UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM 10-K/A


(Amendment
No. 1)





(Mark
One)




x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934




For the
fiscal year ended December 31, 2008




or




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934




For the
transition period from ___________ to ___________




Commission
file number: 000-21522




WILLAMETTE
VALLEY VINEYARDS, INC.


(Exact
name of registrant as specified in its charter)





Oregon
            93-0981021(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer
              Identification
      No.)





8800
Enchanted Way, S.E.


Turner,
OR 97392


(Address
of principal executive offices)




Registrant’s
telephone number, including area code: (503) 588-9463





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





Securities
registered pursuant to Section 12(g) of the Act:


Common
Stock


(Title
of class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes o No x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act.  Yes o No x




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 o No x




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 or any
amendment to this Form 10-K. x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.




Large
accelerated filer o Accelerated
filer o Non-accelerated
filer o Smaller
reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).  Yes o No x




The
aggregate market value of common stock held by non-affiliates of the registrant
as of June 30, 2008 was approximately $24,979,184.




The
number of outstanding shares of the registrant’s Common Stock as of March 27,
2009 was 4,851,329.










DOCUMENTS
INCORPORATED BY REFERENCE




None












Willamette
Valley Vineyards, Inc.




FORM 10-K/A


(Amendment
No. 1)




TABLE
OF CONTENTS





PageExplanatory
      Note
            
            
            
            3PART
      IIItem
      9A
            
            Controls
      and Procedures
            
            4PART
      IIIItem
      10
            
            Directors,
      Executive Officers and Corporate Governance
            
            8Signatures
            
            
            
            10




2




EXPLANATORY
NOTE







This
Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Annual Report on
Form 10-K of Willamette Valley Vineyards, Inc. (the “Company”) for the fiscal
year ended December 31, 2008, originally filed with the Securities and Exchange
Commission (the “SEC”) on March 31, 2009 (the “Original Filing”). The purpose of
this Amendment is to provide additional disclosures with respect to the
information required under (i) Item 9A to Part II of Form 10-K, and (ii) Item 10
to Part III of Form 10-K. In addition, in accordance with the rules of the SEC,
we are including certain currently dated certifications with this
Amendment.




Except as
expressly set forth in this Amendment, we are not amending any other part of the
Original Filing. This Amendment continues to speak as of the date of the
Original Filing, and does not reflect events occurring after the filing of the
Original Filing or modify or update any related or other disclosures unless
expressly noted otherwise. Accordingly, this Amendment should be read in
conjunction with the Original Filing and with our other filings made with the
SEC subsequent to the filing of the Original Filing, including any amendments to
those filings. The filing of this Amendment shall not be deemed an admission
that the Original Filing when made included any untrue statement of a material
fact or omitted to state a material fact necessary to make a statement not
misleading.




3





PART
II





Item
9A.  Controls and Procedures.




Evaluation
of Disclosure Controls and Procedures




We
maintain disclosure controls and procedures that are designed to ensure that the
information required to be disclosed in the reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer/Controller as appropriate, to allow timely
decisions regarding required disclosure. In connection with the preparation of
this Annual Report on Form 10-K, our management carried out an evaluation, under
the supervision and with the participation of our CEO and CFO/Controller, as of
December 31, 2008, of the effectiveness of the design and operation of our
disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
and 15d-15(e) under the Exchange Act.  Based upon this evaluation, our
CEO and CFO/Controller concluded that our disclosure controls and procedures
were not effective as of December 31, 2008.  Management’s conclusion
was based on discoveries and observations made during the 2008 year-end audit in
conjunction with our independent audit firm, Moss-Adams
LLP.  Management identified the following material
weaknesses:




·
            Inadequate
      reconciliations of our general ledger cash balances to the balances per
      our bank statements.This
      material weakness was identified during the 2007 year-end audit by
      management and accounting staff present at the time of the audit, in
      conjunction with our independent auditors, Moss-Adams
      LLP.  During the course of the audit, several adjusting entries
      were necessary to properly reconcile the general ledger cash balance to
      the bank statements.





·
            Lack
      of sufficient procedures and controls related to our maintenance of our
      perpetual inventory records of in-state purchased wines.  This
      is mainly due to the loss of key project owners in accounting who were
      therefore unable to oversee the implementation. This material
      weakness was identified during the 2007 year-end audit by management and
      accounting staff present at the time of the audit, in conjunction with our
      independent auditors, Moss-Adams LLP. During the course of the audit, we
      tested our perpetual inventory costs by comparing costs as recorded in the
      system versus the supplier invoiced amount and multiple differences were
      discovered.





·
            Lack
      of sufficient procedures and controls related to the allocation of costs
      to our produced wines. This material weakness began when the Company
      modified its process for inventory cost allocation during the second
      quarter of 2008. This material weakness was identified during the 2008
      year-end audit by management and accounting staff present at the time of
      the audit, in conjunction with our independent auditors, Moss-Adams
      LLP.  During the 2008 year-end audit, key accounting personnel
      worked closely with independent audit staff to revise our inventory
      costing methods in an effort to remediate this
  weakness.





·
            Lack
      of adequate job sufficient accounting and finance personnel and
      transition/training of personnel responsible for preparation and review of
      such reconciliations, records, and allocations. This material weakness
      began when a key accounting resource terminated their employment with the
      Company during the third quarter of 2008. This material weakness was
      identified during the 2008 year-end audit by management and accounting
      staff present at the time of the audit, in conjunction with our
      independent auditors, Moss-Adams LLP.    The Company
      is actively pursuing the permanent and temporary resources necessary to
      remediate this deficiency in an effort to remediate this
      weakness.





4





Management’s
Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Our internal control over financial reporting
is a process designed to provide reasonable assurance regarding the reliability
of our financial reporting and the preparation of our financial statements for
external purposes in accordance with generally accepted accounting principles.
Internal control over financial reporting is defined in Rules 13a-15(f) and
15d-15(f) promulgated under the Exchange Act and includes those policies and
procedures that: (a) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets; (b) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and (c) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on our
financial statements. All internal controls, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.




Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2008. In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) in Internal Control – Integrated
Framework.  In performing this assessment, management
identified the following material weaknesses:





·
            Inadequate
      reconciliations of our general ledger cash balances to the balances per
      our bank statements.This
      weakness was identified during the 2007 year-end audit by management and
      accounting staff present at the time of the audit, in conjunction with our
      independent auditors, Moss-Adams LLP.  Management has difficulty
      discerning when this material weakness first began due to the turnover in
      key accounting personnel during 2007. It is management’s best estimate
      that this weakness likely existed since the first quarter of
      2007.





·
            Lack
      of sufficient procedures and controls related to our maintenance of our
      perpetual inventory records of in-state purchased wines.  This
      weakness was identified during the 2007 year-end audit by management and
      accounting staff present at the time of the audit, in conjunction with our
      independent auditors, Moss-Adams LLP.  Management believes this
      material weakness began at the point of an order fulfillment system
      conversion that was not properly managed prior to and during
      implementation. This is mainly due to the loss of key project owners in
      accounting who were therefore unable to oversee the
      implementation.





·
            Lack
      of sufficient procedures and controls related to the allocation of costs
      to our produced wines. This weakness was identified during the 2008
      year-end audit by management and accounting staff present at the time of
      the audit, in conjunction with our independent auditors, Moss-Adams
      LLP.  This material weakness began when we converted our process
      for inventory cost allocation during the second quarter of 2008. During
      the 2008 year-end audit key accounting personnel worked closely with
      independent audit staff to revise our inventory costing
      methods.





·
            Lack
      of adequate job sufficient accounting and finance personnel and
      transition/training of personnel responsible for preparation and review of
      such reconciliations, records, and allocations. This weakness was
      identified during the 2008 year-end audit by management and accounting
      staff present at the time of the audit, in conjunction with our
      independent auditors, Moss-Adams LLP.  This material weakness
      began when a key accounting resource terminated their employment with the
      Company during the third quarter of 2008.  The Company is
      actively pursuing the permanent and temporary resources necessary to
      remediate this deficiency.





Based on
its assessment, our management concluded that, as of December 31, 2008, our
internal control over financial reporting was not
effective.  Management believes that these material weaknesses have
not affected our ability to present GAAP-compliant financial statements in this
Form 10-K.  During the independent audit review we were able to
recognize and adjust our financial records to properly present our financial
statements and we were thefore able to present GAAP-compliant financial
statements.  Management does not believe that its weaknesses with
respect to its procedures and controls have had a pervasive effect upon our
financial reporting and the overall control environment due to our ability to
make the necessary reconciling adjustments to our financial
statements.




5




The
reconciling adjustments posted to our 2008 closing trial balance were identified
by both the company’s internal accounting personnel and our auditors after our
closing trial balance was provided to our auditors for their final fieldwork in
February. Of the adjustments posted during this period, one was deemed to be a
significant fourth quarter adjustment and was disclosed in Footnote 14 of our
2008 financial statements.   This adjustment, which increased
cost of goods sold and decreased ending inventory by $140,540 for the allocation
of certain produced wine expenditures to the cost of goods sold, was identified
by our auditors.  The other significant fourth quarter adjustment
disclosed in Note 14 of our 2008 financial statements for the adjustment of
inventory for our year-end physical count was identified by management prior the
time our closing trial balance was provided to our
auditors.   There were other insignificant adjustments identified
by both management and our auditor after the commencement of the audit final
fieldwork.




Given the
reconciling adjustments posted during the year-end financial statement close,
combined with the year-end physical inventory adjustment, we undertook an
evaluation of the underlying causes of these errors, including an evaluation the
accounting and finance personnel, in connection with our assessment of the
effectiveness of internal control over financial reporting at December 31,
2008.   We expanded the scope of the related reconciliations and
as well as additional analysis of other accounts in light of the material
weaknesses identified.  We believe the additional procedures performed
by management subsequent to the commencement of our auditors fieldwork, but
prior to the filing of our Form 10-K mitigated the risk of material misstatement
in the financial statements.




This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management’s report in this
annual report.





Management’s
Remediation Initiatives





In
addition to the remediation efforts specifically discussed above, management has
commenced a number of initiatives to address the materials weaknesses noted
above, including the following:





Management
has engaged experienced resources in the first quarter of 2009 to ensure that a
process design is created and implemented with proper training of accounting
personnel.





Management
has determined that additional education and proper system training of personnel
in the wholesale inventory department is required.  In the first
quarter 2009 the Company has brought in a qualified instructor/trainer to work
closely with the end users in this department.  This training is meant
to effectively ensure that they have the proper system training and education to
properly adjust inventory cost based on invoice
pricing.  Additionally, more training is being scheduled in Q2 2009 on
purchasing and inventory control.





Management
is undertaking a review of its cash reconciliation and inventory costing
processes and intends to revise the related daily and period end cash
reconciliation and inventory procedures, controls and review.





Key
managers and accounting personnel will work closely with our independent audit
firm in evaluating our progress in remediating our material weaknesses with
oversight by the audit committee.





Elements
of our remediation plan can only be accomplished over time and we can offer no
assurances that those initiatives will ultimately have the intended
effects.





6




Management
will continue the process of reviewing existing controls, procedures and
responsibilities to more closely identify financial reporting risks and the
required controls to address them.  Key control and compensating
control procedures will be developed to ensure that material weaknesses are
properly addressed and related financial reporting risks are mitigated. Periodic
control validation and testing will also be implemented to ensure that controls
continue to operate consistently and as designed.





Changes
in Internal Control over Financial Reporting





In 2008
the Company revised the procedures for accounts receivable and the related cash
receipts posting.  Additionally, the accounts receivable aging is
reviewed carefully for outstanding invoices and customer account statements sent
out timely.  This has greatly improved the accuracy of our outstanding
accounts receivable.  Also, in 2008 the Company’s Senior Accountant
resigned and to date has not been replaced.  The Company has relied on
contract accounting resources to help manage the period end accounting
activities.  There have not been any other changes in the Company’s
internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s fourth
fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial
reporting.





7




PART
III





Item
10.  Directors, Executive Officers and Corporate
Governance.





Directors,
nominees for election as a director, and each such person’s age at December 31,
2008 and position with the Company.





Name
            
            Position(s) with the
      Company
            
            AgeJames
      W. Bernau ***
            
            Chairperson
      of the Board, President and Director
            
            55James
      L. Ellis ***
            
            Secretary
      and Director
            
            64Jeffrey
      J. Fox
            
            Chief
      Financial Officer and Controller
            
            44Sean
      M. Cary
            
            Director
            
            35Thomas
      M. Brian **
            
            Director
            
            60Delna
      L. Jones * ***
            
            Director
            
            68Craig
      Smith **
            
            Director
            
            62Betty
      M. O’Brien *
            
            Director
            
            64Stan
      G. Turel * ** ***
            
            Director
            
            61




_______________________________


*Member
of the Compensation Committee


**Member
of the Audit Committee


***Member
of the Executive Committee





All
directors hold office until the next annual meeting of shareholders or until
their successors have been elected and qualified.  Executive officers
are appointed by the Board of Directors and serve at the pleasure of the Board
of Directors.  Set forth below is additional information as to each
director and executive officer of the Company.





James W.
Bernau.  Mr. Bernau has been President and Chairperson of the
Board of Directors of the Company since its inception in May
1988.  Willamette Valley Vineyards was originally established as a
sole proprietorship by Oregon winegrower Jim Bernau in 1983, and he co-founded
the Company in 1988 with Salem grape grower, Donald Voorhies.  From
1981 to September 1989, Mr. Bernau was Director of the Oregon Chapter of the
National Federation of Independent Businesses (“NFIB”), an association of 15,000
independent businesses in Oregon. Mr. Bernau has served as the President of the
Oregon Winegrowers Association and the Treasurer of the association’s Political
Action Committee (PAC) and Chair of the Promotions Committee of the Oregon Wine
Advisory Board, the State of Oregon’s agency dedicated to the development of the
industry.  In March 2005, Mr. Bernau received the industry’s Founder’s
Award for his service.





James L.
Ellis.  Mr. Ellis has served as a Director since July 1991 and
Secretary since June 1997.  Mr. Ellis has served as the Company’s
Director of Human Resources from January 1993, and Vice President /Corporate
since 1998.  From 1990 to 1992, Mr. Ellis was a partner in Kenneth L.
Fisher, Ph.D. & Associates, a management-consulting firm.  From
1980 to 1990, Mr. Ellis was Vice President and General Manager of R.A. Kevane
& Associates, a Pacific Northwest personnel-consulting firm.  From
1962 to 1979, Mr. Ellis was a member of and administrator for the Christian
Brothers of California, owner of Mont La Salle Vineyards and producer of
Christian Brothers wines and brandy.





Jeffrey J.
Fox.  Mr. Fox has been Chief Financial Officer and Controller
since October 2007.  Previously, from 2006 to 2007, Mr. Fox served as
the Chief Financial Officer for Traeger Pellet Grills LLC based in Wilsonville,
Oregon.  The principal business of Traeger Pellet Grills LLC is the
manufacturing and distribution of barbecue grills.  From 2005 to 2006
he served as Analysis Manager and acting Controller for the Georgia-Pacific
paper mill based in Bellingham, Washington.  The principal business of
Georgia-Pacific is the manufacturing of consumer paper products. Prior to that,
from 2001 to 2005, he served as Controller for Georgia-Pacific Northwest
Handling Division located in Portland, Oregon. The principal business of
Georgia-Pacific Northwest Handling Division is the distribution of
Georgia-Pacific brand consumer paper products.  None of the foregoing
organizations are a parent, subsidiary or other affiliate of the
Company.  Mr. Fox holds a Bachelor of Science Degree in Finance from
Oregon State University.





8




Sean M. Cary.  Mr.
Cary was elected to the Board of Directors in 2007.  Mr. Cary is the
Corporate Controller of National Warranty Corporation, a Eugene, Oregon based
provider of finance and insurance products sold through automobile dealers
located in the Pacific Northwest.  Previously, Mr. Cary served as the
CFO of Cascade Structural Laminators, a laminated bean manufacturer
headquartered in Eugene, Oregon and prior to that as Controller of Willamette
Valley Vineyards.  Mr. Cary served in the U.S. Air Force as a
Financial Officer.  Mr. Cary holds a Master of Business Administration
degree from the University of Oregon and a Bachelor of Science Degree in
Management from the U.S. Air Force Academy.





Thomas M.
Brian.  Mr. Brian was appointed to the Board of Directors in
June of 2004.  Mr. Brian has served as Chairman of the Washington
County Board of Commissioners since 1999.  Previously, he served for
10 years in the Oregon House of Representatives.  While in the
legislature, Mr. Brian was Chairman of the Revenue Committee and served on the
Judicial and Ways and Means Committees. He also served 10 years as City
Councilor and Mayor of Tigard, OR.  Mr. Brian has successfully owned
and operated a commercial/industrial real estate company for eighteen
years.





Delna L.
Jones.  Ms. Jones has served as a Director since November 1994.
Ms. Jones resigned from the Board in December of 2002 having moved to Southern
California and was reappointed by the Board in March of 2005 having returned to
Oregon.  Currently Ms. Jones is President of Delna Jones and
Associates, an independent consulting firm.  Ms. Jones was elected in
1998 and served as a County Commissioner for Washington County, Oregon from 1998
to 2000.  Ms. Jones has served as project director for the CAPITAL
Center, an education and business consortium from 1994 to 1998.  From
1985 to 1990, Ms. Jones served as Director of Economic Development with US West
Communications.  Beginning in 1982, she was elected six times to the
Oregon House as the State Representative for District 6.  During her
tenure, she served as the Assistant Majority Leader; she also chaired the
Revenue and School Finance committee,and served on
the Legislative Rules and Reorganization committee and the Business and Consumer
Affairs committee.





Craig Smith, CPA, MBA, JD.
Mr. Smith has served as a Director since October 2007.  Mr. Smith is
the Vice President/Chief Financial Officer of Chemeketa Community College in
Salem, Oregon.  He was an Adjunct Professor at the Atkinson Graduate
School of Management at Willamette University, as well as Managing Partner of a
large local CPA firm.  He has served on many State of Oregon
commissions and he has served as the Board Chairperson for many of the local
non-profit and educational institutions including the Salem Keizer School Board,
Chemeketa Community College Board of Education, State Fair Dismissal Appeals
Board, Mid-Willamette Valley Council of Governments, Oregon School Boards
Association and the United Way.  Mr. Smith is an active member of the
Oregon State Bar and a Certified Public Accountant. Mr. Smith is an independent
director as defined under NASDAQ rules.





Betty M.
O’Brien.  Ms. O’Brien has served as a Director since July 1991.
Ms. O’Brien is co-owner of Elton Vineyards L.L.C., a commercial vineyard located
in Eola Hills in Yamhill County, Oregon and established in 1983.  Ms.
O’Brien was the Executive Director of the Oregon Wine Board from 2001 to
2004.  Ms. O’Brien was employed by Willamette University as its
Director of News and Publications from 1988 to 2000.  She is a member
of the Oregon Winegrowers Association, having previously served as its President
and Treasurer and as a director.  Ms. O’Brien is a member of the
Vineyard Management/Winemaking Program Advisory Committee at Chemeketa Community
College (CCC). She headed a wine industry task force developing a new wine
marketing program and curriculum leading to a two-year degree at
CCC.  She now teaches Introduction to Wine Marketing.  She
serves as Chair of the Board of Directors of LIVE (Low Input Viticulture and
Enology).





Stan G. Turel.  Mr.
Turel has served as a Director since November of 1994. Mr. Turel is President of
Turel Enterprises, a real estate management company managing his own properties
in Oregon, Washington and Idaho. Prior to his current activities, Mr. Turel was
the Principal and CEO of Columbia Turel, (formally Columbia Bookkeeping, Inc.) a
position which he held from 1974 to 2001. Prior to the sale of the company to
Fiducial, one of Europe’s largest accounting firms, Columbia had 26,000 annual
tax clients including 4,000 small business clients. Additionally Mr. Turel
successfully operated as majority owner two cable TV companies during the 80’s
and 90’s which were eventually sold to several public corporations. Mr. Turel is
a pilot, was a former delegate to the White House Conference on Small Business
and held positions on several state and local Government
committees.




9





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.






WILLAMETTE
      VALLEY VINEYARDS, INC.(Registrant)By
              /s/
      James W. BernauJames
      W. Bernau,Chairperson
      of the Board, PresidentDate:
      January 25, 2010




10