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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K







|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the Fiscal Year Ended December 25, 2009

OR



| ̈ | 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: 000-31715





Jagged Peak,
Inc.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 91-2007478                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|3000 Bayport Drive, Suite 250, Tampa Florida                   |  | 33607                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (813) 637-6900





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

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

Title of each class:

Common Stock, par value $.001 per share





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

Indicate by check mark whether the issuer is not required to file reports pursuant to section 13
or 15(d) of the Exchange Act.   ̈

Indicate by check mark whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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.    x  YES     ̈  NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulations S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.     ̈  Yes     ̈  No

Indicate by check mark if disclosure of delinquent filers to Item 405 of Regulation S-K is not contained in 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 |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  | (Do not check if a smaller reporting company)   ̈ |  | 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   ̈    No  x

Aggregate market value of the voting stock held by non-affiliates of the registrant was
$2,124,600, based on $0.145 per share, the registrants common stock at June 26, 2009.

There were 16,020,961 shares of the
registrants common stock outstanding as of March 9, 2010.









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Jagged Peak, Inc.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED

DECEMBER 25, 2009

TABLE OF CONTENTS



|           |  |             |  |                                                                                                              |  |   
|---------- |  | ----------- |  | ------------------------------------------------------------------------------------------------------------ |  | --
|PART I     |  |             |  |                                                                                                             
|           |  | Item 1.     |  | Business                                                                                                     |  | 1 
|           |  | Item 1A.    |  | Risks Factors                                                                                                |  | 5 
|           |  | Item 1B.    |  | Unresolved Staff Comments                                                                                    |  | 10
|           |  | Item 2.     |  | Properties                                                                                                   |  | 10
|           |  | Item 3.     |  | Legal Proceedings                                                                                            |  | 10
|           |  | Item 4.     |  | Submission of Matters to a Vote of Security Holders                                                          |  | 11
|           |  |            
|PART II    |  |             |  |                                                                                                             
|           |  | Item 5.     |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 11
|           |  | Item 6.     |  | Selected Financial Data                                                                                      |  | 11
|           |  | Item 7.     |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 11
|           |  | Item 7A.    |  | Quantitative and Qualitative Disclosures about Market Risk                                                   |  | 18
|           |  | Item 8.     |  | Financial Statements and Supplementary Data                                                                  |  | 19
|           |  | Item 9.     |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 41
|           |  | Item 9A(T). |  | Controls and Procedures                                                                                      |  | 41
|           |  | Item 9B.    |  | Other Information                                                                                            |  | 41
|           |  |            
|PART III   |  |             |  |                                                                                                             
|           |  | Item 10.    |  | Directors, Executive Officers and Corporate Governance                                                       |  | 42
|           |  | Item 11.    |  | Executive Compensation                                                                                       |  | 43
|           |  | Item 12.    |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 46
|           |  | Item 13.    |  | Certain Relationships and Related Transactions, and Directors Independence                                  |  | 48
|           |  | Item 14.    |  | Principal Accountants Fees and Services                                                                      |  | 48
|           |  | Item 15.    |  | Exhibits and Financial Statement Schedules                                                                   |  | 48
|           | 
|SIGNATURES |  | 51         



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PART I

This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. The Company has based these forward-looking statements on the Companys current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and
assumptions about us and the Companys subsidiaries that may cause the Companys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as may, will, should, could, would,
expect, plan, anticipate, believe, estimate, continue or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a material
difference include, but are not limited to, those discussed elsewhere in this Annual Report, including the section entitled Risks Particular to the Companys Business and the risks discussed in the Companys other Securities
and Exchange Commission filings. The following discussion should be read in conjunction with the Companys audited Financial Statements and related Notes thereto included elsewhere in this report.



|Item 1. | Business
|------- | --------

OVERVIEW

Jagged Peak, Inc. (the Company or Jagged Peak) is an e-business software and services company headquartered in Tampa, Florida,
providing Demand and Supply Chain management, CRM execution and e-Fulfillment solutions and services. The Companys flagship product, EDGE (E-Business Dynamic Global Engine), is a web-based software application that enables companies to control
and coordinate multi-channel orders, catalogs, multi-warehouse inventories, and fulfillment across multiple customers, suppliers, employees, and partners in real-time. The Company enables clients to build and operate custom branded portals such as
e-commerce, incentive and rebate programs, customer service, repair and reverse logistics, marketing materials management, and automate other business processes through the use of the EDGE application and its related tools. The EDGE platform has
been deployed in multiple vertical markets such as consumer goods, financial services, distribution, travel and tourism and manufacturing.

Jagged Peaks multi-channel, enterprise EDGE application provides a comprehensive, integrated platform for e-business management that supports a broad range of business and operational applications. Clients can use EDGE as an
enterprise application or as an integrator and consolidator for multiple businesses, processes and applications. EDGE has built in tools to extend the application which enables clients to create complex and robust e-commerce, CRM related customer
services and repair and reverse logistics solutions. The EDGE application permits users to manage order capturing, processing, tracking, fulfillment, settlement, creating, and managing dynamic catalogs, customer relation management, marketing and
reporting, all in real-time application. The EDGE application is built to industry-standard best practices. The application has been integrated seamlessly with legacy and back-office management systems as well as industry leading ERP, WMS, TMS and
CRM software systems. In addition to the traditional software license sales model, Jagged Peak offers its software with a flexible managed services transaction based pricing model.

Jagged Peak provides outsourced e-commerce and supply chain solutions that enable manufacturers, distributors, and consumer brand companies the ability to quickly and cost effectively establish and
operate a direct to customer online business that is fully integrated with their offline sales channels. Jagged Peaks proven solutions provide companies the tools, expertise, infrastructure and scalability they need to create and maximize
their direct to customer sales channel potential without the risk and burden of managing it themselves. The Company uniquely provides companies the benefit of maintaining complete control of the channel, ownership of the customer relationship and
retention of the gross product margin normally lost to distributors, resellers and other trading partners.

Jagged Peak recently announced the
launch of TotalCommerce, a solution that includes everything a company needs to quickly and cost effectively launch a fully operational, best practices direct to consumer sales channel in less than 60 days. TotalCommerce is an outsourced
managed services solution that leverages Jagged Peaks extensive technology and supply chain infrastructure and provides manufacturers with a turnkey, rapidly deployable solution including e-commerce webstore(s); order, inventory
and transportation management software; a nationwide network of fulfillment centers; back office program management; and a range of online marketing services.

Jagged Peak has a network of independently owned fulfillment warehouses throughout North America that enables its clients to provide better service to their customers, while lowering their overall
delivery costs. The EDGE application is able to automatically route the orders to the optimal warehouse based on an established set of factors such as service, cost and priority. This enables our clients to achieve their customer service goals while
reducing cost and internal infrastructure.

In July 2009, Jagged Peak began operations in Canada through its wholly owned subsidiary, Jagged
Peak Canada, Inc. The operations provide similar services as in the United States through a network of independently owned fulfillment warehouses, which are managed through technology provided by Jagged Peak, Inc.



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In addition to application software and demand execution, Jagged Peak also focuses on e-marketing and
e-channel management to provide a holistic e-commerce solution for its clients. The Companys approach to e-marketing is to build marketing programs and systems that elevate clients sites to be viewed by leading search engines as
authorities within a particular product niche or keyword search term. Our services help companies excel in online retailing through the management, development, and optimization of e-commerce stores. Jagged Peaks e-marketing
Services achieve superior results by utilizing a mix of traditional and emerging strategies and industry best practices. The Companys e-channel management services help protect clients online pricing and intellectual property policies by
utilizing an automated system and business process to identify, notify and potentially enforce violations. Jagged Peaks holistic approach to e-commerce provides its clients with assurance that their e-business is performing at its highest
level.

There are a variety of risks associated with the Companys ability to achieve strategic objectives, including the ability to
increase market penetration, acquire and profitably manage additional businesses, current reliance on key customers, the risks inherent in expanding, and the intense competition in the industry. For a more detailed discussion of these risks, see the
section of this Item 1 entitled Risks Particular to the Companys Business.

INDUSTRY OVERVIEW

According to most market indicators, e-commerce sales continue to grow at a rapid pace. Many industry analysts predict strong e-commerce growth rates to
continue in the U.S., with even higher expected growth rates in European and Asia-Pacific markets. There are a number of growth factors to be considered: (i) continued adoption of the Internet as a means of commerce; (ii) increase in users
with high speed internet connection, which enables providers to create more interactive and customer specific web portals; (iii) Internet users like the convenience of buying products online and the ability to have that product delivered to
their destination of choice; (iv) enhancements to online store functionality, enabling not only the user additional purchase options, it also enables sellers ability to quickly take advantage of market fluctuations through immediate price
changes and adjustments to sales promotions; (v) the sellers are able to better track customer buying habits and Internet activity, which enables them to focus marketing efforts and costs on the ideal customer group; and (vi) businesses
are placing increased emphasis on their online business.

Despite the fact that large companies have become more reliant on sophisticated
software applications to run their businesses, many enterprises have been dissatisfied with the return on their investments. Deploying new business applications and keeping them up and running has taken them more time, effort and money than
anticipated. Most companies today have a variety of order management systems, which are segregated based on different channels, verticals, and/or lines of business. Each system typically has different workflows and order cycles to accomplish the
requirements of the business. This leads to a lack of visibility into customer interactions across the enterprise, and an inability to optimize orders across multiple order systems. For most companies, managing order-to-delivery is largely a manual
process that requires numerous staff to pull information from multiple systems and coordinate order fulfillment with suppliers and logistics providers using phone, fax, e-mail, and Electronic Data Interchange (EDI) messages. These manual systems are
expensive to manage, error-prone, not scalable, and typically break down under the real-time demands and compressed business cycles of todays environment.

COMPETITIVE ADVANTAGES

The Company provides a suite of services to help businesses
worldwide grow their revenues and avoid the costs and risks associated with running a global technology operation in-house. The Company provides vertically integrated e-business solutions that include e-commerce, order management, CRM, digital and
physical product fulfillment, e-mail marketing, business process automation and strategic marketing services. At the core of these services is the Companys proprietary EDGE software. The EDGE application provides a complete multi-channel,
multi-distribution center, multi-enterprise, highly functional software solution that can be deployed in minimal time, requires a lower upfront purchase cost or activation fee, and is easy to use and maintain. As a result, Jagged Peak believes it is
able to deliver a complete enterprise commerce management software solution faster and at a lower cost than the competition. Jagged Peak offers its clients an end-to-end web based order management software solution that has a compelling
return-on-investment proposition that is the result of an attractive and flexible transaction-based pricing model coupled with reduced implementation requirements. The Company believes its EDGE application maintains additional advantages relative to
the competition such as complete web-native architecture, platform or vendor independence, highly scalable solution, role-based hierarchical security, real-time order visibility and ease of use. We believe that we are uniquely positioned to assist
our clients accelerate and manage their growth.

Jagged Peaks web to fulfillment services is what makes the Company unique. Orders
captured through the order portal may be processed directly through the EDGE application (no FTP process) and transmitted to Jagged Peaks warehouse management system in real time for order processing. Transaction data contains all necessary
information and instructions to facilitate a fully executable order. This frictionless processing environment ensures prompt and accurate order fulfillment and data integrity. Order status, inventory activity and carrier
shipping manifest data will be automatically uploaded from Jagged Peaks Warehouse and Transportation management systems to EDGE. Clients may view and download activity information from the EDGE user interface in Excel format.



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GROWTH STRATEGY

The Companys growth strategy includes:



| |  | Increasing Market ShareJagged Peak believes that it can leverage its success with existing clients to obtain new clients.
The Company has a proven ability to add new client relationships by utilizing its scalable business model to increase its client base while maintaining its ability to provide a high quality software product.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, the Company believes that current clients will continue to increase their spending on technology solutions in an effort to update legacy order
capture and order management applications that are no longer efficient and will ultimately become obsolete. Jagged Peak expects that its growing number of new client relationships, combined with its proven ability to expand its revenue base with
existing clients, will enable the Company to capture a greater portion of its clients global outsourced e-commerce related expenditures.

Jagged Peak believes that significant opportunities exist to leverage its current client base to increase its penetration in attractive end markets such as consumer retail, financial services & insurance, healthcare &
pharmaceutical, travel & tourism, general manufacturing, and government.



| |  | Developing Brand RecognitionThe Company must continue to incur expenses to develop the brand of Jagged Peak and
EDGE. The Company intends to leverage the Companys broader set of capabilities with the goal of capturing business opportunities, which would not normally be available to smaller companies.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Expanding EDGE Application OfferingsJagged Peak has a proven ability to identify and develop new applications for its EDGE product
offering to meet the needs of the marketplace. The Company plans to continue to diversify its EDGE software platform by adding capabilities such as demand forecasting, marketing data mining, analytical tools and communications, as well as
multi-vendor selection and permissions for purchasing and procurement.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Expanding the Sales Force and Investment in MarketingJagged Peak has achieved an impressive customer base without the efforts of a
large dedicated sales force. Client referrals and prior client relationships have fueled the growth of the Company to date. Management believes, however, in order to fully capitalize on the market opportunity, a direct sales force and marketing
organization needs to be established and complimented with focused channel partners. The Company began to recruit direct salespeople with enterprise software sales experience and long-standing relationships in various targeted vertical markets in
2007. The Company has not recognized a significant benefit from those efforts; however it will continue its efforts to build an impactful sales and marketing organization.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Future Software Product DevelopmentThe EDGE application was first released in January of 2000 and has been under continual
development. Significant functionality has been added over the years and the current product is highly functional and robust, yet easy to use and rapidly deployed. Features have been added based on real world demand from clients. The Company plans
to continuously invest in and enhance the EDGE product.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Mergers and Acquisitions Jagged Peak has a strong management team with extensive experience in mergers and acquisitions. The
Company is looking for strategic acquisitions that will expand Jagged Peaks web-based technology services and its clientele.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

OPERATIONS AND SERVICES

Software Product and Technology

Jagged Peaks proprietary EDGE application is a highly scalable e-business platform that empowers companies to effectively conduct business and communicate with their customers, vendors, suppliers,
employees and distribution partners. The EDGE application is a web-based, end-to-end transaction processing and information management system that enables companies to achieve complete automation and total integration of their demand management,
e-business and related processes. EDGE is comprised of integrated modules that work together seamlessly in real-time.



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Custom Software Development

Jagged Peak offers proficiency and demonstrated capability in all aspects of custom software development, which typically is integrated into our EDGE application. We can confidently provide consulting,
analysis, design and architecture, computer programming and development, installation and long term technical support.

Fulfillment
Services

Jagged Peak leads its sales and marketing of new business development efforts with its EDGE application. It also offers customers
a complete turnkey solution, if desired, which can include both physical and digital fulfillment services. EDGE is used for our fulfillment, which includes reporting, warehouse optimization, order fulfillment, return authorizations, back order
processing, and full transaction auditing capabilities.

E-marketing Services

Jagged Peak utilizes a mix of traditional and emerging strategies and techniques to elevate our clients sites to be viewed by leading search engines as
authorities within a particular product niche so as to build high quality, sustainable traffic. The Companys team of industry experts determines the most advantageous strategy to enhance websites overall optimality.

Hosting and Managed Services (ASP)

Jagged Peaks hosting and managed services (ASP) transaction pricing model provides a strong recurring revenue stream for the Company as it builds its customer base. Managed services contracts are typically three years in length with
minimum transaction volumes guaranteed. The managed services model provides a lower initial cost, a turnkey outsourced solution with a very rapid path to deployment, which requires less of our clients internal resources.

INFORMATION SYSTEMS

A key component of the
Jagged Peak growth strategy is the significant capital, planning and corporate intelligence that is deployed towards technology as we deliver our solution primarily through the EDGE application. To remain competitive, we must continue to enhance and
improve the responsiveness, features and functionality of the EDGE application and the underlying network infrastructure. We are continuously working to improve our infrastructure, core applications and software products.

EDGE is a highly available, scalable platform that is designed to handle an unlimited number of stores and products. An EDGE cluster consists of a
configurable number of redundant web servers configured to J2EE standards that serve data from a cluster of Microsoft SQL or similar database servers. Part of our standard architecture includes the use of a sophisticated database configured and
designed to maintain flexibility and speed. Due to the programming architecture and network design of the EDGE platform, it can seamlessly be extended with additional modules and components. The EDGE administrative system allows instantaneous system
wide changes to be implemented and administrated by the end user to support rapid response to industry changes, including business logic changes, payment processing changes, warehouse and logistics concerns, requirements for taxes, and pricing
rules. EDGE allows the end user to create dynamic, time sensitive business rules to control what items are available to specific users, based upon a highly configurable set of data. EDGE also supports real time based transactions in all instances as
opposed to a batching process, enabling our clients inventory and orders to have real-time accuracy and to be in synch with external systems.

Our environment architecture consists of multiple layers to ensure smooth operation with minimal interruption. By co-locating our mission critical systems, we enable ourselves to separate our web accessible systems from those that support
our internal functions. Each network is protected using industry standard encryption, authentication, firewalls, and anti-virus software. With dependant clients spanning the entire globe, state of the art monitoring is used to provide alerting,
logging, and the timely notifications needed to support a twenty-four hour, three hundred and sixty-five day operation. Whenever possible we continue to improve and implement the latest in best-practices to ensure that our system infrastructure
remains current and up-to-date, allowing us to keep sensitive information safe and our systems secure while meeting the changing demands of our clients and an always evolving industry.

In executing this strategy, the Company has and will continue to invest significant management and financial resources to deliver these technologies. The Company believes these technologies will provide
financial and competitive advantages in the years ahead and will increase our sustainable competitive advantages in the marketplace.

CUSTOMERS, SALES AND MARKETING

Jagged Peaks EDGE application addresses the large market opportunity for e-commerce
software applications that can integrate across Supply Chain Management (SCM) and Customer Relationship Management (CRM) systems. Since 2000, the generally accepted definition of SCM has expanded to include all applications relating to demand
management, e-commerce, and order execution. Many companies today are trying to cost effectively and rapidly web enable their legacy order managements systems.



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Larger corporations have many departments, divisions, or subsidiary companies that are seeking to optimally
manage their demand chain. In general, companies are attempting to enhance communications and create more efficient business processes and visibility within an enterprise and across customers, vendors, suppliers or other external relationships. EDGE
facilitates the integration of multiple applications across the Web, while providing companies a way to effectively manage transactions of every nature with multiple parties. The market for SCM software is expected to be more than $3 billion in the
next few years. Factors contributing to the historical and projected growth in the SCM software market include: increased emphasis on the customer  and supplier-centric approach to managing revenues and expenses, increasing profits, and
expanding overall competitive positioning. In addition, current economic conditions have increased companies requirements for short-term Return-On-Investment (ROI) and proof of value.

A significant portion of the Companys revenue comes from a few customers. (See Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations, Critical Accounting Policies, Concentration of Risk.)

SEASONALITY

Historically, the Companys revenues and profitability have been subject to moderate quarterly seasonal trends. The first quarter has traditionally been
the weakest and the fourth quarter has traditionally been the strongest. Typically, this pattern has been the result of factors such as, national holidays, customer demand and economic conditions. Additionally, significant portions of the
Companys revenues are from clients whose business levels are impacted by seasonality and the economy.

PERSONNEL

At December 25, 2009, the Company had approximately 95 full time employees. At this time, none of the Companys employees are covered by a
collective bargaining agreement. The Company recognizes the employees as one of its most valuable asset and provides above industry average compensation and benefits. The recruitment, training and retention of qualified employees are essential to
support continued growth and to meet the service requirements of our clients.

RISK MANAGEMENT

The Company maintains general liability, errors and omissions, property, property of others and workers compensation insurance. The Company could incur
claims in excess of the policy limits or incur claims not covered by the insurance policy.

CORPORATE INFORMATION

Compass Marketing Services, Inc. (Compass), a Florida corporation, was formed in 1990. On August 22, 2000, Compass merged with IBIS Business
Internet Solutions, Inc., a Florida corporation, in a merger of equals and amended its name to Jagged Peak, Inc. In July 2005, Jagged Peak, Inc. merged with a subsidiary of Absolute Glass Inc., which was incorporated in Nevada in November of 1999.
Absolute Glass, Inc. subsequently amended its articles of incorporation and changed its name to Jagged Peak, Inc. (the Company). The Companys principal executive offices are located at 3000 Bayport Drive, Tampa, Florida 33607. The
telephone number is (813) 637-6900 and the Internet website address is www.JaggedPeak.com.



|Item 1A. | Risks Factors
|-------- | -------------

OUR ABILITY TO COMPETE
AND PURSUE STRATEGIC ALTERNATIVES COULD BE JEOPARDIZED IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR INFRINGE ON INTELLECTUAL PROPERTY RIGHTS OF OTHERS

We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. We also enter into confidentiality or license
agreements with our employees, consultants and corporate partners and control access to and distribution of our products, documentation and other proprietary information. Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy or otherwise obtain and use our products or technology. Monitoring unauthorized use of our products is difficult and we cannot be certain that the steps we have taken will prevent unauthorized use of our technology, particularly
in foreign countries where the laws may not protect our proprietary rights as fully as in the United States. If competitors are able to use our technology, our ability to compete and pursue strategic alternatives effectively could be harmed.
Litigation may be necessary to enforce our intellectual property rights. Any such litigation could result in substantial costs and diversion of resources and could have a material adverse affect on our business, operating results and financial
condition.

Our industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding
patents and other intellectual property rights. In the course of our business, we may receive claims of infringement or otherwise become aware of potentially relevant patents or other intellectual property rights held by other parties. We evaluate
the validity and applicability of these intellectual property rights, and determine in each case whether we must negotiate licenses or cross-licenses to incorporate or use the proprietary technologies in our products.



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Any parties asserting that our products infringe upon their proprietary rights would require us to defend
ourselves, and possibly our customers, manufacturers or suppliers against the alleged infringement. Regardless of their merit, these claims could result in costly litigation and subject us to the risk of significant liability for damages. Such
claims would likely be time consuming and expensive to resolve, would divert management time and attention and would put us at risk to:



| |  |  | Stop selling, incorporating or using our products that incorporate the challenged intellectual property;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | Obtain from the owner of the intellectual property right, a license to sell or use the relevant technology, which license may not be available on
reasonable terms, or at all;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Redesign those products that use such technology; or
| | - |  | ----------------------------------------------------



| |  |  | Accept a return of products that use such technologies.
| | - |  | -------------------------------------------------------

If we are forced to take any of the foregoing actions, our business may be seriously harmed.

In
addition, we license public domain software and proprietary technology from third parties for use in our existing products, as well as new product development and enhancements. We cannot be assured that such licenses will be available to us on
commercially reasonable terms in the future, if at all. The inability to maintain or obtain any such license required for our current or future products and enhancements could require us to substitute technology of lower quality or performance
standards or at greater cost, either of which could adversely impact the competitiveness of our products.

RECENT GLOBAL ECONOMIC TRENDS
COULD ADVERSELY AFFECT OUR BUSINESS, LIQUIDITY AND FINANCIAL RESULTS

Recent global economic conditions, including disruption of financial
markets, could adversely affect our business and results of operations, primarily through limiting our access to credit, our ability to refinance debt and disrupting our customers business, which is heavily dependent on retail and e-commerce
transactions. Although we currently believe that we will be able to obtain the necessary financing in the future, there is no assurance that these institutions will be able to loan us the necessary capital, which could have a material adverse impact
on our business. In addition, continuation or worsening of general market conditions in the United States economy or other national economies important to our businesses may adversely affect our customers level of spending, ability to obtain
financing for purchases and ability to make timely payments to us for our services, which could require us to increase our allowance for doubtful accounts, negatively impact our days sales outstanding and adversely affect our results of operations.

OUR LIMITED OPERATING HISTORY

The Company is in the expansion stage and accordingly, the Companys business is subject to the risks inherent in the transition to a large-scale business. Failure by the Company to develop the ability to consistently provide high
quality products and services to its clients would have a material adverse effect on the Companys business, operating results and financial condition. To address these risks, the Company must, among other things, respond to competitive
developments, attract and motivate qualified personnel, develop market acceptance for its products, establish effective distribution channels, effectively manage growth and continue to improve its proprietary technologies and successfully
commercialize products incorporating such technologies. In addition, the Companys limited operating history makes forecasting difficult.

OUR OFFICERS AND DIRECTORS OWN A CONTROLLING INTEREST IN OUR STOCK AND INVESTORS HAVE A LIMITED VOICE IN OUR MANAGEMENT

The
Companys executive officers and directors and their affiliates together control more than 50% of the Companys voting shares outstanding. As a result, these stockholders, if they act together, will be able to control all matters requiring
the Companys stockholders approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may delay, prevent or deter a change in control, and could deprive the
Companys stockholders of an opportunity to receive a premium for their common stock as part of a sale of the Company or its assets.

WE HAVE EXPERIENCED LOSSES FROM OPERATIONS AND MAY NOT BE PROFITABLE IN THE FUTURE

Jagged Peak had losses before tax benefit
of approximately $338,800 for the fiscal year ended December 25, 2009, and losses before tax benefit of approximately $260,700 for the fiscal year ended December 26, 2008, and there can be no assurance that the Company will not incur
additional losses in the future. The Companys operating expenses have increased as the business has grown and can be expected to increase significantly because of expansion efforts. There is no assurance that the Company will be able to
generate sufficient revenue to meet its operating expenditures or to operate profitably.



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WE ARE DEPENDENT ON A SMALL NUMBER OF CLIENTS FOR A LARGE PORTION OF OUR SALES AND A LOSS OF ANY CLIENT
THAT ACCOUNTS FOR A LARGE PORTION OF OUR REVENUE WOULD CAUSE OUR REVENUE TO DECLINE

Sales to one of our clients, Nespresso USA, a division
of Nestle, accounted for approximately 77% of our revenue in 2009, an increase of approximately 12% since 2008. A significant reason for the increase was the opening of our Canadian operation. Contracts with our clients are generally two to three
years in length. If any one of these key contracts is not renewed or otherwise terminates, particularly this contract, or if revenues from this or other key clients decline for any other reason (such as competitive developments), our revenue would
decline and our ability to obtain profitability would be impaired. It is important to our ongoing success that we maintain these key client relationships and at the same time develop new client relationships.

COMPETITION

Competition in the market for
providing transaction management software is intense. The Companys software products face competition from many larger, more established companies. In addition, other companies could seek to introduce competing products or services and
increased competition could result in a decrease in the price charged by the Companys competitors for their products and services or reduce demand for the Companys products and services, which would have a material adverse effect on the
Companys business, operating results and financial condition. There can be no assurance that the Company will be able to compete successfully with its existing or potential competitors, which may have substantially greater financial,
technical, and marketing resources, longer operating histories, greater name recognition or more established relationships in the industry than the Company. If any of these competitors provide competitive software products and services to the
marketplace in the future, the Company cannot be sure that it will have the resources or expertise to compete successfully.

LACK OF MARKET
ACCEPTANCE FOR PRODUCTS

The market for the Companys software may develop at a slower pace than expected as a result of lack of
acceptance by companies involved in implementing a supply-chain execution software system for their business processes. If the market develops more slowly than expected, or if the Companys software products do not achieve significant market
acceptance, the Companys business, operating and financial condition would be materially adversely affected.

OUR OPERATING RESULTS
ARE SUBJECT TO FLUCTUATIONS IN DEMAND FOR PRODUCTS AND SERVICES OFFERED BY OUR CLIENTS OR US

Our quarterly and annual operating results
are subject to fluctuations in demand for the products or services offered by our clients or us. If, as a result, our annual or quarterly revenues or operating profits fail to meet the guidance we provide to securities analysts and investors, or we
otherwise fail to meet their expectations, the trading price of our common stock will likely decline.

NEED FOR FURTHER PRODUCT DEVELOPMENT

Although the Company currently has the capability to achieve installation of its software products for enterprise initiatives, additional
ongoing development is necessary to continue to enhance the quality, efficiency and reliability of the Companys software product offerings. If the Company were unable to continue to develop and install market leading software products, then
the Companys business, operating results and financial condition would be materially adversely affected.

INTERNATIONAL OPERATIONS

In the normal course of business, the Company may enter into contractual relationships with companies located worldwide. Accordingly, the
Company may be subject to general geopolitical risks in connection with some of its contracts, such as political, social and economic instability, changes in diplomatic and trade or business relationships and other factors beyond the Companys
control. There can be no assurance that such factors will not impact the Companys operations in the future or require the Company to modify its anticipated research practices.

WE MAY BECOME LIABLE TO CLIENTS WHO ARE DISSATISFIED WITH OUR SERVICES

We design, develop,
implement and manage e-commerce solutions that are crucial to the operation of our clients businesses. Defects in the solutions we develop could result in delayed or lost revenue, adverse end-user reaction, and/or negative publicity, which
could require expensive corrections. As a result, clients who experience these adverse consequences either directly or indirectly as a result of our services could bring claims against us for substantial damages. Any claims asserted could exceed the
level of any insurance coverage that may be available to us. Moreover, the insurance we carry may not continue to be available on economically reasonable terms, or at all. The successful assertion of one or more large claims that are uninsured, that
exceed insurance coverage or that result in changes to insurance policies (including premium increases) could adversely affect our operating results or financial condition.

CHANGES IN GOVERNMENT REGULATION COULD LIMIT OUR INTERNET ACTIVITIES OR RESULT IN ADDITIONAL COSTS OF DOING BUSINESS OVER THE INTERNET

We are subject to the same federal, state and local laws as other companies conducting business over the Internet. Today, there are relatively few laws specifically directed towards conducting business
over the Internet. The adoption or modification of laws related to the Internet could harm our business, operating results and financial condition by increasing our costs and administrative burdens. Due to the increasing popularity and use of the
Internet, many laws and regulations relating to the Internet are being debated at the international, federal and state levels.



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Applicability to the Internet of existing laws governing issues such as property ownership, copyrights and
other intellectual property issues, taxation, libel, obscenity and personal privacy could also harm our operating results and substantially increase the cost to us of doing business.

LAWS RELATING TO USER INFORMATION AND ONLINE PRIVACY MAY LIMIT THE COLLECTION AND USE OF END-USER DATA FOR OUR CLIENTS

We collect and maintain end-user data for our clients, which subjects us to increasing international, federal and state regulation related to online privacy and the use of personal user information.
Congress recently enacted anti-SPAM legislation with which we must comply when providing e-mail campaigns for our clients. Bills are pending in Congress and in various states that address online privacy protections. Several states have proposed, and
some have enacted, legislation that would limit the use of personal user information or require online services to establish privacy policies. In addition, the U.S. Federal Trade Commission, or FTC, has urged Congress to adopt legislation regarding
the collection and use of personal identifying information obtained from individuals when accessing Web sites.

Even in the absence of laws
requiring companies to establish these procedures, the FTC has settled several proceedings resulting in consent decrees in which Internet companies have been required to establish programs regarding the manner in which personal information is
collected from users and provided to third parties. We could become a party to a similar enforcement proceeding. These regulatory and enforcement efforts could limit our collection of demographic and personal information from end-users, which could
adversely affect our ability to comprehensively serve our clients.

INTERNET-RELATED STOCK PRICES ARE ESPECIALLY VOLATILE AND THIS
VOLATILITY MAY DEPRESS OUR STOCK PRICE OR CAUSE IT TO FLUCTUATE SIGNIFICANTLY

The stock market and the trading prices of Internet-related
companies in particular, have been notably volatile. This volatility is likely to continue in the short-term and is not necessarily related to the operating performance of affected companies. This broad market and industry volatility could
significantly reduce the price of our common stock at any time, without regard to our operating performance.

INTERRUPTION OF BUSINESS DUE
TO INCREASED SECURITY MEASURES IN RESPONSE TO TERRORISM

The continued threat of terrorism within the United States and the ongoing
military action and heightened security measures in response to such threat has and may cause significant disruption to commerce. The U.S. economy in general is being adversely affected by the terrorist activities and potential activities. Any
economic downturn could adversely impact the Companys results of operations, impair the Companys ability to raise capital or otherwise adversely affect the Companys ability to grow the business. It is impossible to predict how this
may affect the Companys business or the economy in the U.S. and in the world, generally. In the event of further threats or acts of terrorism, the Companys business and operations may be severely and adversely affected or destroyed.

REGULATION

The
Companys operations are subject to various federal, state and local laws and regulations. Although compliance with these laws and regulations has not had a material effect on the Companys operations or financial condition, there is no
assurance that additions or changes to current laws or regulations will not have a material effect on us, the Companys profitability and financial condition.

SUBSTANTIAL ALTERATION OF THE COMPANYS CURRENT BUSINESS AND REVENUE MODEL

The
Companys present business and revenue model represents the current view of the optimal business and revenue structure, which is to derive revenues and achieve profitability in the shortest period. There can be no assurance that current models
will not be altered significantly or replaced with an alternative model that is driven by motivations other than near-term revenues and/or profitability (for example, building market share before the Companys competitors). Any such alteration
or replacement of the business and revenue model may ultimately result in the deferring of certain revenues in favor of potentially establishing larger market share. The Company cannot assure that any adjustment or change in the business and revenue
model will prove to be successful.

INABILITY TO MANAGE GROWTH AND INTERNAL EXPANSION

The Company has not yet undergone the significant managerial and internal expansion that the Company expects will occur, and the Companys inability to
manage growth could hurt the results of operations. Expansion of operations will be required to address anticipated growth of the Companys customer base and market opportunities. Expansion will place a significant strain on the Companys
management, operational and financial resources. Currently, the Company has a limited number of employees. The Company will need to improve existing procedures and controls as well as implement new transaction processing, operational and financial
systems, procedures and controls to expand, train and manage the Companys employee base. The Companys failure to manage growth effectively could have a damaging effect on the Companys business, results of operations and financial
condition.



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DEPENDENCE ON KEY MANAGEMENT; LOSS OF KEY MANAGEMENT COULD HAVE A MATERIAL ADVERSE EFFECT ON OPERATIONS

The Companys success depends in part upon retaining the services of certain executive officers, software developers and other key
employees. In addition, because of the Companys rapid pace of growth, the Company is also dependent on its ability to recruit, retain and motivate personnel with technical, marketing, sales and managerial skills. If the Company loses key
personnel or is unable to recruit qualified personnel, the ability to manage the day-to-day aspects of the business will be weakened. The Companys operations and prospects depend in large part on the performance of the senior management team.
The loss of the services of one or more members of the senior management team could have a material adverse effect on the business, financial condition and results of operation. Because the senior management team has exceptional experience with the
Company and in the industry, it would be difficult to replace them without adversely effecting the Companys business operations.

WE
ARE NOT REQUIRED TO MEET OR MAINTAIN ANY LISTING STANDARDS FOR OUR COMMON STOCK TO BE QUOTED ON THE OTC BULLETIN BOARD, WHICH COULD AFFECT OUR STOCKHOLDERS ABILITY TO ACCESS TRADING INFORMATION ABOUT OUR COMMON STOCK

OTCBB market is separate and distinct from the Nasdaq Stock Market and any national stock exchange, such as the New York Stock Exchange or the American Stock
Exchange. Although the OTC Bulletin Board is a regulated quotation service operated by the Financial Industry Regulatory Authority (FINRA), that displays real-time quotes, last sale prices, and volume information in over-the-counter
(OTC) equity securities like our common stock, we are not required to meet or maintain any qualitative or quantitative standards for our common stock to be quoted on the OTCBB. Our common stock does not presently meet the minimum listing
standards for listing on the Nasdaq Capital Market or any national securities exchange, which could affect our stockholders ability to access trading information about our common stock.

IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD, WHICH WOULD LIMIT THE ABILITY OF
BROKERDEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET

Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain
price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely
affected by limiting the ability of brokerdealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

VOLATILITY OF THE MARKET PRICE OF THE COMPANYS STOCK

The market price of the
Companys common stock may be volatile, which could cause the value of your investment to decline. Any of the following factors could affect the market price of our common stock:



| |  |  | Changes in earnings estimates and outlook by financial analysts;
| | - |  | ----------------------------------------------------------------



| |  |  | Our failure to meet financial analysts and investors performance expectations;
| | - |  | --------------------------------------------------------------------------------



| |  |  | Changes in market valuations of other transportation and logistics companies; or
| | - |  | --------------------------------------------------------------------------------



| |  |  | General market and economic conditions.
| | - |  | ---------------------------------------



| |  |  | We have a small trading volume.
| | - |  | -------------------------------

ACCORDING TO THE SEC, THE MARKET FOR PENNY STOCKS HAS SUFFERED FROM PATTERNS OF FRAUD AND ABUSE

Such patterns include:



| |  |  | Control of the market for the security by one or a few brokerdealers that are often related to the promoter or issuer;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excessive and undisclosed bidask differentials and markups by selling brokerdealers; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | The wholesale dumping of the same securities by promoters and brokerdealers after prices have been manipulated to a desired level, along with the
inevitable collapse of those prices with consequent investor losses.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, many of the risks described elsewhere in
this Risk Factors section could adversely affect the stock price. The stock markets have experienced price and volume volatility that have affected many companies stock prices. Stock prices for many companies have experienced wide
fluctuations that have often been unrelated to the operating performance of those companies. These types of fluctuations may affect the market price of our common stock.



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APPLICABILITY OF LOW PRICED STOCK RISK DISCLOSURE REQUIREMENTS

The Companys common stock may be considered a low priced security under rules promulgated under the Securities Exchange Act of 1934 (Exchange
Act). Under these rules, broker-dealers participating in transactions in low priced securities must first deliver a risk disclosure document which describes that risks associated with such stock, the broker-dealers duties, the
customers rights and remedies, and certain market and other information, and make a suitability determination approving the customer for low priced stock transactions based on the customers financial situation, investment experience and
objectives. Broker-dealers must also disclose these restrictions in writing and provide monthly account statements to the customer, and obtain specific written consent of the customer. With these restrictions, the likely effect of designation as a
low price stock would be to decrease the willingness of broker-dealers to make a market for the stock, to decrease the liquidity of the stock and to increase the transaction costs of sales and purchase of such stocks compared to other securities.

NO DIVIDENDS ANTICIPATED

The Company intends to retain all future earnings for use in the development of the Companys business and does not anticipate paying any cash dividends on the Common Stock in the near future.

IF AN EVENT OF DEFAULT OCCURS UNDER THE SECURITY AND PURCHASE AGREEMENT, OUR LENDER COULD TAKE POSSESSION OF ALL OUR ASSETS

In connection with the security and purchase agreement entered into in December, 2009, we granted to Moriah Capital L.P. (Moriah) a first
priority security interest in our assets. The security and purchase agreement provides that upon the occurrence of an event of default under the agreement, Moriah shall have the right to take possession of the collateral, to operate our business
using the collateral, and have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the collateral, at public or private sale or otherwise to satisfy our obligations under these agreements. Any attempt by Moriah to
foreclose on our assets could likewise cause us to curtail our current operations.



|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

Not Applicable



|Item 2. | Properties
|------- | ----------

The
Companys executive offices are located in 12,000 square feet of leased office space located at 3000 Bayport Drive, Tampa, Florida 33607. Monthly rent expense is approximately $20,000 per month under a lease that expires January of 2011. In
addition, the Company leases approximately 90,000 square feet of warehouse space at 118 18thStreet South, St. Petersburg, Florida. The monthly rent expense is approximately $30,000 per month under a lease that expires May 2011.

The following is an annual schedule of approximate future minimum rental payments required under operating facilities leases that have an initial or remaining non-cancelable lease term in excess of one
year as of December 25, 2009:



|            |  |                        |        
|----------- |  | ---------------------- | -------
|Year Ending |  | MinimumRental Payments
|            | 
|2010        |  | $                      | 602,800
|2011        |  | $                      | 132,200
|            |  |                        |        
|            | 
|Total       |  | $                      | 735,000
|            |  |                        |        

The Company believes the facilities are in reasonable condition, the
correct size, adequately insured and adequately provide for the Companys immediate and foreseeable needs.



|Item 3. | Legal Proceedings
|------- | -----------------

None.



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|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None

PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

The Companys common stock is traded on the OTC bulletin board under the symbol JGPK. The table below sets forth the high and low bid prices
for the Companys common stock for the quarters within 2008 and 2009. Quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.



|                   |  |   |  |                    |  |     |  |  |  |   |      |  |   |     
|------------------ |  | - |  | ------------------ |  | --- |  |  |  | - | ---- |  | - | ----
|Period             |  |   |  | High               |  | Low
|                   |  |   |  |                    |  |    
|December 29, 2007  |  | - |  | March 28, 2008     |  |     |  |  |  | $ | 0.40 |  | $ | 0.14
|March 29, 2008     |  | - |  | June 27, 2008      |  |     |  |  |  | $ | 0.40 |  | $ | 0.16
|June 28, 2008      |  | - |  | September 26, 2008 |  |     |  |  |  | $ | 0.20 |  | $ | 0.12
|September 27, 2008 |  | - |  | December 26, 2008  |  |     |  |  |  | $ | 0.17 |  | $ | 0.12
|December 27, 2008  |  | - |  | March 27, 2009     |  |     |  |  |  | $ | 0.29 |  | $ | 0.11
|March 28, 2009     |  | - |  | June 26, 2009      |  |     |  |  |  | $ | 0.28 |  | $ | 0.12
|June 27, 2009      |  | - |  | September 25, 2009 |  |     |  |  |  | $ | 0.26 |  | $ | 0.11
|September 26, 2009 |  | - |  | December 25, 2009  |  |     |  |  |  | $ | 0.25 |  | $ | 0.11

The Company has approximately 85
stockholders of record. The Company has never paid cash dividends on the Companys common stock. The Company intends to keep future earnings, if any, to finance the expansion of the Companys business, and the Company does not anticipate
that any cash dividends will be paid in the near future. The Companys future payment of dividends will depend on the Companys earnings, capital requirements, expansion plans, financial condition and other relevant factors.



|Item 6. | Selected Financial Data
|------- | -----------------------

Not Applicable



|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

This discussion is intended to further the readers understanding of the Companys financial condition and results of operations and should be read
in conjunction with the Companys financial statements and related notes included elsewhere herein. This discussion also contains forward-looking statements. The Companys actual results could differ materially from those anticipated in
these forward-looking statements as a result of the risks and uncertainties set forth elsewhere in this Annual Report and in the Companys other SEC filings. Readers are cautioned not to place undue reliance on any forward-looking statements,
which speak only as of the date hereof. The Company is not party to any transactions that would be considered off balance sheet pursuant to disclosure requirements under Item 303(c) of Regulation S-K.

OVERVIEW

Jagged Peak, Inc. (the
Company or Jagged Peak) is an e-business software and services company headquartered in Tampa, Florida, providing Demand and Supply Chain management, CRM execution and e-Fulfillment solutions and services. The Companys
flagship product, EDGE (E-Business Dynamic Global Engine), is a web-based software application that enables companies to control and coordinate multi-channel orders, catalogs, multi-warehouse inventories, and fulfillment across multiple customers,
suppliers, employees, and partners in real-time. The Company enables clients to build and operate custom branded portals such as e-commerce, incentive and rebate programs, customer service, repair and reverse logistics, marketing materials
management, and automate other business processes through the use of the EDGE application and its related tools. The EDGE platform has been deployed in multiple vertical markets such as consumer goods, financial services, distribution, travel and
tourism and manufacturing.

Jagged Peaks multi-channel, enterprise EDGE application provides a comprehensive, integrated platform for
e-business management that supports a broad range of business and operational applications. Clients can use EDGE as an enterprise application or as an integrator and consolidator for multiple businesses, processes and applications. EDGE has built in
tools to extend the application which enables clients to create complex and robust e-commerce, CRM related customer services and repair and reverse logistics solutions. The EDGE application permits users to manage order capturing, processing,
tracking, fulfillment, settlement, creating, and managing dynamic catalogs, customer relation management, marketing and reporting, all in real-time application. The EDGE application is built to industry-standard best practices. The application has
been integrated seamlessly with legacy and back-office management systems as well as industry leading ERP, WMS, TMS and CRM software systems. In addition to the traditional software license sales model, Jagged Peak offers its software with a
flexible managed services transaction based pricing model.



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Jagged Peak provides outsourced e-commerce and supply chain solutions that enable manufacturers,
distributors, and consumer brand companies the ability to quickly and cost effectively establish and operate a direct to customer online business that is fully integrated with their offline sales channels. Jagged Peaks proven solutions provide
companies the tools, expertise, infrastructure and scalability they need to create and maximize their direct to customer sales channel potential without the risk and burden of managing it themselves. The Company uniquely provides companies the
benefit of maintaining complete control of the channel, ownership of the customer relationship and retention of the gross product margin normally lost to distributors, resellers and other trading partners.

Jagged Peak recently announced the launch of TotalCommerce, a solution that includes everything a company needs to quickly and cost effectively launch
a fully operational, best practices direct to consumer sales channel in less than 60 days. TotalCommerce is an outsourced managed services solution that leverages Jagged Peaks extensive technology and supply chain
infrastructure and provides manufacturers with a turnkey, rapidly deployable solution including e-commerce webstore(s); order, inventory and transportation management software; a nationwide network of fulfillment centers; back office program
management; and a range of online marketing services.

Jagged Peak has a network of independently owned fulfillment warehouses throughout
North America that enables its clients to provide better service to their customers, while lowering their overall delivery costs. The EDGE application is able to automatically route the orders to the optimal warehouse based on an established set of
factors such as service, cost and priority. This enables our clients to achieve their customer service goals while reducing cost and internal infrastructure.

In July 2009, Jagged Peak began operations in Canada through its wholly owned subsidiary, Jagged Peak Canada, Inc. The operations provide similar services as in the United States through a network of
independently owned fulfillment warehouses, which are managed through technology provided by Jagged Peak, Inc.

In addition to application
software and demand execution, Jagged Peak also focuses on e-marketing and e-channel management to provide a holistic e-commerce solution for its clients. The Companys approach to e-marketing is to build marketing programs and systems that
elevate clients sites to be viewed by leading search engines as authorities within a particular product niche or keyword search term. Our services help companies excel in online retailing through the management, development, and
optimization of e-commerce stores. Jagged Peaks e-marketing services achieve superior results by utilizing a mix of traditional and emerging strategies and industry best practices. The Companys e-channel management services help protect
clients online pricing and intellectual property policies by utilizing an automated system and business process to identify, notify and potentially enforce violations. Jagged Peaks holistic approach to e-commerce provides its clients
with assurance that their e-business is performing at its highest level.

There are a variety of risks associated with the Companys
ability to achieve strategic objectives, including the ability to increase market penetration, acquire and profitably manage additional businesses, current reliance on key customers, the risks inherent in expanding, and the intense competition in
the industry. For a more detailed discussion of these risks, see section entitled Risks Factors.

Effective January 1, 2003,
the Company elected to change its fiscal year end to correspond to accounting periods based on a 52/53 week reporting year. Therefore, the periods ended December 25, 2009 and December 26, 2008 consisted of 52 weeks.

CRITICAL ACCOUNTING POLICIES

Use of
Estimates

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States
of America. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. The Company reviews its estimates, including but not limited to, capitalization of software, work in process, recoverability of long-lived assets, recoverability of prepaid expenses,
valuation on deferred tax assets and allowance for doubtful accounts, on a regular basis and makes adjustments based on historical experiences and existing and expected future conditions. These evaluations are performed and adjustments are made, as
information is available. Management believes that these estimates are reasonable and have been discussed with the audit committee; however, actual results could differ from these estimates.

Revenue Recognition

Revenue from software
license agreements is recognized when an agreement exists, delivery of the software has occurred, the fee is fixed or determinable, and collectability is probable. In software arrangements that include more than one element, the Company allocates
the total arrangement fee among the elements based on the relative fair value of each of the elements. Maintenance and support agreement revenues are amortized over the contract period, which is usually one year.



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Additional technology revenues are derived from software development services, managed services, transaction
fees, and consulting and customized technology assignments. Revenue from technology service arrangements and software development services is recognized as services are provided or on the percentage of completion method for those arrangements with
specified milestones. The percentage of completion is based on labor hours incurred to total labor hours expected to be incurred.

Revenue is
also derived from fulfillment service arrangements. Services included under fulfillment arrangements include account services, shipping and handling, order processing, packaging, storage and reporting. These services are based on established monthly
charges as well as handling fees based on volume. Work in process represents unbilled costs and services. Shipping and handling costs are classified as cost of revenue.

Concentration of Risk

Financial instruments, which potentially subject the Company to
concentrations of credit risk, are cash and cash equivalents and accounts receivables.

The majority of cash is maintained with a major
financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk.

Sales to a single customer amounted to approximately $13,290,300 or approximately 80% of total revenue and amounted to approximately $10,762,800 or
approximately 65% of total revenues during the 52-week periods ended December 25, 2009 and December 26, 2008, respectively. Accounts receivable from this customer was approximately $974,200 or approximately 70% of total accounts receivable
and approximately $801,600 or approximately 37% of total accounts receivable at December 25, 2009 and December 26, 2008, respectively. The risk of this is mitigated as the deferred revenue and customer deposits from this customer at
December 25, 2009 and at December 26, 2008 was approximately $525,000 and $250,000, respectively. There was one additional account receivable from a customer, which was approximately $314,300 or approximately 15% of total accounts
receivable at December 26, 2008.

The Company extends credit to its various customers based on evaluation of the customers
financial condition and ability to pay the Company in accordance with the payment terms. The Company provides for estimated losses on accounts receivable considering a number of factors, including the overall aging of accounts receivables,
customers payment history and the customers current ability to pay its obligation. Based on managements review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $40,000 and $230,000
is considered necessary as of December 25, 2009 and December 26, 2008, respectively. The Company charges uncollectible accounts against the allowance account once the invoices are deemed unlikely to be collectible. Although management
believes that accounts receivable are recorded at their net realizable value, a 10% decline in historical collection rate would increase the current bad debt expense for the period ended December 25, 2009 by approximately $10,000. We do not
accrue interest on past due receivables.

Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax return purposes. Deferred tax
assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax
rate is recognized as income or expense in the period that included the enactment date.

The Company generated deferred tax assets primarily
in 2004 and 2005 as a result of expenses from the triangular reverse merger with Absolute Glass, the write off expenses related to an unsuccessful capital raising, moving the warehouse facility and general operating losses.

The Company periodically assesses the recoverability of its deferred tax assets, as necessary, when the Company experiences changes that could materially
affect its determination of the recoverability of its deferred tax assets. In conducting this assessment, management considered a variety of factors, including the Companys operating profits, the reasons for the Companys operating losses
in prior years, and managements judgment as to the likelihood of continued profitability and expectations of future performance, and other factors. Management does not believe that a valuation allowance is necessary; however the amount of
deferred tax asset realizable could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. Net loss carry forwards will begin to expire in 2017.



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Put Options

The Company recently issued restricted common shares as partial consideration for a loan obtained from Moriah Capital L.P. (Moriah). Pursuant to the terms and conditions of the governing
Securities Issuance Agreement, the holder of such shares has the right, but not the obligation, to put the shares back to the Company at a fixed price of $0.21 per common share on March 18, 2011. Moriah can sell these shares of common
stock at their sole discretion in compliance with applicable securities laws. The Company has accounted for these shares in accordance with the guidance established by FASB ASC 480 as a reclassification of the value of the shares from permanent to
temporary equity. As of March 18, 2011 if the put expires unexercised, the Company will transfer the value of the shares back to permanent equity, less any amount recovered from the holder.

RESULTS OF OPERATIONS

For the 52-week
period ended December 25, 2009 compared to the 52-week period ended December 26, 2008.

The following table summarizes selected
financial data of the Company:



|                                             |  |      |            |      |   |            |  |   |          |   |  |        |   
|-------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | -------- | - |  | ------ | --
|                                             |  | 2009 |            | 2008 |   | Change     |  |   | Percent  |  
|                                             |  |      |            |     
|Net revenue                                  |  | $    | 16,679,300 |      | $ | 16,564,700 |  | $ | 114,600  |   |  | 0.69   | % 
|                                             |  |      |            |     
|Cost of revenue                              |  |      | 12,455,400 |      |   | 11,949,400 |  |   | 506,000  |   |  | 4.00   | % 
|                                             |  |      |            |      |   |            |  |   |          |   |  |        |   
|                                             |  |      |            |     
|Gross profit                                 |  |      | 4,223,900  |      |   | 4,615,300  |  |   | (391,400 | ) |  | (8.00  | )%
|                                             |  |      |            |      |   |            |  |   |          |   |  |        |   
|                                             |  |      |            |     
|Selling, general and administrative expenses |  |      | 4,175,000  |      |   | 4,360,000  |  |   | (185,000 | ) |  | (4.00  | )%
|                                             |  |      |            |      |   |            |  |   |          |   |  |        |   
|                                             |  |      |            |     
|Income from operations                       |  | $    | 48,900     |      | $ | 255,300    |  | $ | (206,400 | ) |  | (81.00 | )%
|                                             |  |      |            |      |   |            |  |   |          |   |  |        |   

The following table sets forth the Companys capitalization as of December 25, 2009. The table should be
read in conjunction with the Companys financial statements and related notes included elsewhere in this Form 10-K filing.



|                                                                                                                           |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|Total current liabilities                                                                                                  |  | $ | 3,278,000  |  
|Long-term liabilities                                                                                                      |  |   | 1,017,800  |  
|                                                                                                                           | 
|Temporary equity  Common stock, subject to put rights 775,000                                                             |  |   | 162,800    |  
|                                                                                                                           | 
|Common stock; $.001 par value; 70,000,000 shares authorized; 15,926,844 shares issued and outstanding at December 25, 2009 |  |   | 16,000     |  
|Additional paid-in capital                                                                                                 |  |   | 3,420,100  |  
|Accumulated deficit                                                                                                        |  |   | (3,251,400 | )
|                                                                                                                           |  |   |            |  
|Total liabilities and stockholders equity                                                                                 |  | $ | 4,643,300  |  
|                                                                                                                           |  |   |            |  

For the 52-week period ended December 25, 2009 compared to the 52-week period ended December 26, 2008.

Net revenues increased approximately $114,600, or less than 1%, to approximately $16,679,300 for the 52-week period ended December 25,
2009, as compared to approximately $16,564,700 for the 52-week period ended December 26, 2008. There was a decrease in revenue for the United States operation of approximately $850,000, which was primarily related to the (i) decline in the
overall economy, (ii) distribution of transactions to network warehouses which lowers overall amounts charged to customers, and (iii) lower revenue from technology services. The newly operating Canadian operation had approximately $961,000
of revenue for the 52-week period ended December 25, 2009. The Canadian operation is similar to our United States fulfillment operation, however all technology services are still performed and billed from the United States.



14



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##### Table of Contents

Costs of revenue, which consist primarily of labor, software amortization, technology, facilities, postage,
freight, and packing supplies increased by approximately $506,000 or 4%, to approximately $12,455,400 for the 52-week period ended December 25, 2009, as compared to approximately $11,949,400 for the 52-week period ended December 26, 2008.
As a percentage of revenues cost of revenue amounted to approximately 75% of related revenues for the 52-week period ended December 25, 2009, as compared with approximately 72% for the 52-week period ended December 26, 2008. Increased
costs of revenue and increases as a percentage of revenue resulted primarily from (i) increased order / transaction volume, (ii) decrease in technology revenue, (iii) increased orders flowing through the Companys North America
distribution network, and (iv) the newly operating Canadian operation has a higher cost of revenue as a percentage of revenue. The newly operating Canadian operation had approximately $891,000 of cost of revenue for the 52-week period ended
December 25, 2009. This is approximately 93% as a percentage of revenue, which contributed to the overall increase in cost of revenue and as a percentage of revenue. Executive management continues to change the infrastructure and production
methods, and to develop technology enhancements to enable the Company to continue to increase productivity without significant additional resources and to allow the Company to better capitalize on economies of scale as revenues increase. In 2010, we
will implement a new pick to light system, which is expected to increase productivity more than 200%. Management expects the percentage of cost of revenue to revenue to decrease as sales increase and we are able to capitalize on the additional
capacity.

Selling, General and administrative expense decreased by approximately $185,000 or 4% to approximately $4,175,000 for the 52-week
period ended December 25, 2009 as compared to approximately $4,360,000 for the 52-week period ended December 26, 2008. The decrease was primarily related to (i) decrease in personnel and other overhead expenses that were determined
unnecessary, (ii) decrease in recruiting expenses for new employees, (iii) completion of the new accounting system implementation and (iv) reduction in the costs related to investor relations. Management continues to
re-deploy administrative resources to focus on sales and marketing activities to enable the Company to grow without significant increases in selling, general and administrative expenses.

The Company realized a loss from continuing operations before provisions for income taxes of approximately $338,800 for the 52-week period ended
December 25, 2009, compared with the loss from continuing operations before provisions for income taxes of approximately $260,700 for the 52-week period ended December 26, 2008.

The income tax benefit was approximately $116,200 for the 52-week period ended December 25, 2009 compared to an income tax benefit of approximately
$65,900 for the 52-week period ended December 26, 2008. Differences between the effective tax rate used for 2009 and 2008, as compared to the U.S. Federal and State statutory rate, are primarily due to permanent differences. As of
December 25, 2009, the Company had federal and state net operating loss carry-forwards totaling approximately $4,200,000, which begin to expire in 2017. Management believes that there will be sufficient future earnings to support the more than
likely realization of deferred tax assets in excess of existing taxable temporary differences. The amount of deferred tax assets considered realizable, however, could be reduced in the near-term if estimates of future taxable income are reduced.

Basic loss per share from continuing operations for the 52-week period ended December 25, 2009 was $0.02 per weighted average share,
compared with basic loss of $0.01 per weighted average share for the 52-week period ended December 26, 2008. This was based on 14,699,330 and 14,648,914 weighted average number common shares outstanding for the 52-week period ended
December 25, 2009 and December 26, 2008, respectively.

EBITDA

EBITDA for the 52-week period ended December 25, 2009 was approximately $400,200 compared to approximately $524,500 in the comparable period of the prior year. The decrease in the EBITDA directly
relates to the decreased gross margin in 2009. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization costs. The Company also excludes the cumulative effect of a change in accounting principle, discontinued
operations, and the impact of restructuring and other charges from the computation. The Company believes EBITDA is a useful measure of operating performance before the impact of investing and financing transactions, making comparisons between
companies earnings power more meaningful and providing consistent comparisons of the Companys performance. In order to provide consistent comparisons of year-over-year EBITDA, the following reconciliation is provided.



|                              |  |                      |          |   |                   |   |          |  
|----------------------------- |  | -------------------- | -------- | - | ----------------- | - | -------- | -
|                              |  | For the period ended |         
|                              |  | December 25, 2009    |          |   | December 26, 2008 |  
|Net loss as reported          |  | $                    | (222,600 | ) |                   | $ | (194,800 | )
|Income tax benefit            |  |                      | (116,200 | ) |                   |   | (65,900  | )
|Interest expense              |  |                      | 452,700  |   |                   |   | 516,000  |  
|Depreciation and amortization |  |                      | 286,300  |   |                   |   | 269,200  |  
|                              |  |                      |          |   |                   |   |          |  
|                              |  |                     
|EBITDA                        |  | $                    | 400,200  |   |                   | $ | 524,500  |  
|                              |  |                      |          |   |                   |   |          |  



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USE OF GAAP AND NON-GAAP MEASURES

In addition to results presented in accordance with generally accepted accounting principles (GAAP), the Company has included in this report EBITDA, with EBITDA being defined by
the Company as earnings before interest, taxes, depreciation and amortization. The Company excludes the cumulative effect of a change in accounting principle, discontinued operations, and the impact of restructuring and other charges from the
computation of EBITDA. For each non-GAAP financial measure, the Company has presented the most directly comparable GAAP financial measure and has reconciled the non-GAAP financial measure with such comparable GAAP financial measure.

This non-GAAP financial measure provides useful information to investors to assist in understanding the underlying operational performance of the Company.
Specifically, EBITDA is a useful measure of operating performance before the impact of investing and financing transactions, making comparisons between companies earnings power more meaningful and providing consistent period-over-period
comparisons of the Companys performance. In addition, the Company uses this non-GAAP financial measure internally to measure its on-going business performance and in reports to bankers to permit monitoring of the Companys ability to pay
outstanding liabilities.

Liquidity and Capital Resources

As of December 25, 2009, the Company has approximately $679,300 of negative working capital compared to approximately $1,113,900 of negative working capital at December 26, 2008. As of
December 25, 2009, the Company has cash of approximately $331,300 compared with approximately $126,500 of cash at December 26, 2008. The significant increase in working capital is primarily the result of the decrease in the short term
portion of the long-term debt, since the debt was refinanced in December of 2009.

During the 52-week period ended December 25, 2009 cash
increased by approximately $204,800. During the 52-week period ended December 25, 2009 there were losses from operations, which included non-cash expenses of (i) approximately $286,300 related to depreciation and amortization,
(ii) approximately $321,700 related to the amortization of debt cost, and (iii) approximately $3,900 related to stock based employee compensation. In addition there was approximately $521,300 used by investing activities for the purchase
of fixed assets and the development of software, approximately $487,200 was provided by operations for the decrease in account receivables and work in process, approximately $216,300 was provided by operations for the decrease in accounts payable
and accrued salaries and approximately $319,800 was used by financing activities to reduce the total outstanding debt.

In December 2009, the
Company entered into a Loan and Security Agreement with Moriah Capital L.P., a Delaware limited partnership (Moriah and the Closing), whereby we agreed to a Term Note (the Note) in the principal amount of one
million five hundred thousand dollars ($1,500,000). The interest rate of the Note is six percent (6%) above prime with a floor of eleven percent (11%) and is paid on a monthly basis. There are no monthly principal payments; a final balloon
payment of $1,500,000 is due in March of 2011. The proceeds from the Note were used to extinguish all remaining loans of the Company and provide the necessary working capital to accelerate the Companys growth initiatives. A portion of the Note
is secured by the Jagged Peak common stock held by certain stockholders of the Company, which could cause a change of control if the Company was to default on the loan.

Management expects to obtain additional financing or an equity infusion to make the final payment to Moriah, due in March of 2011. The current principal balance is $1,000,000. Based on the cash flow from
operations and the Companys past history, management believes they will be able to find conventional financing with reasonable terms. If the Company is unable to obtain the necessary financing from a conventional bank, it is highly likely that
the current shareholders would be significantly diluted if the Company was required to refinance the debt with additional convertible debt at the current market price of the stock.

The Company has embarked on marketing activities, upgrades to technology and increasing infrastructure that it believes will enhance cash flows and business opportunities in the future. In addition, the
Company uses its warehouse to provide a portion of its e-fulfillment services. When the Company outgrows the capabilities of this warehouse facility, the Company may elect to outsource these additional fulfillment service arrangements to other
warehouse services providers, or elect to add additional warehouse space. The Companys current strategy has been to build a network of partner warehouses to fulfill the additional order requirements. If the Company elected to add additional
warehouse space, we may need to obtain additional financing. There is no assurance that we will be able to obtain financing on terms favorable to the Company or successfully implement infrastructure growth strategies.



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Our strategy is to continue to expand through both internal development and mergers and acquisitions, which
will depend on a number of factors that are beyond our control. There can be no assurance that we will be successful in implementing our growth strategy or successful obtaining adequate financing on favorable terms for these strategies.

From time to time the Company may become a defendant in legal proceedings in the normal course of business. Since the Company has not established a
reserve in connection with such claims or any general reserve for legal expenses or claims, any such liability, if at all, would be recorded as an expense in the period incurred or estimated. This amount, even if not material to the Companys
overall financial condition, could adversely affect the Companys results of operations in the period recorded.

NEW ACCOUNTING
PRONOUNCEMENTS

In October 2009, the Financial Accounting Standards Board (FASB) issued, Multiple Deliverable Revenue
Arrangements,which modifies accounting for multiple element arrangements by requiring that the separation of the arrangements be based on estimated selling prices based on entity specific assumptions rather than fair value, eliminating
the residual method of allocation and requiring additional disclosures related to such arrangements. The standard is effective prospectively for arrangements entered into or materially modified in fiscal years beginning on or after June 15,
2010. The Company has not yet evaluated the impact the adoption of the standard will have on its consolidated financial statements.

In
October 2009, the FASB issued, Certain Revenue Arrangements That Include Software Elements,which amends software revenue recognition guidance to eliminate from its scope tangible products containing software components that
function together to deliver the tangible products essential functionality and to provide guidance on how to allocate arrangement consideration to deliverables in an arrangement that contain both tangible products and software. The standard is
effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company has not yet evaluated the impact the adoption of the standard will have on its consolidated
financial statements.

In August 2009, the FASB issued changes to fair value accounting for liabilities. These changes clarify existing
guidance that in circumstances in which a quoted price in an active market for the identical liability is not available, an entity is required to measure fair value using either a valuation technique that uses a quoted price of either a similar
liability or a quoted price of an identical or similar liability when traded as an asset, or another valuation technique that is consistent with the principles of fair value measurements, such as an income approach (e.g., present value technique).
This guidance also states that both a quoted price in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are
required are Level 1 fair value measurements. Management has determined that the adoption of these changes will not have an impact on the consolidated financial statements.

In June 2009, the FASB issued Codification and the Hierarchy of Generally Accepted Accounting Principles and establishes the FASB Accounting Standards Codification (Codification) as the source of
authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC)
under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the
FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. Management has determined that the adoption of these changes will not have an
impact on the consolidated financial statements.

In June 2009, the FASB issued Amendments to Consolidation of Variable Interest Entities to
require an enterprise to perform an analysis to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise
is the primary beneficiary of a variable interest entity; to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; to add an additional reconsideration event for determining
whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment are at risk, as a group, lose the power from voting rights or similar rights of those investments to direct
the activities of the entity that most significantly impact the entitys economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprises
involvement in a variable interest entity. Management has determined that the adoption of these changes will not have an impact on the consolidated financial statements.

In May 2009, the FASB issued Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the financial statements
are issued or available to be issued (subsequent events). This requires disclosure of the date through which the entity has evaluated subsequent events and the basis for that date. For public entities, this is the date the
financial statements are issued. This does not apply to subsequent events or transactions that are within the scope



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of other GAAP and will not result in significant changes in the subsequent events reported by the Company. The Company has evaluated events and transactions occurring subsequent to the
balance sheet date of December 31, 2009, for items that should be recognized or disclosed in these financial statements.

Other recent
accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Companys present or future financial statements.



|Item 7A. | Quantitative and Qualitative Disclosures about Market Risk
|-------- | ----------------------------------------------------------

N/A



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|Item 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------

Consolidated Financial Statements

Jagged Peak, Inc.

For the Fiscal Years Ended December 25, 2009 and December 26, 2008

Reports of Independent Registered Public Accounting Firm

Contents



|                                                           |  |   
|---------------------------------------------------------- |  | --
|Report of Independent Registered Public Accounting Firm    |  | 20
|                                                           | 
|Financial Statements:                                      |  |   
|                                                           | 
|Consolidated Balance Sheets                                |  | 21
|Consolidated Statements of Operations                      |  | 22
|Consolidated Statements of Changes in Stockholders Equity |  | 23
|Consolidated Statements of Cash Flows                      |  | 24
|Notes to Audited Consolidated Financial Statements         |  | 25



19



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Jagged Peak, Inc.

We have audited the accompanying consolidated balance sheets of Jagged Peak,
Inc. and Subsidiary as of December 25, 2009 and December 26, 2008, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the 52-week periods then ended. These financial statements
are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Jagged Peak,
Inc. and Subsidiary as of December 25, 2009 and December 26, 2008, and the results of their operations and their cash flows for the 52-week periods ended December 25, 2009 and December 26, 2008, in conformity with accounting
principles generally accepted in the United States of America.

We were not engaged to examine managements assessment of the
effectiveness of Jagged Peak, Inc. and Subsidiarys internal control over financial reporting as of December 25, 2009, included in the accompanying Managements Report on Internal Control Over Financial Reporting and, accordingly, we
do not express an opinion thereon.

Gregory, Sharer & Stuart, P.A.

St. Petersburg, Florida

March 9, 2010



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Jagged Peak, Inc.

Consolidated Balance Sheets



|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                                                                                                                          |  | December 25,2009 |            |   | December 26,2008 |  
|Assets                                                                                                                                                                                    |  |                  |            |   |                  |   |            |  
|Current assets:                                                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Cash                                                                                                                                                                                      |  | $                | 331,300    |   |                  | $ | 126,500    |  
|Accounts receivable, net of allowance for doubtful accounts of $40,000 and $230,000 at December 25, 2009 and
December 26, 2008, respectively                                              |  |                  | 1,357,500  |   |                  |   | 1,923,800  |  
|Other receivables                                                                                                                                                                         |  |                  | 231,000    |   |                  |   | 135,000    |  
|Work in process, net of allowance of $30,000 at December 25, 2009 and December 26, 2008                                                                                                   |  |                  | 64,000     |   |                  |   | 149,700    |  
|Deferred tax asset                                                                                                                                                                        |  |                  | 173,000    |   |                  |   | 268,600    |  
|Other current assets                                                                                                                                                                      |  |                  | 441,900    |   |                  |   | 443,800    |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total current assets                                                                                                                                                                      |  |                  | 2,598,700  |   |                  |   | 3,047,400  |  
|Property and equipment, net of accumulated depreciation of $1,547,400 and $1,885,700 at December 25, 2009 and
December 26, 2008, respectively                                             |  |                  | 239,400    |   |                  |   | 327,400    |  
|                                                                                                                                                                                          |  |                 
|Other assets:                                                                                                                                                                             |  |                  |            |   |                  |   |            |  
|EDGE application, net of accumulated amortization of $1,406,300 and $1,318,100 at December 25, 2009 and December 26,
2008, respectively                                                   |  |                  | 386,000    |   |                  |   | 79,400     |  
|Deferred tax asset                                                                                                                                                                        |  |                  | 1,350,500  |   |                  |   | 1,138,700  |  
|Other assets                                                                                                                                                                              |  |                  | 68,700     |   |                  |   | 0          |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total long-term assets                                                                                                                                                                    |  |                  | 2,044,600  |   |                  |   | 1,545,500  |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total assets                                                                                                                                                                              |  | $                | 4,643,300  |   |                  | $ | 4,592,900  |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|                                                                                                                                                                                          |  |                 
|Liabilities and Stockholders Equity                                                                                                                                                      |  |                  |            |   |                  |   |            |  
|Current liabilities:                                                                                                                                                                      |  |                  |            |   |                  |   |            |  
|Accounts payable, trade                                                                                                                                                                   |  | $                | 1,861,300  |   |                  | $ | 1,641,500  |  
|Accrued payroll and bonuses                                                                                                                                                               |  |                  | 317,200    |   |                  |   | 407,800    |  
|Other accrued expenses                                                                                                                                                                    |  |                  | 149,000    |   |                  |   | 61,900     |  
|Deferred rent                                                                                                                                                                             |  |                  | 37,000     |   |                  |   | 34,900     |  
|Notes payable, current portion                                                                                                                                                            |  |                  | 0          |   |                  |   | 1,415,000  |  
|Deferred revenue and customer deposits                                                                                                                                                    |  |                  | 913,500    |   |                  |   | 600,200    |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total current liabilities                                                                                                                                                                 |  |                  | 3,278,000  |   |                  |   | 4,161,300  |  
|                                                                                                                                                                                          |  |                 
|Long-term liabilities:                                                                                                                                                                    |  |                  |            |   |                  |   |            |  
|Long term debt                                                                                                                                                                            |  |                  | 1,000,000  |   |                  |   | 0          |  
|Deferred rent, long term                                                                                                                                                                  |  |                  | 17,800     |   |                  |   | 57,200     |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total long-term liabilities                                                                                                                                                               |  |                  | 1,017,800  |   |                  |   | 57,200     |  
|                                                                                                                                                                                          |  |                 
|Temporary equity  Common stock, subject to put rights 775,000 and 0 shares respectively                                                                                                  |  |                  | 162,800    |   |                  |   | 0          |  
|                                                                                                                                                                                          |  |                 
|Stockholders equity:                                                                                                                                                                     |  |                  |            |   |                  |   |            |  
|Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at December 25, 2009 and
December 26, 2008                                                 |  |                  |            |   |                  |   |            |  
|Common stock, $.001 par value; 70,000,000 shares authorized; 15,926,844 shares issued and outstanding at December 25, 2009,
14,677,594 shares issued and outstanding at December 26, 2008 |  |                  | 16,000     |   |                  |   | 14,800     |  
|Additional paid-in capital                                                                                                                                                                |  |                  | 3,420,100  |   |                  |   | 3,388,400  |  
|Accumulated deficit                                                                                                                                                                       |  |                  | (3,251,400 | ) |                  |   | (3,028,800 | )
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total stockholders equity                                                                                                                                                                |  |                  | 184,700    |   |                  |   | 374,400    |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  
|Total liabilities and equity                                                                                                                                                              |  | $                | 4,643,300  |   |                  | $ | 4,592,900  |  
|                                                                                                                                                                                          |  |                  |            |   |                  |   |            |  

The accompanying notes are an integral part of the consolidated financial statements.



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Jagged Peak, Inc.

Consolidated Statements of Operations

52-Week Period Ended



|                                                                                  |  |                  |            |   |                  |   |            |  
|--------------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                  |  | December 25,2009 |            |   | December 26,2008 |  
|                                                                                  |  |                 
|Revenue                                                                           |  | $                | 16,679,300 |   |                  | $ | 16,564,700 |  
|                                                                                  |  |                 
|Cost of revenue                                                                   |  |                  | 12,455,400 |   |                  |   | 11,949,400 |  
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Gross profit                                                                      |  | $                | 4,223,900  |   |                  | $ | 4,615,300  |  
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Selling, general and administrative expenses                                      |  |                  | 4,175,000  |   |                  |   | 4,360,000  |  
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Income from operations                                                            |  | $                | 48,900     |   |                  | $ | 255,300    |  
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Other income (expense)                                                            |  |                  | 65,000     |   |                  |   | 0          |  
|                                                                                  |  |                 
|Interest expense                                                                  |  |                  | (452,700   | ) |                  |   | (516,000   | )
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Loss before income taxes                                                          |  | $                | (338,800   | ) |                  | $ | (260,700   | )
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Provision for income tax benefit                                                  |  |                  | (116,200   | ) |                  |   | (65,900    | )
|                                                                                  |  |                 
|Net loss                                                                          |  | $                | (222,600   | ) |                  | $ | (194,800   | )
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Net loss per common share                                                         |  | $                | (0.02      | ) |                  | $ | (0.01      | )
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Weighted average number of common shares outstanding                              |  |                  | 14,699,330 |   |                  |   | 14,648,914 |  
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Diluted loss per common share                                                     |  | $                | (0.02      | ) |                  | $ | (0.01      | )
|                                                                                  |  |                  |            |   |                  |   |            |  
|                                                                                  |  |                 
|Weighted average number of common shares and common equivalent shares outstanding |  |                  | 14,699,330 |   |                  |   | 14,648,914 |  
|                                                                                  |  |                  |            |   |                  |   |            |  

The accompanying notes are an integral part of the consolidated financial statements.



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Jagged Peak, Inc.

Consolidated Statements of Changes in Stockholders Equity

52-Week Period Ended December 25, 2009 and December 26, 2008



|                                                              |  |              |  |                          |        |  |                    |           |   |       |   |            |   |  |   |          |  
|------------------------------------------------------------- |  | ------------ |  | ------------------------ | ------ |  | ------------------ | --------- | - | ----- | - | ---------- | - |  | - | -------- | -
|                                                              |  | Common Stock |  | AdditionalPaid
inCapital |        |  | AccumulatedDeficit |           |   | Total |  
|                                                              |  | Shares       |  | Amount                   |        |  |                   
|Balance, December 28, 2007                                    |  | 14,627,594   |  | $                        | 14,700 |  | $                  | 3,334,500 |   |       | $ | (2,834,000 | ) |  | $ | 515,200  |  
|                                                              |  |              |  |                          |       
|Issuance of stock options to a consultant                     |  |              |  |                          |        |  |                    | 13,500    |   |       |   |            |   |  |   | 13,500   |  
|                                                              |  |              |  |                          |       
|Issuance of stock related to services or exercise of warrants |  | 50,000       |  |                          | 100    |  |                    | 8,700     |   |       |   |            |   |  |   | 8,800    |  
|                                                              |  |              |  |                          |       
|Amortization of officer, director and employee compensation   |  |              |  |                          |        |  |                    | 31,700    |   |       |   |            |   |  |   | 31,700   |  
|                                                              |  |              |  |                          |       
|Net loss for the period                                       |  |              |  |                          |        |  |                    |           |   |       |   | (194,800   | ) |  |   | (194,800 | )
|                                                              |  |              |  |                          |        |  |                    |           |   |       |   |            |   |  |   |          |  
|Balance, December 26, 2008                                    |  | 14,677,594   |  | $                        | 14,800 |  | $                  | 3,388,400 |   |       | $ | (3,028,800 | ) |  | $ | 374,400  |  
|                                                              |  |              |  |                          |       
|Issuance of stock subject to put rights                       |  | 775,000      |  |                          | 800    |  |                    | 162,000   |   |       |   |            |   |  |   | 162,800  |  
|                                                              |  |              |  |                          |       
|Reclassified to temporary equity                              |  |              |  |                          |        |  |                    | (162,800  | ) |       |   |            |   |  |   | (162,800 | )
|                                                              |  |              |  |                          |       
|Issuance of stock                                             |  | 474,250      |  |                          | 400    |  |                    | 28,600    |   |       |   |            |   |  |   | 29,000   |  
|                                                              |  |              |  |                          |       
|Amortization of stock options                                 |  |              |  |                          |        |  |                    | 3,900     |   |       |   |            |   |  |   | 3,900    |  
|                                                              |  |              |  |                          |       
|Net loss for the period                                       |  |              |  |                          |        |  |                    |           |   |       |   | (222,600   | ) |  |   | (222,600 | )
|                                                              |  |              |  |                          |        |  |                    |           |   |       |   |            |   |  |   |          |  
|                                                              |  |              |  |                          |       
|Balance, December 25, 2009                                    |  | 15,926,844   |  | $                        | 16,000 |  | $                  | 3,420,100 |   |       | $ | (3,251,400 | ) |  | $ | 184,700  |  
|                                                              |  |              |  |                          |        |  |                    |           |   |       |   |            |   |  |   |          |  

The accompanying notes are an integral part of the consolidated financial statements.



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Jagged Peak, Inc.

Consolidated Statements of Cash Flows

52-Week Period Ended



|                                                                                    |  |                  |           |   |                  |   |          |  
|----------------------------------------------------------------------------------- |  | ---------------- | --------- | - | ---------------- | - | -------- | -
|                                                                                    |  | December 25,2009 |           |   | December 26,2008 |  
|                                                                                    |  |                 
|Operating activities                                                                |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Net loss                                                                            |  | $                | (222,600  | ) |                  | $ | (194,800 | )
|                                                                                    |  |                  |           |   |                  |   |          |  
|Adjustments to reconcile net loss to net cash provided by operating activities:     |  |                  |           |   |                  |   |          |  
|Depreciation and amortization                                                       |  |                  | 286,300   |   |                  |   | 269,200  |  
|Non-cash consulting expense                                                         |  |                  | 0         |   |                  |   | 22,300   |  
|Amortization of warrants related to debt                                            |  |                  | 321,700   |   |                  |   | 321,400  |  
|Amortization of officers, director and employee compensation                        |  |                  | 0         |   |                  |   | 31,700   |  
|Non-cash options expense                                                            |  |                  | 3,900     |   |                  |   | 0        |  
|Non-cash related to financing                                                       |  |                  | 168,700   |   |                  |   | 0        |  
|Gain on extinguishment of debt                                                      |  |                  | (72,100   | ) |                  |   | 0        |  
|Bad debt expense                                                                    |  |                  | 164,800   |   |                  |   | 165,000  |  
|Changes in:                                                                         |  |                  |           |   |                  |   |          |  
|Accounts receivable                                                                 |  |                  | 401,500   |   |                  |   | 414,600  |  
|Work-in-process                                                                     |  |                  | 85,700    |   |                  |   | 46,200   |  
|Other receivables                                                                   |  |                  | (96,000   | ) |                  |   | (13,000  | )
|Deferred tax asset                                                                  |  |                  | (116,200  | ) |                  |   | (65,900  | )
|Other assets                                                                        |  |                  | (372,100  | ) |                  |   | (56,000  | )
|Accounts payable and accrued expenses                                               |  |                  | 216,300   |   |                  |   | 9,600    |  
|Deferred rent                                                                       |  |                  | (37,300   | ) |                  |   | (27,400  | )
|Deferred revenue and customer deposits                                              |  |                  | 313,300   |   |                  |   | (2,100   | )
|                                                                                    |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Net cash provided by operating activities                                           |  |                  | 1,045,900 |   |                  |   | 920,800  |  
|                                                                                    |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Investing activities                                                                |  |                  |           |   |                  |   |          |  
|Acquisition of property and equipment                                               |  |                  | (126,400  | ) |                  |   | (142,700 | )
|Acquisition/development of software - EDGE platform                                 |  |                  | (394,900  | ) |                  |   | (20,700  | )
|                                                                                    |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Net cash used by investing activities                                               |  |                  | (521,300  | ) |                  |   | (163,400 | )
|                                                                                    |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Financing activities                                                                |  |                  |           |   |                  |   |          |  
|Proceeds from the issuance of stock                                                 |  |                  | 200       |   |                  |   | 0        |  
|Proceeds and (payments), net from revolving note                                    |  |                  | 0         |   |                  |   | (164,900 | )
|Payments on notes payable and bank notes                                            |  |                  | (320,000  | ) |                  |   | (540,000 | )
|                                                                                    |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Net cash used by financing activities                                               |  |                  | (319,800  | ) |                  |   | (704,900 | )
|                                                                                    |  |                  |           |   |                  |   |          |  
|Net increase in cash                                                                |  |                  | 204,800   |   |                  |   | 52,500   |  
|                                                                                    |  |                 
|Cash, beginning of period                                                           |  |                  | 126,500   |   |                  |   | 74,000   |  
|                                                                                    |  |                  |           |   |                  |   |          |  
|                                                                                    |  |                 
|Cash, end of period                                                                 |  | $                | 331,300   |   |                  | $ | 126,500  |  
|                                                                                    |  |                  |           |   |                  |   |          |  
|Supplemental disclosure of cash flow information and non-cash financing activities: |  |                  |           |   |                  |   |          |  
|Cash paid during the period for interest                                            |  | $                | 158,300   |   |                  | $ | 195,600  |  
|                                                                                    |  |                  |           |   |                  |   |          |  

The accompanying notes are an integral part of the consolidated financial statements.



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Jagged Peak, Inc.

Notes to Audited Consolidated Financial Statements

52-Week Period Ended December 25, 2009 and December 26, 2008



|1. | General Background Information
|-- | ------------------------------

Jagged
Peak, Inc. (the Company or Jagged Peak) is an e-business software and services company headquartered in Tampa, Florida, providing Demand and Supply Chain management, CRM execution and e-Fulfillment solutions and services. The
Companys flagship product, EDGE (E-Business Dynamic Global Engine), is a web-based software application that enables companies to control and coordinate multi-channel orders, catalogs, multi-warehouse inventories, and fulfillment across
multiple customers, suppliers, employees, and partners in real-time. The Company enables clients to build and operate custom branded portals such as e-commerce, incentive and rebate programs, customer service, repair and reverse logistics, marketing
materials management, and automate other business processes through the use of the EDGE application and its related tools. The EDGE platform has been deployed in multiple vertical markets such as consumer goods, financial services, distribution,
travel and tourism and manufacturing.

Jagged Peaks multi-channel, enterprise EDGE application provides a comprehensive, integrated
platform for e-business management that supports a broad range of business and operational applications. Clients can use EDGE as an enterprise application or as an integrator and consolidator for multiple businesses, processes and applications. EDGE
has built in tools to extend the application which enables clients to create complex and robust e-commerce, CRM related customer services and repair and reverse logistics solutions. The EDGE application permits users to manage order capturing,
processing, tracking, fulfillment, settlement, creating, and managing dynamic catalogs, customer relation management, marketing and reporting, all in real-time application. The EDGE application is built to industry-standard best practices. The
application has been integrated seamlessly with legacy and back-office management systems as well as industry leading ERP, WMS, TMS and CRM software systems. In addition to the traditional software license sales model, Jagged Peak offers its
software with a flexible managed services transaction based pricing model.

Jagged Peak provides outsourced e-commerce and supply chain
solutions that enable manufacturers, distributors, and consumer brand companies the ability to quickly and cost effectively establish and operate a direct to customer online business that is fully integrated with their offline sales channels. Jagged
Peaks proven solutions provide companies the tools, expertise, infrastructure and scalability they need to create and maximize their direct to customer sales channel potential without the risk and burden of managing it themselves. The Company
uniquely provides companies the benefit of maintaining complete control of the channel, ownership of the customer relationship and retention of the gross product margin normally lost to distributors, resellers and other trading partners.

Jagged Peak recently announced the launch of TotalCommerce, a solution that includes everything a company needs to quickly and cost effectively
launch a fully operational, best practices direct to consumer sales channel in less than 60 days. TotalCommerce is an outsourced managed services solution that leverages Jagged Peaks extensive technology and supply chain
infrastructure and provides manufacturers with a turnkey, rapidly deployable solution including e-commerce webstore(s); order, inventory and transportation management software; a nationwide network of fulfillment centers; back office program
management; and a range of online marketing services.

Jagged Peak has a network of independently owned fulfillment warehouses throughout
North America that enables its clients to provide better service to their customers, while lowering their overall delivery costs. The EDGE application is able to automatically route the orders to the optimal warehouse based on an established set of
factors such as service, cost and priority. This enables our clients to achieve their customer service goals while reducing cost and internal infrastructure.

In July 2009, Jagged Peak began operations in Canada through its wholly owned subsidiary, Jagged Peak Canada, Inc. The operations provide similar services as in the United States through a network of
independently owned fulfillment warehouses, which are managed through technology provided by Jagged Peak, Inc.

In addition to application
software and demand execution, Jagged Peak also focuses on e-marketing and e-channel management to provide a holistic e-commerce solution for its clients. The Companys approach to e-marketing is to build marketing programs and systems that
elevate clients sites to be viewed by leading search engines as authorities within a particular product niche or keyword search term. Our services help companies excel in online retailing through the



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management, development, and optimization of e-commerce stores. Jagged Peaks e-marketing services achieve superior results by utilizing a mix of traditional and emerging strategies and
industry best practices. The Companys e-channel management services help protect clients online pricing and intellectual property policies by utilizing an automated system and business process to identify, notify and potentially enforce
violations. Jagged Peaks holistic approach to e-commerce provides its clients with assurance that their e-business is performing at its highest level.

There are a variety of risks associated with the Companys ability to achieve strategic objectives, including the ability to increase market penetration, acquire and profitably manage additional
businesses, current reliance on key customers, the risks inherent in expanding, and the intense competition in the industry. For a more detailed discussion of these risks, see Item 1 of the 10K entitled Risks Particular to the
Companys Business.

Effective January 1, 2003, the Company elected to change its fiscal year end to correspond to accounting
periods based on a 52/53 week reporting year. Therefore, the period ended December 25, 2009 and the period ended December 26, 2008 consists of 52 weeks.

On July 8, 2005, Absolute Glass Protection, Inc. (Absolute) completed the acquisition of Jagged Peak, Inc. a Florida corporation (Jagged Peak), through a reverse triangular
merger in which Jagged Peak merged with Absolute Glass Protection Acquisition Corporation, a Nevada corporation (Absolute Sub) that was a wholly owned subsidiary of Absolute with no assets or liabilities formed solely for the purpose of
facilitating the merger (the Merger). This transaction is accounted for as a reverse merger, with Jagged Peak treated as the accounting acquirer for financial statement purposes. This transaction closed effective July 8, 2005, and
Absolute changed its corporate name to Jagged Peak, Inc. Only operations of Jagged Peak remain post merger and therefore no pro-forma information is presented in these financial statements.



|2. | Significant Accounting Policies
|-- | -------------------------------

Use
of Estimates

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United
States of America. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. The Company reviews its estimates, including but not limited to, capitalization of software, work in process, recoverability of long-lived assets, recoverability of prepaid
expenses, valuation on deferred tax assets and allowance for doubtful accounts, on a regular basis and makes adjustments based on historical experiences and existing and expected future conditions. These evaluations are performed and adjustments are
made, as information is available. Management believes that these estimates are reasonable and have been discussed with the audit committee; however, actual results could differ from these estimates.

Revenue Recognition

Revenue from software
license agreements is recognized when an agreement exists, delivery of the software has occurred, the fee is fixed or determinable, and collectability is probable. In software arrangements that include more than one element, the Company allocates
the total arrangement fee among the elements based on the relative fair value of each of the elements. Maintenance and support agreement revenues are amortized over the contract period, which is usually one year.

Additional technology revenues are derived from software development services, managed services, transaction fees, and consulting and customized technology
assignments. Revenue from technology service arrangements and software development services is recognized as services are provided or on the percentage of completion method for those arrangements with specified milestones. The percentage of
completion is based on labor hours incurred to total labor hours expected to be incurred.

Revenue is also derived from fulfillment service
arrangements. Services included under fulfillment arrangements include account services, shipping and handling, order processing, packaging, storage and reporting. These services are based on established monthly charges as well as handling fees
based on volume. Work in process represents unbilled costs and services. Shipping and handling costs are classified as cost of revenue.



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Software and Development Enhancements

Software and development enhancements expenses include payroll and employee benefit costs associated with product development. The EDGE application is continually being enhanced with new features and
functions. Once technological feasibility of new features and functions is established, the cost incurred until release to production are capitalized and amortized over a three-year useful life. There was approximately $394,900 capitalized during
the 52-week period ended December 25, 2009 and there was approximately $20,700 capitalized during the 52-week period ended December 26, 2008. Amortization expenses related to capitalized software and charged to operations for the 52-week
period ended December 25, 2009 and December 26, 2008 were approximately $88,200 and approximately $66,500, respectively.

Cash
and Cash Equivalents

Cash and cash equivalents include cash on hand and investments in money market funds with high quality financial
institutions. The Company considers all highly liquid instruments purchased with a remaining maturity of less than three months at the time of purchase as cash equivalents.

Concentration of Risk

Financial instruments, which potentially subject the Company to
concentrations of credit risk, are cash and cash equivalents and accounts receivables.

The majority of cash is maintained with a major
financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk.

Sales to a single customer amounted to approximately $13,290,300 or approximately 80% of total revenue and amounted to approximately $10,762,800 or
approximately 65% of total revenues during the 52-week periods ended December 25, 2009 and December 26, 2008, respectively. Accounts receivable from this customer was approximately $974,200 or approximately 70% of total accounts receivable
and approximately $801,600 or approximately 37% of total accounts receivable at December 25, 2009 and December 26, 2008, respectively. The risk of this is mitigated as the deferred revenue and customer deposits from this customer at
December 25, 2009 and at December 26, 2008 was approximately $525,000 and $250,000, respectively. There was one additional account receivable from a customer, which was approximately $314,300 or approximately 15% of total accounts
receivable at December 26, 2008.

The Company extends credit to its various customers based on evaluation of the customers
financial condition and ability to pay the Company in accordance with the payment terms. The Company provides for estimated losses on accounts receivable considering a number of factors, including the overall aging of accounts receivables,
customers payment history and the customers current ability to pay its obligation. Based on managements review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $40,000 and $230,000
is considered necessary as of December 25, 2009 and December 26, 2008, respectively. The Company charges uncollectible accounts against the allowance account once the invoices are deemed unlikely to be collectible. Although management
believes that accounts receivable are recorded at their net realizable value, a 10% decline in historical collection rate would increase the current bad debt expense for the period ended December 25, 2009 by approximately $10,000. We do not
accrue interest on past due receivables.

Identified Intangible Assets

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of
the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of
the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. For
the 52-week period ended December 25, 2009 and December 26, 2008, there was no impairment of intangible assets.

Property and
Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives,
principally one to ten years. Accelerated methods are used for tax depreciation. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed
of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Equipment held under capital leases are stated at the present value of the minimum lease payments and amortized on a
straight-line basis over the estimated useful life of the asset.



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Depreciation is calculated by the straight-line method over the following estimated useful lives of the
related assets:



|                                |  |           
|------------------------------- |  | ----------
|                                |  | Years     
|Furniture and equipment         |  | 3-7       
|Computer equipment and software |  | 1-4       
|Warehouse equipment             |  | 3-10      
|Leasehold improvements          |  | Lease term

Estimated Fair Value of Financial
Instruments

The aggregated net fair value estimates discussed herein are based upon certain market assumptions and pertinent information
available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, receivables, payables, accrued expenses and
short-term borrowings. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The
fair value of the Companys debt is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities.

Uncertain Tax Positions

The Company
periodically assesses its tax positions taken for all open tax years and has not identified any uncertain tax positions. The Company is not subject to examination by taxing authorities for years prior to 2006.

Income Taxes

Deferred income taxes reflect
the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax return purposes. Deferred tax assets and liabilities are determined based on the differences between the book
values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date.

The Company generated deferred tax assets primarily in 2004 and 2005 as a result of expenses from the triangular reverse merger with Absolute
Glass, the write off expenses related to an unsuccessful capital raising, moving the warehouse facility and general operating losses.

The
Company periodically assesses the recoverability of its deferred tax assets, as necessary, when the Company experiences changes that could materially affect its determination of the recoverability of its deferred tax assets. In conducting this
assessment, management considered a variety of factors, including the Companys operating profits, the reasons for the Companys operating losses in prior years, and managements judgment as to the likelihood of continued
profitability and expectations of future performance, and other factors. Management does not believe that a valuation allowance is necessary; however the amount of deferred tax asset realizable could be reduced in the near term if estimates of
future taxable income during the carry forward period are reduced. Net loss carry forwards will begin to expire in 2017.

Put Options and
Temporary Equity

The Company recently issued restricted common shares as partial consideration for a loan obtained from Moriah Capital
L.P. (Moriah). Pursuant to the terms and conditions of the governing Securities Issuance Agreement, the holder of such shares has the right, but not the obligation, to put the shares back to the Company at a fixed price of $0.21 per
common share on March 18, 2011. Moriah can sell these shares of common stock at their sole discretion. The Company has accounted for these shares in accordance with the guidance established by FASB ASC 480 as a reclassification of the
value of the shares from permanent to temporary equity. As of March 18, 2011 if the put expires unexercised, the Company will transfer the value of the shares back to permanent equity, less any amount recovered from the holder.



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Stock-Based Compensation

The Company has stock option and stock incentive plans for employees and non-employee directors that provide for grants of restricted stock awards and options to purchase shares of Jagged Peak common
stock at exercise prices generally equal to the fair values of such stock at the dates of grant. The Company recognizes the cost of all share-based payments in the financial statements using a fair-value based measurement method. The Company uses a
Black-Scholes model to value its stock option grants and expenses the related compensation cost using the straight-line method over the vesting period. The fair value of the stock compensation is determined on the grant date using assumptions for
the expected term, volatility, dividend yield and the risk free interest rate. The period expense is then determined based on the valuation of the options and an estimated forfeitures. Generally, stock options vest 50 percent on each anniversary of
the grant date, are fully vested two years from the grant date, and have a contractual term of five years.

Foreign Currency

Generally, the functional currency of our international subsidiary is the local currency. The financial statements are translated to U.S.
dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs and expenses. Translation gains and losses are recorded in accumulated other comprehensive income as a component of
stockholders equity. There were no recorded translation gains for the 52 week period ended December 25, 2009. Net gains and losses resulting from foreign exchange transactions are recorded as a component of interest income and other, net.
The Company recorded approximately $7,100 of foreign exchange losses on transactions for the 52 week period ended December 25, 2009.

Earnings per Share

The Company computes earnings per share in accordance with FASB ASC 260, Earnings Per Share. FASB
ASC 260 provides for the calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. Potential common stock shares consist of shares that may arise from outstanding dilutive common
stock options and warrants (the number of which is computed using the treasury stock method) and from outstanding convertible debentures (the number of which is computed using the if converted method). Diluted EPS considers
the potential dilution that could occur if the Companys outstanding common stock options, warrants and convertible debentures were converted into common stock that then shared in the Companys earnings (as adjusted for interest expense,
that would no longer occur if the debentures were converted).

The weighted average number of shares was 14,699,330 and 14,648,914 for the
52-week period ended December 25, 2009 and December 26, 2008. The diluted weighted average number of shares was 15,011,404 and 14,966,105 for the 52-week period ended December 25, 2009 and December 26, 2008, respectively.

Common stock equivalents for the 52-week period ended December 25, 2009 and December 26, 2008 were anti-dilutive due to the net
losses sustained by the Company during these periods. Therefore, the diluted weighted average common shares outstanding for the dilutive weighted average share calculation in the period ended December 25, 2009 and December 26, 2008
excludes approximately 312,074 shares and 317,191 shares that could dilute earnings per share in future periods, respectively.

Recently
Issued Financial Accounting Standards

In October 2009, the Financial Accounting Standards Board (FASB) issued, Multiple
Deliverable Revenue Arrangements,which modifies accounting for multiple element arrangements by requiring that the separation of the arrangements be based on estimated selling prices based on entity specific assumptions rather than fair
value, eliminating the residual method of allocation and requiring additional disclosures related to such arrangements. The standard is effective prospectively for arrangements entered into or materially modified in fiscal years beginning on or
after June 15, 2010. The Company has not yet evaluated the impact the adoption of the standard will have on its consolidated financial statements.

In October 2009, the FASB issued, Certain Revenue Arrangements That Include Software Elements,which amends software revenue recognition guidance to eliminate from its scope
tangible products containing software components that function together to deliver the tangible products essential functionality and to provide guidance on how to allocate arrangement consideration to deliverables in an arrangement that
contain both tangible products and software. The standard is



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effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company has not yet evaluated the impact the
adoption of the standard will have on its consolidated financial statements.

In August 2009, the FASB issued changes to fair value accounting
for liabilities. These changes clarify existing guidance that in circumstances in which a quoted price in an active market for the identical liability is not available, an entity is required to measure fair value using either a valuation technique
that uses a quoted price of either a similar liability or a quoted price of an identical or similar liability when traded as an asset, or another valuation technique that is consistent with the principles of fair value measurements, such as an
income approach (e.g., present value technique). This guidance also states that both a quoted price in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the asset are required are Level 1 fair value measurements. Management has determined that the adoption of these changes will not have an impact on the consolidated financial statements.

In June 2009, the FASB issued Codification and the Hierarchy of Generally Accepted Accounting Principles and establishes the FASB Accounting Standards
Codification (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of
the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or
Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. Management has determined
that the adoption of these changes will not have an impact on the consolidated financial statements.

In June 2009, the FASB issued Amendments
to Consolidation of Variable Interest Entities to require an enterprise to perform an analysis to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity; to
require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; to add
an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment are at risk, as a group, lose the power from voting
rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entitys economic performance; and to require enhanced disclosures that will provide users of financial statements with more
transparent information about an enterprises involvement in a variable interest entity. Management has determined that the adoption of these changes will not have an impact on the consolidated financial statements.

In May 2009, the FASB issued Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance
sheet date, but before the financial statements are issued or available to be issued (subsequent events). This requires disclosure of the date through which the entity has evaluated subsequent events and the basis for that
date. For public entities, this is the date the financial statements are issued. This does not apply to subsequent events or transactions that are within the scope of other GAAP and will not result in significant changes in the subsequent
events reported by the Company. The Company has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2009, for items that should be recognized or disclosed in these financial statements.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by
management to have a material impact on the Companys present or future financial statements.



|3. | Property and Equipment
|-- | ----------------------

Property and
equipment consist of:



|                                |  |                  |           |                  |   |          
|------------------------------- |  | ---------------- | --------- | ---------------- | - | ---------
|                                |  | December 25,2009 |           | December 26,2008
|Furniture and equipment         |  | $                | 92,300    |                  | $ | 201,900  
|Computer equipment and software |  |                  | 936,800   |                  |   | 1,289,200
|Warehouse equipment             |  |                  | 653,200   |                  |   | 617,500  
|Leasehold improvements          |  |                  | 104,500   |                  |   | 104,500  
|                                |  |                  |           |                  |   |          
|                                |  |                 
|Total property and equipment    |  |                  | 1,786,800 |                  |   | 2,213,100
|Less accumulated depreciation   |  |                  | 1,547,400 |                  |   | 1,885,700
|                                |  |                  |           |                  |   |          
|                                |  | $                | 239,400   |                  | $ | 327,400  
|                                |  |                  |           |                  |   |          



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Depreciation expense for the 52-week periods ended December 25, 2009 and December 26, 2008 was
approximately $198,000 and $202,700 respectively.



|4. | Other Assets
|-- | ------------

Other assets consist of:



|                                                  |  |                  |         |                  |   |        
|------------------------------------------------- |  | ---------------- | ------- | ---------------- | - | -------
|                                                  |  | December 25,2009 |         | December 26,2008
|                                                  |  |                 
|Capitalized debt cost                             |  | $                | 397,500 |                  | $ | 308,400
|                                                  |  |                  |         |                  |   |        
|                                                  |  |                  | 397,500 |                  |   | 308,400
|                                                  |  |                 
|Current portion classified as other current asset |  |                  | 328,800 |                  |   | 308,400
|                                                  |  |                  |         |                  |   |        
|                                                  |  | $                | 68,700  |                  | $ | 0      
|                                                  |  |                  |         |                  |   |        



|5. | Notes Payable and Secured Revolving Note
|-- | ----------------------------------------

Notes payable consist of:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                  |           |                  |   |          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | --------- | ---------------- | - | ---------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | December 25,2009 |           | December 26,2008
|Moriah Note payable; interest at prime plus 6.0% (interest at December 25, 2009 was at the floor rate of 11.0%); interest
only payments due monthly with the entire principal and any accrued interest due March 18, 2011; collateralized by all the business assets and partially guaranteed with the stock of certain stockholders.                                                                                                                         |  | $                | 1,000,000 |                  | $ | 0        
|Laurus Bank Note payable; interest at prime plus 2.0% (interest at December 26, 2008 was at the floor rate of 10.25%);
interest only payments due monthly with the principal payments of $45,000 per month beginning in December 2007, for two years, and the remaining balance due in December 2009; collateralized by all the business assets and personal guarantees by a
certain stockholder. This loan has been fully extinguished at December 25, 2009. |  |                  | 0         |                  |   | 1,415,000
|                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                  |           |                  |   |          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                  | 1,000,000 |                  |   | 1,415,000
|Less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  | 0         |                  |   | 1,415,000
|                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                  |           |                  |   |          
|Long-term portion of notes payable                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $                | 1,000,000 |                  | $ | 0        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                  |           |                  |   |          

Moriah Agreements:

In December 2009, the Company entered into a Loan and Security agreement and a Secured Revolving Note with Moriah Capital, L.P., a Delaware Limited
Partnership (Moriah and the Closing), whereby we agreed to a Secured Revolving Term Note (the Note) with one million five hundred thousand dollars ($1,500,000) availability based on certain criteria. The loan is
based on the Companys account receivables and is advanced at a rate of 85% of eligible receivables, in addition to other collateral. The interest rate of the Note is six percent (6%) above prime with a floor of eleven percent
(11.0%) and is paid on a monthly basis. The loan is secured by all of the Companys assets. The entire Principal is payable in March of 2011. The proceeds from the Note were used to extinguish loans of the Company and provide the necessary
working capital to accelerate the Companys growth initiatives. A portion of the Note is secured by the Jagged Peak common stock held by certain stockholders of the Company.



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In connection with the Loan and Security agreement, the Company executed a Securities Issuance agreement.
Pursuant to the terms and conditions of the governing Securities Issuance Agreement, the Company issued 775,000 shares of Jagged Peak common stock along with a put option to sell the stock back to the Company at a fixed price of $0.21 per share.
Moriah has the right, but not the obligation, to put the shares back to the Company at the fixed price per share on March 18, 2011. Moriah can sell these shares of common stock at their sole discretion in compliance with applicable
securities laws. The Company has accounted for these shares with a put option as a reclassification of the value of the shares from permanent to temporary equity.

Pursuant to the terms and conditions of the Loan and Security agreement, the Company must maintain certain financial Covenants as follows:

Fixed Charge Coverage Ratio  Beginning March 31, 2010, Borrower shall maintain a Fixed Charge Coverage Ratio on a consolidated
basis of not less than the following, in each case for the preceding twelve-month period: (i) 0.75:1.0 for the quarter ended March 31, 2010; (ii) 1.0:1.0 for the quarter ended June 30, 2010; (iii) 1.25:1.0 for the quarter
ended September 30, 2010 and (iv) 1.5:1.0 for the quarter ended December 31, 2010;

Funded Debt to EBITDA Ratio
 Beginning March 31, 2010, Borrower shall maintain a Funded Debt to EBITDA Ratio on a consolidated basis of not less than the following, in each case as of the last day of each calendar quarter, for the immediately preceding twelve-month
period: (i) 3.0:1.0 for the quarter ended March 31, 2010; (ii) 2.5:1.0 for the quarter ended June 30, 2010; and (iii) 2.0:1.0 as of the end of each calendar quarter thereafter.

In connection with the Security and Purchase agreement, we agreed to pay Moriah, a closing payment equal to $112,500 and other fees, totaling approximately
$35,000 in cash and 775,000 shares of Jagged Peak common stock. Additionally, we agreed to pay a finders fee to Bryant Park Capital, Inc. of $90,000 in cash and 54,250 shares of Jagged Peak common stock.

If an Event of Default were to occur, Moriah may at its option, demand repayment in full of all obligations and liabilities owed to it by the Company, plus
any accrued and unpaid interest.

In addition, the Company entered into a Pledge and Security Agreement, Patent and Trademark Assignment and
Security Agreement, and a Trademark Collateral Assignment and Security Agreement.

The Company expects that positive cash flow from operations
will allow the Company to make payments to Moriah according to the terms of the loan agreement. The Company expects to obtain additional financing or an equity infusion to make the final principle payment, due in March of 2011. Based on the cash
flow from operations and the Companys past history, management believes they will be able to find conventional financing with reasonable terms. If the Company is unable to obtain the necessary financing from a conventional bank, it is highly
likely that the current shareholders would be significantly diluted if the Company was required to refinance the debt with additional convertible debt at the current market price of the stock.

Laurus Agreements:

The Laurus revolving note was
fully extinguished in 2009. Laurus accepted a payment of approximately $915,000 and 190,000 shares of Jagged Peak common stock as full payment for the convertible note. The Company recognized a gain on this transaction of approximately $72,100.

In December 2006, the Company entered into a Security and Purchase Agreement with Laurus Master Fund, Ltd., a Cayman Islands company
(Laurus and the Closing), whereby we agreed to a Secured Convertible Term Note (the Note or Convertible Note) in the principal amount of two million dollars ($2,000,000), which is convertible into an
aggregate of 2,000,000 shares of the Companys Common Stock at a conversion price of $1.00 per share (the Fixed Conversion Price). The interest rate of the Convertible Note is two percent (2%) above prime with a floor of ten
and a quarter percent (10.25%) and is paid on a monthly basis. Monthly principal payments of $45,000 per month will begin in December of 2007 with a final balloon payment of $920,000 due in December of 2009. The proceeds from the Convertible
Note were used to extinguish all remaining loans of the Company and provide the necessary working capital to accelerate the Companys growth initiatives. The Note is personally guaranteed by one of the stockholders.

The Company also agreed to a Secured Revolving Note (the Revolving Note) in the amount of one million dollars ($1,000,000). The loan is secured
by the Companys account receivables and is advanced at a rate of 90% of eligible receivables. The interest rate of the Revolving Note is two percent (2%) above prime with a floor of ten percent (10%) and is paid on a monthly basis.
The term of the Revolving Note is three years and terminates in December 2009.



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Laurus must convert all or a portion of the monthly principal and interest payments for the Convertible Note
into shares of our Common Stock if: (i) the average closing price of our Common Stock for the five trading days immediately proceeding such payment is greater than or equal to 115% of the Fixed Conversion Price; and (ii) the amount of such
conversion does not exceed twenty-five percent of the aggregate dollar trading volume of the Common Stock for the period of twenty-two trading days immediately preceding such payment date (the Conversion Criteria); however if subsection
(i) of the Conversion Criteria is met but subsection (ii) of the Conversion Criteria is not met as to the entire monthly principal payment, Laurus shall convert only such part of the monthly principle payment that meets subsection
(ii) of the Conversion Criteria. If the monthly payment (or a portion of such monthly payment if not all of the payment may be converted into shares of Common Stock) is required to be paid in shares of Common Stock, the number of such shares to
be issued by the Company shall be the number determined by dividing (i) the portion of such payment converted into shares of Common Stock, by (ii) $1.00 (subject to certain adjustments). Any portion of the monthly principal payment that
Laurus has not been able to convert into shares of Common Stock due to the failure to meet the Conversion Criteria, shall be paid in cash by the Company, jointly and severally, at the rate of 100% of the monthly principal payment otherwise due on
such Amortization Date, within three (3) business days of such due Date.

In addition, Laurus may from time to time voluntarily convert
all or a portion of the outstanding principal amount of the Note plus all accrued but unpaid interest into shares of common stock at a price of $1.00 (subject to certain adjustments).

The Company may prepay the Note in cash by giving Laurus a notice of repayment, ten (10) days before such intent to prepay, and by paying Laurus an amount equal to 130% of the outstanding principal
amount. The Note includes a provision whereby Laurus is not entitled to convert any portion of the Note in excess of that portion of the Note upon exercise of which the sum of (1) the number of shares of Common Stock beneficially owned by
Laurus and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of Laurus subject to a
limitation on conversion analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this is being made, would
result in beneficial ownership by Laurus and its affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock (whether or not, at the time of such conversion, Laurus and its affiliates beneficially own more than 9.99%
of the then outstanding shares of Common Stock). The limitation can be waived by the Laurus upon provision of no less than sixty-one (61) days prior notice to the Company and shall automatically become null and void following notice to the
Company upon the occurrence and during the continuance of an Event of Default.

Additionally, if the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock or any preferred stock issued by the Company in shares of Common Stock, the Fixed Conversion Price shall be proportionately reduced in
case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior to such event.

Any default under the Security and Purchase agreement
will constitute a default under the Convertible Note and the Revolving Note (Both Notes). Events of default under the Security and Purchase agreement include our failure to pay amounts due under Both Notes; breach of any covenants under
Both Notes, if not cured within 15 business days; breach of any warranties found in the Security Agreement, Both Notes or any other related agreement; the occurrence of any default under any agreement, which causes any contingent obligation to
become due prior to its stated maturity or to become payable; any change or occurrence likely to have a material adverse effect on the business, assets, liabilities, financial condition, our operations or prospects; our bankruptcy; a judgment
against us in excess of $50,000, which has not been vacated, discharged or stayed, within thirty (30) days of the date of entry; our insolvency; a change in control of the Company; an indictment or other proceedings against the Company or any
executive officer; if the Company breaches any provision of the Securities Purchase Agreement or any other related agreements (each, an Event of Default).

Following the occurrence and during the continuance of an Event of Default, the Company shall, jointly and severally, pay additional interest on the outstanding principal balance of Both Notes in an
amount equal to one percent (1%) per month, and all outstanding obligations, including unpaid interest, shall continue to accrue interest at such additional interest rate from the date of such Event of Default until the date such Event of
Default is cured or waived.

If an Event of Default were to occur under the Security Agreement, Laurus may at its option, demand repayment in
full of all obligations and liabilities owed to it by us under Both Notes, Securities Purchase Agreement and any related agreement and may require us to immediately pay 130% of the principal amount outstanding under the Both Notes, plus any accrued
and unpaid interest.



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On September 28, 2008, the Company obtained the effectiveness of a Registration Statement (333-142099)
for the resale of 1,000,000 shares by Laurus. On July 23, 2007, Laurus and the Company entered into an amendment to the Laurus registration rights agreement, pursuant to which Laurus agreed that: (1) the total number of shares to be
registered on behalf of Laurus on such Registration Statement would be 1,000,000 (the Reduced Shares), all of which consist of shares of common stock issuable upon conversion of the Note, and (2) such reduction in shares will not
give rise to a breach of the Registration Rights Agreement nor to any liquidated damages or other obligations; provided, however, that upon the earlier of (a) the date Laurus has sold all of the Reduced Shares and (b) six months after the
Effectiveness Date, the Company shall use its commercially reasonable efforts, in compliance with any applicable Commission guidance, and subject to the remaining terms of the Registration Rights Agreement, to register the balance of the
Registerable Securities on separate registration statements; provided, further, that in no event shall the Company be required to register Registerable Securities in excess of that number of shares that is permitted to be registered by the
Commission on behalf of selling security holders as a secondary offering under Rule 415; provided, further, that the Company shall not be required to file any additional registration statements or to keep any such additional registration statements
effective after the earlier of the date (i) all Registrable Securities owned by Laurus have been sold or (ii) all Registrable Securities owned by Laurus may be sold immediately without registration under the Securities Act and without
volume restrictions pursuant to Rule 144(k). Further, Laurus agreed to waive any liquidated damages that have arisen, or will arise through August 31, 2007, under Section 2(b) of the Registration Rights Agreement solely as a result of the
delay in Effectiveness Date of the Registration Statement of the Company as otherwise required pursuant to the terms of the Registration Rights Agreement.

In addition the Company entered into a Funds Escrow Agreement and an Intellectual Property Security Agreement with Laurus.

In connection with the Security and Purchase agreement, we agreed to pay Laurus Capital Management, L.L.C., the manager of Laurus, a closing payment equal to $105,000 and other fees, totaling
approximately $135,000 in cash and 706,000 warrants exercisable at $0.01 per common share. Additionally, we agreed to pay Stonegate Securities $160,000 in cash and 70,600 warrants exercisable at $0.01 per common share as a finders fee. In
addition, in a transaction unrelated to the Laurus Private Placement we agreed with the former holders of the Companys debt (JP Funding Inc. and Andrew Krusen) to an early extinguishment of the debt, cancellation of all previously issued,
variable warrants, in consideration of, among other things, the issuance of 230,000, three-year warrants exercisable at $0.01 per common share. We have agreed to register all such warrants pursuant to this registration statement.

The following is a schedule by year of future minimum principle payments required under the terms of the above notes payable as of December 25, 2009:



|                     |  |   |          
|-------------------- |  | - | ---------
|Year Ending December |  |  
|2011                 |  | $ | 1,000,000
|                     |  |   |          
|                     | 
|Total                |  | $ | 1,000,000
|                     |  |   |          



|6. | Lease Commitments and Contingent Liabilities
|-- | --------------------------------------------

The Company leases its facilities and certain equipment under operating leases with various terms. The following is a schedule, by year, of future minimum rental payments required under operating leases that have an initial or remaining
noncancelable lease term in excess of one year as of December 25, 2009:



|                     |  |   |        
|-------------------- |  | - | -------
|Year Ending December |  |  
|2010                 |  | $ | 618,900
|2011                 |  |   | 148,300
|2012                 |  |   | 11,000 
|                     |  |   |        
|Total                |  | $ | 778,200
|                     |  |   |        

Rent expense amounted to approximately $695,700 and $683,600 for the
52-week period ended December 25, 2009 and December 26, 2008, respectively.



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Litigation

In the ordinary course of business, the Company may be a party to a variety of legal actions that affect any business. The Company does not anticipate any of these matters or any matters in the aggregate
to have a material adverse effect on the Companys business or its financial position or results of operations.

Employment Agreements

In December 2005, the Company entered into an employment agreement with the Companys Chief Financial Officer, which was amended in
2006 to extend the term to 2009. The agreement is renewed annually after 2009. Under the employment agreement, which is for a five-year term, the Chief Financial Officer is paid an initial base salary of $125,000, with minimum annual increases of
$10,000. Additional performance-based bonuses are provided for, and the employee was granted options to purchase 200,000 shares of Company stock. Benefits under the agreement are accelerated on a change of control, and the employee is subject to
certain non-competition covenants.



|7. | Income Taxes
|-- | ------------

The Income tax benefit is
as follows:



|                         |  |                  |         |                  |   |       
|------------------------ |  | ---------------- | ------- | ---------------- | - | ------
|                         |  | Period Ended    
|                         |  | December 25,2009 |         | December 26,2008
|                         |  |                 
|Deferred benefit         |  |                  |         |                  |   |       
|Federal                  |  | $                | 103,600 |                  | $ | 59,500
|State                    |  |                  | 8,200   |                  |   | 6,400 
|Foreign                  |  |                  | 4,400   |                  |   | 0     
|                         |  |                  |         |                  |   |       
|                         |  |                 
|Benefit for income taxes |  | $                | 116,200 |                  | $ | 65,900
|                         |  |                  |         |                  |   |       

The Companys Income tax expense in 2009 included the effect of
the Companys federal, state, and foreign tax benefits. Income taxes are based on the estimation of the annual effective tax rate and evaluations of possible future events and transactions and may be subject to subsequent refinement or
revision. The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows:



|                                                             |  |                  |          |   |                  |   |         |  
|------------------------------------------------------------ |  | ---------------- | -------- | - | ---------------- | - | ------- | -
|                                                             |  | Period Ended     |         
|                                                             |  | December 25,2009 |          |   | December 26,2008 |  
|                                                             |  |                 
|Tax benefit at U.S. statutory rate                           |  | $                | (115,200 | ) |                  | $ | (88,600 | )
|State income tax benefit, net of federal benefit             |  |                  | (8,200   | ) |                  |   | (6,400  | )
|Foreign income tax benefit                                   |  |                  | (4,400   | ) |                  |   | 0       |  
|Effect of general non-deductible expenses                    |  |                  | 10,200   |   |                  |   | 17,200  |  
|Effect of amortization of employee stock option compensation |  |                  | 1,400    |   |                  |   | 11,900  |  
|                                                             |  |                  |          |   |                  |   |         |  
|                                                             |  |                 
|                                                             |  | $                | (116,200 | ) |                  | $ | (65,900 | )
|                                                             |  |                  |          |   |                  |   |         |  



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The tax effects of temporary differences that give rise to significant portions of the deferred tax assets
and deferred tax liabilities at December 25, 2009 and December 26, 2008 are as follows:



|                                                  |  |                  |           |   |                  |   |           |  
|------------------------------------------------- |  | ---------------- | --------- | - | ---------------- | - | --------- | -
|                                                  |  | December 25,2009 |           |   | December 26,2008 |  
|                                                  |  |                 
|Current deferred tax assets:                      |  |                  |           |   |                  |   |           |  
|Allowance for doubtful accounts                   |  | $                | 15,000    |   |                  | $ | 86,500    |  
|Work-in-process reserve                           |  |                  | 11,300    |   |                  |   | 11,300    |  
|Net operating loss carryforward                   |  |                  | 102,000   |   |                  |   | 142,600   |  
|Other                                             |  |                  | 44,700    |   |                  |   | 28,200    |  
|                                                  |  |                  |           |   |                  |   |           |  
|                                                  |  |                 
|Total current deferred tax assets                 |  |                  | 173,000   |   |                  |   | 268,600   |  
|                                                  |  |                 
|Long-term deferred tax assets (liability):        |  |                  |           |   |                  |   |           |  
|Net operating loss carryforward                   |  |                  | 1,481,900 |   |                  |   | 1,195,300 |  
|Depreciation, amortization variance and other     |  |                  | (131,400  | ) |                  |   | (56,600   | )
|                                                  |  |                  |           |   |                  |   |           |  
|                                                  |  |                 
|Total long-term deferred tax assets (liabilities) |  |                  | 1,350,500 |   |                  |   | 1,138,700 |  
|                                                  |  |                  |           |   |                  |   |           |  
|                                                  |  |                 
|Net deferred tax asset                            |  | $                | 1,523,500 |   |                  | $ | 1,407,300 |  
|                                                  |  |                  |           |   |                  |   |           |  

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical performance and projections for future taxable income
over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable,
however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

As of
December 25, 2009, the Company had unrestricted federal net operating loss carryforwards of approximately $4,200,000 to reduce future taxable income, which expire as follows:



|                  |  |                                |          
|----------------- |  | ------------------------------ | ---------
|Expiration Date   |  | Regular Tax NetOperatingLosses
|                  | 
|2017              |  | $                              | 9,400    
|2018              |  |                                | 446,700  
|2021              |  |                                | 1,014,100
|2023 through 2029 |  |                                | 2,729,800
|                  |  |                                |          
|                  |  | $                              | 4,200,000
|                  |  |                                |          

The Company classifies penalty and interest expense related to income
tax liabilities as an income tax expense. There are no interest and penalties recognized in the statement of operations or accrued on the balance sheet.



|8. | Stock Compensation
|-- | ------------------

Overview

The Companys 2005 Stock Incentive Plan as Amended July 2008 (the Plan) authorizes the Board of Directors the
authority to grant up to 5,000,000 options to key employees, officers, directors, and consultants. The aggregate fair market value of grants to one individual shall not exceed $100,000 during any one calendar year for grants of both incentive stock
options and non-qualified stock options. Options granted under the Plan must be exercised within ten years of the date of grant. The Option Price payable for the shares of Common Stock covered by any Option shall be determined by the Board of
Directors, but with regards to Incentive Stock Options, shall not be less than the Fair Market Value of one share of Common Stock on the Date of Grant. The Option Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock
on the Date of Grant only if the Committee determines that special circumstances warrant a lower exercise price.



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The Companys 2000 Stock Incentive Plan authorizes up to 100,000 shares of common stock to any employee
or Consultant during any one calendar year for grants of both incentive stock options and non-qualified stock options to key employees, officers, directors, and consultants. Options granted under the Plan must be exercised within ten years of the
date of grant. The Option Price payable for the shares of Common Stock covered by any Option shall be determined by the Board of Directors, but shall in no event be less than the par value of Common Stock. The Option Price payable for the shares of
Common Stock covered by any Option shall be determined by the Board of Directors, but with regards to Incentive Stock Options, shall not be less than the Fair Market Value of one share of Common Stock on the Date of Grant. The Option Price for
Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of Grant only if the Committee determines that special circumstances warrant a lower exercise price.

Stock Option Awards

In 2009 the
Companys Board of Directors authorized stock option awards for certain employees to purchase up to 200,000 shares of Jagged Peak common stock with a weighted average exercise price of $0.25 per common share and an aggregate market value of
approximately $24,200. The options have a term of five years and vests over a two year period.

In 2008 the Companys Board of Directors
authorized stock option awards for a certain employee to purchase up to 50,000 shares of common stock with a weighted average exercise price of $0.50 per common share and an aggregate market value of approximately $9,300. The option has a term of
five years and vests over a two year period.

In 2008 the Companys Board of Directors authorized a warrant for a certain consultant to
purchase up to 75,000 shares of common stock with a weighted average exercise price of $0.30 per common share and an aggregate market value of approximately $13,400. The option has a term of five years and vests over a two year period.

Stock Compensation Expense

The
Company uses a Black-Scholes model to value its stock option grants and expenses the related compensation cost using the straight-line method over the vesting period. The fair value of stock options is determined on the grant date using assumptions
for the expected term, expected volatility, dividend yield, and the risk free interest rate. The expected term is primarily based on the contractual term of the option and Company data related to historic exercise and post-vesting forfeiture
patterns, which is adjusted based on managements expectations of future results. The expected term is determined separately for options issued to the Companys directors and to employees. The Companys anticipated volatility level is
primarily based on the historic volatility of the Companys common stock, adjusted to remove the effects of certain periods of unusual volatility not expected to recur, and adjusted based on managements expectations of future volatility,
for the life of the option or option group. The Companys model includes a zero dividend yield assumption in all periods, as the Company has not historically paid nor does it anticipate paying dividends on its common stock. The risk free
interest rate is based on recent U.S. Treasury note auction results with a similar life to that of the option. The Companys model does not include a discount for post-vesting restrictions, as the Company has not issued awards with such
restrictions. The period expense is then determined based on the valuation of the options and, at that time, an estimated forfeiture rate is used to reduce the expense recorded. The Companys estimate of pre-vesting forfeitures is primarily
based on the recent historical experience of the Company and is adjusted to reflect actual forfeitures at each vesting date.

The Company
values the options and warrants at the grant date using the Black-Scholes option model with the following weighted average assumptions for options granted in 2009: the historical dividend rate of 0%; the risk-free interest rate of between
approximately 2.4% and 3.8% for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term of 5 years which was calculated based on the Companys historical
pattern of options granted are expected to be outstanding; an expected volatility of between 195% and 160% which was calculated by review of the Companys historical activity as well as comparable peer companies; and an option exercise
experience rate for employees of 50% based on the Companys historical rate of employee options being exercised prior to expiration or termination.

The Company values the options and warrants at the grant date using the Black-Scholes option model with the following weighted average assumptions for options granted in 2008: the historical dividend rate
of 0%; the risk-free interest rate of approximately 4% for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term of 5 years which was calculated based on the
Companys historical pattern of options granted and expected to be outstanding; an expected volatility of 175% which was calculated by review of the Companys historical activity as well as comparable peer companies; and an option exercise
experience rate for employees of 50% based on the Companys historical rate of employee options being exercised prior to expiration or termination.



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The following summarizes the Companys stock option and warrant activity and related information:



|                                               |  |            |   |  |                         |           |                                |   |     
|---------------------------------------------- |  | ---------- | - |  | ----------------------- | --------- | ------------------------------ | - | ----
|                                               |  | Shares     |   |  | Range of ExercisePrices |           | Weighted AverageExercise Price
|                                               |  |            |  
|Outstanding at December 28, 2007               |  | 4,389,898  |   |  | $                       | 0.01-2.50 |                                | $ | 0.84
|Warrants, Convertible Debt and options granted |  | 125,000    |   |  | $                       | 0.30-0.50 |                                | $ | 0.38
|Warrants and options cancelled or expired      |  | (615,000   | ) |  | $                       | 0.55-1.00 |                                | $ | 0.98
|                                               |  |            |   |  |                         |           |                                |   |     
|Outstanding at December 26, 2008               |  | 3,899,898  |   |  | $                       | 0.01-2.50 |                                | $ | 0.80
|Warrants, Convertible Debt and options granted |  | 200,000    |   |  | $                       | 0.25      |                                | $ | 0.25
|Warrants exercised                             |  | (230,000   | ) |  | $                       | 0.01      |                                | $ | 0.01
|Warrants and options cancelled or expired      |  | (1,512,058 | ) |  | $                       | 0.50-1.28 |                                | $ | 1.00
|                                               |  |            |   |  |                         |           |                                |   |     
|Outstanding at December 25, 2009               |  | 2,357,840  |   |  | $                       | 0.01-2.50 |                                | $ | 0.70
|                                               |  |            |  
|Exercisable at December 25, 2009               |  | 2,157,840  |   |  | $                       | 0.01-2.50 |                                | $ | 0.75
|Exercisable at December 26, 2008               |  | 3,849,898  |   |  | $                       | 0.01-2.50 |                                | $ | 0.80

The following table summarizes
information about options and warrants outstanding and exercisable as of December 25, 2009:



|                      |           |                                  |           |                                  |           |                      |   |                               |  |                   |  |                      |  |   |     
|--------------------- | --------- | -------------------------------- | --------- | -------------------------------- | --------- | -------------------- | - | ----------------------------- |  | ----------------- |  | -------------------- |  | - | ----
|                      |           | Outstanding Warrants and Options |           | Exercisable Warrants and Options
|Range ofExercisePrice |           | NumberOutstanding                |           | WeightedAverageRemainingLife     |           | WeightedAveragePrice |   | WeightedAverageRemaining Life |  | NumberExercisable |  | WeightedAveragePrice
|                      |           |                                  |           |                                  |           |                     
|$                     | 0.01      |                                  | 104,899   |                                  | 4.2 years |                      | $ | 0.01                          |  | 4.2 years         |  | 104,899              |  | $ | 0.01
|$                     | 025.-0.77 |                                  | 1,718,529 |                                  | 2.0 years |                      | $ | 0.56                          |  | 1.6 years         |  | 1,518,529            |  | $ | 0.61
|$                     | 1.00-2.50 |                                  | 534,412   |                                  | 1.1 years |                      | $ | 1.29                          |  | 1.1 years         |  | 534,412              |  | $ | 1.29

As of December 25, 2009 and
December 26, 2008, there were approximately 2,157,840 and 3,849,898 options exercisable at a weighted average exercise price of $0.75 and $0.80, respectively. The weighted average fair value of options at the date of grant of the options was
$0.25 and $0.27 for 2009 and 2008, respectively.

The following table represents our nonvested stock option activity for the years ended
December 25, 2009 and December 26, 2008:



|                                      |  |                  |   |  |                                      |     
|------------------------------------- |  | ---------------- | - |  | ------------------------------------ | ----
|                                      |  | Number ofOptions |   |  | Weighted AverageGrant DateFair
Value
|Nonvested options - December 28, 2007 |  | 102,500          |   |  | $                                    | 0.50
|                                      |  |                 
|Granted                               |  | 125,000          |   |  | $                                    | 0.18
|Vested                                |  | (172,500         | ) |  | $                                    | 0.36
|Forfeited                             |  | (5,000           | ) |  | $                                    | 0.46
|                                      |  |                  |   |  |                                      |     
|                                      |  |                 
|Nonvested options - December 26, 2008 |  | 50,000           |   |  | $                                    | 0.19
|                                      |  |                  |   |  |                                      |     
|                                      |  |                 
|Granted                               |  | 200,000          |   |  | $                                    | 0.25
|Vested                                |  | 0                |   |  |                                      |     
|Forfeited                             |  | (50,000          | ) |  | $                                    | 0.20
|                                      |  |                  |   |  |                                      |     
|                                      |  |                 
|Nonvested options - December 25, 2009 |  | 200,000          |   |  | $                                    | 0.25
|                                      |  |                  |   |  |                                      |     



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##### Table of Contents

There was no aggregate intrinsic value of options outstanding at December 25, 2009, based on the
Companys closing stock price of $0.13 as of the last business day of the period ended December 25, 2009, which would have been received by the optionees had all options been exercised on that date. There was no aggregate intrinsic value
of options exercisable at December 25, 2009, based on the Companys closing stock price of $0.13 as of the last business day of the period ended December 25, 2009, which would have been received by the optionees had all options
exercisable been exercised on that date.

There was no aggregate intrinsic value of options outstanding at December 26, 2008, based on
the Companys closing stock price of $0.14 as of the last business day of the period ended December 26, 2008, which would have been received by the optionees had all options been exercised on that date. There was no aggregate intrinsic
value of options exercisable at December 26, 2008, based on the Companys closing stock price of $0.14 as of the last business day of the period ended December 26, 2008, which would have been received by the optionees had all options
exercisable been exercised on that date.

There were no options exercised during the years ended December 25, 2009 and December 26,
2008.



|9. | Equity
|-- | ------

Common Stock

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally
available and when declared by the Board of Directors (the Board), subject to the prior rights of the holders of any outstanding senior classes of stock, of which there are currently none. The Company records stock as issued when the
consideration is received or the obligation is incurred.

Issuance of Common Stock

In December of 2009, the Company issued 230,000 shares of common stock, $0.001 par value per share, under Regulation D promulgated under the Securities Act
of 1933, as amended. The issuance of the stock was related to the exercise of certain warrants with an exercise price $0.01 per common share. The funds were used for working capital.

In December of 2009, the Company issued 190,000 shares of common stock, $0.001 par value per share, under Regulation D promulgated under the Securities Act of 1933, as amended. The issuance of the stock
was related to the extinguishment of the Laurus debt and was recorded at $0.11 per common share, the market price on the date of issuance. No cash was received, only the relief of debt.

In December of 2009, the Company issued 829,250 shares of common stock, $0.001 par value per share, under Regulation D promulgated under the Securities Act of 1933, as amended. The issuance of the stock
was related to the newly obtained Moriah financing. 775,000 shares of the stock issued was pursuant to the terms and conditions of the governing Securities Issuance Agreement, the holder of such shares has the right, but not the obligation, to put
the shares back to the Company at a fixed price per share on March 18, 2011. Moriah can sell these shares of common stock at their sole discretion in compliance with applicable securities laws. The Company has accounted for these shares in
accordance with the guidance established by FASB ASC 480 as a reclassification of the value of the shares from permanent to temporary equity. As of March 18, 2011 when the put expires, the Company will transfer the value of the shares back
to permanent equity, less any amount recovered from the holder.



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##### Table of Contents

|10. | Related Party Transactions
|--- | --------------------------

The Company
contracted with Norco Accounting and Consulting Inc. (Norco) to provide accounting and consulting services. The Company spent approximately $12,900 and $37,200 for the 52-week period ended December 25, 2009 and December 26,
2008, respectively. Norco is 50% owned by Andrew J. Norstrud, who joined the Company in October of 2005, as the Companys Chief Financial Officer. The Company no longer uses Norco for consulting, however does occasionally use Norco for
temporary accounting staffing needs under the contract signed prior to Andrew J. Norstrud joining the Company.

The above related party
transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties.



|11. | Employee Stock Ownership Plan
|--- | -----------------------------

In 2007,
the Company established an Employee Stock Ownership Plan (ESOP), for the benefit of it employees and to purchase shares of the Companys common stock from time to time in the open market or in negotiated transactions at prices deemed to be
attractive. The Plan was amended as of January 1, 2008. Contributions to the ESOP are made at the discretion of the Board of Directors. All employees of Jagged Peak that meet the 1,000 hours work requirement are eligible to participate in the
ESOP. Under the ESOP, which is 100% Company funded, Jagged Peak allocates contributed shares to participants based on their eligible annual compensation. Compensation shall include but not be limited to the regular salaries and wages, overtime pay,
bonuses, commissions and other amounts paid by Jagged Peak and taxable to the employee. The value or number of Jagged Peak common stock shares that are contributed to the ESOP on an annual basis is completely subject to the discretion of the Board
of Directors. Any cash dividends or distributions paid with respect to shares of the ESOP trust will be retained and allocated in the same manner as other income of the ESOP trust. Shares held by the ESOP trust will be treated as all other issued
and outstanding common shares for earnings per share calculations. For 2009 and 2008, the Company recognized expense of $85,700 and $20,000, respectively related to contributions to the ESOP. All ESOP shares are considered outstanding for earnings
per share computations. All shares acquired in 2009 and 2008 are allocated.

The ESOP shares were as follows:



|                               |  |          |  |         
|------------------------------ |  | -------- |  | --------
|                               |  | 12/25/09 |  | 12/26/08
|                               |  |         
|Allocated shares               |  | 980,000  |  | 630,000 
|Shares released for allocation |  |          |  |         
|Unreleased shares              |  |          |  |         
|                               |  |          |  |         
|                               |  |         
|Total ESOP shares              |  | 980,000  |  | 630,000 
|                               |  |          |  |         



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##### Table of Contents

|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------

None.



|Item 9A(T). | Controls and Procedures
|----------- | -----------------------

Evaluation of
Disclosure Controls and Procedures

The Companys Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the fiscal period ending December 25, 2009 covered by this Annual Report on Form 10-K. Based
upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Companys disclosure controls and procedures were effective as required under Rules 13a-15(e) and 15d-15(e)
under the Exchange Act. This conclusion by the Companys Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after December 25, 2009.

Managements Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles
generally accepted in the United States of America.

The Companys internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

Management, under the supervision of the Companys Chief Executive Officer and Chief Financial Officer, conducted an
evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this
evaluation, management concluded that the Companys internal control over financial reporting was effective as of December 25, 2009 under the criteria set forth in the in Internal ControlIntegrated Framework.

This annual report does not include an attestation report of the Companys 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 SEC that permit us to provide only managements report in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

No change in the Companys internal control over financial reporting occurred during the year ended December 25, 2009, that materially affected, or is reasonably likely to materially affect, the
Companys internal control over financial reporting.



|Item 9B. | Other Information
|-------- | -----------------

None.



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##### Table of Contents

PART III



|Item 10. | Directors, Executive Officers and Corporate Governance
|-------- | ------------------------------------------------------

The Companys directors and executive officers as of March 9, 2010 were as follows:



|                    |  |     |  |                                                                   
|------------------- |  | --- |  | ------------------------------------------------------------------
|Name                |  | Age |  | Position                                                          
|                    |  |    
|Paul Demirdjian     |  | 49  |  | Chairman of the Board of Directors and Chief Executive Officer    
|Vince Fabrizzi      |  | 52  |  | Senior Vice President, Chief Sales and Marketing Officer, Director
|Dan Furlong         |  | 62  |  | Chief Operations Officer, Director                                
|Andrew J. Norstrud  |  | 36  |  | Chief Financial Officer                                           
|Primrose Demirdjian |  | 50  |  | Director                                                          

The following is a brief summary of the business
experience of the foregoing directors and executive officers.

The following sets forth information concerning the officers and directors,
including present principal occupations, other business experience during the last 5 years, membership on committees of the Board of Directors and directorships in other publicly held companies.

Paul Demirdjian  Chief Executive Officer, Board Member

Mr. Demirdjian has over twenty years of experience in senior management, including executive positions of Senior Vice President of Operations, Chief Information Officer and Director for over ten
years at Davel Communications, a publicly held telecom company operating private payphones, operator services, and long distance services. Mr. Demirdjian is in the process of applying for patents on a number of e-business methodologies and has
written numerous articles published in Public Communications Magazine. Paul Demirdjian has served on the Board since the inception of Jagged Peak in 2000 and is married to Primrose Demirdjian, another member of the Board. Mr. Demirdjian
attended the University of South Florida, where he was a member of the Engineering Honor Society (Tau Alpha Pi) and has an Electronic Engineering Technology degree.

Vince Fabrizzi  Chief Sales and Marketing Officer, Board Member

Prior to joining
Jagged Peak, Mr. Fabrizzi was Chief Executive Officer and co-Founder of Compass Marketing Services, a logistics services, warehouse management, and fulfillment services company. Previously, Mr. Fabrizzi co-founded Paradigm Communications
in 1989 with Mr. Furlong, and together over the next eight years they built the company into one of the Southeasts largest nationally recognized advertising agencies with over 160 employees, $60 million in revenues and an impressive list
of Fortune 500 clients. Prior to co-founding Paradigm, Mr. Fabrizzi was a Vice President and Partner at FKQ Advertising. Vince Fabrizzi has served on the Board since the inception of Jagged Peak in 2000. Mr. Fabrizzi holds a B.S. in
Mechanical Engineering from West Virginia University.

Dan Furlong  Chief Operating Officer, Board Member

Prior to joining Jagged Peak, Mr. Furlong was President and co-Founder with Mr. Fabrizzi of both Compass Marketing Services and Paradigm
Communications. Previously, Mr. Furlong was Vice President of Marketing for Dollar Rent-A-Car of Florida  the largest Dollar Rent-A-Car franchise in the country. During his tenure, business at the Florida division increased ten-fold.
Mr. Furlong has served as an officer and a board member since the inception of Jagged Peak in 2000. Mr. Furlong graduated from the University of Wyoming with both undergraduate and graduate degrees in Accounting.

Andrew J. Norstrud  Chief Financial Officer

Mr. Norstrud joined Jagged Peak in October of 2005 from Segmentz, Inc., where he served as Chief Financial Officer, and played an instrumental role in the company achieving its strategic goals by pursuing and attaining growth
initiatives, building an exceptional financial team, completing and integrating strategic acquisitions and implementing the structure required of public companies. Previously, Mr. Norstrud worked for Grant Thornton LLP, Norco Accounting and
Consulting, Aerosonic and PricewaterhouseCoopers LLP and has extensive experience with young, rapid growth public companies. Mr. Norstrud earned a Master of Accounting with a systems emphasis from the University of Florida and is a Florida
licensed Certified Public Accountant.

Primrose Demirdjian  Board Member

Primrose Demirdjian is serving as the Companys Public Relations Director. She currently serves on the board of the Tampa Bay International
Business Council and leads the Childrens Cancer Research Group at St. Josephs Childrens Hospital. Prior to her tenure as president and co-founder of IBIS (June 1996), an Internet-related company, Mrs. Demirdjian was
employed by GTE Data Services, Inc. where she held various administrative and technical positions. Primrose Demirdjian is married to Paul Demirdjian, the CEO of the Company. Mrs. Demirdjian has served as a board member since the inception of
Jagged Peak in 2000. Mrs. Demirdjian holds a Bachelor of Science in Management Information Systems from Nova Southeastern University of Florida.



42



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##### Table of Contents

AUDIT COMMITTEE

The Audit Committee consists of the entire Board, as there are no independent Board members. The Audit Committee reviews the results and scope of the audit and other services provided by the
Companys independent auditors and reviews and evaluates the Companys internal control functions. As an advisory function of the committee, members also participate in financings and review budgets versus historical results throughout the
year. The Board of Directors determined that Dan Furlong qualifies as an audit committee financial expert as defined under the regulations of the Securities and Exchange Commission.

COMPENSATION COMMITTEE

The Compensation Committee provides overall guidance to our
compensation and benefit programs. The Compensation Committee consists of the entire Board, as there are no independent Board members. The Compensation Committee does not function pursuant to a written charter adopted by the Board of Directors. The
Committee administers our stock incentive plans and makes recommendations for issuances.

CODE OF ETHICS

The Companys Board of Directors has adopted a Code of Ethics applicable to all of the Companys employees, including the Companys Chief
Executive Officer, Chief Sales and Marketing Officer, Chief Operating Officer, Chief Financial Officer, and Principal Accounting Officer and Controller. A copy of the Companys Code of Ethics is attached as an exhibit to the December 30,
2005 Annual Report on Form 10-KSB. The Company intends to provide any disclosures which are required by the rules of the Securities and Exchange Commissions, or which the Company would otherwise determine to be appropriate, with respect to
amendments of, and waivers from the Companys Code of Ethics by posting such disclosures on the Companys Internet website, www.JaggedPeak.com.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely on the Companys
review of copies of forms filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, and written representations from certain reporting persons, the Company believes that during 2009 all reporting persons timely
complied with all filing requirements applicable to them.

Section 16(a) of the Securities and Exchange Act of 1934 (the Exchange
Act) requires the Companys directors and executive officers, and persons who own more than 10% of a registered class of the Companys equity securities, to file with the Securities and Exchange Commission (SEC) and any
securities exchanges on which the equities of the Company trade, initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than 10% shareholders are
required by SEC regulation to furnish the Company with copies of these reports.



|Item 11. | Executive Compensation
|-------- | ----------------------

COMPENSATION

General

The Compensation
Committee of the Board of Directors is currently composed of all four directors and is not independent.

The Company is engaged in highly
competitive businesses and competes nationally for personnel at the executive and technical staff level. Outstanding candidates are aggressively recruited, often at premium salaries. Highly qualified employees are essential to our success. The
Companys objective is to provide a competitive compensation and work environment that helps attract, retain, and motivate the highly skilled people the Company requires. The Company strongly believes that a considerable portion of the
compensation for the Chief Executive Officer and other top executives must be tied to the achievement of business objectives and overall financial performance, both current and long-term.

The Companys compensation program is based on the philosophy that the total cash compensation should vary with the performance of both the individual
and the Company and any long-term incentive should be closely aligned with the interest of the stockholders. There are two cash components of the executives salary, a base salary and a bonus structure that compensates the executive for both
their individual performance and the overall Company performance.



43



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##### Table of Contents

Long-term incentives are generally realized through the granting of stock options to executives and key
employees. We have also granted certain non-qualified options to our executive officers.

The Company implemented an employee stock ownership
plan in 2007 for the benefit of its employees. At this time, the Company has no other long-term incentive plans for our officers and employees.

Stock Options

Stock options are granted to aid in the retention of executive and key employees and to align the interests of
executive and key employees with those of the stockholders. The level of stock options granted (i.e., the number of shares subject to each stock option grant) is based on the employees ability to impact future corporate results. An
employees ability to impact future corporate results depends on the level and amount of job responsibility of the individual. Therefore, the level of stock options granted is proportional to the Companys evaluation of each
employees job responsibility. Stock options are granted at a price not less than the fair market value on the date granted.

The
following table sets forth a summary of the compensation paid for the three fiscal years ended December 25, 2009 to or for the benefit of the Companys Chief Executive Officer, Chief Financial Officer and other named executives that are
considered the Companys most highly compensated whose total annual salary and bonus compensation exceeded $100,000 (the Named Executive Officers).

SUMMARY COMPENSATION TABLE



|                         |  |                            |  |           |  |          |  |                |  |                 |  |                          |  |         
|------------------------ |  | -------------------------- |  | --------- |  | -------- |  | -------------- |  | --------------- |  | ------------------------ |  | --------
|                         |  | Summary Compensation Table |  |           |  |          |  |               
|Name Principal Positions |  | YearEnded                  |  | Salary($) |  | Bonus($) |  | StockAwards($) |  | OptionAwards($) |  | All OtherCompensation($) |  | Total($)
|Paul Demirdjian,         |  | 2009                       |  | 196,600   |  | 0        |  |               |  |                |  | 19,200                   |  | 215,800 
|Chairman and             |  | 2008                       |  | 222,100   |  | 20,000   |  |               |  |                |  | 15,800                   |  | 257,900 
|Chief Executive Officer  |  | 2007                       |  | 208,500   |  | 35,000   |  |               |  |                |  |                         |  | 243,500 
|                         |  |                            |  |           |  |          | 
|Vince Fabrizzi           |  | 2009                       |  | 187,600   |  | 0        |  |               |  |                |  | 26,100                   |  | 213,700 
|Chief Sales and          |  | 2008                       |  | 212,600   |  | 20,000   |  |               |  |                |  | 16,500                   |  | 249,100 
|Marketing Officer        |  | 2007                       |  | 198,500   |  | 35,000   |  |               |  |                |  |                         |  | 233,500 
|                         |  |                            |  |           |  |          | 
|Dan Furlong              |  | 2009                       |  | 187,600   |  | 0        |  |               |  |                |  | 17,700                   |  | 205,300 
|Chief Operations Officer |  | 2008                       |  | 211,600   |  | 20,000   |  |               |  |                |  | 14,100                   |  | 245,700 
|                         |  | 2007                       |  | 198,500   |  | 35,000   |  |               |  |                |  |                         |  | 233,500 
|                         |  |                            |  |           |  |          | 
|Andrew J. Norstrud       |  | 2009                       |  | 187,600   |  | 0        |  |               |  |                |  | 18,000                   |  | 205,600 
|Chief Financial Officer  |  | 2008                       |  | 213,400   |  | 20,000   |  |               |  |                |  | 14,000                   |  | 247,400 
|                         |  | 2007                       |  | 191,600   |  | 35,000   |  |               |  |                |  |                         |  | 226,600 

The Companys Board appoints
the executive officers to serve at the discretion of the Board.

DIRECTOR COMPENSATION

Directors who are also employees receive no compensation for serving on the Board. The Companys non-employee directors may receive options to purchase
shares of common stock at the market price on the date they are granted, and are entitled to reimbursement of expenses incurred consequential to their service. There has been no (cash or equity) compensation paid in the past two years to
non-employee directors.

EMPLOYMENT AGREEMENTS

In December 2005, the Company entered into an employment agreement with the Companys Chief Financial Officer, which was amended in 2006 to extend the term to 2009. The agreement is renewed annually
after 2009. In addition to expense allotment and other reasonable expense reimbursement, this agreement provides for a base salary of $125,000 with annual increases in salary and bonuses at the discretion of the Board of Directors. The agreement
provided for an option to purchase 100,000 shares of common stock at a price of $1.00 per share and an additional option to purchase 100,000 shares at $0.75 per share and both are completely vested. The agreement contains certain provisions in the
event of a qualified change of control that would require the Company to immediately pay the executive the remaining salary due under the contract.



44



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##### Table of Contents

OPTION GRANTS TO NAMED EXECUTIVES IN LAST FISCAL YEAR

During 2009 and 2008, no options were granted to our Chief Executive Officer, Chief Financial Officer or other named executives.

During 2009, the board voted to issue a total of two hundred thousand options (200,000) to other employees other than named executives or directors.
The exercise price was approximately $0.25 per share. The options primarily have a five-year term and vest over a two-year period and are exercisable only while the employee is employed with the Company. There were three grants that enabled the
employees to purchase up to 200,000 shares of common stock options during the year.

During 2008, the board voted to issue a total of fifty
thousand options (50,000) to other employees other than named executives or directors. The exercise price was approximately $0.50 per share. The options primarily have a five-year term and vest over a two-year period and are exercisable only
while the employee is employed with the Company. There was only one grant of 50,000 options during the year.

STOCK OPTION PLANS

The Companys 2005 Stock Incentive Plan as Amended July 2008 (the Plan) authorizes the Board of Directors the authority
to grant up to 5,000,000 options to key employees, officers, directors, and consultants. The aggregate fair market value of grants to one individual shall not exceed $100,000 during any one calendar year for grants of both incentive stock options
and non-qualified stock options. Options granted under the Plan must be exercised within ten years of the date of grant. The Option Price payable for the shares of Common Stock covered by any Option shall be determined by the Board of Directors, but
with regards to Incentive Stock Options, shall not be less than the Fair Market Value of one share of Common Stock on the Date of Grant. The Option Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of
Grant only if the Committee determines that special circumstances warrant a lower exercise price.

The Companys 2000 Stock Incentive
Plan authorizes up to 100,000 shares of common stock to any employee or Consultant during any one calendar year for grants of both incentive stock options and non-qualified stock options to key employees, officers, directors, and consultants.
Options granted under the Plan must be exercised within ten years of the date of grant. The Option Price payable for the shares of Common Stock covered by any Option shall be determined by the Board of Directors, but shall in no event be less than
the par value of Common Stock. The Option Price payable for the shares of Common Stock covered by any Option shall be determined by the Board of Directors, but with regards to Incentive Stock Options, shall not be less than the Fair Market Value of
one share of Common Stock on the Date of Grant. The Option Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of Grant only if the Committee determines that special circumstances warrant a lower
exercise price.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table summarizes equity awards granted to our Chief Executive Officer, Chief Financial Officer and other named executive
officers that were outstanding as of December 25, 2009.



|                            |  |                                                    |  |                                                                 |  |                                                                                      |  |                         |      |                      |                  |                                                    |   |                                                       |   |                                                                                           |   |                                                                                                          |  
|--------------------------- |  | -------------------------------------------------- |  | --------------------------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | ----------------------- | ---- | -------------------- | ---------------- | -------------------------------------------------- | - | ----------------------------------------------------- | - | ----------------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------------------- | -
|                            |  |                                                    |  | Option Awards                                                   |  |                                                                                      |  |                         |      |                      |                  | Stock Awards                                      
|Name                        |  | Number ofSecuritiesUnderlyingOptions(#)Exercisable |  | Numberof SecuritiesUnderlyingUnexercisedOptions(#)Unexercisable |  | EquityIncentivePlanAwards:Number
ofSecuritiesUnderlyingUnexercisedUnearnedOptions(#) |  | OptionExercisePrice ($) |      | OptionExpirationDate |                  | NumberofSharesor Unitsof StockThatHaveNotVested(#) |   | MarketValueofSharesorUnitsofStockThatHaveNotVested($) |   | EquityIncentivePlanAwards:NumberofUnearnedShares,Units
orOtherRightsThatHave NotVested(#) |   | EquityIncentivePlanAwards:Marketor PayoutValue ofUnearnedShares,Units
orOtherRightsThatHave NotVested($)
|Paul Demirdjian, CEO (1)    |  | 390,000                                            |  |                                                                |  |                                                                                     |  | $                       | 0.74 |                      | 5 yearsfromGrant |                                                    |  |                                                       |  |                                                                                           |  |                                                                                                          | 
|Vince Fabrizzi, CSMO (2)    |  | 443,529                                            |  |                                                                |  |                                                                                     |  | $                       | 0.70 |                      | 5 yearsfromGrant |                                                    |  |                                                       |  |                                                                                           |  |                                                                                                          | 
|Dan Furlong, COO (3)        |  | 443,529                                            |  |                                                                |  |                                                                                     |  | $                       | 0.70 |                      | 5 yearsfromGrant |                                                    |  |                                                       |  |                                                                                           |  |                                                                                                          | 
|Andrew J. Norstrud, CFO (4) |  | 400,000                                            |  |                                                                |  |                                                                                     |  | $                       | 0.71 |                      | 5 yearsfromGrant |                                                    |  |                                                       |  |                                                                                           |  |                                                                                                          | 



45



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##### Table of Contents

|(1) | Consists of a grant made on October 7, 2005 for 90,000 options at a strike price of $0.77 that expire October 7, 2010; a grant made on December 29, 2005
for 100,000 options with a strike price of $1.10 that expire December 29, 2010; and a grant made on December 27, 2006 for 200,000 option at a strike price of $0.55 that expire December 27, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consists of a grant made on August 22, 2000 for 7,842 at a strike price of $0.01 that expire January 1, 2010; a grant made on August 22, 2000 for 15,687
at a strike price of $0.01 that expire January 1, 2010; a grant made on October 7, 2005 for 120,000 options at a strike price of $0.77 that expire October 7, 2010; a grant made on December 29, 2005 for 100,000 options with a
strike price of $1.10 that expire December 29, 2010; and a grant made on December 27, 2006 for 200,000 option at a strike price of $0.55 that expire December 27, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Consists of a grant made on August 22, 2000 for 7,842 at a strike price of $0.01 that expire January 1, 2010; a grant made on August 22, 2000 for 15,687
at a strike price of $0.01 that expire January 1, 2010; a grant made on October 7, 2005 for 120,000 options at a strike price of $0.77 that expire October 7, 2010; a grant made on December 29, 2005 for 100,000 options with a
strike price of $1.10 that expire December 29, 2010; and a grant made on December 27, 2006 for 200,000 option at a strike price of $0.55 that expire December 27, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Consists of a grant made on October 7, 2005 for 100,000 options at a strike price of $0.75 that expire October 7, 2010; a grant made on December 29, 2005
for 100,000 options with a strike price of $1.00 that expire December 29, 2010; and a grant made on December 27, 2006 for 200,000 option at a strike price of $0.55 that expire December 27, 2011.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

EQUITY COMPENSATION PLAN INFORMATION

The
following table sets forth information, as of December 25, 2009, with respect to the Companys stock option plans under which common stock is authorized for issuance, as well as information regarding other compensatory options granted
outside of the Companys stock option plans.



|                                                                                                      |  |                                                                                          |  |                                                                          |      |                                                                                                                                      |          
|----------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | ---- | ------------------------------------------------------------------------------------------------------------------------------------ | ---------
|                                                                                                      |  | (a)                                                                                      |  | (b)                                                                      |      | (c)                                                                                                                                 
|Plan Category                                                                                         |  | Number of securities tobe issued upon exerciseof outstanding options,warrants and rights |  | Weighted-averageexercise price ofoutstanding options,warrants
and rights |      | Number of securitiesremaining available forfuture issuance underequity
compensationplan (excludingsecurities reflected incolumn (a))
|                                                                                                      |  |                                                                                          | 
|Equity compensation related to 2005 stock option plan that is approved by shareholders                |  | 1,358,529                                                                                |  | $                                                                        | 0.86 |                                                                                                                                      | 3,641,471
|Equity compensation not related to a stock option plan not approved by shareholders                   |  | 800,000                                                                                  |  | $                                                                        | 0.55 |                                                                                                                                      |         
|Equity compensation related to the 2000 stock option plan and other warrants approved by shareholders |  | 123,529                                                                                  |  | $                                                                        | 0.31 |                                                                                                                                      |         
|                                                                                                      |  |                                                                                          |  |                                                                          |      |                                                                                                                                      |          
|                                                                                                      |  |                                                                                          | 
|Total                                                                                                 |  | 2,282,058                                                                                |  | $                                                                        | 0.69 |                                                                                                                                      | 3,641,471
|                                                                                                      |  |                                                                                          |  |                                                                          |      |                                                                                                                                      |          



46



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##### Table of Contents

The Companys 2005 Stock Incentive Plan, as Amended July 2008 (the Plan) authorizes the
Board of Directors the authority to grant up to 5,000,000 options to key employees, officers, directors, and consultants. The aggregate fair market value of grants to one individual shall not exceed $100,000 during any one calendar year for grants
of both incentive stock options and non-qualified stock options. Options granted under the Plan must be exercised within ten years of the date of grant. The Option Price payable for the shares of Common Stock covered by any Option shall be
determined by the Board of Directors, but shall in no event be less than the fair market value of the Common Stock. The Option Price for Incentive Stock Options shall not be less than the Fair Market Value of one share of Common Stock on the Date of
Grant. The Option Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of Grant only if the Committee determines that special circumstances warrant a lower exercise price.

The Companys 2000 Stock Incentive Plan authorizes up to 100,000 shares of common stock to any employee or Consultant during any one calendar year for
grants of both incentive stock options and non-qualified stock options to key employees, officers, directors, and consultants. Options granted under the Plan must be exercised within ten years of the date of grant. The Option Price payable for the
shares of Common Stock covered by any Option shall be determined by the Board of Directors, but shall in no event be less than the par value of Common Stock. The Option Price for Incentive Stock Options shall not be less than the Fair Market Value
of one share of Common Stock on the Date of Grant. The Option Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of Grant only if the Committee determines that special circumstances warrant a lower
exercise price.

PRINCIPAL SHAREHOLDERS

The following table sets forth information known to us, as of the date of this Form 10-K filing, relating to the beneficial ownership of shares of common stock by:



| |  | each person who is known by us to be the beneficial owner of more than 5% of the Companys outstanding common stock;
|- |  | --------------------------------------------------------------------------------------------------------------------



| |  | each director;
|- |  | --------------



| |  | each executive officer; and
|- |  | ---------------------------



| |  | all executive officers and directors as a group.
|- |  | ------------------------------------------------

Under securities laws, a person is considered to be the beneficial owner of securities owned by him (or certain persons whose ownership is attributed to him) and that can be acquired by him within 60 days
from the date of this Form 10-K filing, including upon the exercise of options, warrants or convertible securities. The Company determined a beneficial owners percentage ownership by assuming that options, warrants or convertible securities
that are held by him, but not those held by any other person, and which are exercisable within 60 days of the date of this Form 10-K filing, have been exercised or converted.

Except with respect to beneficial ownership of shares attributed to the named person, the following table does not give effect to the issuance of shares in the event outstanding common stock purchase
warrants are exercised.

The Company believes that all persons named in the table have sole voting and investment power with respect to all
shares of common stock shown as being owned by them. Unless otherwise indicated, the address of each beneficial owner in the table set forth below is care of Jagged Peak, Inc., 3000 Bayport Drive, Tampa, Florida 33607.



|                                                           |  |                                          |  |                    |  
|---------------------------------------------------------- |  | ---------------------------------------- |  | ------------------ | -
|Name/Address of Beneficial Owner                           |  | Amount and Nature ofBeneficial Ownership |  | Percentageof Class |  
|Paul Demirdjian and Primrose Demirdjian(1)                 |  | 5,455,084                                |  | 30                 | %
|Dan Furlong(2)                                             |  | 3,310,077                                |  | 19                 | %
|Vince Fabrizzi(3)                                          |  | 3,310,077                                |  | 19                 | %
|Andrew J. Norstrud(4)                                      |  | 440,000                                  |  | 2                  | %
|                                                           |  |                                          |  |                    |  
|                                                           |  |                                         
|Executive Officers, Directors and others (as a group of 5) |  | 12,515,238                               |  | 70                 | %



|(1) | Mr. Demirdjian is the Companys Chairman, Chief Executive Officer and a Director. Mrs. Demirdjian is a director of the Company. All
shares are held jointly with Primrose Demirdjian and include 100,000 shares underlying common stock purchase options exercisable at $1.10 per share, 180,000 shares underlying common stock purchase warrants exercisable at $0.77 per share, 25,000
shares underlying common stock purchase warrants exercisable at $2.00 per share and 250,000 shares underlying common stock purchase warrants exercisable at $0.55 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. Furlong is the Companys Chief Operating Officer and a Director. Includes 443,529 shares underlying common stock purchase options
exercisable between $.01 per share and $1.10 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Mr. Fabrizzi is the Companys Chief Sales and Marketing Officer and a Director. Includes 443,529 shares underlying common stock purchase
options exercisable between $.01 per share and $1.10 per share.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Mr. Norstrud is the Companys Chief Financial Officer and a Director. Includes 400,000 shares underlying common stock purchase options
exercisable between $0.55 per share and $1.00 per share.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|Item 13. | Certain Relationships and Related Transactions, and Directors Independence
|-------- | ---------------------------------------------------------------------------

The Company contracted with Norco Accounting and Consulting Inc. (Norco) to provide accounting and consulting services. The Company spent approximately $12,900 and $37,200 for the 52-week
period ended December 25, 2009 and December 26, 2008, respectively. Norco is 50% owned by Andrew J. Norstrud, who joined the Company in October of 2005, as the Companys Chief Financial Officer. The Company no longer uses Norco for
consulting, however does occasionally use Norco for temporary accounting staffing needs under the contract signed prior to Andrew J. Norstrud joining the Company.

The Company does not have any independent board members and does not expect to add any in 2010. The members of the Board currently own approximately 70% of the Company and all have a long history with the
Company and the industry. The Board believes there is sufficient segregation between the boards financial statement overview responsibilities and the Chief Financial Officers responsibilities of financial reporting and the Companys
compliance responsibilities.

The above related party transactions are not necessarily indicative of the amounts and terms that would have
been incurred had comparable transactions been entered into with independent parties.



|Item 14. | Principal Accountants Fees and Services
|-------- | ---------------------------------------

Audit Fees

During 2009, our accountants, Gregory, Sharer & Stuart, P.A., billed us approximately $73,400 for audit
work and review of our Form 10-Q and 8K filings. During 2008, our accountants, Pender Newkirk & Company, billed us approximately $65,500 for audit work and review of our Form 10-QSB and 8K filings.

Audit Related Fees

None

Tax Fees

During 2009, we were billed by
our accountants, Gregory, Sharer & Stuart, P.A., approximately $7,175 to prepare our federal and state tax returns. During 2008, we were billed by our accountants, Pender Newkirk & Company, approximately $5,120 to prepare our
federal and state tax returns. The audit committee approved all fees.

All Other Fees

None

The Board of Directors has not adopted any
pre-approval policies and approves all engagements with the Companys auditors prior to performance of services by them.



|Item 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------



|              |  |                                                                                                                                                                            
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                
|              | 
|2.1           |  | Acquisition and Plan of Merger (filed as exhibit 2.1 to the form 8k filed with the SEC on July 11, 2005 and incorporated herein by reference)                              
|              | 
|3.1           |  | Articles of Incorporation (filed as Exhibit 3.1 to the Form 10SB12G filed with the SEC on October 10, 2000, and incorporated herein by reference)                          
|              | 
|3.2           |  | Certificate of Amendment to Articles of Incorporation (filed as Exhibit 3.1 to the Form 10-Q filed with the SEC on November 10, 2008, and incorporated herein by
reference)



48



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##### Table of Contents

|       |  |                                                                                                                                                                                                         
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | 
|3.3    |  | By-Laws (filed as Exhibit 3.2 to the Form 10SB12G filed with the SEC on October 10, 2000, and incorporated herein by reference)                                                                         
|       | 
|10.1   |  | Security and Purchase Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by reference)                           
|       | 
|10.2   |  | Secured Convertible Term Note (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                             
|       | 
|10.3   |  | Secured Revolving Note (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                                    
|       | 
|10.4   |  | Registration Rights Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                             
|       | 
|10.5   |  | Intellectual Property Security Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                  
|       | 
|10.6*  |  | Employee Stock Ownership Plan (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                             
|       | 
|10.7*  |  | 2005 Stock Incentive Plan (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                 
|       | 
|10.8*  |  | 2000 Stock Incentive Plan (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                 
|       | 
|10.9*  |  | Andrew J. Norstrud Employment Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                   
|       | 
|10.10* |  | 2005 Stock Incentive Plan as Amended July 2008 (Included as an exhibit to Registrants Annual Report on Form 10-Q for the quarter ended September 26, 2008 and incorporated
herein by reference)        
|       | 
|10.11* |  | Employee Stock Ownership Plan, as amended January 2008 (Included as an exhibit to Registrants Annual Report on Form 10-Q for the quarter ended September 26, 2008 and
incorporated herein by reference)
|       | 
|10.12  |  | Loan and Security Agreement                                                                                                                                                                             
|       | 
|10.13  |  | Securities Issuance Agreement                                                                                                                                                                           
|       | 
|10.14  |  | Secured Revolving Loan Note                                                                                                                                                                             
|       | 
|10.15  |  | Trademark Collateral Assignment and Security Agreement                                                                                                                                                  
|       | 
|10.16  |  | Patent and Trademark Security Agreement                                                                                                                                                                 
|       | 
|14.1   |  | Executive Management Code of Ethics (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                       
|       | 
|14.2   |  | Company Code of Conduct (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                   
|       | 
|31.1   |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                      
|       | 
|31.2   |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                      



49



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##### Table of Contents

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|32.1 |  | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.)
|     | 
|32.2 |  | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.)



|* | Management contract or compensatory plan or arrangement required to be filed as an exhibit.
|- | -------------------------------------------------------------------------------------------



50



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tampa, State of Florida, on March 9, 2010.



JAGGED PEAK, INC.BY:

/s/    Paul DemirdjianPaul Demirdjian(Chairman of the Board of Directors and Chief Executive Officer)




BY:

/s/    Andrew J. NorstrudAndrew J. Norstrud(Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer)


PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.



|                           |  |                                        |  |              
|-------------------------- |  | -------------------------------------- |  | -------------
|SIGNATURE                  |  | TITLE                                  |  | DATE         
|                           |  |                                       
|/s/    Paul Demirdjian     |  | Chairman of the Board of Directors and |  | March 9, 2010
|Paul Demirdjian            |  | Chief Executive Officer                |  |              
|                           |  |                                       
|/s/    Vince Fabrizzi      |  | Chief Sales and Marketing Officer and  |  | March 9, 2010
|Vince Fabrizzi             |  | Director                               |  |              
|                           |  |                                       
|/s/    Dan Furlong         |  | Chief Operations Officer and Director  |  | March 9, 2010
|Dan Furlong                |  |                                        |  |              
|                           |  |                                       
|/s/    Primrose Demirdjian |  | Director                               |  | March 9, 2010
|Primrose Demirdjian        |  |                                        |  |              



51



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##### Table of Contents

Exhibit Index



|              |  |                                                                                                                                                                                                         
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                             
|              | 
|2.1           |  | Acquisition and Plan of Merger (filed as exhibit 2.1 to the form 8k filed with the SEC on July 11, 2005 and incorporated herein by reference)                                                           
|              | 
|3.1           |  | Articles of Incorporation (filed as Exhibit 3.1 to the Form 10SB12G filed with the SEC on October 10, 2000, and incorporated herein by reference)                                                       
|              | 
|3.2           |  | Certificate of Amendment to Articles of Incorporation (filed as Exhibit 3.1 to the Form 10-Q filed with the SEC on November 10, 2008, and incorporated herein by
reference)                             
|              | 
|3.3           |  | By-Laws (filed as Exhibit 3.2 to the Form 10SB12G filed with the SEC on October 10, 2000, and incorporated herein by reference)                                                                         
|              | 
|10.1          |  | Security and Purchase Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by reference)                           
|              | 
|10.2          |  | Secured Convertible Term Note (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                             
|              | 
|10.3          |  | Secured Revolving Note (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                                    
|              | 
|10.4          |  | Registration Rights Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                             
|              | 
|10.5          |  | Intellectual Property Security Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                  
|              | 
|10.6*         |  | Employee Stock Ownership Plan (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 29, 2006 and incorporated herein by
reference)                             
|              | 
|10.7*         |  | 2005 Stock Incentive Plan (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                 
|              | 
|10.8*         |  | 2000 Stock Incentive Plan (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                 
|              | 
|10.9*         |  | Andrew J. Norstrud Employment Agreement (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                   
|              | 
|10.10*        |  | 2005 Stock Incentive Plan as Amended July 2008 (Included as an exhibit to Registrants Annual Report on Form 10-Q for the quarter ended September 26, 2008 and incorporated
herein by reference)        
|              | 
|10.11*        |  | Employee Stock Ownership Plan, as amended January 2008 (Included as an exhibit to Registrants Annual Report on Form 10-Q for the quarter ended September 26, 2008 and
incorporated herein by reference)
|              | 
|10.12         |  | Loan and Security Agreement                                                                                                                                                                             
|              | 
|10.13         |  | Securities Issuance Agreement                                                                                                                                                                           



52



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##### Table of Contents

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.14 |  | Secured Revolving Loan Note                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      | 
|10.15 |  | Trademark Collateral Assignment and Security Agreement                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | 
|10.16 |  | Patent and Trademark Security Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | 
|14.1  |  | Executive Management Code of Ethics (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                                                                                                                                                                                                                                                                               
|      | 
|14.2  |  | Company Code of Conduct (Included as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 30, 2005 and incorporated herein by
reference)                                                                                                                                                                                                                                                                                                           
|      | 
|31.1  |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                              
|      | 
|31.2  |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                              
|      | 
|32.1  |  | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.)
|      | 
|32.2  |  | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.)



|* | Management contract or compensatory plan or arrangement required to be filed as an exhibit.
|- | -------------------------------------------------------------------------------------------



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