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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q







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

For the Quarterly Period Ended March 27, 2009

OR



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

For the transition period from              to
            .

Commission file number: 000-31715





Jagged Peak, Inc.

(Exact Name of Registrant 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)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

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

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



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|                        |  |   | 
|Non-Accelerated Filer   |  |  ̈ |  | 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 has 70,000,000 shares of common stock, par value $0.001, authorized and 14,677,594 shares of common stock outstanding as of May 7, 2009.









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##### Table of Contents

Jagged Peak, Inc.

Contents



|                               |  |                                                                                                                                                             |  |     
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Part I  Financial Information |  |                                                                                                                                                            
|                               |  |                                                                                                                                                            
|Item 1.                        |  | Financial Statements                                                                                                                                        |  |     
|                               |  |                                                                                                                                                            
|                               |  | Balance Sheets for the 13 Week Period Ended March 27, 2009 (Unaudited) and December 26, 2008 (Audited)                                                      |  | 1   
|                               |  |                                                                                                                                                            
|                               |  | Statements of Operations for the 13 Week Period Ended March 27, 2009 (Unaudited) and the 13 Week Period Ended March 28, 2008 (Unaudited)                    |  | 2   
|                               |  |                                                                                                                                                            
|                               |  | Statement of Changes in Stockholders Equity for the 13 Week Period Ended March 27, 2009 (Unaudited)                                                        |  | 3   
|                               |  |                                                                                                                                                            
|                               |  | Statements of Cash Flows for the 13 Week Period Ended March 27, 2009 (Unaudited) and the 13 Week Period Ended March 28, 2008 (Unaudited)                    |  | 4   
|                               |  |                                                                                                                                                            
|                               |  | Notes to the Unaudited Financial Statements for the 13 Week Period Ended March 27, 2009 (Unaudited) and the 13 Week Period Ended March 28, 2008 (Unaudited) |  | 5-12
|                               |  |                                                                                                                                                            
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                       |  | 13  
|                               |  |                                                                                                                                                            
|Item 3.                        |  | Quantitative and Qualitative Disclosure About Market Risk                                                                                                   |  | 18  
|                               |  |                                                                                                                                                            
|Item 4(T).                     |  | Controls and Procedures                                                                                                                                     |  | 18  
|                               | 
|Part II  Other Information    |  | 19                                                                                                                                                         
|                               |  |                                                                                                                                                            
|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                                                                                                                                               |  | 19  
|                               |  |                                                                                                                                                            
|Item 6.                        |  | Exhibits                                                                                                                                                    |  | 19  
|                               | 
|Signatures                     |  | 20                                                                                                                                                         



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Jagged Peak, Inc.

Balance Sheets



|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ---------- | - | ------------------------- | - | ---------- | -
|                                                                                                                                                |  | March 27,2009(Unaudited) |            |   | December 26,2008(Audited) |  
|Assets                                                                                                                                          |  |                          |            |   |                           |   |            |  
|Current assets:                                                                                                                                 |  |                          |            |   |                           |   |            |  
|Cash                                                                                                                                            |  | $                        | 189,700    |   |                           | $ | 126,500    |  
|Accounts receivable, net of allowance for doubtful accounts of $230,000 at March 27, 2009 and December 26, 2008,
respectively                   |  |                          | 1,338,300  |   |                           |   | 1,923,800  |  
|Other receivables                                                                                                                               |  |                          | 111,500    |   |                           |   | 135,000    |  
|Work in process, net of allowance of $30,000 at March 27, 2009 and December 26, 2008, respectively                                              |  |                          | 203,400    |   |                           |   | 149,700    |  
|Deferred tax asset                                                                                                                              |  |                          | 268,600    |   |                           |   | 268,600    |  
|Other current assets                                                                                                                            |  |                          | 403,800    |   |                           |   | 443,800    |  
|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|Total current assets                                                                                                                            |  |                          | 2,515,300  |   |                           |   | 3,047,400  |  
|                                                                                                                                                |  |                         
|Property and equipment, net of accumulated depreciation of $1,936,300 and $1,885,700 at March 27, 2009 and December 26, 2008,
respectively      |  |                          | 315,300    |   |                           |   | 327,400    |  
|                                                                                                                                                |  |                         
|Other assets:                                                                                                                                   |  |                          |            |   |                           |   |            |  
|EDGE and other applications, net of accumulated amortization of $1,325,100 and $1,318,100 at March 27, 2009 and December 26, 2008,
respectively |  |                          | 157,300    |   |                           |   | 79,400     |  
|Deferred tax asset                                                                                                                              |  |                          | 1,207,600  |   |                           |   | 1,138,700  |  
|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|Total long-term assets                                                                                                                          |  |                          | 1,680,200  |   |                           |   | 1,545,500  |  
|                                                                                                                                                |  |                         
|Total assets                                                                                                                                    |  | $                        | 4,195,500  |   |                           | $ | 4,592,900  |  
|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|                                                                                                                                                |  |                         
|Liabilities and Stockholders Equity                                                                                                            |  |                          |            |   |                           |   |            |  
|Current liabilities:                                                                                                                            |  |                          |            |   |                           |   |            |  
|Accounts payable, trade                                                                                                                         |  | $                        | 1,217,700  |   |                           | $ | 1,641,500  |  
|Accrued payroll and bonuses                                                                                                                     |  |                          | 463,400    |   |                           |   | 407,800    |  
|Other accrued expenses                                                                                                                          |  |                          | 71,500     |   |                           |   | 61,900     |  
|Revolving note, $261,000 and $1,000,000 was available at March 27, 2009 and December 26, 2008, respectively                                     |  |                          | 173,800    |   |                           |   | 0          |  
|Deferred rent                                                                                                                                   |  |                          | 25,500     |   |                           |   | 34,900     |  
|Notes payable                                                                                                                                   |  |                          | 1,280,000  |   |                           |   | 1,415,000  |  
|Deferred revenue and customer deposits                                                                                                          |  |                          | 679,300    |   |                           |   | 600,200    |  
|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|Total current liabilities                                                                                                                       |  |                          | 3,911,200  |   |                           |   | 4,161,300  |  
|                                                                                                                                                |  |                         
|Long-term liabilities:                                                                                                                          |  |                          |            |   |                           |   |            |  
|Deferred rent, long term                                                                                                                        |  |                          | 57,300     |   |                           |   | 57,200     |  
|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|Total long-term liabilities                                                                                                                     |  |                          | 57,300     |   |                           |   | 57,200     |  
|                                                                                                                                                |  |                         
|Stockholders equity:                                                                                                                           |  |                          |            |   |                           |   |            |  
|Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at March 27, 2009 and December 26,
2008          |  |                          |            |   |                           |   |            |  
|Common stock, $.001 par value; 70,000,000 shares authorized; 14,677,594 shares issued and outstanding at March 27, 2009 and
December 26, 2008   |  |                          | 14,800     |   |                           |   | 14,800     |  
|Additional paid-in capital                                                                                                                      |  |                          | 3,388,400  |   |                           |   | 3,388,400  |  
|Accumulated deficit                                                                                                                             |  |                          | (3,176,200 | ) |                           |   | (3,028,800 | )
|                                                                                                                                                |  |                          |            |   |                           |   |            |  
|Total stockholders equity                                                                                                                      |  |                          | 227,000    |   |                           |   | 374,400    |  
|Total liabilities and stockholders equity                                                                                                      |  | $                        | 4,195,500  |   |                           | $ | 4,592,900  |  
|                                                                                                                                                |  |                          |            |   |                           |   |            |  

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



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Jagged Peak, Inc.

Statements of Operations (Unaudited)



|                                                                             |  |                      |            |   |               |   |            |  
|---------------------------------------------------------------------------- |  | -------------------- | ---------- | - | ------------- | - | ---------- | -
|                                                                             |  | Thirteen Weeks Ended |           
|                                                                             |  | March 27,2009        |            |   | March 28,2008 |  
|Revenue                                                                      |  | $                    | 4,007,800  |   |               | $ | 3,942,000  |  
|                                                                             |  |                     
|Cost of revenues                                                             |  |                      | 2,984,900  |   |               |   | 3,008,200  |  
|                                                                             |  |                      |            |   |               |   |            |  
|Gross profit                                                                 |  |                      | 1,022,900  |   |               |   | 933,800    |  
|                                                                             |  |                      |            |   |               |   |            |  
|                                                                             |  |                     
|Selling, general and administrative expenses                                 |  |                      | 1,123,600  |   |               |   | 929,400    |  
|                                                                             |  |                      |            |   |               |   |            |  
|                                                                             |  |                     
|Operating (loss) income                                                      |  |                      | (100,700   | ) |               |   | 4,400      |  
|                                                                             |  |                     
|Interest expense                                                             |  |                      | 115,200    |   |               |   | 126,700    |  
|                                                                             |  |                      |            |   |               |   |            |  
|Loss before tax benefit                                                      |  |                      | (215,900   | ) |               |   | (122,300   | )
|                                                                             |  |                     
|Provision for income tax benefit                                             |  |                      | (68,500    | ) |               |   | (36,800    | )
|                                                                             |  |                      |            |   |               |   |            |  
|                                                                             |  |                     
|Net loss                                                                     |  | $                    | (147,400   | ) |               | $ | (85,500    | )
|                                                                             |  |                      |            |   |               |   |            |  
|                                                                             |  |                     
|Weighted average number of common shares outstanding  basic & fully diluted |  |                      | 14,677,594 |   |               |   | 14,627,594 |  
|                                                                             |  |                      |            |   |               |   |            |  
|                                                                             |  |                     
|Net loss per share  basic & fully diluted                                   |  | $                    | (0.01      | ) |               | $ | (0.01      | )
|                                                                             |  |                      |            |   |               |   |            |  

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



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Jagged Peak, Inc.

Statement of Changes in Stockholders Equity

13 Weeks Ended March 27, 2009
(Unaudited)



|                           |  |              |  |                    |        |             |   |           |  |   |            |   |  |   |          |  
|-------------------------- |  | ------------ |  | ------------------ | ------ | ----------- | - | --------- |  | - | ---------- | - |  | - | -------- | -
|                           |  | Common Stock |  | Additional Paid in |        | Accumulated |   |           |  |  
|                           |  | Shares       |  | Amount             |        | Capital     |   | Deficit   |  |   | Total      |  
|Balance, December 26, 2008 |  | 14,677,594   |  | $                  | 14,800 |             | $ | 3,388,400 |  | $ | (3,028,800 | ) |  | $ | 374,400  |  
|                           |  |              |  |                    |       
|Net loss for the period    |  |              |  |                    |        |             |   |           |  |   | (147,400   | ) |  |   | (147,400 | )
|                           |  |              |  |                    |        |             |   |           |  |   |            |   |  |   |          |  
|                           |  |              |  |                    |       
|Balance, March 27, 2009    |  | 14,677,594   |  | $                  | 14,800 |             | $ | 3,388,400 |  | $ | (3,176,200 | ) |  | $ | 227,000  |  
|                           |  |              |  |                    |        |             |   |           |  |   |            |   |  |   |          |  

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



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Jagged Peak, Inc.

Statements of Cash Flows (Unaudited)



|                                                                                |  |                |          |   |               |   |          |  
|------------------------------------------------------------------------------- |  | -------------- | -------- | - | ------------- | - | -------- | -
|                                                                                |  | 13 Weeks Ended |         
|                                                                                |  | March 27,2009  |          |   | March 28,2008 |  
|Operating activities                                                            |  |                |          |   |               |   |          |  
|Net loss                                                                        |  | $              | (147,400 | ) |               | $ | (85,500  | )
|                                                                                |  |                |          |   |               |   |          |  
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                |          |   |               |   |          |  
|Depreciation and amortization                                                   |  |                | 57,600   |   |               |   | 70,100   |  
|Amortization of officers, director and employees compensation                   |  |                | 0        |   |               |   | 10,900   |  
|Amortization of warrants related to long term debt                              |  |                | 80,400   |   |               |   | 80,300   |  
|Adjustment to allowance for bad debt expense                                    |  |                | 35,200   |   |               |   | 1,100    |  
|Changes in:                                                                     |  |                |          |   |               |   |          |  
|Accounts receivable                                                             |  |                | 550,300  |   |               |   | 804,800  |  
|Work-in-process                                                                 |  |                | (53,700  | ) |               |   | (86,300  | )
|Other current assets                                                            |  |                | 23,500   |   |               |   | 27,200   |  
|Other receivables                                                               |  |                | (40,400  | ) |               |   | (33,900  | )
|Deferred tax asset                                                              |  |                | (68,900  | ) |               |   | (36,800  | )
|Accounts payable                                                                |  |                | (423,800 | ) |               |   | (323,100 | )
|Accrued payroll                                                                 |  |                | 55,600   |   |               |   | (284,000 | )
|Accrued expenses                                                                |  |                | 9,600    |   |               |   | (20,600  | )
|Deferred rent                                                                   |  |                | (9,300   | ) |               |   | (6,900   | )
|Other liabilities                                                               |  |                | 79,100   |   |               |   | 90,100   |  
|                                                                                |  |                |          |   |               |   |          |  
|                                                                                |  |               
|Net cash flows provided by operating activities                                 |  |                | 147,800  |   |               |   | 207,400  |  
|                                                                                |  |                |          |   |               |   |          |  
|                                                                                |  |               
|Investing activities                                                            |  |                |          |   |               |   |          |  
|Acquisition of property and equipment                                           |  |                | (38,500  | ) |               |   | (48,400  | )
|Acquisition/development of software - EDGE Platform                             |  |                | (84,900  | ) |               |   | (20,700  | )
|                                                                                |  |                |          |   |               |   |          |  
|Cash flows used by investing activities                                         |  |                | (123,400 | ) |               |   | (69,100  | )
|                                                                                |  |                |          |   |               |   |          |  
|                                                                                |  |               
|Financing activities                                                            |  |                |          |   |               |   |          |  
|Net proceeds and payments on revolving note                                     |  |                | 173,800  |   |               |   | 100,800  |  
|Payments on notes payable                                                       |  |                | (135,000 | ) |               |   | (135,000 | )
|                                                                                |  |                |          |   |               |   |          |  
|Cash flows provided (used) by financing activities                              |  |                | 38,800   |   |               |   | (34,200  | )
|                                                                                |  |                |          |   |               |   |          |  
|                                                                                |  |               
|Net increase in cash                                                            |  |                | 63,200   |   |               |   | 104,100  |  
|                                                                                |  |               
|Cash, beginning of period                                                       |  |                | 126,500  |   |               |   | 74,000   |  
|                                                                                |  |                |          |   |               |   |          |  
|                                                                                |  |               
|Cash, end of period                                                             |  | $              | 189,700  |   |               | $ | 178,100  |  
|                                                                                |  |                |          |   |               |   |          |  
|                                                                                |  |               
|Supplemental disclosure of cash flow information                                |  |                |          |   |               |   |          |  
|Cash paid during the period for interest                                        |  | $              | 34,800   |   |               | $ | 46,600   |  
|                                                                                |  |                |          |   |               |   |          |  

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 Week Periods Ended
March 27, 2009 and March 28, 2008

1. General Background Information

Jagged Peak, Inc. (the Company or Jagged Peak) is an e-business software and services company headquartered in Tampa, Florida, providing Demand and Supply Chain management, CRM execution and
e-Fulfillment solutions and services. The Companys flagship product, EDGE (E-Business Dynamic Global Engine), is a web-based software application that enables companies to control and coordinate multi-channel orders, catalogs, multi-warehouse
inventories, and fulfillment across multiple customers, suppliers, employees, and partners in real-time. The Company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 March 27, 2009 and March 28, 2008 consist of 13 weeks.

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
March 27, 2009, (b) the results of operations for the 13-weeks ended March 27, 2009 and March 28, 2008, (c) the statement of changes in stockholders equity ended March 27, 2009 and (d) cash flows for the
13-weeks ended March 27, 2009 and March 28, 2008, have been made.



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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 26, 2008.

Use of Estimates

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

Revenue Recognition

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

Software development costs, including costs to develop software products or the software component of products to be marketed to external users, as well as software programs to be used solely to meet our internal needs are accounted for in
accordance with SFAS No. 86, Accounting for Costs of Computer Software to be Sold, Leased, or Otherwise Marketed and Statement of Position No. 98-1, Accounting for Costs of Computer Software Developed or Obtained for Internal
Use. Software and development enhancements expenses include costs such as payroll and employee benefit costs associated with product development. The EDGE product platform, including the order management, the warehouse management and the
transportation management systems are continually being enhanced with new features and functions. Once technological feasibility of new features and functions is established, the cost incurred



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until release to production are capitalized and amortized over a three-year useful life. There was approximately $84,900 capitalized during the 13-week
period ended March 27, 2009 and approximately $20,700 capitalized during the 13-week period ended March 28, 2008. Amortization expenses related to capitalized software and charged to operations for the 13-week period ended March 27,
2009 and March 28, 2008 were approximately $7,000 and approximately $21,900, respectively.

Cash and Cash Equivalents

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

Fiduciary Relationship

The Company has control of funds collected on behalf of customers and funds established by our customers, for the payment of our customer incentive
programs. These accounts total approximately $28,100 at March 28, 2008. There were no amounts in these accounts at March 27, 2009. Because the accounts represent funds held for customers and our customers purposes, the cash and the
corresponding liability for future payments are not shown on the financial statements.

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 13-week periods ended March 27, 2009
and March 28, 2008, sales to one customer amounted to approximately $2,865,100 and $2,486,300, respectively, or 71% and 63% of total revenues, respectively. Accounts receivable from the same customer at March 27, 2009 amounted to
approximately $524,000 or approximately 33% of the balance. This customer is a large international company with more than one hundred brands. The Company classifies all business done for all of this customers brands as one single customer for
the concentration of risk calculation.

The Company extends credit to its various customers based on evaluation of the customers financial condition
and ability to pay the Company in accordance with the payment terms. The Company provides for estimated losses on accounts receivable considering a number of factors, including the overall aging of accounts receivables, customers payment
history and the customers current ability to pay its obligation. Based on managements review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $230,000 is considered necessary as of
March 27, 2009. 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 March 27, 2009
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



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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 13-week periods ended March 27, 2009 and March 28, 2008, there was no impairment of long-lived or intangible assets.

Property and Equipment

Property and equipment are recorded at cost
and depreciated on a straight-line basis over their estimated useful lives, principally 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 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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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 statement of operations over the period during which an employee is required to provide service in exchange for the award.

Under SFAS 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 SFAS 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 of approximately 4%, for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term
of 5 years which was calculated based on the Companys historical pattern of options granted 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 expiration or termination.

There were no options granted during the 13-week period ended March 27, 2009 and 50,000 options granted during the 13-week period ended March 28, 2008. As of
March 27, 2009, there was no unrecognized stock-based compensation expense related to nonvested stock options.

The following table represents our
nonvested stock option activity for the 13-week period ended March 27, 2009:



|                                      |  |                  |  |                                    |     
|------------------------------------- |  | ---------------- |  | ---------------------------------- | ----
|                                      |  | Number ofOptions |  | WeightedAverageGrantDate FairValue
|Nonvested options - December 26, 2008 |  | 50,000           |  | $                                  | 0.19
|                                      |  |                 
|Granted                               |  |                  |  |                                    |     
|Vested                                |  |                  |  |                                    |     
|Expired                               |  | 50,000           |  | $                                  | 0.19
|                                      |  |                  |  |                                    |     
|                                      |  |                 
|Nonvested options  March 27, 2009    |  | 0                |  | $                                  | 0.00
|                                      |  |                  |  |                                    |     

There was no aggregate intrinsic value of options outstanding at March 27, 2009, based on the Companys
closing stock price of $0.13 as of the last business day of the period ended March 27, 2009, which would have been received by the optionees had all options been exercised on that date. There was no aggregate intrinsic value of options
exercisable at March 27, 2009, based on the Companys closing stock price of $0.13 as of the last business day of the period ended March 27, 2009, which would have been received by the optionees had all options exercisable been
exercised on that date. There were no options exercised during the 13-weeks ended March 27, 2009 and March 28, 2008.



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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 14,677,594 and 14,627,594 for the 13-week periods ended March 27, 2009 and March 28, 2008, respectively. The diluted weighted average
number of shares was approximately 14,990,167 and 14,946,546 for the 13-week periods ended March 27, 2009 and March 28, 2008, respectively.

Common stock equivalents for the 13-week periods ended March 27, 2009 and March 28, 2008 were anti-dilutive due to the net losses sustained by the Company during these periods. Therefore, the diluted weighted average common shares
outstanding for the dilutive weighted average share calculation in the periods ended March 27, 2009 and March 28, 2008 excludes approximately 312,573 shares and 318,952 shares that could dilute earnings per share in future periods,
respectively.

3. Other Assets

Other
assets consist of:



|                                                  |  |               |         |                  |   |        
|------------------------------------------------- |  | ------------- | ------- | ---------------- | - | -------
|                                                  |  | March 27,2009 |         | December 26,2008
|Capitalized debt cost                             |  | $             | 227,600 |                  | $ | 308,400
|                                                  |  |               |         |                  |   |        
|                                                  |  |              
|Current portion classified as other current asset |  |               | 227,600 |                  |   | 308,400
|                                                  |  |               |         |                  |   |        
|                                                  |  | $             | 0       |                  | $ | 0      
|                                                  |  |               |         |                  |   |        

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

The Companys 2000 Stock
Incentive Plan authorizes up to 100,000 shares of common stock to any employee or Consultant during any one calendar year for grants of both incentive stock options and non-qualified stock options to key employees, officers, directors, and
consultants. Options granted under the



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Plan must be exercised within ten years of the date of grant. The Option Price payable for the shares of Common Stock covered by any Option shall be
determined by the Board of Directors, but shall in no event be less than the par value of Common Stock. The Option Price for Incentive Stock Options shall not be less than the Fair Market Value of one share of Common Stock on the Date of Grant. The
Option Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of Grant only if the Board 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 28, 2007               |  | 4,389,898 |   |  | $                       | 0.01-2.50 |                                | $ | 0.84
|Warrants, Convertible Debt and options granted |  | 125,000   |   |  | $                       | 0.30-0.50 |                                | $ | 0.38
|Warrants and options cancelled or expired      |  | (615,000  | ) |  | $                       | 0.55-1.00 |                                | $ | 0.98
|                                               |  |           |   |  |                         |           |                                |   |     
|Outstanding at December 26, 2008               |  | 3,899,898 |   |  | $                       | 0.01-2.50 |                                | $ | 0.80
|                                               |  |           |  
|Warrants and options cancelled or expired      |  | (232,058  | ) |  | $                       | 0.50-1.28 |                                | $ | 0.95
|                                               |  |           |   |  |                         |           |                                |   |     
|                                               |  |           |  
|Outstanding at March 27, 2009                  |  | 3,667,840 |   |  | $                       | 0.01-2.50 |                                | $ | 0.80
|                                               |  |           |  
|Exercisable at March 27, 2009                  |  | 3,667,840 |   |  | $                       | 0.01-2.50 |                                | $ | 0.80
|Exercisable at December 26, 2008               |  | 3,849,898 |   |  | $                       | 0.01-2.50 |                                | $ | 0.80

The following table summarizes information about options and warrants outstanding and exercisable
as of March 27, 2009:



|                      |           |                                  |           |                                  |           |                      |   |                               |  |                   |  |                      |  |   |     
|--------------------- | --------- | -------------------------------- | --------- | -------------------------------- | --------- | -------------------- | - | ----------------------------- |  | ----------------- |  | -------------------- |  | - | ----
|                      |           | Outstanding Warrants and Options |           | Exercisable Warrants and Options
|Range ofExercisePrice |           | NumberOutstanding                |           | WeightedAverageRemainingLife     |           | WeightedAveragePrice |   | WeightedAverageRemaining Life |  | NumberExercisable |  | WeightedAveragePrice
|$                     | 0.01      |                                  | 334,899   |                                  | 2.1 years |                      | $ | 0.01                          |  | 2.1 years         |  | 334,899              |  | $ | 0.01
|$                     | 0.50-0.77 |                                  | 1,518,529 |                                  | 2.4 years |                      | $ | 0.61                          |  | 2.4 years         |  | 1,518,529            |  | $ | 0.61
|$                     | 1.00-2.50 |                                  | 1,814,412 |                                  | 1.1 years |                      | $ | 1.09                          |  | 1.1 years         |  | 1,814,412            |  | $ | 1.09



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As of March 27, 2009 and December 26, 2008, there were approximately 3,677,840 and 3,849,898
options exercisable at a weighted average exercise price of $0.80 and $0.80, respectively. The weighted average fair value of options at the date of grant of the options was $0.27 and $0.27 for 2009 and 2008, 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 $12,900 during the 13-week period ended March 27, 2009 and approximately $8,500 during the 13-week period ended
March 28, 2008. Norco is 50% owned by Andrew J. Norstrud, who joined the Company in October of 2005 as the Companys Chief Financial Officer. The Company 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 Operation
|------- | ------------------------------------------------------------------------------------

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-K for the year ended December 26, 2008.

Background of our Company

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



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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.

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 26, 2008 annual report filed with the SEC under Item 1A entitled Risks Particular to The Companys Business.

RESULTS OF OPERATIONS

For the 13-week period ended
March 27, 2009 compared to the 13-week period ended March 28, 2008

Revenues increased approximately $65,800, or 2%, to approximately
$4,007,800 for the 13-week period ended March 27, 2009, as compared to approximately $3,942,000 for the 13-week period ended March 28, 2008. The increases in revenue primarily related to (i) continued growth in order/transaction
volume, (ii) the continued expansion of services to existing customers, and (iii) new customers resulting from marketing efforts.

Costs of
revenue, which consist primarily of labor, software amortization, technology, facilities, postage, freight, and packing supplies decreased by approximately $23,300, or 1%, to approximately $2,984,900 for the 13-week period ended March 27, 2009,
as compared to approximately $3,008,200 for the 13-week period ended March 28, 2008. As a percentage of revenues cost of revenue amounted to approximately 74% of related revenues for the 13-week period ended March 27, 2009, as compared
with approximately 76% for the 13-week period ended March 28, 2008. The decrease in cost of revenue and the decrease as a percentage of revenue resulted primarily from (i) increased order / transaction volume, (ii) increased orders
flowing through the Companys North America distribution network, (iii) improved margins as the Company capitalizes on growth, and (iv) 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.

Selling, general and administrative expense increased by approximately $194,200 or 21% to approximately $1,123,600 for the
13-week period ended March 27, 2009 as compared to approximately $929,400 for the 13-week period ended March 28, 2008. 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, and (iii) e-commerce marketing and management. 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 a loss from
continuing operations before provisions for income taxes of approximately $215,900 for the 13-week period ended March 27, 2009, compared with the loss from continuing operations before provisions for income taxes of approximately $122,300 for
the 13-week period ended March 28, 2008.



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The income tax benefit was approximately $68,500 for the 13-week period ended March 27, 2009 compared to an income
tax benefit of approximately $36,800 for the 13-week period ended March 28, 2008. Differences between the effective tax rate used for 2009 and 2008, as compared to the U.S. federal statutory rate, are primarily due to permanent differences. As
of March 27, 2009 the Company had federal and state net operating loss carry-forwards totaling approximately $1,476,200, which begin to expire in 2021.

Basic loss per share from continuing operations for the 13-week period ended March 27, 2009 was $0.01 per weighted average share, compared with basic loss of $0.01 per weighted average share for the 13-week period ended March 28,
2008.

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 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.



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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 13-week period ended March 27, 2009 and March 28, 2008, sales to one customer amounted to approximately
$2,865,100 and $2,486,300, respectively, or 71% and 63% of total revenues, respectively. Accounts receivable from the one customer at March 27, 2009 amounted to approximately $524,000 or approximately 33% of the balance. This one customer is a
large international company with more than a hundred brands. The Company classifies all business done for all of the customers brands as one single customer for the concentration of risk calculation.

The Company extends credit to its various customers based on evaluation of the customers financial condition and ability to pay the Company in accordance with the
payment terms. The Company provides for estimated losses on accounts receivable considering a number of factors, including the overall aging of accounts receivables, customers payment history and the customers current ability to pay its
obligation. Based on managements review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $230,000 is considered necessary as of March 27, 2009. 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 March 27, 2009 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 consolidated 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 reserve against that asset of approximately $900,000.

EBITDA

EBITDA for the 13-week period ended March 27, 2009
was approximately $(43,100) compared to approximately $74,500 in the comparable period of the prior year. The decrease in the EBITDA directly relates to the increase of selling, general and administrative expenses. The Company defines EBITDA as
earnings before interest, taxes, depreciation and amortization costs. The Company also excludes any 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.



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|                              |  |                        |          |   |               |   |         |  
|----------------------------- |  | ---------------------- | -------- | - | ------------- | - | ------- | -
|                              |  | For the 13-weeks ended |         
|                              |  | March 27,2009          |          |   | March 28,2008 |  
|Net loss as reported          |  | $                      | (147,400 | ) |               | $ | (85,500 | )
|                              |  |                       
|Income tax benefit            |  |                        | (68,500  | ) |               |   | (36,800 | )
|                              |  |                       
|Interest expense              |  |                        | 115,200  |   |               |   | 126,700 |  
|                              |  |                       
|Depreciation and amortization |  |                        | 57,600   |   |               |   | 70,100  |  
|                              |  |                        |          |   |               |   |         |  
|                              |  |                       
|EBITDA                        |  | $                      | (43,100  | ) |               | $ | 74,500  |  
|                              |  |                        |          |   |               |   |         |  

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 any 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
March 27, 2009 the Company has approximately $1,395,900 of negative working capital and has cash and cash equivalents of approximately $189,700, compared with approximately $126,500 of cash and cash equivalents at December 26, 2008. The
primary reason for the negative working capital is the classification of the note payable as short term, since the final payment is in December of 2009. Management expects to refinance this debt prior to December.

During the 13-week period ended March 27, 2009 cash has increased by approximately $63,200. During the 13-week period ended March 27, 2009 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) increase in accrued salaries, (v) decrease in accounts payable, and (vi) 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 has approximately $260,000 on the line of credit available at March 27, 2009 for any short term cash needs.



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Management expects that positive cash flow from operations will allow the Company to continue to make payments on the
note payable according to the terms of the loan agreement. Management expects to obtain additional financing to make the final balloon payment of $920,000, due in December of 2009. Management does not expect to start the process of obtaining the
additional debt until the end of the second or third quarter, primarily due to the significant prepayment penalty of the current note payable. If the Company is unable to obtain the necessary financing from a conventional bank, it is highly likely
that the current shareholders would be significantly diluted if the Company was required to refinance the debt with additional convertible debt at the current market price of the stock.

The Company has embarked on marketing activities, upgrades to technology and increases to 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, if at all, would be recorded as an expense in the period incurred or estimated. This amount, even if not material to the Companys overall financial condition, could adversely affect the Companys results of operations in the
period recorded.

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.



|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 March 27, 2009. 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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (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 March 27, 2009 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
|------- | -----------------

As of the date of this Quarterly Report, there
are no material pending legal proceedings other than ordinary routine litigation to which the Company is a party or of which any of its property is subject.



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

There
are no unregistered sales of equity securities that have not been previously filed or included in an 8-K report.



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

None.



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

During the
13-week period ended March 27, 2009, the Company did not submit any matters to a vote of its security holders.



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

None.



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



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



|     |  |                                                                                                                                                                                                                                                                                      
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of the Chief Executive Officer dated May 7, 2009 (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 May 7, 2009 (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 May 7, 2009 (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 May 7, 2009 (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  |  |  |  | May 7, 2009 |  | 
|Paul B. Demirdjian      |  |  |  | Date        |  | 
|Chief Executive Officer |  |  |  |             |  | 
|                        |  |  | 
|/s/ Andrew J. Norstrud  |  |  |  | May 7, 2009 |  | 
|Andrew J. Norstrud      |  |  |  | Date        |  | 
|Chief Financial Officer |  |  |  |             |  | 



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