.



•

Focus on High Growth IT Markets:  We look to capitalize on the growth trends in IT infrastructure and data center services, such as increased outsourcing of IT. The small and medium size business market is expected to experience higher growth than the overall market with respect to IT related services.



•

Attractive Business Model Leverage:  We believe there are significant opportunities to expand our margins with respect to many of our existing and new customers. All of our data center fixed costs, excluding depreciation, are covered based on a current capacity utilization of only approximately 62% for our three data centers.



•

Recurring Revenues from Data Center Services:  Revenue derived from our data center services and solutions provides a solid basis for long-term relationships with our customers resulting in strong recurring revenue for this component of our business, which represented approximately 36% of our consolidated pro forma revenues for the year ended December 31, 2006.



•

Experienced Management Team:  Our experienced and dedicated management team includes a core group of executives and senior managers who have, on average, approximately 22 years of industry experience. The current management team has successfully integrated our prior acquisitions and has achieved organic growth through both geographic expansion and new product offerings.



•

Established Relationships with Industry Leading Vendors:  Our relationships with leading technology vendors facilitate our ability to meet the IT needs of our customers. Our director and Chief Executive Officer is the co-president of the Sun Microsystems, Inc. National Advisory Board and sits on Symantec Corporation Global and National Advisory Boards, and our director and Executive Vice-President of Solutions Consulting and Delivery sits on the Network Appliance, Inc. and BMC Software Inc. National Advisory Boards. These advisory board positions provide us with opportunities to expand our relationships with senior vendor management and align our business strategy with these important vendors.

Growth Strategy

        In addition to increasing penetration with existing customers and adding new clients, our strategy is to provide a comprehensive suite of IT infrastructure and data center services and solutions across our customer base. We will also seek to enhance our leadership position in the IT marketplace through the continued

2

development of new services, further geographic expansion and through strategic acquisitions and partnerships, thus participating in industry consolidation on a regional basis. The key components of our growth strategy are:

•

Penetration of Existing Customer Base:  We currently have an installed base of over 650 active customers. We believe that our enhanced service and solution offerings represent a significant opportunity to increase our revenue per customer. By cross selling our broad suite of services and solutions, our goal is to expand our share of our customers' IT expenditures. For example, recent cross-sell activities have resulted in a new managed services contract from two of our existing key customers.



•

Development of New Solutions:  We are continuously developing new services and creating customized solution sets to meet our customers' evolving requirements. We collaborate with our customers, vendors, and industry analysts to create a highly targeted solution roadmap.



•

Organic Geographic Expansion:  We have grown our business in markets where small and medium size business concentration is high and competition is fragmented. We have developed a disciplined process of identifying, targeting and assessing new expansion opportunities.



•

Strategic Acquisitions:  We believe that we can accelerate our growth through strategic acquisitions of businesses that expand our solution set and geographic reach. Our senior management and board have considerable acquisition experience and have completed four acquisitions for our business.

Risk Factors

        Our ability to execute our growth strategy is subject to various risks, including those that are generally associated with operating in our industry. For example, disruptions or complications may arise since our integration plan for the combined business (post STI Merger) has only recently been operational, our larger customers may choose to in-source IT capabilities as a substitute for our services and solutions, and intense and growing competition from our competitors may subject us to negative pricing pressures. These factors and other factors may limit our ability to successfully execute our business strategy. Investing in our common stock involves substantial risk. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under "Risk Factors" in deciding whether to invest in our common stock.

Our Locations

        We are headquartered in Cary, North Carolina, with 11 regional sales offices in Atlanta, Georgia, Birmingham, Alabama, Charlotte, North Carolina, Ft. Lauderdale, Florida, Jacksonville, Florida, Glastonbury, Connecticut, Greenville, South Carolina, Knoxville, Tennessee, Nashville, Tennessee, Salt Lake City, Utah, and Rockville, Maryland. We operate three data center facilities in Salt Lake City, Utah and have contractual arrangements with data center facilities in Denver, Colorado and Cincinnati, Ohio.

3

COMPANY INFORMATION

        CTI is a Delaware corporation incorporated on October 13, 2006. Our principal executive offices are located at 301 Gregson Drive, Cary, North Carolina 27511. Our telephone number is (919) 379-8000. Our website address is www.consonus.com. Information on our website is not, and should not be deemed to be part of this prospectus, and is not being incorporated by reference herein.

        On January 22, 2007, we consummated a merger transaction, referred to as the STI Merger, with STI, CAC, and certain other entities. See "Our Business — Our History." CAC was incorporated on March 31, 2005 under the laws of the State of Delaware by its majority stockholder, Knox Lawrence International, LLC, or KLI, a private equity firm based in New York City. STI was incorporated on August 31, 1988 under the laws of the State of North Carolina.

        The following diagram illustrates the Company's organizational structure following this offering:

4

THE OFFERING

        The number of shares of common stock to be outstanding after this offering is based on the number of shares of common stock outstanding as of April 30, 2007, plus the number of shares of common stock being issued in connection with this offering. This number does not include:

•

195,800 deferred shares of common stock issued on January 22, 2007 under the 2007 Equity Plan, as further described under "Management — Deferred Stock Agreements;"



•

154,200 shares of common stock reserved for future grant or issuance under the 2007 Equity Plan, as further described under "Management — New Equity Plan of the Company;"



•

191,336 shares of common stock that we have reserved upon the vesting of the outstanding equity awards, as further described under "Management — Assumption of Outstanding Equity Awards in CAC and STI Options in connection with the STI Merger;"



•

outstanding options to purchase 258,426 shares of our common stock, at a weighted average exercise price of $15.50 per share, as further described under "Management — Assumption of Outstanding Equity Awards in CAC and STI Options in connection with the STI Merger and Options to Purchase Securities;" and



•

an outstanding warrant to purchase 347,271 shares of our common stock, at an exercise price of $0.00026 per share, as further described under "Description of Capital Stock — Warrant" and "Certain Relationships and Related Transactions — Warrant."

        Except as otherwise indicated in this prospectus, all of the information in this prospectus regarding shares of our common stock reflects no exercise or forfeiture of outstanding options and the warrant to purchase shares of our common stock as further described under "Management — Assumption of Outstanding Equity Awards in CAC and STI Options in connection with the STI Merger and Options to Purchase Securities," "Description of Capital Stock — Warrant" and "Certain Relationships and Related Transactions — Warrant."

5

SUMMARY FINANCIAL INFORMATION

        The following tables set forth a summary of certain historical and pro forma consolidated financial information for CTI, CAC, and its predecessor, Consonus, Inc. and STI for the periods indicated. The following summary historical and pro forma consolidated financial information should be read in conjunction with our financial statements and related notes and "Selected Financial Information," "Unaudited Pro Forma Condensed Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," each of which are included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected for any future period.

STI

        The statement of operations information for the years ended December 31, 2004, 2005 and 2006 has been derived from the audited financial statements of STI. The balance sheet information as of December 31, 2004, 2005 and 2006 has been derived from the audited financial statements of STI. The following table represents a summary of certain historical financial information of STI:

6

CAC

        The statement of operations information for the year ended December 31, 2004 and the balance sheet data as of such date have been derived from the audited financial statements of Consonus, Inc. (a predecessor company).

        The statement of operations information for the year ended December 31, 2005 includes a compilation of the audited statements of operations of a predecessor company (Consonus, Inc.) for the period January 1, 2005 to May 30, 2005 and a successor company for the period May 31, 2005 to December 31, 2005 (CAC was incorporated on March 31, 2005, but did not buy the assets of Consonus, Inc. until May 31, 2005, and therefore this period only includes operations for the period May 31, 2005 to December 31, 2005). The balance sheet information as of December 31, 2005 has been derived from the audited financial statements of CAC.

        The statement of operations information for the year ended December 31, 2006 and the balance sheet information as of such date has been derived from the audited financial statements of CAC.

        The following table presents a summary of certain historical financial information of CAC and its predecessor:

7

CTI

        The following table presents the unaudited pro forma consolidated statement of operations information of CTI for the year ended December 31, 2006 and certain unaudited pro forma consolidated balance sheet information as of December 31, 2006.

8

RISK FACTORS

        Investing in our shares of common stock involves a high degree of risk. You should consider carefully the following factors and the other information in this prospectus before deciding to purchase any of our common stock. If any of the following risks actually occur, our business, financial condition, results of operations and cash flow could suffer materially and adversely. In that case, the trading price of our common stock could decline, and you might lose all or part of your investment.

Risks Related to Our Business

Our business is the result of our merger with STI and the integration plan for the business has only recently been operational.

        Due to the limited operating history of our business combined with that of STI, on a forward going basis, there are risks associated with the STI Merger including the following:

•

integrating STI's business operations, systems, employees, compensation philosophies, services, technologies and sales channels into our existing business will be complex, time-consuming and expensive and, in addition, could lead to morale issues, increased employee turnover and lower productivity than anticipated; and



•

the STI Merger may disrupt our ongoing business, divert resources, increase our expenses and distract our management.

        The integration process following a merger is inherently unpredictable and subject to delay and unexpected costs. We cannot assure you that we will successfully overcome these risks or any other problems we encounter as a result of the STI Merger. Our inability to deal effectively with these risks and successfully integrate the business and operations of STI into our business could materially adversely affect our business, operations and financial position.

We have a limited operating history as a merged company, which may make it difficult for you to evaluate our business and prospects.

        We have a limited operating history upon which to evaluate our business and prospects. Further, the STI Merger provides additional uncertainty as we have only recently begun to integrate these two businesses. We cannot provide any assurance that we will be profitable in any given period, if at all. In view of the rapidly evolving nature of our business, our limited operating history and the risks discussed elsewhere in these risk factors and throughout this prospectus, we believe that period to period comparisons of operating results are not meaningful and should not be relied upon as an indication of future performance.

We may experience fluctuations in our financial results which will make it difficult to predict our future performance and may result in volatility in the market price of our common stock.

        We have experienced fluctuations in our operating results on a quarterly and annual basis. The fluctuations in our operating results may cause the market price of our common stock to be volatile. We expect to experience significant fluctuations in our operating results in the foreseeable future. This could be as a result of several factors, including but not limited to, the size of our operations, the relative significance, particularly on a quarterly basis, of the timing and scope of a relatively small number of large transactions and the long sales cycles related to many of the services and solutions (including our focus on the re-selling of products) we provide to our customers.

        These factors and others all tend to make the timing and amount of our revenue unpredictable and may lead to continued or greater period-to-period fluctuations in revenue than we have experienced historically. As a result of these factors, we believe that our quarterly revenue and results of operations are likely to vary in the future and that period-to-period comparisons of our operating results may not be meaningful. You should not rely on the results of one quarter as an indication of future performance. If our quarterly revenue or results of

9

operations fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.

Our services and solutions have a long sales cycle that may materially adversely affect our business, financial condition and results of operations.

        A customer's decision to co-locate in one of our data centers or to purchase other services and solutions from us typically involves a significant commitment of resources, including time. For example, some customers will be reluctant to commit to locating in our data centers until they are confident that the data center has adequate carrier connections and security features. As a result, we have a long sales cycle. These long sales cycles for new business not currently under contract tend to make the timing and amount of our revenue unpredictable. Furthermore, we may expend significant time and resources in pursuing a particular sale or customer that do not result in revenue. As a result of these factors, we believe that our quarterly revenue and results of operations are likely to vary significantly in the future and that period-to-period comparisons of our operating results may not be meaningful. Delays due to length of our sales cycle may also materially adversely affect our business, financial condition and results of operations.

Our customers may choose to in-source IT capabilities as a substitute for our services and solutions.

        As our customers grow in size and complexity and develop more comprehensive back office capabilities, there is an increasing likelihood that they will choose to in-source key IT activities which were previously provided by us in an attempt to reduce expenses. Although we are focused on building our customer base of small to medium-sized businesses, currently, many of our top 10 customers consist of relatively large enterprises, which may further develop their own internal IT or data storage capabilities, thereby decreasing or eliminating the need for our services and solutions. If customers representing a material portion of our revenue base decide to terminate the services and solutions we provide for them, our revenue could materially decline and this may adversely affect our business, operating results and financial position.

The loss of our major customers could have a material adverse effect on our business, financial condition and results of operations.

        For the year ended December 31, 2006, our top 10 customers generated approximately 23.0% of our revenue on an unaudited pro forma basis. We expect that our top 10 customers will continue to account for a significant portion of our revenue for the foreseeable future. In 2005, we lost two significant customers, Wachovia Corporation, which represented approximately 13.5% of the revenues of STI for 2005 and MyFamily.com which represented approximately 27% of the revenues of CAC for the period March 31, 2005 (date of inception) to December 31, 2005. It is possible that other large customers could decide to terminate their relationships with us. The loss of one or more of our top 10 customers, or a substantial decrease in demand by any of those customers for our services and solutions, could have a material adverse effect on our business, results of operations and financial condition.

If our security systems are breached we could incur liability, our services may be perceived as not being secure, and our business and reputation could suffer.

        Our business involves the storage, management, and transmission of the proprietary information of customers. Although we employ control procedures to protect the security of data we store, manage and transmit for our customers, we cannot guarantee that these measures will be sufficient for this purpose. Breaches of our security could result in misappropriation of personal information, suspension of hosting operations or interruptions in our services. If our security measures are breached as a result of a third-party action, employee error or otherwise, and as a result customers' information becomes available to unauthorized parties, we could incur liability and our reputation would be damaged. This could lead to the loss of current and potential customers. If we experience any breaches of our network security due to unauthorized access, sabotage, or human error, we may be required to expend significant capital and other resources to remedy, protect against or alleviate these and related problems. We also may not be able to remedy these problems in a timely manner, or at all. Because techniques used to obtain unauthorized network access or to sabotage systems change frequently

10

and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventive measures. Our systems are also exposed to computer viruses, denial of service attacks and bulk unsolicited commercial email, or spam. Being subject to these events and items could cause a loss of service and data to customers, even if the resulting disruption is temporary.

        The property and business interruption insurance we carry may not provide coverage adequate to compensate us fully for losses that may occur or litigation that may be instituted against us in these circumstances. We could be required to make significant expenditures to repair our systems in the event that they are damaged or destroyed, or if the delivery of our services to our customers is delayed and our business could be harmed.

        In addition, the U.S. Federal Trade Commission and certain state agencies have investigated various companies' use of their customers' personal information. Various governments have also enacted laws protecting the privacy of consumers' non-public personal information. Our failure to comply with existing laws (including those of foreign countries), the adoption of new laws or regulations regarding the use of personal information that require us to change the way we conduct our business, or an investigation of our privacy practices could increase the costs of operating our business.

We face intense and growing competition. If we are unable to compete successfully, our business will be seriously harmed through loss of customers or increased negative pricing pressure.

        The market for our services and solutions is extremely competitive. Our competitors vary in size and in the variety of services and solutions they offer, and include:

•

national and international hosting, co-location and managed service providers;



•

regional hosting providers; and



•

national and international full service IT infrastructure outsourcing providers.

        Some of our current and potential direct competitors have longer operating histories, significantly greater financial, technical, marketing and other resources than we do, greater brand recognition and, we believe, a larger base of customers. In addition, competitors may operate more successfully or form alliances to acquire significant market share. These direct competitors may be able to adapt more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote more resources to the promotion, sale and development of their services and solutions than us and there can be no assurance that our current and future competitors will not be able to develop services and solutions comparable or superior to those offered by us at more competitive prices. As a result, in the future, we may suffer from an inability to offer competitive services and solutions or be subject to negative pricing pressure that would adversely affect our ability to generate revenue and adversely affect our operating results.

Our business will be adversely affected if we cannot successfully retain key members of our management team or retain, hire, train and manage other key employees, particularly in the sales and customer service areas.

        Our continued success is largely dependant on the personal efforts and abilities of our executive officers and senior management, including Michael G. Shook, Chief Executive Officer, William M. Shook, Executive Vice-President of Solutions Consulting and Delivery and Daniel S. Milburn, Senior Vice-President and Chief Operating Officer of Hosting and Infrastructure Services. Our success also depends on our continued ability to attract, retain, and motivate key employees throughout our business. In particular, we are substantially dependent on our skilled technical employees and our sales and customer service employees. Competition for skilled technical, sales and customer service professionals is intense and our competitors often attempt to solicit our key employees and may be able to offer them employment benefits and opportunities that we cannot. There can be no assurance that we will be able to continue to attract, integrate or retain additional highly qualified personnel in the future. In addition, our ability to achieve significant growth in revenue will depend, in large part, on our success in effectively training sufficient numbers of technical, sales and customer service personnel. New employees require significant training before they achieve full productivity. Our recent and planned hires may not be as productive as anticipated, and we may be unable to hire sufficient numbers of qualified

11

individuals. If we are not successful in retaining our existing employees, or hiring, training and integrating new employees, or if our current or future employees perform poorly, growth in the sales of our services may not materialize and our business will suffer.

We are highly dependent on third-party service and technology providers and any loss, impairment or breakdown in those relationships could damage our operations significantly if we are unable to find alternative providers.

        We are dependent on other companies to supply various key components of our infrastructure, including network equipment, telecommunications backbone connectivity, the connections from our customers' networks to our network, and connections to other Internet network providers. We are also dependent on the same companies for the products and services that we sell and deliver to our customers. For example, approximately 61% of the products we sell and deliver to our customers are provided by Sun Microsystems, Inc. and approximately another 25% of the products and services we sell to our customers are provided by Symantec Corporation, BMC Software Inc. and Network Appliance, Inc. There can be no assurance that any of these providers will be able to continue to provide these services or products without interruption and in an efficient, cost-effective manner, or that they will be able to adequately meet our needs as our business develops. There is also no assurance that any agreements that we have in place with these third-party providers will not be terminated or will be renewed, or if renewed, renewed on commercially acceptable terms. If we are unable to obtain required products or services from third-party suppliers on a timely basis and at an acceptable cost, we may be unable to provide our data center and IT infrastructure services and solutions on a competitive and timely basis, if at all. If our suppliers fail to provide products or services on a timely basis and at an acceptable cost, we may be unable to meet our customer service commitments and, as a result, we may experience increased costs or loss of revenue, which could have a material adverse effect on our business, financial condition and operating results.

We resell products and services of third parties that may require us to pay for such products and services even if our customers fail to pay us for the products and services, which may have a negative impact on our cash flow and operating results.

        In order to provide resale services such as bandwidth, managed services, other network management services and infrastructure equipment, we contract with third party service providers, such as Sun Microsystems, Inc., Network Appliance, Inc., XO Communications, VeriSign, Inc. and BMC Software Inc. These services require us to enter into fixed term contracts for services with third party suppliers of products and services. If we experience the loss of a customer who has purchased a resale product or service, we will remain obligated to continue to pay our suppliers for the term of the underlying contracts. The payment of these obligations without a corresponding payment from customers will reduce our financial resources and may have a material adverse affect on our financial performance, cash flow and operating results.

We may fail to adequately protect our proprietary technology, which would allow competitors or others to take advantage of our research and development efforts.

        We rely upon trade secrets, proprietary know-how, and continuing technological innovation to develop new data center and IT infrastructure services and solutions and to remain competitive. If our competitors learn of our proprietary technology or processes, they may use this information to produce data center and IT infrastructure services and solutions that are equivalent or superior to our services and solutions, which could materially adversely affect our business, operations and financial position. Our employees and consultants may breach their obligations not to reveal our confidential information, and any remedies available to us may be insufficient to compensate our damages. Even in the absence of such breaches, our trade secrets and proprietary know-how may otherwise become known to our competitors, or be independently discovered by our competitors, which could adversely affect our competitive position.

12

We are dependent on the reliability and performance of our data centers as well as internally developed systems and operations. Any difficulties in maintaining these systems, whether due to human error or otherwise, may result in service interruptions, decreased service quality for our customers, a loss of customers or increased expenditures.

        Our revenue and profit depend on the reliability and performance of our services and solutions. We have contractual obligations to provide service level credits to almost all of our customers against future invoices in the event that certain service disruptions occur. Furthermore, customers may terminate their agreements with us as a result of significant service interruptions, or our inability, whether actual or perceived, to provide our services and solutions at desired quality levels or at any time. If our services are unavailable, or customers are dissatisfied with our performance, we could lose customers, our revenue and profits would decrease and our business operations or financial position could be harmed. In addition, the software and workflow processes that underlie our ability to deliver our services and solutions have been developed primarily by our own employees and consultants. Malfunctions in the software we use or human error could result in our inability to provide services or cause unforeseen technical problems. If we incur significant financial commitments to our customers in connection with our failure to meet service level commitment obligations, we may incur significant liability and our liability insurance and revenue reserves may not be adequate. In addition, any loss of services, equipment damage or inability to meet our service level commitment obligations could reduce the confidence of our customers and could consequently impair our ability to obtain and retain customers, which would adversely affect both our ability to generate revenue and our operating results.

We are subject to restrictive debt covenants that impose operating and financial restrictions on our operations and could limit our ability to grow our business.

        Covenants in our indebtedness impose significant operating and financial restrictions on us. These restrictions prohibit or limit, among other things, our incurrence of additional indebtedness, acquisitions and mergers, asset sales and the creation of certain types of liens. These restrictions could limit our ability to obtain future financing, withstand downturns in our business or take advantage of business opportunities. Furthermore, our indebtedness requires us to maintain specified financial ratios and to satisfy specified financial condition tests. Our ability to comply with these ratios or tests may be affected by events beyond our control, including prevailing economic, financial and industry conditions. On November 22, 2006, CAC obtained a waiver from U.S. Bank National Association of our total funded debt covenant, as defined in the credit agreement, and on December 12, 2006, CAC entered into the first amendment to the credit agreement to formally amend the terms of the credit agreement with U.S. Bank. As of December 31, 2006, we were in compliance with the amended covenants. In addition, on June 22, 2006, STI entered into an amended agreement with its senior lender in order to comply with certain financial covenants and determine future payments and the terms of existing notes. Concurrent with the amendment, STI received a waiver for past debt covenant violations. As of September 30, 2006, STI was not in compliance with certain financial covenants of the amended agreement and STI subsequently received a waiver in October 2006 in respect of those covenants. In addition, as of December 31, 2006, STI was not in compliance with certain covenants of the amended agreement and STI subsequently received a waiver in January 2007 in respect of those covenants. On May 1, 2007, STI entered into a second amendment to the amended agreement with its senior lender. The effect of the second amendment was to change certain financial covenants and to determine future payments and terms of existing indebtedness. The amendment caused certain financial covenants to remain in compliance that otherwise would have been in default. If we are unable to comply with the covenants and ratios in our credit facilities, we may be unable to obtain waivers of non-compliance from the lenders, which would put us in default under the facilities, or we may be required to pay substantial fees or penalties to the lenders. Either development could have a material adverse effect on our business.

The increased use of high power density equipment may limit our ability to fully utilize our data centers.

        Customers are increasing their use of high density electrical equipment, such as blade servers, in our data centers which has significantly increased the demand for power. Because most of our data centers were built several years ago, the current demand for electrical power may exceed our designed capacity in these facilities. As electrical power, not space, is typically the limiting factor in our data centers, our ability to fully utilize our

13

data centers may be limited in these facilities which could have a material adverse effect on our business, results of operations and financial condition.

Our business could be harmed by prolonged electrical power outages or shortages, increased costs of energy or general availability of electrical resources.

        Our data centers are susceptible to regional variations in the cost of power, electrical power outages, planned or unplanned power outages such as those that occurred in California during 2001 and the U.S. Northeast in 2003, natural disasters such as the tornados on the U.S. East Coast in 2004 and limitations on availability of adequate power resources. Power outages could harm our customers and our business including the loss of our customers' data and extended service interruptions. While we attempt to limit exposure to system downtime by using backup generators and power supplies, we may not be able to limit our exposure entirely even with these protections in place, as was the case with the power outage we experienced in our Salt Lake City West Data Center in 2005. In this case, we were not required to issue any credits due to this incident and it had no adverse effect on our customer base but this may not be the case with respect to future power outages. With respect to any increase in energy costs, we may not be able to pass these increased costs on to our customers which could have a material adverse effect on our business, results of operations and financial condition.

Our systems and data centers are vulnerable to natural disasters and other unexpected problems that could lead to interruptions, delays, loss of data, or the inability to accept and fulfill customer subscriptions.

        Hurricanes, fire, floods, power loss, telecommunications failures, earthquakes, break-ins, acts of war or terrorism, computer sabotage and similar events could damage or destroy our data centers as well as the systems and information housed in those facilities or the systems we build and manage for our customers. These disasters or problems could temporarily or permanently prevent us from fulfilling existing service obligations and from securing new customers. These events could also cause loss of service and data to customers. Our business could be seriously harmed even if these disruptions are temporary, and our revenue could decline or customers' confidence in our systems could decrease. We could also be required to make significant expenditures if our systems were damaged or destroyed, or if the delivery of our services to our customers were delayed or stopped by any of these occurrences. Disruptions in our business caused by these events could materially adversely affect our business, operating results and financial position.

We may expand through acquisitions of, or investments in, other companies or technologies which may result in additional dilution to our stockholders and consume resources that may be necessary to sustain our business.

        One of our business strategies is to acquire complementary services, technologies or businesses. In connection with one or more of these transactions, we may:

•

issue additional shares of common stock or other equity securities that would dilute our stockholders' ownership position and could adversely affect the market price of our common stock;



•

use cash that we may need in the future to operate our business; and



•

incur debt that could have terms unfavorable to us or that we might be unable to repay.

        Any acquisition could involve risks, including, but not limited to, the following:

•

integrating acquired business operations, systems, employees, services, technologies and sales channels into our existing business, workforce and services could be complex, time-consuming and expensive;



•

an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management;



•

we may assume debt or other liabilities, known and unknown, including litigation risk, associated with the acquired services, technology or a company;



•

to the extent an acquired company has a different corporate culture from ours, we may have difficulty assimilating this organization, which could lead to morale issues, increased turnover of employees and

14

lower productivity than anticipated, and could also have a negative impact on the culture of our existing organization;

•

we may be required to record substantial accounting charges; and



•

an acquisition may involve entry into geographic or business markets in which we have little or no prior experience.

        There is also no assurance that we will be able to complete these transactions at all. For example, in 2006 we attempted to negotiate a merger transaction with another party but we were unable to complete it on commercially reasonable terms. In connection with this transaction, we incurred costs of approximately $198,000. In addition, we may not realize the anticipated benefits of any acquisition, including securing the services of key employees. Incurring unknown liabilities or the failure to realize the anticipated benefits of an acquisition could seriously harm our business. Our inability to deal effectively with these risks could materially adversely affect our business, operations and financial position.

        Any of the foregoing or other factors could harm our ability to achieve anticipated levels of profit from acquired services, technologies or businesses, or to realize other anticipated benefits of acquisitions. We may not be able to identify or consummate any future acquisitions on favorable terms, or at all. If we do effect an acquisition, it is possible that the financial markets or investors will view the acquisition negatively. Even if we successfully complete an acquisition, it could adversely affect our business.

We operate in a price sensitive market and we are subject to pressures from customers to decrease our fees for the services and solutions we provide.

        The competitive market in which we conduct our business could require us to reduce our prices. If our competitors offer discounts on certain products or services in an effort to recapture or gain market share or to sell other products, we may be required to lower our prices or offer other favorable terms to compete successfully. Any of these changes would likely reduce our margins and could adversely affect our operating results. Some of our competitors may bundle products and services that compete with us for promotional purposes or as a long-term pricing strategy or provide guarantees of prices and product implementations. In addition, many of the services and solutions that we provide and market are not unique to us and our customers and target customers may not distinguish our services and solutions from those of our competitors. All of these factors could, over time, limit or reduce the prices that we can charge for our services and solutions. If we cannot offset price reductions with a corresponding increase in the number of sales or with lower spending, then the reduced revenue resulting from lower prices would adversely affect our margins and operating results.

Our revenue and profit depend upon retention and growth of our customer base as well as their end-user base.

        In order to execute our business plan successfully, we must maintain existing relationships with our customers and establish new relationships with additional small and medium-sized businesses. Our ability to attract customers will depend on a variety of factors, including the presence of multiple telecommunications carriers, our ability to provide and market an attractive and useful mix of products and services and our ability to operate our data centers reliably. If we are unable to diversify and extend our customer base, our ability to grow our business may be compromised, which would have a material adverse effect on our financial condition and results of operations. In addition, some of our customers are, and are likely to continue to face many competitive pressures and may not ultimately be successful. If these customers do not succeed, they are unlikely to continue to use our data centers or use our other services and solutions. This would also have a material adverse effect on our business, prospects, financial conditions and results of operations.

Our customers may consolidate their relationships with other providers or chose to manage their IT infrastructure in different ways which would adversely affect our business.

        Our customers may establish or strengthen existing, or form new, relationships with systems integrators, third-party consulting firms or other parties. This could lead them to terminate their relationships with us, or pursue alternative means to manage their IT infrastructure or data center related activities. Our inability to

15

successfully address these changing relationships, if they arise could materially adversely affect our business, operating results and financial position.

We are at risk of not filling available data center capacity.

        We have significant available capacity in our data centers, and there can be no assurance that the existing or future market demand will be sufficient to fill this excess capacity. For example, our South Data Center is at 51% utilization and our Metro Data Center is at 16% utilization. Although our data center customers typically sign one to three-year contracts with automatic renewal provisions, some of these contracts are terminable on thirty days notice by either party. Should the demand for our data center services decline or fail to increase, this may adversely affect our future results from operations and financial performance.

We may become subject to environmental liabilities which could require us to expend significant resources.

        We are subject to the same broad environmental regulatory regime as any owner or manager (including a tenant) of real estate, which includes, among other things, significant potential liability for property contamination even where others (including neighbors or previous occupants) caused or permitted it. Although we are not aware of any circumstances we believe are likely to give rise to material environmental liability for us, we may in the future discover material issues, or known circumstances may develop into material issues, which could require us to expend significant resources and in either case have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Our Industry and the Economy

If economic or other factors negatively affect the small and medium-sized business sector, our customers and target customers may become unwilling or unable to purchase our services and solutions, which could cause our revenue to decline and impair our ability to operate profitably.

        Many of our existing and target customers include small and medium-sized businesses. These businesses are more likely to be significantly affected by economic downturns than larger, more established businesses. Additionally, these businesses often have limited funds, which they may choose to spend on items other than our services and solutions. If a material portion of the small and medium-sized businesses that we service, or are looking to service, experience economic hardship, these small and medium-sized businesses may be unwilling or unable to expend resources on the services and solutions we provide, which would negatively affect the overall demand for our services and could cause our revenue to decline.

If we do not respond effectively and on a timely basis to rapid technological change, our business could suffer.

        The markets in which we operate are characterized by changing technology and evolving industry standards. There can be no assurance that our current and future competitors will not be able to develop services or expertise comparable or superior to those we have developed or to adapt more quickly than us to new technologies, evolving industry standards or customer requirements. Failure or delays in our ability to develop services and solutions to respond to industry or user trends or developments and the actions of our competitors could have a material adverse effect on our business, results of operations and financial condition. Our ability to anticipate changes in technology, technical standards and product offerings will be a significant factor in the Company's success in its current business and in expanding into new markets.

Litigation could result in substantial costs to us and our insurance may not cover these costs.

        There is a risk that our services may not perform up to expectations. While in certain circumstances we attempt to contractually limit our liability for damages arising from our provision of services, there can be no assurance that they will be enforceable in all circumstances or in all jurisdictions. Furthermore, litigation, regardless of contractual limitations, could result in substantial cost to the Company, divert management's attention and resources from the Company's operations and result in negative publicity that may impair the Company's ongoing marketing efforts and therefore its ability to maintain and grow its customer base. Although

16

we have general liability insurance in place, there is no assurance that this insurance will cover these claims or that these claims will not exceed the insurance limit under its current policies.

Risks Related to this Offering and Ownership of Our Common Stock

There is currently no market for our common stock. An active trading market may not develop for our common stock, and the price of our common stock may be subject to factors beyond our control. If our share price fluctuates after this offering, you could lose all or a significant part of your investment.

        Prior to this offering, no public market existed for our common stock. An active and liquid market for the shares of our common stock may not develop following the completion of this offering or, if developed, may not be maintained. If an active public market does not develop or is not maintained, you may have difficulty selling your shares. The initial public offering price of our shares of common stock was determined by negotiations between us, the selling stockholders and the underwriters of this offering, and may not be indicative of the price at which the shares will trade following the completion of this offering. The market price of our shares of common stock may also be influenced by many other factors, some of which are beyond our control, including, among other things:

•

actual or anticipated variations in quarterly operating results;



•

departure of key personnel;



•

changes in financial estimates or opinions by research analysts;



•

actual or anticipated changes in the U.S., Canadian and European economies;



•

terrorist acts or wars;



•

weather and acts of God;



•

announcements by us or our competitors of significant contracts, new technological capabilities, product enhancements, lower fees, significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives; and



•

actual or anticipated sales or distributions of shares of common stock by our officers, directors and significant stockholders, whether in the market or in subsequent public offerings by us.

        As a result of this volatility, you may not be able to resell your shares of common stock at or above the initial public offering price. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. These broad market and industry factors may materially reduce the market price of our shares of common stock, regardless of our operating performance.

Investors purchasing shares of common stock in this offering will incur substantial and immediate dilution.

        The initial public offering price of our common stock is substantially higher than the net tangible book value per outstanding share of common stock. Purchasers of our shares of common stock in this offering will incur immediate and substantial dilution of Cdn$            per share ($            per share) in the net tangible book value of our shares of common stock from an assumed initial public offering price of Cdn$            per share ($            per share). For a further description of the effects of dilution in the net tangible book value of our shares of common stock. See "Dilution."

Our share price may decline because of the ability of others to sell our shares of common stock.

        Sales of substantial amounts of our shares of common stock following this offering, or the possibility of those sales, could adversely affect the market price of our shares of common stock and impede our ability to raise capital through the issuance of equity securities. See "Shares Eligible for Future Sale" for a discussion of possible future sales of our shares of common stock.

17

        Following this offering, our existing stockholders will own            % of our outstanding shares of common stock (            % if the underwriters exercise their over-allotment option in full). Such stockholders have no contractual obligation to retain any of our shares of common stock, except pursuant to the lock-up agreements described under "Underwriting," under which, generally, they have agreed to not sell any of our shares of common stock without the underwriters' consent until 180 days after the closing of this offering. Subject to applicable securities laws, after the expiration of this 180-day lock-up period or before, with consent of the underwriters, they may sell any and all of our shares of common stock that they beneficially own. In addition, after the expiration of this 180-day lock-up period, we could issue and sell additional shares of our common stock. Any sale by our existing stockholders or us of shares of our common stock in the public market, or the perception that sales could occur, could adversely affect prevailing market prices for our common stock. Following this offering, we intend to file a registration statement on Form S-8 to register shares of our common stock that are or will be reserved for issuance under our incentive compensation plan, referred to in this prospectus as the 2007 Equity Plan. In addition, three of our largest stockholders were granted registration rights at the closing of the STI Merger and Avnet, Inc. has registration rights with respect to shares of our common stock underlying the warrant (other than in connection with this offering). Significant sales of our shares of common stock pursuant to the 2007 Equity Plan, or by these stockholders pursuant to the registration rights agreement and warrant, could also adversely affect the prevailing market price for shares of our common stock. See "Shares Eligible for Future Sale — Shares Issued Under Employee Plan," "Shares Eligible for Future Sale — Registration Rights Agreement" and "Shares Eligible for Future Sale — Warrant to Purchase Shares of our Common Stock."

KLI, and members of senior management, collectively, will retain significant influence over our affairs due to their continued share ownership.

        On completion of this offering, KLI (the principals of which are both members of our board of directors), and members of our senior management, collectively, will own, or exercise control or direction over, approximately            % of the outstanding shares of our common stock. Accordingly, KLI and our current senior management will together continue to have a significant influence over our policies and affairs and will be in a position to determine or influence significantly the outcome of corporate actions requiring stockholder approval, including the election of directors, the adoption of amendments to our charter and the approval of significant transactions such as the sale of our assets.

Being a public company will increase our administrative costs.

        As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. For example, Sarbanes-Oxley and rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. These rules and regulations will apply to us once we are a public company and will increase our legal and financial compliance costs and make some activities more time-consuming or costly. Furthermore, as a public company we intend to implement additional internal controls and disclosure controls and procedures, increase our directors and officers insurance coverage, adopt, monitor and enforce an insider trading policy, and incur all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under securities laws. In addition, our management's attention might be diverted from other business concerns.

Our corporate documents and Delaware law make a takeover of our company more difficult, we have a classified board of directors and certain provisions of our certificate of incorporation and by-laws require a super-majority vote to amend, all of which may prevent certain changes in control and limit the market price of our common stock.

        Our certificate of incorporation authorizes our board of directors to issue up to 10,000,000 shares of preferred stock and to determine the powers, preferences, privileges, rights (including voting rights), qualifications, limitations and restrictions on those shares, without any further vote or action by the stockholders. The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of shares of preferred stock could have the effect of delaying, deterring or preventing a change in control and could adversely affect the voting power or economic value of the shares of common stock. In addition, our charter,

18

by-laws and Section 203 of the Delaware General Corporation Law contain provisions that might enable our management to resist a takeover. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years after the person became an interested stockholder, unless the interested stockholder attained such status with the approval of our board or the business combination is approved in a prescribed manner. Our certificate of incorporation and by-laws establish a classified board of directors which means that our directors serve staggered three-year terms and do not all stand for re-election every year. In addition, any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before the meeting and special meetings of the stockholders may only be called by the Chairman of our board, our Chief Executive Officer, our President or our Secretary. Further, our certificate of incorporation provides that directors may be removed only for cause by the affirmative vote of the holders of 66²/3% of our shares of capital stock entitled to vote, and any vacancy on our board, including a vacancy resulting from an enlargement of our board, may only be filled by vote of a majority of our directors then in office. In addition, our by-laws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of persons for election to the board. These provisions of our certificate of incorporation and by-laws, including those setting forth the classified board, require a super-majority vote of stockholders to amend. These provisions might discourage, delay or prevent a change in the control of our company or a change in our management. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors and take other corporate actions. The existence of these provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. See "Description of Capital Stock — Delaware Anti-Takeover Law and Certain Provisions of our Certificate of Incorporation and ByLaws."

If, after this offering, we are unable to satisfy the requirements of Section 404 of Sarbanes-Oxley, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned and our share price may suffer.

        Section 404 of Sarbanes-Oxley requires any company subject to the reporting requirements of U.S. securities laws to perform a comprehensive evaluation of its and its subsidiaries' internal controls over financial reporting. To comply with this statute, we will be required to document and test our internal control procedures, our management will be required to assess and issue a report concerning our internal controls over financial reporting and our independent auditors will be required to issue an opinion on management's assessment and the effectiveness of those matters. Our compliance with Section 404 of Sarbanes-Oxley will first be reported on in connection with the filing of our annual report on Form 10-K for the fiscal year ended December 31, 2008. The rules governing the standards that must be met for management to assess our internal controls over financial reporting are new and complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or significant deficiencies which may not be remedied in time to meet the deadline imposed by the SEC rules implementing Section 404. In addition, it may be difficult to design and implement effective financial controls for combined operations, and differences in existing controls of any acquired businesses may result in weaknesses that require remediation when the financial controls and reporting are combined. If our management cannot favorably assess the effectiveness of our internal controls over financial reporting, or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken, and our share price may suffer.

The proposed use of the net proceeds of the offering represents the Company's current best estimate of the expected use of these funds.

        With the exception of the repayment of the Avnet, Inc. indebtedness, the indebtedness owed to Questar InfoComm, Inc. and the payment of certain fees owed to Raymond James & Associates, Inc., the Company has not specifically allocated the funds among the various purposes listed under "Use of Proceeds," and our management and board of directors may allocate the funds in different proportions among such stated purposes or such other purposes as they consider appropriate from time to time depending on their assessment of our needs subsequent to the offering. With the exception of the repayment of the Avnet, Inc. indebtedness, the indebtedness owed to Questar InfoComm, Inc. and the payment of certain fees owed to Raymond James & Associates, Inc., the Company has no present agreements, arrangements or commitments with respect to the use of these funds. It is likely that the net proceeds of the offering, together with the Company's other available cash resources, will not be fully deployed for a significant period following the closing of the offering, and during this period these funds will be administered and invested by and at the discretion of the board of directors.

19

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        Certain statements in this prospectus are not historical facts and are "forward looking" statements that represent our beliefs, projections, predictions and assumptions about future events. All statements other than statements of historical facts contained in this prospectus are forward-looking statements. Forward-looking statements may be identified by words such as "anticipate," "could," "estimate," "expect," "intend," "may," "will," "should," "would," "believe," "plan," "target," "project" and other similar terminology.

        Forward-looking statements, such as statements regarding our ability to develop and expand our business, our ability to manage costs, our ability to exploit and respond to technological innovation, the effects of laws and regulations (including tax laws and regulations) and legal and regulatory changes, our anticipated future revenue, our anticipated capital spending, our anticipated financial resources, the expected strength of and growth prospects for our existing customers and the markets that we serve, and other statements contained in this prospectus regarding matters that are not historical facts, involve predictions. Statements of that sort are subjective and involve known and unknown risks, uncertainties and other important factors, many of which are beyond our ability to control or predict, and that may cause our actual results, performance or achievements, or industry results, to be materially different from any estimates of future results, performance or achievements expressed or implied by any statements of that sort. These risks and uncertainties include, among other things:

•

our ability to retain our customer base as well as their end-user base;



•

customer consolidation;



•

in-source IT capabilities being substituted for our services and solutions;



•

the loss of our major customers;



•

intense and growing competition;



•

an only recently operational integration plan for the business following the STI Merger;



•

our limited operating history;



•

fluctuations in our financial results;



•

our ability to successfully retain, hire, train and manage our key employees;



•

our dependence on third-party service and technology providers;



•

our ability to adequately protect our proprietary technology;



•

our ability to maintain our data centers, internally developed systems and operations;



•

the breach of our security systems;



•

increased use of high power density equipment;



•

prolonged electrical power outages or shortages, increased costs of energy or general availability of electrical resources;



•

our vulnerability to natural disasters and other unexpected problems;



•

dilution to our stockholders through acquisitions of, or investments in, other companies or technologies;



•

our ability to maintain effective Internet domain names;



•

the possibility of future litigation despite our general liability insurance;



•

economic or other factors negatively affecting the small and medium-sized business sector;



•

our ability to respond effectively to rapid technological change;



•

pressures from customers to decrease our fees for the services and solutions we provide;



•

changes in government regulation; and



•

the other factors set forth under "Risk Factors" included elsewhere in this prospectus.

20

        We caution you that the foregoing list of important factors is not exclusive. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Before investing in our common stock, investors should be aware that the occurrence of the risks, uncertainties and events described in the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Our Business" and elsewhere in this prospectus could have a material adverse effect on our business, results of operations and financial condition.

        Because of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements contained in this prospectus.

        Forward-looking statements should not be read as guarantees or accurate indications of future results, performance or achievements. All forward-looking statements appearing in this prospectus speak only as of the date of this prospectus and, accordingly, except as required by law, we assume no obligation to update or revise them to reflect changed events or circumstances.

OUR BUSINESS

Overview

        We are a leading provider of IT infrastructure, data center solutions and related managed services to the growing small and medium size business market in the United States. Our highly secure and reliable data centers combined with our ability to offer a comprehensive suite of related IT infrastructure services give us an ability to offer our customers customized solutions to address their critical needs of data center availability, data manageability, disaster recovery and data center consolidation, as well as a variety of other related managed services.

        Our data center related services and solutions primarily enable business continuity, back-up and recovery, capacity-on-demand, regulatory compliance (such as email archiving), virtualization, data center best practice methodologies and software as a service. Additionally, we provide managed hosting, maintenance and support for all of our solutions, as well as related professional and consulting services.

        We have chosen to focus on small and medium size business clients in under-served geographic markets. We define small and medium size businesses as (i) companies having between $50 million and $1 billion in annual revenue, or (ii) companies with 300 to 2,000 employees, as well as regional and department-level offices of large enterprises.

        Our merger with STI has significantly expanded our breadth of offerings and geographic footprint. Today, our large and diverse customer base consists of over 650 active customers in 33 states in the United States. With several customers in each of the industries we serve, including financial services, government, manufacturing, pharmaceutical, telecommunications, technology, education, utilities, healthcare and consumer goods, we have a well-diversified revenue base with no one customer exceeding 6% of our unaudited pro forma consolidated revenue for the year ended December 31, 2006.

        We are headquartered in Cary, North Carolina, with 11 regional sales offices in Atlanta, Georgia, Birmingham, Alabama, Charlotte, North Carolina, Ft. Lauderdale, Florida, Jacksonville, Florida, Glastonbury, Connecticut, Greenville, South Carolina, Knoxville, Tennessee, Nashville, Tennessee, Salt Lake City, Utah, and Rockville, Maryland. We operate three data center facilities in Salt Lake City, Utah and have contractual arrangements with existing facilities in Denver, Colorado and in Cincinnati, Ohio.

        We have increased our revenue by substantially increasing our customer penetration. We have further increased revenue by providing our customers with an enhanced array of services. Our unaudited revenue for the year ended December 31, 2006 on a consolidated pro forma basis was approximately $105.3 million.

21

Industry Overview

        An increasing number of business critical applications are now delivered over the Internet. As a result, businesses of all sizes are evolving to depend on 24 hours a day, seven days a week, or 24 × 7, connectivity, availability and security of their IT systems.

        Data centers built a decade ago were focused on environmental controls and backup systems for utility failures. Modern data centers must be designed and operated at a level approaching 100% of system availability. In addition, multiple, diversely routed connections to separate telecommunications carriers for Internet access are considered a minimum standard. To achieve this, multiple redundant layers of power, bandwidth and cooling systems are now mandatory. The economic resources and technical expertise required to build facilities of this kind are well beyond the capabilities of a typical small and medium size business.

        The requirement for connectivity, availability and security has driven corporations to develop and deploy system architectures that are increasingly complex, creating a sense of urgency and demand for specialized IT infrastructure and data center services. As a result, companies are increasingly working with data center service providers rather than attempting to manage these functions internally.

Small and Medium Sized Businesses

        We have chosen to focus on small and medium size business clients in under-served geographic markets. There are over six million small and medium sized businesses in the United States. To effectively compete, many small and medium size businesses, including regional and department-level offices of large enterprises, have become reliant on sophisticated IT infrastructure that, in the past, has been typically deployed at larger enterprises. However, the situation for large enterprises, managing, monitoring, administering, and maintaining a sophisticated IT infrastructure can rapidly deplete the limited resources of small and medium size businesses which need to be directed at core business activities. These complex and growing demands necessitate a closer relationship with solution-oriented technology providers.

Market Trends

        We view the North American market for IT infrastructure and data center services and solutions as highly fragmented with no single dominant player. Specifically, we believe the industry includes small regional providers serving the small and medium size business market, and a limited number of national and multi-national providers that serve larger business clients.

        We believe that there is a growing trend to outsource data center-related infrastructure and managed services to third-party providers. We expect this trend to remain healthy for the foreseeable future given the significant costs associated with attempting to deliver high-quality data center-related services through an in-house approach. In particular, we believe that small and medium size businesses face significant challenges in trying to deliver these services on their own because of constraints related to technical expertise and cost. We believe that outsourcing these functions will allow organizations to focus capital and personnel resources on their core business operations, as opposed to IT infrastructure.

        We believe our ability to offer a comprehensive suite of data center infrastructure, along with related managed and professional services and solutions, provides us with an important competitive advantage to capitalize upon the growing trend of IT outsourcing within the small to medium business segment.

        In addition, we expect growth in this market to remain robust, as increasingly stringent regulatory requirements in North America, along with the potentially significant loss of revenue and credibility resulting from unannounced downtime, force businesses to invest in highly secure and reliable products and services such as those offered by Consonus.

Merger Rationale

        We believe that the STI Merger has created, or will create, the following benefits and synergies:

•

Margin expansion:    Owning our data centers allows us the ability to operate independently from third party data center providers and increases our data center utilization by integrating both customer bases.

22

•

Broader service and solution offerings:    Our IT expertise enables us to provide end-to-end solutions to new and existing customers.



•

New services and solutions:    Our broad operational platform enables the development of new services and solutions designed specifically for small and medium size businesses.



•

Improved customer penetration:    We will have the opportunity to cross-sell existing services and solutions to a broader customer base in new, under served regional markets. For example, recent cross-sell activities have resulted in a new managed services contract from two of our existing key customers.



•

Vendor consolidation:    Customers increasingly prefer to deal with a smaller number of IT providers who are able to provide a greater number of valuable services and solutions.

        We believe that we have been able to extend and expand the relationship with our customers by providing a more comprehensive and customized set of single-source services and solutions. By combining our data centers with STI-provided IT solutions, we have created a comprehensive platform to serve the small and medium size business market and meet an increasing demand for a single-source provider for data center services and solutions. As a result, the STI Merger provides us with cross-selling opportunities over a larger suite of products.

Our Services and Solutions

        We provide IT infrastructure and data center services and solutions to the growing small and medium size business market. Throughout our history, we have developed a comprehensive set of data center-centric skills and capabilities. As a result of the STI Merger, we are now able to leverage this significant combined expertise through our two complementary business lines to deliver customized solutions to our clients on their premises or on a managed basis in our facilities.

23

Business Strengths

        We believe our strengths can be attributed to several distinguishing factors, including:

Broad Service Offering

        We provide our customers with a comprehensive suite of services and solutions that distinguish us in the market place. We have organized our comprehensive suite into "solution sets" designed to bring incremental value to our customers. We are able to leverage these offerings and our in-house expertise to meet our customers' needs, which include storage, server, networking and security. Additionally, our single-source service approach allows us to design, build, manage, host and support these initiatives for our customers and bring sustained, differentiated value to the marketplace.

Diverse and Loyal Customer Base

        Our large and diverse customer base consists of over 650 active customers in 33 states in the United States. With several customers in each of the industries we serve, including financial services, government, manufacturing, pharmaceutical, telecommunications, technology, education, utilities, healthcare and consumer goods, we have a well-diversified revenue base with no one customer exceeding 6% of our unaudited pro forma consolidated revenue for the year ended December 31, 2006.

Strategic Geographic Presence

        We are focused primarily on underserved geographic markets where we can best leverage the breadth of our capabilities. We focus our attention on small and medium size businesses in markets where a local presence, broad resources and thought leadership are scarce. As a result, we believe we have been able to effectively differentiate ourselves from our competitors and we believe this has positioned us for continued growth in these markets. We are currently located in markets on the East coast of the United States with a high concentration of small and medium size businesses and may expand into targeted regions within the Southwest, Midwest and the West Coast of the United States.

24

Focus on High Growth IT Markets

        We focus on providing services related to high growth segments of the overall IT market, looking to specifically capitalize on the growth trends in IT infrastructure and data center services. Our technical capabilities and service expertise allow us to benefit from the increased migration from in-house IT management to externally managed and hosted services for small and medium size businesses. The small and medium size business market, specifically, is expected to experience higher growth than the overall market with respect to IT related services.

Attractive Business Model Leverage

        We believe there are significant opportunities to expand our margins with respect to many of our existing customers. Our IT infrastructure and data center services and solutions have been organized into repeatable "solution sets" allowing us to cost-effectively deploy these solutions. In addition, all of the data center fixed costs are covered based on a capacity utilization of approximately 62% for our three data centers, resulting in minimal additional variable costs and, allowing for increased margins as we continue to increase our data center utilization.

Recurring Revenue Model

        Our data center services and solutions revenue provide a solid basis for long-term relationships with our customers resulting in strong recurring revenue which provide a high degree of visibility into our future financial performance. Our data center customers typically sign one to three-year contracts with automatic renewal provisions. For the year ended December 31, 2006, revenue from our data center services and solutions represented approximately 36% of our total unaudited consolidated pro forma revenue.

        We have consistently demonstrated strong customer retention by providing a superior blend of products and services. Many of our early customers, since the inception of our predecessor companies 18 years ago, are still loyal customers today. We have over 450 support, managed and hosting services customers. We historically experience very high contract renewal rates. Specifically, our renewal rate for 2006 was 95%.

Experienced Management Team

        We are led by an experienced and dedicated management team, including a core group of executives and senior managers who have, on average, 22 years of experience. High employee retention has allowed us to continually build the knowledge base and technical expertise within our Company. The current management team has successfully integrated prior acquisitions and has achieved organic growth through both geographic expansion and new product offerings.

Established Relationships with Industry Leading Vendors

        Our technology vendors include Cisco Systems, Inc., Sun Microsystems, Inc., Symantec Corporation, BMC Software Inc., Network Appliance, Inc., Microsoft Corporation, Hewlett Packard Company, Oracle Corporation and VeriSign, Inc. In addition, Mr. Michael G. Shook, our director and Chief Executive Officer of the Company, is the co-president of the Sun Microsystems, Inc. National Advisory Board. Mr. Shook also sits on Symantec Corporation's Global and National Advisory Boards. Mr. William M. Shook, our director and Executive Vice-President of Solutions Consulting and Delivery sits on the Network Appliance, Inc. and BMC Software Inc. National Advisory Boards. The advisory board positions held by each of Mr. Michael G. Shook and William M. Shook provide us with opportunities to expand our relationships with senior vendor management and to align our business strategy with that of our vendors.

Growth Strategy

        We have experienced strong growth in our revenue and customer base. Our unaudited revenue for the year ended December 31, 2006 (pro forma) was approximately $105.3 million. In addition to increasing penetration with existing customers and adding new clients, our strategy is to provide a comprehensive suite of IT infrastructure and data center services and solutions across our customer base. In addition, we will seek to

25

enhance our leadership position in the IT marketplace through the continued development of new services, further geographic expansion and strategic acquisitions and partnerships.

Penetration of Existing Customer Base

        We currently have an installed base of over 650 active customers. We believe that our extensive customer base and our enhanced service and solution offerings represent a significant opportunity to increase our revenue per customer. By cross selling our broad suite of services and solutions, our goal is to expand our share of the customer's IT expenditure with the objective of becoming their single source provider. For example, recent cross-sell activities have resulted in a new managed services contract from two of our existing key customers.

Development of New Solutions

        We are continuously developing new services and creating customized solution sets to meet our customers' evolving requirements. We have developed a process whereby we collaborate with our customers, vendors, and industry analysts to create a highly targeted solution roadmap. New solution sets include a broader offering of software as a service, data management, disaster recovery and business continuity services, and capacity and storage on demand. See "New Data Center Services and Solutions."

Geographic Expansion

        We have achieved success in markets where small and medium size business concentration is high and competition is fragmented. We have developed a disciplined process of identifying, targeting and assessing new expansion opportunities. Variables we analyze prior to entering any new market include: customer demographics, competitive landscape, vendor support and labor pool. Once a decision has been made to enter a new region, we implement what we believe to be a proven expansion process to minimize cost and to maximize speed to market and return on investment. Through our current presence, we have established a solid base of operations from which we intend to grow into other adjacent high-growth, high-concentration areas, targeting the Southwest, Midwest and West Coast.

Strategic Acquisitions

        We believe that we can accelerate our growth through strategic acquisitions of businesses that expand our solution set or geographic reach. Current senior management and members of our board have considerable acquisition experience and have completed four acquisitions for us. Areas of interest include standalone data centers or companies providing data center and IT solutions that may or may not be currently offered by us. We see a significant opportunity to participate in the industry consolidation of the fragmented, regional small and medium size business market.

Sales

        The complex nature of our client engagements requires a highly targeted, structured sales process and a team based approach.

        Our sales process combines a highly targeted sales approach, which includes a detailed regional analysis of the small and medium sized business market across key variables and success parameters, with an in-depth understanding of a client's organization and its complexities. We compliment this effort with the ability to offer a multi-dimensional solution set that is customized to a client's needs and IT infrastructure.

        As of March 31, 2007, our sales team consists of 34 commissioned sales professionals, and is supported by 16 solutions consultants and 9 technical configuration and product sourcing specialists. Our team is organized by region and focuses on selling customers our entire range of services and solutions. With an average of 13 years experience, our sales team draws upon extensive experience in the IT infrastructure and data center services industry.

        Our current selling model requires the sales force to be well informed on the principles of running a data center and the possible approaches to driving up service levels and driving down costs.

26

        Our sales compensation model is margin-based, providing greater compensation to sales professionals who sell higher margin services. As a result, we have benefited from a significant improvement in the average sales person revenue and margin.

Customers

        Our large and diverse customer base consists of over 650 active customers in 33 states in the United States. With several customers in each of the industries we serve, including financial services, government, manufacturing, pharmaceutical, telecommunications, technology, education, utilities, healthcare and consumer goods sectors, we have a well-diversified revenue base with no one customer exceeding 6% of our unaudited pro forma consolidated revenue for the year ended December 31, 2006. Our diverse client base also includes regional and department level offices of Fortune 1000-type companies, which we believe demonstrates our ability to meet the highest service standards in the industry.

        While we have the capability to serve large size businesses and do serve larger customers including regional and department level offices of larger enterprises, we have made an explicit choice to focus on clients with between roughly $50 million and $1 billion in annual revenue or companies with 300 to 2,000 employees. In addition, our geographic coverage model is focussed on less competitive markets, where small and medium size businesses are typically underserved.

        Since inception of our predecessor entity STI approximately 18 years ago, we have attempted to constantly provide superior client service and broad product offerings in order to achieve significant repeat business. As our products and services continue to expand across the IT infrastructure and data center activity chain, our sales force will continue to focus on growing our share of our clients' annual IT expenditure.

        Our largest 10 customers represented approximately 23% of our unaudited pro forma consolidated revenue for the year ended December 31, 2006, and include Tekelec Inc., SAS Institute Inc., and University of Alabama at Birmingham Hospital.

Products and Services

        We are a leading provider of IT infrastructure, data center solutions and related managed services to the growing small and medium size business market in the United States. Our comprehensive suite of services and solutions are organized under the following two headings: data center services and solutions and IT infrastructure services and solutions.

Data Center Services and Solutions

        We currently operate three data center facilities in Salt Lake City, Utah which provide a comprehensive spectrum of co-location and hosting services and facilitate a secure, fault-tolerant environment to host and manage equipment and critical data. Data centers are classified in terms of availability by a tiering schedule developed by the Uptime Institute that ranges from Tier I at the low end to Tier IV at the high end. Our South and West data centers are characterized as Tier IV and Tier III respectively, and are designed for both high-availability and high-density power as well as for server and storage architectures. We also have contractual arrangements to resell space in third party data center facilities in Denver, Colorado and Cincinnati, Ohio. See "Facilities."

        Key features of our data centers include:

•

24 × 7 on site staff, monitoring and support;



•

hardened physical security perimeters, biometric access control;



•

seismic base isolation which permits operation during earthquakes up to 7.5 on the Richter scale;



•

redundancies in uninterruptible power supply systems and generators which allows for uptime during scheduled maintenance windows;



•

climate control systems to maintain temperature and humidity within strict tolerances; and

27

•

fire control with early warning smoke detection, gas-based suppression or dry-pipe sprinkler systems.

        Our suite of data center services and solutions includes the following:

Managed Infrastructure

        Our high availability, secure data center facilities provide a comprehensive spectrum of co-location and hosting services for our clients' IT infrastructure.

        We use industry standard best practices to ensure integration between the servers, applications and networks available to our customers, allowing us to monitor and manage their critical IT functions, using the following products:

•

Managed Server:    Provides customers with rapidly deployed brand name servers to host their applications. Dedicated servers can be located within the customer's co-location enclosure or our fully managed environment.



•

Managed Firewall:    Provides customers with dedicated network security solutions. A properly configured firewall helps protect servers from unauthorized access and attacks.



•

Managed Virtual Private Network:    Provides customers with a fully managed site-to-site virtual private network allowing them to securely access the data in their co-located servers from their offices.



•

Remote System Administration:    Includes a wide spectrum of system administration services that address the daily administration activities required to maintain a stable server environment for our clients.



•

Asset Tracking Management:    Enables customers to manage and track changes to the infrastructure supporting their critical applications.

Managed Services

        Our suite of managed services provide a single-source solution for all data center needs and enables our clients to leverage our specialized technical knowledge and benefit from reliable, uninterrupted services.

        Our comprehensive suite of managed services for our customers' IT infrastructure needs are described as follows:

•

Co-Location:    Premier, secure, fault-tolerant environments which locate clients' mission critical content and IT infrastructure.



•

Monitoring and Alerting:    24 × 7 automated monitoring of all elements in the network and computing infrastructure. This service package monitors systems, network devices, databases, and critical services for warning, error and failure conditions.



•

Management:    Remote systems administration services that address the daily administration activities required to maintain a stable server environment. We use industry standard best practices to ensure integration between servers, applications and networks, allowing us to manage our clients' critical IT functions.



•

Managed Archive Services:    Reliable, secure and automated data backup and recovery services.



•

Patch and Change Management:    Management, tracking and deployment of software and security updates designed to minimize maintenance duration and maximize system availability.



•

Managed Security Services and Consulting:    Security assessment and audit services, including: vulnerability scans, onsite consulting, managed intrusion detection, intrusion prevention and virtual private network services.



•

Enterprise Email Security:    Hosted email security scanning platform that mitigates the threat of both targeted and previously unknown threats against our customers' email and networking infrastructures. Unlike traditional virus detection tools and methodologies, our solution does not require previous exposure to known viruses.

28

•

Network Optimization and Protection:    Identifies and manages the impact of network performance for real-time capacity planning and audit compliance by controlling bandwidth usage by user, application type and destination.

Maintenance Manager

        Our 24 × 7 data center staff offers multiple levels of support, from proactive, mission-critical service to basic, self-service maintenance. Our maintenance managers have an average industry experience of 12 years. Their experience across multiple technologies allows them to diagnose and resolve IT issues for our clients in a relatively quick and efficient manner. With engineers answering calls, customers are immediately engaged with knowledgeable resource personnel that are able to solve their problems as opposed to waiting for call backs. Our highly skilled team resolves approximately 95% of support cases in-house. When our personnel are unable to resolve a customer's IT issue and it is necessary to refer it the vendor, our team follows a well-defined call handling process and serves as the customer's advocate, leveraging our relationship with the customer and the vendor to ensure a rapid response. This "single source accountability" is highly regarded by our customers, as is evidenced by our 94% contract renewal rate over the past 12 months.

        Our team of 13 Support Engineers, 3 Escalation Managers, 3 Service Managers and 5 Contacts/Quoting Specialists who reside in our corporate headquarters and field offices, supports approximately 450 customers across diverse industries on a 24 × 7 basis. Our team handles an average of approximately 600 cases per month on technologies including Sun Microsystems, Inc./StorageTek, Symantec Corporation Availability, Network Appliance, Inc., Hitachi Data Systems, Brocade, BMC/Remedy, Linux and Windows. We regularly receive the highest marks on audits from our vendors and satisfaction surveys from our customers.

Managed Bandwidth

        Our managed bandwidth services connect client equipment directly to a high-performance, extensively connected, reliable, multi-carrier network. Our data centers employ multiple carriers to ensure continuous high availability services for clients. Our redundant network offers clients an optimized network path for fast and reliable connectivity by maximizing available speed and bandwidth through automated flow control. This optimizes the network connection on a continual basis and minimizes the number of networks, delays and points-of-failure between our clients and their users.

New Data Center Services and Solutions

        Over the course of the next 12 months, we are planning to introduce an expanded offering of data center services and solutions, including the following products:

•

Software as a Service:  We plan to offer a solution that enables companies — primarily independent software vendors — to offer access to their software application to end users via the Internet. We currently intend that our solution will include the design, implementation, hosting, and management of the underlying infrastructure, allowing our customers to focus on their core competency of software development.



•

Disaster Recovery and Business Continuity Services:  Data protection, disaster recovery and security are three critical issues facing the IT industry. We plan to offer disaster recovery and business continuity services including the development of a core group of services such as managed security infrastructure, data center hosting, data replication and mirroring, backup and recovery and data storage services.



•

Data Management:  We plan to develop a suite of complimentary data center related offerings which will both store and manage our clients mission critical data. We will offer this service based on the desired storage capacity needs of our clients. Our storage area network architecture is designed specifically for clients with high volume and high performance storage management needs. In addition, we plan to offer network attached storage architecture which is specifically designed for clients with storage flexibility and price flexibility needs. We also expect that our data management services to include full tape backup, archiving and restoration capabilities. Our combined suite of storage and data management services will be designed to assure our clients' maximum protection of their vital business data.

29

•

Capacity and Storage on Demand:  We plan to develop a data center related offering which will allow our clients to utilize our data center services based on a "pay per service" basis. Our intent is that this service offering will accommodate our clients unanticipated increased capacity and storage needs.

IT Infrastructure Services and Solutions

        Our trained team of certified consultants enables us to quickly identify IT infrastructure challenges, improve business processes and produce comprehensive IT infrastructure services and solutions for our clients.

Professional and Consulting Services

        We offer a variety of professional and consulting services, including the following:

•

IT Infrastructure Architecture Design and Installation:    We offer a comprehensive range of deployment services for complex IT architectures. All of our skilled consultants hold many of the highest vendor certifications required to design, install, and configure the latest solutions for servers, software, and storage.



•

Assessment, Consolidation and Disaster Recovery Planning:    Ensuring business continuity requires the ability to efficiently consolidate data as well as manage and replicate information in order to prevent downtime or loss of information. We have developed an assessment methodology focused on designing and delivering customized IT infrastructure solutions which deliver performance and cost benefits that meet our clients' IT planning needs.



•

Regulatory Compliance Tools:    We offer a variety of IT infrastructure solutions which enable our clients to address their regulatory compliance requirements, including:



•

Document Retention:    We offer email, file system and instant messaging archival solutions to enable businesses to electronically comply with their document retention policies;



•

Electronic Storage and Encryption:    We offer products that enable encryption of client data, whether transmitted over the network or stored on magnetic media, to prevent exposure of proprietary, client, or employee data; and



•

Tracking:    We enable our clients to manage and track changes to their hosted applications. See "Managed Infrastructure — Asset Tracking Management."



•

Strategic Service Management Solutions:    We offer a variety of service management tools which manage our clients' entire technology asset lifecycle and performance, including help desk solutions, application performance management solutions which monitor processes to detect and correct any application malfunctions and asset management solutions which track and manage business assets throughout their lifecycle from acquisition to retirement. These service management tools ensure that our clients maximize the performance and availability of their IT infrastructure.



•

Information Technology Infrastructure Library, or ITIL:    ITIL is a framework of best practice approaches and methodology intended to facilitate the delivery of high quality IT services. ITIL outlines an extensive set of management procedures that are intended to support businesses in achieving both quality and value for their money in IT operations. Our staff includes one of the world's 400 ITIL masters, enabling us to be one of only four companies in North America to provide businesses with ITIL certification.

Hardware and Software Procurement and Provisioning

        Our relationship with our vendors (see "Business Strengths — Established Relationships with Leading Industry Vendors") and our technical, sales and operations staff is an integral component of our hardware and software procurement process. Our strategic relationship with our vendors enables us to provide our clients with a comprehensive range of hardware and software products, including server, storage, network and virtualization technology. Our experienced technical, sales and operations staff employ a variety of configuration tools to determine hardware and software compatibility and deliver customized hardware and software products.

30

IT Training Services

        We seek to provide high quality, cost effective technical training to our clients. Our hands-on training is designed to provide technical professionals with the necessary skill sets to meet their IT infrastructure challenges. At both our clients' sites and in our own modern training facilities, we offer our clients on-site and customized training programs for software applications developed by industry leading names including the following:

Competition

        The market for IT infrastructure and data center services and solutions is highly fragmented. The industry includes small regional providers serving the small and medium size business market, notably in secondary markets such as Raleigh, Nashville, Birmingham and Richmond, and a limited number of national and multi-national providers that serve larger business clients notably in metropolitan markets such as Los Angeles, New York, San Francisco and Washington. Generally speaking, the small regional providers focus their services on the provision of physical space (hosting and co-location) and managed bandwidth with a limited offering of IT infrastructure and data center services and solutions. National and multi-national providers' generally either focused on hosting, co-location and managed services or on being full service IT infrastructure outsourcing providers.

        Our current and potential competitors can be divided into 3 categories:

•

national and international hosting, co-location and managed service providers;



•

regional hosting providers; and



•

national and international full service IT infrastructure outsourcing providers.

        National and international hosting, co-location and managed service providers include companies such as Equinix Inc., Saavis Communications Corporation, Switch & Data Facilities Company, Inc., Terramark Worldwide, Inc. and Q-9 Networks Inc. These companies provide physical space (hosting and co-location), managed bandwidth and network services, and to varying degrees, some data center related services such as system and network monitoring, security and data and system management. We generally do not compete with these providers because they operate principally in metropolitan markets targeting multi-national companies. In the limited instances where these providers have pre-existing business relationships with businesses in our target small and medium size business secondary markets, we differentiate ourselves by providing physical space (hosting and co-location) as well as a broader offering of IT infrastructure and data center services and solutions.

        Regional hosting providers include companies that are typically small and privately held such as Hosted Solutions Inc. in Raleigh, North Carolina, Nashville Regional Exchange Point, Inc. in Nashville, Tennessee and ServerVault Corp. in Dulles, Virginia. These companies have limited IT infrastructure and data center service offerings and typically only provide physical space (hosting and co-location), managed bandwidth, network monitoring and security, and limited managed services. These regional hosting providers are typically smaller than us and generally do not possess, we believe, the financial strength, technical knowledge or resources required for in-depth customer support and product development. These factors, in addition to our comprehensive breadth of IT infrastructure and data center service and product offerings will, we believe, enable us to effectively compete with the regional hosting providers.

        National and international IT outsourcing providers include companies such as Electronic Data Systems Corporation and International Business Machines Corporation, or IBM. These companies provide IT infrastructure and data center services and solutions, including, application hosting, site management, IT

31

professional and consulting services, technology design, co-location facilities and managed bandwidth. These companies generally target large multi-national companies with global IT sites and broad managed service needs in primary markets and generally do not focus on small and medium size businesses in secondary markets. We have, in limited cases, leveraged our core competencies in the data center, including designing, deploying and supporting mission-critical computing environments to service large multi-national customers in primary markets.

Facilities

        Our data center facilities offer world class design, security and continuity, delivering a premier environment to host and manage equipment and critical data. We currently maintain the following facilities:

        In addition to our Utah facilities, we also have contractual arrangements with existing third party facilities in Denver, Colorado (characterized as Tier IV) and in Cincinnati, Ohio (characterized as Tier II) which allow us to utilize their data centers. The Denver facility is approximately 150,000 square feet. We have recurring revenues for the Denver facility which are approximately $9,900 per month. We currently have two customers in the Denver partner facility. The Cincinnati facility exceeds 50,000 square feet and they are currently in the process of building another 35,000 square feet. We currently have no customers in the Cincinnati partner facility and thus no revenue has been generated from that facility to date.

        In addition to the above noted offices, we maintain our corporate headquarters in an owned facility in Cary, North Carolina.

        We have leased regional sales offices located in the following cities: (a) Atlanta, GA; (b) Birmingham, AL; (c) Charlotte, NC; (d) Ft. Lauderdale, FL; (e) Glastonbury, CT; (f) Greenville, SC; (g) Jacksonville, FL; (h) Knoxville, TN; (i) Nashville, TN; (j) Salt Lake City, UT; and (k) Rockville, MD.

Our History

        We were incorporated on October 13, 2006 under the laws of the State of Delaware. Our predecessor, CAC, was incorporated on March 31, 2005 under the laws of the State of Delaware by its majority stockholder, KLI, a private equity firm based in New York City.

32

        On May 2, 2005, CAC merged with Gazelle Technologies, Inc. As a part of this merger transaction, Gazelle Technologies, Inc., a company engaged in software development for the utility sector, exchanged its assets for stock in CAC. Prior to this merger transaction, Gazelle Technologies, Inc. sold 15,000,000 convertible preferred shares of its capital stock to American Marketing Complex, Inc., or AMC, in exchange for AMC credits to purchase AMC merchandise and services. Upon the consummation of this merger transaction, AMC became the holder of 15,000,000 shares of series B convertible preferred stock of CAC and CAC acquired the AMC credits. Prior to the closing of the STI Merger, AMC's 15,000,000 shares of series B convertible preferred stock of CAC were exchanged for 177 shares of common stock of CAC. At the closing of the STI Merger, AMC's 177 shares of common stock of CAC were converted into 97,599 shares of our common stock.

        On May 31, 2005, CAC acquired all of the assets of Consonus, Inc. from Questar InfoComm, Inc. Total consideration paid by CAC was approximately $18.4 million consisting of $13.0 million paid in cash at closing, $3.7 million in notes payable to Questar InfoComm, Inc., and $1.7 million in deal and closing costs. The cash portion was partially funded through a secured credit accommodation entered into between CAC and US Bank National Association dated May 31, 2005. From 1996 until CAC's acquisition, Consonus, Inc. had been engaged in the business of designing, building and operating data centers, IT networks and web-enabled application delivery systems.

        On October 18, 2006, we agreed to acquire all of the issued and outstanding shares of capital stock of CAC and STI and to assume all unvested grants of common stock of CAC and all outstanding options and warrant to purchase STI common stock, pursuant to an agreement and plan of merger and reorganization by and among STI, CAC, CAC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, STI Merger Sub, Inc., a North Carolina corporation and a wholly owned subsidiary of the Company, KLI, as the CAC stockholders' agent and Irvin J. Miglietta as the STI stockholders' agent, which is referred to in this prospectus as the Merger Agreement. This merger transaction is referred to in this prospectus as the STI Merger.

        On the closing of the STI Merger, which occurred on January 22, 2007, CAC and STI became our direct wholly owned subsidiaries. STI was incorporated on August 31, 1988 under the laws of the State of North Carolina. Since then, STI has established itself as a managed services and IT infrastructure solutions provider for small and medium sized businesses. STI has grown organically and through the acquisitions of Path Tech Software Solutions, Inc. in February 22, 2000, and Allied Group, Inc. — DEL on October 17, 2001.

        The STI Merger was accounted for using the purchase method of accounting. For financial reporting purposes, we were deemed the acquiror of STI. The net purchase price was approximately $46.7 million for the acquisition of STI.

33

        The following diagram illustrates our organizational structure following the completion of this offering:

Employees

        As of March 31, 2007, we had 183 employees including 54 employees in sales and marketing, 37 employees in business operations and finance and corporate administration, 47 employees in infrastructure computing, information management, service management and client solutions delivery, and 45 employees in customer care, education services and managed services. All of our employees are full-time employees. No union represents any employees in their employment relationship with us.

Intellectual Property

        Our business utilizes a wide range of proprietary information, data, software and know-how. Consistent with industry practice, we rely on a combination of contractual provisions, non-disclosure agreements and internal protocols to protect our proprietary rights in its products and services.

Legal Proceedings

        As of the date hereof, we are not a party to or aware of any legal proceedings that individually, or in the aggregate, will have a material adverse effect on our business, financial position or result of operations.

DIVIDEND POLICY

        We have never declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings to fund the development and growth of our business and we do not currently anticipate paying dividends on our shares of common stock. Any determination to pay dividends to holders of our common stock in the future will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, legal requirements and such other factors as the board of directors deems relevant.

34

USE OF PROCEEDS

        We estimate that our net proceeds from our sale of approximately                        shares of common stock at an initial offering price of $                         (Cdn$                        ) per share) (the mid-point of the rage set forth on the cover page of this prospectus), after deducting underwriting commissions and estimated offering expenses payable by us, will be approximately $             (Cdn$                        ). We will not receive any proceeds from the sale of shares of common stock by the selling stockholders should the underwriters exercise the over-allotment option. The expenses associated with the over-allotment option, together with the underwriters' commissions, will be paid by the selling stockholders. The net proceeds of the offering of common stock by us will be used as follows:

Repayment of Certain Indebtedness

•

Avnet, Inc. Indebtedness  

        We intend to use approximately $                        of the net proceeds of the offering to repay indebtedness owed by STI to Avnet, Inc. which consists of a $                        million aggregate principal amount fixed rate loan which bears interest at 8% per annum and a $            million aggregate principal amount fixed rate loan which bears interest at 8% per annum. This indebtedness is due on May 1, 2010. For a further description of the Avnet, Inc. Indebtedness, see "Certain Relationships and Related Transactions — Avnet, Inc. Indebtedness."

•

Questar InfoComm, Inc. Indebtedness  

        We intend to use approximately $                        of the net proceeds of the offering to repay indebtedness owed by CAC to Questar InfoComm, Inc. which consists of a $                        million aggregate principal amount fixed rate loan which bears interest at 9.0% per annum and is due on May 31, 2008. See "Our Business — Our History."

Payment of STI Merger Advisory Fees

        We intend to use approximately $                        of the net proceeds of the offering to pay certain fees owed to Raymond James & Associates, Inc.

General Corporate Purposes

        We intend to use the remaining $            the net proceeds of the offering for sales and marketing, research and development, working capital and other general corporate purposes. These proceeds may also be used to pursue growth through the selective acquisition of, or investment in, complementary services, technologies and businesses. We have no present agreements or commitments with respect to any prospective business acquisitions or investments. The amount and timing of our actual expenditures for general corporate purposes will vary significantly depending on a number of factors, including the amount of cash generated by our operations. Accordingly, management will have broad discretion in the application of the net proceeds generated from the offering for such general corporate purposes. You will not have the opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use these remaining proceeds.

        We also note that the funds may not be fully used for a significant period following the closing of the offering. Pending final use, we may invest net proceeds of this offering in short-term, investment grade, interest-bearing securities or guaranteed obligations of the United States or Canada or their respective agencies.

35

CAPITALIZATION

        The following table sets forth the cash and cash equivalents and capitalization as of December 31, 2006:

•

for each of CAC and STI on an actual basis;



•

for CTI on a pro forma basis to give effect to the following transactions:



•

the STI Merger (the conversion ratio of CAC stock to CTI stock was 551.408212 and the conversion ratio of STI stock to CTI stock was .077171303934418);



•

the conversion of all the CAC shares of preferred stock outstanding as of December 31, 2006 into 97,599 shares of our common stock;



•

the sale of                         shares of common stock in this offering at the assumed initial public offering price of $            per share, the mid-point of the range shown on the cover page of this prospectus, after deducting estimated underwriting commissions and offering expenses;



•

the application of a portion of the net proceeds from this offering to repay approximately $             million of outstanding indebtedness as described in "Use of Proceeds;"



•

the repayment of approximately $374,000 of promissory notes made in favor of Michael G. Shook and William M. Shook by STI as described in "Certain Relationships and Related Transactions — Indebtedness owed by STI to Michael G. Shook and William M. Shook;" and



•

the forgiveness of loan amounts totalling approximately $1.7 million owed by Michael G. Shook and William M. Shook to STI as described under "Certain Relationships and Related Transactions — Indebtedness owed by Michael G. Shook and William M. Shook to STI."

36

        You should read this table together with our consolidated financial statements and the related notes, "Unaudited Pro Forma Condensed Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Use of Proceeds" appearing elsewhere in this prospectus.

(1)

As of December 31, 2006, the above table excludes 262 shares of CAC common stock (which represents 144,467 shares of our common stock) eligible for issuance under agreements with each of Mr. Robert Muir and Mr. Daniel S. Milburn, and one of CAC's advisory board members which gave them an opportunity to earn a certain percentage of the equity of CAC. The percentages range from 1% to 3.5% and vest over a 2 or 3 year vesting period, which will vest on the completion of this offering. See "Management — Assumption of Outstanding Equity Awards in CAC and STI Options in connection with the STI Merger and Outstanding Equity Awards at Fiscal Year End" and "Certain Relationships and Related Transactions — Outstanding Equity Awards."

(2)

As of December 31, 2006 on a pro forma basis, the above table excludes (a) 195,800 shares of common stock reserved for issuance pursuant to deferred stock grants awarded to some of our executive officers under the 2007 Equity Plan; (b) 154,200 shares of common stock eligible for future grant or issuance under the 2007 Equity Plan; (c) 191,336 shares of common stock represented in Footnote (1) above, (d) options to purchase 258,542 shares of our common stock outstanding as of the closing of the STI Merger (which as of April 30, 2007 represent options to purchase 258,426 shares of our common stock); and (e) 347,271 shares of our common stock eligible for issuance pursuant to the warrant that was issued by the Company to Avnet, Inc. For further details, see also "Use of Proceeds," "Principal and Selling Stockholders," "Description of Capital Stock — Warrant," "Management — New Equity Plan of the Company, Deferred Stock Agreements, Assumption of Outstanding Equity Awards in CAC and STI Options in connection with the STI Merger" and "Certain Relationships and Related Transactions — Outstanding Equity Awards."

37

DILUTION

        If you invest in our common stock, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share and the pro forma as adjusted net tangible book value per share upon the completion of this offering.

        The net tangible book value per share of our common stock represents the amount of our total tangible assets (total assets less intangible assets) less total liabilities, divided by the total number of outstanding shares of common stock. Our pro forma net tangible book value as of December 31, 2006 was approximately                        , or            per share, based on the number of shares of common stock outstanding as of December 31, 2006, after giving effect to (i) the STI Merger; (ii) the conversion of all of CAC's shares of preferred stock outstanding as of December 31, 2006 into 97,599 shares of our common stock; and (iii) the issuance of 200,000 restricted shares of our common stock under the 2007 Equity Plan on January 22, 2007. See "Our Business — Our History" and "Management — Restricted Stock Agreements and 2007 Equity Plan."

        After giving effect to the sale of shares of common stock being offered by us in this offering at an assumed initial public offering price of Cdn$            per share ($            per share), the use of such proceeds to repay the outstanding indebtedness of CAC and STI as described under "Capitalization" and "Use of Proceeds" and the deduction of estimated underwriting commissions and offering expenses payable by us, our pro forma as adjusted net tangible book value, as of December 31, 2006, would have been approximately Cdn$             million ($             million), or Cdn$            per share ($            per share) of common stock. This represents an immediate increase in net tangible book value of Cdn$            per share ($            per share) of common stock to our existing stockholders, and an immediate dilution in net tangible book value of Cdn$            per share ($            per share) of common stock to new investors purchasing shares in this offering.

        The following table illustrates this dilution per share of our common stock:

        The following table summarizes, as of December 31, 2006, on the pro forma as adjusted basis described above, the total number of shares of common stock purchased from us, the total consideration paid or to be paid for those shares and the average price paid per share by our existing stockholders and new investors purchasing shares in this offering. The calculations with respect to shares of common stock purchased by new investors in this offering reflect an assumed initial public offering price of $            per share (the mid-point of the range shown on the cover page of this prospectus):

        The above discussion and tables exclude an aggregate of            shares of common stock issuable pursuant to the underwriters' over-allotment option. The above discussion and tables also assume no exercise of stock options to purchase 258,542 shares of our common stock outstanding as of the closing of the STI Merger, with a weighted average exercise price of $15.50 per share, and no exercise of the warrant to purchase 347,271 shares of our common stock outstanding as of the closing of the STI Merger, at an exercise price of $0.00026 per share. If all of these options and the warrant were exercised, then our existing stockholders, including the holders of these options and the warrant, would own             % and our new investors would own            % of the total number of shares of our common stock outstanding upon closing of this offering, representing            % and             % of the voting power of such shares of common stock, respectively.

        We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

38

SELECTED FINANCIAL INFORMATION

        The following table sets forth selected financial information for CTI, CAC, and its predecessor, Consonus, Inc., for the periods indicated. The following selected financial information should be read in conjunction with our financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Historical results are not necessarily indicative of future results.

        The statement of operations for the years ended December 31, 2002 and 2003 and the balance sheet information as of December 31, 2002 and 2003 have been derived from unaudited financial information of our predecessor, Consonus, Inc.

        The statements of operations information for the year ended December 31, 2004 and the balance sheet information as of December 31, 2004 on the date thereof have been derived from the audited financial statements of our predecessor, Consonus, Inc.

        The statement of operations information for the year ended December 31, 2005 includes a predecessor company (Consonus, Inc.) period from January 1, 2005 to May 30, 2005 and a successor company, CAC, for the period May 31, 2005 to December 31, 2005 (CAC was incorporated on March 31, 2005, but CAC did not buy the assets of Consonus, Inc. until May 31, 2005 and therefore this period only includes operations for the period May 31, 2005 to December 31, 2005). The balance sheet information as of December 31, 2005 has been derived from the audited financial statements of CAC.

39

        The statement of operations information for the year ended December 31, 2006 and the balance sheet information as of the date thereof have been derived from the audited financial statements of CAC.

(1)

The cumulative effect of change in accounting principle represents the write-off of goodwill due to the adoption of Financial Accounting Standard No. 142.

(2)

During 2003, the parent of Consonus, Inc, Questar InfoComm, Inc., recapitalized Consonus, Inc. with 50 shares of common stock. The shares presented for 2002 reflect the recapitalization.

(3)

On May 31, 2005, CAC acquired the assets of Consonus, Inc. Stock for the year ended December 31, 2005 reflect the CAC stock held by KLI.

40

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

        Our unaudited pro forma condensed consolidated financial data has been prepared by applying pro forma adjustments to the historical financial statements of CAC and the historical financial statements of STI, which are included elsewhere in this prospectus.

        On January 22, 2007, the STI Merger was effective. The acquisition was accounted for under the purchase method of accounting in accordance with SFAS 141 and the acquired assets and liabilities were recorded at their estimated fair values based on a valuation performed by independent third party appraisers. The purchase price was approximately $46.7 million consisting of 1,144,181 shares of our common stock, 347,271 of stock warrants, and 258,542 of stock options, assumption of $34.5 million in long-term debt, acquisition related expenses of approximately $1.0 million consisting of legal and other professional fees and approximately $0.4 million for the repayment of notes payable to stockholders of STI. The estimated fair value of the equity instruments was approximately $10.8 million based on a valuation performed by independent third-party appraisers.

        The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2006 gives effect to the following transactions, as if each had occurred at the beginning of the respective periods:

•

the STI Merger, as discussed above and throughout this prospectus;



•

the issuance of            shares of our common stock in this offering at an assumed price of $            per share, the mid-point of the range shown on the cover of this prospectus; and



•

the application of the net proceeds from this offering, after deducting the underwriting commissions and estimated offering expenses, to pay down the seller notes of CAC and certain of the outstanding indebtedness of STI.

        As part of the 2007 Equity Plan (see "Management — Equity Awards under the 2007 Equity Plan") we issued to certain officers on January 22, 2007, 200,000 shares of restricted stock and 195,800 shares of deferred stock that are subject to service and performance based criteria. Of the 395,800 total shares to be issued, 198,600 shares will vest in the first year, 98,600 will vest in the second year and 98,600 will vest in the third year. These shares exclude 16,650 shares of deferred stock which were forfeited prior to the date of this prospectus. CTI will measure and record compensation expense for these equity instruments in accordance with the provisions of the Statements of Financial Accounting Standards (SFAS) 123R, "Share-Based Payment." Compensation expense related to the vesting of these shares has not been included as an adjustment in the accompanying unaudited pro forma statement of operations.

        In addition, STI recorded approximately $1.7 million of compensation expense in connection with the forgiveness of notes receivable from Michael G. Shook and William M. Shook as described under "Certain Relationship and Related Transactions — Indebtedness owed by Michael G. Shook and William M. Shook to STI." Furthermore, STI will record compensation expense immediately prior to the STI Merger in connection with the acceleration of vesting of stock options and the modification of the exercise price of certain options in accordance with the provisions of SFAS 123R. Because these items are non-recurring in nature, we have not given effect to them in the pro forma condensed consolidated statement of operations.

        In addition, the unaudited pro forma condensed consolidated statement of operations does not reflect the expenses directly related to the proposed transactions summarized above. However, the unaudited pro forma condensed consolidated balance sheet as of December 31, 2006 reflects the transaction related expenses as discussed further below.

        The unaudited pro forma condensed consolidated balance sheet as of December 31, 2006 gives effect to the following transactions as if they had occurred on December 31, 2006:

•

the STI Merger;



•

the conversion of all the CAC shares of preferred stock outstanding as of December 31, 2006 into 97,599 shares of our common stock;

41

•

the sale of                         shares of common stock in this offering at the assumed initial public offering price of $            per share, the mid-point of the range shown on the cover page of this prospectus, after deducting estimated underwriting commissions and offering expenses;



•

the application of a portion of the net proceeds from this offering to repay approximately $             million of outstanding indebtedness as described in "Use of Proceeds;"



•

the repayment of approximately $374,000 of promissory notes made in favor of Michael G. Shook and William M. Shook by STI as described in "Certain Relationships and Related Transactions — Indebtedness owed by STI to Michael G. Shook and William M. Shook;" and



•

the forgiveness of loan amounts totalling approximately $1.7 million owed by Michael G. Shook and William M. Shook to STI as described under "Certain Relationships and Related Transactions — Indebtedness owed by Michael G. Shook and William M. Shook to STI."

        The historical financial data for CAC and STI was derived from their audited historical financial statements. The unaudited pro forma condensed consolidated balance sheet includes the audited balance sheet of CAC and STI as of December 31, 2006. The pro forma condensed consolidated statement of operations for the year ended December 31, 2006 includes the audited results of operations from CAC and STI. CTI had no operations or balance sheet activity between inception and December 31, 2006 and therefore shows zero balances for all balance sheet and statement of operation line items.

        The unaudited pro forma consolidated financial information is based upon currently available information, assumptions, and estimates which we believe are reasonable. These assumptions and estimates, however, are subject to change. In our opinion, all adjustments have been made that are necessary to present fairly the pro forma information. The unaudited pro forma condensed consolidated financial data is presented for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred had the transactions or the STI Merger been consummated on or as of the dates indicated and such data are not necessarily indicative of future operating results or financial position. The unaudited pro forma condensed consolidated financial data should be read in conjunction with each of the historical companies' financial statements and the related notes and with "Management's Discussion and Analysis of Financial Condition and Results of Operations" that are included elsewhere in this prospectus.

42

CTI

Pro Forma Condensed Consolidated Balance Sheet

As of December 31, 2006
(Unaudited)
(amounts in thousands)