S-1/A 1 v191951_s1a.htm VintageFilings,LLC

As filed with the Securities and Exchange Commission on August 3, 2010.

Registration No. 333-165991

 

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



 

INTRALINKS HOLDINGS, INC.

(Exact Name of Registrant As Specified in Its Charter)

   
Delaware   7374   20-8915510
(State or Other Jurisdiction of
Incorporation or Organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

150 East 42nd Street, 8th Floor
New York, New York 10017
(212) 543-7700

(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)



 

J. Andrew Damico
President and Chief Executive Officer
IntraLinks, Inc.
150 East 42nd Street, 8th Floor
New York, New York 10017
(212) 543-7700

(Name, address, including zip code, and telephone number, including area code, of agent for service)



 

Copies to:

   
Stephen M. Davis, Esq.
Edward A. King, Esq.
Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Telephone: (212) 813-8800
Facsimile: (212) 355-3333
  Gary Hirsch, Esq.
Senior Vice President & General Counsel
IntraLinks, Inc.
150 East 42nd Street, 8th Floor
New York, New York 10017
Telephone: (212) 543-7700
 
  
  Ronald A. Fleming, Jr., Esq.
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036
Telephone: (212) 858-1143
Facsimile: (212) 298-9931
  
  


 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

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.

 
Large Accelerated Filer o   Accelerated Filer o
Non-Accelerated Filer x (Do not check if a smaller reporting company)   Smaller Reporting Company o


 

 


 
 

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CALCULATION OF REGISTRATION FEE

       
Title of Each Class of Securities to Be Registered   Amount to be
Registered(1)
  Proposed Maximum
Aggregate Offering
Price Per Share
  Proposed Maximum Aggregate Offering Price(1)(2)   Amount of Registration Fee(3)
Common Stock, par value $0.001 per share     12,650,000     $ 16.00     $ 202,400,000     $ 14,432  

(1) Includes shares of Common Stock that the underwriters have an option to purchase to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933.
(3) A registration fee of $13,547 has been previously paid.

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


 
 

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)
Issued August 3, 2010

11,000,000 Shares

[GRAPHIC MISSING]

COMMON STOCK



 

IntraLinks Holdings, Inc. is offering shares of its common stock. This is our initial public offering and no public market exists for our shares. We anticipate that the initial public offering price will be between $14.00 and $16.00 per share.



 

Our common stock is approved for listing on the New York Stock Exchange under the symbol “IL .”



 

Investing in the common stock involves risks. See “Risk Factors” beginning on page 14.



 

PRICE $       A SHARE



 

     
  Price to
Public
  Underwriting
Discounts and
Commissions
  Proceeds to
IntraLinks
Holdings, Inc.
Per share     $           $           $      
Total     $           $           $      

We have granted the underwriters the right to purchase up to an additional 1,650,000 shares of common stock to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to purchasers on            , 2010.



 

   
MORGAN STANLEY   DEUTSCHE BANK SECURITIES   CREDIT SUISSE

JEFFERIES & COMPANY

LAZARD CAPITAL MARKETS

PACIFIC CREST SECURITIES

STIFEL NICOLAUS WEISEL

        , 2010


 
 

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You should rely only on the information contained in this prospectus or in any free writing prospectus we file with the Securities and Exchange Commission. We and the underwriters have not authorized anyone to provide you with information different from that contained in this prospectus or any free writing prospectus. We and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front cover of this prospectus, or other earlier date stated in this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

Until     , 2010 (the 25th day after the date of this prospectus), all dealers that buy, sell, or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

For investors outside of the United States: Neither we nor any of the underwriters has done anything that would permit this offering outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

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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 financial statements and the related notes included elsewhere in this prospectus. You should also consider, among other things, the matters described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case appearing elsewhere in this prospectus. Unless otherwise stated, all references to “us,” “our,” “IntraLinks,” “we,” the “Company” and similar designations refer to IntraLinks Holdings, Inc. and its subsidiaries.

INTRALINKS HOLDINGS, INC.

Overview

IntraLinks is a leading global provider of Software-as-a-Service (“SaaS”) solutions for securely managing content, exchanging critical business information and collaborating within and among organizations. Our cloud-based solutions enable organizations to control, track, search and exchange time-sensitive information inside and outside the firewall, all within a secure and easy-to-use environment. Our customers rely on our cost-effective solutions to manage large amounts of electronic information, accelerate information-intensive business processes, reduce time to market, optimize critical information workflow, meet regulatory and risk management requirements and collaborate with business counterparties in a secure, auditable and compliant manner. We help our customers eliminate the inherent risks and inefficiencies of using email, fax, courier services and other existing solutions to collaborate and exchange information.

At our founding in 1996, we introduced cloud-based collaboration for the debt capital markets industry and, shortly thereafter, extended our solutions to merger and acquisition transactions. We have since enhanced our cloud-based platform (our “IntraLinks Platform”) to address the needs of a wider enterprise market, consisting of customers of all sizes across a variety of industries who use our solutions for the secure management and online exchange of information within and among organizations. Today, this enterprise market is our largest and fastest growing market and includes organizations in the financial services, pharmaceutical, biotechnology, consumer, energy, industrial, legal, insurance, real estate and technology sectors, as well as government agencies. Across all of our principal markets, we help transform a wide range of slow, expensive and information-intensive tasks into streamlined, efficient and real-time business processes. Examples of such business processes include:

debt capital markets transactions, including loan syndication and other financing activities;
due diligence for merger and acquisition transactions, initial public offerings (“IPOs”) and other strategic transactions;
clinical trial management and safety information exchange;
life sciences drug development and licensing;
private equity fundraising and investor reporting;
contract and vendor management;
energy exploration and production ventures; and
board reporting.

In the year ended December 31, 2009, over 4,300 customers across 25 industries used our IntraLinks Platform to enable collaboration among more than 400,000 end-users and approximately 50,000 organizations worldwide. In the year ended December 31, 2009, revenue from our enterprise, mergers and acquisitions (“M&A”) and debt capital markets (“DCM”) principal markets represented 39%, 36% and 25% of our total revenue, respectively, with revenue from the enterprise market increasing 55% over the year ended December 31, 2008.

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Gartner, an independent market research firm, recognizes IntraLinks as the market revenue leader in the teaming and enterprise social software market with an estimated 22.5% share of the worldwide market in 2009.(1) Since our inception, over 1,000,000 professionals have used our solutions. End-users of our solutions have included professionals at the 50 largest global banking institutions, the 25 largest law firms, the 10 largest pharmaceutical companies, the 10 largest biotechnology companies and 8 of the 10 largest global energy and utility companies. The broad adoption of our cloud-based solutions across multiple industries has created end-user communities of individuals that prefer our solutions. We are able to leverage our popularity within these communities of existing users to help drive new users and business partners to collaborate using our platform.

We deliver our solutions entirely through a cloud-based model where they are available on-demand over the Internet using a multi-tenant SaaS architecture in which a single instance of our software serves all of our customers. Our business model has provided us with a high level of revenue visibility. We sell our solutions directly through an enterprise sales team with industry-specific expertise and indirectly through a customer referral network and channel partners. In 2009, we generated $140.7 million in revenue, of which approximately 33% was derived from sales across 61 countries outside of the United States. We have generated positive cash flow from operations on an annual basis since 2003, including $25.1 million in 2009. We intend to use the net cash generated from operations to fund our future growth, with most of the net proceeds of this offering being used to repay indebtedness.

The Market Opportunity

Several significant trends are driving the need for cloud-based solutions that allow users to securely manage content, exchange critical business information and collaborate within and among organizations:

increasingly complex, time-sensitive and information-intensive business processes that require the global exchange of critical information both inside and outside of an organization’s firewall;
the proliferation of unstructured electronic information within enterprises;
growing compliance, governance, regulatory and corporate risk management requirements;
rapidly changing end-user behavior and expectations for efficient online collaboration and information exchange; and
a greater willingness by enterprises to adopt cost-effective SaaS solutions for their mission-critical business processes.

Organizations are increasingly adopting software applications that help to address these trends. According to International Data Corporation, or IDC, an independent market research firm, the market for worldwide collaborative content workspaces is expected to grow from an estimated $9.2 billion in 2009 to $12.2 billion in 2013, representing a compound annual growth rate of 7.3%.(2) IDC defines this market as a combination of content management, team collaborative applications, search and discovery applications and enterprise portals.

Notwithstanding these trends, the status quo for information exchange and collaboration today predominantly remains email, fax or courier services. Enterprise software vendors and niche software providers have developed solutions that attempt to address the need for efficient business collaboration and secure information management and exchange, but these solutions may be difficult to implement and deploy. These services and solutions can also be severely limited in terms of security, auditability or accessibility of information, especially when collaborating across company boundaries (i.e., outside the firewall).

The IntraLinks Solution

We provide our customers with various services, including access to our cloud-based IntraLinks Platform, access to one or more pre-configured areas of the platform that we call IntraLinks Exchanges, and related customer support and other services. Our IntraLinks Platform is a highly secure and scalable, multi-tenant platform upon which we develop solutions that allow our customers to collaborate, manage and exchange

(1) Gartner — Market Share: Web Conferencing, Teaming and Enterprise Social Software, Worldwide, 2009, April 2010.
(2) IDC — Worldwide Collaborative Content Workspace 2009-2013 Forecast and 2008 Vendor Shares: A Case of Coalescing Submarkets, Doc # 219885, September 2009.

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critical information across organizational and geographic boundaries. The IntraLinks Platform scales from the needs of small groups and individuals within one organization to large teams of people across multiple enterprises and governmental agencies.

We provide organizations with value-creating solutions to address the problems associated with traditional and inefficient intra- and cross-organizational collaboration. Combining our advanced enterprise SaaS technology platform with industry-specific process expertise, superior ease of use and extensive product support, we are able to add immediate value for our customers. Our cloud-based solutions offer the following key benefits:

Specifically architected for cross-organizational critical information exchange and collaboration:   Our technology platform is architected to enable users to manage content and work processes, and to collaborate both within and among organizations, inside and outside the firewall.
Secure, compliant and auditable:  Our technology platform provides enterprise-class user and network security and enables organizations to more easily audit interactions and operate in compliance with regulatory provisions.
“Trusted hub,” neutral third-party provider:  Much of the information that is shared on our platform is highly valuable and proprietary. We believe our customers choose us in part because we do not compete with them; instead we operate as a “trusted hub” between our customers and their various constituents to enable them to properly protect and exchange confidential information.
Easy to purchase and deploy:  We deliver our solutions via a SaaS model over the Internet. This model allows our customers to easily subscribe to our service without a significant upfront capital investment or the requirement for professional services to integrate software or upgrades into their environment.
Ease of use and adoption:  Our intuitive, easy-to-use, web-based interface enables customers to easily create an online exchange, add and permission users, and find and exchange information without the help of information technology professionals. Our solutions are accessible worldwide at any time over the Internet and are available in six languages.
Third generation platform with enterprise-class scalability and availability:  Our solutions have been in use for over 12 years, during which time we have continued to innovate and make enhancements to performance and usability that are reflected in our third generation platform.
Industry-specific expertise:  In addition to providing cross-industry and cross-departmental solutions, we help customers address industry-specific business processes that have unique workflow and regulatory requirements. We have a strong and knowledgeable enterprise sales and services force with specialized expertise in the industry-specific needs of our customers. Our multi-tenant architecture provides easily customizable, industry-specific templates without the need for customized on-premise software.
Communities of interest:  The broad adoption of our solutions over time has created communities of organizations and individuals that use our solutions repeatedly. As the adoption and familiarity of our solutions within these communities grows, organizations and individuals develop a preference for our solutions to address new needs and use cases. This creates a powerful network effect that drives further adoption of our solutions as these user communities refer new users and business partners to our solutions.
Full service and global support to all users:  Our customer service team provides live support for all end-users, regardless of whether they are direct customers or invited members to an IntraLinks Exchange. We offer full service support through our live global support help desk, which is available 24 hours per day, 7 days per week and 365 days per year in over 140 languages.

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Our Growth Strategy

Our goal is to be the leading global provider of cloud-based solutions for critical information management, exchange and collaboration. The following are key elements of our strategy:

increase our market share in the principal markets that we target;
further penetrate our existing customer base and cross-sell our solutions;
expand into new industries;
broaden our sales channels to expand into new geographies;
continue to innovate and enhance the value of our technology platform; and
further leverage our global user community.

Recent Developments

Results for the Three and Six Months Ended June 30, 2010 and 2009

The following tables set forth selected summary unaudited financial data as of and for the three and six months ended June 30, 2010 and 2009. Results for the three and six months ended June 30, 2010 may not be indicative of our results for any future period. This data should be read in conjunction with our audited consolidated financial statements and the related notes as well as the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus:

Consolidated Statement of Operations Data:

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2009   2010   2009   2010
  (unaudited)   (unaudited)
Enterprise   $ 12,362     $ 19,717     $ 23,959     $ 37,735  
M&A     11,725       16,224       25,536       30,425  
DCM     8,776       8,468       17,991       16,181  
Total Revenue     32,863       44,409       67,486       84,341  
Cost of revenue     12,692       11,555       26,849       23,031  
Gross profit     20,171       32,854       40,637       61,310  
Gross margin     61.4 %      74.0 %      60.2 %      72.7 % 
Operating Expenses:
                       
Product development     2,890       4,461       6,016       8,743  
Sales and marketing     13,806       19,106       27,943       38,126  
General and administrative     5,196       7,595       9,541       13,142  
Restructuring costs     245             293        
Total operating expenses     22,137       31,162       43,793       60,011  
(Loss) income from operations     (1,966 )      1,692       (3,156 )      1,299  
Interest expense, net     7,025       7,109       14,025       14,136  
Amortization of debt issuance costs     473       457       950       914  
Other (income) expense(1)     (1,461 )      (361 )      9,701       (286 ) 
Net loss before income tax     (8,003 )      (5,513 )      (27,832 )      (13,465 ) 
Income tax benefit     (2,922 )      (1,568 )      (10,632 )      (4,041 ) 
Net loss   $ (5,081 )    $ (3,945 )    $ (17,200 )    $ (9,424 ) 
Net loss per common share – 
basic and diluted
  $ (3.30 )    $ (1.78 )    $ (11.81 )    $ (4.42 ) 
Weighted average shares outstanding used in basic and diluted net loss per common share calculation     1,537,432       2,210,438       1,456,094       2,133,393  

(1) The three months ended June 30, 2009 and 2010 include a $1.6 million and $0.6 million gain, respectively, on fair value adjustments to the interest rate swap. The six months ended June 30, 2009 and 2010 include a $9.1 million loss and $0.8 million gain, respectively, on fair value adjustments to the interest rate swap, inclusive of a $10.7 million reclassification of the accumulated loss from “Other

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Comprehensive Income (Loss)”, a component of Stockholders' Equity on the Consolidated Balance Sheet, to “Other (income) expense” on the Consolidated Statement of Operations for the three months ended March 31, 2009, as this derivative instrument no longer qualifed for hedge accounting treatment as of this period.

Other Financial Data:

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2009   2010   2009   2010
  (unaudited)   (unaudited)
Adjusted gross margin(1)     79.9 %      81.5 %      79.1 %      80.6 % 
Adjusted EBITDA(2)   $ 11,334     $ 14,153     $ 24,050     $ 25,076  
Adjusted EBITDA margin(2)     34.5 %      31.9 %      35.6 %      29.7 % 
Capital expenditures   $ 2,826     $ 9,201     $ 7,101     $ 14,255  

(1) Adjusted gross margin represents gross profit, adjusted for amortization of intangible assets and stock-based compensation expense classified within the cost of revenue line item, as a percentage of revenue. See “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for additional disclosure regarding this measure. Adjusted gross margin is not a measure of financial performance under U.S. GAAP and, accordingly, should not be considered as an alternative to gross profit as an indicator of operating performance. The table below provides a reconciliation between the non-U.S. GAAP financial measure of Adjusted gross margin discussed above to the comparable U.S. GAAP measures of gross profit and margin:

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2009   2010   2009   2010
  (unaudited)   (unaudited)
Gross profit   $ 20,171     $ 32,854     $ 40,637     $ 61,310  
Gross margin     61.4 %      74.0 %      60.2 %      72.7 % 
Adjustments:
                       
Cost of revenue – amortization of intangible assets   $ 6,067     $ 3,309     $ 12,685     $ 6,618  
Cost of revenue – stock-based compensation expense   $ 18     $ 15     $ 41     $ 28  
Adjusted gross profit   $ 26,256     $ 36,178     $ 53,363     $ 67,956  
Adjusted gross margin     79.9 %      81.5 %      79.1 %      80.6 % 
(2) Adjusted EBITDA represents net income (loss) adjusted for (1) interest expense, net of interest income, (2) income tax provision (benefit), (3) depreciation and amortization, (4) amortization of intangible assets, (5) stock-based compensation expense, (6) amortization of debt issuance costs and (7) other (income) expenses. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue. See “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for additional disclosure regarding these measures. Adjusted EBITDA and Adjusted EBITDA margin are not a measures of financial performance under U.S. GAAP and, accordingly, should not be considered as alternatives to net loss as an indicator of operating performance. The table below provides a reconciliation between the non-U.S. GAAP financial measure of Adjusted EBITDA discussed above to the comparable U.S. GAAP measure of net loss:

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2009   2010   2009   2010
  (unaudited)   (unaudited)
Net loss   $ (5,081 )    $ (3,945 )    $ (17,200 )    $ (9,424 ) 
Interest expense, net     7,025       7,109       14,025       14,136  
Income tax benefit     (2,922 )      (1,568 )      (10,632 )      (4,041 ) 
Depreciation and amortization     2,923       4,262       5,886       7,607  
Amortization of intangible assets     9,976       7,208       20,503       14,426  
Stock-based compensation expense     401       991       817       1,744  
Amortization of debt issuance costs     473       457       950       914  
Other (income) expense     (1,461 )      (361 )      9,701       (286 ) 
Adjusted EBITDA   $ 11,334     $ 14,153     $ 24,050     $ 25,076  

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Consolidated Balance Sheet Data:

   
  June 30,
  2009   2010
  (unaudited)
Cash and cash equivalents   $ 22,838     $ 15,931  
Short-term investments   $     $ 5,218  
Working capital   $ 13,738     $ 14,985  
Total assets   $ 511,611     $ 496,753  
Long-term debt, net of current portion   $ 287,755     $ 291,821  
Redeemable convertible preferred stock   $ 176,149     $ 176,617  
Accumulated deficit   $ (58,804 )    $ (75,800 ) 
Total stockholders' deficit   $ (55,449 )    $ (69,614 ) 

The results for the three months ended June 30, 2010 reflect an increase in total revenue of $11.5 million, or 35.1%, as compared to the three months ended June 30, 2009. The results for the six months ended June 30, 2010 reflect an increase in total revenue of $16.9 million, or 25.0%, as compared to the six months ended June 30, 2009. The increases in total revenue for both the three and six months ended June 30, 2010 as compared to the prior year periods were driven by increases in revenues in the enterprise and M&A markets, partially offset by a decrease in the DCM market. The year-over-year increase in the enterprise market was attributed primarily to an increased customer base, larger contract values for new customers (compared to historic levels), as well as higher renewal levels for existing customers. This activity reflects both wider adoption of our services across customers’ organizations and greater utilization of our services than customers’ initial commitments, thus resulting in increased overage fees and higher renewal levels. In the M&A market, the year-over-year increase was attributed primarily to improved global economic conditions resulting in increased volume of M&A transactions, as well as increased market share. Accordingly, we have experienced a higher volume of transaction deals. In the DCM market, the year-over-year decrease primarily reflects the slower recovery of the global debt capital markets.

The results for the three months ended June 30, 2010 also reflect a decrease in cost of revenue of $1.1 million, or 9.0%, as compared to the three months ended June 30, 2009. The results for the six months ended June 30, 2009 reflect a decrease in cost of revenue of $3.8 million, or 14.2%, as compared to the six months ended June 30, 2009. The decreases in cost of revenue for both the three and six month periods, as compared to the prior year periods, were attributed primarily to the scheduled decrease in amortization of definite-lived intangible assets. This decrease in cost of revenue was partially offset by an increase in amortization of capitalized software costs and an increase in software maintenance and license fees reflecting the growth of and costs to support the business. The net decrease in cost of revenue, coupled with the increase in total revenue described above, drove improvements in gross margin of 12.6 and 12.5 percentage points, respectively, for the three and six months ended June 30, 2010, on a year-over-year basis.

Total operating expenses for the three months ended June 30, 2010 increased by approximately $9.0 million, or 40.8%, as compared to the three months ended June 30, 2009. Total operating expenses for the six months ended June 30, 2010 increased by approximately $16.2 million, or 37.0%, as compared to the six months ended June 30, 2009. These year-over-year increases were primarily driven by higher support and maintenance costs reflecting an expanded product portfolio, an increase in headcount related expenses, including recruitment, largely reflecting the growth of the sales function to drive market expansion plans, and increased travel and entertainment expenses, driven primarily by the larger headcount in sales and a wider geographic focus. We also experienced an increase in one-time professional fees and other related expenses in preparation of becoming a public company and to support our new global entity organization structure. Our non-cash stock compensation charges increased as a result of additional grants made in the latter half of 2009, and the first quarter of 2010. Additionally, during the first quarter of 2010 we recorded a credit to general and administrative expenses representing a reversal of an accrual for corporate, non-income taxes, for which we had no liability as of March 31, 2010. See Note 2 to the consolidated financial statements contained elsewhere in this prospectus. This credit to general and administrative expenses in the first quarter of 2010 partially offset the increase in operating expenses described above.

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The effective tax rate was 28.4% and 30.0%, respectively, for the three and six months ended June 30, 2010, compared with an effective tax rate of 36.5% and 38.2%, respectively, for the three and six months ended June 30, 2009. The decreases in income tax benefit as compared to the prior year periods were primarily attributable to the discrete item in the first quarter of 2009 related to the de-designation of the interest rate swap, as well as an increase in annualized projections for stock-based compensation on a comparative basis to the prior year, thus decreasing the estimated tax rate for 2010.

Capital expenditures during the three and six months ended June 30, 2010 increased by $6.4 million, or 225.6%, and $7.2 million, or 100.7%, respectively, over the prior year comparable periods, primarily driven by the purchase of previously leased equipment, as described in Note 17 to the consolidated financial statements contained elsewhere in this prospectus. The cost of the purchased equipment is being depreciated over the remaining useful lives of the respective assets. Other than with respect to the increase in capital expeditures, none of the events described in Note 17 to the consolidated financial statements contained elsewhere in this prospectus had a material impact on our financial results for the three and six months ended June 30, 2010.

Selected Risk Factors

Our business is subject to many risks and uncertainties of which you should be aware before you decide to invest in our common stock. These risks are discussed more fully under “Risk Factors” in this prospectus. Some of these risks are:

we have historically incurred significant net operating losses, resulting in an accumulated deficit of $71.9 million as of March 31, 2010, and our future profitability and ability to sustain positive cash flow are uncertain;
our operating results are likely to fluctuate, which may have an impact on our stock price;
we expect to have approximately $152.5 million of debt following this offering, even after application of approximately $144.2 million of the net proceeds from this offering to repay such indebtedness, which debt exposes us to risks that could adversely affect our business, operating results and financial condition;
failure to maintain the security and integrity of our systems could seriously damage our reputation and affect our ability to retain customers and attract new business;
a significant part of our business is derived from the use of our solutions in connection with financial and strategic business transactions and, if the volume of such transactions does not increase, demand for our services may not grow and could decline; and
our growth depends on increasing penetration into existing markets and extending into additional markets, expanding our direct sales capabilities and sustaining customer referrals from financial institutions and other users of our services.

Company and Other Information

Our business was incorporated in Delaware as “IntraLinks, Inc.” in June 1996. In June 2007, we completed a merger (the “Merger”) pursuant to which IntraLinks, Inc. became a wholly-owned subsidiary of TA Indigo Holding Corporation, a Delaware corporation formed by an investor group led by TA Associates, Inc., a prominent growth private equity firm, and Rho Capital Partners, Inc., an investment and venture capital management company and one of the principal investors in IntraLinks, Inc. since 2001. In 2010, we changed the name of TA Indigo Holding Corporation to “IntraLinks Holdings, Inc.” Our principal executive office is located at 150 East 42nd Street, 8th Floor, New York, New York 10017, and our telephone number is (212) 543-7700. Our website address is www.intralinks.com. We do not incorporate the information on or accessible through our website into this prospectus, and you should not consider any information on, or that can be accessed through, our website as part of this prospectus.

IntraLinks,” our IntraLinks stylized logo, “Bringing the Dataroom to the Desktop,” and “On-Demand Workspaces” are trademarks or servicemarks of IntraLinks, Inc. Other trademarks or servicemarks appearing in this prospectus are the property of their respective holders.

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THE OFFERING

Common stock offered by us    
    11,000,000 shares
Common stock to be outstanding after this offering    
    49,284,964 shares
Over-allotment option to purchase additional shares    
    The underwriters have an option to purchase a maximum of 1,650,000 additional shares of common stock from us. The underwriters can exercise this option at any time within 30 days from the date of this prospectus
Use of Proceeds    
    We estimate that we will receive net proceeds from the sale of shares of our common stock in this offering of approximately $150.7 million, or $173.7 million if the underwriters fully exercise their over-allotment option, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use up to approximately $171.4 million of the net proceeds from this offering to repay indebtedness. See “Use of Proceeds” in this prospectus.
New York Stock Exchange symbol    
    IL
Risk Factors    
    You should read carefully “Risk Factors” in this prospectus for a discussion of factors that you should consider before deciding to invest in shares of our common stock.
Conflicts of Interest    
    We intend to use a portion of the net proceeds of this offering to repay indebtedness owed by us to affiliates of Deutsche Bank Securities Inc. who are lenders under our Holdings Senior PIK Credit Agreement. In addition, Deutsche Bank Securities Inc. will receive a fee for acting as sole arranger and bookrunner in connection with amendments to our First Lien Credit Facility and Second Lien Credit Facility. Because more than 5% of the net proceeds of this offering may be used to repay amounts owed to affiliates of Deutsche Bank Securities Inc. (who is a member of the Financial Industry Regulatory Authority (“FINRA”)), Deutsche Bank Securities Inc. may be deemed to have a “conflict of interest” with us under NASD Conduct Rule 2720 of FINRA (“Rule 2720”). Accordingly, this offering will be conducted in compliance with the requirements of Rule 2720. See “Underwriting — Conflicts of Interest” in this prospectus.

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The number of shares of common stock to be outstanding after this offering is based on 38,284,964 shares outstanding as of March 31, 2010 and excludes:

2,486,855 shares of common stock issuable upon exercise of outstanding options as of March 31, 2010 at a weighted average exercise price of $3.97 per share (of which options to acquire 605,335 shares of common stock are vested as of March 31, 2010);
3,228,181 shares of our common stock reserved for future issuance under our equity incentive plans as of March 31, 2010; and
400,000 shares of our common stock reserved for future issuance under our 2010 Employee Stock Purchase Plan, which will become effective in connection with this offering.

Except as otherwise indicated, all information in this prospectus:

gives effect to our amended and restated certificate of incorporation, which will be in effect upon completion of this offering;
gives effect to the conversion of all outstanding shares of our Series A redeemable convertible preferred stock into an aggregate of 35,101,716 shares of our common stock upon the completion of this offering; and
assumes no exercise by the underwriters of their option to purchase up to an additional 1,650,000 shares of our common stock in this offering to cover over-allotments.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The summary consolidated financial data presented below under “Consolidated Statement of Operations Data” for the periods January 1, 2007 through June 14, 2007 (“Predecessor period”) and June 15, 2007 through December 31, 2007 (“Successor period”) as well as for the years ended December 31, 2008 and 2009 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2007 is presented giving effect to the Merger as if it had occurred on January 1, 2007. The unaudited pro forma consolidated results of operations for the year ended December 31, 2007 are based on our historical audited consolidated statement of operations included elsewhere in this prospectus, adjusted to give pro forma effect to the Merger. Management believes this presentation provides a meaningful comparison of operating results enabling twelve months of 2007 to be compared with 2008 and 2009, adjusting for the impact of the Merger. The unaudited pro forma consolidated statement of operations is for informational purposes only and does not purport to represent what our actual results of operations would have been if the Merger had been completed as of January 1, 2007.

The summary consolidated statement of operations data for the first three months of 2009 and 2010 and the summary consolidated balance sheet data as of March 31, 2010 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated financial statements include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, that management considers necessary for the fair presentation of financial information set forth in those statements,

Our historical results are not necessarily indicative of future operating results, and the results for the first three months of 2010 are not necessarily indicative of results to be expected for the full year or for any other period. You should read this summary consolidated financial data in conjunction with the sections entitled “Capitalization,” “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, all included elsewhere in this prospectus.

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     Predecessor   Successor     Pro Forma Year Ended
December 31,
2007
(1)
  Successor   Successor
(In Thousands, Except Share and per Share Amounts)     
January 1
through
June 14,
2007
  June 15
through
December 31,
2007
  Pro Forma
Adjustments
(1)
  Year Ended
December 31,
2008
  Year Ended
December 31,
2009
  Three Months
Ended
March 31,
2009
  Three
Months
Ended
March 31, 2010
Consolidated Statement of Operations Data:
                                                                       
Revenue   $ 51,928     $ 70,786           $ 122,714     $ 143,401     $ 140,699       34,623       39,931  
Cost of revenue(2)     12,801       30,718       10,516       54,035       56,161       48,721       14,157       11,476  
Gross profit     39,127       40,068       (10,516 )      68,679       87,240       91,978       20,466       28,455  
Gross margin     75.4 %      56.6 %               56.0 %      60.8 %      65.4 %      59.1 %      71.3 % 
Operating expenses:
                                                                       
Product development(2)     6,046       6,949             12,995       14,847       14,222       3,126       4,283  
Sales and marketing(2)     18,418       35,532       12,201       66,151       61,556       59,058       14,137       19,020  
General and administrative(2)     5,868       8,959       666       15,493       19,209       20,556       4,345       5,510  
Restructuring costs                             1,316       1,494       48        
Costs related to the Merger     8,948                   8,948                          
Total operating expenses     39,280       51,440       12,867       103,587       96,928       95,330       21,656       28,813  
Loss from operations     (153 )      (11,372 )      (23,383 )      (34,908 )      (9,688 )      (3,352 )      (1,190 )      (358 ) 
Interest (income) expense, net     (562 )      14,718       12,840       26,996       28,234       28,935       7,000       7,028  
Amortization of debt issuance costs           910       770       1,680       1,803       1,872       477       457  
Other (income) expense     (9 )      (255 )            (264 )      271       9,027       11,162       73  
Net income (loss) before income tax     418       (26,745 )      (36,993 )      (63,320 )      (39,996 )      (43,186 )      (19,829 )      (7,916 ) 
Income tax provision (benefit)     237       (9,737 )      (15,352 )      (24,852 )      (15,398 )      (18,415 )      (7,710 )      (2,438 ) 
Net income (loss)   $ 181     $ (17,008 )      (21,641 )    $ (38,468 )    $ (24,598 )    $ (24,771 )      (12,119 )      (5,478 ) 
Net loss per common share – basic and diluted         $ (22.33 )          $ (50.51 )    $ (25.54 )    $ (15.38 )    $ (8.82 )    $ (2.66 ) 
Weighted average shares outstanding used in basic and diluted net loss per common share calculation           761,554             761,554       963,019       1,611,090       1,373,853       2,055,891  
Unaudited pro forma net loss per share  – basic and diluted(3)                                 $ (0.67 )          $ (0.15 ) 
Weighted average shares used in computing unaudited pro forma net loss per share  – basic and diluted(3)                                   36,714,423             37,157,607  
Unaudited as adjusted pro forma net loss per share – basic and diluted(4)                                 $ (0.20 )          $ (0.04 ) 
Shares used in computing unaudited as adjusted pro forma net loss per share – basic and diluted(4)                                   47,616,613             48,059,797  

(1) Separate presentation of the Predecessor period and Successor period within an annual period is required under U.S. GAAP when a change in accounting basis occurs. Under the provisions of the FASB’s Business Combination standard, the historical carrying values of assets acquired and liabilities assumed are adjusted to fair value, resulting in a higher cost basis associated with the

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allocation of the purchase price, which affects post-acquisition period results and period-to-period comparisons. We believe presenting only the separate Predecessor period and Successor period within the year ended December 31, 2007 may impede understanding of our operating performance. Therefore, we have also presented the unaudited pro forma consolidated statement of operations for the year ended December 31, 2007, assuming the Merger occurred on January 1, 2007. The unaudited pro forma consolidated statement of operations includes pro forma adjustments to give effect to the Merger. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for additional details regarding the nature of the pro forma adjustments.
(2) Includes stock-based compensation expense as follows:

         
  Year Ended December 31,   Three Months Ended March 31, 2010
     Pro Forma
2007(1)
  2008   2009   2009   2010
Cost of revenue   $ 307     $ 173     $ 63     $ 22     $ 13  
Product development     656       519       483       71       126  
Sales and marketing     1,339       855       529       16       327  
General and administrative     2,031       2,245       863       307       287  
Total   $ 4,333     $ 3,792     $ 1,938     $ 416     $ 753  

(3) The unaudited pro forma net loss per share, basic and diluted, and pro forma weighted average shares outstanding for the year ended December 31, 2009 and the three months ended March 31, 2010 in the table above give effect to the conversion of all outstanding Series A redeemable convertible preferred stock into an aggregate of 35,103,333 and 35,101,716 shares, respectively of common stock upon the completion of this offering.
(4) As adjusted pro forma basic and diluted earnings per share for the year ended December 31, 2009 and three months ended March 31, 2010 reflects the pro forma effect of the conversion of all outstanding shares of our Series A redeemable convertible preferred stock into an aggregate of 35,103,333 and 35,101,716 shares, respectively, of common stock upon completion of this offering and also to give effect to the issuance of 10,902,190 additional shares by us in this offering, which represents the proportionate number of shares allocated to the repayment of outstanding indebtedness and related prepayment fees, and the application of the net proceeds of this offering to repay $144.4 million in principal amount of outstanding indebtedness and related prepayment fees, as if the offering and repayment of outstanding indebtedness had occurred at the beginning of the respective period. As a result of this repayment of indebtedness, our net loss would have decreased by approximately $15.3 million and $3.6 million, respectively, for the year ended December 31, 2009 and the three months ended March 31, 2010, primarily driven by a decrease in interest expense of approximately $14.4 million and $3.4 million, respectively, as well as a decrease in deferred financing costs of approximately $0.9 million and $0.2 million, respectively. See “Use of Proceeds” in this prospectus for additional details.

     
  As of March 31, 2010
(In Thousands)   Actual   Pro Forma(5)   Pro Forma
as Adjusted(5)
Consolidated Balance Sheet Data:
                          
Cash and cash equivalents   $ 14,897     $ 14,897     $ 14,897  
Short-term investments   $ 7,186     $ 7,186       7,186  
Working capital   $ 14,345     $ 14,345     $ 14,345  
Total assets   $ 495,985     $ 495,985     $ 495,985  
Long-term debt, net of current portion   $ 290,215     $ 290,215     $ 146,345  
Redeemable convertible preferred stock   $ 176,555              
Accumulated deficit   $ (71,855 )    $ (71,855 )    $ (76,099 ) 
Total stockholders’ (deficit) equity   $ (66,661 )    $ 109,894     $ 256,350  

(5) The pro forma column in the consolidated balance sheet data table reflects the pro forma effect of the conversion of all outstanding shares of our Series A redeemable convertible preferred stock into an aggregate of 35,101,716 shares of our common stock upon the completion of this offering. The pro forma as adjusted column gives further effect to our receipt of estimated net proceeds from the sale of 11,000,000 shares of our common stock in this offering, at an assumed initial public offering price of $15.00 per share, the mid-point of the range set forth on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and offering expenses payable by us, the use of $144.4 million of proceeds from this offering to repay outstanding indebtedness and the anticipated application of the remaining net proceeds from this offering.

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The key metrics set forth below are used to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. We discuss these measures in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

     
  Year Ended December 31,
(In Thousands)   2007   2008   2009
Additional Key Metrics
                          
Deferred revenue(6) at December 31   $ 23,777     $ 24,938     $ 26,795  
Revenue(7)   $ 122,714     $ 143,401     $ 140,699  
Adjusted gross margin(7),(8)     77.7 %      79.4 %      79.1 % 
Adjusted EBITDA(7),(9)   $ 31,766     $ 43,332     $ 45,092  
Adjusted EBITDA margin(7)     25.9 %      30.2 %      32.0 % 
Cash flow provided by (used in) operating activities(10)   $ 27,170     $ 23,657     $ 25,072  

(6) Deferred revenue represents the billed but unearned portion of existing contracts for services to be provided. Deferred revenue does not include future potential revenue represented by the unbilled portion of existing contractual commitments of our customers.
(7) The key metrics presented in this table, related to the results of operations for the year ended December 31, 2007, are presented on a pro forma basis, assuming the Merger occurred on January 1, 2007, and include pro forma adjustments to give effect to the Merger. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for additional details regarding the nature of the pro forma adjustments.
(8) Adjusted gross margin represents gross profit, adjusted for amortization of intangible assets and stock-based compensation expense classified within the cost of revenue line item, as a percentage of revenue. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for a reconciliation of these measures to gross profit and gross margin, which are the comparable measures of operating performance under U.S. GAAP. Adjusted gross margin is not a measure of financial performance under U.S. GAAP and, accordingly, should not be considered as an alternative to gross profit as an indicator of operating performance.
(9) Adjusted EBITDA represents net income (loss) adjusted for (1) interest expense, net of interest income, (2) income tax provision (benefit), (3) depreciation and amortization, (4) amortization of intangible assets, (5) stock-based compensation expense, (6) amortization of debt issuance costs and (7) other (income) expenses. For the year ended December 31, 2007, net loss was also adjusted for “Costs of the Merger” to arrive at Adjusted EBITDA. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for our reconciliation to net loss which is an acceptable measure of operating performance under U.S. GAAP. Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered as alternatives to net loss as an indicator of operating performance.
(10) Cash flow provided by operating activities for the year ended December 31, 2007 is presented for the combined periods of January 1 through June 14, 2007 (Predecessor Company) and June 15 through December 31, 2007 (Successor Company). Management believes this presentation provides a meaningful comparison of cash flows, enabling twelve months of 2007 to be compared with 2008 and 2009, within the Key Metrics tables.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all other information in this prospectus, including our consolidated financial statements and related notes, before investing in our common stock. Any of the risk factors we describe below could adversely affect our business, financial condition or results of operations. The market price of our common stock could decline if one or more of these risks or uncertainties actually occurs, causing you to lose all or part of the money you paid to buy our common stock. Certain statements below are forward-looking statements. See “Forward-Looking Statements” in this prospectus.

Risks Related to Our Business and Our Industry

Our future profitability is uncertain.

We have historically incurred significant net operating losses. As a result of these operating losses, we accumulated a deficit of $71.9 million from the date of our Merger through March 31, 2010. Our future profitability depends on, among other things, our ability to generate revenue in excess of our costs. At the same time, we have significant and continuing fixed costs relating to the maintenance of our assets and business, including our substantial debt service requirements, which we may not be able to reduce adequately to sustain our profitability if our revenue decreases. In addition, as a public company, we will incur additional significant legal, accounting and other expenses that we did not incur as a private company. These increased expenditures will make it more difficult for us to achieve and maintain future profitability. Our profitability also may be impacted by non-cash charges such as stock-based compensation charges and impairment of goodwill, which will negatively affect our reported financial results. Even if we achieve our profitability on an annual basis, we may not be able to achieve profitability on a quarterly basis. You should not consider recent revenue growth as indicative of our future performance. In fact, in future quarters we may not have any revenue growth and our revenue could decline. We may continue to incur significant losses in the future for a number of reasons, including the other risks described in this prospectus, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events. Our failure to achieve and maintain our profitability could negatively impact the market price of our common stock.

We may be unable to sustain positive cash flow.

Our ability to continue to generate positive cash flow depends on our ability to generate collections from sales in excess of our cash expenditures. Our collections from sales can be negatively affected by many factors, including but not limited to:

our inability to convince new customers to use our services or existing customers to renew their contracts or use additional services;
the lengthening of our sales cycle;
changes in our customer mix;
a decision by any of our existing customers to cease or reduce using our services;
failure of customers to pay our invoices on a timely basis or at all;
a failure in the performance of our solutions or our internal controls that adversely affects our reputation or results in loss of business;
the loss of market share to existing or new competitors;
regional or global economic conditions affecting the perceived need or value of our services; and
our inability to develop new products or expand our offering on a timely basis and thus potentially not meet evolving market needs.

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We anticipate that we will incur increased sales and marketing and general and administrative expenses as we continue to diversify our business into new industries and geographic markets. Our business will also require significant amounts of working capital to support our growth. We may not achieve sufficient collections from sales to offset these anticipated expenditures to maintain positive future cash flow. In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events that cause our costs to exceed our expectations. An inability to generate positive cash flow may decrease our long-term viability.

Our operating results are likely to fluctuate from quarter to quarter, which may have an impact on our stock price.

Our operating results have varied significantly from quarter to quarter and may vary significantly from quarter to quarter in the future. As a result, we may not be able to accurately forecast our revenues or operating results. Our operating results may fall below market analysts’ expectations in some future quarters, which could lead to downturns in the market price of our common stock. Quarterly fluctuations may result from factors such as:

changes in the markets that we serve;
changes in demand for our services;
rate of penetration within our existing customer base;
loss of customers or business from one or more customers, including from consolidations and acquisitions of customers;
increased competition;
changes in the mix of customer types;
changes in our standard service contracts that may affect when we recognize revenue;
loss of key personnel;
interruption in our service resulting in a loss of revenue;
changes in our pricing policies or the pricing policies of our competitors;
write-offs affecting any of our material assets;
changes in our operating expenses;
software “bugs” or other service quality problems;
concerns relating to the security of our systems; and
general economic conditions.

We believe that our quarterly operating results may vary significantly in the future, that period-to-period comparisons of results of operations may not necessarily be meaningful and, as a result, such comparisons should not be relied upon as indications of future performance.

We have a substantial amount of debt that exposes us to risks that could adversely affect our business, operating results and financial condition.

We had approximately $291.6 million of debt outstanding as of March 31, 2010, $192.5 million of which is secured by liens on substantially all of our assets. Even after giving effect to the uses of proceeds of this offering as described under “Use of Proceeds” in this prospectus, we expect to continue to have a significant amount of debt following this offering. The level and nature of our indebtedness could, among other things:

make it difficult for us to obtain any necessary financing in the future;
limit our flexibility in planning for or reacting to changes in our business;
reduce funds available for use in our operations;

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impair our ability to incur additional debt because of financial and other restrictive covenants or the liens on our assets which secure our current debt;
hinder our ability to raise equity capital, because in the event of a liquidation of our business, debt holders receive a priority before equity holders;
make us more vulnerable in the event of a downturn in our business; and
place us at a possible competitive disadvantage relative to less leveraged competitors and competitors that have better access to capital resources.

In addition, we may incur significantly more debt in the future, which will increase each of the risks described above related to our indebtedness. As of March 31, 2010, we had $13.4 million available to us for additional borrowing under a $15.0 million revolving credit facility. If we increase our indebtedness by borrowing under our credit facilities or incur other new indebtedness, each of the risks described above would increase.

Failure to maintain the security and integrity of our systems could seriously damage our reputation and affect our ability to retain customers and attract new business.

Maintaining the security and integrity of our systems is an issue of critical importance for our customers and users because they use our system to store and exchange large volumes of proprietary and confidential information. Individuals and groups may develop and deploy viruses, worms and other malicious software programs that attack or attempt to infiltrate our system. We may not be able to detect and prevent such events from occurring. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and we could lose sales and customers.

In addition, we rely upon our customers and users of our solutions to perform important activities relating to the security of the data maintained on our IntraLinks Platform, such as assignment of user access rights and administration of document access controls. Because we do not control the access provided by our customers to third-parties with respect to the data on our systems, we cannot ensure the complete integrity or security of such data in our systems. Errors or wrongdoing by users resulting in security breaches may be attributed to us. Because many of our engagements involve business-critical projects for financial institutions and their customers and for other types of customers where confidentiality is of paramount importance, a failure or inability to meet customers’ expectations with respect to security and confidentiality could seriously damage our reputation and affect our ability to retain customers and attract new business.

The security and integrity of our systems also may be jeopardized by a breach of our internal controls and policies by our employees, consultants or subcontractors having access to such systems. If our systems fail or are breached as a result of a third-party attack or an error, violation of internal controls or policies or a breach of contract by an employee, consultant or subcontractor causing the unauthorized disclosure of proprietary or confidential information or customer data, we may lose business, suffer irreparable damage to our reputation, and incur significant costs and expenses relating to the investigation and possible litigation of claims relating to such event. We may be liable in such event for damages, penalties for violation of applicable laws or regulations and costs for remediation and efforts to prevent future occurrences, any of which liabilities could be significant. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. We also cannot assure you that our existing general liability insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, litigation, regardless of its outcome, could

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result in a substantial cost to us and divert management’s attention from our operations. Any significant claim or litigation against us could have a material adverse effect on our business, financial condition and results of operations.

A significant part of our business is derived from the use of our solutions in connection with financial and strategic business transactions. If the volume of such transactions does not increase, demand for our services may not grow and could decline.

A significant portion of our revenue depends on the purchase of our services by parties involved in financial and strategic business transactions such as mergers and acquisitions, loan syndications and other debt capital markets transactions. During the fiscal years ended December 31, 2007, 2008 and 2009, revenues generated from the M&A and DCM markets constituted approximately 79%, 75% and 61%, respectively, of our total revenues. We expect to continue to derive a significant portion of our revenue from these sources for the foreseeable future. The volume of these transactions decreased from 2008 to 2009 as the world experienced a significant economic recession. If the volume of such transactions does not increase, demand for our services may not grow and could decline. The credit crisis, deterioration of global economies, rising unemployment and reduced equity valuations all create risks that could harm our business. If macroeconomic conditions worsen, we are not able to predict the impact of such worsening conditions on our results of operations. Our customers in the financial services industry are facing difficult conditions and their budgets for our services have been negatively affected. The level of activity in the financial services industry, including the financial transactions our services are used to support, is sensitive to many factors beyond our control, including interest rates, regulatory policies, general economic conditions, our customers’ competitive environments, business trends, terrorism and political change. Unfavorable conditions or changes in any of these factors could adversely affect our business, operating results and financial condition.

Changes in laws, regulations or governmental policy applicable to our customers or potential customers may decrease the demand for our solutions.

The level of our customers’ and potential customers’ activity in the business processes our services are used to support is sensitive to many factors beyond our control, including governmental regulation and regulatory policies. Many of our customers and potential customers in the life sciences, energy, utilities, insurance, financial and other industries are subject to substantial regulation and may be the subject of further regulation in the future. Accordingly, significant new laws or regulations or changes in, or repeals of, existing laws, regulations or governmental policy may change the way these customers do business and could cause the demand for and sales of our solutions to decrease. For example, many products developed by our customers in the life sciences industry require approval of the U.S. Food and Drug Administration, or FDA, and other similar foreign regulatory agencies before they can market their products. The processes for filing and obtaining FDA approval to market these products are guided by specific protocols that our services help support, such as 21 CFR Part 11 which provides the criteria for acceptance by the FDA of electronic records. If new government regulations from future legislation or administrative action or from changes in FDA policy occur in the future, the services we currently provide may no longer support these life science processes and protocols, and we may lose customers in the life sciences industry. Any change in the scope of applicable regulations that decreases the volume of transactions that our customers or potential customers enter into or otherwise negatively impact their use of our solutions would have a material adverse effect on our revenues or gross margins. Moreover, complying with increased or changed regulations could cause our operating expenses to increase. We may have to reconfigure our existing services or develop new services to adapt to new regulatory rules and policies which will require additional expense and time. Such changes could adversely affect our business, results of operations and financial condition.

If we are unable to increase our penetration in our principal existing markets and expand into additional markets, we will be unable to grow our business and increase revenue.

We currently market our solutions for a wide range of business processes. These include clinical trial management; safety information exchange and drug development and licensing for the life sciences industry; private equity fundraising and investor reporting; energy exploration and production ventures for the oil and gas industry; loan syndication and other debt capital markets transactions; due diligence for mergers and acquisitions; initial public offerings and other strategic transactions; contract and vendor management; and

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board reporting. We intend to continue to focus our sales and marketing efforts in these markets to grow our business. In addition, we believe our future growth depends not only on increasing our penetration into the principal markets in which our services are currently used, but also identifying and expanding the number of industries, communities and markets that use or could use our services. Efforts to expand our service offerings beyond the markets that we currently serve, however, may divert management resources from existing operations and require us to commit significant financial resources to an unproven business, either of which could significantly impair our operating results. Moreover, efforts to expand beyond our existing markets may never result in new services that achieve market acceptance, create additional revenue or become profitable. Our inability to further penetrate our existing markets or our inability to identify additional markets and achieve acceptance of our services in these additional markets could adversely affect our business, results of operations and financial condition.

Our performance depends on customer referrals from financial institutions and other users of our services.

We depend on end-users of our solutions to generate customer referrals for our services. We depend in part on the financial institutions, legal providers and other third parties who use our services to recommend them to a larger customer base than we can reach through our direct sales and internal marketing efforts. For instance, a significant portion of our revenues from the mergers and acquisitions sector business is derived from referrals by investment banks, financial advisors and law firms that have relied on our services in connection with merger and acquisition transactions. These referrals are an important source of new customers for our services, and generally are made without expectation of compensation. We intend to continue to focus our marketing efforts on these referral partners in order to expand our reach and improve the efficiency of our sales efforts. The willingness of these users to provide referrals depends on a number of factors, including the performance, ease of use, reliability, reputation and cost-effectiveness of our services as compared to those offered by our competitors. We may not be able to maintain strong relationships with these financial institutions or professional advisors. The loss of any of our significant referral sources or a decline in the number of referrals could require us to devote substantially more resources to the sales and marketing of our services, which would increase our costs, and could lead to a decline in our revenue, slow our growth and have a material adverse effect on our business, results of operations and financial condition. In addition, the revenue we generate from our referral relationships may vary from period to period.

If we are unable to maintain or expand our direct sales capabilities, we may not be able to generate anticipated revenues.

We rely primarily on our direct sales force to sell our services. As of March 31, 2010, we had a team of 129 dedicated sales professionals. Our services and solutions require a sophisticated sales effort targeted at the senior management of our prospective customers. We must expand our sales force to generate increased revenue from new customers. Failure to hire or retain qualified sales personnel will preclude us from expanding our business and generating anticipated revenue. Competition for such personnel is intense, and there can be no assurance that we will be able to retain our existing sales personnel or attract, assimilate or retain enough highly qualified sales personnel. Many of the companies with which we compete for experienced personnel have greater resources than we have. If any of our sales representatives were to leave us and join one of our competitors, we may be unable to prevent such sales representatives from helping competitors to solicit business from our existing customers, which could adversely affect our revenue. In addition, in making employment decisions, particularly in the software industry, job candidates often consider the value of the stock options they are to receive in connection with their employment. Significant volatility in the price of our stock after this offering may, therefore, adversely affect our ability to attract or retain key employees. In the past, we have had high turn-over rates among our sales force. New hires require training and take time to achieve full productivity. If we experience high turnover in our sales force in the future, we cannot be certain that new hires will become as productive as necessary to maintain or increase our revenue.

We may lose sales opportunities if we do not successfully develop and maintain strategic relationships to sell and deliver our solutions.

In addition to generating customer referrals through third-party users of our solutions, we intend to pursue additional relationships with other third parties, such as technology and content providers and implementation partners. Identifying partners and negotiating and documenting relationships with them require

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significant time and resources as does integrating third-party content and technology. Some of these third parties have entered and may continue to enter, into strategic relationships with our competitors. Further, these third parties may have multiple strategic relationships and may not regard us as significant for their businesses. They may terminate their respective relationships with us, pursue other partnerships or relationships, or attempt to develop or acquire services or solutions that compete with ours. Our strategic partners also may interfere with our ability to enter into other desirable strategic relationships. If we are unsuccessful in establishing or maintaining our relationships with these third parties on favorable economic terms, our ability to compete in the marketplace or to grow our revenue could be impaired, and our business, results of operations and financial condition would suffer. Even if we are successful, we cannot assure you that these relationships will result in increased revenue or customer usage of our solutions or that the economic terms of these relationships will not adversely affect our margins.

Our business depends substantially on customers renewing and expanding their subscriptions for our services. Any decline in our customer renewals and expansions would harm our future operating results.

We enter into subscription agreements with certain of our customers that are generally one year in length. As a result, maintaining the renewal rate of our subscription agreements is critical to our future success. Contracts with annual commitment terms typically contain an automatic renewal clause; however, optional notification of non-renewal is typically permitted to be given by customers within 30 to 90 days prior to the end of the contract term. Repeat customers who do not have automatic renewal terms typically must negotiate renewal terms at each annual termination date. Our customers have no obligation to renew their subscriptions for our services after the expiration of the initial term of their agreements, and some customers have elected not to do so. We cannot assure you that any of our customer agreements will be renewed. Our renewal rates may decline due to a variety of factors, including:

the price, performance and functionality of our solutions;
the availability, price, performance and functionality of competing products and services;
our ability to demonstrate to new customers the value of our solutions within the initial term;
the relative ease and low cost of moving to a competing product or service;
consolidation in our customer base;
the effects of economic downturns, including the current global economic recession, and global economic conditions;
reductions in our customers’ spending levels; or
if any of our customers cease using, or anticipate declining requirements for, our services in their operations.

If our renewal rates are lower than anticipated or decline for any reason, or if customers renew on terms less favorable to us, our revenue may decrease and our profitability and gross margin may be harmed, which would have a material adverse effect on our business, results of operations and financial condition.

The nature of our transactional contracts, such as those for merger and acquisition transactions, require frequent new contracts with customers.

Many of our contracts with customers are entered into in connection with discrete one-time financial and strategic business transactions and projects such as merger and acquisition transactions. During the fiscal years ended December 31, 2007, 2008 and 2009, and the three months ended March 31, 2010, revenues generated from transactional contracts constituted approximately 53%, 53%, 43% and 42%, respectively, of our total revenues. These transactional agreements typically have initial terms of six to twelve months depending on the purpose of the exchange. Accordingly, our business depends on our ability to replace these transactional agreements as they expire. Our inability to enter into new contracts with existing customers or find new customers to replace these contracts could have a material adverse effect on our business, results of operations and financial condition.

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Consolidation in the commercial and investment banking industries and other industries we serve could adversely impact our business by eliminating a number of our existing and potential customers.

There has been, and continues to be, merger, acquisition and consolidation activity in the banking and financial services industry. Mergers or consolidations of banks and financial institutions have reduced and may continue to reduce the number of our customers and potential customers for our solutions. A smaller market for our services could have a material adverse impact on our business and results of operations. For example, in 2008 and 2009, some of our largest customers in the commercial and investment banking industries merged with each other causing the consolidation of several contracts. In addition, it is possible that the larger banks or financial institutions which result from mergers or consolidations could perform themselves some or all of the services that we currently provide or could provide. A merger of two of our existing customers may also result in the merged entity deciding not to use our service or to purchase fewer of our services than the companies did separately or may result in the merged entity seeking pricing advantages or discounts using the leverage of its increased size. If that were to occur, it could adversely impact our revenue, which in turn would adversely affect our business, results of operations and financial condition.

If we do not maintain the compatibility of our services with third-party applications that our customers use in their business processes, demand for our services could decline.

Our solutions can be used alongside a wide range of other systems, such as email and enterprise software systems used by our customers in their businesses. If we do not support the continued integration of our services with third-party applications, including through the provision of application programming interfaces that enable data to be transferred readily between our services and third-party applications, demand for our services could decline and we could lose sales. We will also be required to make our services compatible with new or additional third-party applications that are introduced to the markets that we serve. We may not be successful in making our services compatible with these third-party applications, which could reduce demand for our services. In addition, prospective customers, especially large enterprise customers, may require heavily customized features and functions unique to their business processes. If prospective customers require customized features or functions that we do not offer, and that would be difficult for them to develop and integrate within our services, then the market for our services will be adversely affected.

We operate in highly competitive markets, which could make it more difficult for us to acquire and retain customers.

The market for online collaborative content workspaces is intensely competitive and rapidly changing with relatively low barriers to entry. We expect competition to increase from existing competitors as well as new and emerging market entrants such as Microsoft Corporation and Google, Inc. We compete primarily on product functionality, service, price and reputation. Our competitors include companies that provide online products that serve as document repositories or dealrooms, together with other products or services, which may result in such companies effectively selling these services at lower prices and creating downward pricing pressure for us. Some of our competitors have longer operating histories and significantly greater financial resources. They may be able to devote greater resources to the development and improvement of their services than we can and, as a result, may be able to more quickly implement technological changes and respond to customers’ changing needs. In addition, if our competitors consolidate, or our smaller competitors are acquired by other, larger competitors, they may be able to provide services comparable to ours at a lower price due to their size. Our competitors may also develop services or products that are superior to ours, and their products or services may gain greater market acceptance than our services. Furthermore, our customers or their advisors, including investment banks and law firms, may acquire or develop their own technologies, such as client extranets, that could decrease the need for our services. The arrival of new market entrants or the use of these internal technologies could reduce the demand for our services, or cause us to reduce our pricing, resulting in a loss of revenue and adversely affecting our business, results of operations and financial condition.

The average sales price of our solutions may decrease, which may reduce our profitability.

The average sales price for our solutions may decline for a variety of reasons, including competitive pricing pressures, discounts we offer, a change in the mix of our solutions, anticipation of the introduction of new solutions or promotional programs. Competition continues to increase in the market for online

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collaborative content workspaces and we expect competition to further increase in the future, thereby leading to increased pricing pressures. We cannot assure you that we will be successful maintaining our prices at levels that will allow us to maintain profitability. Failure to maintain our prices could have an adverse effect on our business, results of operations and financial condition.

If we fail to adapt our services to changes in technology or the marketplace, we could lose existing customers and be unable to attract new business.

Our customers and users regularly adopt new technologies and industry standards continue to evolve. The introduction of products or services and the emergence of new industry standards can render our existing services obsolete and unmarketable in short periods of time. We expect others to continue to develop and introduce new products and services, and enhancements to existing products and services, which will compete with our services. Our future success will depend, in part, on our ability to enhance our current services and to develop and introduce new services that keep pace with technological developments, emerging industry standards and the needs of our customers. We cannot assure you that we will be successful in cost effectively developing, marketing and selling new services or service enhancements that meet these changing demands, that we will not experience difficulties that could delay or prevent the successful development, introduction and marketing of these services, or that our new service and service enhancements will adequately meet the demands of the marketplace and achieve market acceptance.

Our customers may adopt technologies that decrease the demand for our services, which could reduce our revenue and adversely affect our business.

We target large institutions such as commercial banks, investment banks and life sciences companies for many of our services and we depend on their continued need for our services. However, over time, our customers or their advisors, such as law firms, may acquire, adopt or develop their own technologies such as client extranets that decrease the need for our solutions. The use of such internal technologies could reduce the demand for our services, result in pricing pressures or cause a reduction in our revenue. If we fail to manage these challenges adequately, our business, results of operations and financial condition could be adversely affected.

Government regulation of the Internet and e-commerce and of the international exchange of certain technologies is subject to possible unfavorable changes, and our failure to comply with applicable regulations could harm our business and operating results.

As Internet commerce continues to evolve, increasing regulation by federal, state or foreign governments becomes more likely. For example, we believe increased regulation is likely in the area of data privacy, and laws and regulations applying to the solicitation, collection, processing or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing demand for our products and services. In addition, taxation of products and services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet may also be imposed. Any regulation imposing greater fees for Internet use or restricting the exchange of information over the Internet could result in reduced growth or a decline in the use of the Internet and could diminish the viability of our Internet-based services, which could harm our business and operating results.

Interruptions or delays in our service due to problems with our third-party web hosting facility or other third-party service providers could adversely affect our business.

We rely on SunGard Availability Services LP for the maintenance of the equipment running our solutions and software at geographically dispersed hosting facilities. Our agreement with SunGard Availability Services LP expires on December 31, 2013. If we are unable to renew, extend or replace this contract, we may be unable to timely arrange for replacement services at a similar cost, which could cause an interruption in our service. We do not control the operation of these SunGard Availability Services LP facilities and each may be subject to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures or similar events. These facilities may also be subject to break-ins, sabotage, intentional acts of vandalism or similar misconduct. Despite precautions taken at these facilities, the occurrence of a natural disaster, cessation of operations by our third-party web hosting provider or its decision to close a facility without adequate notice or other unanticipated problems at either facility could result in lengthy interruptions in our service. In

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addition, the failure by these facilities to provide our required data communications capacity could result in interruptions in our service. Further, our services are highly dependent on our computer and telecommunications equipment and software systems. Disruptions in our service and related software systems could be the result of errors or acts by our vendors, customers, users or other third parties, or electronic or physical attacks by persons seeking to disrupt our operations. Any damage to, or failure or capacity limitations of, our systems and our related network could result in interruptions in our service. Interruptions in our service may cause us to lose revenue, cause us to issue credits or refunds, cause customers to terminate their subscriptions and adversely affect our renewal rates. Our business and reputation will be adversely affected if our customers and potential customers believe our service is unreliable.

Our business may not generate sufficient cash flow from operations, or future borrowings under our credit facilities or from other sources may not be available to us, in amounts sufficient to enable us to repay our indebtedness or to fund our other liquidity needs, including capital expenditure requirements.

We cannot guarantee that we will be able to generate or obtain enough capital to service our debt and fund our planned capital expenditures and business plan. We may be more vulnerable to adverse economic conditions than less leveraged competitors and thus less able to withstand competitive pressures. Any of these events could reduce our ability to generate cash available for investment or debt repayment or to make improvements or respond to events that would enhance profitability. If we are unable to service or repay our debt when it becomes due, our lenders could seek to accelerate payment of all unpaid principal and foreclose on our assets, and we may have to take actions such as selling assets, seeking additional equity investments or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. Additionally, we may not be able to effect such actions, if necessary, on commercially reasonable terms, or at all. Any such event would have a material adverse effect on our business, results of operations and financial condition.

Our loan agreements contain operating and financial covenants that may restrict our business and financing activities.

We had total indebtedness of $291.6 million outstanding as of March 31, 2010, pursuant to a First Lien Credit Agreement, a Second Lien Credit Agreement and a Holdings Senior PIK Credit Agreement, each entered into on June 15, 2007. These borrowings are secured by substantially all of our assets, including our intellectual property. Our loan agreements restrict, among other things, our ability to:

incur additional indebtedness;
create liens;
make investments and acquisitions;
sell assets;
pay dividends or make distributions on and, in certain cases, repurchase our stock; or
consolidate or merge with other entities.

In addition, our loan agreements have change in control provisions that may accelerate the maturity date of our loans. With respect to our First Lien Credit Agreement (“First Lien Credit Facility”), upon the occurrence of a change in control, all first-lien credit facility commitments shall terminate and all first-lien loans shall become due and payable. With respect to our Second Lien Credit Agreement (“Second Lien Credit Facility”), upon a change in control, each holder of second-lien term loans will be entitled to require us to repay the second-lien term loans at a price of 101% of the principal plus accrued and unpaid interest. With respect to our Holdings Senior PIK Credit Agreement (“PIK Loan”), upon a change of control, we are required to offer to prepay the principal at 101% plus accrued and unpaid interest. Even after application of the proceeds of this offering to repay a portion of our total outstanding indebtedness, including under our Second Lien Credit Facility and our PIK Loan, these change in control provisions could have the effect of delaying or preventing a change in control of our company.

Furthermore, our loan agreements require us to meet specified minimum financial measurements. The operating and financial restrictions and covenants in these loan agreements, as well as any future financing agreements that we may enter into, may restrict our ability to finance our operations, engage in business

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activities or expand or fully pursue our business strategies. Our ability to comply with these covenants may be affected by events beyond our control, and we may not be able to meet those covenants. A breach of any of these covenants could result in a default under our loan agreements, which could cause all of the outstanding indebtedness under our loan agreements to become immediately due and payable and terminate all commitments to extend further credit.

We might require additional capital to support business growth, and this capital might not be available.

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 services or enhance our existing services, enhance our operating infrastructure and acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock, including shares of common stock sold in this offering. Any debt financing secured by us in the future could involve 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 business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if 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 limited.

Our growth may strain our management, information systems and resources.

Our business has expanded rapidly in recent years. This rapid growth has placed, and may continue to place, a significant strain on our managerial, administrative, operational, financial and other resources. We intend to further expand our overall business, customer base, headcount and operations both domestically and internationally. Growing a global organization and managing a geographically dispersed workforce will require substantial management effort and significant additional investment in our infrastructure. We will be required to continue to improve our information technology infrastructure, operational, financial and management controls and our reporting systems and procedures, and manage expanded operations in geographically distributed locations. Our expected additional growth will increase our costs, which will make it more difficult for us to offset any future revenue shortfalls by offsetting expense reductions in the short term. If we fail to successfully manage our growth we will be unable to successfully execute our business plan, which could have a negative impact on our business, financial condition and results of operations.

Expansion of our business internationally will subject us to additional economic and operational risks that could increase our costs and make it difficult for us to operate profitably.

One of our key growth strategies is to pursue international expansion. International revenue accounted for approximately 33% of our revenue in both 2008 and 2009. The continued expansion of our international operations may require significant expenditure of financial and management resources and result in increased administrative and compliance costs. In addition, such expansion will increasingly subject us to the risks inherent in conducting business internationally, including:

foreign currency fluctuations, which could result in reduced revenue and increased operating expenses;
localization of our services, including translation into foreign languages and adaptation for local practices and regulatory requirements;
longer accounts receivable payment cycles and increased difficulty in collecting accounts receivable;
the effect of applicable foreign tax structures, including tax rates that may be higher than tax rates in the United States or taxes that may be duplicative of those imposed in the United States;
tariffs and trade barriers;
difficulties in managing and staffing international operations;
general economic and political conditions in each country;

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inadequate intellectual property protection in foreign countries;
dependence on certain third parties, including channel partners with whom we may not have extensive experience;
the difficulties and increased expenses in complying with a variety of foreign laws, regulations and trade standards, including data protection and privacy laws which may or may not be in conflict with U.S. law; and
international regulatory environments.

Because we recognize revenue for our services ratably over the term of our customer agreements, downturns or upturns in the value of signed contracts will not be fully and immediately reflected in our operating results.

We offer our services primarily through fixed commitment contracts and recognize revenue ratably over the related service period, which typically range from six to twelve months. As a result, some portion of the revenue we report in each quarter is revenue from contracts entered into during prior quarters. Consequently, a decline in signed contracts in any quarter will not be fully and immediately reflected in the revenue of that quarter and will negatively affect our revenue in future quarters. In addition, we may be unable to adjust our cost structure to take account of this reduced revenue. Similarly, revenue attributable to an increase in contracts signed in a particular quarter will not be fully and immediately recognized in the quarter that the contract is signed, as revenue from new or renewed contracts is recognized ratably over the applicable service period. Because we incur sales commissions at the time of sale, we may not recognize revenues from some customers despite incurring considerable expense related to our sales processes. Timing differences of this nature could cause our margins and profitability to fluctuate significantly from quarter to quarter.

The sales cycles for enterprise customers can be long and unpredictable, and require considerable time and expense, which may cause our operating results to fluctuate.

The timing of our revenue from sales to enterprise customers is difficult to predict. These efforts require us to educate our customers about the use and benefit of our services, including the technical capabilities and potential cost savings to an organization. Enterprise customers typically undertake a significant evaluation process that has in the past resulted in a lengthy sales cycle, typically several months. We spend substantial time, effort and money on our enterprise sales efforts without any assurance that our efforts will produce any sales. If sales expected from a specific customer for a particular quarter are not realized in that quarter or at all, our results could fall short of public expectations and our business, operating results and financial condition could be adversely affected.

If we fail to maintain proper and effective internal controls in the future, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors’ views of us and, as a result, the value of our common stock.

Ensuring that we have effective internal control over financial reporting and disclosure controls and procedures in place is a costly and time-consuming effort that needs to be frequently evaluated. In connection with this offering, we have commenced the process of documenting, reviewing and improving our internal controls over financial reporting for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, which will require an annual management assessment of the effectiveness of our internal controls over financial reporting and a report from our independent registered public accounting firm addressing the effectiveness of our internal controls over financial reporting. Both we and our independent registered public accounting firm will be attesting to the effectiveness of our internal controls over financial reporting in connection with the audit of our financial statements for the year ending December 31, 2011.

We have identified deficiencies in our internal controls over financial reporting in the past, including in connection with the audit of our financial statements for the year ended December 31, 2009. In addition, in connection with our 2009 audit, we identified a material weakness in our internal control over financial reporting related to our application of certain provisions within ASC 815, Derivatives and Hedging (“ASC 815”) as it relates to an interest rate hedging instrument that we have held since 2007. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that

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there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls. From the date of inception of the interest rate hedging instrument through March 2009, we properly interpreted and applied the guidance of ASC 815. In March 2009 we made certain amendments to the swap agreement that under the guidance of ASC 815 should have resulted in the de-designation of the hedge as of that date. Based on our interpretation of the guidance, in periods subsequent to the amendment made in March 2009, we improperly concluded that the interest rate hedging instrument qualified for hedge accounting treatment. The resulting adjustment to reclassify the cumulative fair value adjustments out of Other comprehensive (loss) income on the Consolidated Balance Sheet to Other expense in the Consolidated Statement of Operations, both of which are contained elsewhere in this prospectus, was considered an audit adjustment and was recorded prior to the issuance of the consolidated financial statements for the year ended December 31, 2009. The adjustment recorded as a result of this material weakness is discussed within Note 9 to our consolidated financial statements contained elsewhere in this prospectus. We have concluded no remedial action is required with respect to this material weakness as we no longer apply hedge accounting treatment to the existing interest rate swap.

As part of our process of documenting and testing our internal controls over financial reporting, we may identify areas for further attention and improvement. We expect to incur substantial accounting and auditing expense and to expend significant management time in complying with the requirements of Section 404 of the Sarbanes-Oxley Act. If we are not able to comply with these requirements in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal controls over financial reporting that could rise to the level of a material weakness, we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal controls over financial reporting, we will be unable to assert that our internal controls over financial reporting are effective. If we are unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal controls over financial reporting, we could be subject to investigations or sanctions by the Securities and Exchange Commission or other regulatory authorities, and we could lose investor confidence in the accuracy and completeness of our financial reports, which could cause an adverse effect on the market price of our common stock, our business, reputation, financial position and results of operation. In addition, we could be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings.

We rely on third-party software and hardware to support our system and services and our business and reputation could suffer if our services fail to perform properly.

We rely on hardware purchased or leased and software licensed from third parties to offer our service. This hardware and software may not continue to be available on commercially reasonable terms or at all. Any loss of the right to use any of this hardware or software could result in delays in the provisioning of our services, which could negatively affect our business until equivalent technology is either developed by us or, if available, is identified, obtained and integrated. The software underlying our services can contain undetected errors or bugs. We may be forced to delay commercial release of our services until such problems are corrected and, in some cases, may need to implement enhancements to correct errors that we do not detect until after deployment of our services. In addition, problems with the software underlying our services could result in:

damage to our reputation;
loss of or delayed revenue;
loss of customers;
warranty claims or litigation;
loss of or delayed market acceptance of our services; and
unexpected expenses and diversion of resources to remedy errors.

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Our use of “open source” software could negatively affect our ability to sell our services and subject us to possible litigation.

A portion of the technologies licensed by us incorporate so-called “open source” software, and we may incorporate open source software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses. If we fail to comply with these licenses, we may be subject to certain conditions, including requirements that we offer our services that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or alterations under the terms of the particular open source license. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our services that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our services.

If we are found to infringe on the proprietary rights of others, we could be required to redesign our services, pay significant royalties or enter into license agreements with third parties. This may significantly increase our costs or adversely affect our results of operations and stock price.

A third-party may assert that our technology or services violates its intellectual property rights. In particular, as the number of products and services offered in our markets, as well as the number of related patents issued in the United States and elsewhere, increase, and the functionality of these products and services further overlap, we believe that infringement claims may arise. Any claims, regardless of their merit, could:

be expensive and time-consuming to defend;
force us to stop providing services that incorporate the challenged intellectual property;
require us to redesign our technology and services;
divert management’s attention and other company resources; and
require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies, which may not be available on terms acceptable to us, if at all.

If we are unable to protect our proprietary technology and other rights, the value of our business and our competitive position may be impaired.

If we are unable to protect our intellectual property, our competitors could use our intellectual property to market products and services similar to ours, which could decrease demand for our services. We rely on a combination of copyright, patent, trademark and trade secret laws as well as third-party nondisclosure agreements and other contractual provisions and technical measures to protect our intellectual property rights. These protections may not be adequate to prevent our competitors from copying or reverse-engineering our technology and services to create similar offerings. The scope of patent protection, if any, we may obtain from our patent applications is difficult to predict and our patents may be found invalid, unenforceable, or of insufficient scope to prevent competitors from offering similar services. Our competitors may independently develop technologies that are substantially equivalent or superior to our technology. To protect our trade secrets and other proprietary information, we require employees, consultants, advisors, subcontractors and collaborators to enter into confidentiality agreements and maintain policies and procedures to limit access to our trade secrets and proprietary information. These agreements and the other actions taken by us may not provide meaningful protection for our trade secrets, know-how or other proprietary information from unauthorized use, misappropriation or disclosure. Existing copyright and patent laws may not provide adequate or meaningful protection in the event competitors independently develop technology, products or services similar to ours. Even if such laws provide protection, we may have insufficient resources to take the legal actions necessary to protect our interests. In addition, our intellectual property rights and interests may not be afforded the same protection under the laws of foreign countries as they are under the laws of the United States.

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Our success depends on our customers’ continued high-speed access to the Internet and the continued reliability of the Internet infrastructure.

Our future sales growth depends on our customers’ high-speed access to the Internet, as well as the continued maintenance and development of the Internet infrastructure. The future delivery of our services will depend on third-party Internet service providers to expand high-speed Internet access, to maintain a reliable network with the necessary speed, data capacity and security, and to develop complementary products and services, including high-speed modems, for providing reliable and timely Internet access and services. The success of our business depends directly on the continued accessibility, maintenance and improvement of the Internet as a convenient means of customer interaction, as well as an efficient medium for the delivery and distribution of information among businesses and by businesses to their employees. All of these factors are out of our control. If for any reason the Internet does not remain a widespread communications medium and commercial platform, the demand for our services would be significantly reduced, which would harm our business, results of operations and financial condition.

To the extent that the Internet continues to experience increased numbers of users, frequency of use or bandwidth requirements, the Internet may become congested and be unable to support the demands placed on it, and its performance or reliability may decline. Any future Internet outages or delays could adversely affect our ability to provide services to our customers, which could adversely affect our business.

We may not successfully develop or introduce new services or enhancements to our IntraLinks Platform and, as a result, we may lose existing customers or fail to attract new customers and our revenues may suffer.

Our ability to attract new customers and increase revenue from existing customers will depend in large part on our ability to enhance and improve our existing IntraLinks Platform and to introduce new functionality either by acquisition or internal development. Our operating results would suffer if our innovations are not responsive to the needs of our customers, are not appropriately timed with market opportunity, or are not effectively brought to market. We have in the past experienced delays in the planned release dates of new features and upgrades, and have discovered defects in new services after their introduction. There can be no assurance that new services or upgrades will be released according to schedule, or that when released they will not contain defects. Either of these situations could result in adverse publicity, loss of revenues, delay in market acceptance or claims by customers brought against us, all of which could have a material adverse effect on our business, results of operations and financial condition. Moreover, upgrades and enhancements to our service offerings may require substantial investment and we have no assurance that such investments will be successful. If new innovations to our solutions do not become widely adopted by customers, we may not be able to justify the investments we have made. If we are unable to develop, license or acquire new products or enhancements to existing services on a timely and cost-effective basis, or if such new products or enhancements do not achieve market acceptance, our business, results of operations and financial condition will be materially adversely affected.

If we fail to develop our brand cost-effectively, our business may suffer.

We believe that developing and maintaining awareness of the IntraLinks brand in a cost-effective manner is critical to achieving widespread acceptance of our existing and future services and is an important element in attracting new customers. Furthermore, we believe that the importance of brand recognition will increase as competition in our market develops. Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and on our ability to provide reliable and useful services at competitive prices. Brand promotion and protection will also require protection and defense of our trademarks, service marks and trade dress, which may not be adequate to protect our investment in our brand or prevent competitors’ use of similar brands. In the past, our efforts to build our brand have involved significant expense. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, and our business could suffer.

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If we are unable to retain our key executives, we may not be able to implement our business strategy.

We rely on the expertise and experience of our senior management, especially our President and Chief Executive Officer, J. Andrew Damico, as well as the other executive officers and key employees listed in the “Management” section of this prospectus. Although we have employment agreements with Mr. Damico and Mr. Anthony Plesner, our Chief Financial Officer, neither of them nor any of our other management personnel is obligated to continue his or her employment with us. We have no key-man insurance on any members of our management team. The loss of services of any key management personnel could make it more difficult to successfully pursue our business goals. Furthermore, recruiting and retaining qualified management personnel are critical to our growth plans. We may be unable to attract and retain such personnel on acceptable terms given the competition among technology companies for experienced management personnel.

Our ability to use our net operating loss carryforwards may be limited.

As of December 31, 2009, we had federal net operating loss carryforwards, or NOLs, of $62.4 million to offset future taxable income, which expire in various years through 2027, if not utilized. The deferred tax asset representing the benefit of these NOLs has been offset by our deferred tax liabilities, leaving us in a net deferred tax liability position. A lack of future taxable income would adversely affect our ability to utilize these NOLs. In addition, under the provisions of the Internal Revenue Code, substantial changes in our ownership may limit the amount of NOLs that can be utilized annually in the future to offset taxable income. Section 382 of the Internal Revenue Code, or Section 382, imposes limitations on a company’s ability to use NOLs if a company experiences a more-than-50-percent ownership change over a three-year testing period. We believe that, as a result of this offering or as a result of prior or future issuances of our capital stock, it is possible that a change in our ownership has occurred or will occur. If such a change in our ownership has occurred or occurs, our ability to use our NOLs in any future periods may be substantially limited. Additionally, due to an administrative omission from certain prior year tax filings with respect to our U.K. subsidiary losses, we are seeking relief from the Internal Revenue Service. In the event relief is not obtained, our ability to use certain NOLs may be restricted. If we are limited in our ability to use our NOLs, we will pay more taxes than if we were able to utilize our NOLs fully. This occurrence could adversely affect the market price of our common stock.

If we undertake business combinations and acquisitions, they may be difficult to integrate, disrupt our business, dilute stockholder value or divert management’s attention.

We may support our growth through acquisitions of complementary businesses, services or technologies. Future acquisitions involve risks, such as:

challenges associated with integrating acquired technologies and operations of acquired companies;
exposure to unforeseen liabilities;
diversion of managerial resources from day-to-day operations;
possible loss of key employees, customers and suppliers;
misjudgment with respect to the value, return on investment or strategic fit of any acquired operations or assets;
higher than expected transaction costs; and
additional dilution to our existing stockholders if we use our common stock as consideration for such acquisitions.

As a result of these risks, we may not be able to achieve the expected benefits of any acquisition. If we are unsuccessful in completing or integrating acquisitions, we may be required to reevaluate our growth strategy and we may have incurred substantial expenses and devoted significant management time and resources in seeking to complete and integrate the acquisitions.

Future business combinations could involve the acquisition of significant intangible assets. We may need to record write-downs from future impairments of identified intangible assets and goodwill. These accounting charges would reduce any future reported earnings or increase a reported loss. In addition, we could use

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substantial portions of our available cash, including some or all of the proceeds of this offering, to pay the purchase price for acquisitions. Subject to the provisions of our existing indebtedness, it is possible that we could incur additional debt or issue additional equity securities as consideration for these acquisitions, which could cause our stockholders to suffer significant dilution.

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could harm our operating results.

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 requirements. We also have incurred and will incur costs associated with current corporate governance requirements, including requirements under Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the Securities and Exchange Commission and the exchange on which we list our shares of common stock issued in this offering. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. We expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We are unable to currently estimate these costs with any degree of certainty. We also expect these new rules and regulations may make it more difficult and more 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 previously available. 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.

If we are required to collect sales and use taxes on the services we sell, we may be subject to liability for past sales and our future sales may decrease.

We may lose sales or incur significant expenses should tax authorities anywhere we do business be successful in imposing sales and use taxes, value added taxes or similar taxes on the services we provide. A successful assertion by one or more tax authorities that we should collect sales or other taxes on the sale of our services could result in substantial tax liabilities for past sales and otherwise harm our business. States and certain municipalities in the United States, as well as countries outside the United States, have different rules and regulations governing sales and use taxes and these rules and regulations are subject to varying interpretations that may change over time. Certain of these rules and regulations may be interpreted to apply to us depending on the characterization of our services. We currently do not collect sales or use tax on our services in any state in the United States other than Ohio and Texas. We have not historically charged or collected value added tax on our services anywhere in the world.

Vendors of services, like us, are typically held responsible by taxing authorities for the collection and payment of any applicable sales and similar taxes. If one or more taxing authorities determines that taxes should have, but have not, been paid with respect to our services, we may be liable for past taxes in addition to taxes going forward. Liability for past taxes may also include very substantial interest and penalty charges. Although our customer contracts typically provide that our customers are responsible for the payment of all taxes associated with the provision and use of our services, customers may decline to pay back taxes and may refuse responsibility for interest or penalties associated with those taxes. In certain cases, we may elect not to request customers to pay back taxes. If we are required to collect and pay back taxes and the associated interest and penalties and if our customers fail or refuse to reimburse us for all or a portion of these amounts, or if we elect not to seek payment of these amounts, we will have incurred unplanned expenses that may be substantial. Moreover, imposition of such taxes on our services going forward will effectively increase the cost of such services to our customers and may adversely affect our ability to retain existing customers or to gain new customers in the areas in which such taxes are imposed. Any of the foregoing could have a material adverse effect on our business, results of operation or financial condition.

Risks Related to Our Common Stock

Our stock price may fluctuate significantly.

Prior to this offering, you could not buy or sell our common stock publicly. An active public market for our common stock may not develop or be sustained after the completion of this offering. We will negotiate and determine the initial public offering price with the underwriters based on several factors. This price may

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vary from the market price of our common stock after this offering. You may be unable to sell your shares of common stock at or above the initial offering price. The stock market, particularly in recent years, has experienced significant volatility, particularly with respect to technology stocks. The volatility of technology stocks often does not relate to the operating performance of the companies represented by the stock. Factors that could cause volatility in the market price of our common stock include:

market conditions affecting our customers’ businesses, including the level of activity in the mergers and acquisitions and syndicated loan markets;
the loss of any major customers or the acquisition of new customers for our services;
announcements of new services or functions by us or our competitors;
developments concerning intellectual property rights;
comments by securities analysts, including the publication of their estimates of our operating results;
actual and anticipated fluctuations in our quarterly operating results;
rumors relating to us or our competitors;
actions of stockholders, including sales of shares by our directors and executive officers;
additions or departures of key personnel; and
developments concerning current or future strategic alliances or acquisitions.

These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management.

Our principal stockholders will exercise significant control over our company.

After this offering, our two largest stockholders will beneficially own, in the aggregate, shares representing approximately 68.4% of our outstanding capital stock. Although we are not aware of any voting arrangements that will be in place among these stockholders following this offering, if these stockholders were to choose to act together, as a result of their stock ownership, they would be able to influence our management and affairs and control all matters submitted to our stockholders for approval, including the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock.

Future sales of shares by existing stockholders could cause our stock price to decline.

If our existing stockholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public market after the 180-day contractual lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline significantly and could decline below the initial public offering price. Based on shares outstanding as of March 31, 2010, upon the completion of this offering, we will have outstanding 49,284,964 shares of common stock, assuming no exercise of outstanding options. Of these shares, 11,000,000 shares of common stock, plus any shares sold pursuant to the underwriters’ option to purchase additional shares, will be immediately freely tradable, without restriction, in the public market. Morgan Stanley & Co. Incorporated may, in its sole discretion, permit our officers, directors, employees and current stockholders to sell shares prior to the expiration of the lock-up agreements. Moreover, a relatively small number of our shareholders own large blocks of shares. We cannot predict the effect, if any, that public sales of these shares or the availability of these shares for sale will have on the market price of our common stock.

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After the lock-up agreements pertaining to this offering expire and based on shares outstanding as of March 31, 2010, an additional 38,284,964 shares will be eligible for sale in the public market, subject to any applicable volume limitations under federal securities laws. In addition, shares subject to outstanding options under our equity incentive plans and shares reserved for future issuance under our equity incentive plans will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. Moreover, 180 days after the completion of this offering, holders of approximately 33,966,681 shares of our common stock will have the right to require us to register these shares under the Securities Act of 1933, as amended, pursuant to a registration rights agreement. If our existing stockholders sell substantial amounts of our common stock in the public market, or if the public perceives that such sales could occur, this could have an adverse impact on the market price of our common stock, even if there is no relationship between such sales and the performance of our business.

We will have broad discretion in how we use the proceeds of this offering. We may not use these proceeds effectively, which could affect our results of operations and cause our stock price to decline.

We will have considerable discretion in the application of the net proceeds of this offering. We currently intend to use the net proceeds of this offering for the repayment of certain of our outstanding indebtedness and for working capital and other general corporate purposes, including capital expenditures and possible investments in, or acquisitions of, complementary businesses, services or technologies. As a result, investors will be relying upon management’s judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Provisions of Delaware law, our charter documents and our loan agreements could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for you to change management.

Provisions of Delaware law, our amended and restated certificate of incorporation and amended and restated by-laws, which will be effective upon the completion of this offering, and our loan agreements, may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions may also prevent or delay attempts by stockholders to replace or remove our current management or members of our board of directors. These provisions include:

a classified board of directors;
limitations on the removal of directors;
advance notice requirements for stockholder proposals and nominations;
the inability of stockholders to act by written consent or to call special meetings;
the ability of our board of directors to make, alter or repeal our amended and restated by-laws;
the authority of our board of directors to issue preferred stock with such terms as our board of directors may determine; and
provisions in our loan agreements that may accelerate payment of our debt in a change in control.

The affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote, and not less than 75% of the outstanding shares of each class entitled to vote thereon as a class, is generally necessary to amend or repeal the above provisions that are contained in our amended and restated certificate of incorporation. Also, absent approval of our board of directors, our amended and restated by-laws may only be amended or repealed by the affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote.

In addition, upon the closing of this offering, we will be subject to the provisions of Section 203 of the Delaware General Corporation Law, which limits business combination transactions with stockholders of 15% or more of our outstanding voting stock that our board of directors has not approved. These provisions

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and other similar provisions make it more difficult for stockholders or potential acquirers to acquire us without negotiation. These provisions may apply even if some stockholders may consider the transaction beneficial to them.

As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. These provisions might also discourage a potential acquisition proposal or tender offer, even if the acquisition proposal or tender offer is at a premium over the then current market price for our common stock.

We have never paid dividends on our capital stock and we do not anticipate paying any dividends in the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases.

We have not paid dividends on any of our classes of capital stock to date and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of our outstanding indebtedness restrict our ability to pay dividends, and any future indebtedness that we may incur could preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. Consequently, in the foreseeable future, you will likely only experience a gain from your investment in our common stock if the price of our common stock increases.

An active trading market for our common stock may not develop, and you may not be able to resell your shares at or above the initial public offering price.

Prior to this offering, there has been no public market for shares of our common stock. Although our common stock has been approved for listing on the New York Stock Exchange in connection with this offering, an active trading market for our shares may never develop or be sustained following this offering. The initial public offering price of our common stock will be determined through negotiations between us and the underwriters. This initial public offering price may not be indicative of the market price of our common stock after this offering. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the initial public offering price or at the time that they would like to sell.

Investors in this offering will pay a much higher price than the book value of our common stock.

If you purchase common stock in this offering, you will pay more for your shares than the amounts paid by existing stockholders for their shares. You will incur immediate and substantial dilution of $17.92 per share, representing the difference between our pro forma net tangible book value per share after giving effect to this offering and an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover of this preliminary prospectus. In the past, we issued options and restricted stock to acquire common stock at prices significantly below the assumed initial public offering price. To the extent these outstanding options are ultimately exercised, you will sustain further dilution.

If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our common stock, the price of our common stock could decline.

The trading market for our common stock will rely in part on the research and reports that equity research analysts publish about us and our business. We do not control these analysts. The price of our common stock could decline if one or more equity analysts downgrade our common stock or if analysts issue other unfavorable commentary or cease publishing reports about us or our business.

Affiliates of Deutsche Bank Securities Inc. will receive a portion of the offering proceeds through the repayment of the PIK Loan under our Holdings Senior PIK Credit Agreement, and therefore may be deemed to have interests in this offering beyond customary underwriting discounts and commissions.

Deutsche Bank Securities Inc. or its affiliates served as an administrative agent, syndication agent, joint lead arranger, joint bookrunner and a lender under our Holdings Senior PIK Credit Agreement. We intend to use a portion of the net proceeds from the sale of our common stock in this offering to repay indebtedness owed by us to affiliates of Deutsche Bank Securities Inc. (and other lenders) through the repayment of the

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PIK Loan under our Holdings Senior PIK Credit Agreement. In addition, Deutsche Bank Securities Inc. will receive a fee for acting as sole arranger and bookrunner in connection with amendments to our First Lien Credit Facility and Second Lien Credit Facility, which fees will be payable upon the earlier of the completion of this offering and August 31, 2010. Because more than 5% of the net proceeds of this offering of our common stock may be used to repay amounts owed to affiliates of Deutsche Bank Securities Inc. (who is a member of the Financial Industry Regulatory Authority (“FINRA”)), Deutsche Bank Securities Inc. may be deemed to have a “conflict of interest” with us under NASD Conduct Rule 2720 of FINRA (“Rule 2720”), and accordingly, this offering will be conducted in compliance with the requirements of Rule 2720. As such, Deutsche Bank Securities Inc. may be deemed to have an interest in, and receive financial benefits as a result of, the successful completion of this offering beyond its interest as an underwriter in this offering and the customary underwriting discounts and commissions it will receive. See “Underwriting—Conflicts of Interest”.

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FORWARD-LOOKING STATEMENTS

This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this prospectus include, but are not limited to, statements about:

our ability to achieve profitability;
our competitive position and the effect of competition in our industry;
our ability to penetrate existing markets and develop new markets for our services;
our ability to retain or hire qualified accounting and other personnel;
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
our ability to maintain the security and reliability of our systems;
our estimates with regard to our addressable markets and future performance;
our estimates regarding our anticipated results of operations, future revenue, capital requirements and our needs for additional financing;
our use of proceeds from this offering; and
our goals and strategies.

In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this prospectus and the documents that we reference in this prospectus and have filed with the Securities and Exchange Commission as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.

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USE OF PROCEEDS

We estimate that our net proceeds from the sale of shares of our common stock in this offering will be approximately $150.7 million, or $173.7 million if the underwriters fully exercise their over-allotment option, based upon an assumed initial public offering price of $15.00 per share, the mid-point of the price range set forth on the cover of this preliminary prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We currently intend to use up to approximately $171.4 million of the net proceeds of this offering to repay indebtedness, including related prepayment fees. In particular, we intend to use a portion of the net proceeds of this offering to first repay in full the PIK Loan, including related prepayment fees, under our Holdings Senior PIK Credit Agreement and then to repay, on a pro rata basis, a portion of the Tranche B and Tranche C term loans under our Second Lien Credit Agreement, with any remaining net proceeds to be used for working capital and other general corporate purposes, including capital expenditures and possible investments in, or acquisitions of, complementary businesses, services or technologies. As of March 31, 2010, we had $99.0 million, $29.3 million and $35.0 million, outstanding under our PIK Loan, Tranche B term loan and Tranche C term loan, respectively. We have no current agreements or commitments with respect to any investment or acquisition and we currently are not engaged in negotiations with respect to any investment or acquisition.

The PIK Loan under our Holdings Senior PIK Credit Agreement is due and payable in full on June 15, 2015. The interest rate on the PIK Loan is 13% per annum and the PIK Loan provides for a prepayment penalty of 4%. The Tranche B and Tranche C term loans under our Second Lien Credit Agreement mature on December 15, 2014. The Tranche B term loan under the Second Lien Credit Agreement bears interest at 11% per annum. The Tranche C term loan bears interest at the Eurodollar Rate (as defined in the credit agreement) plus 5.75% per annum, which was 5.98% at March 31, 2010. Following this offering, the Eurodollar Rate on the Tranche C term loan will be subject to a floor of 2.0% per annum and the rate margin on the Eurodollar Rate will increase from 5.75% to 6.50%. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

In addition, except for the amounts used to repay our outstanding indebtedness, the amount of what, and timing of when, we actually spend for these purposes may vary significantly and will depend on a number of factors, including our future revenue and cash generated by operations and the other factors described under “Risk Factors” in this prospectus. Accordingly, our management will have broad discretion in applying a portion of the net proceeds of this offering. Pending these uses, we intend to invest the net proceeds in high quality, investment grade, short-term fixed income instruments which include corporate, financial institution, federal agency or U.S. government obligations.

DIVIDEND POLICY

We have never declared or paid dividends on our capital stock. We do not anticipate paying any dividends on our capital stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. Any future determination to declare dividends will be subject to the discretion of our board of directors and will depend on various factors, including applicable laws, our results of operations, financial condition, future prospects and any other factors deemed relevant by our board of directors. In addition, the terms of our outstanding indebtedness restrict our ability to pay dividends, and any future indebtedness that we may incur could preclude us from paying dividends. Investors should not purchase our common stock with the expectation of receiving cash dividends.

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CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2010:

on an actual basis;
on a pro forma basis to give effect to the conversion of all outstanding shares of our Series A redeemable convertible preferred stock, par value $0.001 per share (“Series A Preferred Stock”) into an aggregate of 35,101,716 shares of our common stock and the filing of our amended and restated certificate of incorporation; and
on a pro forma as adjusted basis to give further effect to our sale in this offering of 11,000,000 shares of our common stock at an assumed initial public offering price of $15.00 per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, and after the application of a portion of the net proceeds of this offering to the repayment of certain of our outstanding indebtedness.

You should read this table in conjunction with the sections of this prospectus entitled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus.

     
  As of March 31, 2010   Pro Forma
As Adjusted(1)(2)
 
     Actual   Pro Forma
     (In Thousands, Except Share Data)
Long-term debt, including current maturities:
                          
First Lien Credit Facility   $ 128,248     $ 128,248     $ 128,248  
Second Lien Credit Facility:
                          
Tranche B, net of discount of $729, $729 and $221, respectively     29,271       29,271       8,857  
Tranche C     35,000       35,000       10,590  
PIK Loan     99,046       99,046           
Total debt   $ 291,565     $ 291,565     $ 147,695  
Series A Preferred Stock, par value $0.001 per share; 36,000,000 shares authorized, 35,863,270 shares issued and outstanding (actual); 36,000,000 shares authorized, no shares issued and outstanding (pro forma); no shares authorized, issued and outstanding (pro forma as adjusted)   $ 176,555              
Shareholders’ (deficit) equity:
                          
Undesignated preferred stock, par value $0.001 per share; no shares authorized, issued or outstanding (actual); 10,000,000 shares authorized, no shares issued or outstanding (pro forma and pro forma adjusted)                  
Common stock, par value $0.001 per share; 41,000,000 shares authorized, 3,183,248 shares issued and outstanding (actual); 300,000,000 shares authorized, 38,284,964 shares issued and outstanding (pro forma); 300,000,000 shares authorized, 49,284,964 shares issued and outstanding (pro forma as adjusted)(3)   $ 3     $ 38     $ 49  
Additional paid-in capital     5,097       181,617       332,306  
Accumulated deficit     (71,855 )      (71,855 )      (76,099 ) 
Accumulated other comprehensive income     94       94       94  
Total stockholders’ (deficit) equity   $ (66,661 )    $ 109,894     $ 256,350  
Total capitalization   $ 401,459     $ 401,459     $ 404,045  

(1) The information above is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

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(2) A $1.00 increase or decrease in the assumed initial public offering price of $15.00 per share, the midpoint of the range set forth on the cover page of this preliminary prospectus, would increase or decrease each of additional paid-in capital and total stockholders’ equity by $11 million, assuming that the number of shares of our common stock offered by us, as set forth on the cover page of this preliminary prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1 million shares in the number of shares of common stock offered by us, assuming an initial public offering price of $15.00 per share, the midpoint of the range set forth on the cover page of this preliminary prospectus, would increase or decrease each of additional paid-in capital and total stockholders’ equity by approximately $15 million.
(3) The number of shares of our common stock outstanding set forth in the table excludes (i) 2,486,855 shares of common stock issuable upon exercise of outstanding options as of March 31, 2010 at a weighted average exercise price of $3.97 per share (of which options to acquire 605,335 shares of common stock are vested as of March 31, 2010), (ii) 3,228,181 shares of our common stock reserved for future issuance under our equity incentive plans as of March 31, 2010, and (iii) 400,000 shares of our common stock reserved for future issuance under our 2010 Employee Stock Purchase Plan, which will become effective in connection with this offering.

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DILUTION

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

Our historical net tangible book value (deficit) as of March 31, 2010, was approximately $(464.5) million, or $(145.93) per share, based on 3,183,248 shares of common stock outstanding as of March 31, 2010. Historical net tangible book value per share is determined by dividing our total tangible assets less total liabilities and Series A Preferred Stock by the actual number of outstanding shares of our common stock. Our pro forma net tangible book value (deficit) as of March 31, 2010 was approximately $(288.0) million, or approximately $(7.52) per share, based on 38,284,964 shares of common stock outstanding after giving effect to the conversion of all outstanding shares of our Series A Preferred Stock into an aggregate of 35,101,716 shares of our common stock upon the completion of this offering. Pro forma net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the pro forma number of shares of common stock outstanding before giving effect to this offering.

After giving effect to our sale of 11,000,000 shares of common stock in this offering based on an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover of this preliminary prospectus less underwriting discounts and commissions and offering expenses payable by us, our pro forma net tangible book value (deficit) as of March 31, 2010 would have been $(2.92) per share. This represents an immediate increase in pro forma net tangible book value per share of $4.60 to existing stockholders and immediate dilution in pro forma net tangible book value of $17.92 per share to new investors purchasing our common stock in this offering at the initial public offering price. Dilution per share to new investors is determined by subtracting pro forma net tangible book value per share after this offering from the assumed initial public offering price per share paid by a new investor. The following table illustrates the per share dilution without giving effect to the over-allotment option granted to the underwriters:

   
Assumed initial public offering price per share(1)            $ 15.00  
Historical net tangible book value (deficit) per share as of March 31, 2010   $ (145.93 )          
Increase per share due to the conversion of all shares of Series A Preferred Stock     138.41        
Pro forma net tangible book value (deficit) per share as of March 31, 2010     (7.52 )          
Increase per share attributable to new investors     4.60        
Pro forma net tangible book value (deficit) per share after this offering     (2.92 )            
Dilution per share to new investors         $ 17.92  

(1) The midpoint of the price range set forth on the cover of this preliminary prospectus.

The following table summarizes as of March 31, 2010, the number of shares of our common stock purchased from us, the total cash consideration paid to us and the average price per share paid to us by existing stockholders and by new investors in this offering at an assumed initial public offering price of $15.00 per share, the mid-point of the price range set forth on the cover of this preliminary prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us:

         
  Shares Purchased   Total Consideration   Average
Price per
Share
In Thousands, Except per Share Numbers   Number   Percent   Amount   Percent
Existing stockholders     38,284,964       77.7 %    $ 176,812,556       51.7 %    $ 4.62  
New investors     11,000,000       22.3       165,000,000       48.3       15.00  
Total     49,284,964       100.0 %    $ 341,812,566       100.0 %    $ 6.94  

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The above discussion and tables are based on 3,183,248 shares of common stock issued and outstanding as of March 31, 2010 and also reflects the conversion of all outstanding shares of our Series A Preferred Stock into an aggregate of 35,101,716 shares of our common stock upon the completion of this offering and excludes:

2,486,855 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2010, with a weighted average exercise price of $3.97 per share (of which options to acquire 605,335 shares of common stock were vested as of March 31, 2010);
3,228,181 shares of our common stock reserved for future issuance under our equity incentive plans as of March 31, 2010; and
400,000 shares of our common stock reserved for future issuance under our 2010 Employee Stock Purchase Plan, which will become effective in connection with this offering.

To the extent that outstanding options are exercised and restricted stock grants vest, you will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further dilution to our stockholders.

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SELECTED CONSOLIDATED FINANCIAL DATA

You should read the selected consolidated financial data presented below in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus and consolidated financial statements and the related notes included elsewhere in this prospectus. The selected consolidated financial data presented below under the heading “Consolidated Statement of Operations Data” for the years ended December 31, 2008 and 2009 and the selected consolidated financial data presented below under the heading “Consolidated Balance Sheet Data” as of December 31, 2008 and 2009, have been derived from our audited consolidated financial statements included elsewhere in this prospectus.

The unaudited pro forma consolidated statement of operations for the year ended December 31, 2007 is presented giving effect to the Merger as if it had occurred on January 1, 2007. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2007 is based on our historical audited consolidated statements of operations included elsewhere in this prospectus, adjusted to give pro forma effect to the Merger. Management believes this presentation provides a meaningful comparison of operating results enabling twelve months of 2007 to be compared with 2008 and 2009, adjusting for the impact of the Merger. The unaudited pro forma consolidated statement of operations is for informational purposes only and does not purport to represent what our actual results of operations would have been if the Merger had been completed as of January 1, 2007.

The selected consolidated financial data presented below under the headings “Consolidated Statement of Operations Data” for the years ended December 31, 2005 and 2006 and under “Consolidated Balance Sheet Data” as of December 31, 2005, 2006 and 2007, have been derived from consolidated financial statements not included in this prospectus. The consolidated statements of operations data and balance sheet data as of and for the first three months of 2009 and 2010 were derived from our unaudited consolidated financial statements that are included elsewhere in this prospectus. The unaudited consolidated financial statements include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, that management considers necessary for the fair presentation of the financial information set forth in those statements. Our historical results are not necessarily indicative of the results of operations to be expected for future periods, and the results for the first three months of 2010 are not necessarily indicative of results to be expected for the full year or for any other period.

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  Predecessor   Successor       Successor   Successor
               Pro Forma
(In Thousands, Except Share and per Share Amounts)   Year
Ended
December 31,
2005
  Year
Ended December 31,
2006
  January 1,
2007 through
June 14,
2007
  June 15,
2007 through
December 31,
2007
  Pro
Forma
Adjustments
  Year
Ended
December 31, 2007(1)
  Year
Ended
December 31, 2008
  Year
Ended
December 31, 2009
  Three
Months
Ended
March 31,
2009
  Three
Months
Ended
March 31,
2010
Consolidated Statement of Operations Data:
                                                                                         
Revenue   $ 54,961     $ 86,368     $ 51,928     $ 70,786     $       122,714     $ 143,401     $ 140,699       34,623       39,931  
Cost of revenue(2)     18,782       22,530       12,801       30,718       10,516       54,035       56,161       48,721       14,157       11,476  
Gross profit     36,179       63,838       39,127       40,068       (10,516 )      68,679       87,240       91,978       20,466       28,455  
Operating expenses:
                                                                                         
Product development(2)     6,938       9,160       6,046       6,949             12,995       14,847       14,222       3,126       4,283  
Sales and marketing(2)     23,597       30,434       18,418       35,532       12,201       66,151       61,556       59,058       14,137       19,020  
General and administrative(2)     8,469       10,796       5,868       8,959       666       15,493       19,209       20,556       4,345       5,510  
Founders litigation costs, net of insurance recoveries     (347 )                                                             
Restructuring costs     100                                     1,316       1,494       48        
Write-off of initial public offering fees     2,039                                                              
Costs related to the Merger                 8,948                   8,948                          
Total operating expenses     40,796       50,390       39,280       51,440       12,867       103,587       96,928       95,330       21,656       28,813  
(Loss) income from operations     (4,617 )      13,448       (153 )      (11,372 )      (23,383 )      (34,908 )      (9,688 )      (3,352 )      (1,190 )      (358 ) 
Interest (income) expense, net     (64 )      (549 )      (562 )      14,718       12,840       26,996       28,234       28,935       7,000       7,028  
Amortization of debt issuance costs                       910       770       1,680       1,803       1,872       477       457  
Other (income) expense                 (9 )      (255 )            (264 )      271       9,027       11,162       73  
Net (loss) income before income tax     (4,553 )      13,997       418       (26,745 )      (36,993 )      (63,320 )      (39,996 )      (43,186 )      (19,829 )      (7,916 ) 
Income tax provision (benefit)           529       237       (9,737 )      (15,352 )      (24,852 )      (15,398 )      (18,415 )      (7,710 )      (2,438 ) 
Net (loss) income   $ (4,553 )    $ 13,468     $ 181     $ (17,008 )    $ (21,641 )    $ (38,468 )    $ (24,598 )    $ (24,771 )      (12,119 )      (5,478 ) 
Net loss per common share –  basic and diluted                              $ (22.33 )             $ (50.51 )    $ (25.54 )    $ (15.38 )    $ (8.82 )    $ (2.66 ) 
Weighted average shares outstanding used in basic and diluted net loss per common share calculation                                761,554                761,554       963,019       1,611,090       1,373,853       2,055,891  
Unaudited pro forma net loss per share  – basic and diluted(3)                                                                  $ (0.67 )             $ (0.15 ) 
Shares used in computing unaudited pro forma net loss per share – basic and diluted(3)                                                                    36,714,423                37,157,607  
Unaudited as adjusted pro forma net loss per share – basic and diluted(4)                                                                  $ (0.20 )             $ (0.04 ) 
Shares used in computing unaudited as adjusted pro forma net loss per share – basic and diluted(4)                                                                    47,616,613                48,059,797  

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(1) Separate presentation of the Predecessor period and Successor period within an annual period is required under U.S. GAAP when a change in accounting basis occurs. Under the provisions of the FASB’s Business Combination standard, the historical carrying values of assets acquired and liabilities assumed are adjusted to fair value, resulting in a higher cost basis associated with the allocation of the purchase price, which affects post-acquisition period results and period-to-period comparisons. We believe presenting only the separate Predecessor period and Successor period within the year ended December 31, 2007 may impede understanding of our operating performance. Therefore, we have also presented the unaudited pro forma consolidated results of operations for the year ended December 31, 2007, assuming the Merger occurred on January 1, 2007. The unaudited pro forma consolidated results of operations includes pro forma adjustments to give effect to the Merger. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for additional details regarding the nature of the pro forma adjustments.
(2) Includes stock-based compensation expense as follows:

             
  Predecessor   Pro
Forma
  Successor   Successor
     Year Ended December 31,   Three Months
Ended March 31,
     2005   2006   2007(1)   2008   2009   2009   2010
Cost of revenue   $ 424     $ 286     $ 307     $ 173     $ 63     $ 22     $ 13  
Product development     588       460       656       519       483       71       126  
Sales and marketing     1,696       1,095       1,339       855       529       16       327  
General and administrative     1,958       1,611       2,031       2,245       863       307       287  
Total   $ 4,666     $ 3,452     $ 4,333     $ 3,792     $ 1,938     $ 416     $ 753  
(3) The pro forma net loss per share, basic and diluted, and pro forma weighted average shares outstanding in the table above give effect to the conversion of all outstanding Series A Preferred Stock into common stock upon the completion of this offering.
(4) As adjusted pro forma basic and diluted earnings per share for the year ended December 31, 2009 and three months ended March 31, 2010 reflects the pro forma effect of the conversion of all outstanding shares of our Series A redeemable convertible preferred stock into an aggregate of 35,103,333 and 35,101,716 shares, respectively, of common stock upon completion of this offering and also to give effect to the issuance of 10,902,190 additional shares by us in this offering, which represents the proportionate number of shares allocated to the repayment of outstanding indebtedness and related prepayment fees, and the application of the net proceeds of this offering to repay $144.4 million in principal amount of outstanding indebtedness and related prepayment fees, as if the offering and repayment of outstanding indebtedness had occurred at the beginning of the respective period. As a result of this repayment of indebtedness, our net loss would have decreased by approximately $15.3 million and $3.6 million, respectively, for the year ended December 31, 2009 and the three months ended March 31, 2010, primarily driven by a decrease in interest expense of approximately $14.4 million and $3.4 million, respectively, as well as decrease in deferred financing costs of approximately $0.9 million and $0.2 million, respectively. See “Use of Proceeds” in this prospectus for additional details.

           
  As of December 31,   As of
March 31,
2010
     2005   2006   2007   2008   2009
Consolidated Balance Sheet Data:
                                                     
Cash and cash equivalents   $ 5,903     $ 10,462     $ 17,671     $ 24,671     $ 30,481       14,897  
Short-term investments     1,200       10,500       4,500             3,414       7,186  
Working capital     (1,280 )      10,216       (622 )      9,821       15,591       14,345  
Total assets     33,125       60,210       551,583       532,852       509,341       495,985  
Deferred revenue     13,796       18,522       23,777       24,938       26,795       29,789  
Long-term debt, net of current portion                 275,233       284,164       290,513       290,215  
Series 1 convertible preferred stock     67,000       67,000                          
Series A Preferred Stock                 173,751       175,991       176,478       176,555  
Accumulated deficit     (165,417 )      (151,949 )      (17,008 )      (41,606 )      (66,377 )      (71,855 ) 
Total stockholders’ deficit     (58,221 )      (41,269 )      (20,002 )      (44,611 )      (62,032 )      (66,661 ) 

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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 our consolidated financial statements and the related notes and the other financial information included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly those under “Risk Factors.” Dollars in tabular format are presented in thousands, except per share data, or otherwise indicated.

Overview

IntraLinks is a leading global provider of Software-as-a-Service (“SaaS”) solutions for securely managing content, exchanging critical business information and collaborating within and among organizations. Our cloud-based solutions enable organizations to control, track, search and exchange time-sensitive information inside and outside the firewall, all within a secure and easy-to-use environment. Our customers rely on our cost-effective solutions to manage large amounts of electronic information, accelerate information-intensive business processes, reduce time to market, optimize critical information workflow, meet regulatory and risk management requirements and collaborate with business counterparties in a secure, auditable and compliant manner. We help our customers eliminate the inherent risks and inefficiencies of using email, fax, courier services and other existing solutions to collaborate and exchange information.

At our founding in 1996, we introduced cloud-based collaboration for the debt capital markets industry and, shortly thereafter, extended our solutions to merger and acquisition transactions. We have since enhanced our IntraLinks Platform to address the needs of a wider enterprise market consisting of customers of all sizes across a variety of industries who use our solutions for the secure management and online exchange of information within and among organizations. Today, this enterprise market is our largest and fastest growing market and includes organizations in the financial services, pharmaceutical, biotechnology, consumer, energy, industrial, legal, insurance, real estate and technology sectors, as well as government agencies. Across all of our principal markets we help transform a wide range of slow, expensive and information-intensive tasks into streamlined, efficient and real-time business processes. In the year ended December 31, 2009, over 4,300 customers across 25 industries used the IntraLinks Platform to enable collaboration among more than 400,000 end-users and approximately 50,000 organizations worldwide.

We deliver our solutions entirely through a multi-tenant SaaS architecture in which a single instance of our software serves all of our customers. Our business model has provided us with a high level of revenue visibility. We sell our solutions directly through an enterprise sales team with industry-specific expertise, and indirectly through a customer referral network and channel partners. In 2009, we generated $140.7 million in revenue, of which approximately 33% was derived from international sales across 61 countries.

We evaluate our operating and financial performance using various performance indicators, including the financial metrics discussed under “— Key Metrics” below, as well as macroeconomic trends affecting the demand for our solutions in our principal markets. We also monitor relevant industry performance, including transactional activity in the debt capital markets and M&A market globally, to measure the success of our sales activities and estimate our market share in our principal markets.

Corporate Structure and Financing

In June 1996, our business was incorporated under the name “IntraLinks, Inc.” On June 15, 2007 (the “Merger Date”), through a series of transactions, all of the outstanding equity of IntraLinks, Inc. was acquired by a newly formed entity, TA Indigo Holding Corporation, which was owned by TA Associates, Inc., Rho Capital Partners, Inc., a principal stockholder in IntraLinks, Inc. since 2001, and other stockholders, including former and current officers and employees of IntraLinks, Inc. These transactions are referred to herein as the “Merger.” As a result of the Merger, TA Indigo Holding Corporation owns all of the common stock of IntraLinks, Inc. TA Indigo Holding Corporation, which was subsequently renamed “IntraLinks Holdings, Inc.” has no operations of its own. The Merger was funded in part through a first lien credit facility, a second lien credit facility and a senior payable-in-kind credit facility totaling $275.0 million. The Merger was accounted

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for under the purchase accounting method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Key Metrics

Our management relies on certain performance indicators to manage and assess our business. The key performance indicators set forth below help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. We discuss revenue and cash flow from operating activities, respectively, under “—Components of Operating Results” and “—Liquidity and Capital Resources” below. Other measures of our quarterly and annual performance, including deferred revenue, Adjusted Gross margin, Adjusted EBITDA and Adjusted EBITDA margin, are discussed below.