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Filed pursuant to rule 424(b)(3)
File number 333-34410
Dated July 21, 2000
151,282 Shares
ACTUATE CORPORATION
Common Stock
_________________
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
STARTING ON PAGE 4.
_________________
The selling stockholders listed on page 13 are offering and selling 151,282
shares of our common stock under this prospectus.
The selling stockholders may offer their Actuate stock through public or
private transactions, on or off the Nasdaq National Market, at prevailing market
prices, or at privately negotiated prices.
Our common stock is traded on The Nasdaq National Market under the symbol
"ACTU." On April 6, 2000, the closing bid price of the common stock on The
Nasdaq National Market was $43.38 per share.
________________________
Neither the Securities and Exchange Commission Nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
_________________________
The date of this Prospectus is July 21, 2000
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TABLE OF
CONTENTS
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Page
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Business of Actuate Corporation 3
Risk Factors 4
Forward-Looking Statements 12
Use of Proceeds 12
Selling Stockholders 13
Plan of Distribution 14
Legal Matters 14
Experts 14
Where You Can Find More Information 14
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THE BUSINESS OF ACTUATE
Actuate Corporation is a leading provider of e.Reporting solutions that
automate the creation and delivery of structured, personalized content,
providing tens of thousands of users with instant access to high-resolution,
customized business information that is seamlessly integrated into a company's
e.Business website. We sell our software products directly to end user customers
through our direct sales force and through indirect channel partners such as
e.Business application vendors, resellers and distributors. e.Business
application vendors generally integrate our products with their applications and
either embed them into their products or resell them with their products. Our
other indirect channel partners resell our software products to end user
customers.
We sell our products outside the United States primarily through our
European subsidiaries and other distributors. Our revenues are derived primarily
from license fees for software products and, to a lesser extent, fees for
services relating to such products, including software maintenance and support,
training and consulting. We were incorporated in California in November 1993 and
reincorporated in Delaware in July 1998.
Our principle executive offices are located at 701 Gateway Boulevard, South
San Francisco, California 94080 and our telephone number is (650) 837-2000.
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This Prospectus includes trademarks of Actuate and other corporations.
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RISK FACTORS
OUR OPERATING RESULTS MAY BE VOLATILE AND DIFFICULT TO PREDICT. IF WE FAIL TO
MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE MARKET PRICE
OF OUR STOCK MAY DECREASE SIGNIFICANTLY.
The susceptibility of our operating results to significant fluctuations
makes any prediction of future operating results unreliable. In addition, we
believe that period-to-period comparisons of our operating results are not
necessarily meaningful and you should not rely on them as indications of our
future performance. Our operating results have in the past, and may in the
future, vary significantly due to factors such as the following:
- demand for our products;
- the size and timing of significant orders for our products;
- sales cycles of our indirect channel partners;
- changes in pricing policies by us or our competitors;
- changes in our level of operating expenses and our ability to control
costs;
- budgeting cycles of our customers;
- ability to make new products commercially available in a timely manner;
- failure to successfully manage acquisitions made by us;
- defects in our products and other product quality problems;
- failure to meet hiring needs and unexpected personnel changes;
- the management and expansion of our international operations;
- changes in our sales incentive plans;
- continued successful relationships and the establishment of new
relationships with e.Business application vendors;
- the impact of consolidation by competitors and indirect channel partners;
and
- general domestic and international economic and political conditions.
Because our software products are typically shipped shortly after orders
are received, total revenues in any quarter are substantially dependent on
orders booked and shipped throughout that quarter. Furthermore, several factors
may require us, in accordance with generally accepted accounting principles in
the United States, to defer recognition of license fee revenue for a significant
period of time after entering into a license agreement, including:
- whether the license agreement includes both software products that are
then currently available and software products or other enhancements that
are still under development;
- whether the license agreement relates entirely or partly to then
currently undeliverable software products; and
- whether the license agreement includes acceptance criteria that may
preclude revenue recognition prior to customer acceptance.
In addition, we may in the future experience fluctuations in our gross and
operating margins due to changes in the mix of our domestic and international
revenues and changes in the mix of our direct sales and indirect sales, as well
as changes in the mix among the indirect channels through which our products are
offered.
A significant portion of our total revenues in any given quarter is derived
from existing customers. Our ability to achieve future revenue growth, if any,
will be substantially dependent upon our ability to increase revenues from
license fees and services from existing customers, to expand our sales force and
to increase the average size of our orders. To the extent that such increases do
not occur in a timely manner, our business, operating results and financial
condition would be harmed. Our expense levels and plans for expansion, including
plans to significantly increase our sales and marketing and research and
development efforts, are based in significant part on our expectations of future
revenues and are relatively fixed in the short-term. If revenues fall below our
expectations and we are unable to quickly reduce our spending in response, our
business, operating results and financial condition are likely to be harmed.
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Based upon all of the factors described above, we have a limited ability to
forecast future revenues and expenses, and it is likely that in some future
quarter our operating results will be below the expectations of public market
analysts and investors. In the event that operating results are below
expectations, the price of our common stock could decline.
IF WE DO NOT SUCCESSFULLY EXPAND OUR DISTRIBUTION CHANNELS AND DEVELOP AND
MAINTAIN RELATIONSHIPS WITH E.BUSINESS APPLICATION VENDORS OUR BUSINESS WOULD BE
SERIOUSLY HARMED.
To date, we have sold our products principally through our direct sales
force, as well as through indirect sales channels, such as e.Business
application vendors, resellers and distributors. Our revenues from license fees
resulting from sales through indirect channel partners were approximately 38% in
the first quarter of 2000, 39% in fiscal 1999 and 41% in fiscal 1998. Our
ability to achieve significant revenue growth in the future will depend in large
part on our success in expanding our sales force and in further establishing and
maintaining relationships with e.Business application vendors, resellers and
distributors. In particular, a significant element of our strategy is to embed
our technology in products offered by e.Business application vendors for resale
or as a hosted application to such vendors' customers and end users. We intend
to seek additional distribution arrangements with other e.Business application
vendors to embed our technology in their products and expect that these
arrangements will continue to account for a significant portion of our revenues
in future periods. Our future success will depend on the ability of our indirect
channel partners to sell and support our products. If the sales and
implementation cycles of our indirect channel partners are lengthy or variable
or our e.Business application vendors experience difficulties embedding our
technology into their products or we fail to train the sales and customer
support personnel of such indirect channel partners in a timely fashion, our
business, operating results and financial condition would be harmed.
Although we are currently investing, and plan to continue to invest,
significant resources to expand and develop relationships with e.Business
application vendors, we have at times experienced and continue to experience
difficulty in establishing and maintaining these relationships. If we are unable
to successfully expand these distribution channels and secure license agreements
with additional e.Business application vendors on commercially reasonable terms
and extend existing license agreements with existing e.Business and application
vendors on commercially reasonable terms our operating results would be harmed.
Any inability by us to maintain existing or establish new relationships with
indirect channel partners or, if such efforts are successful, a failure of our
revenues to increase correspondingly with expenses incurred in pursuing such
relationships, would harm our business, operating results and financial
condition.
IF THE MARKET FOR WEB BASED REPORTING SOFTWARE DOES NOT GROW AS WE EXPECT OUR
BUSINESS WOULD BE SERIOUSLY HARMED.
The market for Web based reporting software products is still emerging and
we cannot be certain that it will continue to grow or that, even if the market
does grow, businesses will adopt our products. If the market for Web based
reporting products fails to grow or grows more slowly than we expect, our
business, operating results and financial condition would be harmed. To date,
all of our revenues have been derived from licenses for our
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reporting and related products and services, and we expect this to continue for
the foreseeable future. We have spent, and intend to continue to spend,
considerable resources educating potential customers and indirect channel
partners about Web based reporting and our products. However, if such
expenditures do not enable our products to achieve any significant degree of
market acceptance our business, operating results and financial condition would
be harmed.
WE MAY MAKE FUTURE ACQUISITIONS AND ACQUISITIONS INVOLVE NUMEROUS RISKS
The Web reporting software business is highly competitive, and as such, our
growth is dependent upon market growth and our ability to enhance our existing
products, introduce new products on a timely basis and expand our distribution
channels and professional services organization. One of the ways we have
addressed and will continue to address the need to expand our distribution
channels, develop new products and expand our professional service organization
is through acquisitions of other companies. Acquisitions involve numerous risks,
including the following:
- difficulties in integration of the operations, technologies, and
products of the acquired companies;
- the risk of diverting management's attention from normal daily
operations of the business;
- risks of entering markets in which we have no or limited direct prior
experience; and
- the potential loss of key employees of the acquired company.
Mergers and acquisitions of high-technology companies are inherently risky,
and no assurance can be given that any acquisition will be successful and will
not materially adversely affect our business, operating results or financial
condition. Failure to manage growth effectively and successfully integrate
acquisitions made by us could harm our business and operating results.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AGAINST CURRENT AND FUTURE
COMPETITORS.
The market in which we compete is intensely competitive and characterized
by rapidly changing technology and evolving standards. Our competition comes in
five principal forms:
- direct competition from current or future vendors of reporting
solutions such as Seagate Software, Inc. (a division of Seagate
Technology, Inc.),MicroStrategy Incorporated and Brio Technology,
Inc.;
- indirect competition from vendors of OLAP and query tools such as
Hyperion Solutions Corp., Business Objects S.A., Cognos, Inc. and
Microsoft that integrate reporting functionality with such tools;
- indirect competition from e.Business software vendors such as SAP and
Oracle, to the extent they include reporting functionality in their
applications; competition from e.Business software vendors and Web
development tool vendors; and
- competition from the information systems departments of current or
potential customers that may develop reporting solutions internally
which may be cheaper and more customized than our products.
Many of our current and potential competitors have significantly greater
financial, technical, marketing and other resources than us. These competitors
may be able to respond more quickly to new or emerging technologies and changes
in customer requirements or devote greater resources to the development,
promotion and sales of their products than us. Also, most current and potential
competitors, including companies such as Oracle and Microsoft, have greater name
recognition and the ability to leverage significant installed customer bases.
These companies could integrate competing Web based reporting software with
their products, resulting in a loss of market share for us. We expect additional
competition as other established and emerging companies enter the Web based
reporting software market and new products and technologies are introduced.
Increased competition could result in price reductions, fewer customer orders,
reduced gross margins, longer sales cycles and loss of market share, any of
which would harm our business, operating results and financial condition.
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Current and potential competitors may make strategic acquisitions or
establish cooperative relationships among themselves or with third parties,
thereby increasing their ability to address the reporting needs of our
prospective customers. For example in 1999 Brio Technology, Inc. completed the
acquisition of our competitor SQRIBE Technologies, Inc. Also current or future
indirect channel partners have in the past, or may in the future, establish
cooperative relationships with our current or potential competitors, thereby
limiting our ability to sell our products through particular distribution
channels. It is possible that new competitors or alliances among current and new
competitors may emerge and rapidly gain significant market share. Such
competition could harm our ability to obtain revenues from license fees from new
or existing customers and service revenues from existing customers on terms
favorable to us. If we are unable to compete successfully against current and
future competitors our business, operating results and financial condition would
be harmed.
IF WE DO NOT RESPOND TO RAPID TECHNOLOGICAL CHANGES, OUR PRODUCTS COULD BECOME
OBSOLETE AND OUR BUSINESS COULD BE SERIOUSLY HARMED.
The market for our products is characterized by rapid technological
changes, frequent new product introductions and enhancements, changing customer
demands and evolving industry standards. Any of these factors can render
existing products obsolete and unmarketable. We believe that our future success
will depend in large part on our ability to support current and future releases
of popular operating systems, databases and e.Business software applications, to
timely develop new products that achieve market acceptance, and to meet an
expanding range of customer requirements. If the announcement or introduction of
new products by us or our competitors or any change in industry standards causes
customers to defer or cancel purchases of existing products our business,
operating results and financial condition would be harmed. As a result of the
complexities inherent in Web based reporting, major new products and product
enhancements can require long development and testing periods. In addition,
customers may delay their purchasing decisions in anticipation of the general
availability of new or enhanced versions of our products. As a result,
significant delays in the general availability of such new releases or
significant problems in the installation or implementation of such new releases
could harm our business, operating results and financial condition. If we fail
to successfully develop, on a timely and cost effective basis, product
enhancements or new products that respond to technological change, evolving
industry standards or customer requirements or such new products and product
enhancements fail to achieve market acceptance, our business, operating results
and financial condition may be harmed.
IF WE DO NOT RELEASE NEW PRODUCTS AND ENHANCEMENTS TO EXISTING PRODUCTS IN A
TIMELY MANNER OR IF SUCH NEW PRODUCTS AND ENHANCEMENTS FAIL TO ACHIEVE MARKET
ACCEPTANCE OUR BUSINESS COULD BE SERIOUSLY HARMED.
We believe that our future success will depend in large part on the success
of new products and enhancements that we make generally available. Prior to the
release of any new products or enhancements, the software must undergo a long
development and testing period. To date, the development and testing of new
products and enhancements have taken longer than expected. In the event the
development and testing of new products and enhancements continue to take longer
than expected, the release of new products and enhancements will be delayed. If
we fail to release new products and enhancements in a timely manner, our
business, operating results and financial condition may be harmed. In addition,
if such new products and enhancements do not achieve market acceptance our
business, operating results and financial condition may be harmed.
BECAUSE THE SALES CYCLES OF OUR PRODUCTS ARE LENGTHY AND VARIABLE, OUR QUARTERLY
RESULTS MAY FLUCTUATE.
The purchase of our products by our end user customers for deployment
within a customer's organization typically involves a significant commitment of
capital and other resources, and is therefore subject to delays that are beyond
our control. These delays can arise from a customer's internal procedures to
approve large capital expenditures, budgetary constraints and the testing and
acceptance of new technologies that affect key operations. The sales cycle for
an initial order of our products is typically 3 to 6 months and the sales cycle
associated with a follow-on large scale deployment of our products typically
extends for another 6 to 9 months or longer. We may
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experience longer sales cycles in the future. Additionally, sales cycles for
sales of our products to e.Business application vendors tend to be longer,
ranging from 6 to 24 months or more and involve convincing the vendor's entire
organization that our products are the appropriate reporting solution for the
vendor's application. This time period does not include the sales and
implementation cycles of such vendors' own products, which are typically
significantly longer than our sales and implementation cycles. Certain of our
customers have in the past, or may in the future, experience difficulty
completing the initial implementation of our products. Any difficulties or
delays in the initial implementation by our end user customers or our indirect
channel partners could cause such customers to reject our software or lead to
the delay or non-receipt of future orders for the large-scale deployment of our
products.
IF WE FAIL TO EXPAND OUR INTERNATIONAL OPERATIONS OUR BUSINESS WOULD BE
SERIOUSLY HARMED.
During the first quarter of 2000 and fiscal 1999 and 1998, we derived 11%,
14% and 6% of our total revenues, respectively, from sales outside North
America. Our ability to achieve revenue growth in the future will depend in
large part on our success in increasing revenues from international sales. We
intend to continue to invest significant resources to expand our sales and
support operations outside the United States and to enter additional
international markets. In order to expand international sales, we must establish
additional foreign operations, expand our international channel management and
support organizations, hire additional personnel, recruit additional
international distributors and increase the productivity of existing
international distributors. If we are not successful in expanding international
operations in a timely and cost-effective manner, our business, operating
results and financial condition could be harmed.
THERE ARE MANAGEMENT AND OPERATIONAL RISKS ASSOCIATED WITH OUR INTERNATIONAL
OPERATIONS THAT COULD SERIOUSLY HARM OUR BUSINESS.
We have wholly-owned subsidiaries located in Australia, the United Kingdom,
France and Germany, and a majority-owned subsidiary in Japan, whose sole
business purpose is the marketing, sale and distribution of our software
products. We have very limited experience in the management of international
operations. We also have a number of other distributors located worldwide.
International operations are subject to a number of risks including the
following:
- costs of localizing products for foreign countries;
- difficulty in hiring employees in foreign countries;
- trade laws and business practices favoring local competition;
- dependence on local vendors;
- compliance with multiple, conflicting and changing government laws and
regulations;
- longer sales and payment cycles;
- import and export restrictions and tariffs;
- difficulties in staffing and managing foreign operations;
- greater difficulty or delay in accounts receivable collection;
- foreign currency exchange rate fluctuations;
- multiple and conflicting tax laws and regulations; and
- political and economic instability.
Because the majority of our international revenues have been denominated to
date in U.S. dollars, increases in the value of the United States dollar could
increase the price of our products so that they become relatively more expensive
to customers in the local currency of a particular country, and result in a
reduction in sales and profitability in that country. We believe that an
increasing portion of our revenues and costs will be denominated in foreign
currencies. To the extent such denomination in foreign currencies does occur,
gains and losses on the conversion to U.S. dollars of accounts receivable,
accounts payable and other monetary assets and liabilities arising from
international operations may contribute to fluctuations in our results of
operations. Any of the foregoing factors could harm our business, operating
results and financial condition. Although we may from time to time undertake
foreign exchange hedging transactions to cover a portion of our foreign currency
transaction exposure, we currently do not attempt to cover any foreign currency
exposure. If we are not successful in any future foreign
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exchange hedging transactions that we engage in, our business, operating results
and financial condition could be harmed.
TO MANAGE OUR GROWTH AND EXPANSION, WE NEED TO IMPROVE AND IMPLEMENT OUR
INTERNAL SYSTEMS, PROCEDURES AND CONTROLS. IF WE ARE UNABLE TO DO SO
SUCCESSFULLY, OUR BUSINESS WOULD BE SERIOUSLY HARMED.
Our rapid expansion in the number of employees and the scope of operations
has placed and will continue to place a significant strain on our management,
information systems and resources. Any acquisitions made by us will put a
significant strain on our management, information systems and resources. In
addition, we expect that an expansion of our international operations will lead
to increased financial and administrative demands associated with managing our
operations in Europe and managing an increasing number of relationships with
foreign partners and customers and expanded treasury functions to manage foreign
currency risks. Our future operating results will also depend on our ability to
further develop indirect channels and expand our support organization to
accommodate growth in our installed base. If we fail to manage our expansion
effectively our business, operating results and financial condition would be
harmed.
THE INABILITY TO ATTRACT AND RETAIN HIGHLY QUALIFIED PERSONNEL IN THE FUTURE
WOULD SERIOUSLY HARM OUR BUSINESS.
From January 1999 through March 2000, we increased our headcount from 149
to 418 full-time employees. Furthermore, significant increases in the number of
employees are anticipated during the remainder of 2000 and 2001. In particular,
we currently plan to significantly expand the number of employees in sales,
customer support and marketing. Our success depends to a significant degree upon
the efforts of certain key management, sales, customer support and research and
development personnel. We believe that our future success will depend in large
part upon our continuing ability to attract and retain highly skilled
managerial, sales, marketing, customer support and research and development
personnel. Like other software companies, we face intense competition for such
personnel, and we have experienced and will continue to experience difficulty in
recruiting qualified personnel, particularly in the San Francisco Bay Area,
where the employment market for qualified sales, marketing and engineering
personnel is extremely competitive.
OUR EXECUTIVE OFFICERS AND CERTAIN KEY PERSONNEL ARE CRITICAL TO OUR BUSINESS
AND THESE OFFICERS AND KEY PERSONNEL MAY NOT REMAIN WITH US IN THE FUTURE.
Our future success depends upon the continued service of our executive
officers and other key engineering, sales, marketing and support personnel and
none of our officers or key employees is bound by an employment agreement for
any specific term. If we lose the service of one or more of our key employees,
or if one or more of our executive officers or employees decide to join a
competitor or otherwise compete directly or indirectly with us, this could have
a significant adverse effect on our business.
THERE ARE RISKS ASSOCIATED WITH THE SOFTWARE INDUSTRY
The software industry has historically experienced significant periodic
downturns, often in connection with, or in anticipation of, declines in general
economic conditions during which management information systems budgets often
decrease. Such a change in economic conditions could result in a slow down of
the purchase of Web based reporting products. If this occurs, our business,
operating results and financial condition may in the future reflect substantial
fluctuations from period to period as a consequence of buying patterns and
general economic conditions in the software industry.
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IF OUR PRODUCT CONTAINS MATERIAL DEFECTS, OUR BUSINESS COULD BE SERIOUSLY
HARMED.
Software products as complex as those offered by us often contain errors or
defects, particularly when first introduced, when new versions or enhancements
are released and when configured to individual customer computing systems. We
currently have known errors and defects in our products. Despite testing
conducted by us, if additional defects and errors are found in current versions,
new versions or enhancements of our products after commencement of commercial
shipment this could result in the loss of revenues or a delay in market
acceptance. The occurrence of any of these events could seriously harm our
business, operating results and financial condition.
IF A SUCCESSFUL PRODUCT LIABILITY CLAIM IS MADE AGAINST US, OUR BUSINESS WOULD
BE SERIOUSLY HARMED.
Although license agreements with our customers typically contain provisions
designed to limit our exposure to potential product liability claims, it is
possible that such limitation of liability provisions may not be effective as a
result of existing or future laws or unfavorable judicial decisions. We have not
experienced any product liability claims to date. However, the sale and support
of our products may entail the risk of such claims, which are likely to be
substantial in light of the use of our products in business-critical
applications. A product liability claim brought against us could seriously harm
our business, operating results and financial condition.
IF THE PROTECTION OF OUR PROPRIETARY RIGHTS IS INADEQUATE, OUR BUSINESS COULD BE
SERIOUSLY HARMED.
We have two issued and two pending U.S. patents and we rely primarily on a
combination of copyright and trademark laws, trade secrets, confidentiality
procedures and contractual provisions to protect our proprietary technology.
For example, we license our software pursuant to shrink-wrap or signed license
agreements, which impose certain restrictions on licensees' ability to utilize
the software. In addition, we seek to avoid disclosure of our intellectual
property, including requiring those persons with access to our proprietary
information to execute confidentiality agreements with us and restricting access
to our source code. We seek to protect our software, documentation and other
written materials under trade secret and copyright laws, which afford only
limited protection.
Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or to obtain and use information
that we regard as proprietary. Policing unauthorized use of our products is
difficult, and while we are unable to determine the extent to which piracy of
our software products exists, software piracy can be expected to be a persistent
problem. In addition, the laws of many countries do not protect our proprietary
rights to as great an extent as do the laws of the United States. If our means
of protecting our proprietary rights is not adequate or our competitors
independently develop similar technology, our business could be seriously
harmed.
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INTELLECTUAL PROPERTY CLAIMS AGAINST US COULD BE COSTLY AND MIGHT RESULT IN THE
LOSS OF SIGNIFICANT RIGHTS.
To date, we have not been notified that our products infringe the
proprietary rights of third parties, but we cannot be certain that third parties
will not claim infringement by us with respect to current or future products.
We expect Web based reporting software product developers will increasingly be
subject to infringement claims as the number of products and competitors in our
industry segment grows and the functionality of products in different industry
segments overlaps. Any such claims, with or without merit, could be time-
consuming to defend, result in costly litigation, divert management's attention
and resources, cause product shipment delays or require us to enter into royalty
or licensing agreements. Such royalty or licensing agreements, if required, may
not be available on terms acceptable to us or at all. A successful claim of
product infringement against us and our failure or inability to license the
infringed or similar technology could harm our business, operating results and
financial condition.
OUR COMMON STOCK PRICE MAY BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES
FOR STOCKHOLDERS.
The market price of shares of our common stock has been and is likely to
continue to be highly volatile and may be significantly affected by factors such
as the following:
- actual or anticipated fluctuations in our operating results;
- announcements of technological innovations;
- new products or new contracts announced by us or our competitors;
- developments with respect to copyrights or proprietary rights;
- conditions and trends in the software and other technology industries;
- changes in corporate purchasing of e.Business application software;
- the announcement of mergers or acquisitions;
- adoption of new accounting standards affecting the software industry;
- changes in financial estimates by securities analysts;
- changes in the economic conditions in the United States and abroad;
and the purchase or sale of our common stock by "day traders".
In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have particularly affected the market prices
for the securities of technology companies. In the past, following periods of
volatility in the market price of a particular company's securities, securities
class action litigation has often been brought against such company. If we are
involved in such litigation, it could result in substantial costs and a
diversion of management's attention and resources and could harm our business,
operating results and financial condition.
CERTAIN OF OUR CHARTER PROVISIONS AND DELAWARE LAW MAY PREVENT OR DETER A
CHANGE IN CONTROL OF ACTUATE.
Actuate's Certificate of Incorporation, as amended and restated (the
"Certificate of Incorporation"), and Bylaws, as amended and restated ("Bylaws"),
contain certain provisions that may have the effect of discouraging, delaying or
preventing a change in control of Actuate or unsolicited acquisition proposals
that a stockholder might consider favorable, including provisions authorizing
the issuance of "blank check" preferred stock and eliminating the ability of
stockholders to act by written consent. In addition, certain provisions of
Delaware law and our 1998 Equity Incentive Plan may also have the effect of
discouraging, delaying or preventing a change in control of Actuate or
unsolicited acquisition proposals. The anti-takeover effect of these provisions
may also have an adverse effect on the public trading price of our common stock.
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FORWARD - LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference herein,
contains forward-looking statements that involve risks and uncertainties.
Statements contained in this prospectus or incorporated by reference herein that
are not purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the 1934 Act, including
statements regarding Actuate's expectations, beliefs, intentions or strategies
regarding the future. All forward-looking statements included in this document
are based on information available to Actuate on the date hereof, and Actuate
assumes no obligation to update any such forward-looking statements. Actuate's
actual results could differ materially from those anticipated in these forward-
looking statements as a result of certain factors, including, but not limited
to, those set forth in this prospectus under "Risk Factors." You should
carefully consider the risks described in the "Risk Factors" section, in
addition to the other information set forth in this prospectus and incorporated
by reference herein, before making an investment decision.
USE OF PROCEEDS
All net proceeds from the sale of our common stock will go to the
stockholders who offer and sell their shares. Accordingly, we will not receive
any proceeds from the sale of the shares by the selling stockholders.
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SELLING STOCKHOLDERS
The following table presents selected information, as of March 29, 2000,
regarding the number of shares of common stock owned by the selling stockholders
and as adjusted to give effect to the sales of the shares of common stock being
sold in this offering. Because the selling stockholders are not obligated to
sell the shares of common stock, and selling stockholders may also acquire
publicly traded shares of our common stock, we cannot know how many shares each
selling stockholder will beneficially own after this offering. Therefore, the
number of shares listed in the column entitled shares beneficially owned after
offering reflects only the current share ownership of the selling stockholders.
We may update or supplement this prospectus from time to time to update this
information. These shares are being registered to permit public secondary
trading of the shares and the selling stockholders may offer these shares for
resale from time to time. For a discussion regarding their resale, please see
"Plan of Distribution."
The shares being offered by the selling stockholders were acquired from us
in private placement transactions effected on February 29, 2000 and March 16,
2000. The shares were issued under the exemption from the registration
requirements of the Securities Act provided by Section 4(2) of the Securities
Act. Each of the selling stockholders represented to us that it was acquiring
the shares for investment and with no present intention of distributing the
shares.
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Shares Beneficially Shares Beneficially
Owned Before the Owned After the
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Offering Shares Offering
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Name and Address of Selling Stockholders Number Percent(1) Offered Number Percent(1)
---------------------------------------- ------ ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C>
Sandeep Jain 100,000 * 100,000 0 -
845 Mowry Ave., Suite 120
Fremont, CA 94526
Anita Gupta 16,668 * 16,668 0 -
28 Sparrow Drive
Princeton, NJ 08550
Rohit Mathur 11,538 * 11,538 0 -
2 Kara Court
Matawan, NJ 07747
Barry Clague 11,538 * 11,538 0 -
433 West 21/st/ Street, Apt. 100
New York, NY 10011
Sowmya Narayan 11,538 * 11,538 0 -
28 Sparrow Drive
Princeton, NJ 08550
</TABLE>
__________________________
* Represents less than 1%.
(1) Based on 28,129,055 shares of common stock outstanding as of March 29,
2000.
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<PAGE>
PLAN OF DISTRIBUTION
The shares offered hereby may be sold by the selling stockholders at
various times in one or more of the following transactions:
. In the over-the-counter market;
. On The Nasdaq National Market;
. In privately negotiated transactions; or
. In a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices prevailing
at the time of the sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
The selling stockholders may use broker-dealers to sell their shares. If
this happens, broker-dealers will either receive discounts or commissions from
the selling stockholders, or they will receive commissions from purchasers of
shares for whom they acted as agents.
For the purposes of this prospectus, the term "selling stockholders" shall
include donees, pledgees and other assignees selling shares received from a
selling stockholder named herein as well as any donees, pledgees and other
assignees selling shares received from such donees, pledgees or assignees.
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for
Actuate by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, Menlo
Park, California.
EXPERTS
The consolidated financial statements of Actuate Corporation appearing in
Actuate Corporation's Annual Report (Form 10-K) for the year ended December 31,
1999, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from the SEC's website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
1. Annual Report on Form 10-K for the year ended December 31, 1999, filed
on March 30, 2000;
2. Current Report on Form 8-K, filed on March 10, 2000; and
3. Current Report on Form 8-K, filed on March 27, 2000.
4. Amended Report on Form 8-K/A, filed on May 10, 2000.
5. Quarterly Report on Form 10-Q for the quarterly period ending March
31, 2000, filed on May 11, 2000.
14
<PAGE>
2. The description of Actuate capital stock contained in our registration
statement on Form 8-A, dated July 10, 1998, including any amendment or
report updating such description.
You may request a copy of these filings, at no cost, by calling us at (650)
837-2000 or by writing to us at the following address:
Actuate Corporation
701 Gateway Boulevard
South San Francisco, CA 94080
Attn: Chief Financial Officer
15
<PAGE>
This prospectus is part of a registration statement we filed with the SEC. You
should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
151,282 Shares
ACTUATE CORPORATION
Common Stock
______________
July 21, 2000
______________
