##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q







|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the Quarterly Period Ended September 26, 2008

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 Small Business Issuer 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, FL 33607

(Address of principal executive offices, including zip code)

(813) 637-6900

(Registrants telephone number, including area code)



(Former name or former address, if changed since last report)





Check 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 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   ̈   |  | 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

The Registrant had 14,677,594 shares of common stock outstanding as of November 7, 2008.









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##### Table of Contents

Jagged Peak, Inc.

Contents



|                               |  |                                                                                       |  |   
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | --
|Part I  Financial Information |  |                                                                                      
|                               |  |                                                                                      
|Item 1.                        |  | Financial Statements                                                                  |  | 1 
|                               |  |                                                                                      
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 13
|                               |  |                                                                                      
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 19
|                               |  |                                                                                      
|Item 4(T).                     |  | Controls and Procedures                                                               |  | 19
|                               | 
|Part II  Other Information    |  |                                                                                      
|                               |  |                                                                                      
|Item 1.                        |  | Legal Proceedings                                                                     |  | 19
|                               |  |                                                                                      
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 19
|                               |  |                                                                                      
|Item 3.                        |  | Defaults Upon Senior Securities                                                       |  | 19
|                               |  |                                                                                      
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |  | 19
|                               |  |                                                                                      
|Item 5.                        |  | Other Matters                                                                         |  | 20
|                               |  |                                                                                      
|Item 6.                        |  | Exhibits                                                                              |  | 20
|                               | 
|Signatures                     |  | 21                                                                                   



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##### Table of Contents

PART IFINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

Jagged Peak, Inc.

Financial Statements

13
and 39 Week Periods Ended September 26, 2008 (Unaudited), the

13 and 39 Week Periods Ended September 28, 2007 (Unaudited)
and

December 28, 2007 (Audited)

Contents

Financial Statements



|                                             |  |     
|-------------------------------------------- |  | ----
|Balance Sheets                               |  | 2   
|Statements of Operations                     |  | 3   
|Statement of Changes in Stockholders Equity |  | 4   
|Statements of Cash Flows                     |  | 5   
|Notes to the Unaudited Financial Statements  |  | 6-12



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Jagged Peak, Inc.

Balance Sheets



|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | ------------------------- | - | ---------- | -
|                                                                                                                                                                                              |  | September 26,2008(Unaudited) |            |   | December 28,2007(Audited) |  
|Assets                                                                                                                                                                                        |  |                              |            |   |                           |   |            |  
|Current assets:                                                                                                                                                                               |  |                              |            |   |                           |   |            |  
|Cash                                                                                                                                                                                          |  | $                            | 225,200    |   |                           | $ | 74,000     |  
|Accounts receivable, net of allowance for doubtful accounts of $170,000 and $130,000 at September 26, 2008 and December 28, 2007                                                              |  |                              | 1,735,100  |   |                           |   | 2,503,400  |  
|Other receivables                                                                                                                                                                             |  |                              | 109,000    |   |                           |   | 122,000    |  
|Work in process, net of allowance of $30,000 at September 26, 2008 and December 28, 2007                                                                                                      |  |                              | 277,500    |   |                           |   | 195,900    |  
|Deferred tax asset                                                                                                                                                                            |  |                              | 75,300     |   |                           |   | 75,300     |  
|Other current assets                                                                                                                                                                          |  |                              | 407,700    |   |                           |   | 400,800    |  
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|Total current assets                                                                                                                                                                          |  |                              | 2,829,800  |   |                           |   | 3,371,400  |  
|                                                                                                                                                                                              |  |                             
|Property and equipment, net of accumulated depreciation of $1,834,900 and $1,683,000 at September 26, 2008 and December 28, 2007,
respectively                                                |  |                              | 350,300    |   |                           |   | 387,400    |  
|                                                                                                                                                                                              |  |                             
|Other assets:                                                                                                                                                                                 |  |                              |            |   |                           |   |            |  
|EDGE application, net of accumulated amortization of $1,309,600 and $1,251,600 at September 26, 2008 and December 28, 2007,
respectively                                                      |  |                              | 87,900     |   |                           |   | 125,200    |  
|Deferred tax asset                                                                                                                                                                            |  |                              | 1,318,200  |   |                           |   | 1,266,100  |  
|Other assets                                                                                                                                                                                  |  |                              | 88,900     |   |                           |   | 308,400    |  
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|Total long-term assets                                                                                                                                                                        |  |                              | 1,845,300  |   |                           |   | 2,087,100  |  
|Total assets                                                                                                                                                                                  |  | $                            | 4,675,100  |   |                           | $ | 5,458,500  |  
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|                                                                                                                                                                                              |  |                             
|Liabilities and Stockholders Equity                                                                                                                                                          |  |                              |            |   |                           |   |            |  
|Current liabilities:                                                                                                                                                                          |  |                              |            |   |                           |   |            |  
|Accounts payable, trade                                                                                                                                                                       |  | $                            | 1,311,400  |   |                           | $ | 1,563,400  |  
|Accrued payroll and bonuses                                                                                                                                                                   |  |                              | 482,000    |   |                           |   | 472,500    |  
|Other accrued expenses                                                                                                                                                                        |  |                              | 58,400     |   |                           |   | 65,700     |  
|Revolving Note, $745,000 and $835,100 was available at September 26, 2008 and December 28, 2007, respectively                                                                                 |  |                              | 0          |   |                           |   | 164,900    |  
|Deferred rent                                                                                                                                                                                 |  |                              | 32,400     |   |                           |   | 25,500     |  
|Notes payable, current portion                                                                                                                                                                |  |                              | 540,000    |   |                           |   | 540,000    |  
|Deferred revenue and customer deposits                                                                                                                                                        |  |                              | 754,300    |   |                           |   | 602,300    |  
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|Total current liabilities                                                                                                                                                                     |  |                              | 3,178,500  |   |                           |   | 3,434,300  |  
|                                                                                                                                                                                              |  |                             
|Long-term liabilities:                                                                                                                                                                        |  |                              |            |   |                           |   |            |  
|Notes payable, net of current portion                                                                                                                                                         |  |                              | 1,010,000  |   |                           |   | 1,415,000  |  
|Deferred rent, long term                                                                                                                                                                      |  |                              | 66,500     |   |                           |   | 94,000     |  
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|Total long-term liabilities                                                                                                                                                                   |  |                              | 1,076,500  |   |                           |   | 1,509,000  |  
|                                                                                                                                                                                              |  |                             
|Stockholders equity:                                                                                                                                                                         |  |                              |            |   |                           |   |            |  
|Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at September 26, 2008 and
December 28, 2007                                                    |  |                              |            |   |                           |   |            |  
|Common stock, $.001 par value; 70,000,000 shares authorized; 14,677,594 shares issued and outstanding at September 26, 2008 and
14,627,594 shares issued and outstanding at December 28, 2007 |  |                              | 14,800     |   |                           |   | 14,700     |  
|Additional paid-in capital                                                                                                                                                                    |  |                              | 3,383,800  |   |                           |   | 3,334,500  |  
|Accumulated deficit                                                                                                                                                                           |  |                              | (2,978,500 | ) |                           |   | (2,834,000 | )
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  
|Total stockholders equity                                                                                                                                                                    |  |                              | 420,100    |   |                           |   | 515,200    |  
|Total liabilities and stockholders equity                                                                                                                                                    |  | $                            | 4,675,100  |   |                           | $ | 5,458,500  |  
|                                                                                                                                                                                              |  |                              |            |   |                           |   |            |  

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



2



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##### Table of Contents

Jagged Peak, Inc.

Statements of Operations (Unaudited)



|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|-------------------------------------------------------------------- |  | -------------------- | ---------- | - | ----------------------- | - | ---------- | ----------------- |  | - | ----------------- | - |  | - | ---------- | -
|                                                                     |  | Thirteen Weeks Ended |            |   | Thirty-Nine Weeks Ended |  
|                                                                     |  | September 26,2008    |            |   | September 28,2007       |   |            | September 26,2008 |  |   | September 28,2007 |  
|Revenue:                                                             |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Gross revenue                                                        |  | $                    | 4,840,900  |   |                         | $ | 4,097,000  |                   |  | $ | 14,015,100        |   |  | $ | 12,174,100 |  
|Discounts, freight and other                                         |  |                      | (615,400   | ) |                         |   | (706,400   | )                 |  |   | (1,985,300        | ) |  |   | (2,328,300 | )
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Net revenues                                                         |  |                      | 4,225,500  |   |                         |   | 3,390,600  |                   |  |   | 12,029,800        |   |  |   | 9,845,800  |  
|                                                                     |  |                      |            |  
|Cost of sales                                                        |  |                      | 2,991,200  |   |                         |   | 2,446,600  |                   |  |   | 8,755,100         |   |  |   | 7,463,100  |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Gross profit                                                         |  |                      | 1,234,300  |   |                         |   | 944,000    |                   |  |   | 3,274,700         |   |  |   | 2,382,700  |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Operating expenses:                                                  |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|                                                                     |  |                      |            |  
|General and administrative expenses                                  |  |                      | 1,081,700  |   |                         |   | 914,100    |                   |  |   | 3,076,700         |   |  |   | 2,541,700  |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Operating profit (loss)                                              |  |                      | 152,600    |   |                         |   | 29,900     |                   |  |   | 198,000           |   |  |   | (159,000   | )
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Other expenses:                                                      |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Interest expense                                                     |  |                      | 129,200    |   |                         |   | 130,700    |                   |  |   | 394,600           |   |  |   | 396,600    |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Total other expenses                                                 |  |                      | 129,200    |   |                         |   | 130,700    |                   |  |   | 394,600           |   |  |   | 396,600    |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Profit (loss) before tax benefit                                     |  |                      | 23,400     |   |                         |   | (100,800   | )                 |  |   | (196,600          | ) |  |   | (555,600   | )
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Provision for income tax expense (benefit)                           |  |                      | 14,300     |   |                         |   | (30,700    | )                 |  |   | (52,100           | ) |  |   | (183,300   | )
|                                                                     |  |                      |            |  
|Net profit (loss)                                                    |  | $                    | 9,100      |   |                         | $ | (70,100    | )                 |  | $ | (144,500          | ) |  | $ | (372,300   | )
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Weighted average number of common shares outstanding  basic         |  |                      | 14,659,261 |   |                         |   | 14,339,053 |                   |  |   | 14,639,354        |   |  |   | 14,058,493 |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Weighted average number of common shares outstanding  fully diluted |  |                      | 14,975,555 |   |                         |   | 14,339,053 |                   |  |   | 14,639,354        |   |  |   | 14,058,493 |  
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  
|Net loss per share  basic & fully diluted                           |  | $                    | 0.00       |   |                         | $ | (0.00      | )                 |  | $ | (0.01             | ) |  | $ | (0.03      | )
|                                                                     |  |                      |            |   |                         |   |            |                   |  |   |                   |   |  |   |            |  

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



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Jagged Peak, Inc.

Statement of Changes in Stockholders Equity

39 Weeks Ended September 26,
2008 (Unaudited)



|                                          |  |              |  |                          |        |                    |   |           |       |   |            |   |  |   |          |  
|----------------------------------------- |  | ------------ |  | ------------------------ | ------ | ------------------ | - | --------- | ----- | - | ---------- | - |  | - | -------- | -
|                                          |  | 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                         |  | 50,000       |  |                          | 100    |                    |   | 8,700     |       |   |            |   |  |   | 8,800    |  
|                                          |  |              |  |                          |       
|Amortization of stock options             |  |              |  |                          |        |                    |   | 27,100    |       |   |            |   |  |   | 27,100   |  
|                                          |  |              |  |                          |       
|Net loss for the period                   |  |              |  |                          |        |                    |   |           |       |   | (144,500   | ) |  |   | (144,500 | )
|                                          |  |              |  |                          |        |                    |   |           |       |   |            |   |  |   |          |  
|Balance, September 26, 2008               |  | 14,677,594   |  | $                        | 14,800 |                    | $ | 3,383,800 |       | $ | (2,978,500 | ) |  | $ | 420,100  |  
|                                          |  |              |  |                          |        |                    |   |           |       |   |            |   |  |   |          |  

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



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Jagged Peak, Inc.

Statements of Cash Flows (Unaudited)



|                                                                                       |  |                   |          |   |                   |   |          |  
|-------------------------------------------------------------------------------------- |  | ----------------- | -------- | - | ----------------- | - | -------- | -
|                                                                                       |  | 39 Weeks Ended    |         
|                                                                                       |  | September 26,2008 |          |   | September 28,2007 |  
|Operating activities:                                                                  |  |                   |          |   |                   |   |          |  
|Net loss                                                                               |  | $                 | (144,500 | ) |                   | $ | (372,300 | )
|Adjustments to reconcile net loss to net cash provided (used) by operating activities: |  |                   |          |   |                   |   |          |  
|Depreciation and amortization                                                          |  |                   | 209,800  |   |                   |   | 272,700  |  
|Non-cash consulting expense                                                            |  |                   | 8,800    |   |                   |   | 3,400    |  
|Non-cash amortization of officers, director and employees compensation                 |  |                   | 40,600   |   |                   |   | 44,300   |  
|Amortization related to long term debt                                                 |  |                   | 241,000  |   |                   |   | 241,000  |  
|Adjustment to allowance for bad debt expense                                           |  |                   | 84,300   |   |                   |   | 70,400   |  
|Changes in:                                                                            |  |                   |          |   |                   |   |          |  
|Accounts receivable                                                                    |  |                   | 688,600  |   |                   |   | (258,800 | )
|Work-in-process                                                                        |  |                   | (81,600  | ) |                   |   | (184,100 | )
|Other current assets                                                                   |  |                   | 13,000   |   |                   |   | (30,700  | )
|Other assets                                                                           |  |                   | (28,400  | ) |                   |   | (22,000  | )
|Deferred tax asset and liability, net                                                  |  |                   | (52,100  | ) |                   |   | (183,300 | )
|Accounts payable                                                                       |  |                   | (252,000 | ) |                   |   | 5,000    |  
|Accrued payroll                                                                        |  |                   | 9,500    |   |                   |   | 125,000  |  
|Accrued expenses                                                                       |  |                   | (11,500  | ) |                   |   | 16,000   |  
|Deferred rent                                                                          |  |                   | (20,600  | ) |                   |   | (15,100  | )
|Other liabilities                                                                      |  |                   | 152,000  |   |                   |   | 133,200  |  
|                                                                                       |  |                   |          |   |                   |   |          |  
|Net cash provided (used) by operating activities                                       |  |                   | 856,900  |   |                   |   | (155,300 | )
|                                                                                       |  |                   |          |   |                   |   |          |  
|Investing activities:                                                                  |  |                   |          |   |                   |   |          |  
|Acquisition of property and equipment                                                  |  |                   | (114,700 | ) |                   |   | (153,900 | )
|Acquisition/development of software/ Edge platform                                     |  |                   | (20,700  | ) |                   |   | (19,200  | )
|                                                                                       |  |                   |          |   |                   |   |          |  
|Cash flows used by investing activities                                                |  |                   | (135,400 | ) |                   |   | (173,100 | )
|                                                                                       |  |                   |          |   |                   |   |          |  
|Financing activities:                                                                  |  |                   |          |   |                   |   |          |  
|Payments on line of credit                                                             |  |                   | (165,300 | ) |                   |   |          |  
|Payments on notes payable                                                              |  |                   | (405,000 | ) |                   |   |          |  
|Issuance of common stock, net                                                          |  |                   |          |   |                   |   | 600      |  
|                                                                                       |  |                   |          |   |                   |   |          |  
|Cash flows (used) provided by financing activities                                     |  |                   | (570,300 | ) |                   |   | 600      |  
|                                                                                       |  |                   |          |   |                   |   |          |  
|Net increase (decrease) in cash                                                        |  |                   | 151,200  |   |                   |   | (327,800 | )
|                                                                                       |  |                  
|Cash, beginning of period                                                              |  |                   | 74,000   |   |                   |   | 947,200  |  
|                                                                                       |  |                   |          |   |                   |   |          |  
|Cash, end of period                                                                    |  | $                 | 225,200  |   |                   | $ | 619,400  |  
|                                                                                       |  |                   |          |   |                   |   |          |  
|Supplemental disclosure of cash flow information                                       |  |                   |          |   |                   |   |          |  
|                                                                                       |  |                  
|Cash paid during the period for taxes                                                  |  | $                 |          |   |                   | $ |          |  
|Cash paid during the period for interest                                               |  | $                 | 155,600  |   |                   | $ | 157,800  |  

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



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Jagged Peak, Inc.

Notes to the Unaudited Financial Statements

For the 13 and 39-Week Periods Ended
September 26, 2008 and the 13 and

39-Week Periods Ended September 28, 2007



|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s clients are able to build and operate custom branded portals such as e-commerce, incentive and rebate programs, customer service, repair and reverse logistics 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 offers its clients third party fulfillment services that are typically bundled with its software and sold as a turnkey
web-to-ship solution. Jagged Peak has a network of 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.

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 September 26, 2008 and September 28, 2007 both consist of 13 weeks and 39 weeks.



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

Basis of Presentation

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the financial
position at September 26, 2008, (b) the results of operations for the 13 and 39 weeks ended September 26, 2008 and September 28, 2007, (c) the statement of changes in stockholders equity for the period ended
September 26, 2008 and (d) cash flows for the 39 weeks ended September 26, 2008 and September 28, 2007, have been made.

The unaudited
financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted. The accompanying statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the 52-week period ended December 28, 2007.

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 they have been discussed with the audit committee; however, actual results
could differ from these estimates.

Revenue Recognition

The Company recognizes revenues in accordance with Statement of Position (SOP) 97-2, (Software Revenue Recognition) as amended by SOP 98-9 (Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions).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 sales.

Software and
Development Enhancements Expenses

Software and development enhancements expenses include payroll and employee benefit costs associated with product
development. The EDGE product platform is continually being enhanced with new features and functions. Once technological feasibility of new features and functions is established, the costs incurred until release to production are capitalized and
amortized over a three-year useful life. There was approximately $0 and $20,700 capitalized during the 13-week and 39-week periods ended September 26, 2008, respectively, and approximately $19,200 capitalized during the 13-week and 39-week
periods ended September 28, 2007. Amortization expense related to capitalized software and charged to operations for the 13-week and 39-week periods ended September 26, 2008 were approximately $8,500 and $58,000, respectively. Amortization
expense related to capitalized software and charged to operations for the 13-week and 39-week periods ended September 28, 2007 were approximately $22,000 and $154,600, respectively.



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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.

During the 39-week periods ended September 26, 2008 and September 28, 2007, sales to
our largest customer amounted to approximately $7,565,900 and $5,896,600, respectively, or 63% and 60% of total revenues, respectively. Accounts receivable from two customers at September 26, 2008 amounted to approximately $772,000 or
approximately 41% of the balance. Accounts receivable from our three largest customers at September 28, 2007 amounted to approximately $856,400 or approximately 57% of the balance.

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, the 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 $170,000 is considered necessary as of September 26, 2008. 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 September 26, 2008 by approximately $10,000. We do not accrue interest on past due receivables.

Identified Intangible Assets

The Company follows the
provisions of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which establishes accounting standards for the impairment of long-lived assets such as property, plant and equipment and intangible assets
subject to amortization. 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 39-week
periods ended September 26, 2008 and September 28, 2007, management determined that there was no impairment of long-lived or intangible assets.



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Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, principally three 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.

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.

Income Taxes

Taxes on income are provided in accordance with SFAS No. 109, Accounting for Income Taxes. Deferred income tax assets and liabilities are recognized for the
expected future tax consequences of events that have been reflected in the financial statements. 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. Through the reverse acquisition with Absolute Glass
the Company acquired net operating losses for tax purposes of approximately $2.4 million. Internal Revenue Code Sec. 382 places limitations on the utilization of the acquired net operating losses. Due to the limitation the Company has placed a
full valuation against that asset of approximately $900,000.

Stock-Based Compensation

The Company follows SFAS No. 123 (revised 2004), Share-Based Payment (SFAS 123R) in accounting for its stock options issued to employees and consultants. SFAS 123R requires all share-based
payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under SFAS 123R, the Company is required to measure the cost of employee services received in exchange for
stock options and similar awards based on the grant-date fair value of the award and recognize this cost in the income statement over the period during which an employee is required to provide service in exchange for the award.



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Under FAS 123R, companies must choose among alternative valuation models and amortization assumptions. After
assessing alternative valuation models and amortization assumptions, the Company uses the Black-Scholes valuation model and has elected to use the ratable method to amortize compensation expense over the vesting period of the grant.

The value of each grant under FAS 123R is estimated at the grant date using the Black-Scholes option model with the following weighted average assumptions for options
granted in 2007: the historical dividend rate of 0%; the risk-free interest rate of 5% 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; and expected volatility of 154% 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 forfeited prior to vesting.

The value of each grant under FAS 123R is estimated 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 ranged between 4.12% and 4.48%, 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; and 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 forfeited prior to vesting.

There were
125,000 options granted during the 39-week period ended September 26, 2008 and 150,000 options granted during the 39-week period ended September 28, 2007. As of September 26, 2008, there was approximately $8,100 of unrecognized
stock-based compensation expense related to nonvested stock options. This expense will be recognized over a weighted average period of approximately two years.

The following table represents our nonvested stock option activity for the 39-week period ended September 26, 2008:



|                                       |  |                  |   |  |                                      |     
|-------------------------------------- |  | ---------------- | - |  | ------------------------------------ | ----
|                                       |  | Number ofOptions |   |  | Weighted AverageGrant DateFair Value
|Nonvested options  December 28, 2007  |  | 102,500          |   |  | $                                    | 0.50
|Granted                                |  | 125,000          |   |  | $                                    | 0.18
|Vested                                 |  | (127,500         | ) |  | $                                    | 0.38
|Expired or canceled                    |  | (10,000          | ) |  | $                                    | 0.46
|                                       |  |                  |   |  |                                      |     
|Nonvested options  September 26, 2008 |  | 90,000           |   |  | $                                    | 0.31
|                                       |  |                  |   |  |                                      |     

There was no aggregate intrinsic value of options outstanding at September 26, 2008, based on the
Companys closing stock price of $0.16 as of the last business day of the period ended September 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 September 26, 2008, based on the Companys closing stock price of $0.16 as of the last business day of the period ended September 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 39-weeks ended September 26, 2008 and September 28, 2007.



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Earnings per Share

Earnings per common share are computed in accordance with SFAS No. 128, Earnings per Share, which requires companies to present basic earnings per share and diluted earnings per share. Basic earnings per share are computed
by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding
and dilutive options outstanding during the year. The weighted average number of shares was approximately 14,639,354 and 14,058,493 for the 39-week periods ended September 26, 2008 and September 28, 2007, respectively. The diluted weighted
average number of shares was approximately 14,958,084 and 14,941,422 for the 39-week periods ended September 26, 2008 and September 28, 2007, respectively.

Common stock equivalents for the 39-week periods ended September 26, 2008 and September 28, 2007 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 periods ended September 26, 2008 and September 28, 2007 excludes approximately 318,730 and 882,929 shares that could dilute earnings per
share in future periods, respectively

Recently Issued Financial Accounting Standards

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 (FAS 159). FAS 159 permits
entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective of FAS 159 is to provide opportunities to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without having to apply hedge accounting provisions. FAS 159 is effective for fiscal years beginning after Nov. 15, 2007. The Company adopted FAS 159 effective Jan. 1, 2008, but
did not elect to measure any financial instruments at fair value. Accordingly, its adoption did not have any effect on its balance sheets, statement of operations or statement of cash flows.

In May 2008, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 162, The Hierarchy of Generally Accepted Accounting
Principles. SFAS No. 162 codifies the hierarchy of generally accepted accounting principles to be used by the preparers of financial statements. The hierarchy is identical to that contained in the American Institute of Certified
Public Accountants Statements on Auditing Standards No. 69, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. SFAS No. 162 is effective for the Company sixty days following the
Securities and Exchange Commission (SEC) approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles, which is expected to occur during the fourth quarter of fiscal 2008. The Company does not expect that adoption of the standard will impact its Financial Statements.



|3. | Other Assets
|-- | ------------

Other assets consist of:



|                                                  |  |                   |         |                  |   |        
|------------------------------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|                                                  |  | September 26,2008 |         | December 28,2007
|Capitalized debt cost                             |  | $                 | 388,400 |                  | $ | 629,400
|Other  prepaid rent                              |  |                   | 21,500  |                  |   |        
|                                                  |  |                   |         |                  |   |        
|                                                  |  |                   | 409,900 |                  |   | 629,400
|Current portion classified as other current asset |  |                   | 321,000 |                  |   | 321,000
|                                                  |  |                   |         |                  |   |        
|                                                  |  | $                 | 88,900  |                  | $ | 308,400
|                                                  |  |                   |         |                  |   |        

Other current assets consists of the current portion of capitalized debt cost and minimal account balances such as
prepaid rent, prepaid insurance, refundable deposits, supply inventory and prepaid postage.



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|4. | 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 all classes of stock outstanding. The Company records stock as issued when the consideration is received or the obligation is incurred.

The Companys 2005 Stock Incentive Plan, as restated January 1, 2008 (the Plan) authorizes the Board of Directors 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. 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 the board of
directors to grant shares of common stock (subject to certain statutory limits) to any employee or Consultant for grants of both incentive stock options and non-qualified stock 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 and 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 following summarizes the Companys stock option and warrant activity and related information:



|                                               |  |           |   |  |                         |             |                                |   |     
|---------------------------------------------- |  | --------- | - |  | ----------------------- | ----------- | ------------------------------ | - | ----
|                                               |  | Shares    |   |  | Range of ExercisePrices |             | Weighted AverageExercise Price
|Outstanding at December 29, 2006               |  | 5,594,244 |   |  | $                       | 0.01 - 2.50 |                                | $ | 0.75
|Warrants, Convertible Debt and options granted |  | 150,000   |   |  | $                       | 0.50        |                                | $ | 0.50
|Warrants exercised                             |  | (765,818  | ) |  | $                       | 0.01        |                                | $ | 0.01
|Warrants and options cancelled or expired      |  | (588,528  | ) |  | $                       | 0.50 - 2.00 |                                | $ | 1.03
|                                               |  |           |   |  |                         |             |                                |   |     
|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      |  | (470,000  | ) |  | $                       | 0.55 - 1.00 |                                | $ | 0.98
|                                               |  |           |   |  |                         |             |                                |   |     
|Outstanding at September 26, 2008              |  | 4,044,898 |   |  | $                       | 0.01 - 2.50 |                                | $ | 0.81
|Exercisable at September 26, 2008              |  | 3,954,898 |   |  | $                       | 0.01 - 2.50 |                                | $ | 0.76
|Exercisable at December 28, 2007               |  | 4,287,398 |   |  | $                       | 0.01 - 2.50 |                                | $ | 0.83

The following table summarizes information about options and warrants outstanding and exercisable
as of September 26, 2008:



|                        |  |                                  |  |                                  |  |                      |      |                               |           |                   |           |                      |   |     
|----------------------- |  | -------------------------------- |  | -------------------------------- |  | -------------------- | ---- | ----------------------------- | --------- | ----------------- | --------- | -------------------- | - | ----
|                        |  | Outstanding Warrants and Options |  | Exercisable Warrants and Options
|Range of Exercise Price |  | NumberOutstanding                |  | WeightedAverageRemainingLife     |  | WeightedAveragePrice |      | WeightedAverageRemaining Life |           | NumberExercisable |           | WeightedAveragePrice
|$0.01                   |  | 334,899                          |  | 2.6 years                        |  | $                    | 0.01 |                               | 2.6 years |                   | 334,899   |                      | $ | 0.01
|$0.30-0.77              |  | 1,578,529                        |  | 3.0 years                        |  | $                    | 0.61 |                               | 2.6 years |                   | 1,488,529 |                      | $ | 0.58
|$1.00-2.50              |  | 2,131,470                        |  | 1.5 years                        |  | $                    | 1.08 |                               | 1.5 years |                   | 2,131,470 |                      | $ | 1.08

As of September 26, 2008 and December 28, 2007, there were 3,954,898 and 4,287,398 options exercisable
at a weighted average exercise price of $0.76 and $0.83, respectively. The weighted average fair value of options at the date of grant of the options was $0.19 and $0.27 for 2008 and 2007, respectively.



|5. | Related Party Transaction
|-- | -------------------------

The Company contracted with Norco
Accounting and Consulting Inc. (Norco) to provide accounting and consulting services. The Company spent approximately $24,500 and $27,400 during the 39-week periods ended September 26, 2008 and September 28, 2007, respectively.
Norco is 50% owned by Andrew J. Norstrud, who joined the Company in October 2005, as the Companys Chief Financial Officer. The Company continues to 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.



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PART I  FINANCIAL INFORMATION



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS ANTICIPATED, BELIEVE, EXPECT, PLAN, INTEND, SEEK, ESTIMATE,
PROJECT, WILL, COULD, MAY, AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL
EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANYS CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND
BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER
MATTERS, MANY OF WHICH ARE BEYOND THE COMPANYS CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED,
BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes
appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk,
uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional
license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements. The following discussions should be read in conjunction with our
financial statements and the notes thereto presented in Item 1  Financial Statements and our audited financial statements and the related Managements Discussion and Analysis of Financial Condition and Results of Operations
included in our report on Form 10-KSB for the year ended December 28, 2007.

Background of our Company

Jagged Peak, Inc. (the Company or Jagged Peak) is an e-business software and services company headquartered in Clearwater, 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s clients are able to build and operate custom branded portals such
as e-commerce, incentive and rebate programs, customer service, repair and reverse logistics 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 offers its clients third party fulfillment services that are typically bundled with its software and
sold as a turnkey web-to-ship solution. Jagged Peak has a network of 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.

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 our December 28, 2007 annual report filed with the SEC under Item 1 entitled Risks Particular to The Companys Business.

For the 13-week period ended September 26, 2008 compared to the 13-week period ended September 28, 2007

Net revenues increased
approximately $834,900, or 25%, to approximately $4,225,500 for the 13-week period ended September 26, 2008, as compared to approximately $3,390,600 for the 13-week period ended September 28, 2007. The increases in revenue primarily
related to (i) increase technology revenue from several new projects, (ii) continued growth in order / transaction volume, (iii) the continued expansion of services to existing customers, and (iv) new customers resulting from
marketing efforts.

Cost of sales, which consist primarily of labor, software amortization, technology, facilities, postage, freight, and packing supplies
increased by approximately $544,600, or 22%, to approximately $2,991,200 for the 13-week period ended September 26, 2008, as compared to approximately $2,446,600 for the 13-week period ended September 28, 2007. As a percentage of revenues,
cost of sales amounted to approximately 71% of related revenues for the 13-week period ended September 26, 2008, as compared with approximately 72% for the 13-week period ended September 28, 2007. Increase in costs of service and the
decrease as a percentage of revenue resulted primarily from (i) increased order / transaction volume, (ii) increase of technology staff to accommodate new contracts, (iii) increased orders flowing through the Companys North
America distribution network, (iv) improved margins as the Company capitalizes on growth, and (v) improved supplier contracts with increased purchase volume. 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. Management
expects the percentage of cost of sales to revenue to decrease as sales increase and we are able to capitalize on the additional capacity.

General and
administrative expense increased by approximately $167,600 or 18% to approximately $1,081,700 for the 13-week period ended September 26, 2008 as compared to approximately $914,100 for the 13-week period ended September 28, 2007. The
increase was primarily related to (i) increased personnel and other overhead expenses related to the sales and marketing plan, (ii) increases in infrastructure cost to support the current and expected growth, (iii) e-commerce
marketing and management, (iv) increased cost for recruitment of new employees, and (v) costs related to a new investor relations program. Management continues to re-deploy administrative resources to focus on sales and
marketing activities to enable the Company to grow without significant increases in general and administrative expenses.

The Company realized operating
income before other expenses and provisions for income taxes of approximately $152,600 for the 13-week period ended September 26, 2008, compared with operating income from continuing operations before provisions for income taxes of
approximately $29,900 for the 13-week period ended September 28, 2007.



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The income tax was approximately $14,300 for the 13-week period ended September 26, 2008 compared to an income tax
benefit of approximately $30,700 for the 13-week period ended September 28, 2007. Differences between the effective tax rate used for 2008 and 2007, as compared to the U.S. federal statutory rate, are primarily due to permanent differences. As
of September 26, 2008 the Company had federal and state net operating loss carry-forwards totaling approximately $3,500,000, which begin to expire in 2021.

Basic income per share from continuing operations for the 13-week period ended September 26, 2008 was $0.00 per weighted average share, compared with basic loss of $0.00 per weighted average share for the 13-week period ended
September 28, 2007.

For the 39-week period ended September 26, 2008 compared to the 39-week period ended September 28, 2007

Net revenues increased approximately $2,184,000, or 22%, to approximately $12,029,800 for the 39-week period ended September 26, 2008, as compared
to approximately $9,845,800 for the 39-week period ended September 28, 2007. The increases in revenue primarily related to (i) significant increase in order / transaction volume, and (ii) the continued expansion of services to
existing customers.

Cost of sales, which consist primarily of labor, software amortization, technology, facilities, postage, freight, and packing supplies
increased by approximately $1,292,000, or 17%, to approximately $8,755,100 for the 39-week period ended September 26, 2008, as compared to approximately $7,463,100 for the 39-week period ended September 28, 2007. As a percentage of
revenues cost of sales amounted to approximately 73% of related revenues for the 39-week period ended September 26, 2008, as compared with approximately 76% for the 39-week period ended September 28, 2007. Increase in costs of service and
the decrease as a percentage of revenue resulted primarily from (i) increased order / transaction volume, (ii) increase of technology staff to accommodate new contracts, (iii) increased orders flowing through the Companys North
America distribution network, (iv) improved margins as the Company capitalizes on growth, and (v) improved supplier contracts with increased purchase volume. 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. Management
expects the percentage of cost of sales to revenue to decrease as sales increases and we are able to capitalize on the additional capacity.

General and
administrative expense increased by approximately $535,000 or 21% to approximately $3,076,700 for the 39-week period ended September 26, 2008 as compared to approximately $2,541,700 for the 39-week period ended September 28, 2007. The
increase was primarily related to (i) increased personnel and other overhead expenses related to the sales and marketing plan, (ii) increases in infrastructure cost to support the current and expected growth, (iii) e-commerce
marketing and management, (iv) increased cost for recruitment of new employees, and (v) costs related to a new investor relations program. Management continues to re-deploy administrative resources to focus on sales and
marketing activities to enable the Company to grow without significant increases in general and administrative expenses. Management has budgeted for significant increases in general and administrative expenses for the remainder of 2008 as the
Company builds the sales organization.

The Company realized an operating profit before other expenses and provisions for income taxes of approximately
$198,000 for the 39-week period ended September 26, 2008, compared with the loss from continuing operations before provisions for income taxes of approximately $159,000 for the 39-week period ended September 28, 2007.

The income tax benefit was approximately $52,100 for the 39-week period ended September 26, 2008 compared to an income tax benefit of approximately $183,300 for the
39-week period ended September 28, 2007. Differences between the effective tax rate used for 2008 and 2007, as compared to the U.S. federal statutory rate, are primarily due to permanent differences. As of September 26, 2008 the Company
had federal and state net operating loss carry-forwards totaling approximately $3,500,000, which begin to expire in 2021. If the Company does not begin to show taxable profits by the fourth quarter, management will begin to reserve any additional
net operating loss carry-forwards.

Basic loss per share from continuing operations for the 39-week period ended September 26, 2008 was $0.01 per
weighted average share, compared with basic loss of $0.03 per weighted average share for the 39-week period ended September 28, 2007.



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Critical Accounting Policies and Estimates

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 they have been discussed with the audit committee; however, actual results could differ from these estimates.

Revenue Recognition

The Company recognizes revenues in accordance
with Statement of Position (SOP) 97-2, (Software Revenue Recognition) as amended by SOP 98-9 (Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions).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 sales.

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.

During the 39-week periods ended September 26,
2008 and September 28, 2007, sales to our largest customer amounted to approximately $7,565,900 and $5,896,600, respectively, or 63% and 60% of total revenues, respectively. Accounts receivable from two customers at September 26, 2008
amounted to approximately $772,000 or approximately 41% of the balance. Accounts receivable from our three largest customers at September 28, 2007 amounted to approximately $856,400 or approximately 57% of the balance.

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 receivable, the customers payment history and the customers current ability to pay
its obligation. Based on managements review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $170,000 is considered necessary as of September 26, 2008. 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 September 26, 2008 by approximately $10,000. We do not accrue interest
on past due receivables.

Income Taxes

Taxes on income
are provided in accordance with SFAS No. 109, Accounting for Income Taxes. Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the financial statements.
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. Through the reverse acquisition with Absolute Glass the Company acquired net operating losses for tax purposes of approximately $2.4 million. Internal
Revenue Code Sec. 382 places limitations on the utilization of the acquired net operating losses. Due to the limitation the Company has placed a full valuation against that asset of approximately $900,000.



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EBITDA

EBITDA for
the 39-week period ended September 26, 2008 was approximately $407,800 compared to approximately $113,700 in the comparable period of the prior year. The increase in the EBITDA is primarily related to the increased gross margin as the Company
continues to capitalize on growth. 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 39-weeks ended |         
|                              |  | September 26,2008      |          |   | September 28,2007 |  
|Net loss as reported          |  | $                      | (144,500 | ) |                   | $ | (372,300 | )
|Income tax benefit            |  |                        | (52,100  | ) |                   |   | (183,300 | )
|Interest expense              |  |                        | 394,600  |   |                   |   | 396,600  |  
|Depreciation and amortization |  |                        | 209,800  |   |                   |   | 272,700  |  
|                              |  |                        |          |   |                   |   |          |  
|EBITDA                        |  | $                      | 407,800  |   |                   | $ | 113,700  |  
|                              |  |                        |          |   |                   |   |          |  

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 earnings EBITDA, with EBITDA being defined by the
Company as earnings before interest, taxes, depreciation and amortization. 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 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.

These non-GAAP financial measures provide 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 these non-GAAP financial measures 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
September 26, 2008, the Company has approximately $348,700 of negative working capital and has cash and cash equivalents of approximately $225,200, compared with approximately $74,000 of cash and cash equivalents at December 28, 2007.

During the 39-week period ended September 26, 2008, cash has increased by approximately $151,200. During the 39-week period ended September 26,
2008, the change was primarily caused by (i) losses from operations, (ii) the significant decrease in the accounts receivable, (iii) non-cash expenses, including but not limited to amortization related to long term debt and
depreciation and amortization, (iv) decrease in accrued salaries, (v) decrease in accounts payable, (vi) significant payments on the notes payable and the line of credit, and (vii) other changes in assets and liabilities.
Management expects to have positive cash flow from operations going forward, except in periods when the accounts receivable and work in process balances significantly increase based on revenue growth. Management had approximately $745,000 available
under the line of credit at September 26, 2008 for any short term cash needs.

Management does not expect the Company to require additional cash flow
resources to fund operations during the next twelve (12) months.



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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. There is no assurance that we will be able to obtain financing on terms favorable to the Company
or successfully implement infrastructure growth strategies.

Our strategy is to continue to expand primarily through internal development, 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 in 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 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.

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.

NEW ACCOUNTING PRONOUNCEMENTS

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement
No. 115 (FAS 159). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective of FAS 159 is to provide
opportunities to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply hedge accounting provisions. FAS 159 is effective for fiscal years beginning after Nov. 15, 2007. The
Company adopted FAS 159 effective Jan. 1, 2008, but did not elect to measure any financial instruments at fair value. Accordingly, its adoption did not have any effect on its balance sheets, statement of operations or statement of cash flows.

In May 2008, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS No. 162 codifies the hierarchy of generally accepted accounting principles to be used by the preparers of financial statements. The hierarchy is identical to that contained in the American Institute of
Certified Public Accountants Statements on Auditing Standards No. 69, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. SFAS No. 162 is effective for the Company sixty days
following the Securities and Exchange Commission (SEC) approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles, which is expected to occur during the fourth quarter of fiscal 2008. The Company does not expect that adoption of the standard will impact its Financial Statements.



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##### Table of Contents

|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

Not
Applicable



|Item 4(T). | Controls and Procedures
|---------- | -----------------------



| | (a) | Evaluation of disclosure controls and procedures. Under the supervision and with the participation of management, including the CEO and CFO, we conducted an evaluation
of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of September 26, 2008. Based on this evaluation, our
principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective for timely gathering, analyzing, and disclosing the information we are required to disclose in our reports filed under
the Securities Act of 1934, as amended.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Changes in Internal Control over Financial Reporting.There has been no significant change in the Companys internal control over financial reporting during the
fiscal quarter ended September 26, 2008 that materially affected or is reasonably likely to materially affect the Companys internal control over financial reporting.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

None.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



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

The Annual
Meeting of the Shareholders of the Company was held on August 28, 2008. At the meeting, the following actions were taken by the shareholders:

Paul
Demirdjian, Vince Fabrizzi, Daniel Furlong, and Primrose Demirdjian were elected as Directors, to serve until the Annual Meeting in the year 2009, until their respective successors are elected and qualified or until their earlier resignation,
removal from office or death. The votes cast for and withheld were as follows:



|                    |  |            |  |     |                    |  |   |  |   |  
|------------------- |  | ---------- |  | --- | ------------------ |  | - |  | - | -
|                    |  | Voted For  |  |     | Withhold Authority | 
|Paul Demirdjian     |  | 12,308,939 |  | 100 | %                  |  | 0 |  | 0 | %
|Vince Fabrizzi      |  | 12,308,939 |  | 100 | %                  |  | 0 |  | 0 | %
|Daniel Furlong      |  | 12,308,939 |  | 100 | %                  |  | 0 |  | 0 | %
|Primrose Demirdjian |  | 12,308,939 |  | 100 | %                  |  | 0 |  | 0 | %

The adoption of the Amended and Restated Jagged Peak, Inc. 2005 Stock Incentive Plan was ratified and approved.
The voting on the approval was as follows:



|          |  |           
|--------- |  | ----------
|For       |  | 11,671,787
|Against   |  | 50,052    
|Abstain   |  | 5,584     
|Non Votes |  | 581,515   



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##### Table of Contents

|Item 5. | Other Matters
|------- | -------------

None.



|Item 6. | Exhibits
|------- | --------



|(a) | Exhibits included herewith are:
|--- | -------------------------------



|     |  |                                                                                                                                                                                                                                                                                           
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Certificate of Amendment to Articles of Incorporation                                                                                                                                                                                                                                     
|     | 
|10.1 |  | Amended and Restated Jagged Peak, Inc. 2005 Stock Incentive Plan (As Amended and Restated July 2008)                                                                                                                                                                                      
|     | 
|10.2 |  | Jagged Peak, Inc. Employee Stock Ownership Plan Effective as of January 1, 2007 (As restated, January 1, 2008)                                                                                                                                                                            
|     | 
|31.1 |  | Certification of the Chief Executive Officer dated November 7, 2008 (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 99.1 pursuant to SEC interim filing guidance.)                                                                     
|     | 
|31.2 |  | Certification of the Chief Financial Officer dated November 7, 2008 (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 99.2 pursuant to SEC interim filing guidance.)                                                                     
|     | 
|32.1 |  | Written Statements of the Chief Executive Officer dated November 7, 2008 (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item
601(b) (32) (iii) of Regulation S-K as Exhibit 99.3 pursuant to SEC interim filing guidance.)
|     | 
|32.2 |  | Written Statements of the Chief Financial Officer dated November 7, 2008 (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item
601(b) (32) (iii) of Regulation S-K as Exhibit 99.3 pursuant to SEC interim filing guidance.)



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SIGNATURES

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



|                        |  |                 
|----------------------- |  | ----------------
|Jagged Peak, Inc.       |  |                 
|Registrant              |  |                 
|                        | 
|/s/ Paul B. Demirdjian  |  | November 7, 2008
|Paul B. Demirdjian      |  | Date            
|Chief Executive Officer |  |                 
|                        | 
|/s/ Andrew J. Norstrud  |  | November 7, 2008
|Andrew J. Norstrud      |  | Date            
|Chief Financial Officer |  |                 



21