865917--1/29/2007--VERSANT

related topics

{product, market, service}

{property, intellectual, protect}

{stock, price, share}

{customer, product, revenue}

{personnel, key, retain}

{acquisition, growth, future}

{operation, international, foreign}

{regulation, change, law}

{tax, income, asset}

{stock, price, operating}

{financial, litigation, operation}

{cost, operation, labor}

{condition, economic, financial}

Risks Related to Our Business We are dependent on a limited number of products, especially Versant Object Database. Our quarterly revenue levels are not predictable. We may not be able to manage costs effectively given the unpredictability of our revenues. Our future revenues are substantially dependent upon our installed customers continuing to license Versant products and renewing maintenance agreements for our products; our future professional services and maintenance revenues are dependent on future sales of our software products. Our customer concentration increases the potential volatility of our operating results. Reduced demand for our products and services may prevent us from achieving targeted revenues and profitability. We have limited working capital and may experience difficulty in obtaining needed funding, which may limit our ability to effectively pursue our business strategies. We rely for revenues on the technology, telecommunications and defense industries, and these industries are characterized by complexity, intense competition and changes in purchasing cycles. We depend increasingly on our international operations for our revenues as North American revenues have declined. International Operations pose unique risks. In order to be successful, Versant must attract, retain and motivate key employees and failure to do so could seriously harm the Company. Our personnel, management team and operations are located in different countries and as a result, we may experience difficulty in coordinating our activities and successfully implementing Company goals. Our products have a lengthy sales cycle. We are subject to litigation and the risk of future litigation. We will incur increased costs as a result of recently enacted laws and regulations relating to corporate governance matters and public disclosure. The requirement to account for stock options we grant as compensation expense reduce our net income and our earnings per share, and may result in or increase losses. Adoption and application of accounting regulations and related interpretations and policies regarding revenue recognition could cause us to defer recognition of revenue or recognize lower revenues and profits. Charges to earnings resulting from the application of the purchase method of accounting for the merger with Poet and FastObjects may adversely affect the market value of our common stock. Risks Related to Our Industry Our products face significant competition. We depend on successful technology development. We depend on our personnel, for whom competition is intense. We must protect our intellectual property. We may be subject to claims of intellectual property infringement. Risks Related to our Stock Our common stock is listed on the NASDAQ Capital Market. We may engage in future acquisitions that dilute our shareholders and cause us to incur debt or assume contingent liabilities. Our stock price is volatile.

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865917--1/29/2007--VERSANT_CORP