UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 2

ýAnnual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended October 31, 2004

Or

o  Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from           to           .

Commission file number: 0-28540

VERSANT CORPORATION

(Exact name of registrant as specified in its charter)

California	94-3079392
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6539 Dumbarton Circle, Fremont, California 94555
(Address of principal executive offices) (Zip code)

(510) 789-1500
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or an amendment to Form 10-K.  ý

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).  Yes o No o

The aggregate market value of the outstanding common stock held by non-affiliates of the Registrant as of April 30, 2004, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price of $2.08 per share on the NASDAQ SmallCap Market on April 30, 2004, was approximately $62,138,003.20.  This amount excludes 631,764 shares of common stock held by directors, officers and certain shareholders of the Registrant as of April 30, 2004.  Exclusion of shares held by any person should not be construed to indicate that that person possesses power, direct or indirect, to direct or cause the direction of the management or policies of the Registrant, or that such person is controlled by or is under common control with the Registrant.

As of February 22, 2005, there were outstanding 34,823,361 shares of the Registrant’s common stock, no par value

DOCUMENTS INCORPORATED BY REFERENCE

None.

VERSANT CORPORATION
AMENDMENT NO. 2 TO ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended October 31, 2004

TABLE OF CONTENTS

Item No.	Name of Item
9A	Controls and Procedures
Signatures
Certifications

EXPLANATORY NOTE

This Amendment No. 2 to Versant Corporation’s Annual Report on Form 10-K for its fiscal year ended October 31, 2004 is being filed in order to amend disclosure required by Item 9A.

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PART II

Item 9A.  Controls and Procedures.

(a)           Evaluation of Disclosure Controls and Procedures.  Securities and Exchange Commission, or SEC, rules define the term “disclosure controls and procedures” to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in its reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  Based on the evaluation of the effectiveness of our disclosure controls and procedures by our management and the advice of our independent auditors, with the participation of our Chief Executive Officer and our Chief Financial Officer, our Chief Executive Officer and our Chief Financial Officer have, for the reasons noted below, concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

In the course of conducting its audit of our financial statements for our fiscal year ended October 31, 2004, in late November 2004 our registered independent public accounting firm, Grant Thornton LLP, determined that there were certain material weaknesses and significant deficiencies in our internal controls.  Promptly following this determination, Grant Thornton advised our management and, on December 13, 2004, the audit committee of our board of directors, of the following matters that Grant Thornton considered to bematerial weaknessesin our internal controls:

(i)            Grant Thornton concluded that the number of year end audit adjustments and a prior amendment to the Company’s reported financial statements relating to an acquisition matter were indicative of a material weakness in controls over closing procedures and the accounting for non-routine transactions.  Our auditors determined that the Company lacked certain procedures, staffing, and required expertise needed to properly account for non-routine transactions (such as acquisitions of other businesses) and prepare certain of its required financial statement disclosures (primarily with respect to non-routine transactions).  Additionally, in connection with its fiscal 2004 year-end audit, Grant Thornton discovered several cut-off errors in our financial statements (primarily with respect to period-end accruals) that should have been identified by the Company prior to the audit (in aggregate these adjustments represented approximately 1% of our net loss for fiscal 2004).

(ii)           Our auditors also identified a material weakness in our consolidation controls.  During Grant Thornton’s audit, errors were noted in the Company’s consolidation, specifically with respect to eliminating entries.  Such errors are due to the complexity of

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the consolidation, in addition to a lack of certain formal procedures and expertise necessary to ensure an accurate consolidation.  Primarily due to the Company’s acquisition of Poet Holdings, Inc., which significantly increased the number of our corporate subsidiaries and the quantity of inter-company transactions, the Company’s consolidation of accounting information has become a complex and time-consuming process (especially as it relates to inter-company eliminations).  The current consolidation process is both error-prone and inefficient.

At the time it advised our audit committee of its above conclusions, Grant Thornton also advised the audit committee of the following significant deficiencies in our internal controls:

•Monitoring controls over the recording and analysis of revenue transactions (particularly multiple element transactions) are in need of improvement. There are currently no established or documented policies and procedures that require review of revenue entries and related analysis performed by accounting personnel.  The need for additional training of personnel dealing with the recording and review of revenue transactions was also identified as an area for improvement.

•Inadequate segregation of duties was noted with respect to the revenue, expenditure and payroll processes as numerous incompatible tasks are performed by the same accounting personnel.  The Company needs to review current policies and procedures to ensure that incompatible duties are not performed by one individual or that there are specific compensating controls if incompatible duties cannot be avoided.

The material weaknesses and significant deficiencies in internal controls described above still exist; however in the quarter ended October 31, 2004 we took certain actions to improve our disclosure controls and procedures and our internal control over financial reporting that are described below in subparagraph (i) of part (b) of this Item 9A (see “Changes in Internal Control Over Financial Reporting”).  In addition, following the close of our fiscal year on October 31, 2004, we have taken several other affirmative steps to begin the process of remediating these weaknesses in controls as described more fully in subparagraph (ii) of part (b) of this Item 9A.

In part (b) of this Item 9A we have also explained in greater detail those aspects of the material weaknesses in our controls that continue to require remediation, certain steps we have taken thus far to address these weaknesses and our current estimate of when we hope to substantially cure or eliminate these weaknesses.

When in certain of the Company’s prior filings under the Securities Exchange Act, including the filing of the Company’s Form 10-Q/A for the quarter ended April 30, 2004 that was filed on September 14, 2004 (the “Q2 10-Q/A”), officers of Versant provided conclusions regarding the effectiveness of the Company’s disclosure controls and procedures, they believed that their conclusions were then accurate. The officers did not conclude that amendments made to address certain accounting matters in the Company’s Exchange Act filings during the fiscal year ended October 31, 2004 (including the Q2 10-Q/A) were indicative of material weakness in the Company’s disclosure controls and procedures. The officers concluded that the circumstances that led to the filing of these amendments resulted primarily from the complexity, under relevant accounting rules, of certain non-ordinary course transactions related to the Company’s

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acquisition of Poet Holdings, Inc. and from certain past accounting actions that were implemented several years before the Company’s current disclosure controls were designed and implemented.  However, after working closely with the Company’s independent auditors on the audit of the Company’s financial statements for the fiscal year ended October 31, 2004 and receiving and assessing the formal advice regarding the Company’s controls that the Company’s independent auditors provided in the course of that audit process, the Company’s Chief Executive Officer and Chief Financial Officer have reached the conclusions regarding the Company’s disclosure controls set forth above in the first paragraph of part (a) of this Item 9A.

The certifications of Versant’s chief executive officer and chief financial officer attached as Exhibits 31.01 and 31.02 to this Report on Form 10-K and its amendments include, in paragraph 4 of such certifications, information concerning Versant’s disclosure controls and procedures and internal control over financial reporting.  Such certifications should be read in conjunction with the information contained in this Item 9A for a more complete understanding of the matters covered by such certifications.  The certifying officers worked to design, or caused to be designed, disclosure controls and procedures, for the purpose of ensuring that material information relating to the Company, including its consolidated subsidiaries, is made known to them by other personnel of the Company on a timely basis.  These disclosure controls and procedures were designed and adopted in good faith for this purpose, but it is recognized that these procedures must be continually evaluated and can always merit further improvement. Versant believes that the material weaknesses and significant deficiencies in the Company’s internal controls identified by the Company’s independent auditors and described above do not materially affect the fairness or accuracy of the presentation of the Company’s financial condition and results of operation in the Company’s historical financial statements as set forth in the Company’s reports previously filed with the SEC under the Securities Exchange Act of 1934.  This belief is based on the fact that, despite the material weaknesses subsequently noted by our auditor, the Company believes that it applied an appropriate amount of reviews and analysis by management to reasonably determine the accuracy and fairness of the Company’s financial reports.  Although it has subsequently appeared that the Company’s controls and procedures have certain material weaknesses, these certifying officers and the Company have been and continue to be engaged in efforts to promptly change and improve the Company’s disclosure controls and procedures as described in part (b) of this Item 9A. The Company expects that these efforts will, over time, positively address the weaknesses noted by the Company’s independent auditors.

(b)           Changes in Internal Control Over Financial Reporting.  SEC rules define the term “internal control over financial reporting” as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

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•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

(i)            During the fiscal quarter ended October 31, 2004, we made the following changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting:

•We simplified our subsidiary structure in Europe and reduced the number of subsidiaries we will need to consolidate in fiscal 2005.

•We made changes in our accounting personnel and launched a search for a new Director of Finance / Corporate Controller.

•We re-organized responsibilities within our accounting organization to provide a stronger focus on our SEC reporting and to increase the total internal person-hours dedicated to the SEC reporting process.

•We increased employee training on SEC reporting requirements and subscribed to an accounting research service in an effort to keep more current with accounting pronouncements and financial reporting matters.

Subsequent Events

(ii)           During the fiscal quarter ended January 31, 2005, the Company took the following actions that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting:

•The Company recently hired a new Director of Finance and Corporate Controller to expand its internal finance and accounting staff and increase its internal accounting expertise.

•The Company has established a formal disclosure committee comprised of one audit committee member and senior management to assist the Company on resolving issues regarding proper disclosure over financial reporting.

•The Company revised its quarter-end closing process to strengthen its close cycle and to improve its quarter-end cut off as well as its accrual process. The Company will implement these new procedures in its fiscal quarter ended April 30, 2005.

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•The Company revised its consolidation process for the three months ended January 31, 2005 and will implement a standard closing and reporting package for all of its subsidiaries during the quarter ending April 30, 2005.

•The Company plans to review both its domestic and international revenue recognition process during the quarter ending April 30, 2005.

•The Company has also added an SEC analyst to its staff and plans to add an additional staff with strong technical accounting skills by the end of the current fiscal year to be able to support the Company’s Sarbanes-Oxley Section 404 implementation.

•The Company has subscribed to an accounting research service and currently conducts reviews and research on all new and relevant existing accounting and SEC pronouncements.

•The Company is in the process of reorganizing its accounting and finance operation and has put more emphasis on proper disclosures and improving its internal controls.

The certifications of Versant’s chief executive officer and chief financial officer attached as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K as amended include, in paragraph 4 of such certifications, information concerning Versant’s disclosure controls and procedures and internal control over financial reporting. Such certifications should be read in conjunction with the information contained in this Item 9A for a more complete understanding of the matters covered by such certifications.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VERSANT CORPORATION
By:	/s/ Lee McGrath
Lee McGrath
Vice President, Finance and Administration and
Chief Financial Officer
Date: May 12, 2005

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Title	Date
PRINCIPAL EXECUTIVE OFFICER:
/s/ Nick Ordon	President, Chief Executive Officer and	May 12, 2005
Nick Ordon	Director
PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER
/s/ Lee McGrath	Vice President-Finance and	May 12, 2005
Lee McGrath	Administration, and Chief Financial
	Officer
ADDITIONAL DIRECTORS:
/s/ Jochen Witte	President, European Operations and	May 12, 2005
Jochen Witte	Director
/s/ Uday Bellary	Director	May 12, 2005
Uday Bellary
/s/ William Henry Delevati	Director	May 12, 2005
William Henry Delevati
/s/ Herbert May	Director	May 12, 2005
Herbert May

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EXHIBIT INDEX

Exhibit Number	Exhibit Description	Incorporated by Reference			Filed Herewith
		Form	Date	Number
31.01	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				ý
31.02	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				ý

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