8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

February 2, 2010

Date of Report (Date of earliest event reported)

Actuate Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-24607	94-3193197
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

2207 Bridgepointe Parkway

Suite 500

San Mateo, California 94404

(Address of principal executive offices) (Zip Code)

(650) 645-3000

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

On February 2, 2010, Actuate Corporation (“Actuate”) filed a Current Report on Form 8-K (the “Form 8-K”) disclosing the completion of a take-over bid for all of the outstanding common shares of Xenos Group Inc., a corporation existing under the laws of the Province of Ontario, Canada (“Xenos”) by Actuate Canada International Corporation, a corporation existing under the laws of the Province of Ontario, Canada and a wholly-owned subsidiary of Actuate.

Upon completion of its analysis of Rule 3-05 and Article 11 of Regulation S-X, Actuate concluded the acquisition of Xenos was not a significant acquisition, such that financial information would not be required to be filed under Item 9.01(a) and/or Item 9.01(b) of Form 8-K. However, after review of comments from the Staff of the Securities Exchange Commission, Actuate has concluded the acquisition of Xenos was a significant acquisition. Thus, Actuate is now filing this Form 8-K-A to disclose the financial information required by Item 9.01(a) and Item 9.01(b) of Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

Consolidated Financial Statements of Xenos Group, Inc. for the year ended September 30, 2009.

(b) Pro Forma Financial Information

Unaudited Pro Forma Condensed Financial Information combining the Xenos Group Inc. financial results for the year ended September 30, 2009 with the financial results of Actuate Corporation for the year ended December 31, 2009.

(d) Exhibits

Exhibit Number	Description
9.01(a)	Consolidated Financial Statements of Xenos Group, Inc. for the year ended September 30, 2009.
9.01(b)	Unaudited Pro Forma Condensed Financial Information combining the Xenos Group Inc. financial results for the year ended September 30, 2009 with the financial results of Actuate Corporation for the year ended December 31, 2009.
23.1	Consent of Independent Registered Public Accounting Firm.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Actuate Corporation
Date: October 12, 2010	By:	/s/ Peter I. Cittadini
		Name:	Peter I. Cittadini
		Title:	President and Chief Executive Officer

EXHIBIT INDEX

Exhibit Number	Description
9.01(a)	Consolidated Financial Statements of Xenos Group, Inc. for the year ended September 30, 2009.
9.01(b)	Unaudited Pro Forma Condensed Financial Information combining the Xenos Group Inc. financial results for the year ended September 30, 2009 with the financial results of Actuate Corporation for the year ended December 31, 2009.
23.1	Consent of Independent Registered Public Accounting Firm.

EX-9.01(A)

Exhibit 9.01(a)

Consolidated Financial

Information

September 30, 2009

(all monitary amounts are stated in Canadian Dollars unless otherwise indicated)

Table of Contents

Auditors’ Report	1
Consolidated Financial Statements	2
Notes to Consolidated Financial Statements	5

Management’s Responsibility for Financial Reporting

The accompanying financial statements of Xenos Group Inc. (Xenos) are the responsibility of management and have been approved by the Board of Directors on recommendation by the Audit Committee.

The financial statements have been prepared by management in accordance with generally accepted accounting principles. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances. Financial statements are not precise since they include certain amounts based on estimates and judgments. Management has determined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly, in all material respects. Management has prepared financial information presented elsewhere in the annual report and has ensured that it is consistent with that in the financial statements.

Xenos maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the company’s assets are appropriately accounted for and safeguarded.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board carries out this responsibility through its Audit Committee.

The Audit Committee is appointed by the Board. The Committee meets periodically with management and the external auditors to discuss internal controls over the financial reporting processes, auditing matters and financial reporting issues to satisfy itself that each party is properly discharging its responsibilities, and to review the financial statements and the external auditors’ report. The Committee reports its findings to the Board for consideration when approving the financial statements for issuance to the shareholders. The Committee also considers, for review by the Board and approval by the shareholders, the engagement or re-appointment of the external auditors.

Financial statements have been audited by Grant Thornton LLP, the external auditors, in accordance with generally accepted auditing standards on behalf of the shareholders. Grant Thornton LLP has full and free access to the Audit Committee.

“George Kypreos”

        (signed)

Vice President Finance and Chief Financial Officer

December 16, 2009

Report of Independent Certified Public Accountants

To the Shareholders of Xenos Group Inc.

We have audited the consolidated balance sheets of Xenos Group Inc. as of September 30, 2009 and 2008 and the related statements of operations and deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Xenos Group Inc. as of September 30, 2009 and 2008 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in Canada.

/s/ Grant Thornton LLP

Markham, Canada

December 16, 2009

1

Xenos Group Inc.

Consolidated Statements of Operations and Deficit

Year Ended September 30	2009			2008
Sales	$	17,246,526		$	15,908,301
Cost of sales		2,847,985			3,418,876
Gross profit		14,398,541			12,489,425
Expenses
Sales and marketing		5,828,834			4,895,248
Research and development		3,835,560			3,202,134
Administration and general		2,180,526			2,177,384
Amortization		823,784			945,188
Stock based compensation		104,346			96,828
Interest and bank charges		44,674			81,124
		12,817,724			11,397,906
Income before undernoted items		1,580,817			1,091,519
Interest and other		90,489			218,332
Foreign exchange (loss) gain		(419,312	)		240,657
		(328,823	)		458,989
Income before income taxes		1,251,994			1,550,508
Provision for income taxes (Note 12)		54,499			54,137
Net income	$	1,197,495		$	1,496,371
Net income per common share
Basic	$	0.12		$	0.15
Diluted	$	0.12		$	0.15
Weighted average number of shares outstanding
Basic		10,005,444			9,995,562
Diluted		10,101,916			10,146,085
Deficit, beginning of year	$	(35,710,117	)	$	(37,206,488	)
Net income		1,197,495			1,496,371
Deficit, end of year	$	(34,512,622	)	$	(35,710,117	)

See accompanying notes to the consolidated financial statements.

2

Xenos Group Inc.

Consolidated Balance Sheets

September 30	2009			2008
Assets
Current
Cash and cash equivalents (Notes 13 and 19)	$	9,311,112		$	8,115,259
Trade receivables		2,876,941			2,471,700
Other receivables		23,260			23,767
Non-hedging financial derivatives (Note 5)		480,395			82,524
Prepaids		644,872			597,052
Income taxes recoverable		25,837			26,766
		13,362,417			11,317,068
Long term
Future income taxes (Note 12)		1,191,797			1,193,086
Capital assets (Note 6)		877,214			998,436
Intangibles and other assets (Note 7)		2,082,578			1,999,370
	$	17,514,006		$	15,507,960
Liabilities
Current
Payables and accruals	$	2,418,300		$	2,259,583
Income taxes payable		122,056			97,921
Deferred revenue		3,679,136			3,099,644
Current portion – capital lease (Note 9)		2,543			61,170
		6,222,035			5,518,318
Long term
Capital lease obligations (Note 9)		—			2,543
Deferred revenue		36,942			14,812
Deferred lease inducements (Note 20)		106,635			125,734
		6,365,612			5,661,407
Shareholders’ Equity
Capital stock (Note 10)		45,125,209			45,125,209
Contributed surplus (Note 11)		535,807			431,461
Deficit		(34,512,622	)		(35,710,117	)
		11,148,394			9,846,553
	$	17,514,006		$	15,507,960

Commitments and contingency (Notes 14 and 15)

On behalf of the Board

Stuart Butts	Director	Calvin Galatiuk	Director
(“signed”)		(“signed”)

See accompanying notes to the consolidated financial statements.

3

Xenos Group Inc.

Consolidated Statements of Cash Flows

Year Ended September 30	2009			2008
Cash derived from (applied to)
Operating
Net income	$	1,197,495		$	1,496,371
Amortization		823,784			945,188
Unrealized foreign exchange loss (gain)		138,315			(13,245	)
Unrealized gain on non-hedging financial derivatives (Note 5)		(397,871	)		(82,524	)
Loss on disposal of capital assets		406			24,527
Future income taxes		1,289			(35,229	)
Stock based compensation (Note 17)		104,346			96,828
Change in non-cash working capital (Note 13)		313,750			(729,030	)
		2,181,514			1,702,886
Financing
Capital lease payments		(61,170	)		(87,277	)
Proceeds on issue of shares		—			93,480
		(61,170	)		6,203
Investing
Purchase of capital assets		(204,080	)		(240,872	)
Proceeds on disposal of capital assets		—			505
Development costs incurred		(582,096	)		(723,516	)
		(786,176	)		(963,883	)
Effect of foreign exchange rate fluctuations on cash and cash equivalents		(138,315	)		13,245
Net increase in cash and cash equivalents		1,195,853			758,451
Cash and cash equivalents, beginning of year		8,115,259			7,356,808
Cash and cash equivalents, end of year	$	9,311,112		$	8,115,259

See accompanying notes to the consolidated financial statements.

4

Xenos Group Inc.

Notes to the Consolidated Financial Statements

September 30, 2009

1. Nature of operations

Xenos is a market-leading provider of high-performance software solutions that deliver a superior Return on Information™ by Streamlining Enterprise Information Supply Chains™. The company’s solutions, based on the scalable Xenos Enterprise Server™ and its components, process, extract, transform, repurpose and personalize high volumes of data and documents for storage, real-time access, ePresentment, printing and delivery in numerous formats across multiple channels. By readily repurposing, integrating with and extending the business value of existing technology, infrastructure and business applications, Xenos solutions empower organizations to adapt to changing market demands. They also improve operational efficiency, enhance business processes, reduce risk for compliance management and increase employee productivity with lowered total cost of ownership both for the enterprise and for its customers. Xenos supports Green IT initiatives by empowering organizations to “Reduce Reuse Recycle” information resources.

Xenos customers are among the largest organizations worldwide, spanning numerous industries including financial services and insurance. Xenos has offices in Canada, the United States, the United Kingdom and France and a global partner network.

2. Summary of significant accounting policies

The consolidated financial statements of the Company were prepared by management in accordance with Canadian generally accepted accounting principles (“GAAP”).

Accounting estimates

In preparing the Company’s financial statements, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Significant areas requiring the use of management estimates include the useful lives of capital assets, the amount of investment tax credits to be received, fair value of non-hedging derivatives, the evaluation of impairment for intangibles and other long lived assets, the value of assets acquired and liabilities assumed in business combinations, and the provision for income taxes, including the recording of the benefit of loss carry-forwards. Actual results could differ from those estimates.

Principles of consolidation

The consolidated financial statements include the accounts of all companies in which the Company has a controlling interest, after the elimination of inter-company transactions and balances.

Investment tax credits

Investment tax credits relating to scientific research and experimental development expenditures are recorded as a reduction of the expenditure whether current or capital in nature. Investment tax credits are recorded when there is reasonable assurance they will be realized.

5

2. Summary of significant accounting policies (continued)

Amortization

Amortization of capital assets is recorded from the date of acquisition over their estimated service lives, on the following bases:

Computer equipment	30% declining balance
Software	33% straight-line
Office furniture and equipment	20% declining balance
Vehicles	25% declining balance
Leasehold improvements	Straight-line over the term of the lease

Deferred development costs are amortized on a straight-line basis over their estimated useful lives of five years.

Acquired intangibles are being amortized on a straight-line basis over ten years, being the estimated useful life of the asset.

Long-lived assets

Long-lived assets, including capital assets and acquired intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable from estimated undiscounted future cash flows. Long lived assets are carried at cost less accumulated amortization and writedowns.

Acquired intangibles

Acquired intangibles represent the purchase price allocated to intellectual property rights, being technology, acquired in a business acquisition.

Revenue recognition

(a) License revenues

The Company records product revenue from software licenses when persuasive evidence of an arrangement exists, the software product has been delivered, there are no significant uncertainties surrounding product acceptance, the fees are fixed and determinable and collection is considered probable. The Company uses the residual method to recognize revenue on delivered elements when a license agreement includes one or more elements to be delivered at a future date, if evidence of the fair value of all undelivered elements exists. If an undelivered element for the arrangement exists under the license arrangement, revenue related to the undelivered element is deferred based on vendor-specific objective evidence (“VSOE”) of the fair value of the undelivered element.

6

2. Summary of significant accounting policies (continued)

Revenue recognition (continued)

(a) License revenues (continued)

The Company’s multiple-element sales arrangements include arrangements where software licenses and the associated post contract support (“PCS”) are sold together. The Company has established VSOE of the fair value of the undelivered PCS element based on the contracted price for renewal PCS included in the original multiple element sales arrangement, as substantiated by contractual terms and the Company’s significant PCS renewal experience, from its existing worldwide base. The Company’s multiple element sales arrangements generally include rights for the customer to renew PCS after the bundled term ends. These rights are irrevocable to the customer’s benefit, are for specified prices and the customer is not subject to any economic or other penalty for failure to renew. Further, the renewal PCS options are for services comparable to the bundled PCS and cover similar terms.

It is the Company’s experience that customers generally exercise their renewal PCS option. In the renewal transaction, PCS is sold on a stand alone basis to the licensees, one year or more after the original multiple element sales arrangement. The renewal PCS price is consistent with the price in the original multiple element sales arrangement although an adjustment to reflect consumer price changes is not uncommon.

If VSOE of fair value does not exist for all undelivered elements, all revenue is deferred until sufficient evidence exists or all elements have been delivered.

The Company assesses whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. The Company’s sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. The only time exceptions would be made to these standard terms is on certain sales in parts of the world were local practice differs. In these jurisdictions, the Company’s customary payment terms are in line with local practice.

(b) Service revenues

Service revenues consist of revenues from consulting, implementation, training and integration services. These services are set forth separately in the contractual arrangements such that the total price of the customer arrangement is expected to vary as a result of the inclusion or exclusion of these services. For those contracts where the services are not essential to the functionality of any other element of the transaction, the Company determines VSOE of fair value for these services based upon normal pricing and discounting practices for these services when sold separately. These consulting and implementation services contracts are primarily time and materials based contracts that are, on average, less than six months in length. Revenue from these services is recognized at the time such services are rendered based on time incurred by the Company.

The Company also enters into contracts that are primarily fixed fee arrangements wherein the services are not essential to the functionality of a software element. In such cases the proportional performance method is applied to recognize revenue.

Revenues from training and integration services are recognized as the services are rendered.

7

2. Summary of significant accounting policies (continued)

Revenue recognition (continued)

(c) Customer support revenues

Customer support revenues consist of revenue derived from contracts to provide PCS to license holders. These revenues are recognized ratably over the term of the contract, after ratification thereof. Advance billings of PCS are not recorded to the extent that the term of the PCS has not commenced and payment has not been received.

Research and development

Research costs are expensed as incurred. Development costs are expensed as incurred unless a project meets the criteria under generally accepted accounting principals for deferral and amortization.

Financial Instruments

Financial instruments are classified into one of the following five categories: held-for-trading, held-to-maturity investments, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included on the consolidated balance sheet and are measured at fair market value, except loans and receivables, investments held-to-maturity and other financial liabilities, which are measured at amortized cost. Subsequent measurement and recognition of changes in fair value of financial instruments depend on their initial classification. Held-for-trading financial investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial instruments are measured at fair value with revaluation gains and losses, net of tax, included in other comprehensive income until the instruments are derecognized or impaired. In accordance with the standard, the Company has classified its cash and cash equivalents and non-hedging financial derivatives as held-for-trading, which is measured at fair value, trade receivables and other receivables as loans and receivables, which are measured at amortized cost, and payables and accruals and capital lease obligations as other financial liabilities, which are recorded at amortized cost.

Translation of foreign currencies

Canadian legal entities and integrated foreign subsidiaries translate monetary assets and liabilities at the year end rate of exchange. Non-monetary items are translated at the exchange rate in effect on the date on which the transaction occurred. Revenue and expenses are translated at average rates of exchange, except for amortization, which is translated at the rates prevailing when the related assets were acquired. Translation gains and losses are included in earnings.

8

2. Summary of significant accounting policies (continued)

Stock-based compensation plan

The Company has a stock-based compensation plan, which is described in Note 17. The Company recognizes, at the grant date, the compensation costs of the stock options granted to directors, officers, employees and consultants, measured at fair value using the Black-Scholes option pricing model and expensed over the period in which the related services are rendered, with a corresponding credit to contributed surplus. Any consideration received upon exercise of options and issues of shares is credited to share capital and adjusted to contributed surplus.

Income taxes

The Company provides for income taxes using the liability method of tax allocation. Under this method, future income tax assets and liabilities are determined based on deductible or taxable temporary differences between financial statement values and tax values of assets and liabilities, using substantively enacted income tax rates expected to be in effect for the year in which the differences are expected to reverse.

The Company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that one or all of the future tax assets will not be realized.

Earnings per share

Basic and diluted earnings per share amounts are computed using the weighted average number of common shares outstanding during the year.

The Company uses the treasury stock method to determine the dilutive effect of stock options and other dilutive instruments. Under the treasury stock method, only instruments with exercise amounts less than market prices impact the diluted calculations. This method assumes that common shares are issued for the exercise of options and that the assumed proceeds from the exercise of options are used to purchase common shares at the average market price during the period. The difference between the number of shares assumed issued and the number of shares assumed purchased is then added to the basic weighted average number of shares outstanding to determine the fully diluted number of common shares outstanding. No exercise or conversion is assumed during periods in which a net loss is incurred as the effect is anti-dilutive.

3. Adoption of new accounting policies

Effective October 1, 2008 the Company adopted the following new accounting standards issued by the Canadian Institute of Chartered Accountants (CICA) during 2008: Section 3064, Goodwill and Intangible Assets (“Section 3064”) which replaces Section 3062, Goodwill and Other Intangible Assets (“Section 3062”) and Section 3450, Research and Development Costs (“Section 3450”); and amended Handbook Section 1400, General Standards of Financial Statement Presentation (“Section 1400”).

Section 3064 establishes standards for the recognition, measurement and disclosure of goodwill and intangible assets.

9

3. Adoption of new accounting policies (continued)

Section 1400 requires management to disclose any uncertainties that cast significant doubt on the entity’s ability to continue as a going concern. In assessing whether the going concern assumption is appropriate, Management must take into account all available information about the future, which is at least, but is not limited to, 12 months from the balance sheet date.

In January 2009, the CICA issued Emerging Issue Committee Abstract 173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities (“EIC 173”) to be applied retrospectively without restatement of prior periods to all financial assets and liabilities measured at fair value in interim and annual financial statements for periods ending on or after January 20, 2009. EIC 173 recommends that an entity take into account its own credit risk and the credit risk of the counterparty in determining the fair value of financial assets and financial liabilities.

The adoption of these new standards did not have a material impact on the Company’s consolidated financial statements.

4. Recent accounting pronouncements issued and not yet applied

In January 2009, the CICA issued Section 1582, Business Combinations (“Section 1582”), concurrently with Section 1601, Consolidated Financial Statements (“Section 1601”), and Section 1602 , Non-controlling Interests (“Section 1602”).

Section 1582, replaces Section 1581, Business Combinations, establishes standards for the accounting of business combinations and provides the Canadian equivalent to the IFRS standard, IFRS 3 (revised), Business Combinations. The Section applies prospectively to business combinations for which the acquisition date is on or after October 1, 2011 and allows for earlier application.

Section 1601 replaces Section 1600, Consolidated Financial Statements and carries forward the existing guidance on preparation of consolidated financial statements subsequent to acquisition, other than non-controlling interests. Section 1602 establishes guidance for the treatment of non-controlling interests in a subsidiary, subsequent to a business combination. The sections are equivalent to the corresponding provisions of the IFRS standard, IAS 27 (revised), Consolidated and Separate Financial Statements. The new sections apply to interim and annual consolidated financial statements relating to fiscal years beginning on or after October 1, 2011 and allows for earlier adoption.

The Company is currently evaluating the impact of the adoption of these new standards.

In January 2006, the CICA adopted a strategic plan for the direction of accounting standards in Canada. As part of that plan the AcSB confirmed in February 2008 that International Financial Reporting Standards (“IFRS”) will replace Canadian GAAP over a transition period which will end in 2011, when IFRS will be fully adopted for profit-oriented publicly accountable enterprises. The Company will be required to report its results in accordance with IFRS starting in fiscal 2012.

In preparation for the conversion to IFRS, the Company has developed an IFRS changeover plan. In addition to a working team, the Company has engaged outside consultants to assist with the changeover plan. The working team meets regularly and quarterly updates are provided to the Audit Committee.

10

4. Recent accounting pronouncements issued and not yet applied (continued)

The Company has completed the diagnostic phase which involved a high-level review of the differences between current Canadian GAAP and IFRS, as well as a review of the alternatives available on adoption. The second phase of the plan has been in progress since September 2009. This phase encompasses a detailed impact assessment addressing the differences between Canadian GAAP and IFRS. Deliverables stemming from this phase include documentation of the rationale supporting accounting policy choices, new disclosure requirements and authoritative literature supporting these choices. As the implications of the transition and conversion are identified, the impacts on the other key elements of the conversion will be assessed. These key elements include: information technology changes, education and training requirements, internal control over financial reporting, and impacts on business activities.

5. Non-hedging financial derivatives	2009		2008
Fair value of forward exchange contracts	$	480,395	$	82,524

The Company has recorded foreign exchange losses of $216,980 (2008 – gain of $82,524) in the consolidated statement of operations in relation to these contracts.

11

6. Capital assets

	2009		2008
Cost
Computer equipment	$	2,213,529	$	2,174,209
Software		1,159,587		1,113,213
Leasehold improvements		555,352		572,223
Office furniture and equipment		1,009,200		879,088
Motor vehicles		92,620		—
Assets under capital lease		75,735		220,806
		5,106,023		4,959,539
Accumulated amortization
Computer equipment		1,868,749		1,761,451
Software		1,062,055		983,866
Leasehold improvements		440,265		419,075
Office furniture and equipment		795,407		673,762
Motor vehicles		13,503		—
Assets under capital lease		48,830		122,949
		4,228,809		3,961,103
Net book value
Computer equipment		344,780		412,758
Software		97,532		129,347
Leasehold improvements		115,087		153,148
Office furniture and equipment		213,793		205,326
Motor vehicles		79,117		—
Assets under capital lease		26,905		97,857
	$	877,214	$	998,436

Included in amortization expense in the consolidated statement of operations is $324,896 (2008 - $351,369) related to amortization of capital assets.

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7. Intangibles and other assets	2009		2008
Cost
Deferred development costs	$	8,190,742	$	7,608,646
Acquired intangible assets		1,104,000		1,104,000
		9,294,742		8,712,646
Accumulated amortization
Deferred development costs		6,556,064		6,167,576
Acquired intangible assets		656,100		545,700
		7,212,164		6,713,276
Net book value
Deferred development costs		1,634,678		1,441,070
Acquired intangible assets		447,900		558,300
	$	2,082,578	$	1,999,370

The Company deferred development costs of $582,096 (2008 - $723,516) in the current year.

Included in amortization expense in the consolidated statement of operations is $388,488 (2008 - $483,419) related to amortization of deferred development costs and $110,400 (2008 - $110,400) related to amortization of acquired intangibles.

8. Bank indebtedness

The Company has a revolving operating line of credit available for $1,000,000 (2008 - $1,000,000), of which $1,000,000 was unused at September 30, 2009 (2008 - $1,000,000). This demand loan bears interest at the Royal Bank Prime Rate which was 2.25 % at September 30, 2009.

Security provided by the Company for the line of credit includes a general security agreement covering all the assets of the Company.

9. Capital lease obligations	2009		2008
Capital lease obligations payable in monthly principal and interest instalments of $2,570 (2008 - $5,397)	$	2,543	$	63,713
Less: current portion of principal		2,543		61,170
	$	—	$	2,543

13

9. Capital lease obligations (continued)

Future minimum payments under capital lease are as follows:

2010		2,570
Less: amount representing interest		27
	$	2,543

Included in interest and bank charges in the income statement is $3,597 (2008 - $10,511) related to capital lease obligations.

10. Capital stock	2009			2008
	Number	Amount		Number	Amount
Balance, beginning of year	10,005,444	$	45,125,209	9,949,244	$	44,997,009
Issued pursuant to exercise of vested stock options (Note 17)	—		—	56,200		93,480
Transfer from contributed surplus of issue date fair value for options exercised (Note 11)	—		—	—		34,720
Balance, end of year	10,005,444	$	45,125,209	10,005,444	$	45,125,209

In addition to an unlimited number of no-par value common shares, the authorized share capital includes an unlimited number of special shares issuable in series, none of which have been issued.

11. Contributed surplus	2009		2008
Balance, beginning of year	$	431,461	$	369,353
Stock based compensation		104,346		96,828
Transfer to capital stock of issue date fair value for options exercised (Note 10)		—		(34,720	)
Balance, end of year	$	535,807	$	431,461

14

12. Income taxes

The reconciliation of the statutory federal and provincial rates to the Company’s effective income tax rate is as follows:

	2009			2008
Combined basic income tax	$	413,502		$	513,533
Effect of differing tax rates of foreign jurisdictions		3,186			(30,447	)
Non-deductible expense		16,497			21,961
Effect of change in statutory tax rates		49,697			12,788
Expiry of non-capital losses		—			2,387,767
Benefit of previously unrecognized losses		(258,370	)		(218,495	)
Other		26,201			17,621
Decrease in valuation allowance		(196,214	)		(2,650,591	)
	$	54,499		$	54,137
Income tax expense
Current	$	53,210		$	89,366
Future		1,289			(35,229	)
	$	54,499		$	54,137

Future income taxes represent the future benefits of temporary differences between the tax and accounting bases of assets and liabilities consisting of:

	2009			2008
Future tax assets
Net operating loss carryforwards	$	932,129		$	1,078,361
Investment tax credits		663,774			838,793
Foreign tax credits		68,254			84,867
Differences between accounting and tax carrying values of capital assets, intangibles and other assets and goodwill		2,100,210			1,959,849
Valuation allowance		(2,572,570	)		(2,768,784	)
Net future tax asset		1,191,797			1,193,086
Less current		—			—
Long term	$	1,191,797		$	1,193,086

15

12. Income taxes (continued)

Loss carryforward amounts and tax credits if unused will expire as follows:

		Non-capital Losses		Tax credits
2010		—		71,606
2011		—		89,643
2012		—		65,334
2013-2027		2,740,016		505,444
	$	2,740,016	$	732,028

The above noted losses include those that have been recorded as future tax assets net of an appropriate valuation allowance.

13. Supplemental cash flow information

		2009			2008
(a)	Change in non-cash operating working capital:
	Receivables	$	(404,734	)	$	(762,420	)
	Prepaids		(47,820	)		138,821
	Income taxes recoverable		929			(26,205	)
	Payables and accruals		158,717			177,355
	Income taxes payable		24,135			82,243
	Deferred lease inducements		(19,099	)		(22,260	)
	Deferred revenue		601,622			(316,564	)
		$	313,750		$	(729,030	)
(b)	Cash and cash equivalents consist of cash on hand, balances with banks, cash equivalents and short term investments. (See Note 19)
(c)	Interest paid	$	34,482		$	42,124
(d)	Income taxes paid (net of recoveries)	$	6,003		$	10,207
(e)	Reorganization costs paid (Note 16)	$	—		$	55,969

16

14. Commitments

The Company has entered into future commitments and contractual obligations for operating leases, capital leases and certain purchase obligations. Minimum payments in aggregate and for each of the next five years are as follows:

2010	$	589,558
2011		386,260
2012		362,071
2013		288,633
2014		213,875
Thereafter		107,245
	$	1,947,642

15. Contingency

The Company is a party to a legal proceeding brought by a shareholder of a predecessor company alleging entitlement to 135,900 Class A shares of the predecessor company. An estimate of the potential loss cannot be determined, if any.

The Company denies entitlement and intends to vigorously defend this action.

16. Reorganization costs

During the second quarter of fiscal 2007, the Company incurred a reorganization charge of $190,817, which included a 13% reduction in headcount and the relocation of the remaining U.S. based head office management functions to Toronto. Of this amount, $45,080 related to the loss incurred on disposal of excess capital equipment. The total reorganization costs paid during the year ended September 2007 was $570,507 and included amounts paid in connection with the reorganization charge incurred during the fourth quarter of fiscal 2006. During the year ended September 30, 2008, the remaining commitment on the U.S. Head Office lease expired and the outstanding liability of $55,969 which had been included in accrued liabilities at September 2007 was depleted.

17. Stock-based compensation plan

(a) Stock option plan

The Company has a stock option plan which allows the granting of stock options to employees and service providers up to an aggregate of 1.6 million common shares. Under current company practice the options, which have a five-year term, vest immediately for directors and generally over 4 years for all others, commencing on the grant date. The exercise price of each option equals the closing market price of the Company’s common shares on the last trading day preceding the date of grant.

17

17. Stock-based compensation plan (continued)

A summary of the status of the Company’s stock option plan as of the fiscal year ends 2009 and 2008 and changes during each fiscal year is presented below.

	Shares				Weighted Average Exercise Price
	2009		2008		2009	2008
Outstanding, beginning of year	798,000		648,950		1.94	1.84
Granted	25,000		255,000		1.60	2.28
Exercised	—		(56,200	)	—	1.66
Forfeited	(66,500	)	(49,750	)	3.46	2.70
Outstanding, end of year	756,500		798,000		1.80	1.94
Options exercisable at year end	454,250		309,750

The following information applies to options outstanding and exercisable at September 30, 2009:

Exercise Price		Number outstanding and exercisable	Number outstanding but not exercisable	Weighted average remaining life in months	Weighted average exercise price		Expiry
$	1.26	5,000	—	25	$	1.26	October, 2011
	1.29	168,750	56,250	24		1.29	September, 2011
	1.34	18,750	6,250	24		1.34	September, 2011
	1.35	12,500	12,500	28		1.35	January, 2012
	1.60	25,000	—	53		1.60	February, 2014
	1.65	12,000	—	29		1.65	February, 2012
	1.84	6,250	18,750	39		1.84	December, 2012
	1.85	25,000	25,000	31		1.85	April, 2012
	1.90	9,000	—	16		1.90	January, 2011
	1.90	25,000	25,000	32		1.90	May, 2012
	1.99	59,250	19,750	18		1.99	March, 2011
	2.33	73,750	138,750	41		2.33	February, 2013
	2.35	14,000	—	5		2.35	February, 2010

(b) Fair value determination

The fair value of each stock option grant on the date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions: dividend yield 0%, expected volatility 30% (2008 – 30%), risk-free interest rate of 1.74% (2008 – 3.35% – 3.92%) and expected lives of 4 years (2008- 4 years) as applicable to the specific grants.

18

18. Capital disclosures

The Company’s objectives in managing capital are to ensure sufficient liquidity to pursue its strategy of organic growth and to deploy capital to provide an appropriate return on investment to its shareholders. The capital structure of the Company consists of cash and cash equivalents and shareholders’ equity comprised of deficit and capital stock. The Company manages its capital structure and makes adjustments to it in light of economic conditions and the risk characteristics of the underlying assets. The Company’s primary uses of capital are to finance non-cash working capital requirements, capital expenditures and research and development programs, which are currently funded from its internally-generated cash flows.

The Company is not subject to any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital.

19. Financial instruments

Fair value of current financial assets and liabilities

Due to the short period to maturity of the instruments, the carrying values as presented in the consolidated balance sheets are reasonable estimates of fair value. As at September 30, 2009 cash and cash equivalents include $4,734,332 of interest bearing notes (2008 - $4,906,537).

Foreign currency risk

The Company operates internationally and is exposed to risk from changes in foreign currency rates.

The following factors create significant exposure with regard to fluctuations in exchange rates:

• the majority of the Company’s sales are denominated in U.S. dollars and British pounds, while the majority of its operating expenses are in Canadian dollars

• Xenos Inc., a subsidiary of the Company, operates in the United States

• Xenos Europe Limited, a subsidiary of the Company, operates in the United Kingdom and France

The Company attempts, as much as possible, to match cash outlays with cash inflows in the same currency. The Company’s revenues denominated in U.S. dollars generate sufficient U.S. dollars to cover its annual U.S. dollar expenses and act as a hedge against exchange rate fluctuations. The Company’s revenues denominated in British pounds generate sufficient British pounds to cover its annual British pound expenses and act as a hedge against exchange rate fluctuations.

The consolidated balance sheets include significant foreign financial assets such as cash and cash equivalents and accounts receivable, as well as significant foreign financial liabilities, such as accounts payable and accrued liabilities of $2,484,000, $2,759,000, and $927,000, respectively, as of September 30, 2009 ($1,229,000, $2,397,000 and $1,022,000, respectively as of September 30, 2008). As at September 30, 2009, the cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities denominated in U.S. dollars amount to US$1,590,000, US$2,234,000 and US$332,000, respectively. For the same date,

19

19. Financial instruments (continued)

Foreign currency risk (continued)

the cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities denominated in British Pound Sterling amount to £284,000, £49,000 and £195,000, and Euros amount to €184,000, €171,000 and €151,000, respectively.

From time to time, the Company uses foreign exchange forward contracts to hedge portions of its cash inflows denominated in foreign currencies. As a matter of policy, the Company does not enter into speculative futures contracts or use other derivative financial instruments. These activities serve to minimize, but not eliminate, the risk from fluctuations in the exchange rate between the foreign currency and the Canadian dollar.

Even though hedge accounting has not been applied, the Company formally documents all relationships between hedging instruments and hedging items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all hedging instruments to specific firm commitments or anticipated transactions. The company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the hedging instruments that are used in hedging transactions are effective in offsetting hedged risks.

As at September 30, 2009 the Company has entered into the following outstanding foreign exchange forward contracts representing commitments to sell U.S. dollars. The Company has committed to sell $6.0 million U.S. dollars during fiscal 2010 at an average rate of exchange of CAD 1.1509. The fair value of those contracts at September 30, 2009 was $6.449 million U.S. dollars. As at September 30, 2008 the Company had committed to sell $6.0 million U.S. dollars at an average rate of exchange of CAD 1.0758. The fair value of those contracts at September 30, 2008 was $6.078 million U.S. dollars.

Changes in the value of the Canadian dollar versus the U.S. Dollar, British Pound Sterling and Euro impact the financial results reported by the Company. A 10% adjustment in the Canadian dollar against its other functional currencies would have increased (decreased) equity and net income by the amount shown below. This analysis assumes that all other variables remain constant.

Net income as reported	$	1,197,495
Effect of 10% appreciation in Canadian dollar		200,196
	$	1,397,691
Net income as reported	$	1,197,495
Effect of 10% decline in Canadian dollar		(200,196	)
	$	997,299

20

19. Financial instruments (continued)

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company’s liquidity risk is minimized due to its significant unrestricted cash balance of approximately $ 9.3 million at September 30, 2009, the excess availability under its credit facility of $ 1.0 million and the absence of any long term debt other than a small obligation relating to a capital lease.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments, which potentially subject the Company to credit risk, consist primarily of cash and cash equivalents and trade receivables. The Company’s cash and cash equivalents are maintained at major financial institutions. The Company believes that its credit risk with respect to its trade receivables is limited based on past experience and due to its customer base of large and financially sound companies.

20. Deferred lease inducements

During the year ended September 30, 2004, the Company entered into a new lease agreement for its head office location in Toronto, whereby a lease inducement benefit was received. Deferred lease inducements on the consolidated balance sheet represent the benefit of operating lease inducements, which are being amortized on a straight-line basis over the term of the lease.

21. Earnings per share	2009		2008
Earnings – basic and diluted	$	1,197,476	$	1,496,371
Weighted average number of common shares outstanding during the year		10,005,444		9,995,562
Dilutive impact of stock options		96,472		150,523
Denominator used for diluted earnings per share		10,101,916		10,146,085
Earnings per share – basic and diluted	$	0.12	$	0.15

The stock options other than the items adjusted above were not included in the computation of diluted earnings per share as they are anti-dilutive.

21

22. Segmented information

The Company has determined that it serves one industry segment, information technology.

Geographic information

	Sales to External Customers				Capital Assets
	2009		2008		2009		2008
Canada	$	669,623	$	491,781	$	613,007	$	743,967
Europe		2,008,784		1,310,243		4,865		6,728
United Kingdom		3,270,159		4,808,943		244,600		231,200
United States		10,690,000		8,871,942		14,742		16,541
Other		607,960		425,392		—		—
	$	17,246,526	$	15,908,301	$	877,214	$	998,436

23. Subsequent event

On December 8, 2009, Actuate Corporation (NASDAQ: ACTU) and Xenos Group Inc. announced that they had entered into a definitive agreement (the “Acquisition Agreement”) for Actuate to acquire all of the outstanding common shares of Xenos by way of a take-over bid (the “Offer”) at a price of CAD $3.50 per share in cash. The Offer is subject to customary conditions, including the tender of at least 66 ²/3% of the outstanding common shares of Xenos.

In connection with the Offer, certain Xenos directors and certain other shareholders representing approximately 48% of the outstanding Xenos shares have entered into lock-up agreements with Actuate pursuant to which they have agreed to tender all of their Xenos shares to the Offer.

The Xenos Board of Directors has unanimously determined that the Offer is in the best interest of Xenos shareholders and has recommended acceptance of the Offer.

The transaction is expected to close in the first quarter of calendar 2010.

22

Directors & Officers	Shareholder Information	Corporate Addresses
Graham Barker Chief Marketing Officer Stuart Butts 3,4 Director, Chairman of the Board, Chief Executive Officer and President Calvin Galatiuk Director and Product Manager George Kypreos 4 Vice President Finance and Chief Financial Officer Chungsen Leung 1 Director Business Executive Edmund F. Merringer 3,4 Director and Secretary Partner, Borden Ladner Gervais LLP Kent Petzold 1,2 Director Senior Managing Director, Alare Capital Securities LLC Frank W. Smith 1,2 Director Managing Director, PegasusGlobal Group Limited Paul Walker 4 Executive Vice President and Chief Operating Officer Peter Williams 2,3 Director Chairman of RPC Group Plc Notes: 1 Member of the Audit Committee 2 Member of the Compensation Committee 3 Member of the Nominating/Corporate Governance Committee 4 Member of the Disclosure Policy Committee	Legal Counsel Borden Ladner Gervais LLP Scotia Plaza 40 King Street West Toronto, Ontario M5H 3Y4 Auditors Grant Thornton LLP Chartered Accountants 15 Allstate Parkway Suite 200 Markham, Ontario L3R 5B4 Investor Relations Corbet Pala Phone: +1-416-657-2400 e-mail: cpala@xenos.com Transfer Agent/Registrar CIBC Mellon Trust Company P.O. Box 7010 Adelaide Postal Station Toronto, Ontario M5C 2W9 Phone: +1-416-643-5500 Toll Free throughout North America: +1-800-387-0825 e-mail: inquiries@cibcmellon.com Trading Xenos Group Inc. trades on the Toronto Stock Exchange and is listed under the symbol TSX:XNS.	European Headquarters 130-132 Terrace Road Walton-on-Thames Surrey KT12 2EA United Kingdom Phone +44 1932 252 299 Fax: +44 1932 252 288 Corporate Headquarters 95 Mural Street, Suite 201 Richmond Hill, Ontario L4B 3G2 Phone: +1-905-709-1020 Toll Free: +1-888-242-0692 Fax: +1-905-709-1023 “Xenos is a trademark of Xenos Group Inc. All other product names mentioned are acknowledged to be the marks of their producing companies.” This annual report can be downloaded from the Xenos Group Inc. website at www.xenos.com

EX-9.01(B)

Exhibit 9.01(b)

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On February 1, 2010, Actuate Corporation (“Actuate”) completed the acquisition of Xenos Group Inc., (“Xenos”), a provider of high-performance software solutions for approximately $34.3 million. The following unaudited pro forma condensed combined balance sheets and the unaudited pro forma condensed combined statements of income are based on the historical financial statements of Actuate and Xenos, after giving effect to Actuate’s acquisition of Xenos using the purchase method of accounting, and after applying the assumptions, reclassifications and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements.

Actuate and Xenos have different fiscal year ends. Accordingly, the unaudited pro forma condensed combined balance sheet as of December 31, 2009 combines Actuate’s historical audited condensed consolidated balance sheet as of December 31, 2009 and Xenos’ historical audited condensed consolidated balance sheet as of September 30, 2009. Similarly, the unaudited pro forma condensed combined statement of income for the twelve months ended December 31, 2009 combines the audited historical results of Actuate for the fiscal year ended December 31, 2009 and the audited historical results of Xenos for the fiscal year ended September 30, 2009 presented as if the acquisition of Xenos had occurred on January, 1, 2009 and includes all adjustments that give effect to events that are directly attributable to the acquisition of Xenos and that are factually supportable.

The Xenos financials were prepared in accordance with Canadian Generally Accepted Accounting Principle (“Canadian GAAP”). However, the differences between Canadian GAAP and U.S. GAAP were insignificant to the Xenos financials as a whole. Therefore, no further adjustments were needed to convert the Xenos financials from Canadian GAAP to U.S. GAAP, other than conversion of the currency from Canadian Dollars to U.S. Dollars using an exchange rate of .9529 for the balance sheet and .88029 for the statement of income.

The acquisition has been accounted for using the purchase method of accounting. The estimated purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed. The allocation of the purchase price is preliminary and based on valuations derived from estimated fair value assessments and assumptions used by management that are subject to change within the purchase price allocation period as valuations are finalized. Also, as with acquisitions that we have undertaken in the past, we have initiated structural changes in our corporate structure in order to incorporate the Xenos entities. These changes in our organizational structure are ongoing and could also affect our estimates and assumptions. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill.

The unaudited pro forma condensed combined financial statements do not include the effects of any future restructuring activities that pertain to Actuate operations. These future restructuring expenses may be material and may include costs for severance, costs of vacating facilities and costs to exit or terminate other duplicative activities. Future restructuring expenses pertaining to Actuate operations are expected to be incurred over the remainder of fiscal 2010 and in fiscal 2011 and will be recorded in operating expenses in the period that these expenses are incurred.

These unaudited pro forma condensed combined financial statements should be read in conjunction with Actuate’s historical consolidated financial statements and notes thereto contained in Actuate’s Annual Report on Form 10-K for its fiscal year ended December 31, 2009 and Xenos’ historical consolidated financial statements and notes thereto contained herein for its fiscal year ended September 30, 2009, which is included as Exhibit 99.1 to this Form 8-K/A.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

On February 1, 2010, Actuate completed the acquisition of Xenos Group Inc. (“Xenos”), whereby Xenos became a wholly-owned subsidiary of Actuate in a transaction accounted for using the purchase method of accounting. Under the terms of the agreement, Actuate completed its tender offer to acquire all of the outstanding shares of Xenos common stock at a price of CAD 3.50 per outstanding share, or total consideration of approximately $34.3 million ($27.3 million, net of $6.9 million of Xenos cash at the time of the acquisition).

Assets acquired and liabilities assumed were recorded at their fair values as of February 1, 2010. The total $34.3 million purchase price was comprised of the following (in thousands):

	In U.S. Dollars
Acquisition of approximately 10.0 million shares of outstanding common stock of Xenos at CAD 3.50 per share in cash	$	33,149
Net payout for exercise of 707,000 of outstanding employee options at CAD 3.50 per option, (net of exercise price)		1,124
Estimated fair value of 30,750 earned stock options assumed and converted		59
Total purchase price	$	34,332

Under the purchase method of accounting, the total purchase price as shown in the table above is allocated to Xenos’ net tangible and intangible assets based on their fair values as of the date of the completion of the merger. The purchase price has been allocated based on preliminary estimates that are described in the introduction to these unaudited pro forma condensed combined financial statements. The allocation of the purchase price as of the acquisition date on February 1, 2010 and estimated useful lives associated with certain assets are as follows (in thousands):

	Amount (in  thousands)		Weighted Average Useful life (in years)
Net tangible assets and liabilities	$	6,362	N/A
Existing technology		7,657	7
Customer contracts and relationships		8,030	7
In-process research and development (“IPR&D”)		1,961	7
Favorable leases		47	5
Goodwill		10,275	N/A
Total preliminary purchase price allocation	$	34,332

Net tangible assets and liabilities—Xenos’ tangible assets and liabilities as of February 1, 2010 were adjusted to their estimated fair value as necessary. Among the net tangible assets assumed were $6.9 million in cash and cash equivalents and $1.8 million in trade receivables.

Identifiable intangible assets—Existing technology acquired primarily consists of Xenos’ Enterprise Server, Xenos D2e, Xenos terminalONE, and Xenos InfoWeb. The preliminary estimated fair value of the existing technology was determined based on the present value of the expected cash flows to be generated by each existing technology. Customer contracts and relationships consist of Xenos’ contractual relationships and customer loyalty related to their customers as well as partner customers that resell Xenos’ services to end users. The Company expects to amortize the fair value of these intangible assets on a straight-line basis over their respective estimated useful lives.

In-process research and development—In-process research and development (“IPR&D”) represents the fair value of a development project that was underway at Xenos and was not yet completed as of the date of the acquisition. At the date of the acquisition the development team was still in the final stages of development and was in the process of performing final fixes to the software and finalizing minor functionality. The estimated fair value was determined by estimating the net cash flows expected to be generated from the project and discounting the net cash flows to their present value. The underlying product was generally released on June 28, 2010 and we plan to amortize the fair value of the intangible asset on a straight-line basis over the respective estimated useful life of seven years beginning July 2010.

Goodwill—Goodwill represents the excess of the purchase price over the fair value of the underlying acquired net tangible and intangible assets. The factors that contributed to the recognition of goodwill included securing buyer-specific synergies that increase revenue and profits and are not otherwise available to a marketplace participant. 

2. Pro Forma Adjustments

Pro forma adjustments are necessary to reflect the purchase price, to reflect amounts related to Xenos’ net tangible and intangible assets at an amount equal to the preliminary estimate of their fair values, to reflect the additional borrowing by Actuate against its existing revolving credit facility to partially fund the acquisition of Xenos and to account for acquisition-related payments and accruals included in Actuate’s historical Statement of Income for the fiscal year ended December 31, 2009. The pro forma combined income tax benefit does not necessarily reflect the amounts that would have resulted had Actuate and Xenos filed consolidated income tax returns during the periods presented.

The pro forma adjustments included in the unaudited pro forma condensed combined financial statements are as follows:

(A) To record cash purchase considerations, including $34.3 million paid by the Company to acquire 10.0 million shares of Xenos common stock and payouts for exercise of 707,000 of outstanding employee options upon consummation of the acquisition;

(B) To eliminate deferred tax assets. The deferred tax assets (“DTAs”) were eliminated due to utilization from filing returns and the loss of these DTAs through tax planning and integration of the companies. As a result of tax planning and integration, there were also no deferred tax liabilities (“DTLs”);

(C) To adjust deferred revenues to fair value;

(D) To record acquired goodwill of $10.3 million, reduced by approximately $3.1 million due to the change in the net tangible asset value between September 30, 2009 and the acquisition date;

(E) To eliminate Xenos’ historical intangible assets of approximately $2.0 million and record the fair value of Xenos’ identifiable intangible assets of approximately $17.7 million;

(F) To record the additional amounts borrowed against the existing revolving credit facility to partially fund the acquisition. The cash purchase consideration is net of $10.0 million of cash proceeds generated from the additional borrowing by Actuate against its existing revolving credit facility to partially fund the acquisition;

(G) To reverse non-recurring historical charges totaling approximately $483,000 that were directly related to the acquisition and were initially included in Actuate’s December 31, 2009 statement of income. In addition, approximately $635,000 of direct incremental costs related to the acquisition was added to Actuate’s balance sheet. These costs were not yet reflected in the historical financials. The costs were added to the balance sheet for proforma purposes as they are non-recurring and directly related to the acquisition.

(H) To eliminate Xenos’ equity. This elimination was offset by approximately $635,000 in acquisition related costs accrued to Actuate’s December 31, 2009 balance sheet (see G above);

(I) To increase operating expense by reversing Xenos’ capitalized research and development costs of approximately $512,000, offset by decreases in operating expenses of approximately $342,000 due from historical amortization of deferred product development costs;

(J) To eliminate Xenos’ historical amortization of tangible and other intangible assets totaling approximately $725,000;

(K) To reduce Xenos’ historical property, plant and equipment balance on the balance sheet to fair value by approximately $526,000, net and record amortization expense based on the revised fair value totaling approximately $162,000;

(L) Approximately $2.4 million associated with the amortization of the fair value of the new Xenos identifiable intangible assets that were recorded as part of the purchase price allocation. Of this total, approximately $1.1 million is classified to the cost of license as this represents amortization of purchased technologies and the remainder is classified to the amortization of other intangibles. The Company amortizes the fair value of these intangible assets on a straight-line basis over their respective estimated useful lives ranging between five to seven years;

(M) To reflect the increase in interest expense resulting from the issuance of debt to finance the acquisition;

(N) There was no real tax effect as each company’s tax liabilities would not materially change.

3. Pro Forma Net Income per Share

The pro forma combined basic and diluted net income per share are based on the number of Actuate shares of common stock used in computing basic and diluted net income per share. The Company did not include the dilutive effect of the 30,750 assumed Xenos stock options in computing pro forma combined basic and diluted net income per share as these assumed options were deemed immaterial to the overall calculation.

ACTUATE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of December 31, 2009

(in thousands)

	Historical
	December 31, 2009			September 30, 2009
	Actuate			Xenos			Pro Forma Adjustments			Pro Forma combined
ASSETS
Current Assets
Cash and cash equivalent	$	53,173		$	8,873		$	(24,272	)A,F	$	37,774
Short term investments		22,358			457			—			22,815
Accounts receivables, net		33,176			2,742			—			35,918
Other assets		5,667			661			—			6,328
Total Current Assets		114,374			12,733			(24,272	)		102,835
Property and equipment, gross		13,430			4,866			(4,556	)K		13,740
Accumulated depreciation		(9,644	)		(4,030	)		4,030	K		(9,644	)
Property and equipment, net		3,786			836			(526	)K		4,096
Non current deferred tax assets		12,920			1,136			(1,136	)B		12,920
Goodwill		36,114			—			7,192	D		43,306
Other intangibles		900			1,985			15,710	E		18,595
Other assets		1,670			—			—			1,670
Total Assets	$	169,764		$	16,690		$	(3,032	)	$	183,422
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Notes payable to bank
Accounts payable	$	1,372		$	2,304		$	—		$	3,676
Idle facilities reserve		2,796			—			—			2,796
Accrued compensation		4,918			—			—			4,918
Other accrued liabilities		5,330			3			635	G		5,968
Income tax payable		845			116			—			961
Deferred revenue		44,999			3,506			(2,408	)C		46,097
Total current Liabilities		60,260			5,929			(1,773	)		64,416
Long-Term Liabilities
Notes payable		30,000			—			10,000	F		40,000
Tax liability		806			—			—			806
Deferred revenue		1,288			35			—			1,323
Other deferred liabilities		769			102			—			871
Idle facilities reserve		622			—			—			622
Total long term liabilities		33,485			137			10,000			43,622
Noncontrolling interest in subsidiary		617			—			—			617
Stockholder’s Equity
Common stock		45			—			—			45
Additional paid in capital		50,239			43,001			(43,001	)H		50,239
Unrealized gain on investments		17			—			—			17
Cummulative translation adjustment		(222	)		—			—			(222	)
Retained earnings/(loss)		25,323			(32,377	)		31,742	G,H		24,688
Total stockholders’ equity		75,402			10,624			(11,259	)		74,767
		—						—			—
Total Liabilities & Stockholders’ Equity	$	169,764		$	16,690		$	(3,032	)	$	183,422

ACTUATE CORPORATION

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF INCOME

For the Twelve Months Ended December 31, 2009

(in thousands, except per share data)

	Historical
	Twelve Months Ended
	December 31, 2009			September 30, 2009
	Actuate			Xenos			Pro Forma Adjustments			Pro Forma combined
Revenues:
License fees	$	36,146		$	3,823		$	—		$	39,969
Maintenance		76,466			8,696			—			85,162
Professional services		6,721			2,663			—			9,384
Total revenues		119,333			15,182			—			134,515
Costs and expenses:
Cost of license fees		934			—			1,094	L		2,028
Cost of services		17,843			2,529			31	K		20,403
Sales and marketing		41,747			5,157			64	K		46,968
Research and development		20,267			3,406			212	I,K		23,885
General and administrative		20,315			1,973			(458	)G,K		21,830
Amortization of other intangibles		680			725			594	J,L		1,999
Restructuring charges		348			—			—			348
Total costs and expenses		102,134			13,790			1,537			117,461
Income from operations		17,199			1,392			(1,537	)		17,054
Interest income and other income/(expense), net		294			(290	)		—			4
Interest expense		(1,404	)		—			(323	)M		(1,727	)
Income before income taxes		16,089			1,102			(1,860	)		15,331
Provision for income taxes		3,910			48			—	N		3,958
Net income	$	12,179		$	1,054		$	(1,860	)	$	11,373
Basic net income per share	$	0.27		$	0.11					$	0.25
Shares used in basic per share calculation		45,131			10,005						45,131
Diluted net income per share	$	0.25		$	0.10					$	0.23
Shares used in diluted per share calculation		49,396			10,102						49,396

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated December 16, 2009, with respect to the consolidated financial statements of Xenos Group Inc. as at and for the years ended September 30, 2009 and 2008, included in a Form 8K filed by Actuate Corporation on October 12, 2010. We hereby consent to the incorporation by reference of said reports in the Registration Statements of Actuate Corporation on Forms S-3 (Nos. 333-67220 and 333-34410) and on Forms S-8 (333-164702, 333- 159904, 333-151004, 333-143235, 333-134140, 333- 124546, 333-113545, 333-104101, 333-84582, 333-62600, 333-56906, 333-33720, 333-73015, 333-59959, and 333-167748).

/s/ Grant Thornton LLP

Markham, Canada

October 12, 2010