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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on June 5, 2013

Registration No. 333-187745

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



Amendment No. 4
to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Textura Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  7372
(Primary Standard Industrial
Classification Code Number)
  26-1212370
(I.R.S. Employer
Identification Number)

1405 Lake Cook Road
Deerfield, IL 60015
(847) 457-6500
(Address, including zip code and telephone number, including area code, of registrant's principal executive offices)

Patrick J. Allin
Chief Executive Officer
1405 Lake Cook Road
Deerfield, IL 60015
(847) 457-6500
(Name, address, including zip code and telephone number, including area code, of agent for service)



Copies to:
David A. Schuette
Mayer Brown LLP
71 South Wacker Drive
Chicago, IL 60606
(312) 782-0600
  Christopher D. Lueking
Latham & Watkins LLP
233 South Wacker Drive, Suite 5800
Chicago, IL 60606
(312) 876-7700



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 of 1933 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, please 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

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



CALCULATION OF REGISTRATION FEE

               
 
Title of Securities Being Registered
  Amount to be
Registered(1)

  Estimated Maximum
Offering Price Per
Share(2)

  Estimated Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee(3)

 

Common Stock $0.001 par value per share

  5,175,000   $15.00   $77,625,000   $10,589

 

(1)
Includes 675,000 shares of common stock that the underwriters have the option to purchase to cover over-allotments, if any.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) of the Securities Act of 1933, as amended.

(3)
The registrant previously paid $9,412 of this amount.



         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 that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


Table of Contents

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 jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 5, 2013

4,500,000 Shares

GRAPHIC

Textura Corporation

Common Stock



        This is the initial public offering of common stock of Textura Corporation.

        We are selling 4,500,000 shares of common stock. Prior to this offering, there has been no public market for our common stock. The initial public offering price of the common stock is expected to be between $13.00 and $15.00 per share. Our common stock has been approved for listing on the New York Stock Exchange under the symbol "TXTR."

        The underwriters have an option to purchase a maximum of 675,000 additional shares to cover over-allotments of shares.

        We are an "emerging growth company" as defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements.

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 12.

 
  Price to Public   Underwriting
Discounts and
Commissions(1)
  Proceeds,
before Expenses,
to Textura Corporation
 

Per Share

  $     $     $    

Total

  $     $     $    

(1)
See "Underwriting" for additional information regarding underwriting compensation.

        Certain of our directors and existing stockholders, including certain affiliates of our directors, have indicated an interest in purchasing an aggregate of approximately $15.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, less or no shares in this offering to any of these directors or stockholders, or any of these directors or stockholders may determine to purchase more, less or no shares in this offering.

        Delivery of the shares of common stock will be made on or about                         , 2013.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse   William Blair

JMP Securities   Oppenheimer & Co.   Barrington Research

The date of this prospectus is                         , 2013.


LOGO



TABLE OF CONTENTS

 
  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    12  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

    31  

INDUSTRY AND MARKET DATA

    32  

USE OF PROCEEDS

    33  

DIVIDEND POLICY

    34  

CAPITALIZATION

    35  

DILUTION

    38  

SELECTED CONSOLIDATED FINANCIAL DATA

    40  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    42  

BUSINESS

    73  

MANAGEMENT AND BOARD OF DIRECTORS

    95  

EXECUTIVE COMPENSATION

    102  

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    119  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

    120  

PRINCIPAL STOCKHOLDERS

    123  

DESCRIPTION OF CAPITAL STOCK

    127  

SHARES ELIGIBLE FOR FUTURE SALE

    133  

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

    135  

UNDERWRITING

    139  

LEGAL MATTERS

    146  

EXPERTS

    146  

WHERE YOU CAN FIND MORE INFORMATION

    146  

INDEX TO FINANCIAL STATEMENTS

    F-1  



        You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

        Information contained in our website does not constitute part of this prospectus.


Dealer Prospectus Delivery Obligation

        Until                                    , 2013, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and related notes included elsewhere in this prospectus and the information set forth under the headings "Risk Factors," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Unless the context requires otherwise, the words "Textura Corporation," "Textura," "we," "our company," "us" and "our" refer to Textura Corporation, a Delaware corporation, and its subsidiaries. Unless otherwise indicated, all numbers of shares, per share amounts and share prices related to our common stock in this prospectus reflect the 2 for 1 stock split in the form of a stock dividend declared on March 28, 2013.

Overview

        We are a leading provider of on-demand business collaboration software to the commercial construction industry. Our solutions are focused on facilitating collaboration between owners/developers, general contractors and subcontractors. Our solutions increase efficiency, enable better risk management, and provide improved visibility and control of construction activities for our clients.

        Our collaboration solutions offer robust functionality, data sharing and exchange capabilities, and workflow tools that support several mission-critical business processes at various stages of the construction project lifecycle:

    Construction Payment Management ("CPM") enables the generation, collection, review and routing of invoices and the necessary supporting documentation and legal documents, and initiation of payment of invoices.

    Submittal Exchange enables the collection, review and routing of project documents.

    GradeBeam supports the process of obtaining construction bids, including identifying potential bidders, issuing invitations-to-bid and tracking bidding intent.

    Pre-Qualification Management ("PQM") supports contractor risk assessment and qualification.

    Greengrade facilitates the management of environmental certification processes.

        In addition, we offer PlanSwift, a take-off and estimating solution used in preparing construction bids, and Contractor Default Claims Management, which supports the process of documenting a subcontractor default insurance claim.

        Each of our collaboration solutions was designed from inception as a software-as-a-service ("SaaS") solution with an on-demand architecture. Our collaboration solutions each use a single code base and we do not customize our solutions for any of our clients. Our technology platform is designed to be highly configurable, scalable, reliable and secure.

        We believe we are a leading example of a new generation of on-demand software solutions focused on enablement of business-to-business collaborative processes. Such solutions are by design on-demand, as they require neutral third parties to act as the platform for collaboration by multiple parties and to facilitate the exchange of data and documents.

        We believe the construction industry represents a large and growing market for technology solutions of all types. The industry, we believe, is especially attractive for our solutions and our growth because it is underpenetrated by technology solutions that enable construction industry participants to more easily collaborate and operate more effectively. We have established a strong market position serving this industry. As of March 31, 2013, since the date of launch or acquisition of our solutions, our clients have used one or more of our on-demand collaboration solutions to help manage over 13,000

 

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commercial construction projects representing more than $125 billion in construction value as reported by our clients. Our collaboration solutions have been used by more than 3,000 general contractors, owners/developers, and architects. This includes 41 of the 100 largest general contractors in North America, ranked as of May 2012 by Engineering News-Record based on annual construction revenues. In addition, based on management estimates, approximately 300,000 subcontractors were active on our solutions during fiscal 2012. Our solutions are used on construction projects of all sizes, from small remodels or renovations to multi-billion dollar developments.

        We have achieved significant growth since introducing our solutions to the market. In the fiscal years ended September 30, 2010, 2011 and 2012, we generated revenue of $6.0 million, $10.5 million and $21.7 million, respectively, which represented growth over the prior period of 90.0%, 74.7% and 106.2%, respectively. In those same periods, we had net losses of $15.9 million, $18.9 million and $18.8 million, respectively.

Our Industry

        Construction is a major global industry and consists of building new structures, making additions and modifications to existing structures, as well as conducting maintenance, repair and improvements on existing structures. Worldwide construction spending was $7.2 trillion in 2010, according to "Global Construction 2020," a study produced by Global Construction Perspectives, an industry research provider. A total of $97.7 trillion will be spent on construction worldwide during this decade, and by 2020 construction is expected to reach more than $12 trillion in annual spending and account for 13.2% of world GDP, according to the same study.

        We believe the outlook for the construction industry is strong. The industry currently continues to be impacted in certain markets across the globe by slow economic recovery from the global financial crisis, oversupply of occupiable space, and limited availability of credit. However, long-term trends of population growth, deteriorating infrastructure and changing needs for buildings—driven by both socioeconomic and technological changes—all imply a continuing and growing need for construction activity. In certain markets, including our core markets in North America, the industry's growth rate also is benefitting as a result of the recovery from the factors described above. Overall, global construction spending is expected to grow at a compounded annual growth rate of 5.2% from 2010 to 2020, according to Global Construction Perspectives.

        Each construction project requires a complex collaborative effort between the many different participants that play a part throughout or at different stages of the project's lifecycle. The practices used by the industry to manage this complexity have been largely manual, paper-based and inefficient, or have relied on technology solutions not designed for collaboration. As a result, we believe participants face numerous challenges collaborating on construction projects, including significant administrative overhead burdens; disparate standards, procedures and systems; lack of workflow discipline and control; inefficient process coordination; errors, inconsistencies and omissions; limited risk management tools; and siloed applications and data repositories. Furthermore, the industry is changing in response to the many issues it faces, including those resulting from the global financial crisis, new approaches to project delivery and an increased focus on risk management, transparency and efficiency.

        In order to meet these challenges and as companies seek to support growth while limiting costs, we believe industry participants are increasingly adopting software solutions that can also increase visibility into and control over critical stages of the construction lifecycle. We believe software solutions delivered on an on-demand basis and by a neutral third party are necessary to meet this demand. Such solutions can facilitate the exchange of data and information in a cost-effective, flexible, scalable and secure manner.

 

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        We believe therefore there is a significant opportunity to offer comprehensive on-demand collaboration software solutions that are designed to address the evolving needs of the construction industry as it responds to the many challenges it faces and seeks to achieve greater operational and financial efficiencies, better manage risk and grow significantly over the next decade and beyond.

Our Solution

        Our on-demand business collaboration software solutions address the several challenges associated with the traditional paper-based and personnel-intensive manual approaches or with technology solutions not designed for collaborative processes, and support many of the trends currently occurring within the commercial construction industry. We believe our solutions benefit our clients because they are:

    Designed specifically for collaborative processes.  Our collaboration solutions facilitate the sharing and exchange of data between and within organizations and provide robust workflow tools to ensure that necessary steps are carried out in the right sequence by appropriately authorized users.

    Developed to meet the needs of the construction industry.  Our solutions are built to meet the unique requirements of the construction industry and our delivery capabilities have been organized around the specialized needs of our clients.

    Delivered through a trusted and neutral third party.  We host, provide access to and facilitate the exchange of information, enabling project participants to achieve a common and transparent view of project status.

    Valuable to all participants.  Our solutions are designed to reduce costs, manage risk and improve visibility and decision-making for each participant independent of their specific role or responsibility.

    Interfaced with existing enterprise systems.  Our solutions leverage and protect our clients' existing investments, facilitate their business processes and reduce or eliminate duplicate data entry.

    Easy to implement, use and adopt.  Our solutions can be configured by our clients to meet their specific needs without needing customization, and can be rapidly implemented by our clients across their organizations.

    Accompanied by high levels of training and support to all users.  Our client services team provides extensive on-site training for enterprise clients and unlimited remote live support for all end-users.

Our Key Business Attributes

        Key attributes of our business include the following:

    Large, attractive market.  The construction industry affords us a large market in which to sell our solutions and we believe it is currently underutilizing on-demand business collaboration software solutions.

    Next-generation approach to solving the challenges facing our clients.  We believe ours is a disruptive approach to solving business-to-business collaboration challenges and also can be applied to many processes and industries.

    High recurrence of fees, favorable timing of cash flow and predictable reported revenue.  Our revenue is derived primarily from fees driven by construction project activity and from monthly fees. We increase revenue both as we add clients and our clients increase the number of their

 

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      projects on our solutions. We historically have experienced high recurrence of fees, favorable timing of cash flow and predictable reported revenue.

    Highly defensible market position.  We believe our industry expertise, leading market share, large installed base and strong intellectual property portfolio represent significant barriers to successful competitive entry.

    Ability to differentiate through our business and technology approach.  We believe we are uniquely positioned to integrate our solutions with other enterprise software and support our solutions with a strong client service capability, and that we have the resources to support significant investment.

    Focus on quality of service.  Our solutions support mission-critical processes and time-sensitive interactions and communications, which require timely and accurate client support. Client service and support is a cornerstone of our value proposition, and we believe it is a significant element of our long-term success.

Our Strategy

        We intend to leverage our existing solutions and industry presence to become the industry standard for collaboration solutions in the construction industry, both domestically and in targeted international markets. The key elements of our strategy to accomplish these objectives are as follows:

    Increase our market penetration of the construction industry.  We intend to actively pursue new client relationships with owners/developers, general contractors and subcontractors that do not currently use our solutions. We intend to focus our existing sales and marketing capabilities on large, strategic owners/developers and general contractors, as they can generate significant, multi-year growth. At the same time, we plan to launch solution and channel initiatives that target smaller industry participants in a cost-effective fashion.

    Expand our suite of solutions.  We plan to continue to use our domain expertise in construction and to work closely with our clients to identify and develop new applications, features and functionality that address business processes we currently do not support.

    Pursue acquisitions of complementary businesses.  We believe that acquisitions of complementary businesses can help us expand our suite of solutions more rapidly, enter into new markets, expand our client base and increase the knowledge and skill sets within our organization. We believe we can enhance the value of these solutions through our financial, technical and other resources, industry presence and their integration into our existing suite of solutions.

    Increase our client penetration.  We believe we have a significant opportunity to cross-sell to our existing clients both our current and our future solutions, and increase the utilization or adoption of our solutions to include a greater number of their projects. We also plan to integrate both our current and our future solutions into a single platform solution, which we believe will significantly increase the value of our solutions and drive increased adoption of multiple solutions by our clients.

    Expand globally.  We believe a substantial opportunity exists to grow sales of our solutions globally. To date, substantially all of our revenue has been generated from clients located in the United States and Canada. However, in certain markets, due to local business practices and regulations, we believe our value proposition could be even stronger than in our established markets in North America. Certain of our large current and potential construction clients also have or are seeking to establish international operations, and have indicated their interest that we support their current or planned international operations, especially as they seek new growth

 

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      opportunities outside their traditional North American markets. We believe we have accumulated significant experience with the process necessary to enter new markets successfully.

    Increase the number of industries we serve.  Our solutions are designed for complex collaborative environments with significant subcontracting activity. We believe that these characteristics exist in several industries in addition to the construction industry. While we currently do not operate in these other industries, we believe based on our research that there could be demand for our solutions in these other industries.

Our Sales Approach

        We generally market and sell our solutions directly to our clients. Our solutions generally provide significantly greater benefits if deployed to manage all of a client's related construction activities, which requires buy-in and commitment at the highest levels of our clients' organizations. In our experience, this requires an in-person, relationship-driven, consultative approach with a high degree of solution and domain expertise on the part of our employees. Certain of our solutions or clients, however, are effectively sold and supported remotely, primarily over the phone and using email, webinars and other appropriate methods. We intend to grow our remote sales and support capability significantly in order to address the market opportunity we believe is available to us, as well as to support new solutions and segment initiatives.

Risks Affecting Us

        Our business is subject to a number of risks, which could materially and adversely affect our business, financial condition, results of operations and prospects. You should consider carefully these risks before making an investment decision. These risks are described more fully in the "Risk Factors" section beginning on page 12 and include, but are not limited to, the following:

    we have a history of losses and we do not expect to be profitable for the foreseeable future;

    we may be adversely affected by conditions in the global and domestic economy or a downturn in the construction industry;

    we may not be able to execute our growth strategy including expanding into international markets, successfully acquiring complementary businesses or entering into new industries;

    we may not succeed in developing the market for our solutions;

    we derive a significant portion of our revenue from a relatively limited number of large client relationships and from a single software solution; and

    we may be adversely affected if our solutions fail to perform properly.

Recent Developments

        In March 2013, we entered into a non-binding letter of intent related to a potential software development arrangement with an existing client. This development arrangement would result in our company acquiring certain intellectual property rights from the client in connection with the further joint development of these intellectual property rights for use by the client and subsequent commercialization by us in the form of a new collaboration solution for the construction market. The letter of intent contemplates that, in consideration for the transfer of the intellectual property rights and other consideration, including cash, we will issue a number of shares of common stock equal in value to $12 million with the value of such shares set at 85% of the initial public offering price in this offering. The letter of intent contemplates that 50% of the shares will be issued upon signing of a definitive agreement with the remainder issued over the term of the development arrangement upon the achievement of specified milestones. This development arrangement is subject to further due

 

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diligence by us and the client and the parties' negotiation and agreement to acceptable terms of a definitive agreement. Accordingly, the terms described above are subject to change.

Corporate Information

        Our business was founded in 2004 and we were incorporated in Delaware in 2007. Our principal executive offices are located at 1405 Lake Cook Road, Deerfield, IL 60015, and our telephone number is (847) 457-6500. Our website address is www.texturacorp.com. Information contained on our website is not incorporated by reference into this prospectus, and should not be considered to be part of this prospectus.

        "Textura," "Textura Construction Payment Management," "Submittal Exchange," "GradeBeam," "Greengrade" and "PlanSwift" are registered trademarks or logos appearing in this prospectus and are the property of Textura Corporation or one of our subsidiaries. All other trademarks, service marks and trade names in this prospectus are the property of their respective owners.

 

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The Offering

Common stock we are offering

  4,500,000 shares

Common stock to be outstanding after this offering

 

21,461,604 shares (22,136,604 shares if the over-allotment option is exercised in full)

Use of proceeds

 

We will use $8.1 million of the net proceeds from this offering to repay indebtedness. We currently intend to use the remainder of the net proceeds for financing our growth, working capital and other general corporate purposes. In addition, we believe that opportunities may exist from time to time to expand our current business through acquisitions of, or investments in, complementary companies, products or technologies. Other than as described in "—Recent Developments," we have no current agreements, commitments or understandings for any specific acquisitions or investments at this time. However, we may use a portion of the net proceeds for these purposes in the future.

Underwriters' option to purchase additional shares

 

The underwriters have an option to purchase a maximum of 675,000 additional shares of common stock from us to cover over-allotments. The underwriters could exercise this option at any time within 30 days from the date of this prospectus.

Risk Factors

 

See "Risk Factors" and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

New York Stock Exchange symbol

 

"TXTR"

        Certain of our directors and existing stockholders, including certain affiliates of our directors, have indicated an interest in purchasing an aggregate of approximately $15.0 million, or 24% based on an assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, in shares of our common stock being offered in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, less or no shares in this offering to any of these directors or stockholders, or any of these directors or stockholders may determine to purchase more, less or no shares in this offering. Any shares purchased by these potential investors will be subject to lock-up restrictions described in "Underwriting."

        The number of shares of common stock that will be outstanding after this offering is based on the number of shares outstanding as of March 31, 2013 and excludes:

    623,834 shares of common stock issuable upon settlement of restricted stock units outstanding as of March 31, 2013;

    2,442,514 shares of common stock issuable upon the exercise of stock options outstanding as of March 31, 2013, with a weighted average exercise price of approximately $13.77 per share;

    1,332,593 shares of common stock issuable upon the exercise of warrants to purchase common stock outstanding as of March 31, 2013, with a weighted average exercise price of approximately $14.71 per share;

 

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    166,785 shares of common stock, issuable upon the conversion of 58,727 shares of convertible preferred stock issued after March 31, 2013 upon the exercise of warrants outstanding on March 31, 2013, as if converted on March 31, 2013; and

    6,000,000 shares of common stock reserved for future awards under our 2013 Long Term Incentive Plan including awards to be granted effective with this offering consisting of restricted stock units having an aggregate grant date fair value, based on the initial public offering price, equal to $1.1 million and stock options having an aggregate grant date fair value of approximately $7.1 million with exercise prices equal to the initial public offering price.

        Unless otherwise indicated, all information in this prospectus is presented on a pro forma basis assuming:

    the conversion of all shares of our convertible preferred stock outstanding as of March 31, 2013 into 5,168,510 shares of our common stock and the issuance of 426,403 shares of common stock in satisfaction of the dividends accrued on such shares of convertible preferred stock, based on a value equal to the assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and assuming the conversion had occurred on March 31, 2013;

    the conversion of all Submittal Exchange Holdings, LLC Class A Preferred Units into 963,400 shares of our common stock;

    the conversion of all of our outstanding convertible debentures and accrued interest thereon through March 31, 2013 into 468,457 shares of our common stock at a conversion price equal to the initial offering price based on an assumed initial offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and assuming the conversion had occurred on March 31, 2013;

    no exercise by the underwriters of their over-allotment option to purchase up to 675,000 additional shares of common stock from us; and

    the filing of an amendment to our restated certificate of incorporation.

        All outstanding shares of our convertible preferred stock, Submittal Exchange Holdings, LLC Class A Preferred Units and convertible debentures automatically convert into shares of our common stock immediately prior to or concurrently with the completion of this offering. Because the number of shares that will be issued in satisfaction of the accrued dividends on the convertible preferred stock and upon conversion of the convertible debentures depends upon the actual initial public offering price per share in this offering and the closing date of this offering, the actual number of shares issuable at such time will differ from the number of shares set forth above. Assuming the closing of this offering occurred on June 12, 2013, based on the shares of common stock outstanding on the date of this prospectus and an assumed initial public offering price of $14.00 per share, there would be 21,649,663 shares of common stock outstanding immediately following this offering after giving effect to the conversion of all outstanding convertible preferred stock, convertible debentures and Submittal Exchange Holdings, LLC Class A Preferred Units, and the satisfaction of all accrued dividends and interest thereon through such date.

 

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Summary Consolidated Financial Data

        The following summary consolidated financial data should be read together with "Use of Proceeds," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and related notes included elsewhere in this prospectus. We derived the summary consolidated statement of operations data for each of the years ended September 30, 2010, 2011 and 2012 and the summary consolidated balance sheet data as of September 30, 2012 from our audited consolidated financial statements included elsewhere in this prospectus. We derived the summary consolidated statement of operations data for the six months ended March 31, 2012 and 2013 and the summary consolidated balance sheet data as of March 31, 2013 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited condensed consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the financial information contained in those statements. Our historical results are not necessarily indicative of the results that may be expected in the future.

 
  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  
 
  (in thousands, except per share data)
 

Consolidated Statement of Operations Data:

                               

Revenue(1)

  $ 6,020   $ 10,514   $ 21,681   $ 9,673   $ 15,319  

Operating expense:

                               

Cost of services(2)

    4,187     4,395     6,152     2,788     3,468  

General and administrative

    5,654     6,856     11,105     5,391     8,266  

Sales and marketing

    3,122     2,601     5,995     2,509     4,102  

Technology and development

    4,747     6,169     11,123     5,545     6,345  

Depreciation and amortization

    2,621     2,161     4,080     1,963     1,873  
                       

Total operating expense

    20,331     22,182     38,455     18,196     24,054  
                       

Loss from operations

    (14,311 )   (11,668 )   (16,774 )   (8,523 )   (8,735 )

Other expense, net

    (1,612 )   (7,260 )   (2,019 )   (989 )   (2,119 )
                       

Loss before income taxes

    (15,923 )   (18,928 )   (18,793 )   (9,512 )   (10,854 )

Income tax provision

                    84  
                       

Net loss

    (15,923 )   (18,928 )   (18,793 )   (9,512 )   (10,938 )

Less: Net loss attributable to non-controlling interests

            (2,866 )   (1,108 )   (1,757 )
                       

Net loss attributable to Textura Corporation

    (15,923 )   (18,928 )   (15,927 )   (8,404 )   (9,181 )

Accretion (decretion) of redeemable Series A-1 preferred stock

    (19,802 )   11,486     3,373     505     1,239  

Accretion of redeemable non-controlling interest

                    147  

Dividends on Series A-2 preferred stock

    480     480     480     240     240  

Undistributed earnings allocated to participating securities

    1,506                  
                       

Net income (loss) available to Textura Corporation common stockholders

  $ 1,893   $ (30,894 ) $ (19,780 ) $ (9,149 ) $ (10,807 )
                       

Net income (loss) available to Textura Corporation common stockholders, basic and diluted

  $ 1,893   $ (30,894 ) $ (19,780 ) $ (9,149 ) $ (10,807 )

Net income (loss) per share available to Textura Corporation common stockholders:

                               

Basic

  $ 0.27   $ (4.18 ) $ (2.31 ) $ (1.07 ) $ (1.18 )

Diluted

  $ 0.26   $ (4.18 ) $ (2.31 ) $ (1.07 ) $ (1.18 )

Weighted average number of common shares outstanding:

                               

Basic

    6,942     7,392     8,548     8,544     9,161  

Diluted

    7,166     7,392     8,548     8,544     9,161  

Pro forma net loss per share, basic and diluted(3)

              $ (1.05 )       $ (0.54 )
                             

Pro forma weighted average common shares outstanding, basic and diluted(3)

                16,689           16,998  
                             

 

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  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  
 
  (dollars in thousands, except where otherwise indicated)
 

Operational Data:

                               

Activity-driven revenue

  $ 5,705   $ 9,875   $ 19,064   $ 8,496   $ 12,758  

Organization-driven revenue

    315     639     2,617     1,177     2,561  
                       

Total revenue

  $ 6,020   $ 10,514   $ 21,681   $ 9,673   $ 15,319  
                       

Activity-driven revenue:

                               

Number of projects added

    1,898     2,475     4,167     1,766     2,291  

Client-reported construction value added (billions)           

  $ 18.4   $ 19.4   $ 33.8   $ 16.8   $ 18.1  

Active projects during period

    2,783     3,952     6,393     4,074     6,249  

Organization-driven revenue:

                               

Number of organizations

    151     945     5,204     4,029     6,997  

Adjusted EBITDA(4)

  $ (9,565 ) $ (8,031 ) $ (9,346 ) $ (4,728 ) $ (4,951 )

Deferred revenue balance as of the end of period

  $ 2,396   $ 5,279   $ 14,166   $ 10,894   $ 16,963  

 

 
  March 31, 2013  
 
  Actual   Pro forma(6)   Pro forma
as adjusted(7)
 
 
  (in thousands)
 

Consolidated Balance Sheet Data:

                   

Cash

  $ 5,021   $ 5,021   $ 53,162  

Property and equipment, net

    18,133     18,133     18,133  

Goodwill and other intangibles

    34,983     34,983     34,983  

Total assets

    64,546     64,546     112,687  

Deferred revenue, current and long-term

    16,963     16,963     16,963  

Total debt, current and long-term(5)

    24,637     19,056     11,525  

Redeemable Series A-1 preferred stock

    44,374          

Total Textura Corporation stockholders' equity (deficit)

    (48,120 )   9,606     65,380  

(1)
The acquisitions of GradeBeam and Submittal Exchange contributed $4.9 million and $1.9 million of revenue for the fiscal year ended September 30, 2012 and the six months ended March 31, 2012, respectively. The acquisition of PlanSwift contributed $1.0 million of revenue for the six months ended March 31, 2013.

(2)
Cost of services is exclusive of depreciation and amortization, which is shown separately below.

(3)
Unaudited basic and diluted pro forma net loss per share has been calculated assuming the conversion (using the if-converted method) of all outstanding shares of our convertible preferred stock, Submittal Exchange Holdings, LLC Class A Preferred Units and convertible debentures into our common stock and the settlement of restricted stock units that become fully vested upon this offering as though the conversion and settlement had occurred on October 1, 2011. See Note 15 to our audited consolidated financial statements and Note 9 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus. In addition, the pro forma calculation for the six months ended March 31, 2013 assumes the sale of 582,080 shares of common stock issued by us at the assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, the proceeds from which will be used to repay indebtedness of $8.1 million.

(4)
Adjusted EBITDA represents loss before interest, taxes, depreciation and amortization, share-based compensation expense and acquisition-related expense. Adjusted EBITDA is not determined in accordance with accounting principles generally accepted in the United States ("GAAP"), and is a performance measure used by management in conjunction with traditional GAAP operating performance measures as part of the overall assessment of our performance including:

for planning purposes, including the preparation of the annual budget;

to evaluate the effectiveness of business strategies; and

as a factor when determining management's total compensation.


We believe the use of Adjusted EBITDA as an additional operating performance metric provides greater consistency for period-to-period comparisons of our operations. For our internal analysis, Adjusted EBITDA

 

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    removes fluctuations caused by changes in our capital structure (interest expense) and non-cash items such as depreciation, amortization and share-based compensation. These excluded amounts in any given period may not directly correlate to the underlying performance of the business or may fluctuate significantly from period to period due to the issuance or conversion of convertible debentures, acquisitions, fully amortized tangible or intangible assets, or the timing and pricing of new share-based awards. We also believe Adjusted EBITDA is useful to investors and securities analysts in evaluating our operating performance as it provides them an additional tool to compare business performance across companies and periods.


Adjusted EBITDA is not a measurement under GAAP and should not be considered an alternative to net loss or as an alternative to cash flows from operating activities. The Adjusted EBITDA measurement has limitations as an analytical tool and the method of calculation may vary from company to company.


The following table presents a reconciliation from the most directly comparable GAAP measure, net loss, to Adjusted EBITDA:

 
  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  
 
  (in thousands)
 

Net loss

  $ (15,923 ) $ (18,928 ) $ (18,793 ) $ (9,512 ) $ (10,938 )

Net interest expense

    1,612     7,260     2,200     1,074     2,477  

Income tax provision

                    84  

Depreciation and amortization

    2,621     2,161     4,080     1,963     1,873  
                       

EBITDA

    (11,690 )   (9,507 )   (12,513 )   (6,475 )   (6,504 )

Share-based compensation expense

    2,125     1,468     2,676     1,355     1,139  

Acquisition-related expense

        8     491     392     414  
                       

Adjusted EBITDA

  $ (9,565 ) $ (8,031 ) $ (9,346 ) $ (4,728 ) $ (4,951 )
                       
(5)
Total debt, representing the current and long-term portions, includes our loan payable to related party for the purchase of land and construction of our corporate headquarters, convertible debentures, notes payable and leases payable.

(6)
The pro forma consolidated balance sheet data gives effect to the automatic conversion of all outstanding shares of our convertible preferred stock into shares of our common stock; the automatic conversion of all Submittal Exchange Holdings, LLC Class A Preferred Units into shares of our common stock; the automatic conversion of all of our outstanding convertible debentures and accrued interest thereon through March 31, 2013 into shares of our common stock at a conversion price equal to the initial offering price based on an assumed initial offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus; and compensation expense of $8.7 million related to restricted stock units that become payable upon completion of this offering.

(7)
The pro forma as adjusted consolidated balance sheet data gives effect to the pro forma adjustments described in footnote (6) above, the sale by us of 4,500,000 shares of common stock in this offering based on an assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and the application of the proceeds therefrom as described in "Use of Proceeds."

 

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. If any of the following risks is realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose part or all of your investment.

Risks Related to Our Business and Industry

We have a history of cumulative losses and we do not expect to be profitable for the foreseeable future.

        We have incurred significant losses in each period since our inception in 2004. We incurred net losses of $15.9 million in the fiscal year ended September 30, 2010, $18.9 million in the fiscal year ended September 30, 2011 and $18.8 million in the fiscal year ended September 30, 2012. As of March 31, 2013, we had an accumulated deficit of $150.4 million. These losses and accumulated deficit reflect the substantial investments we made to acquire new enterprise client relationships and develop our solutions. We expect our operating expenses to increase in the future due to anticipated increases in research and development expenses, sales and marketing expenses, operations costs and general and administrative costs, and, therefore, we expect our losses to continue for the foreseeable future. Although our revenues have increased significantly over the past three years, you should not consider our recent growth as indicative of our future performance. We cannot assure you that we will achieve profitability in the future, nor that, if we do become profitable, we will sustain profitability.

Economic conditions of the global and domestic economy or a substantial or prolonged downturn in the commercial construction business cycle may have a material adverse effect on our business, financial condition, results of operations and prospects.

        Economic trends that negatively affect the commercial construction industry may adversely affect our business by reducing the number of commercial construction projects that are occurring, the number of general contractors and subcontractors operating in our markets, or the amount that such clients spend on our solutions. The global and domestic economies currently face a number of economic challenges, including threatened sovereign defaults, credit downgrades, restricted credit for businesses and consumers and potentially falling demand for a variety of products and services. These factors have materially and adversely affected, and may continue to materially and adversely affect, the financial markets and the availability of credit for the commercial construction industry. A reduction in the number of commercial construction projects that are undertaken, the number of general contractors and subcontractors operating in our markets or the amount that clients spend on solutions due to economic conditions could have a material adverse effect on our business, financial condition, results of operations and prospects.

We have experienced rapid growth in recent periods. If we fail to effectively manage our growth, our business and operating results may suffer.

        We have experienced, and expect to continue to experience, significant growth. This rapid growth has placed, and will continue to place, significant demands on our management and our operational and financial infrastructure. We intend to further expand our overall business, client base, headcount and operations, both domestically and internationally. We expect that we will be required to continue to commit substantial financial, operational and technical resources to implement our growth strategy. Continued growth could also strain our ability to maintain reliable operation of our solutions for our clients, develop and improve our operational, financial and management controls and recruit, train and retain highly skilled personnel. As our operations grow in size, scope and complexity, we will also need to continue to improve and upgrade our systems and infrastructure, which will require significant expenditures and allocation of valuable management resources. If we fail to effectively manage our

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growth, our business, financial condition, results of operations and prospects could be materially adversely affected.

We may not succeed in developing the market for our solutions and we may face competition that is harmful to our business.

        We face challenges in developing a market for our solutions and from current and potential products developed or sold by third-party competitors. Currently, our largest source of competition for CPM is from existing manual processes or internally-developed systems that our potential clients have been using for a long period of time and from which they may be reluctant to change. In addition, some competitors may address part of CPM's functional capabilities.

        For our solutions other than CPM, we face current competition from both traditional, larger software vendors offering enterprise-wide software applications and services and smaller companies offering point solutions for the commercial construction industry. Our principal competitors vary depending on the solution we offer. Some of our competitors enjoy substantial competitive advantages over us, such as greater name recognition, more comprehensive and varied products and services, and substantially greater financial, technical and other resources. Certain of our competitors offer, or may in the future offer, lower priced, or free, products or services that compete with our solutions.

        In addition, our industry is highly fragmented, and we believe it is likely that some of our existing competitors will consolidate or will be acquired. Some of our competitors may also enter into new alliances with each other or may establish or strengthen cooperative relationships with systems integrators, third-party consulting firms or other parties. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure, reduced profit margins and our loss of market share and could result in one or more competitors with greater financial, technical, marketing, service and other resources, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

A significant portion of our revenue is derived from a relatively limited number of large client relationships and any loss of, or decrease in sales related to, these client relationships could harm our results of operations.

        A significant portion of our revenue is derived from our relationships with a relatively limited number of large clients, either directly from those clients or from the subcontractors also working on projects that those clients control. Revenue derived from our ten largest client relationships, collectively, accounted for 41.5% of our revenue in fiscal 2012. Our largest client relationship accounted for 10.8% of our revenue in fiscal 2012. This revenue is generated from these clients' use of our CPM solution. We may continue to experience ongoing client concentration, particularly if we are successful in attracting large general contractor clients and in selling additional solutions to our existing clients. In addition, it is possible that revenue from these client relationships, either individually or as a group, may not reach or exceed historical levels in any future period or that one or more of our existing clients may stop utilizing our solutions entirely. We believe that the implementation of our CPM solution results in our clients changing their business processes in ways that make it difficult to discontinue use; however, the loss or significant reduction of business from one or more of our major client relationships would materially adversely affect our business, financial condition, results of operations and prospects.

Our business could be adversely affected if our clients are not satisfied with our solutions.

        Our business model depends in large part on our ability to continue to ensure our clients' satisfaction with our solutions and their resulting decision to continue their reliance on our solutions. Our client services group is organized to provide high levels of service and support to our clients. However, if a client is not satisfied with the functionality or quality of our solutions, or with the type of solutions provided, then they may elect to discontinue using our solutions for future projects or we could incur additional costs to address their dissatisfaction. In addition, negative publicity related to our

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client relationships or the satisfaction of our clients, regardless of its accuracy, may further damage our business by affecting our ability to compete for new enterprise relationships with prospective clients.

If our solutions fail to perform properly, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims.

        Our solutions are inherently complex and involve the generation and exchange of legal documentation and facilitation of financial transactions. In particular, clients using our CPM solution rely on us to properly generate lien waivers and initiate payment instructions. Our solutions may contain material defects or errors and rely in part on data entered by our clients, the accuracy of which we do not control. This may result in our solutions failing to perform as intended. Such failure may result in:

    diversion of development and client service resources;

    injury to our reputation;

    loss of existing clients and difficulty in attracting new clients;

    claims by clients that we are liable for any damages to them as a result of such defects or errors;

    increased insurance costs; and

    sales credits or refunds for prepaid amounts related to unused subscription services.

        The costs incurred in correcting any material defects or errors or in connection with any of the consequences above might be substantial and could adversely affect our business, financial condition, results of operations and prospects.

        The availability or performance of our solutions could be adversely affected by a number of factors, including clients' inability to access the Internet, the failure of our network or software systems, security breaches, variability in user traffic for our solutions or the operation of the ACH Network and other payment clearing systems. Furthermore, because of the large amount of data that we collect and manage, it is possible that hardware failures or errors in our systems could result in data loss or corruption, or cause the information that we collect to be incomplete or contain inaccuracies that our clients regard as significant.

        Additionally, our clients may use our solutions together with software and hardware applications and products from other companies. As a result, when problems occur, it may be difficult to determine the cause of the problem, and our solutions, even when not the ultimate cause of the problem, may be misidentified as the problem. If our solutions are misidentified as the source of the problem, we might incur costs associated with litigation or correcting the problem, and our reputation could be damaged, resulting in a loss of clients.

        Although we currently carry errors and omissions insurance, such insurance may be inadequate or may not be available in the future on acceptable terms, or at all. In addition, our policy may not cover all claims made against us, and defending a suit, regardless of its merit, could be costly and divert management's attention.

We derive a substantial portion of our revenues from a single software solution.

        We derive a substantial portion of our total revenues from sales of CPM. Therefore, any factor adversely affecting sales of this solution, including market acceptance, product competition, performance and reliability, reputation, price competition, or economic and market conditions, could have a disproportionally material adverse effect on our business, financial condition, results of operations and prospects.

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We have a long selling cycle to secure a new enterprise relationship for CPM, which requires significant investments of resources.

        We typically face a long selling cycle of a year or longer to secure a new enterprise client relationship for CPM, which typically requires significant investment of resources and time by both our clients and us. Our enterprise selling cycle is subject to many risks and delays over which we have little control, including our clients' decisions to choose alternatives to our solutions (including internally-developed solutions) and the timing of our clients' budget cycles and approval processes. Before committing to use our solutions, potential clients require us to spend time and resources educating them on the value of our solutions and assessing the feasibility of integrating our solutions with their existing technology. If a potential client does not ultimately choose our solutions, we are unable to recoup these expenses. Even where we have secured a new enterprise relationship with a general contractor or owner/developer, there are no assurances that the general contractor or owner/developer will choose to use our solutions for any or all of their current or future projects.

Our business, financial condition, results of operations and prospects may be materially adversely affected if we are unable to cross-sell our solutions.

        A significant component of our growth strategy is to increase cross-selling of our solutions to current and future clients. We may not be successful in cross-selling our solutions, however, if our clients find our additional solutions to be unnecessary or unattractive. We have invested, and intend to continue to invest, significant resources in developing and acquiring additional solutions, which resources may not be recovered if we are unable to successfully cross-sell these solutions to clients using our existing solutions. Any failure to sell additional solutions to current and future clients could materially adversely affect our business, financial condition, results of operations and prospects.

We may be unable to adequately protect, and we may incur significant costs in defending, our intellectual property and other proprietary rights.

        Our success depends, in part, upon our intellectual property rights. We rely upon a combination of trademark, trade secret, copyright, patent and unfair competition laws, as well as license agreements and other contractual provisions, to protect our intellectual property and other proprietary rights. In addition, we attempt to protect our intellectual property and proprietary information by requiring our employees and consultants to enter into confidentiality, non-competition and assignment of inventions agreements. To the extent that our intellectual property and other proprietary rights are not adequately protected, third parties might gain access to our proprietary information, develop and market solutions similar to ours, or use trademarks similar to ours. Existing United States federal and state intellectual property laws offer only limited protection. Moreover, the laws of Canada, Australia, New Zealand, and any other foreign countries in which we may market our solutions in the future, may afford little or no effective protection of our intellectual property. Changes in patent law, such as changes in the law regarding patentable subject matter, could also impact our ability to obtain patent protection for our solutions. In particular, recent amendments to the United States patent law became effective in 2012 and may affect our ability to protect our solutions and defend against claims of patent infringement.

        In addition, patents may not be issued with respect to our pending or future patent applications, and our patents may not be upheld as valid, may be contested or circumvented or may not prevent the development of competitive solutions. If we resort to legal proceedings to enforce our intellectual property rights or to determine the validity and scope of the intellectual property or other proprietary rights of others, the proceedings could be burdensome and expensive. Such legal proceedings or reductions in the legal protection available for intellectual property rights could have a material adverse effect on our business, financial condition, results of operations and prospects, and we may not prevail.

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We could be subject to assertions of infringement or other violations by us of intellectual property rights (whether actual or alleged), which could result in significant costs and substantially harm our business, financial condition, results of operations and prospects.

        Software and technology companies are frequently subject to litigation based on allegations of infringement, misappropriation or other violations of intellectual property rights or rights related to use of technology. Some software and technology companies, whether our direct competitors or not, own large numbers of patents, copyrights, trademarks and trade secrets, which they may use to assert claims against us. Third parties may in the future assert that we have infringed, misappropriated or otherwise violated their intellectual property rights, and as we face increasing competition, the possibility of intellectual property rights claims against us grows. Such litigation may involve patent holding companies or other adverse patent owners who have no relevant product revenue, and therefore our own issued and pending patents may provide little or no deterrence to these patent owners in bringing intellectual property rights claims against us. Existing laws and regulations are evolving and subject to different interpretations, and various federal and state legislative or regulatory bodies may expand current or enact new laws or regulations. Although we believe that our solutions do not infringe upon the intellectual property rights of third parties, we cannot assure you that we are not infringing or violating any third-party intellectual property rights or rights related to use of technology.

        Any intellectual property infringement or misappropriation claim or assertion against us, our clients or strategic alliance partners, and those from whom we license technology and intellectual property could have a material adverse effect on our business, financial condition, results of operations and prospects regardless of the validity or outcome. If we are forced to defend against any infringement or misappropriation claims, whether they are with or without merit, are settled out of court, or are determined in our favor, we may be required to expend significant time and financial resources on the defense of such claims. Furthermore, an adverse outcome of a dispute may require us to pay damages, potentially including treble damages and attorneys' fees, if we are found to have willfully infringed a party's intellectual property; cease making, licensing or using technology, content or material that is alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our technology; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content or materials; and to indemnify our partners and other third parties. Royalty or licensing agreements, if required or desirable, may be unavailable on terms acceptable to us, or at all, and may require significant royalty payments and other expenditures. In addition, any lawsuits regarding intellectual property rights, regardless of their success, could be expensive to resolve and would divert the time and attention of our management and technical personnel.

We rely on technology and intellectual property of third parties, the loss of which could limit the functionality of our solutions and disrupt our business.

        We use technology and intellectual property licensed from unaffiliated third parties in certain of our solutions, and we may license additional third-party technology and intellectual property in the future. Any errors or defects in this third-party technology and intellectual property could result in errors that could harm our brand and business. In addition, licensed technology and intellectual property may not continue to be available on commercially reasonable terms, or at all. The loss of the right to use or allow our clients to use this third party technology could limit the functionality of our solutions and might require us to redesign our solutions.

        Further, although we believe that there are currently adequate replacements for the third-party technology and intellectual property we presently use, the loss of our right to use any of this technology and intellectual property could result in delays in producing or providing affected solutions until equivalent technology or intellectual property is identified, licensed or otherwise procured, and integrated. Our business would be disrupted if any technology and intellectual property we license from others or functional equivalents of this software were either no longer available to us or no longer

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offered to us on commercially reasonable terms. In either case, we would be required either to attempt to redesign our solutions to function with technology and intellectual property available from other parties or to develop these components ourselves, which would result in increased costs and could result in delays in sales and the release of new solution offerings. Alternatively, we might be forced to limit the features available in affected solutions. Any of these results could harm our business and impact our results of operations.

The use of open source software in our solutions and technology may expose us to additional risks and harm our intellectual property.

        We use open source software development tools and may incorporate open source software into portions of our technology. Given the nature of open source software, third parties might assert copyright and other intellectual property infringement claims against us based on our use of certain open source software programs. The terms of many open source licenses to which we are subject have not been interpreted by United States or foreign courts, and there is a risk that those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our solutions. In that event, we could be required to seek licenses from third parties in order to continue offering our solutions, to redevelop our solutions, to discontinue sales of our solutions or to release our proprietary software code under the terms of an open source license, any of which could materially and adversely affect our business, financial condition, results of operations and prospects.

        Some of our solutions use software development tools that are subject to one or more open source licenses. Open source software is typically freely accessible, usable and modifiable. Certain open source software licenses require a user who intends to distribute the open source software as a component of the user's software to disclose publicly part or all of the source code to the user's software. In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on unfavorable terms or at no cost. This can subject previously proprietary software to open source license terms. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on origin of the software.

        While we monitor the use of all open source software in our solutions, processes and technology and try to ensure that no open source software is used in such a way as to require us to disclose the source code to the related solution when we do not wish to do so, such use may have inadvertently occurred in deploying our proprietary solutions. Additionally, if a third-party software provider has incorporated certain types of open source software into software we license from such third party for our products and solutions, we could, under certain circumstances, be required to disclose the source code to our solutions. This could harm our intellectual property position and have a material adverse effect on our business, financial condition, results of operations and prospects.

Certain of our solutions are dependent on the use and acceptance of electronic signatures, which are governed by relatively new laws and their acceptance in the commercial construction industry may not be complete.

        In the United States, the enforceability of electronic transactions is primarily governed by the Electronic Signatures in Global and National Commerce Act, a federal law enacted in 2000 that largely preempts inconsistent state law, and the Uniform Electronic Transactions Act, a uniform state law that was finalized by the National Conference of Commissioners on Uniform State Laws in 1999 and has now been adopted by most states. If, in the United States or other markets where we offer our solutions, a court were to find that electronic signatures are insufficient to establish that the documents generated by our system have been signed by an authorized person, existing laws were to change, or participants in the commercial construction industry were unwilling to rely on electronic signatures, then acceptance of our solutions would be adversely affected.

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Our business is substantially dependent on market demand for, and acceptance of, the on-demand model for the use of software in the commercial construction industry.

        We sell our collaboration solutions as on-demand solutions, which are an alternative to traditional licensed hardware and software solutions, and solutions developed in-house to which many of our clients or potential clients are accustomed. Our collaboration solutions rely on the acceptance and proliferation of web-based software, which may not be widespread or happen in a timely fashion. Under the perpetual or periodic license model for software procurement, users of the software typically run applications on their hardware. Because commercial construction companies utilizing these perpetual or periodic license models may be predisposed to maintaining control of their IT systems and infrastructure, there may be resistance to the concept of accessing the functionality of software provided as a service through a third party.

        Furthermore, many commercial construction companies currently conduct the business processes that our collaboration solutions support using paper-based processes and a combination of mail services, telephone, facsimile, email and the Internet. Growth in the demand for our collaboration solutions depends on the adoption of our technology-enabled commercial construction management solutions and we may not be able to persuade these prospective clients to change their traditional processes. If our collaboration solutions are not accepted by the commercial construction industry or if the market for on-demand solutions fails to grow, or grows more slowly than we currently anticipate, demand for our collaboration solutions could be negatively affected.

If we are not successful in expanding our international business, we may incur additional losses and our revenue growth could be materially adversely affected.

        Our future results depend, in part, on our ability to expand into international markets. We currently operate in the United States and Canada and, effective October 2012, we entered into a joint venture to begin operations in Australia and New Zealand. We also have a number of distributor and reseller relationships for our PlanSwift solution in international markets. Our ability to expand internationally will depend upon our ability to deliver solution functionality and foreign language translations that reflect the needs of the local commercial construction industries of the international clients that we target. Our ability to expand internationally involves various risks, including the need to invest significant resources in such expansion, the possibility that returns on such investments will not be achieved in the near future or in unfamiliar competitive environments. We may also choose to conduct our international business through strategic alliances. If we are unable to identify strategic alliance partners or negotiate favorable alliance terms, our international growth may be hampered. In addition, we have incurred and may continue to incur significant expenses in advance of generating material revenues as we attempt to establish our presence in particular international markets.

        Expansion internationally will also require significant attention from our management and will require us to add additional management and other resources in these markets. Our ability to expand our business and to attract talented employees and strategic alliances in an increasing number of international markets requires considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute systems, regulatory systems, commercial infrastructures and technology infrastructure. If we are unable to grow our international operations in a timely manner, we may incur additional losses and our revenue growth could be materially adversely affected.

As we expand internationally, our business will become more susceptible to risks associated with international operations.

        We currently operate in the United States and Canada and, effective October 2012, we entered into a joint venture to begin operations in Australia and New Zealand. We also have a number of distributor and reseller relationships for our PlanSwift solution in international markets. Our limited

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experience in operating our business outside the United States increases the risk that our current and future international expansion efforts may not be successful. In particular, our business model may not be successful in particular countries or regions outside the United States for reasons that we currently are unable to anticipate. In addition, conducting international operations subjects us to risks that we have not generally faced in the United States. These include:

    fluctuations in currency exchange rates;

    unexpected changes in foreign regulatory requirements;

    difficulties in managing the staffing of international operations;

    potentially adverse tax consequences, including the complexities of foreign value added tax systems, restrictions on the repatriation of earnings and changes in tax rates;

    dependence on strategic alliance partners to increase client acquisition;

    the burdens of complying with a wide variety of foreign laws and different legal standards;

    data privacy laws that require that client data be stored and processed in a designated territory;

    increased financial accounting and reporting burdens and complexities;

    political, social and economic instability abroad;

    laws and business practices favoring local competitors;

    terrorist attacks and security concerns in general; and

    reduced or varied protection for intellectual property rights in some countries.

        The occurrence of any one of these risks could negatively affect our international business and, consequently, our operating results. Additionally, operating in international markets requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to operate in other countries will produce desired levels of revenue or profitability.

We have made strategic acquisitions in the past and intend to do so in the future. If we are unable to find suitable acquisitions or partners or to achieve expected benefits from such acquisitions or partnerships, there could be a material adverse effect on our business, financial condition, results of operations and prospects.

        As part of our ongoing business strategy to expand our suite of solutions and acquire new technology, we frequently engage in discussions with third parties regarding, and enter into agreements relating to, possible acquisitions, strategic alliances and joint ventures. In October 2011, November 2011 and January 2013, we acquired new technology, know-how and solutions through our acquisitions of GradeBeam, Submittal Exchange and PlanSwift, respectively. There may be significant competition for acquisition targets in our industry, or we may not be able to identify suitable acquisition candidates, negotiate attractive terms for acquisitions or complete acquisitions on expected timelines, or at all. If we are unable to complete strategic acquisitions or do not realize the expected benefits of the acquisitions we do complete, it could have a material adverse effect on our business, financial condition, results of operations and prospects.

        Even if we are able to complete acquisitions or enter into alliances and joint ventures that we believe will be successful, such transactions are inherently risky. Significant risks to these potential transactions, as well as our acquisition of PlanSwift in January 2013, include the following:

    integration and restructuring costs, both one-time and ongoing;

    maintaining sufficient controls, policies and procedures;

    diversion of management's attention from ongoing business operations;

    establishing new informational, operational and financial systems to meet the needs of our business;

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    losing key employees of the acquired businesses;

    failing to achieve anticipated synergies, including with respect to complementary products or services;

    our inability to maintain the key business relationships and the reputations of the businesses we acquire;

    uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;

    our dependence on unfamiliar affiliates and partners of the companies we acquire;

    insufficient revenue to offset our increased expenses associated with acquisitions;

    our responsibility for the liabilities of the businesses we acquire; and

    unanticipated and unknown liabilities.

        If we are not successful in completing acquisitions in the future or do not realize the expected benefits of the acquisitions we do complete, we may be required to reevaluate our acquisition strategy. We also may incur substantial expenses and devote significant management time and resources in seeking to complete acquisitions, some of which may ultimately not be consummated or not result in expected benefits. The occurrence of any of these acquisition-related risks could have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unsuccessful in increasing the number of industries we serve, our growth could be materially adversely affected.

        Our future growth depends, in part, on our ability to successfully penetrate new industries. In order to grow our business, we expect to expand to other project-focused adjacent industries in which we have little or no experience, such as mining or oil and gas. Expanding into new industries may require considerable investment of technical, financial and marketing resources, the scope of which is difficult to predict. Failure to successfully enter new industries could have a material adverse effect on our business, financial condition, results of operations and prospects.

Because we recognize revenues over future periods, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern.

        We generally recognize as revenue fees from clients ratably over future periods, which could be as long as twenty-nine months. As a result, a significant portion of the revenues we report in each quarter is derived from the recognition of deferred revenue relating to payments received during previous quarters. Consequently, downturns or upturns in the commercial construction industry, or increases or decreases to our new sales, in any single quarter will likely have only a small impact on our revenue results for that quarter, but will continue to affect our revenues in future quarters. Our fee model also makes it difficult for us to rapidly increase our revenues through additional sales in any period. Accordingly, the effect of changes in the commercial construction industry impacting our business or changes we experience in our new sales may not be reflected in our short-term results of operations.

We may be unable to develop and bring to market new solutions in a timely manner.

        Our growth and success depends, in part, upon our ability to develop and bring to market new solutions. The length of the development cycle varies depending on the nature and complexity of a solution, the availability of development resources, solution management and other internal resources, and the role, if any, of strategic partners. The time, expense and resources associated with developing and bringing to market new solutions may be greater than we anticipate and we may therefore be unable to develop and bring additional solutions to market in a timely manner or at all. The foregoing could result in a loss of market share to competitors who are able to offer these additional solutions, rejection of our solutions, damage to our reputation, loss of revenues, diversion of development

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resources, and increases in service and support costs, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The loss of key members of our senior management team could disrupt the management of our business and materially impair the success of our business.

        We believe that our success depends on the continued contributions of the members of our senior management team. We rely on our executive officers and other key managers for the successful performance of our business. The loss of the services of Patrick Allin, our Chairman of the Board and Chief Executive Officer, or one or more of our other executive officers or key managers could have a material adverse effect on our business, financial condition, results of operations and prospects. Although we have employment arrangements with members of our senior management team, none of these arrangements prevents any of our employees from leaving us. The loss of any executive officer or key manager could materially impair our ability to perform successfully, including achieving satisfactory operating results and maintaining our growth.

We may fail to attract and retain qualified employees to support our operations, which could have an adverse effect on our ability to expand our business and service our clients.

        We plan to continue to expand our work force to increase our client base and revenue. We believe that there is significant competition for qualified personnel with the skills and technical knowledge that we require. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of personnel to support our growth. New hires require significant training and, in most cases, take significant time before they achieve full productivity. Our recent hires and planned hires may not become as productive as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals. If our recruiting, training and retention efforts are not successful or do not generate a corresponding increase in revenue, it may have a material adverse effect on our business, financial condition, results of operations and prospects.

Government regulation of the Internet and e-commerce is evolving, and unfavorable changes in or our failure to comply with regulations could harm our operating results.

        The future success of our business depends upon the continued use of the Internet as a primary medium for commerce, communication and business applications. Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Changes in these laws or regulations could require us to modify our solutions in order to comply with these changes. In addition, government agencies or private organizations may begin to impose taxes, fees or other charges for accessing the Internet or commerce conducted via the Internet. These laws or charges could limit the growth of Internet-related commerce or communications generally or result in reductions in the demand for Internet-based solutions such as ours.

Our success depends on the development and maintenance of the Internet infrastructure.

        The success of our collaboration solutions depends on the development and maintenance of the Internet infrastructure. This includes maintenance of a reliable network backbone with the necessary speed, data capacity and security, as well as the timely development of complementary products for providing reliable Internet access and services. The Internet has experienced, and is likely to continue to experience, significant growth in the number of users and amount of traffic. The Internet infrastructure may be unable to support such demands. In addition, increasing numbers of users, increasing bandwidth requirements or problems caused by viruses, worms, malware and similar programs may harm the performance of the Internet. The Internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of Internet usage generally as well

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as the level of usage of our services, which could materially adversely affect our business, financial condition, results of operations and prospects.

Our future success depends on continued growth in the use of the Internet by our clients, our clients' access to the Internet and their confidence that other participants in the commercial construction industry have such access.

        Because our collaboration solutions are designed to work over the Internet, our revenue growth depends on the ability of our clients and other participants in the commercial construction industry to access to the Internet. If potential clients do not have reliable access to the Internet or are not willing to use the Internet for business purposes, we will not be able to sell our collaboration solutions to them. Additionally, our potential and current clients may be reluctant to adopt or continue to use our collaboration solutions if they are not confident that other participants in the commercial construction industry have access to the Internet, as this would limit the ability of these participants to use our collaboration solutions.

        Because construction sites are sometimes in remote and isolated locations, our current and potential clients may have additional reason to believe that access to the Internet by some participants in the commercial construction industry may be unreasonably difficult or impossible. The future delivery of our collaboration solutions will therefore depend, in part, on third-party Internet service providers continuing to expand the availability of Internet services, maintaining a reliable network with the necessary speed, data capacity and security, and developing complementary products and services for providing reliable and timely Internet access and services. If access to the Internet by participants in the commercial construction industry is not readily available, demand for our collaboration solutions could be negatively affected.

Interruptions or delays in the services provided by third-party data centers and/or Internet service providers could impair the delivery of our solutions and our business could suffer.

        The primary data center supporting our CPM and PQM solutions is located at a third-party site in Oak Brook, Illinois. Although we maintain a backup facility at our corporate headquarters in Deerfield, Illinois, both facilities are located in the same metropolitan area and could be subject to the same damage or service interruptions that may be caused by fire, flood, severe storm, earthquake, power loss, telecommunications failures, unauthorized intrusion, computer viruses and disabling devices, natural disasters, war, criminal act, military action, terrorist attack and other similar events beyond our control. A prolonged service disruption affecting our collaboration solutions for any of the foregoing reasons, or for any other reason, could damage our reputation with current and potential clients, expose us to liability, cause us to lose clients from whom we receive recurring revenue or otherwise adversely affect our business. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data centers we use.

        Our collaboration solutions are accessed by a large number of clients often at the same time. As we continue to expand the number of our clients and solutions available to our clients, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in service. In addition, the failure of our third-party data centers or third-party Internet service providers to meet our capacity requirements could result in interruptions or delays in access to our collaboration solutions or impede our ability to scale our operations. In the event that our data center or third-party Internet service provider arrangements are terminated, or there is a lapse of service, interruption of Internet service provider connectivity, or damage to such facilities, we could experience interruptions in access to our collaboration solutions as well as delays and additional expense in arranging new facilities and services.

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We face risks related to the storage of our clients' confidential and proprietary information.

        Our collaboration solutions are designed to maintain the confidentiality and security of our clients' confidential and proprietary information that is stored on our systems, including financial information, information regarding their business plans and other critical data. However, any accidental or willful security breaches or other unauthorized access to this data could expose us to liability for the loss of such information, time-consuming and expensive litigation and other possible liabilities as well as negative publicity. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are difficult to recognize and react to. We and our third-party data center facilities may be unable to anticipate these techniques or to implement adequate preventative or reactionary measures. We could be subject to legal claims or harm to our reputation if we or our third-party service providers fail to comply or are seen as failing to comply with our policies concerning confidential and proprietary information or if our policies are inadequate.

Our limited operating history makes it difficult to evaluate our current business and future prospects.

        We have been in existence since 2004, and much of our growth has occurred in recent periods. Our limited operating history makes it difficult for you to evaluate our current business and our future prospects. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including increasing and unforeseen expenses as we continue to grow our business. If we do not manage these risks successfully, our business, financial condition, results of operations and prospects may be materially adversely affected.

Our current and future debt agreements contain or may contain covenants that may impose operating and financial restrictions on us, including our ability to raise additional capital in the future, and we have previously failed to satisfy certain of such covenants. We may seek to renegotiate or refinance our current debt agreement or otherwise raise additional capital and we may be unable to do so on acceptable terms or at all.

        Our current construction loan with First Midwest Bank contains various restrictive and financial covenants, including a ratio of net cash flow from operations to debt service of not less than 1.10 to 1.00, as well as a covenant that requires lender consent for certain future equity issuances. Our net cash flow from operations for fiscal 2012 and the six months ended March 31, 2013 was negative, and we consequently did not satisfy the debt service covenant. Compliance with the debt service covenant and any related default was waived by First Midwest Bank until December 31, 2013. Following the completion of this offering, we intend to renegotiate the terms of the loan and/or seek proposals from other lenders to refinance the loan. However, there can be no assurance that we will be able to do so on acceptable terms or at all.

        We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features for our existing solutions or new solutions, or acquire complementary businesses, personnel and technologies. We therefore may need to engage in equity or debt financings to secure additional capital. Any debt financing we secure in the future also could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue such business opportunities. On the other hand, we may not be able to obtain additional financing on terms favorable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

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Risks Related to this Offering and Ownership of Our Common Stock

Our directors, executive officers and principal stockholders will have substantial control over us after this offering and could delay or prevent a change in corporate control.

        After this offering, our directors, executive officers and current holders of more than 5% of our common stock, together with their affiliates, will beneficially own, in the aggregate, approximately 52% of our outstanding common stock. However, certain of our directors and existing stockholders, including certain affiliates of our directors, have indicated an interest in purchasing an aggregate of $15.0 million, or 24% based on an assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, in shares of our common stock being offered in this offering at the initial public offering price. If all of these shares were to be purchased by our directors and current holders of more than 5% of our common stock, our directors, executive officers and current holders of more than 5% of our common stock, together with their affiliates, would beneficially own, in the aggregate, approximately 56% of our outstanding common stock. As a result, these stockholders, if acting together, would have significant influence over the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, if acting together, would have significant influence over the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by, among other things:

    delaying, deferring or preventing a change in corporate control;

    impeding a merger, consolidation, takeover or other business combination involving us; or

    discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of us.

We will incur increased costs and demands upon management as a result of complying with the laws and regulations that affect public companies, which could materially adversely affect our business, financial condition, results of operations and prospects.

        As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with certain provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), as well as rules implemented by the Securities and Exchange Commission (the "SEC") and the New York Stock Exchange ("NYSE"). In addition, our management team will also have to adapt to the requirements of being a public company. We expect that compliance with these rules and regulations will substantially increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

        The increased costs associated with operating as a public company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our solutions. Additionally, if these requirements divert our management's attention from other business concerns, they could have a material adverse effect on our business, financial condition, results of operations and prospects.

        Additionally, as a public company, we also expect that it may be more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

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As an "emerging growth company," we may rely on the reduced disclosure requirements applicable to emerging growth companies, which may make our common stock less attractive to investors.

        As an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an "emerging growth company" for up to five years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any March 31 before that time, or if we have total annual gross revenues of $1 billion or more during any fiscal year before that time, we would cease to be an "emerging growth company" as of the end of that fiscal year, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an "emerging growth company" immediately. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

        In addition, Section 107 of the Jumpstart Our Business Startups Act (the "JOBS Act") also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. An "emerging growth company" can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

If we fail to comply with the reporting requirements under the Exchange Act or maintain adequate internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, it could result in late or non-compliant filings or inaccurate financial reporting and have a negative impact on the price of our common stock or our business.

        Effective internal controls are necessary for us to provide timely, reliable financial reporting and prevent fraud. Prior to becoming a public company, we were not required to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or with the standards adopted by the Public Company Accounting Oversight Board in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting. As a public company, we will be required to report our financial results on the timeline and in the form prescribed by the Exchange Act and to evaluate and report on our internal control over financial reporting beginning with our Annual Report on Form 10-K for the year ending September 30, 2014. Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until we are no longer an "emerging growth company," as described above. At such time that an attestation is required, our independent registered public accounting firm may issue a report that is adverse in the event that we have one or more material weaknesses. Our remediation efforts may not enable us to avoid material weaknesses in the future.

        The process of documenting and further developing our internal controls to become compliant with Section 404 will take a significant amount of time and effort to complete and will require significant attention of management. Completing implementation of new controls, documentation of

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our internal control system and financial processes, remediation of control deficiencies, and management testing of internal controls will require substantial effort by us. We may experience higher than anticipated operating expenses, as well as increased independent auditor and other fees and expenses during the implementation of these changes and thereafter.

If we do not remediate our material weaknesses in internal controls, it could result in late or non-compliant filings or inaccurate financial reporting and have a negative impact on the price of our common stock or our business.

        In preparation for this offering and for future compliance with Section 404 of the Sarbanes-Oxley Act, we concluded that a material weakness in internal control over financial reporting related to our control environment existed as of September 30, 2012 as described below.

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

    We did not maintain a sufficient complement of personnel with the appropriate level of accounting knowledge, experience, and training in the application of GAAP commensurate with our financial reporting requirements. Specifically, we did not maintain adequate qualified personnel with regard to certain significant complex transactions and technical accounting matters and we lacked adequate controls regarding training in the relevant accounting guidance, review and documentation of certain complex accounting transactions and review of related accounting disclosures such as the accounting for convertible debenture financing agreements, including any embedded features, business combinations and share-based compensation transactions in accordance with GAAP.

        This material weakness in our control environment contributed to the following individual material weaknesses in our internal control over financial reporting:

    We did not maintain effective internal controls related to our accounting for convertible debentures to provide reasonable assurance that (a) the instruments were valued correctly and (b) all pertinent factors related to the convertible debentures, including the impact of conversion and redemption or other embedded or derivative features, were identified and considered for appropriate accounting in accordance with GAAP. Specifically, this material weakness resulted in material misstatements and audit adjustments of non-cash interest expense, convertible debenture and derivative liabilities and additional paid-in capital to the consolidated financial statements for the fiscal years ended September 30, 2010, 2011 and 2012.

    We did not maintain effective internal controls related to the accounting for business acquisitions to provide reasonable assurance that (a) business combination accounting identified and considered all pertinent factors related to all classes of securities of the acquired entity, including any non-controlling interests and (b) there was appropriate review of the purchase price allocation entries recorded in the consolidated financial statements. Specifically, this material weakness resulted in material misstatements and audit adjustments to non-controlling interest and the related income (loss) attributable to our company and the non-controlling interest, additional paid-in capital, deferred revenue and revenue, goodwill, intangible assets and the related amortization expense to the consolidated financial statements for the fiscal year ended September 30, 2012.

        These material weaknesses could result in misstatements of the aforementioned accounts that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

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There is no prior public market for our common stock and therefore an active trading market for our common stock may not be established.

        Currently, there is no public trading market for our common stock. Our common stock has been approved for listing on the NYSE under the symbol "TXTR." The initial public offering price per share will be determined by agreement among us and the representatives of the underwriters and may not be indicative of the market price of our common stock after our initial public offering. An active trading market for our common stock may not develop and continue upon the completion of this offering and the market price of our common stock may decline below the initial public offering price.

The large number of shares eligible for public sale in the near future could depress the market price of our common stock.

        The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after this offering, and the perception that these sales could occur may also depress the market price of our common stock. Based on shares outstanding as of March 31, 2013, we will have 21,461,604 shares of common stock outstanding after this offering. Of these shares, the 4,500,000 shares of common stock sold in this offering will be freely tradable in the United States, except for any shares purchased by our "affiliates" as defined in Rule 144 under the Securities Act. The remaining 16,961,604 shares of common stock will be "restricted securities" within the meaning of the federal securities laws. Holders of substantially all of these restricted securities have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock during the 180-day period beginning on the date of this prospectus, except with the prior written consent of Credit Suisse Securities (USA) LLC. After the expiration of the 180-day restricted period, these shares may be sold in the public market in the United States, subject to prior registration in the United States, if required, or reliance upon an exemption from United States registration, including, in the case of shares held by affiliates or control persons, compliance with the volume restrictions of Rule 144.

        In addition to the foregoing shares of common stock, based on options and warrants to purchase common stock outstanding as of March 31, 2013, we will have outstanding upon completion of this offering options and warrants to purchase an aggregate of 3,775,107 shares of common stock. Holders of options and warrants to purchase substantially all of these shares of common stock have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock during the 180-day period beginning on the date of this prospectus, except with the prior written consent of Credit Suisse Securities (USA) LLC.

        We intend to file a registration statement to register approximately 8.4 million of the shares reserved for issuance under our 2008 Stock Incentive Plan and 2013 Long Term Incentive Plan. Upon the effectiveness of that registration statement, subject to the satisfaction of applicable exercise periods and, in certain cases, lock-up agreements with the representatives of the underwriters referred to above, the shares of common stock issued upon exercise of outstanding options or issued in satisfaction of other share-based awards under such plans will be available for immediate resale in the United States in the open market.

        Sales of our common stock, as the restrictions described above end, may cause our stock price to fall and make it more difficult for you to sell shares of our common stock.

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Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

        Our certificate of incorporation and bylaws will contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors. These provisions include:

    a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

    the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

    the ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

    a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and

    advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of directors or otherwise attempting to obtain control of us.

        We are also subject to certain anti-takeover provisions under Delaware law. Under Delaware law, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction.

Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.

        The assumed initial public offering price is substantially higher than the net tangible book value per share of our common stock. If you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds the net tangible book value per share of our common stock. Investors purchasing common stock in this offering will incur immediate and substantial dilution of $12.20 per share, based on an assumed initial public offering price of $14.00 per share. Further, investors purchasing common stock in this offering will contribute approximately 35.7% of the total amount invested by stockholders since our inception, but will own only approximately 21.0% of the shares of common stock outstanding.

        This dilution is due in large part to the fact that some of our earlier investors paid substantially less than the price of the shares being sold in this offering when they purchased their shares of our capital stock. You will experience additional dilution upon the exercise of warrants held by existing investors and options to purchase common stock and the issuance of restricted stock and restricted stock units to our employees under our equity incentive plans. In addition, we may utilize our common stock as consideration to fund future acquisitions, which could cause you to experience further dilution. See "Dilution."

If we issue additional securities to raise capital, it may have a dilutive effect on your investment.

        If we raise additional capital through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution in their percentage ownership of us. Moreover,

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any new equity securities (other than common stock) we issue could have rights, preferences and privileges senior to those of holders of our common stock, including shares of common stock sold in this offering.

If securities analysts do not publish research or reports about our company and our industry, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline.

        The trading price for our common stock will be influenced by research or reports that industry or financial analysts publish about us and our business, our industry, or technology companies in general. If any of the analysts who cover us or may cover us in the future change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who covers us or may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

        We will use $8.1 million of the net proceeds from this offering to repay indebtedness. We currently intend to use the remainder of the net proceeds for financing our growth, working capital and other general corporate purposes. However, we have not determined the specific allocation of the remainder of the net proceeds among the various uses described in this prospectus. Our management will have broad discretion over the use and investment of the proceeds, and, accordingly, investors in this offering will need to rely upon the judgment of our management with respect to the use of the proceeds, with only limited information concerning management's specific intentions. See "Use of Proceeds."

We do not intend to pay dividends for the foreseeable future.

        We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any gains on their investments for the foreseeable future.

Our stock price may be volatile, and you may not be able to resell your shares at or above the initial public offering price.

        The trading price of our common stock following this offering may fluctuate substantially. The price of the common stock that will prevail in the market after this offering may be higher or lower than the price you pay, depending on many factors, some of which are beyond our control and may not be related to our operating performance. The fluctuations could cause you to lose part or all of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include, but are not limited to:

    fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

    changes in market valuations of similar companies;

    success of competitive products or services;

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    changes in our capital structure, such as future issuances of debt or equity securities;

    announcements by us, our competitors or our clients of significant product releases, contracts, acquisitions, strategic alliances or capital commitments;

    loss of one or more significant clients or strategic alliances;

    changes in laws or regulations relating to our solutions;

    litigation involving our company, our general industry or both;

    changes in general economic, industry and market conditions, including events pertaining to the commercial construction industry;

    investors' general perception of us; and

    additions or departures of key employees.

        In addition, if the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. As a result, you could lose all or part of your investment. Our company and the representatives of the underwriters will negotiate to determine the initial public offering price. The initial public offering price may be higher than the trading price of our common stock following this offering.

If we fail to forecast the timing of our revenues or expenses accurately, our operating results could be materially lower than anticipated, which may cause our stock price to decline.

        We use a variety of factors in our forecasting and planning processes, including historical trends, recent client history, expectations of client buying decisions, client implementation schedules and plans, analyses by our sales and service teams, maintenance renewal rates, our assessment of economic or market conditions and many other factors. While these analyses have historically provided and may continue to provide us with some guidance in business planning and expense management, these estimates are inherently imprecise and may not accurately predict our revenue or expenses in a particular quarter or over a longer period of time. A variation in any or all of these factors could cause us to inaccurately forecast our revenues or expenses and could result in expenditures without corresponding revenue. As a result, our operating results could be materially lower than anticipated in our quarterly or annual forecasts, which could materially adversely affect our business, financial condition, results of operations and prospects and could prevent us from meeting or exceeding the expectations of research analysts or investors, which may cause our stock price to decline.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus includes forward-looking statements. The words "believe," "may," "could," "estimate," "continue," "anticipate," "intend," "expect," "predict," "potential," "will" and similar expressions, as they relate to our company, our business and our management, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

    trends in the global and domestic economy and the commercial construction industry;

    our ability to effectively manage our growth;

    our ability to develop the market for our solutions;

    competition with our business;

    our dependence on a limited number of client relationships for a significant portion of our revenues;

    our dependence on a single software solution for a substantial portion of our revenues;

    the length of the selling cycle to secure new enterprise relationships for CPM, which requires significant investment of resources;

    our ability to cross-sell our solutions;

    the continued growth of the market for on-demand software solutions;

    our ability to develop and bring to market new solutions in a timely manner;

    our success in expanding our international business and entering new industries; and

    the availability of suitable acquisitions or partners and our ability to achieve expected benefits from such acquisitions or partnerships, including our acquisition of PlanSwift in January 2013.

        In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

        All forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this prospectus. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

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INDUSTRY AND MARKET DATA

        Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and data regarding the market size of the construction industry, market position and market opportunity, is based on information from various sources, on assumptions that we have made that are based on those sources, and on our knowledge of the markets for our solutions. These sources include Global Construction Perspectives, Gartner, Inc., Engineering News-Record, the United States Census Bureau and the United States Department of Commerce. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified any third-party information and cannot assure you of its accuracy or completeness. While we believe this information to be generally reliable, such information is inherently imprecise and we cannot give you any assurance that any of the projected data will be achieved. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors" and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

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USE OF PROCEEDS

        We estimate that our net proceeds from the sale of our common stock in this offering will be approximately $56.3 million, based on the assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares from us in full, we estimate that our net proceeds will be approximately $65.1 million.

        We will use the net proceeds from this offering to repay (a) $6.8 million of indebtedness with an interest rate of 10% per annum and (b) $1.3 million of non-interest bearing indebtedness. Such indebtedness was incurred during the three months ended March 31, 2013 to finance our operations and the PlanSwift acquisition and becomes payable upon completion of this offering. We currently intend to use the remainder of the net proceeds to finance our growth, working capital, and other general corporate purposes, although we have not yet determined with certainty the manner in which we will allocate the remainder of the net proceeds of this offering. In addition, we believe that opportunities may exist from time to time to expand our current business through acquisitions of, or investments in, complementary companies, products or technologies. Other than as described in "Summary—Recent Developments," we have no current agreements, commitments or understandings for any specific acquisitions or investments at this time. However, we may use a portion of the net proceeds for these purposes in the future. See "Risk Factors—Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment."

        Each $1.00 increase (decrease) in the assumed offering price of $14.00 per share would increase (decrease) the net proceeds to us from this offering by approximately $4.2 million, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

        Pending use of the proceeds as described above, we intend to invest the proceeds in short-term interest-bearing, investment-grade securities, certificates of deposit or direct or guaranteed obligations of the United States government, or hold as cash.

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DIVIDEND POLICY

        We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws and any restrictions in our current or future financing arrangements and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors considers relevant.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2013:

    on an actual basis;

    on a pro forma basis to give effect to the following adjustments as if they had occurred on March 31, 2013:

    (1)
    the conversion of all shares of our convertible preferred stock outstanding as of March 31, 2013 into 5,168,510 shares of our common stock and the issuance of 426,403 shares of common stock in satisfaction of the dividends accrued through March 31, 2013 on such shares of convertible preferred stock, based on a value equal to the assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus;

    (2)
    the conversion of all Submittal Exchange Holdings, LLC Class A Preferred Units into 963,400 shares of our common stock;

    (3)
    the conversion of all of our outstanding convertible debentures and accrued interest thereon through March 31, 2013 into 468,457 shares of our common stock at a conversion price equal to the initial offering price based on an assumed initial offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus; and

    (4)
    the reclassification of redeemable common stock to additional paid-in capital following the completion of this offering (see Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus); and

    on a pro forma as adjusted basis to give further effect to the issuance and sale by us of 4,500,000 shares of common stock in this offering based on an assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and the application of proceeds therefrom as described in "Use of Proceeds," including the repayment of (a) $6.8 million of indebtedness with an interest rate of 10% per annum and (b) $1.3 million of non-interest bearing indebtedness.

All outstanding shares of our convertible preferred stock, Submittal Exchange Holdings, LLC Class A Preferred Units and convertible debentures automatically convert into shares of our common stock immediately prior to or concurrently with the completion of this offering. Because the number of shares that will be issued in satisfaction of the accrued dividends on the convertible preferred stock and upon conversion of the convertible debentures depends upon the actual initial public offering price per share in this offering and the closing date of this offering, the actual number of shares issuable at such time will differ from the number of shares set forth above. You should read this table in conjunction with the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Capital Stock" and our consolidated financial statements and related notes included elsewhere in this prospectus.

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  As of March 31, 2013  
 
  Actual   Pro Forma   Pro Forma
As Adjusted(1)
 
 
  (in thousands, except share and per share data)
 

Cash and cash equivalents

  $ 5,021   $ 5,021   $ 53,162  
               

Convertible debentures

 
$

5,581
 
$

 
$

 

Leases payable, including current portion

    896     896     896  

Notes payable, including current portion

    7,691     7,691     160  

Loan payable to related party, including current portion

    10,469     10,469     10,469  

Redeemable Series A-1 preferred stock; $.001 par value: 1,441,186 shares authorized, 1,014,920 shares issued and outstanding, actual; no shares issued and outstanding pro forma and pro forma as adjusted

    44,374          

Redeemable common stock: 538,794 shares issued and outstanding, actual; no shares issued and outstanding, pro forma and pro forma as adjusted(2)

    7,898          

Redeemable non-controlling interest

    208     208     208  

Deficit:

                   

Series A-2 preferred stock; $.001 par value: 1,057,869 shares authorized, 804,978 shares issued and outstanding, actual; no shares issued and outstanding, pro forma and pro forma as adjusted

    1          

Common stock; $.001 par value: 90,000,000 shares authorized, 9,817,820 shares issued and 9,396,040 shares outstanding, actual; 17,383,384 shares issued and 16,961,604 shares outstanding pro forma; 21,883,384 shares issued and 21,461,604 shares outstanding, pro forma as adjusted

    9     17     21  

Additional paid-in capital

    107,534     174,812     231,098  

Treasury stock at cost

    (5,231 )   (5,231 )   (5,231 )

Accumulated deficit(3)

    (150,433 )   (159,992 )   (160,508 )
               

Total Textura Corporation stockholders' equity (deficit)

    (48,120 )   9,606     65,380  

Non-controlling interest

    8,072          
               

Total equity (deficit)

    (40,048 )   9,606     65,380  
               

Total capitalization

  $ 37,069   $ 28,870   $ 77,113  
               

(1)
If the underwriters' option to purchase additional shares to cover over-allotments is exercised in full, the pro forma as adjusted amount of cash and cash equivalents, additional paid-in capital, total stockholders' equity (deficit) and total capitalization would increase by approximately $8.8 million, after deducting underwriting discounts and commissions, and we would have 22,558,384 shares of common stock issued and 22,136,604 shares outstanding, pro forma as adjusted.
(2)
Redeemable common stock represents shares of our common stock issued in connection with our acquisition of PlanSwift in January 2013 which will be reclassified to additional paid-in capital following the completion of this offering. See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in the prospectus.
(3)
Pro forma and pro forma as adjusted accumulated deficit reflect share-based compensation expense for outstanding restricted stock units, which become payable upon completion of this offering, and interest expense from unamortized debt discounts and the change in the fair value of the conversion option liability recognized upon conversion of the convertible debentures upon completion of this offering. Pro forma as adjusted accumulated deficit also reflects interest expense from unamortized discounts recognized upon repayment of notes payable upon completion of this offering.

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        Each $1.00 increase (decrease) in the assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by approximately $4.2 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 100,000 shares in the number of shares offered by us would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by approximately $1.3 million, assuming that the assumed initial public offering price, the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

        The table above excludes the following shares:

    623,834 shares of common stock issuable upon settlement of restricted stock units outstanding as of March 31, 2013;

    2,442,514 shares of common stock issuable upon the exercise of stock options outstanding as of March 31, 2013, with a weighted average exercise price of approximately $13.77 per share;

    1,332,593 shares of common stock issuable upon the exercise of warrants to purchase common stock outstanding as of March 31, 2013, with a weighted average exercise price of approximately $14.71 per share;

    166,785 shares of common stock, issuable upon the conversion of 58,727 shares of convertible preferred stock issued after March 31, 2013 upon the exercise of warrants outstanding on March 31, 2013, as if converted on March 31, 2013; and

    6,000,000 shares of common stock reserved for future awards under our 2013 Long Term Incentive Plan including awards to be granted effective with this offering consisting of restricted stock units having an aggregate grant date fair value, based on the initial public offering price, equal to $1.1 million and stock options having an aggregate grant date fair value of $7.1 million with exercise prices equal to the initial public offering price.

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DILUTION

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

        Our pro forma net tangible book value as of March 31, 2013 was a deficit of $25.2 million, or $1.48 per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of March 31, 2013, after giving effect to the automatic conversion of all outstanding shares of our convertible preferred stock and convertible debentures into common stock and the conversion of all Submittal Exchange Holdings, LLC Class A Preferred Units into common stock in connection with this offering and a liability of $8.7 million related to restricted stock units that become payable upon the completion of this offering.

        After giving effect to our sale in this offering of 4,500,000 shares of common stock at an assumed initial public offering price of $14.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and to the repayment of $8.1 million of indebtedness, our pro forma as adjusted net tangible book value as of March 31, 2013 would have been approximately $38.7 million, or $1.80 per share of common stock. This represents an immediate increase in pro forma as adjusted net tangible book value of $3.28 per share to our existing stockholders and an immediate dilution of $12.20 per share to investors purchasing shares in this offering.

        The following table illustrates this per share dilution.

Assumed initial offering price per share

        $ 14.00  

Pro forma net tangible book deficit per share as of March 31, 2013

  $ (1.48 )      

Increase in pro forma net tangible book value per share attributable to investors purchasing shares in this offering

    3.28        
             

Pro forma as adjusted net tangible book value per share after this offering

        $ 1.80  
             

Dilution in pro forma net tangible book value per share to investors in this offering

        $ 12.20  
             

        Each $1.00 increase (decrease) in the assumed initial public offering price of $14.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) our pro forma as adjusted net tangible book value by approximately $4.2 million, or approximately $0.20 per share, and the dilution per share to new investors purchasing common stock in this offering by approximately $0.80 per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase of 100,000 shares in the number of shares offered by us would increase our pro forma as adjusted net tangible book value by approximately $1.3 million, or $0.06 per share, and the dilution per share to new investors purchasing common stock in this offering would be $12.14 per share, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, a decrease of 100,000 shares in the number of shares offered by us would decrease our pro forma as adjusted net tangible book value by approximately $1.3 million, or $0.06 per share, and the dilution per share to new investors purchasing common stock in this offering would be $12.26 per share, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

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        If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value per share after giving effect to this offering would be approximately $2.14 per share, and the dilution in pro forma net tangible book value per share to investors in this offering would be approximately $11.86 per share.

        The following table summarizes, as of March 31, 2013, the differences between the number of shares of our common stock purchased from us, after giving effect to the conversion of our convertible preferred stock and convertible debentures into common stock and the conversion of all Submittal Exchange Holdings, LLC Class A Preferred Units into common stock on a pro forma basis, the total cash consideration paid and the average price per share paid by our existing stockholders and by our new investors purchasing shares in this offering at the assumed initial public offering price of our common stock of $14.00 per share (the midpoint of the price range set forth on the cover page of this prospectus), before deducting underwriting discounts and commissions and offering expenses payable by us:

 
   
   
  Total Consideration    
 
 
  Shares Purchased    
 
 
  Amount
(millions)
   
  Average
Price
Per Share
 
 
  Number   Percent   Percent  

Existing stockholders

    16,961,604     79.0 % $ 113.4     64.3 % $ 6.69  

New investors

    4,500,000     21.0 %   63.0     35.7 %   14.00  
                       

Total

    21,461,604     100 % $ 176.4     100 %      
                         

        If the underwriters exercise their over-allotment option in full, our existing stockholders would own 76.6% and our new investors would own 23.4% of the total number of shares of our common stock outstanding after this offering.

        The above table and discussions are based on the number of shares of our common stock outstanding as of March 31, 2013, and exclude the following shares:

    623,834 shares of common stock issuable upon settlement of restricted stock units outstanding as of March 31, 2013;

    2,442,514 shares of common stock issuable upon the exercise of stock options outstanding as of March 31, 2013, with a weighted average exercise price of approximately $13.77 per share;

    1,332,593 shares of common stock issuable upon the exercise of warrants to purchase common stock outstanding as of March 31, 2013, with a weighted average exercise price of approximately $14.71 per share;

    166,785 shares of common stock, issuable upon the conversion of 58,727 shares of convertible preferred stock issued after March 31, 2013 upon the exercise of warrants outstanding on March 31, 2013, as if converted on March 31, 2013; and

    6,000,000 shares of common stock reserved for future awards under our 2013 Long Term Incentive Plan including awards to be granted effective with this offering consisting of restricted stock units having an aggregate grant date fair value, based on the initial public offering price, equal to $1.1 million and stock options having an aggregate grant date fair value of $7.1 million with exercise prices equal to the initial public offering price.

        To the extent that any outstanding options or warrants are exercised, new investors will experience further dilution.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The consolidated statements of operations data for the years ended September 30, 2010, 2011 and 2012 and the consolidated balance sheet data as of September 30, 2011 and 2012 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended March 31, 2012 and 2013 and the consolidated balance sheet data as of March 31, 2013 are derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited condensed consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the financial information contained in those statements. Our historical results are not necessarily indicative of the results to be expected in the future. The following selected consolidated financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements, related notes and other financial information included elsewhere in this prospectus.

 
  Years Ended September 30,   Six Months Ended March 31,  
 
  2010   2011   2012   2012   2013  
 
  (in thousands, except per share data)
 

Consolidated Statement of Operations Data

                               

Revenue(1)

  $ 6,020   $ 10,514   $ 21,681   $ 9,673   $ 15,319  

Operating expense:

                               

Cost of services(2)

    4,187     4,395     6,152     2,788     3,468  

General and administrative

    5,654     6,856     11,105     5,391     8,266  

Sales and marketing

    3,122     2,601     5,995     2,509     4,102  

Technology and development

    4,747     6,169     11,123     5,545     6,345  

Depreciation and amortization

    2,621     2,161     4,080     1,963     1,873  
                       

Total operating expense

    20,331     22,182     38,455     18,196     24,054  
                       

Loss from operations

    (14,311 )   (11,668 )   (16,774 )   (8,523 )   (8,735 )

Other expense, net

    (1,612 )   (7,260 )   (2,019 )   (989 )   (2,119 )
                       

Loss before income taxes

    (15,923 )   (18,928 )   (18,793 )   (9,512 )   (10,854 )

Income tax provision

                    84  
                       

Net loss

    (15,923 )   (18,928 )   (18,793 )   (9,512 )   (10,938 )

Less: Net loss attributable to non-controlling interests

            (2,866 )   (1,108 )   (1,757 )
                       

Net loss attributable to Textura Corporation

    (15,923 )   (18,928 )   (15,927 )   (8,404 )   (9,181 )

Accretion (decretion) of redeemable Series A-1 preferred stock

    (19,802 )   11,486     3,373     505     1,239  

Accretion of redeemable non-controlling interest

                    147  

Dividends on Series A-2 preferred stock

    480     480     480     240     240  

Undistributed earnings allocated to participating securities

    1,506                  
                       

Net income (loss) available to Textura Corporation common stockholders

  $ 1,893   $ (30,894 ) $ (19,780 ) $ (9,149 ) $ (10,807 )
                       

Net income (loss) available to Textura Corporation common stockholders, basic and diluted

  $ 1,893   $ (30,894 ) $ (19,780 ) $ (9,149 ) $ (10,807 )

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  Years Ended September 30,   Six Months Ended March 31,  
 
  2010   2011   2012   2012   2013  
 
  (in thousands, except per share data)
 

Net income (loss) per share available to Textura Corporation common stockholders:

                               

Basic

  $ 0.27   $ (4.18 ) $ (2.31 ) $ (1.07 ) $ (1.18 )

Diluted

  $ 0.26   $ (4.18 ) $ (2.31 ) $ (1.07 ) $ (1.18 )

Weighted average number of common shares outstanding:

                               

Basic

    6,942     7,392     8,548     8,544     9,161  

Diluted

    7,166     7,392     8,548     8,544     9,161  

Pro forma net loss per share, basic and diluted(3)

              $ (1.05 )       $ (0.54 )
                             

Pro forma weighted average common shares outstanding, basic and diluted(3)

                16,689           16,998  
                             

 

 
  As of September 30,    
 
 
  As of
March 31,
2013
 
 
  2011   2012  
 
  (in thousands)
   
 

Consolidated Balance Sheet Data:

                   

Cash

  $ 5,941   $ 4,174   $ 5,021  

Property and equipment, net

    19,515     17,775     18,133  

Goodwill and other intangibles

        25,671     34,983  

Total assets

    27,305     51,099     64,546  

Deferred revenue, current and long-term

    5,279     14,166     16,963  

Total debt, current and long-term(4)

    13,183     26,607     24,637  

Redeemable Series A-1 preferred stock

    39,762     43,135     44,374  

Total Textura Corporation stockholders' deficit

    (36,422 )   (51,084 )   (48,120 )

(1)
The acquisitions of GradeBeam and Submittal Exchange contributed $4.9 million and $1.9 million of revenue for the year ended September 30, 2012 and the six months ended March 31, 2012, respectively. The acquisition of PlanSwift contributed $1.0 million of revenue for the six months ended March 31, 2013.

(2)
Cost of services is exclusive of depreciation and amortization, which is shown separately below.

(3)
Unaudited basic and diluted pro forma net loss per share has been calculated assuming the conversion (using the if-converted method) of all outstanding shares of our convertible preferred stock, Submittal Exchange Holdings, LLC Class A Preferred Units and convertible debentures into our common stock and the settlement of restricted stock units that become fully vested upon this offering as though the conversion and settlement had occurred on October 1, 2011. See Note 15 to our audited consolidated financial statements and Note 9 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus. In addition, the pro forma calculation for the six months ended March 31, 2013 assumes the sale of 582,080 shares of common stock issued by us at the assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, the proceeds from which will be used to repay indebtedness of $8.1 million.

(4)
Total debt, representing the current and long-term portions, includes our loan payable to related party for the purchase of land and construction of our corporate headquarters, convertible debentures, notes payable and leases payable. In December 2012, holders voluntarily converted $12.4 million in convertible debentures and accrued interest into 826,166 shares of our common stock.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion and analysis of our financial condition and results of operations should be read together with the "Selected Consolidated Financial Data" and the consolidated financial statements and related notes that are included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" or in other parts of this prospectus. Our fiscal years ended September 30, 2010, 2011, 2012 and 2013 are referred to herein as fiscal 2010, fiscal 2011, fiscal 2012 and fiscal 2013.

Overview

        We are a leading provider of on-demand business collaboration software to the commercial construction industry. Our solutions are focused on facilitating collaboration between owners/developers, general contractors and subcontractors. Our solutions increase efficiency, enable better risk management, and provide improved visibility and control of construction activities for our clients.

        Our collaboration solutions offer robust functionality, data sharing and exchange capabilities, and workflow tools that support several mission-critical business processes at various stages of the construction project lifecycle:

    Construction Payment Management ("CPM") enables the generation, collection, review and routing of invoices and the necessary supporting documentation and legal documents, and initiation of payment of the invoices.

    Submittal Exchange enables the collection, review and routing of project documents.

    GradeBeam supports the process of obtaining construction bids, including identifying potential bidders, issuing invitations-to-bid and tracking bidding intent.

    Pre-Qualification Management ("PQM") supports contractor risk assessment and qualification.

    Greengrade facilitates the management of environmental certification.

        In addition, we offer PlanSwift, a take-off and estimating solution used in preparing construction bids, and Contractor Default Claims Management, which supports the process of documenting a subcontractor default insurance claim.

        We derive substantially all of our revenue from fees related to the use by our clients of our software solutions. We classify our revenue into activity-driven revenue and organization-driven revenue:

    Owners/developers, general contractors and subcontractors using our CPM, Submittal Exchange and Greengrade solutions pay us fees that are dependent on the value of the construction project or contract and are collected at the start of activity. In addition, owners/developers and general contractors typically pay us monthly fees that are dependent on the value and total number of projects managed using our system. We typically invoice and collect these monthly fees in advance on a six-month basis. We refer to these fees collectively as activity-driven revenue as they depend on the construction activity of our clients.

    Participants using our GradeBeam and PQM solutions pay us subscription fees. These fees are dependent on a number of characteristics of the organization, which may include size, complexity, type or number of users, and are typically generated on a subscription basis. We typically invoice and collect these subscription fees in advance on a twelve-month basis. We also receive a combination of license fees, maintenance fees, subscription fees and claims fees for our

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      other solutions. We refer to these fees collectively as organization-driven revenue as they do not depend on the construction activity of our clients but rather the number and characteristics of the organizations using the solutions.

        Both our activity-driven and organization-driven revenue have historically exhibited certain characteristics that are beneficial to managing our business:

    Our collaboration solutions are integral to our clients' operation of their business. We seek to establish enterprise relationships with our clients so that all their current and future projects will be managed on our collaboration solutions. This historically has resulted in recurring additions of new projects and the ongoing management of these projects on our solutions by our clients. Because our revenue is derived primarily from fees driven by construction project activity, monthly fees and subscription fees, we historically have experienced a high recurrence of our fees.

    Clients typically pay us fees upfront or in advance of solution usage. We also generally collect the majority of these fees electronically, which historically has reduced our invoicing and collection activity and accelerated our cash flow.

    The nature of the construction industry and our clients' operation of their business historically has in general resulted in low volatility over reporting periods in the number and construction value of projects each client is working on. Our close working relationship with our clients historically has provided us additional insight into their business activity and the number and construction value of projects each client will manage on our system. In addition, because we have a large number of clients, the aggregate number of new projects added to, and of projects being managed on, our solutions historically has benefited from a portfolio effect. Furthermore, projects with similar construction value historically have generated like amounts of fees over their duration. These factors, combined with the high recurrence of our fees discussed above and our recognition of revenue ratably over future periods, have historically resulted in predictable reported revenue. For example, over the eight quarters ended March 31, 2013, a period over which the compounded quarterly growth rate of our reported activity-driven revenue was 15.2%, between 93% and 95% of our reported activity-driven revenue in each quarter resulted from projects that were added to our solutions in prior periods.

While we have historically experienced these favorable characteristics, there can be no assurance that our future results will exhibit these same characteristics.

        Our company was formed in 2004 and initially focused on developing CPM, our solution for facilitating the invoicing process for commercial construction projects. We launched CPM commercially in mid-2006. Since that time, we have experienced rapid growth and increasing acceptance of CPM in the marketplace and we have continued to invest significantly in order to broaden its applicability and functional capabilities. In October 2009, we introduced PQM, our solution that supports the collection of data to undertake effective contractor risk assessment and qualification. In October 2011 and November 2011, we further expanded our suite of solutions via the acquisitions of GradeBeam and Submittal Exchange, respectively. These acquisitions added complementary on-demand software solutions focused on the processes of soliciting bids for potential construction work and collecting, reviewing and routing project documents among project participants, respectively. In January 2013, we expanded the suite of solutions we offer that are focused on subcontractors and material suppliers by acquiring PlanSwift. The PlanSwift solution facilitates the preparation of accurate bids through advanced digital take-off and estimating functionality.

        Since our founding, our strategy has been to devote considerable resources to the development and enhancement of our solutions. We believe this has resulted in a robust suite of solutions, well positioned for the migration of technology solutions to an on-demand environment in the construction industry. While we believe the adoption of technology solutions generally, and on-demand software

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solutions in particular, in the construction industry is gaining traction, it remains at a relatively early stage. In addition, there is a low level of penetration of our collaboration solutions in our existing client base and current target markets. We believe this presents us with a significant opportunity to grow our business through sales of our solutions. We believe our existing and potential clients are increasingly looking to technology to achieve operational and financial efficiencies, better manage risk and improve visibility into and control of their business processes. As part of our strategy to expand our suite of business collaboration solutions for the construction industry, and to expand our market reach, we intend to continue to allocate increasing resources to our technology and development efforts and to expanding our sales and support capabilities. This strategy has resulted in a history of operating losses and accumulated deficit, which have increased as we have increased the substantial investments we are making to acquire new enterprise relationships and develop new solutions in response to our assessment of our market opportunity. These operating losses, however, have declined over time as a percentage of revenue. While we expect our operating expenses to continue to increase in the future, we intend to manage operating expenses and leverage our fixed costs to decrease operating losses. In addition, we expect the mandatory conversion of our convertible debentures upon the completion of this offering and the application of the net proceeds of this offering will result in substantially reduced interest expense and therefore reduce our net loss.

        We market and sell our solutions to our clients through a number of different sales channels, tailored to reflect the solution and the clients we are selling to. We generally seek to establish an enterprise relationship with owners/developers and general contractors for their use of our solutions, particularly in the case of our CPM, PQM and GradeBeam offerings. We have found that this requires an in-person, relationship-driven, consultative approach with a high degree of solution and domain expertise on the part of our employees. Certain of our other solutions in contrast are well suited to be used on a single project and do not require enterprise-wide deployment. Our Submittal Exchange and Greengrade solutions in particular are primarily sold on a project-by-project basis, largely to existing customers with a high level of repeat business. In addition, sales of our GradeBeam, PQM, and PlanSwift solutions to the subcontractor community are generally transactional and reflect the lower cost and complexity of these solutions and the organizations to which we sell them. To address these markets we operate direct sales groups that market to, contact and support prospective clients remotely, primarily using email, webinars, telephone and other appropriate methods. We also have a number of distributor and reseller relationships for our PlanSwift solution in international markets.

        Our revenue growth has been driven by an increase in the number of construction projects being managed on our solutions, the aggregate client-reported construction value of such projects, and the number of organizations using our solutions. In addition, the acquisitions of GradeBeam and Submittal Exchange contributed to our revenue growth in fiscal 2012 and the acquisition of PlanSwift contributed to our growth in the second quarter of fiscal 2013.

        We are focused on growing our business by pursuing the significant market opportunity for on-demand software collaboration solutions in the construction industry. We plan to grow our revenue by adding new clients and helping our existing clients increase the number of projects and volume of construction activity managed on our solutions. We also plan to expand our client base to include geographic regions and client segments beyond those which we currently serve.

Key Business Metrics

        In addition to traditional financial measures, we regularly review the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. These metrics reflect the impact of the acquisition of

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GradeBeam in October 2011, Submittal Exchange in November 2011 and PlanSwift in January 2013 as described in more detail in "—Results of Operations."

 
  Years Ended September 30,   Six Months Ended
March 31
 
 
  2010   2011   2012   2012   2013  
 
  (dollars in thousands,
except where otherwise indicated)

 

Activity-driven revenue

  $ 5,705   $ 9,875   $ 19,064   $ 8,496   $ 12,758  

Organization-driven revenue

    315     639     2,617     1,177     2,561  
                       

Total revenue

  $ 6,020   $ 10,514   $ 21,681   $ 9,673   $ 15,319  
                       

Activity-driven revenue:

                               

Number of projects added

    1,898     2,475     4,167     1,766     2,291  

Client-reported construction value added (billions)

  $ 18.4   $ 19.4   $ 33.8   $ 16.8   $ 18.1  

Active projects during period

    2,783     3,952     6,393     4,074     6,249  

Organization-driven revenue:

                               

Number of organizations

    151     945     5,204     4,029     6,997  

Adjusted EBITDA

 
$

(9,565

)

$

(8,031

)

$

(9,346

)

$

(4,728

)

$

(4,951

)

Deferred revenue balance as of the end of period

 
$

2,396
 
$

5,279
 
$

14,166
 
$

10,894
 
$

16,963
 

    Activity-driven revenue

        Number of projects added.    This metric represents the total number of construction projects added by our clients to our CPM, Submittal Exchange and Greengrade solutions during the reporting period. Each project on our system is created by the client and represents a unit of work they have elected to manage on our system as a single project. As a result, an individual development, structure or remodeling program may result in the creation of multiple projects on our system. A project added to our system does not necessarily become active immediately. We use the number of projects added to our solutions during a reporting period to measure the success of our strategy of further penetrating the construction market with these solutions. Also, activity-driven revenue is dependent in part on the number of projects using our solutions.

        Client-reported construction value added.    This metric represents the total client-entered dollar value of construction projects added by our clients to our CPM, Submittal Exchange and Greengrade solutions during the reporting period. We use client-reported construction value added to measure the success of our strategy of increasing the volume of construction activity managed with these solutions. In addition, we use this metric in conjunction with number of projects added to monitor average project construction value. Also, activity-driven revenue is dependent in part on project construction value.

        Active projects during period.    This metric represents the number of construction projects that have been active during the reporting period on our CPM, Submittal Exchange and Greengrade solutions. Especially with our CPM solution, clients may elect to add a new project on our system before their project activity begins. Accordingly, there may be an interval between when a project is included as a new project added and when we would consider it an active project. We use active projects during period to evaluate our penetration of the construction market with these solutions, to monitor growth from period to period. Also, activity-driven revenue is dependent in part on the number of active projects on our solutions.

        We derive the metrics above from a number of sources, including information entered into our solutions by our clients, our historical data and our analysis of the actions of our clients on our

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solutions. Clients may adjust or update previously-entered information periodically. In particular, client-reported construction value may be modified by the client during the lifetime of the project to revise initial estimates of construction value or reflect changes in the scope or cost of the project, and client-reported construction value may increase or decrease as a result. Since these metrics are based on information available at the time they are prepared, metrics may reflect updates from those previously reported for prior periods. Historically, these updates have not been significant in amount or percentage. In addition, management is unable to independently verify the construction value data entered by our clients. As a result, undue reliance on these metrics by us would carry the risk that we incorrectly evaluate our business performance or the success of our strategies as outlined above. Notwithstanding these limitations, based on our historical experience management believes that these metrics are valuable indicators of the overall progress of the business and the success of our various strategies.

    Organization-driven revenue

        Number of organizations.    This metric includes the number of organizations that are active subscribers on our GradeBeam and PQM solutions as of the end of the reporting period, as measured by the number of active subscriptions. An organization may be a single corporate entity or an operating unit within an entity. These clients pay an upfront fee for a fixed period of access. This metric also includes the number of organizations that have an active subscription or maintenance contract for our PlanSwift solution, or that have purchased a license within the period. We use this metric to measure the success of our strategy of further penetrating the construction market with these solutions. Also, our organization-driven revenue is dependent in part on the number of organizations using our solutions.

    Additional metrics

        Adjusted EBITDA.    We define this metric as loss before interest, taxes, depreciation and amortization, share-based compensation expense and acquisition-related expense. We believe that the use of Adjusted EBITDA as an additional operating performance metric is useful because it provides greater consistency for period-to-period comparisons of our business operations. Adjusted EBITDA is not determined in accordance with GAAP, and should not be considered as a substitute for or superior to financial measures determined in accordance with GAAP. For further discussion regarding Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, refer to the table below and footnote 4 to "Prospectus Summary—Summary Consolidated Financial Data."

 
  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  
 
  (in thousands)
 

Net loss

  $ (15,923 ) $ (18,928 ) $ (18,793 ) $ (9,512 ) $ (10,938 )

Net interest expense

    1,612     7,260     2,200     1,074     2,477  

Income tax provision

                    84  

Depreciation and amortization

    2,621     2,161     4,080     1,963     1,873  
                       

EBITDA

    (11,690 )   (9,507 )   (12,513 )   (6,475 )   (6,504 )

Share-based compensation expense

    2,125     1,468     2,676     1,355     1,139  

Acquisition-related expense

        8     491     392     414  
                       

Adjusted EBITDA

  $ (9,565 ) $ (8,031 ) $ (9,346 ) $ (4,728 ) $ (4,951 )
                       

        Deferred revenue balance.    Our deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenue as of the end of a reporting period. Our deferred revenue

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balance consists of activity-driven and organization-driven revenue that is recognized ratably over the estimated life of a project or contractual service period. We monitor our deferred revenue balance because it represents a significant portion of revenue to be recognized in future periods.

Key Components of Consolidated Statements of Operations

    Revenue

        We classify our revenue into activity-driven revenue and organization-driven revenue.

        Activity-driven revenue.    Activity-driven revenue is generated as a direct result of project activity on our CPM, Submittal Exchange and Greengrade solutions. Such revenue includes project fees and monthly fees, paid by the owner/developer, general contractor or architect; and usage fees, paid by subcontractors. For each project added to our CPM, Submittal Exchange and Greengrade solutions, we generate project fees that are based on the construction dollar value of the project. In addition, for each project that is active on our CPM solution, we generate monthly fees that are based on the construction dollar value of a project and the total number of active projects on our system for the client. Subcontractors pay us a usage fee for each contract managed using our CPM solution, which is based on the value of the contract.

        We collect project fees and usage fees in advance, when a project becomes active and a contract is accepted by the subcontractor, respectively. We invoice our clients for monthly fees in advance in six-month intervals. We record deferred revenue for these upfront fees which corresponds to our obligation to provide services over the relevant period. We recognize project fees and usage fees ratably over the average estimated life of the project and contract, respectively, and recognize monthly fees in each period during which the project is active on our system.

        Organization-driven revenue.    Organization-driven revenue is generated when clients subscribe to our GradeBeam and PQM solutions. These fees are dependent on a number of characteristics of the organization, which may include size, complexity, type, or number of users. We invoice these fees in advance. We record deferred revenue for these upfront fees which corresponds to our obligation to provide services over the relevant period. These fees are recognized ratably over the applicable service period.

        Organization-driven revenue also includes revenue from the sale of software licenses and related maintenance and training for our PlanSwift solution. License revenue is recognized upon delivery of the license, maintenance revenue is recognized ratably over the period of the maintenance contract, which is generally one year, and training revenue is recognized when the services are delivered to the client. For subscription-based licenses, which include maintenance and support, we recognize the subscription fees ratably over the applicable subscription period.

    Operating Expense

        Cost of Services.    Cost of services represents costs related to hosting our solutions, licensing fees, client implementation and ongoing support and other service-related costs, including bank and telecommunication fees. In the case of CPM, cost of service includes all activities performed by our client services group. These costs consist primarily of personnel-related expenses, including salaries, benefits, bonuses and share-based compensation. Cost of services is exclusive of depreciation and amortization which is presented as a separate line item.

        General and Administrative.    Our general and administrative expenses consist of costs of our finance, legal, business development and administration functions. These expenses consist primarily of personnel-related expenses, including salaries, benefits, bonuses and share-based compensation; legal, accounting and consulting third-party professional fees; insurance premiums; and facilities expenses.

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        Sales and Marketing.    Sales and marketing expenses consist primarily of personnel-related expenses for sales and marketing staff, including salaries, commissions, benefits, bonuses and share-based compensation. Sales and marketing expenses also include costs of lead generation activities, marketing and other promotional events, product marketing and other brand-building activities.

        Technology and Development.    Technology and development expenses represent costs to support our solutions, including ongoing maintenance and feature development. These costs consist primarily of personnel-related expenses, including salaries, benefits, bonuses and share-based compensation; the cost of certain third-party contractors; and software and license costs.

        Depreciation and Amortization.    Depreciation and amortization expenses consist primarily of depreciation of fixed assets; amortization of internally-developed software; and amortization of intangible assets. The amounts are amortized on a straight line basis over the anticipated useful life of the related asset.

        Other Expense, Net.    Other expense, net consists primarily of interest expense incurred on our loan payable to related party for our headquarters, interest expense on convertible debentures and interest related to other notes payable and capital leases. The interest expense consists primarily of the stated interest; amortization of discounts resulting from detachable warrants; amortization of discounts resulting from beneficial conversion features and fair value of embedded derivatives, if applicable; and recognition of unamortized discounts upon conversion of debentures containing beneficial conversion features.

        Impact of this offering on operating expense.    As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements.

        In addition, we have granted restricted stock units ("RSUs") to eligible employees and directors under our 2008 Stock Incentive Plan. The RSUs were awarded with a contingency that they would not become payable in cash or shares of common stock unless there was a change in control of our company or the agreements are terminated in connection with the completion of an initial public offering. As neither a change in control nor initial public offering was determined to be probable, we have not recognized any share-based compensation expense for these awards. Upon completion of this offering, the contingency will be met and a one-time charge of $8.7 million (based on an assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover of this prospectus) will be recorded as share-based compensation expense for outstanding RSUs, which become payable pursuant to termination of the agreements in connection with this offering. In addition, we expect to pay cash bonuses to certain of our non-executive employees in an aggregate amount of $2.7 million following the completion of this offering.

Critical Accounting Policies and Estimates

        Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures. Management bases its estimates on historical experience and on various other factors that are believed to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported. In some instances, changes in the accounting estimates are reasonably likely to occur from period-to-period. Our management evaluates its estimates and assumptions on an ongoing basis.

        We believe that there are several accounting policies that are critical to understanding our business and prospects for future performance, as these policies affect the reported amounts of revenue and

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other significant areas that involve management's judgment and estimates. These significant policies and our procedures related to these policies are described in detail below. For further information on all of our significant accounting policies, please see Note 2 of the accompanying notes to our audited consolidated financial statements included elsewhere in this prospectus.

    Revenue Recognition

        We classify our revenue into activity-driven revenue and organization-driven revenue.

        Activity-driven revenue.    Activity-driven revenue is generated as a direct result of project activity on our CPM, Submittal Exchange and Greengrade solutions. Such revenue includes project fees and monthly fees, paid by the owner/developer, general contractor or architect; and usage fees, paid by subcontractors. We recognize activity-driven revenue when there is evidence that project or contracting activity has occurred on our system, the fee is fixed and determinable, delivery of our services has occurred and collection of payment from the project participant is reasonably assured. We recognize project fees and usage fees ratably over the average estimated life of the project and contract, respectively, and recognize monthly fees in each period during which the project is active on our system. The average estimated life of the project and contract is estimated by management based on periodic review and analysis of historical data. The applicable estimated life is based on the project or contract value falling within certain predetermined ranges, as well as the solution on which the project is being managed. We perform periodic reviews of actual project and contract data and revise our estimates as necessary. The estimated life of the projects on our solutions historically has ranged from 5 to 28 months, and depends on the construction value of the project and the solution being utilized. The estimated life of the contracts on our CPM solution historically has ranged from 5 to 14 months, and depends on the value of the contract.

        Organization-driven revenue.    Organization-driven revenue is generated when clients subscribe to our GradeBeam and PQM solutions. We recognize organization-driven revenue when there is evidence of a subscription arrangement on our system, the fee is fixed and determinable, delivery of our services has occurred, and collection of payment from the organization is reasonably assured. These fees are recognized ratably over the applicable service period, ranging from 12 to 24 months.

        Organization-driven revenue also includes revenue from the sale of software licenses and related maintenance and training for our PlanSwift solution. We recognize license revenue upon delivery of the license, we recognize maintenance revenue ratably over the period of the maintenance contract, which is generally one year, and we recognize training revenue when the services are delivered to the client. For multiple-element arrangements that include a perpetual license and either maintenance or both maintenance and training, we use the residual method to determine the amount of license revenue to be recognized. Under the residual method, consideration is allocated to the undelivered elements based upon vendor-specific objective evidence of fair value ("VSOE") of those elements with the residual of the arrangement fee allocated to and recognized as license revenue. For subscription-based licenses, which include maintenance, we recognize the subscription fees ratably over the subscription periods, which typically range from 1 to 6 months.

        We have established VSOE based on our historical pricing and discounting practices for maintenance or training when sold separately. In establishing VSOE, we require that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. The application of VSOE methodologies requires judgment, including the identification of individual elements in multiple element arrangements and whether there is VSOE for some or all elements. Changes to the elements in our sales arrangements, or our ability to establish VSOE for those elements, may impact the timing of revenue recognition, which may result in a material change to the amount of revenue recorded in a given period.

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    Share-Based Compensation

        We account for stock options granted to employees and directors by recording compensation expense based on the award's fair value, estimated on the date of grant using the Black-Scholes option-pricing model. Share-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which generally equals the vesting period.

        Determining the fair value of stock options under the Black-Scholes option-pricing model requires judgment, including estimating the fair value per share of our common stock as a private company, volatility, expected term of the awards, dividend yield and the risk-free interest rate. The assumptions used in calculating the fair value of stock options represent our best estimates, based on management's judgment and subjective future expectations. These estimates involve inherent uncertainties. If any of the assumptions used in the model change significantly, share-based compensation recorded for future awards may differ materially from that recorded for awards granted previously.

        We developed our assumptions as follows:

    Fair value of common stock.  Because our common stock is not publicly traded, we must estimate the fair value of our common stock, as discussed in "—Valuation of Common Stock" below.

    Volatility.  The expected price volatility for our common stock was estimated by taking the median historic price volatility for industry peers based on daily prices over a period equivalent to the expected term of the stock option grants.

    Expected term.  The expected term was estimated to be the mid-point between the vesting date and the expiration date of the award. We believe use of this approach is appropriate as we have no prior history of option exercises upon which to base an expected term.

    Risk-free interest rate.  The risk free interest rate is based on the yields of United States Treasury securities with maturities similar to the expected term of the options.

    Dividend yield.  We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.

        We estimate potential forfeitures of stock options and adjust share-based compensation expense accordingly. The estimate of forfeitures is adjusted over the requisite service period to the extent that actual forfeitures differ from the prior estimates. We estimate forfeitures based upon our historical experience, and, at each period, review the estimated forfeiture rate and make changes as factors affecting the forfeiture rate calculations and assumptions change.

        Refer to Note 13 to our audited consolidated financial statements included elsewhere in this prospectus for the grant date fair value per option, assumptions used in calculating the grant date fair value and other information relating to option activity during the years ended September 30, 2010, 2011 and 2012. The following table summarizes the number of options granted and the fair value of our common stock at each grant date for grants since October 1, 2011:

Grant Date
  Options Granted   Exercise Price
per Option
  Fair Value
per Share
 

October 2011

    60,000   $ 15.00   $ 12.96  

November 2011

    125,000   $ 15.00   $ 13.03  

January 2012

    484,486   $ 13.03   $ 13.03  

August 2012

    40,000   $ 13.03   $ 13.03  

September 2012

    20,000   $ 13.03   $ 13.03  

October 2012

    10,000   $ 13.92   $ 13.92  

January 2013

    10,000   $ 13.92   $ 13.92  

February 2013

    20,000   $ 14.24   $ 14.24  

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        As of the date hereof, the intrinsic value of all vested and unvested stock options is $3.3 million, based on an assumed initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus.

        We also grant RSUs to eligible employees and directors. The stated vesting of these grants generally range from immediate to three years and only become payable in cash or shares of company stock, at our option, upon either a change in control of our company, as defined in the RSU award agreements, or upon termination of the agreements in connection with an initial public offering of our stock. As neither event has previously been probable, we have not recognized any share-based compensation expense related to the RSU awards.

        Refer to Note 13 to our audited consolidated financial statements included elsewhere in this prospectus for information relating to RSU activity during the years ended September 30, 2010, 2011 and 2012. The following table summarizes the number of RSUs granted and the fair value of our common stock at each grant date for grants since October 1, 2011:

Grant Date
  RSUs Granted   Fair Value
per Share
 

November 2011

    49,600   $ 13.03  

January 2012

    225,736   $ 13.03  

August 2012

    10,000   $ 13.03  

February 2013

    6,400   $ 14.24  

    Valuation of Common Stock

        Given the absence of an active market for our common stock, our board of directors is required to estimate the fair value of our common stock at the date of each grant of share-based awards. Our board of directors considered relevant objective and subjective factors it deemed important in each valuation, exercising significant judgment and reflecting our board of directors' best estimates at the time. These factors included:

    our current and historical operating performance;

    our expected future operating performance;

    our financial condition at the grant date;

    any recent privately negotiated sales of our debt securities and related warrants;

    input from management;

    the lack of marketability of our common stock; and

    the likelihood of achieving different liquidity events or remaining a private company.

        Valuation Methodologies Used in Determining Fair Value.    Our board of directors considered contemporaneous valuations in arriving at the estimated fair value of our common stock. Using the Probability Weighted Expected Result Method ("PWERM") methodology, the value of our common stock is estimated based upon analysis of our company assuming various future outcomes, including an initial public offering at various dates, a sale of our company, as well as the continuation of our company as a private enterprise. Fair value per common share is based upon the probability-weighted present value of these expected outcomes, as well as the rights of each class of preferred stock, common stock, convertible debentures, options and warrants.

        October 2011.    Our board of directors granted options to purchase 60,000 shares of common stock with an exercise price per share of $15.00 in October 2011. The fair value of our common stock as of September 2011 was determined by our board to be $12.96.

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        The primary valuation considerations were:

    Total equity value of $214.8 million, which was determined based on the income approach using the PWERM method.

    A discount rate of 22%, our cost of equity.

    Liquidity event scenario probabilities of 25% for an early initial public offering date in November 2012 including successful completion of two pending acquisitions as of the valuation date, 30% for a late initial public offering taking place in March 2013 including successful completion of two pending acquisitions as of the valuation date, 20% for an initial public offering date in March 2014 excluding any pending acquisitions, 15% for a sale or merger and 10% for a continuation of our company as a private enterprise.

    The status of two acquisitions that were in negotiations as of September 2011 and the impact that these acquisitions would have on our revenue growth rates and operating results if successfully completed.

    The improvement in our operating performance during fiscal 2011.

        November 2011.    Our board of directors granted options to purchase 125,000 shares of common stock with an exercise price per share of $15.00 in November 2011. The fair value of our common stock as of November 2011 was determined by our board to be $13.03, an increase of 0.5% from $12.96.

        The primary valuation considerations were:

    Total equity value of $229.3 million, which was determined based on the income approach using the PWERM method.

    A discount rate of 26%, our cost of equity.

    Liquidity event scenario probabilities of 25% for an early initial public offering date in September 2012, 50% for a late initial public offering taking place in March 2013, 15% for a sale or merger and 10% for a continuation of our company as a private enterprise.

    The completion of two acquisitions in October and November 2011, and the impact that these acquisitions were forecasted to have on our revenue growth rates and operating results if successfully integrated.

        January, August and September 2012.    Our board of directors granted options to purchase 484,486 shares of common stock with an exercise price per share of $13.03 in January 2012, 40,000 shares of common stock with an exercise price per share of $13.03 in August 2012 and 20,000 shares of common stock with an exercise price per share of $13.03 in September 2012, all based on the most recent estimated fair value of our common stock available. No significant events occurred that caused our board of directors and management to believe that the estimated fair value of common stock had changed since November 2011.

        October 2012 and January 2013.    Our board of directors granted options to purchase 10,000 shares of common stock with an exercise price per share of $13.92 in October 2012 and January 2013. The fair value of our common stock at that time was determined by our board to be $13.92, an increase of 6.9% from $13.03. We performed a valuation of our common stock in connection with our fiscal year beginning October 1, 2012. The increase in the fair value of our common stock was driven primarily by changes in assumptions related to the timing of a liquidity event and adjusted financial projections, which were refined after nearly a year of ownership experience with Submittal Exchange and GradeBeam.

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        The primary valuation considerations were:

    Total equity value of $250.8 million, which was determined based on the income approach using the PWERM method.

    A discount rate of 24%, our cost of equity.

    Liquidity event scenario probabilities of 30% for an early initial public offering date in May 2013, 50% for a late initial public offering taking place in September 2013, 15% for a sale or merger and 5% for a continuation of our company as a private enterprise.

    The results of our fiscal 2012 operations.

        February 2013.    Our board of directors granted options to purchase 20,000 shares of common stock with an exercise price per share of $14.24 in February 2013. The fair value of our common stock at that time was determined by our board to be $14.24. The increase in the fair value of our common stock was driven primarily by changes in our capital structure resulting from the conversion of certain of our convertible debentures in December 2012 and the closer proximity of the valuation date to a potential liquidity event.

        The primary valuation considerations were:

    Total equity value of $262.5 million, which was determined based on the income approach using the PWERM method.

    A discount rate of 24%, our cost of equity.

    Liquidity event scenario probabilities of 30% for an early initial public offering date in May 2013, 50% for a late initial public offering taking place in September 2013, 15% for a sale or merger and 5% for a continuation of our company as a private enterprise.

    The results of operations for our first quarter of fiscal 2013.

    Accretion of Redemption Premium

        Our redeemable Series A-1 preferred stock is redeemable at the election of the majority of the preferred stock holders beginning in October 2014. To the extent that redemption is requested, the holders will receive the greater of the fair value of the preferred stock at the time of redemption plus cumulative unpaid dividends, regardless if declared or undeclared, or the original issuance price plus cumulative unpaid dividends. We accrete the carrying value of the redeemable Series A-1 preferred stock to the redemption value each reporting period through a decrease or increase to additional paid-in capital. Upon completion of this offering, the redeemable preferred shares will automatically convert to common shares at a fixed conversion rate of 1:2.84 and we will not record any further accretion. Our board of directors determines the fair value of our redeemable Series A-1 preferred stock concurrent with and considering the same factors as the determination of our common stock as described above.

    Accounting for Convertible Debentures

        We issued convertible debentures with detachable warrants to purchase common stock on various dates throughout fiscal 2010, 2011 and 2012. We evaluate features of the convertible debentures to determine whether embedded derivatives must be bifurcated and accounted for separately. Separately-accounted-for derivative financial instruments are recorded at fair value as of the issuance date of the convertible debentures, as a debt discount, and remeasured to fair value as of each subsequent balance sheet date. We determine the fair value of derivative financial instruments using the binomial lattice pricing model. We determine the fair value of the debt using a discounted cash flow analysis based on the stated interest rate of the debt and scheduled principal payments, applying our incremental

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borrowing rate as the discount factor, and the fair value of the detachable warrants using the Black-Scholes model. The assumptions we use in the binomial model and the Black-Scholes model are the fair value of our common stock, as described above, an expected term equal to the contractual term of the derivative or warrant, volatility based on industry peer data as well as assumptions we expect market participants would make in pricing the warrant, risk-free interest rate corresponding to the contractual term, and a dividend yield of zero. Proceeds remaining after recording any derivative financial instruments were allocated to the convertible debentures and the detachable warrants based on their relative fair values at the time of issuance. The debt discount is amortized to interest expense from the issuance date through the various maturity dates of the convertible debentures.

        We calculate the amount of any beneficial conversion feature as the difference between the fair value of common stock at the issuance date and the accounting conversion price, multiplied by the number of shares of common stock the investor can receive under the terms of the agreement. The beneficial conversion feature is recorded as a reduction to the convertible debenture's net carrying value and is amortized over the period from the date of issuance to the maturity date of the convertible debenture.

        Upon conversion, the unamortized debt discount for debentures that include a beneficial conversion feature is recorded as interest expense, and the unamortized debt discount for debentures that do not include a beneficial conversion feature is recorded in equity.

    Goodwill

        We test goodwill for impairment separately on an annual basis in the fourth quarter or whenever events and circumstances indicate that goodwill may be impaired. We test goodwill for impairment at a single reporting unit level and we have not reported any goodwill impairments to date. Based on our testing, the fair value of our reporting unit substantially exceeded its carrying value.

        We evaluated both qualitative and quantitative characteristics in determining our reporting units. Based on this evaluation, we determined that we have one reporting unit. Each of the components within this reporting unit was determined to have similar economic characteristics and therefore should be aggregated. We reached this conclusion because the components provide for the expansion of our suite of solutions to various stages of the construction process lifecycle to a similar customer base and, in the long-term, are expected to have comparable earnings before tax and interest percentages. In addition, the majority of the components utilize a common distribution platform that enables sharing of resources and development across solutions. We also believe that goodwill is recoverable from the overall operations given the economies of scale and leveraging capabilities of the various components.

        The process of evaluating the potential impairment of goodwill requires significant judgment at many points during the analysis. To determine estimated fair value of our reporting unit, we used the income approach, under which fair value was calculated based on estimated discounted future cash flows. The income approach was determined to be the most representative valuation technique that would be utilized by a market participant in an assumed transaction. Significant assumptions are based on historical and forecasted results of operations, and consider estimates of cash flows consistent with the plans and estimates used to manage the business, including significant assumptions as to revenue growth, operating costs and expenses and operating cash flows, as well as various assumptions for attrition, weighted average cost of capital and terminal growth.

        If management's estimates of future operating results change, if there are changes in identified reporting units or if there are changes to other significant assumptions, the estimated carrying values of such reporting units and the estimated fair value of goodwill could change significantly, and could result in an impairment charge.

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    Intangible Assets

        Intangible assets consist of acquired developed product technologies, acquired client relationships, non-competition agreements and trade names. We record intangible assets at fair value and amortize them over their estimated useful lives. We estimate the useful lives of acquired developed product technologies, existing client relationships and trade names based on factors that include the planned use of and the expected pattern of future cash flows to be derived from each of them. The useful lives of non-competition agreements are equal to their contractual lives. We include amortization of intangible assets in depreciation and amortization expenses in our consolidated statement of operations.

        We assess the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that an asset's carrying amount may not be recoverable. Examples of such events or circumstances include, but are not limited to, significant underperformance relative to historical or projected future results, significant negative changes in the manner of use of the acquired assets in our business or material negative changes in relationships with significant customers. An impairment loss would be recognized when the sum of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Such impairment loss would be measured as the difference between the carrying amount of the asset and its fair value. Cash flow assumptions are based on historical and forecasted revenue, operating costs and other relevant factors. If management's estimates of future operating results change, or if there are changes to other assumptions, the estimate of the fair value of our intangible assets could change significantly. Such change could result in impairment charges in future periods, which could have a significant impact on our operating results and financial condition. We have not recorded any impairment charges to date.

        During fiscal 2012, the actual operating results for GradeBeam met assumptions management used to determine the purchase price of the acquisition, but underperformed compared to GradeBeam's revenue forecast at the time of acquisition. In preparing projected future results and analysis of recent actual results, we believe a triggering event had occurred requiring an impairment analysis. The impairment analysis of GradeBeam's developed technology and customer relationship carrying values during the fourth quarter of 2012 indicated there was no impairment.

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Results of Operations

        The following tables set forth our results of operations for the periods presented and as a percentage of our revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

 
  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  
 
  (dollars in thousands)
 

Revenue

  $ 6,020   $ 10,514   $ 21,681   $ 9,673   $ 15,319  

Operating expense:

                               

Cost of services

    4,187     4,395     6,152     2,788     3,468  

General and administrative

    5,654     6,856     11,105     5,391     8,266  

Sales and marketing

    3,122     2,601     5,995     2,509     4,102  

Technology and development

    4,747     6,169     11,123     5,545     6,345  

Depreciation and amortization

    2,621     2,161     4,080     1,963     1,873  
                       

Total operating expense

    20,331     22,182     38,455     18,196     24,054  
                       

Loss from operations

    (14,311 )   (11,668 )   (16,774 )   (8,523 )   (8,735 )

Other expense, net

    (1,612 )   (7,260 )   (2,019 )   (989 )   (2,119 )
                       

Loss before income taxes

    (15,923 )   (18,928 )   (18,793 )   (9,512 )   (10,854 )

Income tax provision

                    84  
                       

Net loss

    (15,923 )   (18,928 )   (18,793 )   (9,512 )   (10,938 )

Less: Net loss attributable to non-controlling interests

            (2,866 )   (1,108 )   (1,757 )
                       

Net loss attributable to Textura Corporation

    (15,923 )   (18,928 )   (15,927 )   (8,404 )   (9,181 )

Accretion (decretion) of redeemable Series A-1 preferred stock

    (19,802 )   11,486     3,373     505     1,239  

Accretion of redeemable non-controlling interest

                    147  

Dividends on Series A-2 preferred stock

    480     480     480     240     240  

Undistributed earnings allocated to participating securities

    1,506                  
                       

Net income (loss) available to Textura Corporation common stockholders

  $ 1,893   $ (30,894 ) $ (19,780 ) $ (9,149 ) $ (10,807 )
                       

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  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  

Revenue

    100.0 %   100.0 %   100.0 %   100.0 %   100.0 %

Operating expense:

                               

Cost of services

    69.6 %   41.8 %   28.4 %   28.8 %   22.6 %

General and administrative

    93.9 %   65.2 %   51.2 %   55.7 %   54.0 %

Sales and marketing

    51.9 %   24.7 %   27.7 %   25.9 %   26.8 %

Technology and development

    78.9 %   58.7 %   51.3 %   57.3 %   41.4 %

Depreciation and amortization

    43.5 %   20.6 %   18.8 %   20.3 %   12.2 %
                       

Total operating expense

    337.7 %   211.0 %   177.4 %   188.1 %   157.0 %
                       

Income (loss) from operations

    (237.7 )%   (111.0 )%   (77.4 )%   (88.1 )%   (57.0 )%

Other expense, net

    (26.8 )%   (69.1 )%   (9.3 )%   (10.2 )%   (13.8 )%
                       

Income (loss) before taxes

    (264.5 )%   (180.0 )%   (86.7 )%   (98.3 )%   (70.9 )%

Income tax provision

                    0.5 %
                       

Net income (loss)

    (264.5 )%   (180.0 )%   (86.7 )%   (98.3 )%   (71.4) %

Less: Net loss attributable to non-controlling interests

            (13.2 )%   (11.5 )%   (11.5 )%
                       

Net loss attributable to Textura Corporation

    (264.5 )%   (180.0 )%   (73.5 )%   (86.9 )%   (59.9 )%

Accretion (decretion) of redeemable Series A-1 preferred stock

    (328.9 )%   109.2 %   15.6 %   5.2 %   8.1 %

Accretion of redeemable non-controlling interest

                    1.0 %

Dividends on Series A-2 preferred stock

    8.0 %   4.6 %   2.2 %   2.5 %   1.6 %

Undistributed earnings allocated to participating securities

    25.0 %                
                       

Net income (loss) available to Textura Corporation common stockholders

    31.4 %   (293.8 )%   (91.2 )%   (94.6 )%   (70.5 )%
                       

Years ended September 30, 2010, 2011 and 2012

    Revenue

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands, except where otherwise indicated)
   
   
 

Activity-driven revenue

  $ 5,705   $ 9,875   $ 19,064     73.1 %   93.1 %

Organization-driven revenue

    315     639     2,617     102.9 %   309.5 %
                       

Total revenue

  $ 6,020   $ 10,514   $ 21,681     74.7 %   106.2 %
                       

Activity-driven revenue:

                               

Number of projects added

    1,898     2,475     4,167     30.4 %   68.4 %

Client-reported construction value added (billions)

  $ 18.4   $ 19.4   $ 33.8     5.4 %   74.2 %

Active projects during period

    2,783     3,952     6,393     42.0 %   61.8 %

Organization-driven revenue:

                               

Number of organizations

    151     945     5,204     525.8 %   450.7 %

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        Activity-driven revenue.    Activity-driven revenue increased $9.2 million, or 93.1%, in fiscal 2012 as compared to fiscal 2011, primarily due to an increase of 68.4% in projects added and an increase of 74.2% in client-reported construction value added. Our acquisition of Submittal Exchange in November 2011 generated $2.8 million of revenue in fiscal 2012 and increased the number of projects added and client-reported construction value added by 1,239 and $9.3 billion, respectively. The remainder of the increase was the result of recently added clients adding their projects to our solutions and our success in adding new clients. Activity-driven revenue also continued to benefit from a change in pricing structure for our subcontractor clients that took effect during fiscal 2011 and is described below.

        Activity-driven revenue increased $4.2 million, or 73.1%, in fiscal 2011 as compared to fiscal 2010. This increase was due to a number of factors, including a change in our pricing structure for our subcontractor clients on our CPM solution that took effect during fiscal 2011, an increase of 30.4% in projects added and an increase of 5.4% in client-reported construction value added. Management instituted a change in our pricing structure for our subcontractor clients that affected all projects added to our CPM solution after December 31, 2010. This change in pricing structure was implemented to make our fees simpler and more transparent. Previously, we charged subcontractors a fee for each payment processed on our system. Under the new structure, we charge subcontractors a fee based on a percentage of their contract value. This change resulted in increased fees for certain subcontractors and decreased fees for others, but the overall effect was to increase the total fees received from subcontractors using our CPM solution. Growth in projects added and client-reported construction value added was unfavorably impacted during the year by our decision to modify our sales approach. Management reviewed prior sales activity and determined that sales being part of our client services group and executive team responsibilities would be more effective than a direct sales approach. This change in organizational responsibilities and headcount, however, resulted in a temporary reduction in sales activity.

        Organization-driven revenue.    Organization-driven revenue increased $2.0 million, or 309.5%, in fiscal 2012 as compared to fiscal 2011, primarily due to the acquisition of GradeBeam in October 2011, which added $2.1 million of revenue in fiscal 2012 and increased the number of organizations by 3,633.

        Organization-driven revenue increased $0.3 million, or 102.9%, in fiscal 2011 as compared to fiscal 2010, primarily due to increased adoption of our PQM solution that was launched in October 2009.

    Cost of services

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Cost of services

  $ 4,187   $ 4,395   $ 6,152     5.0 %   40.0 %

Percent of revenue

    69.6 %   41.8 %   28.4 %            

        Cost of services increased $1.8 million, or 40.0%, from fiscal 2011 to fiscal 2012. The increase was primarily attributable to $1.0 million in increased personnel and related expense due to the addition of employees through the acquisitions of GradeBeam and Submittal Exchange and subsequent hiring and $0.5 million of increased hosting and licensing expenses to support the technology acquired in these acquisitions. Aside from the increased costs associated with these acquisitions, our cost structure has been generally consistent. As a result, cost of services as a percentage of revenue has decreased over the periods reflected in the table above primarily due to revenue growth.

        Cost of services increased $0.2 million, or 5.0%, from fiscal 2010 to fiscal 2011. In April 2010, we streamlined and reorganized our client services group, resulting in an increase in productivity and improvement in our ability to provide service to our customers. This led to a decrease of $0.7 million in employee-related costs from fiscal 2010 to fiscal 2011, despite growth of our business and the increase

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in our revenue over that same time period. This decrease was offset by $1.0 million in accrued bonuses for fiscal 2011.

    General and administrative

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

General and administrative

  $ 5,654   $ 6,856   $ 11,105     21.3 %   62.0 %

Percent of revenue

    93.9 %   65.2 %   51.2 %            

        General and administrative expenses increased $4.2 million, or 62.0%, from fiscal 2011 to fiscal 2012. The increase was primarily attributable to $0.5 million in personnel-related expenses, $0.8 million in professional services fees, and $0.6 million in share-based compensation expense. The acquisitions of Submittal Exchange and GradeBeam resulted in $1.7 million in additional general and administrative expenses post-acquisition, including $0.8 million for employee-related costs, $0.6 million for occupancy and general office expenses, $0.1 million in professional service fees, and $0.1 million in travel expenses.

        General and administrative expenses increased $1.2 million, or 21.3%, from fiscal 2010 to fiscal 2011, attributable to increased employee-related costs from greater headcount and accrued bonuses.

    Sales and marketing

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Sales and marketing

  $ 3,122   $ 2,601   $ 5,995     (16.7 )%   130.5 %

Percent of revenue

    51.9 %   24.7 %   27.7 %            

        Sales and marketing expenses increased $3.4 million, or 130.5%, from fiscal 2011 to fiscal 2012. The increase was primarily attributable to the acquisitions of GradeBeam and Submittal Exchange, including $2.9 million in increased personnel-related expense due to the addition of employees through these acquisitions and subsequent hiring, and $0.3 million in increased marketing and promotional expenses. Both GradeBeam and Submittal Exchange have a higher sales and marketing cost as a percentage of revenue than our other solutions. This increase in sales and marketing expense in fiscal 2012 was partially offset by reduced sales headcount resulting from our decision during the year to change our sales approach for certain of our solutions to an enterprise relationship focus performed by our client services group and executive team.

        Sales and marketing expenses decreased $0.5 million, or 16.7%, from fiscal 2010 to fiscal 2011, primarily due to reduced share-based compensation costs and recruiting fees, as a result of the decision to streamline our direct sales group.

    Technology and development

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Technology and development

  $ 4,747   $ 6,169   $ 11,123     30.0 %   80.3 %

Percent of revenue

    78.9 %   58.7 %   51.3 %            

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        Technology and development expenses increased $5.0 million, or 80.3%, from fiscal 2011 to fiscal 2012. The increase was primarily attributable to increased employee-related expenses as we added headcount and utilized third-party contractors to enhance the functionality of our suite of solutions. The acquisitions of Submittal Exchange and GradeBeam also contributed to the increase in expenses and headcount. Headcount increased by 112% in fiscal 2012 over the prior year.

        Technology and development expenses increased $1.4 million, or 30.0%, from fiscal 2010 to fiscal 2011. The increase was primarily attributable to increased employee-related expenses as we added headcount and utilized third-party contractors to enhance the functionality of our suite of solutions.

    Depreciation and amortization

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Depreciation and amortization

  $ 2,621   $ 2,161   $ 4,080     (17.6 )%   88.8 %

Percent of revenue

    43.5 %   20.6 %   18.8 %            

        Depreciation and amortization expenses increased $1.9 million, or 88.8%, from fiscal 2011 to fiscal 2012. The increase was principally attributable to amortization of intangible assets acquired through the acquisitions of GradeBeam and Submittal Exchange in fiscal 2012.

        Depreciation and amortization expenses decreased $0.5 million, or 17.6%, from fiscal 2010 to fiscal 2011. The decrease was primarily attributable to a reduction in depreciation expense as various assets were fully depreciated in fiscal 2010.

    Other expense, net

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Other expense, net

  $ (1,612 ) $ (7,260 ) $ (2,019 )   350.4 %   (72.2) %

        Other expense, net decreased $5.2 million, or 72.2%, from fiscal 2011 to fiscal 2012. The decrease was principally attributable to the $4.6 million of interest expense in fiscal 2011 recognized upon conversion of convertible debentures. There were no convertible debentures converted in fiscal 2012.

        Other expense, net increased $5.6 million, or 350.4%, from fiscal 2010 to fiscal 2011. The increase was attributable to $4.6 million of interest expense in fiscal 2011 recognized upon conversion of convertible debentures. There were no convertible debentures converted in fiscal 2010.

    Additional metrics

    Adjusted EBITDA

 
  Years Ended September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Adjusted EBITDA

  $ (9,565 ) $ (8,031 ) $ (9,346 )   16.0 %   16.4 %

        Adjusted EBITDA decreased $1.3 million, or 16.4%, from fiscal 2011 to fiscal 2012. The decrease was primarily due to the business developments described above, which led to an increase in loss from operations of $5.1 million, offset by an increase in depreciation and amortization expense of $1.9 million as described above and an increase in share-based compensation expense of $1.2 million.

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        Adjusted EBITDA increased $1.5 million, or 16.0%, from fiscal 2010 to fiscal 2011. The increase was primarily due to the business developments described above, which led to a decreased loss from operations of $2.6 million, offset by a decrease in depreciation and amortization expense of $0.5 million as described above and a decrease in share-based compensation expense of $0.7 million.

    Deferred revenue balance

 
  As of September 30,   Change from
prior period
 
 
  2010   2011   2012   2011   2012  
 
  (dollars in thousands)
   
   
 

Deferred revenue, current and long-term

  $ 2,396   $ 5,279   $ 14,166     120.3 %   168.3 %

        Deferred revenue increased $8.9 million, or 168.3%, from September 30, 2011 to September 30, 2012. The increase was attributable in part to the growth from increased billings in CPM usage fees to subcontractors. The increase also was attributable to $2.8 million in deferred revenue acquired through the acquisitions of GradeBeam and Submittal Exchange in 2012, and an increase of these balances post acquisition of $2.5 million resulting from continued growth.

        Deferred revenue increased $2.9 million, or 120.3%, from September 30, 2010 to September 30, 2011. The increase was primarily attributable to growth from increased billings in CPM usage and project fees.

Six months ended March 31, 2012 and 2013

    Revenue

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands, except where otherwise indicated)
   
 

Activity-driven revenue

  $ 8,496   $ 12,758     50.2 %

Organization-driven revenue

    1,177     2,561     117.6 %
                 

Total revenue

  $ 9,673   $ 15,319     58.4 %
                 

Activity-driven revenue:

                   

Number of projects added

    1,766     2,291     29.7 %

Client-reported construction value added (billions)

  $ 16.8   $ 18.1     7.7 %

Active projects during period

    4,074     6,249     53.4 %

Organization-driven revenue:

                   

Number of organizations

    4,029     6,997     73.7 %

        Activity-driven revenue.    Activity-driven revenue increased $4.3 million, or 50.2%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The increase was primarily due to a 29.7% increase in projects added to our solutions, a 53.4% increase in active projects during the period and a 7.7% increase in client-reported construction value added.

        Organization-driven revenue.    Organization-driven revenue increased $1.4 million, or 117.6%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. Our acquisition of PlanSwift on January 31, 2013 generated $1.0 million of revenue and increased the number of organizations by 1,673 in the six months ended March 31, 2013. The remainder of the increase was primarily due to an increase in the number of organizations using our other solutions.

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Cost of services

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

Cost of services

  $ 2,788   $ 3,468     24.4 %

Percent of revenue

    28.8 %   22.6 %      

        Cost of services increased $0.7 million, or 24.4%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The increase in cost of services was primarily due to a $0.5 million increase in personnel-related expenses, as well as a $0.2 million increase in other service-related costs, which increases were driven primarily by the full-period impact of the acquisitions of GradeBeam and Submittal Exchange in the first fiscal quarter of 2012 and the acquisition of PlanSwift in the second fiscal quarter of 2013.

    General and administrative

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

General and administrative

  $ 5,391   $ 8,266     53.3 %

Percent of revenue

    55.7 %   54.0 %      

        General and administrative expenses increased $2.9 million, or 53.3%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The increase was primarily due to $1.3 million in professional services related to the preparation for our initial public offering, as well as a $0.7 million increase in personnel-related expenses, a $0.2 million increase in facilities expenses and increases of $0.5 million in other miscellaneous overhead expenses.

    Sales and marketing

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

Sales and marketing

  $ 2,509   $ 4,102     63.5 %

Percent of revenue

    25.9 %   26.8 %      

        Sales and marketing expenses increased $1.6 million, or 63.5%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The increase was primarily due to a $1.4 million increase in personnel-related expenses, associated with an increase in headcount due to the addition of employees through the acquisitions of GradeBeam and Submittal Exchange in the six months ended March 31, 2012 and the acquisition of PlanSwift in the six months ended March 31, 2013, and subsequent hiring. In addition, sales and marketing expenses increased due to a $0.1 million increase in marketing expenses and a $0.1 million increase in travel expenses.

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    Technology and development

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

Technology and development

  $ 5,545   $ 6,345     14.4 %

Percent of revenue

    57.3 %   41.4 %      

        Technology and development expenses increased $0.8 million, or 14.4%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The increase was primarily due to a $1.5 million increase in personnel-related expenses, mainly due to additional headcount, partially offset by a $0.7 million decrease in professional services expense, specifically development services provided by third-party developers. A portion of the development projects performed by outside developers in previous periods were either completed prior to the current period or performed by our staff.

    Depreciation and amortization

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

Depreciation and amortization

  $ 1,963   $ 1,873     (4.6 )%

Percent of revenue

    20.3 %   12.2 %      

        Depreciation and amortization expenses decreased by $0.1 million, or 4.6%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The decrease was primarily due to certain internal software that had become fully amortized in September 2012, resulting in lower amortization expense of $0.6 million. The decrease in these expenses was partially offset by a $0.2 million increase in amortization expense related to the acquisition of PlanSwift in January 2013, a $0.1 million increase in amortization expense of intangible assets related to a full period's amortization of the Submittal Exchange intangible assets acquired in the six months ended March 31, 2012, and a $0.1 million increase in depreciation expense related to fixed assets acquired in the six months ended March 31, 2013.

    Other expense, net

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

Other expense, net

  $ (989 ) $ (2,119 )   114.3 %

        Other expense, net, increased by $1.1 million, or 114.3%, in the six months ended March 31, 2013 as compared to the six months ended March 31, 2012. The increase was principally attributable to interest expense recognized upon conversion of convertible debentures in December 2012 as well as a higher amount of average debt outstanding in the six months ended March 31, 2013. These increases were partially offset by a non-cash gain related to the change in the fair value of our derivatives. There were no convertible debentures converted in fiscal 2012.

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    Additional metrics

 
  Six Months Ended
March 31,
   
 
 
  2012   2013   % Change  
 
  (dollars in thousands)
   
 

Adjusted EBITDA

  $ (4,728 ) $ (4,951 )   (4.7 )%

        Adjusted EBITDA decreased $0.2 million, or 4.7%, from the six months ended March 31, 2012 to the six months ended March 31, 2013. The decrease was primarily due to higher operating expenses incurred to support the process of becoming a public company, which were partially offset by higher revenue.

 
  As of
September 30,
2012
  As of
March 31,
2013
  % Change  
 
  (dollars in thousands)
   
 

Deferred revenue, current and long-term

  $ 14,166   $ 16,963     19.7 %

        Deferred revenue increased $2.8 million, or 19.7%, from September 30, 2012 to March 31, 2013. The increase was primarily due to an increase in sales for our Submittal Exchange solution and, to a lesser extent, due to our acquisition of PlanSwift in January 2013.

Unaudited Quarterly Information

        The following tables set forth our unaudited quarterly condensed consolidated statements of operations data for each of the eight quarters in the two-year period ended March 31, 2013. The data has been prepared on the same basis as the audited consolidated financial statements and related notes and the unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus, and you should read the following tables together with such financial statements. The quarterly results of operations include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of this data. Results of interim periods are not necessarily indicative of results for the entire year and are not necessarily indicative of future results.

 
  Three Months Ended  
 
  June 30,
2011
  September 30,
2011
  December 31,
2011
  March 31,
2012
  June 30,
2012
  September 30,
2012
  December 31,
2012
  March 31,
2013
 
 
  (dollars in thousands)
 

Revenue

  $ 2,726   $ 3,284   $ 4,488   $ 5,185   $ 5,689   $ 6,319   $ 6,771   $ 8,548  

Operating expense

                                                 

Cost of services

    1,096     1,089     1,252     1,536     1,573     1,791     1,688     1,780  

General and administrative

    1,735     1,768     2,538     2,853     2,789     2,925     3,705     4,561  

Sales and marketing

    642     572     1,077     1,432     1,653     1,833     1,818     2,284  

Technology and development

    1,573     1,715     2,803     2,742     2,888     2,690     2,995     3,350  

Depreciation and amortization

    528     551     900     1,063     1,055     1,062     760     1,113  
                                   

Total operating expense

    5,574     5,695     8,570     9,626     9,958     10,301     10,966     13,088  
                                   

Loss from operations

    (2,848 )   (2,411 )   (4,082 )   (4,441 )   (4,269 )   (3,982 )   (4,195 )   (4,540 )

Other expense, net

    (5,568 )   (473 )   (487 )   (502 )   (513 )   (517 )   (1,813 )   (306 )
                                   

Loss before income taxes

    (8,416 )   (2,884 )   (4,569 )   (4,943 )   (4,782 )   (4,499 )   (6,008 )   (4,846 )

Income tax provision (benefit)

                            35     49  
                                   

Net loss

    (8,416 )   (2,884 )   (4,569 )   (4,943 )   (4,782 )   (4,499 )   (6,043 )   (4,895 )

Less: Net loss attributable to non-controlling interest

            (416 )   (692 )   (858 )   (900 )   (1,046 )   (711 )
                                   

Net loss attributable to Textura Corporation

  $ (8,416 ) $ (2,884 ) $ (4,153 ) $ (4,251 ) $ (3,924 ) $ (3,599 ) $ (4,997 ) $ (4,184 )
                                   

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  Three Months Ended  
Percentage of revenue:
  June 30,
2011
  September 30,
2011
  December 31,
2011
  March 31,
2012
  June 30,
2012
  September 30,
2012
  December 31,
2012
  March 31,
2013
 

Revenue

    100 %   100 %   100 %   100 %   100 %   100 %   100 %   100 %

Operating expense

                                                 

Cost of services

    40 %   33 %   28 %   30 %   28 %   28 %   25 %   21 %

General and administrative

    64 %   54 %   57 %   55 %   49 %   46 %   55 %   53 %

Sales and marketing

    24 %   17 %   24 %   28 %   29 %   29 %   27 %   27 %

Technology and development

    58 %   52 %   62 %   53 %   51 %   43 %   44 %   39 %

Depreciation and amortization

    19 %   17 %   20 %   21 %   19 %   17 %   11 %   13 %
                                   

Total operating expense

    204 %   173 %   191 %   186 %   175 %   163 %   162 %   153 %
                                   

Loss from operations

    (104 )%   (73 )%   (91 )%   (86 )%   (75 )%   (63 )%   (62 )%   (53 )%

Other expense, net

    (204 )%   (14 )%   (11 )%   (10 )%   (9 )%   (8 )%   (27 )%   (4 )%

Loss before income taxes

    (309 )%   (88 )%   (102 )%   (95 )%   (84 )%   (71 )%   (89 )%   (57 )%

Income tax provision (benefit)

    0 %   0 %   0 %   0 %   0 %   0 %   1 %   1 %
                                   

Net loss

    (309 )%   (88 )%   (102 )%   (95 )%   (84 )%   (71 )%   (89 )%   (57 )%

Less: Net loss attributable to non-controlling interest

    0 %   0 %   (9 )%   (13 )%   (15 )%   (14 )%   (15 )%   (8 )%
                                   

Net loss attributable to Textura Corporation

    (309 )%   (88 )%   (93 )%   (82 )%   (69 )%   (57 )%   (74 )%   (49 )%
                                   

        The following table sets forth our key business metrics for each of the eight quarters in the two-year period ended September 30, 2012.

 
  June 30,
2011
  September 30,
2011
  December 31,
2011
  March 31,
2012
  June 30,
2012
  September 30,
2012
  December 31,
2012
  March 31,
2013
 
 
  (dollars in thousands, except where otherwise indicated)
 

Activity-driven revenue

  $ 2,635   $ 3,171   $ 3,978   $ 4,518   $ 4,988   $ 5,581   $ 5,986   $ 6,772  

Organization-driven revenue

    91     113     510     667     701     738     785     1,776  
                                   

Total revenue

  $ 2,726   $ 3,284   $ 4,488   $ 5,185   $ 5,689   $ 6,319   $ 6,771   $ 8,548  
                                   

Activity-driven revenue:

                                                 

Number of projects added

    644     680     799     967     1,226     1,175     1,048     1,245  

Client-reported construction value added (billions)

  $ 4.9   $ 4.9   $ 8.4   $ 7.7   $ 8.5   $ 9.2   $ 7.3   $ 10.6  

Active projects during period

    2,488     2,789     3,128     3,551     4,143     4,731     5,046     5,263  

Organization-driven revenue:

                                                 

Number of organizations

    971     945     3,974     4,029     4,594     5,204     5,412     6,997  

Deferred revenue as of the end of period

  $ 3,996   $ 5,279   $ 8,604   $ 10,894   $ 12,457   $ 14,166   $ 14,146   $ 16,963  

        Our revenue has increased in each of the quarters presented above as a result of growth in the number of projects and client-reported construction value added to and managed on our solutions, as well as an increase in the number of organizations using our solutions. This growth was in part due to our acquisitions of GradeBeam and Submittal Exchange in the three months ended December 31, 2011 and PlanSwift in the three months ended March 31, 2013. In addition, beginning in the three months ended June 30, 2011, revenue increased in part due to a change in the pricing structure for our subcontractor clients using our CPM solution effective for projects added to our system after January 1, 2011.

        Cost of services was generally consistent in the three months ended June 30, 2011 and the three months ended September 30, 2011. Beginning in the three months ended December 31, 2011, the increases in cost of services were primarily due to increased headcount resulting from the acquisitions of GradeBeam and Submittal Exchange. Cost of services increased in the three months ended March 31, 2013 primarily due to increased personnel-related expenses driven by additional headcount. Except for the increased costs associated with the acquisitions in the three months ended December 31, 2011, our cost structure has generally not changed. As a result, cost of services as a percentage of revenue has decreased over the periods reflected in the table above primarily due to revenue growth.

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        General and administrative expenses were generally consistent in the three months ended June 30, 2011 and the three months ended September 30, 2011. General and administrative expenses increased in the three months ended December 31, 2011 due to the acquisitions of GradeBeam and Submittal Exchange during this period and the associated professional services fees. During the three months ended March 31, 2012, general and administrative expenses increased primarily due to our ownership of GradeBeam and Submittal Exchange for a full quarterly period. The increase in general and administrative expenses during the three months ended September 30, 2012 related primarily to increased personnel expenses driven by higher headcount during the period. General and administrative expenses increased in the three months ended December 31, 2012 and March 31, 2013 due to increased professional fees and headcount to support the process of becoming a public company and, to a lesser extent, increased personnel expenses driven by higher headcount related to the acquisition of PlanSwift in January 2013.

        Sales and marketing expenses generally increased over the course of the quarters presented in the table above due to the acquisitions of GradeBeam and Submittal Exchange in the three months ended December 31, 2011. Additionally, we increased staffing in order to support our growth initiatives following these acquisitions. Prior to these acquisitions, during the three months ended September 30, 2011, sales and marketing expenses decreased due to lower marketing and travel expenses. This was a result of the change in our sales approach for certain of our solutions to an enterprise relationship focus performed by our client services group and executive team. Sales and marketing expenses increased in the three months ended March 31, 2013 primarily due to the acquisition of PlanSwift.

        Technology and development expenses generally increased over the course of the quarters presented in the table above primarily due to increased headcount and higher consulting fees related to the enhancement of our solutions. In addition, technology and development expenses increased beginning in the three months ended December 31, 2011 as a result of the acquisitions of GradeBeam and Submittal Exchange during this period. Technology and development expenses increased in the three months ended March 31, 2013 primarily due to increased headcount, in part driven by our acquisition of PlanSwift in January 2013.

        Depreciation and amortization expenses were generally consistent in the three months ended June 30, 2011 and the three months ended September 30, 2011. Depreciation and amortization expense increased beginning in the three months ended December 31, 2011 due to the amortization of intangible assets acquired through the GradeBeam and Submittal Exchange acquisitions. Depreciation and amortization expenses decreased in the three months ended December 31, 2012 due to lower amortization expense, as internal software had become fully amortized in September 2012. Depreciation and amortization expenses increased in the three months ended March 31, 2013 due to the amortization of intangible assets acquired through the PlanSwift acquisition in January 2013.

Liquidity and Capital Resources

        We have financed our operations primarily through private placements of preferred stock and common stock, private placements of subordinated convertible debentures, notes payable, leases payable and cash provided by operating activities. Our primary source of liquidity as of March 31, 2013 consisted of $5.0 million of cash and cash equivalents.

        Our principal uses of liquidity have been to fund our operations, working capital requirements, capital expenditures, and acquisitions and to service our loan payable to related party. We expect that working capital requirements, acquisitions and capital expenditures will continue to be our principal needs for liquidity over the near term.

        Over the next 12 months, we have planned capital expenditures of $3.4 million and expected debt service obligations of $3.9 million, excluding $6.8 million in debt that becomes payable upon the completion of this offering as described in "Use of Proceeds". In addition, we expect to pay cash

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bonuses to certain of our non-executive employees in an aggregate amount of $2.7 million following the completion of this offering. We believe that our existing cash and cash equivalents, cash flow from operations, available equipment lease financing and the recent non-convertible debt financing will be sufficient to fund our operations, including these capital expenditures and debt service obligations.

        The following table sets forth a summary of our cash flows for the periods indicated:

 
  Years Ended September 30,   Six Months Ended
March 31,
 
 
  2010   2011   2012   2012   2013  
 
  (in thousands)
 

Net cash used in operating activities

  $ (9,842 ) $ (1,909 ) $ (3,403 ) $ (2,588 ) $ (4,192 )

Net cash used in investing activities

    (184 )   (426 )   (12,842 )   (12,808 )   (864 )

Net cash provided by financing activities

    8,194     5,200     14,478     14,414     5,903  

    Net Cash Used in Operating Activities

        Our net loss and cash flows from operating activities are significantly influenced by our investments in headcount and infrastructure to drive future revenue growth and support that anticipated growth.

        Our cash flows from operating activities are affected within the fiscal year by the timing of our invoicing of, and our receipt of payments from, our clients. In particular, our billing cycles for general contractor monthly fees on our CPM solution are concentrated in the second and fourth quarters and are largely collected by the end of the respective quarter. Accordingly, we experience relatively lower levels of billing and client payments in the first and third quarters of each year. We expect this pattern of cash flow from our operating activities to continue in the future.

        In the six months ended March 31, 2013, $4.8 million, or 43.7%, of our net loss of $10.9 million consisted of non-cash items, including $1.9 million of depreciation and amortization expense, $1.8 million of non-cash interest expense and the change in fair value of derivatives and $1.1 million of share-based compensation expense. Working capital changes included a $2.3 million increase in deferred revenue and a $0.8 million increase in accounts payable and accrued expense, partially offset by increases in current assets of $1.1 million. The increase of $1.6 million in cash used in operating activities from the six months ended March 31, 2012 to the six months ended March 31, 2013 was primarily a result of changes in working capital balances year over year and, to a lesser extent, higher expenses incurred to support the process of becoming a public company, partially offset by higher revenue during the period.

        In fiscal 2012, $8.1 million, or 43.1%, of our net loss of $18.8 million, consisted of non-cash items, including $4.1 million of depreciation and amortization expense, $2.7 million of share-based compensation expense and $1.3 million of non-cash interest expense on convertible debentures and change in fair value of derivatives. Working capital changes included the $6.1 million increase in deferred revenue, and a $1.9 million increase in accrued expenses, including a bonus accrual for management and employees. The increase of $1.5 million in cash used in operating activities from fiscal 2011 to fiscal 2012 was a result of expenditures made to enhance the functionality of our suite of solutions, as well as the post-acquisition investments made in GradeBeam and Submittal Exchange.

        In fiscal 2011, $10.2 million, or 54.0%, of our net loss of $18.9 million, consisted of non-cash items, including $6.6 million of non-cash interest expense on convertible debentures, $2.2 million in depreciation and amortization expense and $1.5 million of share-based compensation expense. Working capital changes included a $2.9 million increase in deferred revenue and a $3.7 million increase in accrued expenses, including a bonus accrual for management and employees. The decrease of $7.9 million in cash used in operating activities from fiscal 2010 to fiscal 2011 was a result of revenue

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growth from increased project activity primarily driven by recently added clients adding their projects to our solutions. In addition, we changed our pricing structure for our subcontractor clients using our CPM solution, effective on all projects added to system after January 1, 2011. This change accelerated cash receipts and had a positive impact on cash used in operating activities.

        In fiscal 2010, $5.8 million, or 36.4%, of our net loss of $15.9 million, consisted of non-cash items, including $2.6 million of depreciation and amortization expense, $2.1 million of share-based compensation expense and $1.0 million of non-cash interest expense related to convertible debentures. Changes in working capital included a $0.2 million increase in accounts receivable due to increased sales and decreases of $0.3 million and $0.4 million in accounts payable and accrued expenses, respectively. These uses of cash were offset by a $1.3 million increase in deferred revenue, due to higher project activity.

    Net Cash Used In Investing Activities

        Our primary investing activities have consisted of cash used for acquisitions and capital expenditures in support of expanding our infrastructure and workforce. As our business grows, we expect our investment activity to continue to increase.

        In the six months ended March 31, 2013, cash used in investing activities was $0.9 million, which primarily related to $1.0 million in cash paid in connection with our acquisition of PlanSwift in January 2013 and capital expenditures of $0.1 million. This cash used in investing activities was partially offset by the joint venture partner's investment of $0.2 million cash investment in our joint venture, which we consolidate in our financial statements.

        In fiscal 2012, we used $12.8 million of cash in investing activities, which consisted of $2.4 million of net cash consideration for our acquisition of Submittal Exchange, $10.0 million of cash consideration for our acquisition of GradeBeam and $0.4 million of capital expenditures.

        In fiscal 2011, we used $0.4 million of cash in investing activities, primarily consisting of $0.3 million of capital expenditures.

        In fiscal 2010, we used $0.2 million of cash in investing activities, which were capital expenditures.

    Net Cash Provided by Financing Activities

        In the six months ended March 31, 2013, cash provided by financing activities of $5.9 million related to the issuance of long-term notes totaling $6.9 million, of which $0.5 million was allocated to the detachable warrants issued in connection with certain of the notes. This was partially offset by cash paid for deferred offering and financing costs of $0.7 million, some of which were associated with this offering, and by a $0.3 million payment on the mortgage for our headquarters.

        In fiscal 2012, cash provided by financing activities was $14.5 million, primarily due to the issuance of $14.7 million of convertible debentures, of which $1.8 million was allocated to the beneficial conversion feature and the detachable warrants issued in connection with the convertible debentures, partially offset by $0.5 million in payments on the mortgage for our headquarters. The majority of these activities occurred in the three months ended December 31, 2011.

        In fiscal 2011, cash provided by financing activities was $5.2 million, primarily due to the issuance of $5.5 million of convertible debentures, of which $0.7 million was allocated to the beneficial conversion feature and the detachable warrants issued in connection with the convertible debentures, partially offset by $0.2 million in payments on the mortgage for our headquarters.

        In fiscal 2010, cash provided by financing activities was $8.2 million, primarily due to the issuance of $8.4 million of convertible debentures, of which $1.3 million was allocated to the beneficial

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conversion feature and the detachable warrants issued in connection with the convertible debentures, partially offset by $0.2 million in payments on the mortgage for our headquarters.

Off-Balance Sheet Arrangements

        As part of our ongoing business, we do not have any relationships with other entities or financial partnerships that have been established for the purpose of facilitating off-balance sheet arrangements. We are therefore not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships.

Contractual Obligations

        The following table describes our contractual obligations as of March 31, 2013 (in thousands):

 
  Total   Less Than
1 Year
  1 - 3 years   3 - 5 years   More than
5 years
 

Loan payable to related party(1)

  $ 10,469   $ 500   $ 1,000   $ 8,969   $  

Interest on loan payable(1)

    1,838     567     1,052     219      

Convertible debentures(2)

    6,487             6,487      

PIK interest on convertible debentures(3)

    1,625             1,625      

Notes payable(4)

    8,227     1,315     6,793     42     77  

Interest on notes payable(5)

    2,025     675     1,350          

Lease obligations(6)

    2,694     869     1,201     344     280  
                       

Total contractual obligations(7)

  $ 33,365   $ 3,926   $ 11,396   $ 17,686   $ 357  
                       

(1)
The loan payable to First Midwest Bank has been used exclusively for the purchase of land and the construction of our corporate headquarters facility in Deerfield, Illinois. Interest under the loan is payable at the greater of the 30-day LIBOR plus 4.5% or 5.5%. Estimated interest payments assume the September 30, 2012 interest rate on the loan of 5.5%. The agreement includes a debt service covenant requiring us to maintain a ratio of net cash flow from operations to debt service (both terms as defined in the agreement) of not less than 1.10 to 1.00 (calculated quarterly based on the most recently ended four fiscal quarters), and an equity issuance covenant that requires lender consent for certain future equity issuances. Our net cash flow from operations for fiscal 2012 and the six months ended March 31, 2013 was negative, and we consequently did not satisfy the debt service covenant. We estimate that the additional net cash flow from operations required to satisfy the ratio for the four fiscal quarters ended March 31, 2013 was at least $5.5 million. Compliance with the debt service covenant and any related default was waived by First Midwest Bank until December 31, 2013. Following the completion of this offering, we intend to renegotiate the terms of the loan and/or to seek proposals from other lenders to refinance the loan. If we are unable to renegotiate the terms of the loan or to replace the loan, we expect to have sufficient cash to repay the loan. Accordingly, we do not expect that any failure to satisfy such covenants in the future would have a material adverse effect on our operations.

(2)
The obligation amount consists of the principal amount outstanding plus accrued PIK interest through March 31, 2013 and assumes the convertible debentures will be repaid upon maturity and not converted or redeemed prior to maturity.

(3)
PIK interest at the stated rate of 8.0% is added to the outstanding principal balance and payable upon maturity of the convertible debentures.

(4)
Notes payable include a $1.3 million short-term note related to the PlanSwift acquisition and $6.8 million in long-term notes payable that were issued in the second quarter of fiscal 2013, all of

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    which become payable upon completion of this offering, and $0.2 million in other long-term obligations.

(5)
Interest on notes payable represents the stated 10% interest rate.

(6)
Lease obligations include office leases in Chicago, Illinois, Des Moines, Iowa, Phoenix, Arizona and Salt Lake City, Utah and other office furniture and equipment leases.

(7)
After giving effect to the conversion of the remaining convertible debentures and related PIK interest and repayment of certain notes payable as part of this offering, our total contractual obligations on a pro forma basis are expected to be $15.2 million, with $1.9 million payable in less than one year, $3.3 million payable between one and three years, $9.6 million payable between three and five years and $0.4 million payable after five years.

Internal Control over Financial Reporting

        In preparation for this offering and for future compliance with Section 404 of the Sarbanes-Oxley Act, we concluded that a material weakness in internal control over financial reporting related to our control environment existed as of September 30, 2012 as described below.

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

    We did not maintain a sufficient complement of personnel with the appropriate level of accounting knowledge, experience, and training in the application of GAAP commensurate with our financial reporting requirements. Specifically, we did not maintain adequate qualified personnel with regard to certain significant complex transactions and technical accounting matters and we lacked adequate controls regarding training in the relevant accounting guidance, review and documentation of certain complex accounting transactions and review of related accounting disclosures such as the accounting for convertible debenture financing agreements, including any embedded features, business combinations and share-based compensation transactions in accordance with GAAP.

        This material weakness in our control environment contributed to the following individual material weaknesses in our internal control over financial reporting:

    We did not maintain effective internal controls related to our accounting for convertible debentures to provide reasonable assurance that (a) the instruments were valued correctly and (b) all pertinent facts related to the convertible debentures, including the impact of conversion and redemption or other embedded or derivative features, were identified and considered for appropriate accounting in accordance with GAAP. Specifically, this material weakness resulted in material misstatements and audit adjustments of non-cash interest expense, convertible debenture and derivative liabilities and additional paid-in capital to the consolidated financial statements for the fiscal years ended September 30, 2010, 2011 and 2012.

    We did not maintain effective internal controls related to the accounting for business acquisitions to provide reasonable assurance that (a) business combination accounting identified and considered all pertinent factors related to all classes of securities of the acquired entity, including any non-controlling interests and (b) there was appropriate review of the purchase price allocation entries recorded in the consolidated financial statements. Specifically, this material weakness resulted in material misstatements and audit adjustments to non-controlling interest and the related income (loss) attributable to our company and the non-controlling interest, additional paid-in capital, deferred revenue and revenue, goodwill, intangible assets net

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      and the related amortization expense to the consolidated financial statements for the fiscal year ended September 30, 2012.

        These material weaknesses could result in misstatements of the aforementioned accounts that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

    Plan for Remediation of the Material Weaknesses

        We are currently in the process of finalizing our remediation plans and implementing the same. To date we have implemented and are continuing to implement a number of measures to address the material weaknesses identified. In January 2013, we hired a corporate controller with appropriate experience applying GAAP technical accounting guidance and are in the process of hiring additional accounting personnel. We also are designing additional controls around identification, documentation and application of technical accounting guidance with particular emphasis on events outside the ordinary course of business. These controls are expected to include the implementation of additional supervision and review activities by qualified personnel, the preparation of formal accounting memoranda to support our conclusions on technical accounting matters, and the development and use of checklists and research tools to assist in compliance with GAAP with regard to complex accounting issues. We intend to complete the implementation of our remediation plan during fiscal 2013.

        In addition, we intend to engage a third-party provider to help us assess and improve our internal controls for complying with the Sarbanes-Oxley Act. The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. As we continue to evaluate and take actions to improve our internal control over financial reporting, we may determine to take additional actions to address control deficiencies or determine to modify certain of the remediation measures described above.

        We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.

Quantitative and Qualitative Disclosures About Market Risk

    Interest Rate Risk

        We are exposed to market risk related to changes in interest rates.

        At September 30, 2012, we had a loan payable to related party outstanding of $10.7 million and convertible debentures outstanding with principal amounts of $17.2 million. Our convertible debentures have a fixed interest rate of 8.0% and interest is payable in kind. Our loan payable to related party bears interest at the greater of the 30-day LIBOR plus 4.5% or 5.5%. At September 30, 2012, the interest rate on the loan was 5.5%. Increases in the LIBOR rates would affect operating results and cash flows to the extent LIBOR plus 4.5% exceeds 5.5%. A hypothetical 1.0% increase in the 30-day LIBOR of 0.2143% relative to interest rates at September 30, 2012 would result in an increase of less than $25,000 in interest expense for fiscal 2012. Our interest rate risk has not changed significantly from September 30, 2012 to March 31, 2013.

    Foreign Currency Risk

        We do not believe that fluctuation in the exchange rates of currencies other than the U.S. dollar has had a material effect on our business, financial condition or results of operations. Less than 10% of our revenues, those derived from clients located in Canada, currently are denominated in a currency

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other than the U.S. dollar. The effect of an immediate 10% adverse change in foreign exchange rates would not be material to our financial condition or results of operations.

        Nonetheless, if we are successful in expanding our global presence, an increasing portion of our future revenue and operating expenses may be denominated in currencies other than the U.S. dollar. If our international operations grow, our risks associated with fluctuation in currency rates would become greater, and we would reassess our approach to managing this risk. In addition, currency fluctuations or a weakening U.S. dollar could increase the costs of our international expansion. To date, we have not entered into any foreign currency hedging contracts, since exchange rate fluctuations have not had a material impact on our operating results and cash flows. Based on our current international operations, we do not plan on engaging in hedging activities in the near future.

    Inflation Risk

        We do not believe that inflation has had a material effect on our business, financial condition or results of operations. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

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BUSINESS

Overview

        We are a leading provider of on-demand business collaboration software solutions to the commercial construction industry. Our solutions are focused on facilitating collaboration between owners/developers, general contractors and subcontractors. Our solutions increase efficiency, enable better risk management and provide improved visibility and control of construction activities for our clients, and support several mission-critical business processes at various stages of the construction project lifecycle.

        We believe we are a leading example of a new generation of on-demand software solutions focused on enablement of business-to-business collaborative processes. Such solutions are by design on-demand, as they require neutral third parties to act as the platform for collaboration by multiple parties and to facilitate the exchange of data and documents.

        We address a large and growing end market. The construction industry was an approximately $1 trillion industry in North America in 2012 and was more than $7 trillion globally in 2010, according to the most recent data available from the United States Census Bureau and "Global Construction 2020," a study produced by Global Construction Perspectives, and represents an important component of developed economies. The industry currently continues to be impacted in certain markets across the globe by slow economic recovery from the global financial crisis, oversupply of occupiable space, and limited availability of credit. However, we believe the business outlook for the industry is strong, driven by demographics, economic growth and aging infrastructure, as well as by changing preferences and new technologies being applied to buildings and structures, which include an increased focus on environmental considerations and lower costs of operation and ownership. We believe the construction industry represents a large and growing market for technology solutions of all types, and is especially attractive for our solutions and our growth as a result of being underpenetrated by those technology solutions that enable construction companies to collaborate with each other to operate more effectively.

        We have established a strong market position. As of March 31, 2013, since the date of launch or acquisition of our solutions, our clients have used one or more of our on-demand collaboration solutions to help manage over 13,000 commercial construction projects representing more than $125 billion in construction value as reported by our clients. During fiscal 2012, our clients used one or more of our on-demand solutions to help manage over 4,100 commercial construction projects representing more than $33 billion in construction value as reported by our clients. Our collaboration solutions have been used by more than 3,000 general contractors, owners/developers, and architects. This includes 41 of the 100 largest general contractors in North America, ranked as of May 2012 by Engineering News-Record based on annual construction revenues. In addition, based on management estimates, approximately 300,000 subcontractors were active on our solutions during fiscal 2012. Our solutions are used on construction projects of all sizes, from small remodels or renovations to multi-billion dollar developments.

        Our collaboration solutions provide robust functionality, data sharing and exchange capabilities, and workflow tools that support several mission-critical business processes undertaken by our clients:

    Construction Payment Management ("CPM") is our most widely-used solution. Based on shared entry of—and access to—project data and our workflow tools, CPM enables a disciplined, standardized online approach to generating, collecting, reviewing and routing invoices and the necessary supporting documentation and legal documents, and initiation of payment of the invoices.

    Submittal Exchange is a highly configurable step-by-step workflow tool for collecting, reviewing and routing project documents among project participants. This solution can be applied to any phase of the construction process and used to manage any type of document including

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      submittals, requests for information, daily reports, drawings and specifications, architects' supplements and any other document typically exchanged on a project.

    GradeBeam supports the process of obtaining construction bids by allowing those seeking bids to identify potential bidders, send out invitations-to-bid and track the bidding intent of potential bidders.

    Pre-Qualification Management ("PQM") supports the collection and review of data for effective contractor risk assessment and qualification, and can be used on a project-by-project basis or as part of an ongoing qualification process.

    Greengrade is our solution to facilitate the workflow and data and document collection necessary to manage the Leadership in Energy and Environmental Design ("LEED") Certification process for construction projects.

        In addition, we offer PlanSwift, a take-off and estimating solution used in preparing construction bids, and Contractor Default Claims Management, which supports the process of documenting a subcontractor default insurance claim.

        We intend to continue expanding our portfolio of solutions to support additional business processes and to develop the capabilities of our existing solutions to provide further value to our clients.

        Our revenue model has several attractive characteristics. Our revenue is derived primarily from fees driven by construction project activity, monthly fees and subscription fees. We increase revenue both as we add clients and our clients increase the number of their projects on our solutions. We historically have experienced high recurrence of fees, favorable timing of cash flow and predictable reported revenue.

        We engage directly with our clients to sell our solutions, and we have achieved significant growth since introducing our solutions to the market. In the fiscal years ended September 30, 2010, 2011 and 2012, we generated revenue of $6.0 million, $10.5 million and $21.7 million, respectively, which represented growth over the prior period of 90.0%, 74.7% and 106.2%, respectively. In those same periods, we had net losses of $15.9 million, $18.9 million and $18.8 million, respectively. See "Prospectus Summary—Summary Consolidated Financial Data."

        Our solutions have global applicability and we are an international business: in fiscal 2012, 10.1% of our revenue was derived from clients located outside the United States, principally Canada, and in October 2012 we entered into a joint venture to begin operations in Australia and New Zealand, attractive construction markets with significant further expansion opportunities. PlanSwift also is offered in several international markets through a network of distributors and resellers.

        We believe we have a very large opportunity available to us. Our strategy is to leverage our existing solutions and industry presence to become the industry standard for collaboration and related solutions in the commercial construction industry. We intend to penetrate further our existing markets and capture additional revenue from our clients and expand our suite of solutions through both internal development and the acquisition of complementary businesses. We also plan to increase our market opportunity by expanding both globally and into other industries that experience similar collaboration environments and challenges.

        We have a strong focus on our industry and its needs, and on client service and satisfaction. Our management team has extensive operational and business development experience, and we believe has the skills and expertise to execute our growth strategies.

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Our Industry

    The construction industry is large and growing

        Construction is a major global industry and consists of building new structures, making additions and modifications to existing structures, as well as conducting maintenance, repair and improvements on existing structures. Worldwide construction spending was $7.2 trillion in 2010, according to the Global Construction 2020 study. A total of $97.7 trillion will be spent on construction worldwide during this decade, and by 2020 construction is expected to reach more than $12 trillion in annual spending and account for 13.2% of world GDP, according to the same study. The following sets forth data in the geographic markets we currently serve:

    In the United States, as of December 2012, the annualized value of commercial construction put in place, which excludes single-family residential construction, was $740 billion, according to the United States Census Bureau.

    In Canada, as of 2010, construction output was $255 billion, according to Global Construction Perspectives.

    In Australia, as of 2010, construction output was $203 billion, according to Global Construction Perspectives.

        We believe the outlook for the construction industry is strong. The industry currently continues to be impacted in certain markets across the globe by slow economic recovery from the global financial crisis, oversupply of occupiable space, and limited availability of credit. However, long-term trends of population growth, deteriorating infrastructure and changing needs for buildings—driven by both socioeconomic and technological changes—all imply a continuing and growing need for construction activity. In certain markets, including our core markets in North America, the industry's growth rate also is benefitting as a result of the recovery from the factors described above. For example, in the United States, the annualized value of commercial construction increased approximately 5.8% from the fourth quarter of calendar 2011 to the fourth quarter of calendar 2012, approximately 175% of the rate of growth of United States GDP over the same period based on data from the United States Department of Commerce. Overall, global construction spending is expected to grow at a compounded annual growth rate of 5.2% from 2010 to 2020, according to Global Construction Perspectives.

    Many diverse participants are involved in construction

        A construction project involves the participation of many different organizations, in various roles. The principal participants in the construction process include:

    Owners and Developers.  The construction process begins with an owner or developer deciding to undertake the construction of a new building or other structure, or to make improvements or modifications to an existing building or structure. In the case of an owner, the building will be for the owner's use; and in the case of a developer, the building will be sold or leased to another party. Effectively, any organization can become an owner or developer. The owner or developer will hire architects and obtain financing, insurance and planning permission, but will generally not undertake or oversee the construction activities. For this, the owner or developer will look to hire a general contractor.

    General Contractors.  General contractors are selected by the owner or developer to oversee the successful completion of the construction process. General contractors take responsibility for the completion of the project from the owner or developer. They may do a portion of the work themselves, often through wholly-owned subsidiaries, but they generally subcontract the significant majority of the work to subcontractors. General contractors often specialize in one or more types of construction such as residential or commercial building, and may further specialize

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      in, for example, healthcare facilities or highways. General contractors range from those that manage just a few projects in a single market to multi-billion dollar revenue multi-national organizations.

    Subcontractors.  Specialty trade contractors perform specialized activities related to all types of construction such as site preparation and excavation, mechanical, HVAC, plumbing, electrical and landscaping work. Specialty trade contractors are most commonly referred to as subcontractors as the general contractor is subcontracting out the work. Subcontractors may elect to further subcontract out portions of their work, creating the potential for a multi-tiered pyramid of participants, all overseen and coordinated by the general contractor, who in turn reports to the owner/developer. Subcontractors can be large multinational organizations, but are more typically small businesses with just a few employees.

    Other Participants.  Many other organizations also are involved in the undertaking of a construction project. These may include material suppliers, architects, financing companies, insurance companies, title companies, owners' representatives, cost engineers and many others. Each fulfills a specific and essential role, at specific stages or throughout the construction project, and has to work in a coordinated manner with other participants to contribute to the project's successful completion.

        The construction industry can be divided into two segments: commercial construction, which includes the construction of buildings, such as offices, factories, warehouses, schools, hospitals and multi-family residential complexes, and the construction of infrastructure such as roads, bridges, sewers, tunnels and other projects; and single-family residential construction, representing the construction of single-family homes. Single-family residential construction is often performed by a specialized set of developers, general contractors and subcontractors, especially in the United States and Canada, and it typically does not require the types of complex collaboration typically found in the commercial construction segment. Accordingly, we view the market for our collaboration solutions as being primarily the commercial construction segment.

    Participants face complex collaboration challenges

        Each construction project requires a complex collaborative effort between the many different participants that play a part throughout or at different stages of the project's lifecycle. The participants involved in a project may be working together for the first time, have different working practices, procedures, technology and software solutions, and have limited information about each other. The interaction between the participants begins well in advance of the construction itself—encompassing design, bidding, qualification, contracting and pre-construction—and continues through construction, to eventual close-out and operation. Each step in the process involves multiple, changing participants. The work itself is also ever-changing, with client requirements and in-the-field adjustments often resulting in a large number of modifications to the design and build of the structure, and changes to the scope, sequence and interdependence of participants' tasks.

        The practices used by the industry to manage this complexity have been largely manual, paper-based and inefficient, or have relied on technology solutions not designed for collaboration. As a result, we believe participants face numerous challenges collaborating on construction projects, including:

    Significant administrative overhead burden.  The manual processes or technology solutions currently used by project participants are often personnel-intensive and time-consuming and can lead to increased administrative costs.

    Disparate standards, procedures and systems.  Inconsistent approaches to sharing information, managing tasks and exchanging critical documentation often lead to miscommunication, inaccuracies, inefficiencies, delays and higher costs.

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    Lack of workflow discipline and control.  Manual processes make it difficult to ensure that workflows occur in defined steps and desired sequence, and provide limited visibility for effective management and decision-making.

    Inefficient process coordination.  In the absence of a common process framework, participants are likely to utilize their own business processes, documentation, information systems and communication methods. This results in inefficiency, duplicative effort and potential confusion about responsibilities.

    Errors, inconsistencies and omissions.  Processes such as manually entering data, completing, submitting and reviewing paper documents, verifying conformity of paper documentation with specified requirements and reconciling invoices with work orders often will result in human error requiring data to be reentered, work to be redone, payments to be cancelled or rerouted and further reconciliation to be conducted.

    Limited risk management tools.  The inability to access timely, accurate and relevant information concerning project status, tasks and participants limits the ability to evaluate and manage the many elements of financial, operational and legal risk each participant is exposed to on the project, an issue exacerbated when an organization's entire portfolio of construction activities is considered.

    Siloed applications and data repositories.  Lack of integration between systems being used by project participants hinders the collection, exchange and sharing of information. As a result, organizations do not have the visibility and control they need to manage construction projects in an efficient manner, exacerbating the other challenges identified above.

    The industry is changing in response to the many issues it faces

    New challenges as a result of the global financial crisis

        The global financial crisis had, and continues to have, a significant and multifaceted impact on the construction industry. Significant downward pressure on construction revenue and profits, the pursuit of business outside of areas of traditional focus and competency, and greater financial instability among the universe of contractors have each required industry participants to significantly change the way they operate. Compounding these challenges, in response to the crisis, many contractors have reduced staff levels significantly, especially in corporate and administrative functions, including information technology departments.

        We believe as a result there has been an ever greater emphasis on risk management, efficiency and improved decision making. In response to lower construction volumes but with prospects of recovery, we believe construction executives are placing greater focus on remaining competitive and managing growth while controlling growth in expenses, especially in the back-office.

    New approaches to project delivery

        There also has been an acceleration of the existing trend in the industry to employ new methods to deliver and finance projects at lower costs and more consistently on a timely basis to owners and developers. These methods often involve greater risk sharing and business collaboration. An example of new ways of organizing project delivery teams is Integrated Project Delivery, a highly collaborative approach in which the participants assembled to construct a building or other structures jointly manage the construction process, enter into multiparty agreements and sometimes share contingencies and profits. Another example is Public Private Partnerships, which are partnerships between a governmental entity and private party in which the private party provides a public service or project, and which are increasingly being used to address challenges in financing projects.

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        Today's construction managers require technology solutions to support these new approaches to collaboration, project delivery and financing methods. We believe these solutions must enable project participants to collaborate more effectively, improve accountability and increase productivity.

        The industry also is making increased use of technology to achieve these objectives of lower cost and more consistently timely delivery of projects. Tools such as Building Information Modeling for design, laptops and tablets for on-site access to information, adoption of cloud computing to lower technology costs, and geo-location and radio frequency identification technologies on-site and to manage assets are being used ever more frequently.

    New focus on risk management, transparency and efficiency

        The recent challenges faced by the construction industry have heightened the importance of effective risk management as a critical element of success and profitability for all organizations. We believe senior-level executives involved in managing construction processes now recognize enterprise risk management as a core business process and competency.

        A growing number of owners and contractors we believe also recognize the opportunity to drive efficiency in the construction process through a more transparent and automated procurement and delivery process. Contractors benefit by taking on less risk, while owners avoid unwelcome surprises and gain greater control of the project outcome.

        Reduced construction volumes and more intense competition have put direct pressure on profit margins, resulting in an increased focus on both reducing costs and aligning costs to project volumes, eliminating fixed costs and non value-added support and administrative activities.

    New opportunity for on-demand business collaboration solutions

        The ability to navigate today's construction complexities, and to effectively facilitate the coordination and collaboration of project participants is critical to increasing productivity, lowering costs, managing risk and enhancing transparency. In order to meet this challenge and as companies seek to support growth while limiting costs, we believe industry participants are increasingly willing to adopt software solutions. The importance of these solutions to participants throughout the construction industry and each construction project creates an opportunity for new approaches and solutions focused on collaborative processes, and for solution providers to experience significant demand and capture a greater share of the industry's technology spend.

        We believe software solutions delivered on an on-demand basis and by a neutral third party—rather than as the in-house solution of a particular project participant—are necessary to meet this demand. Such solutions can facilitate the exchange of data and information between and within participants in a cost-effective, flexible, scalable and secure manner.

        Gartner, an industry research firm, estimates worldwide total end-user spending for cloud application services within the enterprise application software markets will grow at a CAGR of 19.1% from $10.7 billion in 2010 to $32.2 billion in 2016. Gartner also has identified the construction industry as being among those sectors taking the least advantage of technology, spending only 1.1% of revenue as compared to more than 6.0% for the leaders in technology usage such as the banking and financial services industry. We believe the trends described above will drive the construction industry to increase its investment in technology at an accelerating rate.

Our Solution

        We are a leading provider of on-demand business collaboration software solutions to the construction industry. Our solutions are focused on facilitating collaboration between owners/developers, general contractors, subcontractors, architects and the many other participants on a

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construction project. Our solutions address the several challenges associated with the traditional paper-based and personnel-intensive manual approaches or with technology solutions that were not designed for collaborative processes, and support many of the trends currently occurring within the industry. Our solutions combine the ease-of-use and ease-of-deployment of on-demand technology with our industry-specific process expertise and comprehensive client support to deliver immediate and substantial benefits to our clients. We believe our solutions benefit our clients because they are:

    Designed specifically for collaborative processes.  Our collaboration solutions facilitate the sharing and exchange of data between and within organizations, and interface with organizations' existing accounting, enterprise resource planning and other systems. Data, documents and information can be shared between organizations so that all parties have a single view of the status of the project. All our solutions include robust workflow tools to ensure that necessary steps are carried out in the right sequence by appropriately authorized users.

    Developed to meet the needs of the construction industry.  Construction projects and the commercial construction industry have specific business processes and practices that require unique solutions to effectively support them. Non industry-specific invoicing, document management or contract management solutions typically do not have these features. Our solutions are built with the unique requirements of construction in mind, and we have a strong and knowledgeable client services team responsible for sales, implementation and ongoing support that has specialized expertise in the needs of our clients.

    Delivered through a trusted and neutral third party.  With our collaboration solutions, we act as a neutral third party in hosting, providing access to and facilitating the exchange of information that is valuable to the participants interacting in the construction process. These participants may, however, have potentially conflicting incentives and interests, and differing views as to the status of their interaction. We believe our success in driving adoption of our collaboration solutions derives in part from the benefits that all participants see in having a single shared, negotiated-and-agreed-upon and transparent view of a project.

    Valuable to all participants.  It is a core principle of our application design that our solutions provide benefits to all users, independent of their specific role or responsibilities on the project. Our solutions seek to achieve reduced costs, better-managed risk, and improved visibility and better decision-making for each owner/developer, general contractor, subcontractor, architect, material supplier and other third parties involved in the construction project.

    Interfaced with existing enterprise systems.  Our solutions recognize that our clients have existing systems for enterprise resource planning, accounting, document management, project management and project scheduling, among others, that represent significant investments for our clients and support business processes that would be highly disruptive to change. As a result, we interface our solutions with these systems in order to leverage and protect existing investments, facilitate business processes and reduce or eliminate duplicate data entry.

    Easy to implement.  Our collaboration solutions are offered on-demand over the Internet, and can be fully configured to meet clients' specific needs and business practices without customization. This allows our clients to deploy our solutions enterprise-wide and for all construction projects without significant upfront capital investment, involvement of the organization's IT departments, or professional services implementation or customization activities. Our clients can begin to use our solutions and then fully deploy them across their organization in a very short period of time.

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    Easy to use and adopt.  Our solutions are designed to be intuitive and easy-to-use, utilize terminology, processes and forms that are familiar to construction industry participants, and feature a web-based interface that is familiar to most computer users. Our solutions are configurable through various parameters to meet the specific needs of the client, and we are able to leverage our extensive experience of implementation within the construction industry to quickly achieve implementation in conformance with best practices. We find that clients are highly self-sufficient with our solutions within a short period of time.

    Accompanied by high levels of training and support to all users.  Our solutions are used by many participants with various roles and expertise. To support this, our client services teams provide extensive initial and ongoing training and support for all end-users, regardless of their role on a project.

    Secure, robust and auditable.  Our solutions support mission-critical processes and handle sensitive data that must be available and yet secure. We have designed our systems and infrastructure to provide enterprise-class security and uptime. Our platform has undergone periodic security audits and evaluations by our clients and independent auditors, in conjunction with our ongoing SSAE 16 compliance program. The security and vulnerability of our solutions also is tested and assessed periodically by qualified independent third parties. All events undertaken by users in our system are logged, providing a level of auditability of actions and interactions unavailable with traditional processes.

Our Key Business Attributes

        Our business of providing software solutions to the construction industry has the following key attributes:

    Large, attractive market.  The construction industry is an important part of the global economy and affords us a large market in which to sell our solutions both in our current markets of North America and Australia and New Zealand, and in new geographies. The industry continues to lag in its use of technology, and we also will seek to add to our suite of solutions to expand our value proposition to our clients and create new revenue opportunities for us.

    Next-generation approach to solving the collaboration challenges facing our clients.  We believe ours is a disruptive approach to solving business-to-business collaboration challenges, which is enabled by the emergence of on-demand solutions as a reliable solution delivery method and is founded on the principles of a neutral third-party solution providing benefits to all participants. We believe this approach can be applied to many processes and industries.

    High recurrence of fees.  Our collaboration solutions are integral to our clients' operation of their business. We seek to establish enterprise relationships with our clients so that all their current and future projects will be managed on our collaboration solutions. This results in recurring additions of new projects and the ongoing management of these projects on our solutions by our clients. Because our revenue is derived primarily from fees driven by construction project activity, monthly fees and subscription fees, this in turn results in a high recurrence of our fees.

    Favorable timing of cash flow.  Clients typically pay us fees upfront or in advance of solution usage. We also generally collect the majority of these fees electronically thereby reducing invoicing and collection activity and accelerating our cash flow.

    Predictable reported revenue.  The nature of the construction industry and our clients' operation of their business generally results in low volatility over reporting periods in the number and construction value of projects each client is working on. Our close working relationship with our clients has provided us additional insight into their business activity and the number and construction value of projects each client will manage on our system. In addition, because we

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      have a large number of clients, the aggregate number of new projects added to, and of projects being managed on, our solutions benefits from a portfolio effect. Furthermore, projects with similar construction value historically have generated like amounts of fees over their duration. These factors, combined with the high recurrence of our fees and our recognition of revenue ratably over future periods, have historically resulted in predictable reported revenue. For example, over the eight quarters ended March 31, 2013, a period over which the compounded quarterly growth rate of our reported activity-driven revenue was 15.2%, between 93% and 95% of our reported activity-driven revenue in each quarter resulted from projects that were added to our solutions in prior periods.

    Highly defensible market position.  We believe our industry expertise, leading market share, large installed base and strong intellectual property portfolio represent significant barriers to successful competitive entry. In addition, our ability to interface with our clients' other enterprise systems further enhances our competitive position. Our client services, technology and development resources are dedicated to creating, enhancing and optimizing a balanced value proposition for all of our clients and supporting collaborative processes in our target markets.

    Ability to differentiate through our business and technology approach.  There are many technology providers targeting the construction industry that offer point solutions. However, these providers generally do not integrate their solutions with other enterprise software, do not support their solutions with a strong client service capability, and do not have the resources to support significant investment. We believe that our business capabilities and technological approach allow us to address these issues, for both our internally-developed and acquired solutions. As demonstrated by the acquisitions we have made since 2010, we are able to successfully identify and acquire companies and software solutions that add to our existing capabilities and suite of solutions, and whose business opportunities are enhanced by being part of our organization.

    Focus on quality of service.  Our focus is to consistently deliver high-quality service to our clients. Our solutions support mission-critical processes and time-sensitive interactions and communications. As such it is essential to our clients' satisfaction with our solutions that we provide all our clients timely and accurate responses to their support requests, effective training and successful implementation and roll-out of our solutions. Client service and support is a cornerstone of our value proposition, and we believe it is a significant differentiator versus other technology providers in the construction industry and an essential element of our long-term success.

    Experienced, proven management team.  Our senior management team has significant operating and service delivery experience. Using this experience, we have focused on delivering benefits to our clients through our solutions, making improvements to our existing solutions, expanding our suite of offerings to our clients, and expanding our client base. Management's extensive knowledge of the industry and their ability to identify opportunities for growth through both internal product development and strategic acquisitions has enabled us to establish a strong market position. Our founders occupy leadership positions in our company and continue to shape the vision and culture of our organization.

Our Strategy

        We intend to leverage our existing solutions and industry presence to become the industry standard for collaboration and related solutions in the construction industry, both domestically and in targeted international markets. Longer term, we also intend to apply our solutions to other industries in which

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similarly complex collaboration and contractual arrangements exist to expand the scope and size of our market opportunity. The key elements of our strategy to accomplish these objectives are as follows:

    Increase our market penetration of the construction industry.  We intend to actively pursue new client relationships with owners/developers, general contractors and subcontractors that do not currently use our solutions. Use of our solutions is frequently mandated by one organization to other project participants. We believe this provides us with the opportunity to demonstrate the value of our solutions to participants that are not our clients and to expand that initial contact into a sales process. For example, we estimate that of the 100 largest general contractors in the United States, based on data reported by Engineering News-Record, 34 have been a participant on a construction project that used CPM for invoice management, but that only approximately one-third of these general contractors are enterprise clients for CPM.

      We intend to focus our existing sales and marketing capabilities on large, strategic owners/developers and general contractors, as such clients can generate significant, multi-year growth. At the same time, we plan to launch solution and channel initiatives that target smaller industry participants in a cost-effective fashion. We also intend to selectively pursue large-scale individual project opportunities that we believe can provide the basis for exposure to new potential clients.

    Expand our suite of solutions.  We believe we have the opportunity to expand the scope of our solutions to address business processes we currently do not support and to integrate our solutions into a single platform solution to increase the benefits and value of our solutions to our clients. We plan to continue to use our domain expertise in construction and to work closely with our clients to identify and develop new applications, features and functionality. Examples may include project management, expanded functionality for bid management, management of disadvantaged business enterprise programs and requirements, and data solutions and analytics.

    Pursue acquisitions of complementary businesses.  We believe that acquisitions of complementary businesses can help us expand our suite of solutions more rapidly, enter into new markets, expand our client base and increase the knowledge and skill sets within our organization. We believe we can enhance the value of acquired solutions through our financial, technical and other resources, industry presence and their integration into our existing suite of solutions. We have previously completed three acquisitions, GradeBeam, Submittal Exchange, and PlanSwift, as part of this strategy. We believe there are several technology providers that we potentially could acquire and integrate into our suite of solutions. We intend to continue to selectively evaluate opportunities to acquire businesses and technologies that may help us accomplish these and other strategic objectives.

    Increase our client penetration.  We believe that our broad portfolio of solutions and strong client relationships create a significant opportunity for us to cross-sell additional solutions to our existing clients, as very few of our clients currently use more than one of our solutions. We also intend to add additional solutions to our technology suite that would address additional processes in the construction lifecycle, and we plan to integrate both our current and our future solutions into a single platform solution. We believe these initiatives will significantly increase the value of our solutions to our clients, further strengthen our competitive position and drive increased adoption of multiple solutions by our clients.

      Furthermore, we believe there are opportunities at many of our clients to increase the utilization or adoption of our solutions to include a greater number of their projects. Examples include expanding into additional areas of our clients' construction business, making it easier for our clients to drive use of our solutions with their business partners, increasing usage of our solutions on smaller projects and increasing the number of client locations or users that are using our solutions.

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    Expand globally.  We believe a substantial opportunity exists to grow sales of our solutions globally. We have developed, through both our internal efforts and as a result of close relationships with multinational clients, an understanding of the structure and practices of the construction industry in many other countries and believe that the value proposition of our solutions applies to these markets. To date, substantially all of our revenue has been generated from clients located in the United States and Canada. However, in certain markets, due to local business practices and regulations, we believe our value proposition could be even stronger than in our established markets in North America. For example, in Australia, our CPM solution can help clients address their legal obligations under securities of payments legislation and manage the significant related administrative burdens. Certain of our large current and potential construction clients also have or are seeking to establish international operations, and have indicated their interest that we support their current or planned international operations, especially as they seek new growth opportunities outside their traditional North American markets. We have served clients in Canada since 2009, and in October 2012, we entered into a joint venture to begin operations in Australia and New Zealand. PlanSwift also is offered in several international markets through a network of distributors and resellers. We believe we have accumulated significant experience with the process necessary to enter new markets successfully.

    Increase the number of industries we serve.  Our solutions are designed for complex collaborative environments with significant subcontracting activity. We believe that these characteristics exist in several industries in addition to the construction industry. While we currently do not operate in these other industries, we believe based on our research, which consisted of our review of publicly available industry studies and interactions with companies operating in these industries, that there could be demand for our solutions in these other industries. Specifically, we believe that the mining and the oil and gas exploration and production industries experience many of the same challenges faced in the commercial construction industry. We believe that our joint venture in Australia, and certain existing construction clients in North America that also currently operate in these industries, can provide us a means of entering these adjacent industries. We also may seek to establish new partnerships or joint ventures, or pursue acquisitions of complementary businesses to facilitate our entry into these markets.

Our Suite of Solutions

        We currently offer a suite of on-demand software solutions as part of an overall portfolio and strategy to support project participants' business processes and interactions at various stages of the construction process, as well as the subsequent operation, maintenance and remodeling of a structure. Our current suite of solutions includes:

    Construction Payment Management

        CPM facilitates the exchange of invoice documents, supporting documentation and lien waivers for fast, secure electronic payment, which reduces errors, administrative overhead and the risk of claims.

        CPM was our first solution—introduced in 2006—and remains our most widely-used solution, accounting for 94.8%, 93.9% and 75.0% of revenue in fiscal 2010, 2011 and 2012, respectively. The decline in 2012 reflects the addition of Submittal Exchange and GradeBeam to our suite of solutions. CPM has been used on over 10,000 projects, representing approximately $100 billion in construction value, by more than 300 major general contractors and the more than 45,000 subcontractors that worked on those projects. Based on management estimates, approximately $2.5 billion in invoices are managed on our solution monthly, with peak daily volumes of payments initiated by our CPM solution in excess of $100 million.

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        Our CPM solution provides the following capabilities and features to participants involved in construction projects:

    A disciplined, standardized online approach to generating, collecting, reviewing and routing invoices based on shared entry of and access to data and sophisticated workflow tools.

    Electronic exchange of data and documents, and automated creation and storage of all monthly invoice and supporting documents.

    Sophisticated and highly configurable tools to manage subcontractor compliance with project-specific requirements.

    Secure disbursement approval, automated generation of payment instruction files and upload of those files to the applicable financial institution to effect secure payment.

        A key differentiator of CPM from other solutions in the marketplace is its ability to handle the generation and exchange of lien waivers or equivalent documents. In the United States, when general contractors, subcontractors