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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 6, 
2005
CHORDIANT SOFTWARE, INC.

(Exact name of Registrant as specified in its 
charter)



  
  
    
      
Delaware
    
      
93-1051328
  
    
      
(State or other jurisdiction of 
      incorporation)
    
      
(I.R.S. Employer Identification 
  No.)


Commission file number:
000-29357
20400 Stevens Creek Boulevard, Suite 400
Cupertino, 
CA    95014
(Address of principal 
executive offices and zip code)

Registrant's telephone number, including area code: (408) 
517-6100
(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 (see 
General Instruction A.2. below):
[ ] 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))
Item 2.02 Results of Operations and Financial Condition.

On December 6, 2005, the Company issued a press release announcing 
results for the three-months and year ended September 30, 2005. A copy of the 
press release is attached as Exhibit 99.1 to this current report on Form 8-K and 
is incorporated by reference herein.
Item 4.02   Non-Reliance on Previously Issued Financial 
Statements or a Related Audit Report or Completed Interim Review.
In the course of preparing its 2005 financial results for the year ended 
September 30, 2005, the Company and its independent registered public accounting 
firm, BDO Seidman, LLP, identified certain errors in the Company's 2005 interim 
financial statements for the quarters ended December 31, 2004, March 31, 2005, 
and June 30, 2005. The Company evaluated the errors in accordance with the 
quantitative and qualitative guidance set forth in SEC Staff Accounting Bulletin 
No. 99.
On December 6, 2005, management concluded that the Company should restate the 
Company's interim financial statements for the quarters ended December 31, 2004, 
March 31, 2005, and June 30, 2005 due to the relative percentages represented by 
the errors in the previously issued interim financial statements to be restated. 
These errors related to: (i) the method by which the Company valued 1,964,279 
shares of restricted stock (the "Stock") issued to two principals of KiQ Limited 
("KiQ") who subsequently became employees of the Company after the Company's 
acquisition of KiQ on December 21, 2004, (ii) the method by which the Company 
amortized the stock-based compensation attributable to the issuance of the Stock 
and (iii) the classification of certain cash expenditures for capitalized costs 
associated with the development of a banking product, which were incorrectly 
reported in the Company's interim Consolidated Statements of Cash Flows as "Net 
Cash Used in Operating Activities" as opposed to "Net Cash Used for Investing 
Activities" for the previously reported interim periods ended December 31, 2004, 
March 31, 2005 and June 30, 2005.
On December 6, 2005, senior management of the Company met with the Audit 
Committee of the Board of Directors of the Company to discuss management's 
conclusion. The Audit Committee concurred with management's conclusion to 
restate the Company's financials for the quarters ended December 31, 2004, March 
31, 2005, and June 30, 2005. The Company's Audit Committee and management 
discussed this conclusion with the Company's independent registered public 
accounting firm. Accordingly, the previously issued financial statements for 
such interim periods should no longer be relied upon.
The Company's preliminary assessment of the impact of the errors for the 
quarters ended December 31, 2004, March 31, 2005, and June 30, 2005 is expressed 
in the estimated ranges of adjustments identified in the table below. The 
restated results will be reflected in the Company's Report on Form 10-K for the 
year ended September 30, 2005, subject to completion of reviews by management 
and the Company's independent registered public accounting firm.

Condensed Consolidated Statements of Operations 
and Comprehensive Loss



  
  
      
    Three months Ended December 31, 2004 Estimated % Range of 
      Adjustment (except EPS) (unaudited)
      

      

      
    Three Months Ended March 31, 2005 Estimated % Range of 
      Adjustment (except EPS) (unaudited)
      

      

      
    Three Months Ended June 30, 2005 Estimated % Range of Adjustment 
      (except EPS) (unaudited)
      

      

      
  
    Total 
      revenues
    0% 
    0%
    0% 
  
    Total 
      cost of revenues
    0-1% 
    2-3% 
    1-2% 
  
    Total 
      operating expenses
    0-1% 
    3-4% 
    1-2% 
  
    Net 
      Income (loss)
    (3-4%)
    (14-15%)
    (10-11%)
  
    Earnings (loss) per share:
     
     
     
  
    Basic
    $0.00 
    ($0.01) 
    ($0.01) 
  
    Diluted
    $0.00
    ($0.01)
    ($0.01)
Consolidated Statements of Cash Flows



  
  
      
    Three months Ended December 31, 2004 Estimated % Range of 
      Adjustment (except EPS) (unaudited)
      

      

      
    Six Months Ended
March 31, 2005
Estimated % Range of 
      Adjustment (except EPS) (unaudited)
      

      

      
    Nine Months Ended
June 30, 2005
Estimated % Range of 
      Adjustment (except EPS) (unaudited)
      

      

      
  
    Net 
      cash used in operating activities
    47-48% 
    14-15%
    16-17% 
  
    Net 
      cash used for investing activities
    (10-11%) 
    (15-16%) 
    (19-20%) 
  
    Net 
      increase (decrease) in cash and cash equivalents
    0% 
    0% 
    0% 
Item 8.01 Other Events
In completing its assessment of the effectiveness of its internal control 
over financial reporting, the Company determined that certain material 
weaknesses (as defined below) in the Company's internal control over financial 
reporting existed as of September 30, 2005. Management determined that the 
Company did not maintain effective control over its accounting for its non-cash 
stock-based compensation and related financial statement disclosures, since the 
method by which the Company originally valued the common stock and amortized 
deferred stock-based compensation for such common stock were determined to be 
incorrect. In addition, management determined that the Company did not maintain 
effective control over the preparation of its Statement of Cash Flows, in 
particular, with regard to the classification of cash expenditures for certain 
capitalized costs. Management has concluded that each of these matters 
constitutes a material weakness in internal control over financial reporting. 
Each of these matters is described in more detail in Item 4.02 
above.
Finally, as originally reported in the Company's quarterly report on 
Form 10-Q for the quarter ended September 30, 2004, management determined that a 
material weakness existed with respect to the Company's internal control over 
financial reporting relating to the staffing of the Company's finance department 
to the effect that inadequate staffing and supervision leading to untimely 
identification and resolution of certain accounting matters. Since October 2004, 
the Company has taken the following steps to remediate this material weakness 
(i) the hiring of a permanent chief financial officer; and (ii) the hiring of 
three individuals to replace the members of the finance team that resigned and 
added eight new members to the finance team, including three additional senior 
accountants. Four members of the finance team hold MBAs. The Company's staff now 
includes five certified public accountants, three chartered accountants in 
financial operations. Notwithstanding the progress made to remediate the 
staffing issues of September 30, 2004, certain untimely identification and 
resolution of certain accounting matters have been identified by the Company in 
the 2005 audit of the Company's financial statements, which, taken in 
combination, have led management to conclude that at September 30, 2005, a 
material weakness in the levels of staffing in the financial department 
continued to exist.

In this report, unless otherwise indicated, a 
"significant deficiency" is defined as a control deficiency, or combination of 
deficiencies, that adversely affects the company's ability to initiate, 
authorize, record, process or report external financial data reliably in 
accordance with generally accepted accounting principles such that there is more 
than a remote likelihood that a misstatement of the company's financial 
statements that is more than inconsequential will not be prevented or detected. 
A "material weakness" is a significant deficiency, or combination of significant 
deficiencies, that results in more than a remote likelihood that a material 
misstatement of the financial statements will not be prevented or detected. 
Item 9.01 Financial Statements and Exhibits.

(c) 
Exhibits

99.1 Press release issued by Chordiant Software, Inc. dated 
December 6, 2005.
 
SAFE HARBOR 

THIS REPORT INCLUDES "FORWARD-LOOKING 
STATEMENTS" THAT ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS THAT 
COULD CAUSE ACTUAL RESULTS OR OUTCOMES TO DIFFER MATERIALLY FROM THOSE 
CONTEMPLATED BY THE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS IN 
THIS RELEASE ARE GENERALLY IDENTIFIED BY WORDS, SUCH AS "BELIEVES," 
"ANTICIPATES," "PLANS," "EXPECTS," "WILL," "WOULD," "GUIDANCE," "PROJECTS" AND 
SIMILAR EXPRESSIONS WHICH ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. 
THERE ARE A NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE THE RESULTS OR OUTCOMES 
DISCUSSED HEREIN TO DIFFER MATERIALLY FROM THOSE INDICATED BY THESE 
FORWARD-LOOKING STATEMENTS, INCLUDING, AMONG OTHERS, ADDITIONAL ERRORS IN THE 
FINANCIAL STATEMENTS, ADDITIONAL DIFFICULTIES IN COMPLETING THE YEAR-END AUDIT 
OF OUR FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005, AND 
INTERPRETATIONS OF ACCOUNTING PRINCIPLES WHICH MAY IMPACT THE AMOUNT OF REVENUES 
WHICH MAY BE RECOGNIZED BY CHORDIANT IN THE PERIODS REPORTED. FURTHER 
INFORMATION ON POTENTIAL FACTORS THAT COULD AFFECT CHORDIANT ARE INCLUDED IN 
RISKS DETAILED FROM TIME TO TIME IN CHORDIANT'S SECURITIES AND EXCHANGE 
COMMISSION FILINGS, INCLUDING, WITHOUT LIMITATION, CHORDIANT'S ANNUAL REPORT ON 
FORM 10-K/T FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004. THESE FILINGS ARE 
AVAILABLE ON A WEB SITE MAINTAINED BY THE SECURITIES AND EXCHANGE COMMISSION AT 
HTTP://WWW.SEC.GOV. CHORDIANT DOES NOT UNDERTAKE AN OBLIGATION TO UPDATE 
FORWARD-LOOKING OR OTHER STATEMENTS IN THIS 
RELEASE.


 

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

  
  
    Date:  December 6, 
      2005
     
    By: /s/ George de Urioste
      
George de Urioste
      
Chief Operating Officer and Chief Financial 
      Officer