SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* NightWatch Capital Management, LLC (Last) (First) (Middle) 3311 NORTH UNIVERSITY AVENUE SUITE 200 (Street) PROVO UT 84604 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol KANA SOFTWARE INC [ KANA ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)
	3. Date of Earliest Transaction (Month/Day/Year) 10/25/2005
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	10/25/2005		P		338,443	A	$1.3188(5)(6)	5,406,914	I	See Footnote(1)(2)(3)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Common Stock (Warrant right to buy)	$1.978(5)(7)	10/25/2005		P		121,840		04/25/2006	10/25/2010	Common Stock	121,840	$1.3188(5)(6)	1,589,689(7)	I	See Footnote(2)(3)(4)

Explanation of Responses:

1. The shares of Common Stock to which this note relates are held directly by NightWatch Capital Partners, L.P., a Delaware limited partnership (?NWCP?), with respect to 2,909,470 shares of Common Stock, and NightWatch Capital Partners II, L.P., a Delaware limited partnership (?NWCP II? and collectively with NWCP, the ?NW Funds?), with respect to 2,497,444 shares of Common Stock.

2. NightWatch Capital Advisors, LLC (the ?Investment Manager?) serves as investment manager to, and has investment discretion over, the securities held by the NW Funds. NightWatch Capital Management, LLC (the ?General Partner?) serves as the general partner of, and has investment discretion over, the securities held by the NW Funds.

3. John Nemelka is the managing member of the managing member of the managing member of the managing member of the managing member of the General Partner. Each managing member and the General Partner understand that by reason of Rule 16a-1 of the Securities Exchange Act of 1934, as amended (the ?Exchange Act?) each may be deemed to be the beneficial owners of the Common Stock of Kana Software, Inc. held by the NW Funds, although each disclaims beneficial ownership of such Common Stock except to the extent of any indirect pecuniary interest (within the meaning of Rule 16a-1 of the Exchange Act) therein in an indeterminate portion of the Common Stock beneficially owned by the NW Funds.

4. The Warrants to which this note relates are held directly by NWCP (exercisable for 869,910 shares of Common Stock) and by NWCP II (exercisable for 719,779 shares of Common Stock).

5. Per share, subject to certain adjustments for anti dilution protection.

6. The Warrants and Common Stock to which this note relates were originally purchased as part of units, pursuant to a Stock Purchase Agreement (the ?Agreement?), for $1.5227 per unit. Pursuant to the terms of the Agreement, the Common Stock and Warrants acquired on October 25, 2005, are being issued in order to bring the units purchased pursuant to the Agreement to an adjusted price of $1.3188 per unit.

7. 679,808 of the Warrants reflected in Column 9 of Table II have a conversion or exercise price of $2.452 per share, subject to certain adjustments for anti-dilution protection.

Remarks:

	/s/ John Nemelka	10/26/2005
	** Signature of Reporting Person	Date
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