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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      FORM 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    January 1, 2008o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file number
    001-31904
 CENTERPLATE, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State of
    incorporation)

13-3870167(I.R.S. Employer
    Identification No.)2187 Atlantic Street
    Stamford, Connecticut 06902(Address of principal
    executive offices, including zip code)

(203) 975-5900(Registrants telephone
    number, including area
    code)   http://www.centerplate.com
 (Registrants
    URL)
  Securities of Centerplate, Inc. registered pursuant to
    Section 12(b) of the Act
  Title of Each Class

Name of Each Exchange on Which RegisteredIncome Deposit Securities (representing shares of
    common stock and subordinated notes)

American Stock Exchange
    Toronto Stock Exchange   Securities
    of Centerplate, Inc. registered pursuant to Section 12(g)
    of the Act:
    None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    Company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K. Form 10-K




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##### 





CENTERPLATE,
    INC.
    FISCAL YEAR 2007Form 10-K
    ANNUAL REPORT
    TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


1Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


31Item 2.


Properties


31Item 3.


Legal Proceedings


31Item 4.


Submission of Matters to a Vote of Security
    Holders


31PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


31Item 6.


Selected Financial Data


37Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


40Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


53Item 8.


Financial Statements and Supplementary Data


F-1Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


54Item 9A.


Controls and Procedures


54Item 9B.


Other Information


56PART IIIItem 10.*


Directors and Executive Officers of the
    Registrant


56Item 11.*


Executive Compensation


56Item 12.*


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


56Item 13.*


Certain Relationships and Related Transactions


56Item 14.*


Principal Accountant Fees and Services


56PART IVItem 15.


Exhibits and Financial Statement Schedules


56EX-10.13: FORM OF WAIVER AND FOURTH AMENDMENT TO THE CREDIT AGREEMENTEX-12.1: COMPUTATION OF RATIO OF EARNINGSEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION      *
    
    Incorporated by reference to the registrants definitive
    proxy statement for its 2008 annual meeting of securityholders,
    which proxy statement is expected to be filed not later than
    April 30, 2008.




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PART I  Introductory
    Note
  Throughout this Annual Report on
    Form 10-K,
    we refer to Centerplate, Inc., a Delaware corporation, as
    Centerplate, and, together with its consolidated
    subsidiaries, as we, our and
    us, unless otherwise indicated. Any reference to
    VSA refers to our wholly owned subsidiary, Volume
    Services America, Inc., a Delaware corporation, and its
    consolidated operations, unless otherwise indicated. In addition
    to VSA, Centerplates subsidiaries include Volume Services,
    Inc., or VSI, and Service America Corporation, or Service
    America, each a Delaware corporation, and others. Centerplate is
    a holding company and has no direct operations. Our principal
    assets are the capital stock of VSA and any intercompany notes
    owed to Centerplate, all of which have been pledged to the
    creditors under the VSA credit facility, which we sometimes
    refer to as our credit facility.
  When discussing the number of facilities we serve, we have
    counted all facilities held by a single client as one facility,
    even though we sometimes service more than one building or
    location for a particular client. For instance, under our client
    relationship with the New York Racing Association, which is
    included as one facility, we service buildings at three
    different locations: the Aqueduct Racetrack, Belmont Park
    Racetrack and Saratoga Race Course.
  Item 1.
    Business  Overview
    
    The largest provider to National Football League
    (NFL) facilities (11 teams as of February 2008);
    The third largest provider to Major League Baseball
    (MLB) facilities (7 teams);
    The largest provider to minor league baseball and spring
    training facilities (30 teams); and
    One of the largest providers to major convention centers, which
    we define as those with greater than approximately
    300,000 square feet of exhibition space (11 centers).      
    24 World Series games;
    nine U.S. Presidential Inaugural Balls;
    11 Super Bowls (including Super Bowl XLII held on
    February 3, 2008);
    nine NCAA Final Four Mens Basketball Tournaments; and
    14 World Cup Soccer games.  History
   1




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Strategic
    Initiatives and Infrastructure Development
    Culinary
    excellence
    Speed
    of service
  ® ® ®
  Branded
    products
    Innovative
    facility design
    Infrastructure
    Development and Strategic Directions
     2




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Services
    and Clients
  Services
            Clients
   3




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2008


2009


2010Facility CategorySports facilities


17



10



11Convention centers


2



6



7Other entertainment facilities


6



7



3Total number of contracts


25



23



21Percentage of fiscal 2007 net sales


19.4
%


14.4
%


12.5
%   Facilities
  Sports
    Facilities
     4




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SeatingFacility Name

Location

Sports Team Tenant

Sport

CapacityArrowhead Stadium

Kansas City, MO

Kansas City Chiefs

NFL


79,000AT&T Park

San Francisco, CA

San Francisco Giants

MLB


42,000FedEx Field

Landover, MD

Washington Redskins

NFL


92,000HHH Metrodome

Minneapolis, MN

Minnesota Vikings

NFL


64,000Minnesota Twins

MLB


44,000INVESCO Field at Mile High Stadium

Denver, CO

Denver Broncos

NFL


76,000Kauffman Stadium

Kansas City, MO

Kansas City Royals

MLB


40,600Louisiana Superdome

New Orleans, LA

New Orleans Saints

NFL


70,054Monster Park

San Francisco, CA

San Francisco 49ers

NFL


68,000Nationals Park

Washington, DC

Washington Nationals

MLB


41,200New Orleans Arena

New Orleans, LA

New Orleans Hornets

NBA


18,500Palace of Auburn Hills

Auburn Hills, MI

Detroit Pistons

NBA


21,000Qualcomm Stadium

San Diego, CA

San Diego Chargers

NFL


71,400RCA Dome

Indianapolis, IN

Indianapolis Colts

NFL


60,000Safeco Field

Seattle, WA

Seattle Mariners

MLB


47,145LP Field

Nashville, TN

Tennessee Titans

NFL


68,500Tropicana Field

St. Petersburg,

Tampa Bay Rays

MLB


48,500University of Phoenix Stadium

Glendale, AZ

Arizona Cardinals

NFL


63,400Xcel Energy Center

St. Paul, MN

Minnesota Wild

NHL


18,064Yankee Stadium

New York, NY

New York Yankees

MLB


55,000   Convention
    Centers
     5




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Size(Approx.Facility Name

Location

Sq. Ft.) (1)Colorado Convention Center

Denver, CO


584,000Dallas Convention Center

Dallas, TX


1,019,142Indiana Convention Center

Indianapolis, IN


493,123Jacob K. Javits Center

New York, NY


814,400Kentucky Fair & Expo Center

Louisville, KY


1,297,000San Diego Convention Center

San Diego, CA


616,363San Jose McEnery Convention Center

San Jose, CA


223,000Walter E. Washington Convention Center

Washington, DC


725,000     (1)
    
    Source: Tradeshow Weeks Major Exhibit Hall Directory
    2006.  Other
    Entertainment Facilities
          Facility Name

Location

Venue TypeBridgeport Arena

Bridgeport, CT

ArenaDTE Energy Music Theatre

Auburn Hills, MI

AmphitheaterLos Angeles Zoo

Los Angeles, CA

ZooNational Hot Rod Association

FL, GA, IN, OH

SpeedwaysNew York Racing Association (Belmont Park Racetrack, Aqueduct
    Racetrack and Saratoga Race Course)

NY

Horse RacetracksVerizon Wireless Amphitheater

Irvine, CA

Amphitheater   Client
    Contracts
   6




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Profit
    and Loss Contracts
      Profit
    Sharing Contracts
    Management
    Fee Contracts
  on-site
  Additional
    Contract Characteristics
       7




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Sales and
    Marketing
    on-site
      Competition
  Competitors
      e.g.
  Competition
    for Contracts
    Suppliers
   8




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Controls
  point-of-sale
  Employees
  on-site event-by-event
    Seasonality
    of Operations
     9




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Regulatory
    Matters
            Environmental
    Matters
       10




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Intellectual
    Property
    Our
    Secondary Offering
    Available
    Information
  Form 10-K, Form 10-Q Form 8-K,
    Item 1A.
    Risk
    Factors  An investment in the IDSs, and the shares of our common stock
    and our subordinated notes represented by the IDSs involves a
    number of risks. There are a number of important factors that
    could affect our business and future operating results,
    including without limitation, the factors set forth below. The
    information contained in this annual report should be read in
    light of such factors.
  Risks
    Relating to the IDSs and the Shares of Common Stock and
    Subordinated Notes Represented by the IDSs
  We
    have substantial indebtedness, which could restrict our ability
    to pay interest and principal on the subordinated notes,
    restrict our ability to pay dividends or impact our financing
    options and liquidity.
    
    our ability in the future to obtain additional financing for
    working capital, capital expenditures or acquisitions may be
    limited;
    our ability to refinance our indebtedness on terms acceptable to
    us or at all may be limited;
    our funds available for future operations, capital expenditures
    and/or
    dividends on our common stock may be reduced due to a
    significant portion of our cash flow from operations being
    dedicated to the payment of the principal of and interest on our
    indebtedness; and
    our vulnerability to economic downturns may increase and our
    ability to withstand competitive pressures may be limited.   11




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We
    would be required to suspend dividend and interest payments if
    we are unable to satisfy certain financial ratios under our
    credit facility, which would reduce the yield on the IDSs. and
    would likely cause the market value of the IDSs to
    decline.
    12-month 12-month
      Our
    credit facility and the indenture governing our subordinated
    notes contain other limits on our ability to pay
    dividends.
   12




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Our
    ability to pay dividends or current installments of interest on
    the subordinated notes in 2008 or thereafter could be affected
    by economic downturn or other factors that are difficult to
    predict.
        We are
    not required to pay any dividends and our board of directors may
    decide not to pay dividends at any time, for any
    reason.
    Because
    of seasonal and other variations in our cash flow and capital
    expenditures, we have used revolver borrowings for the payment
    of dividends and expect to do so in the future, thus increasing
    our interest cost as well as our overall leverage.
   13




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We
    rely on borrowings to allow us to pay dividends and continue to
    make capital investments. Our dividends have been, and we expect
    at least a portion of our dividends to continue to be, treated
    as a return of capital for tax purposes.
      Our
    dividend policy may negatively impact our ability to finance
    capital expenditures or operations.
    We may
    amend the terms of our credit facility, or we may enter into new
    agreements that govern our senior indebtedness with terms that
    may significantly affect our ability to pay interest and
    dividends to you.
      We are
    subject to restrictive debt covenants and other requirements
    related to our outstanding debt that limit our business
    flexibility by imposing operating and financial restrictions on
    our operations.
    
    the incurrence of additional indebtedness and the issuance of
    preferred stock and certain redeemable capital stock;
    the payment of dividends on, and purchase or redemption of,
    capital stock; 14




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
    other restricted payments, including investments;
    specified sales of assets:
    specified transactions with affiliates;
    the creation of liens; and
    consolidations, mergers and transfers of all or substantially
    all of our assets.    and/or
  If we
    are required to defer interest at any time prior to
    December 18, 2008, you may not be paid any deferred
    interest until December 18, 2008, and if we are required to
    defer interest at any time after December 18, 2008 and
    before December 10, 2013, you may not be paid all of the
    deferred interest owed to you until December 10,
    2013.
    You
    will not receive interest with respect to any interest deferral
    if you sell your IDSs or subordinated notes during an interest
    deferral period.
    Deferral
    of interest payments would have adverse tax consequences for you
    by causing you to recognize interest income and pay taxes before
    you receive any cash payment of such interest.
   15




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Deferral
    of interest payments may adversely affect the trading price of
    the IDSs or subordinated notes.
    The
    trading prices of the IDSs and the subordinated notes may be
    lower in value and more volatile than those of other securities
    that do not provide for interest deferral.
    If we
    are unable to deduct the interest on our subordinated notes for
    U.S. federal income tax purposes, our tax liabilities could
    increase significantly, and this could significantly affect our
    after-tax cash flow.
    Centerplate
    is a holding company and relies on dividends, interest and other
    payments, advances and transfers of funds from its subsidiaries
    to meet its debt service and other obligations.
    Our
    interest expense may increase significantly and could cause our
    net income and distributable cash to decline
    significantly.
   16




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We may
    not generate sufficient funds from operations to pay our
    indebtedness at maturity, or upon the exercise by holders of
    your rights upon a change of control.
    To
    service our indebtedness and to fund our liquidity needs, we
    will require a significant amount of cash which may not be
    available to us. Our ability to generate cash depends on many
    factors beyond our control.
      We may
    not be able to repay or refinance the subordinated notes, or our
    credit facility, upon terms acceptable to us, if at
    all.
    
    sales of assets to meet our debt service requirements;
    sales of equity;
    negotiations with our lenders or noteholders to restructure the
    applicable debt; and
    seeking protection under the U.S. federal bankruptcy code
    or other applicable bankruptcy, insolvency or other applicable
    laws dealing with creditors rights generally.  and/or and/or
  The
    indenture governing our subordinated notes and our credit
    facility permit us to pay a significant portion of our free cash
    flow to stockholders in the form of dividends.
   17




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The
    realizable value of our assets upon liquidation may be
    insufficient to satisfy claims.
    Because
    of the subordinated nature of the subordinated notes, holders of
    our subordinated notes may not be entitled to be paid in full,
    if at all, in a bankruptcy, liquidation or reorganization or
    similar proceeding.
        pari passu
 18




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In the
    event of bankruptcy or insolvency, your ability to recover
    amounts owed on the subordinated notes and guarantees of the
    notes by our subsidiaries could be limited or prevented by
    principles of equitable subordination or
    recharacterization.
    Holders
    of our subordinated notes will be structurally subordinated to
    the debt of our non-guarantor subsidiaries.
        The
    validity and enforceability of the subordinated notes and the
    guarantees of the subordinated notes by our subsidiaries may be
    limited by fraudulent conveyance laws and foreign laws
    restricting guarantees.
      
    Centerplate or the subsidiary guarantors intended to hinder,
    delay or defraud our creditors;
    Centerplate or the subsidiary guarantors knew or should have
    known that the transactions were to the detriment of our
    creditors; 19




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
    the transactions had the effect of giving a preference to one
    creditor or class of creditors over another; or
    Centerplate or the subsidiary guarantors did not receive fair
    consideration and reasonably equivalent value for incurring such
    indebtedness or guarantee obligations and we or the subsidiary
    guarantors (i) were insolvent or rendered insolvent by
    reason of the incurrence of such indebtedness or obligations,
    (ii) were engaged or about to engage in a business or
    transaction for which our or the subsidiary guarantors
    remaining assets constituted unreasonably insufficient capital
    or (iii) intended to incur, or believed that we or the
    subsidiary guarantors would incur, debts beyond our or their
    ability to pay as they mature.    
    the sum of its debts, including contingent liabilities, was
    greater than the fair saleable value of all of its assets;
    the present fair saleable value of its assets was less than the
    amount that would be required to pay its existing debts and
    liabilities, including contingent liabilities, as they become
    absolute and mature; or
    it could not or would not pay its debts as they become due.      Seasonality
    and variability of our business may cause volatility in the
    market value of your investment and may hinder our ability to
    make timely distributions on the IDSs.
    
    seasonality of sporting and other events;
    scheduling of events;
    unpredictability in the number, timing and type of new contracts;
    timing of contract expirations and special events; and
    level of attendance at facilities which we serve.     20




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The
    U.S. federal income tax consequences of the purchase, ownership
    and disposition of IDSs are unclear.
    The
    IRS or the courts could successfully assert a treatment of the
    IDSs different than our intended treatment, which could affect
    our tax liability and subject foreign holders to additional
    withholding tax.
  non-U.S. holders
  We may
    have to establish a reserve for contingent tax liabilities in
    the future, which could adversely affect our ability to make
    interest and dividend payments on the IDSs.
    Because
    of the deferral of interest provisions, the subordinated notes
    may be treated as issued with original issue
    discount.
   21




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If
    interest rates rise, the trading value of our IDSs may
    decline.
    There
    is a limited active trading market for securities similar to the
    IDSs in the United States.
    We do
    not expect our common stock or subordinated notes to develop
    separate active trading markets.
    If the
    IDSs automatically separate, the limited liquidity of the market
    for our subordinated notes and our shares of common stock may
    adversely affect your ability to sell our subordinated notes and
    our shares of common stock.
    The
    price of the IDSs may fluctuate substantially, which could
    negatively affect holders of IDSs.
    Future
    sales or the possibility of future sales of a substantial amount
    of IDSs, shares of our common stock or our subordinated notes
    may depress the price of the IDSs and the shares of our common
    stock and our subordinated notes.
     22




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Our
    capital structure and our subordinated notes lack some features
    that have been adopted by other issuers of IDSs. This may affect
    the way our securities are viewed in comparison to other IDSs in
    the market or IDSs issued by others in the future.
    The
    accounting treatment for the IDSs and subordinated notes is
    complex and subject to judgments concerning the valuation of
    embedded derivative rights within the indenture governing the
    subordinated notes. Fluctuations in the valuation of these
    rights could make our financial results
    unpredictable.
    Our
    certificate of incorporation and by-laws and several other
    factors could limit another partys ability to acquire us
    and deprive you of the opportunity to obtain a takeover premium
    for your securities.
    We may
    not be able to repurchase the subordinated notes upon a change
    of control.
   23




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Risks
    Relating to our Business and the Industry
  If
    attendance or the number of events held at our clients
    facilities decreases, our net sales and cash flow would
    significantly decline.
    
    maintenance and physical condition of the facility;
    poor performance by the sports teams using the facility;
    relocation or loss of a major sports team using a facility;
    ticket prices;
    changing consumer preferences for leisure time activities;
    inclement weather;
    natural disasters or pandemics;
    power outages;
    war, insurrection or acts of terrorism;
    scheduling of conventions, meetings and large catered events;
    construction of attractive alternative arenas, stadiums,
    convention centers or other venues or facilities;
    labor stoppages; and
    weaker economic conditions.    The
    pricing and termination provisions of our contracts may limit
    our ability to recover costs or make a profit on our
    contracts.
     24




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We
    have a history of losses and may experience losses in the
    future.
    We may
    not be able to recover our capital investments in clients
    facilities, which may significantly reduce our profits or cause
    losses.
    If the
    sports team tenant of a facility we serve relocates or the
    ownership of a sports team tenant or the facility we serve
    changes, we may lose the contract for that
    facility.
    If we
    were to lose any of our largest clients, our net sales would
    decline significantly.
    
    our largest client, the New York Yankees, accounted for
    approximately 9.6% of our net sales;
    our three largest clients together accounted for approximately
    20.4% of our net sales;
    our 10 largest clients together accounted for approximately
    40.3% of our net sales; and
    our 20 largest clients together accounted for approximately
    59.8% of our net sales.     25




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If any
    significant client were to become bankrupt, our revenues would
    be likely to decline and we could lose our investment in the
    client.
    If we
    are unable to redeploy any capital returned to us from our
    existing contracts it could have a material adverse impact on
    our financial results.
  and/or
  A
    contraction of MLB, or other sports played in facilities that we
    service, that eliminates any of the teams playing in facilities
    served by us could reduce our revenues.
    We may
    not have sufficient funds available to make capital investments
    in clients facilities that are necessary to maintain these
    relationships and, as a consequence, we could lose
    business.
    Increased
    capital investments or commissions to renew existing business
    relationships may lower our profitability.
   26




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Our
    cash resources may be strained and we may need to seek
    additional financing from time to time because of the need to
    make capital investments in order to obtain or maintain
    contractual relationships.
    Our
    ability to grow is limited by our capital structure and dividend
    policy and our reliance on other financing
    sources.
    Future
    strategic transactions, such as acquisitions or joint ventures,
    may require significant resources or result in significant
    losses, costs or liabilities.
      If
    labor or other operating costs increase, we may not be able to
    make a corresponding increase in the prices of our products and
    services and our profitability may decline
    significantly.
    We are
    heavily dependent on key personnel, and a loss of such personnel
    could have a detrimental effect on our business.
    We may
    incur significant liability for withdrawing from multi-employer
    pension plans.
   27




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We may
    harm our reputation or incur significant liabilities if claims
    of illness or injury associated with our service of food and
    beverage to the public are brought against us.
    
    consumer product liability;
    product tampering;
    nutritional and health-related concerns; and
    federal, state, provincial and local food controls.    The
    loss of any of our liquor licenses or permits would adversely
    affect our ability to carry out our business.
    If one
    of our employees sells alcoholic beverages to an intoxicated or
    minor patron, we could be liable to third parties for the acts
    of the patron.
     28




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If we
    fail to comply with applicable governmental regulations, we may
    become subject to lawsuits and other liabilities or restrictions
    on our operations which could significantly reduce our net sales
    and cash flow and undermine the growth of our
    business.
    
    the service of food and alcoholic beverages;
    minimum wage;
    other employment terms and conditions;
    environmental protection; and
    human health and safety.      We
    could be subject to litigation, which, if determined adversely,
    could be material.
    We may
    be subject to significant environmental
    liabilities.
  and/or
  If we
    fail to remain competitive within our industry, we will not be
    able to maintain our clients or obtain new clients, which would
    materially adversely affect our financial condition, results of
    operations and liquidity.
  full-service
    
    financial terms, including the ability to make capital
    investments and commission structures;
    creativity and service innovation;
    strategic approach; 29




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
    quality of products and services; and
    reputation within the industry.    A
    terrorist attack on any facility which we serve, or an attack or
    threat of an attack on large sports facilities in general, could
    significantly harm our business, and our contracts do not
    provide for the recovery by us of our costs in the event of a
    terrorist attack on a facility. Additionally, the response to
    terrorist threats or the outbreak or escalation of any
    insurrection or armed conflict involving the United States or
    any other national or international calamity could significantly
    harm our business.
  force majeure
  A
    natural disaster such as Hurricane Katrina, or a pandemic such
    as a widespread outbreak of avian flu, could have a material
    adverse effect on our financial condition and
    business.
      We may
    not be able to obtain insurance, or obtain insurance on
    commercially acceptable terms, which could result in significant
    liabilities and cause a default under contracts requiring us to
    maintain insurance.
   30




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities   31




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High


LowFiscal 2006First Quarter

$
13.25


$
12.50Second Quarter

$
14.45


$
12.78Third Quarter

$
16.51


$
13.25Fourth Quarter

$
19.06


$
14.94Fiscal 2007First Quarter

$
19.88


$
13.54Second Quarter

$
18.85


$
15.34Third Quarter

$
18.00


$
10.87Fourth Quarter

$
17.92


$
8.66     High


LowFiscal 2006First Quarter

C$
15.13


C$
14.10Second Quarter

C$
15.60


C$
14.68Third Quarter

C$
18.40


C$
14.75Fourth Quarter

C$
22.00


C$
16.00Fiscal 2007First Quarter

C$
22.56


C$
15.70Second Quarter

C$
20.10


C$
17.00Third Quarter

C$
19.00


C$
13.66Fourth Quarter

C$
16.18


C$
9.02     Dividend
    policy and restrictions
      
    nothing requires us to pay dividends;
    our dividend policy could be modified or revoked at any time at
    the discretion of our board of directors; 32




---



##### Table of Contents




    even if our dividend policy were not modified or revoked, the
    actual amount of dividends distributed under the policy and the
    decision to make any distribution is entirely at the discretion
    of our board of directors;
    the amount of dividends distributed is subject to debt covenant
    restrictions under our indenture, our credit facility and any
    other indebtedness;
    the distribution and amount of dividends distributed is subject
    to state law restrictions;
    our board of directors may determine to use or retain our cash
    for other purposes;
    our stockholders have no contractual or other legal right to
    dividends; and
    we may not have enough cash to pay dividends depending on our
    operating earnings, working capital requirements, level of
    contract renewals and anticipated cash needs.  30-day
          
    we may not pay dividends if the payment will exceed the
    quarterly base dividend level in any fiscal quarter; provided
    that if the payment is less than the quarterly base dividend
    level in any fiscal quarter, 50% of the difference between the
    aggregate amount of dividends actually paid and the quarterly
    base dividend level for the quarter will be available for the
    payment of dividends at a later date. The quarterly base
    dividend level for any given fiscal quarter equals 85% of our
    excess cash (as defined 33




---



##### Table of Contents



below) for the
    12-month
    period ending on the last day of our then most recently ended
    fiscal quarter for which internal financial statements are
    available at the time the dividend is declared and paid, divided
    by four. Excess cash means, with respect to any
    period, Adjusted EBITDA, as defined in the indenture, minus the
    sum of (i) cash interest expense and (ii) cash income
    tax expense, in each case, for the period;  
    we may not pay any dividends if not permitted under any of our
    senior indebtedness;
    we may not pay any dividends while interest on the subordinated
    notes is being deferred or, after the end of any interest
    deferral, so long as any deferred interest has not been paid in
    full; and
    we may not pay any dividends if a default or event of default
    under the indenture has occurred and is continuing.    and/or
 34




---



##### Table of Contents



Performance
    Graph
    COMPARISON
    OF CUMULATIVE TOTAL RETURN
    AMONG CENTERPLATE, INC.,
    RUSSELL 2000 INDEX AND SIC CODE INDEX
  
  ASSUMES $100
    INVESTED ON DEC. 5, 2003
    ASSUMES DIVIDEND REINVESTED
    FISCAL YEAR ENDING JAN. 1, 2008
  FISCAL YEAR ENDINGCOMPANY/INDEX/MARKET

12/05/2003

12/30/2003

12/28/2004

1/03/2006

1/2/2007

1/1/2008Centerplate, Inc. IDS Units


100.00



108.52



93.82



105.74



173.86



89.17Eating Places


100.00



98.72



119.08



127.43



154.56



161.94Russell 2000 Index


100.00



101.90



119.73



123.71



144.83



137.67    35




---



##### Table of Contents



Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    Total Number of


Maximum Number ofTotal Number


Average


Shares Purchased as


Shares that May Yetof Shares


Price Paid


Part of a Publicly


be Purchased UnderPeriod

Purchased


per Share


Announced Program


the Plans or ProgramsOctober 2, 2007 to November 1, 2007










N/A



N/ANovember 2, 2007 to December 1, 2008










N/A



N/ADecember 2, 2007 to January 1, 2008(1)


1,543,180


$
9.30
(2)


N/A



N/ATotal


1,543,180


$
9.30
(2)


N/A



N/A     (1)
    
    These repurchases were made in a privately negotiated
    exchange transaction, the terms of which were
    governed by an amended and restated stockholders agreement, as
    amended, that we entered into with the initial equity investors
    at the closing of our IPO. The purpose of the exchange
    transaction was to enable the initial equity investors to
    exercise their rights under a registration rights agreement that
    we entered into with, among others, the initial equity investors
    at the closing of our IPO by converting their equity interest
    into IDSs, which were then sold to the public on
    December 5, 2007. The repurchased shares are now held by us
    as treasury shares.(2)
    
    The shares of common stock were exchanged at an exchange rate of
    $9.30 in principal amount per share, or $14.4 million in
    face amount of subordinated notes. In connection with the
    exchange transaction, the initial equity investors remitted to
    us five months interest on the subordinated notes issued
    in exchange for the repurchased shares of common stock, which
    interest we were obligated to deposit in a cash collateral
    account maintained under our credit facility. 36




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K, Form 10-K.
  Fiscal(1)2003


2004


2005


2006


2007(In millions, except per share data)Statement of operations data:Net sales

$
616.1


$
607.2


$
643.1


$
681.1


$
740.7Cost of sales (excluding depreciation and amortization)


504.0



492.5



519.4



554.8



604.8Selling, general and administrative


59.6



61.5



71.4



70.5



79.6Depreciation and amortization


27.1



26.6



29.3



28.9



31.4Transaction related expenses


2.6







1.0



0.7



1.7Contract related losses


0.8



0.4



0.4



0.4



Operating income


22.0



26.1



21.7



25.9



23.2Interest expense(2)


32.8



25.0



31.3



24.4



28.5Other income, net


(0.1
)


(0.3
)


(1.2
)


(1.7
)


(1.8
)Income (loss) before income taxes


(10.7
)


1.4



(8.4
)


3.2



(3.5
)Income tax benefit


(6.3
)


(1.0
)


(3.9
)


(0.2
)


(1.6
)Net income (loss)


(4.4
)


2.3



(4.6
)


3.5



(1.9
)Accretion of conversion options






0.3











Net income (loss) available to common stock with or without the
    conversion option

$
(4.4
)

$
2.0


$
(4.6
)

$
3.5



(1.9
)   2003


2004


2005


2006


2007(In millions, except per share data)Per share data:Net income (loss) per share with conversion option:Basic and diluted

$
(0.31
)

$
0.17


$
(0.20
)

$
0.15


$
(0.08
)Net income (loss) per share without conversion option:Basic and diluted

$
(0.31
)

$
0.09


$
(0.20
)

$
0.15


$
(0.08
)Dividends declared per share

$
0.09


$
0.79


$
0.79


$
0.79


$
0.79Cash flow data:Net cash provided by operating activities

$
27.2


$
28.4


$
28.4


$
39.4


$
21.7Net cash provided by (used in) investing activities

$
(45.4
)

$
7.1


$
(24.7
)

$
(38.8
)

$
(25.0
)Net cash provided by (used in) financing activities

$
30.8


$
(33.7
)

$
13.0


$
(2.4
)

$
(2.9
)Other data:Maintenance capital expenditures(3)

$
8.3


$
18.2


$
16.7


$
19.3


$
19.1Growth capital expenditures(3)


15.6



5.7



8.4



8.5


$
18.0Aggregate capital expenditures(3)

$
23.9


$
23.9


$
25.1


$
27.8


$
37.1Ratio of earnings to fixed charges(4)






1.1
x






1.1
x


Deficiency in the coverage of earnings to fixed charges(4)

$
(10.7
)





$
(8.4
)





$
(3.5
)   37




---



##### Table of Contents



12/30/03


12/28/04


1/03/06


1/02/07


1/01/08(In millions)Balance sheet data:Total assets

$
322.3


$
299.0


$
318.0


$
332.4


$
332.4Long-term debt (including current portion)

$
186.5


$
170.2


$
211.9


$
225.9


$
253.9   2003


2004


2005


2006


2007(In millions)EBITDA(5):Net income (loss)

$
(4.4
)

$
2.3


$
(4.6
)

$
3.5


$
(1.9
)Income tax benefit


6.3



1.0



3.9



0.2



1.6Income (loss) before income taxes

$
(10.7
)

$
1.4


$
(8.4
)

$
3.2


$
(3.5
)Adjustments:Interest expense(2)


32.8



25.0



31.3



24.4



28.5Depreciation and amortization


27.1



26.6



29.3



28.9



31.4EBITDA(5)

$
49.2


$
53.0


$
52.1


$
56.5


$
56.4     (1)
    
    We have adopted a
    52-53 week
    period ending on the Tuesday closest to December 31 as our
    fiscal year. The 2003, 2004, 2006 and 2007 fiscal years
    consisted of 52 weeks, and the 2005 fiscal year consisted
    of 53 weeks.(2)
    
    Interest expense for fiscal 2003 includes a $5.3 million
    non-cash charge related to the early extinguishment of debt as a
    result of the refinancing of our 1998 credit facility and
    $7.2 million in expenses associated with the repurchase of
    the notes that we issued in 1999 (the 1999 notes).
    Interest expense for fiscal 2004 includes a $1.2 million
    non-cash charge related to the repayment of the remaining 1999
    notes and a $2.0 million non-cash charge for the change in
    the fair value of our derivatives. Interest expense for fiscal
    2005 includes $5.8 million in expenses related to entering
    into a new credit agreement on April 1, 2005. The
    $5.8 million includes a prepayment premium of
    $4.6 million on the prior credit facility and a
    $1.2 million non-cash charge for the
    write-off of
    deferred financing costs. Interest expense for fiscal 2006 and
    fiscal 2007 includes non-cash credits of $3.4 million and
    $0.9 million, respectively, for the change in the fair
    value of our derivatives.(3)
    
    The sum of maintenance and growth capital expenditures equals
    the sum of contract rights acquired (purchase of contract
    rights) and the purchase of property and equipment, for the
    relevant periods as displayed in the statement of cash flows, as
    follows:  Fiscal(1)2003


2004


2005


2006


2007(In millions)Statement of cash flow data:Contract rights acquired (purchase of contract rights)

$
16.0


$
15.9


$
10.4


$
14.0


$
21.7Purchase of property and equipment


7.9



8.0



14.7



13.8



15.4Aggregate capital expenditures

$
23.9


$
23.9


$
25.1


$
27.8


$
37.1
      38




---



##### Table of Contents



(4)
    
    For purposes of determining the ratio of earnings to fixed
    charges, earnings are defined as income (loss) before income
    taxes and cumulative effect of change in accounting principle
    plus fixed charges. Fixed charges include interest expense on
    all indebtedness, amortization of deferred financing costs and
    one-third of rental expense on operating leases representing
    that portion of rental expense deemed to be attributable to
    interest. Where earnings are inadequate to cover fixed charges,
    the deficiency is reported.(5)
    
    EBITDA is not a measure in accordance with GAAP. EBITDA is not
    intended to represent cash flows from operations as determined
    by GAAP and should not be used as an alternative to income
    (loss) before taxes or net income (loss) as an indicator of
    operating performance or to cash flows as a measure of
    liquidity. We believe that EBITDA is an important measure of the
    cash returned on our investment in capital expenditures under
    our contracts.  pro
    forma pro forma
    Fiscal(1)2003


2004


2005


2006


2007(In millions, except ratios)EBITDA

$
49.2


$
53.0


$
52.1


$
56.5


$
56.4Adjustments:Transaction related expenses


2.6







1.0



0.7



1.7Contract related losses


0.8



0.4



0.4



0.4



Non-cash compensation


0.1















Management fees paid to affiliates of Blackstone and GE Capital


0.4















Adjusted EBITDA

$
53.1


$
53.4


$
53.5


$
57.5


$
58.1Unusual item included in EBITDA and Adjusted EBITDA:Ratio of Adjusted EBITDA to fixed charges


2.1
x


2.3
x


1.9
x


2.6
x


2.2x  39




---



##### Table of Contents




    Transaction related expenses include:  
    For fiscal 2003, $2.6 million in expenses related to
    executive compensation associated with the issuance of the IDSs;
    For fiscal 2005, $1.0 million of expenses incurred in
    connection with the contemplated follow-on offering to the 2003
    IPO;
    For fiscal 2006, $0.7 million of expenses incurred in
    connection with the contemplated follow-on offering to the 2003
    IPO;
    For fiscal 2007, $1.7 million of expenses incurred in
    connection with the follow-on offering to the 2003 IPO.  
    Contract related losses include:  
    For fiscal 2003, $0.8 million of non-cash charges for the
    write-down of impaired assets for certain terminated
    and/or
    assigned contracts;
    For fiscal 2004, $0.4 million of non-cash charges for the
    write-down of impaired assets for certain terminated contracts
    and contracts for which we intend to continue
    operations; and
    For fiscal 2005, $0.3 million for the write-off of contract
    rights for a terminated contract and $0.1 million for the
    write-down of impaired contract rights and property and
    equipment.
    For fiscal 2006, $0.4 million for the write-off of impaired
    assets associated with our contracts.
    Non-cash compensation expenses related to the revaluation of
    partnership units purchased by certain members of our management
    financed with nonrecourse loans include $0.1 million for
    fiscal 2003.
    Management fees paid to affiliates of Blackstone and GE Capital
    include $0.4 million for fiscal 2003. The management fees
    were paid quarterly in arrears and ceased upon the closing of
    the IPO.    Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  General
    Overview
     40




---



##### Table of Contents



and/or
  Critical
    Accounting Policies
    
    Recoverability of Property and Equipment, Contract Rights,
    Cost in Excess of Net Assets Acquired and Other Intangible
    Assets.  As of January 1, 2008, net property
    and equipment of $52.0 million and net contract rights of
    $85.2 million were recorded. In accordance with Statement
    of Financial Accounting Standards (SFAS)
    No. 144, we evaluate long-lived assets with finite lives
    for possible impairment when an event occurs which would
    indicate that its carrying amount may not be recoverable. The
    impairment analysis is made at the contract level and evaluates
    the net property and equipment as well as the contract rights
    related to that contract. The undiscounted future cash flows
    from a contract are compared to the carrying value of the
    related long-lived assets. If the undiscounted future cash flows
    are lower than the carrying value, an impairment charge is
    recorded. The amount of the impairment charge is equal to the
    difference between the carrying value (or net book value) of the
    long-lived assets and the future discounted cash flows related
    to the assets (using a rate based on our incremental borrowing
    rate). As we base our estimates of undiscounted future cash
    flows on past operating performance, including anticipated labor
    and other cost increases, and prevailing market conditions, we
    cannot make assurances that our estimates are achievable.
    Different conditions or assumptions, if significantly negative
    or unfavorable, could have a material adverse effect on the
    outcome of our evaluation and our financial condition or future
    results of operations. Events that would trigger an evaluation
    at the contract level include the loss of a tenant team, intent
    to cease operations at a facility due to contract termination or
    other means, the bankruptcy of a client, and the discontinuation
    of a sports league or a significant increase in competition that
    could reduce the future profitability of the contract, among
    others.   41




---



##### Table of Contents




    Insurance.  We have a high-deductible insurance
    program for general liability, auto liability and workers
    compensation risk. We are required to estimate and accrue for
    the amount of losses that we expect to incur. These amounts are
    recorded in cost of sales and selling, general and
    administrative expenses on the statement of operations and
    accrued liabilities and long-term liabilities on the balance
    sheet. Our estimates consider a number of factors, including
    historical experience and an actuarial assessment of the
    liabilities for reported claims and claims incurred but not
    reported. We discount our estimated liabilities to their present
    value based on expected loss patterns determined by experience.
    While we use outside parties to assist us in making these
    estimates, we cannot provide assurance that the actual amounts
    will not be materially different than what we have recorded. In
    addition we are self-insured for employee medical benefits and
    related liabilities. Our liabilities are based on historical
    trends and claims filed and are estimated for claims incurred
    but not reported. While the liabilities represent
    managements best estimate, actual results could differ
    significantly from those estimates.
    Accounting Treatment for IDSs, Common Stock Owned by Initial
    Equity Investors and Derivative Financial Instruments Our IDSs include common stock and subordinated
    notes, the latter of which have three embedded derivative
    features. The embedded derivative features include a call
    option, a change of control put option, and a term-extending
    option on the notes. The call option allows us to repay the
    principal amount of the subordinated notes after the fifth
    anniversary of the issuance, provided that we also pay all of
    the interest that would have been paid during the initial
    10-year term
    of the notes, discounted to the date of repayment at a risk-free
    rate. Under the change of control put option, the holders have
    the right to cause us to repay the subordinated notes at 101% of
    face value upon a change of control, as defined in the
    indenture. The term-extending option allows us to unilaterally
    extend the term of the subordinated notes for two five-year
    periods at the end of the initial
    10-year
    period provided that we are in compliance with the requirements
    of the indenture. We have accounted for these embedded
    derivatives in accordance with SFAS No. 133,
    Accounting for Derivative Instruments and Hedging
    Activities, as amended and interpreted. Based on
    SFAS No. 133, as amended and interpreted, the call
    option and the change of control put option are required to be
    separately valued. As of January 1, 2008 and
    January 2, 2007, the fair value of these embedded
    derivatives was determined to be insignificant. The term
    extending option was determined to be inseparable from the
    underlying subordinated notes. Accordingly, it will not be
    separately accounted for in the current or future periods.   42




---



##### Table of Contents



Redeemable Preferred Stocks.
      Income Taxes
     43




---



##### Table of Contents



Accounting
    for Uncertainty in Income Taxes Accounting for
    Income Taxes.
   44




---



##### Table of Contents



Seasonality
    and Quarterly Results
    
    Seasonality and variations in scheduling of sporting and other
    events;
    Unpredictability in the number, timing and type of new contracts;
    Timing of contract expirations and special events; and
    Level of attendance at the facilities which we serve.        2007Basic andBasic and





DilutedDiluted





Income (Loss)Operating





per Share withOperating


Income


Net


and withoutIncome


(Loss) per


Income


ConversionNet Sales


(Loss)


Share


(Loss)


Option1st Quarter

$
125,333


$
(5,507
)

$
(0.24
)

$
(8,048
)

$
(0.36
)2nd Quarter

$
200,839


$
9,684


$
0.43


$
2,240


$
0.103rd Quarter

$
246,141


$
17,010


$
0.76


$
5,996


$
0.274th Quarter

$
168,373


$
1,971


$
0.09


$
(2,066
)

$
(0.09
)   2006Basic andBasic and





DilutedDiluted





Income (Loss)Operating





per Share withOperating


Income


Net


and withoutIncome


(Loss) per


Income


ConversionNet Sales


(Loss)


Share


(Loss)


Option1st Quarter

$
113,505


$
(3,989
)

$
(0.18
)

$
(5,598
)

$
(0.25
)2nd Quarter

$
190,699


$
12,038


$
0.53


$
(66
)

$
0.003rd Quarter

$
218,929


$
16,130


$
0.72


$
12,269


$
0.544th Quarter

$
157,929


$
1,739


$
0.08


$
(3,127
)

$
(0.14
)   Results
    of Operations
  Fiscal
    2007 Compared to Fiscal 2006
  Net sales
 45




---



##### Table of Contents



Cost of sales
  Selling, general and administrative expenses
  Depreciation and amortization
  Transaction related expenses
  Contract Related Losses
  Interest expense
  Other income
  Income taxes Accounting for Income
    Taxes
 46




---



##### Table of Contents



Fiscal
    2006 Compared to Fiscal 2005
  Net sales
  Cost of sales (excluding depreciation and
    amortization)
  Selling, general and administrative expenses
  Depreciation and amortization step-up
  Transaction related expenses
  Contract related losses
  Operating income
  Interest expense
  Other income
 47




---



##### Table of Contents



Income taxes Accounting for Income
    Taxes
  Liquidity
    and Capital Resources
          Future
    Liquidity and Capital Resources
       48




---



##### Table of Contents



Contracts Expiring in:2008


2009


2010


2011


2012 and After(In millions)$
144.0*


$
106.6


$
92.6


$
12.0


$
380.1     *
    
    (includes the New York Yankees)  Subordinated
    Notes Issued in 2003 and 2007
     49




---



##### Table of Contents



Credit
    Agreement
      thirty-day
    
    an interest coverage ratio (Adjusted EBITDA (as defined in the
    credit facility) to cash interest expense for the last
    12 months) at least equal to 2.00 to 1.00;
    a maximum total leverage ratio (net debt as of the date of
    determination to Adjusted EBITDA (as defined in the credit
    facility) for the 12 months ending on such date) of 4.65 to
    1.00; and
    a maximum senior leverage ratio (net senior debt as of the date
    of determination to Adjusted EBITDA (as defined in the credit
    facility) for the 12 months ending on such date) of 2.15 to
    1.00.       50




---



##### Table of Contents



Other
    Relationships
      Off-Balance
    Sheet Arrangements
   51




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess Than


1-3


4-5


More ThanTotal


1 Year


Years


Years


5 Years(In millions)Long-term borrowings

$
253.9


$
30.6


$
103.7


$
119.6


$
Interest for fixed rate debt


95.9



16.1



48.5



31.3



Interest for variable rate debt(1)


26.9



11.4



15.5







Insurance


14.2



4.8



5.0



2.2



2.2Operating leases


3.0







2.5



0.5



Commissions and Royalties


61.6



10.6



24.7



11.1



15.2Capital commitments(2)


25.0



20.8



4.2







Other long-term liabilities


1.2







0.3







0.9Total Contractual

$
481.7


$
94.3


$
204.4


$
164.7


$
18.3     (1)
    
    Interest for variable rate debt based on forward-looking
    interest rates as disclosed in Item 7A.(2)
    
    Represents capital commitments in connection with several
    long-term concession contracts.    Payments Due by PeriodLess Than


1-3


4-5


More ThanOther Commercial Commitments

Total


1 Year


Years


Years


5 YearsLetters of credit


22.7



22.7











   New
    Accounting Standards
  New Accounting Standards Fair Value
    Measurements
  Fair Value Option for Financial
    Assets and Financial Liabilities including an amendment of FASB
    Statement No. 115
  Business Combinations
 52




---



##### Table of Contents



Cautionary
    Statement Regarding Forward-Looking Statements
  Form 10-K
  Form 10-K.
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest rate risk
  2008


2009


2010


2011


2012


Thereafter


Total(In millions)Fixed rate debt:Represented by IDSs





















$
119.6


$
119.6Average interest rate






















13.5
%


Variable rate debt:Revolving loans

$
29.5






















$
29.5Average interest rate


8.75
%






















Term loans

$
1.1


$
1.1


$
102.7














$
104.8Average interest rate


8.43
%


8.43
%


8.43
%














     Market risk
  Form 10-K
 53




---



##### 



Item 8.  Financial
    Statements and Supplementary Data
    CENTERPLATE,
    INC. AND SUBSIDIARIES
  TABLE OF
    CONTENTS
   
 PageREPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM


F-2CONSOLIDATED FINANCIAL STATEMENTS AS OF JANUARY 2, 2007 AND
    JANUARY 1, 2008 AND FOR THE THREE YEARS IN THE PERIOD ENDED
    JANUARY 1, 2008:Consolidated Balance Sheets


F-3-F-4Consolidated Statements of Operations


F-5Consolidated Statements of Stockholders
    Equity (Deficiency) and Comprehensive Income (Loss)


F-6Consolidated Statements of Cash Flows


F-7-F-8Notes to Consolidated Financial Statements


F-9-F-33   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Accounting for
    Uncertainly in Income Taxes, an interpretation of FASB Statement
    No. 109
  Internal Control  Integrated Framework
      F-2




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 JANUARY
    2, 2007 AND JANUARY 1, 2008
  January 2,


January 1,2007


2008(In thousands, except share data)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
39,591


$
33,853Restricted cash


13,080



1,146Accounts receivable, less allowance for doubtful accounts of
    $1,013 and$993 at January 2, 2007 and January 1, 2008,
    respectively


23,172



29,539Inventories


19,347



23,300Prepaid expenses and other


3,865



3,475Deferred tax assets


3,139



4,204Total current assets


102,194



95,517PROPERTY AND EQUIPMENT:Leasehold improvements


41,770



41,968Merchandising equipment


71,043



84,727Vehicles and other equipment


17,350



18,116Construction in process


1,708



1,895Total


131,871



146,706Less accumulated depreciation and amortization


(81,187
)


(94,720
)Property and equipment, net


50,684



51,986OTHER LONG-TERM ASSETS:Contract rights, net


79,209



85,183Restricted cash


9,041



10,307Cost in excess of net assets acquired


41,142



41,142Deferred financing costs, net


12,930



10,361Trademarks


17,523



17,523Deferred tax assets


14,612



15,867Other


5,035



4,465Total other long-term assets


179,492



184,848TOTAL ASSETS

$
332,370


$
332,351    F-3




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES  CONSOLIDATED
    BALANCE SHEETS (Continued)
  January 2,


January 1,2007


2008(In thousands, except share data)LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)CURRENT LIABILITIES:Current portion of long-term debt

$
1,075


$
1,075Short-term borrowings


15,000



29,500Accounts payable


21,710



24,367Accrued salaries and vacations


15,437



15,704Liability for insurance


4,975



4,847Accrued taxes, including income taxes


5,307



5,220Accrued commissions and royalties


23,458



24,608Liability for derivatives


1,251



311Accrued interest


1,020



1,037Accrued dividends


1,487



1,385Advance deposits


3,662



3,436Other


4,318



3,502Total current liabilities


98,700



114,992LONG-TERM LIABILITIES:Long-term debt


209,789



223,334Liability for insurance


7,744



9,370Other liabilities


535



2,189Total long-term liabilities


218,068



234,893COMMITMENTS AND CONTINGENCIESCOMMON STOCK WITH CONVERSION OPTION, PARVALUE $0.01, EXCHANGEABLE FOR SUBORDINATEDDEBT, NET OF DISCOUNT


14,352



STOCKHOLDERS EQUITY (DEFICIENCY):Common stock, $0.01 par value 
    100,000,000 shares authorized:18,463,995 shares without conversion option issued and
    outstanding at January 2, 2007; 39,995,147 shares without
    conversion option issued  20,981,813 shares
    outstanding at January 1, 2008


185



40021,531,152 shares with conversion option issued 
    4,060,997 shares outstanding at January 2, 2007;
    0 shares with conversion option issued and outstanding at
    January 1, 2008None outstanding at January 1, 2008


215



Additional paid-in capital


218,331



218,331Accumulated deficit


(97,282
)


(117,375
)Accumulated other comprehensive income


741



2,050Treasury stock  at cost (17,470,153 shares at
    January 2, 2007 and19,013,332 shares at January 1, 2008)


(120,940
)


(120,940
)Total stockholders equity (deficiency)


1,250



(17,534
)TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)

$
332,370


$
332,351    F-4




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 YEARS
    ENDED JANUARY 3, 2006, JANUARY 2, 2007, AND JANUARY 1,
    2008
  January 3,


January 2,


January 1,2006


2007


2008(In thousands, except per share data)Net sales

$
643,112


$
681,120


$
740,686Cost of sales (excluding depreciation and amortization)


519,395



554,752



604,785Selling, general and administrative


71,405



70,538



79,640Depreciation and amortization


29,255



28,854



31,443Transaction related expenses


1,006



700



1,660Contract related losses


369



358



Operating income


21,682



25,918



23,158Interest expense


31,274



24,360



28,505Other income


(1,151
)


(1,690
)


(1,841
)Income (loss) before income taxes


(8,441
)


3,248



(3,506
)Income tax benefit


(3,853
)


(230
)


(1,628
)Net income (loss)

$
(4,588
)

$
3,478


$
(1,878
)Basic and Diluted Net Income (Loss) per share with and without
    conversion option

$
(0.20
)

$
0.15


$
(0.08
)Weighted average shares outstanding with conversion option


4,060,997



4,060,997



3,759,769Weighted average shares outstanding without conversion option


18,463,995



18,463,995



18,650,756Total weighted average shares outstanding


22,524,992



22,524,992



22,410,525Dividends declared per share

$
0.79


$
0.79


$
0.79    F-5




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY (DEFICIENCY) AND
    COMPREHENSIVE INCOME (LOSS)YEARS ENDED JANUARY 3, 2006, JANUARY 2, 2007 AND JANUARY 1,
    2008
  Common


Common


Common


CommonShares


Stock


Shares


Stock








Accumulatedwithout


without


with


with


Additional





OtherConversion


Conversion


Conversion


Conversion


Paid-in


Accumulated


Comprehensive


TreasuryOption


Option


Option


Option


Capital


Deficit


Income/(Loss)


Stock


Total(In thousands, except share data)Balance, December 28, 2004


18,463,995


$
185



21,531,152


$
215


$
218,331


$
(60,492
)

$
575


$
(120,940
)

$
37,874Foreign currency translation


























157







157Dividends declared






















(17,840
)










(17,840
)Net loss






















(4,588
)










(4,588
)Balance, January 3, 2006


18,463,995


$
185



21,531,152


$
215


$
218,331


$
(82,920
)

$
732


$
(120,940
)

$
15,603Foreign currency translation


























9







9Dividends declared






















(17,840
)










(17,840
)Net income






















3,478











3,478Balance, January 2, 2007


18,463,995


$
185



21,531,152


$
215


$
218,331


$
(97,282
)

$
741


$
(120,940
)

$
1,250Exercise of conversion option


21,531,152



215



(21,531,152
)


(215
)


















Foreign currency translation


























1,309







1,309Dividends declared






















(17,636
)










(17,636
)Fin 48 transition amount






















(579
)










(579
)Net loss






















(1,878
)










(1,878
)Balance, January 1, 2008


39,995,147


$
400










$
218,331


$
(117,375
)

$
2,050


$
(120,940
)

$
(17,534
)   January 3,


January 2,


January 1,2006


2007


2008Net income (loss)

$
(4,588
)

$
3,478


$
(1,878
)Other comprehensive income  foreign currencytranslation adjustment


157



9



1,309Comprehensive income (loss)

$
(4,431
)

$
3,487


$
(569
)    F-6




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 YEARS
    ENDED JANUARY 3, 2006, JANUARY 2, 2007, AND JANUARY 1,
    2008
  Years EndedJanuary 3,


January 2,


January 1,2006


2007


2008(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
(4,588
)

$
3,478


$
(1,878
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


29,255



28,854



31,443Amortization of deferred financing costs


3,474



2,569



2,569Charge for impaired assets


1,375



358



Change in fair value of derivatives


(40
)


(3,364
)


(940
)Interest earned on restricted cash


(196
)


(425
)


(459
)Deferred tax benefit


(3,547
)


(707
)


(2,320
)Loss (gain) on disposition of assets


15



22



(34
)Changes in assets and liabilities:Decrease (increase) in assets:Accounts receivable


(1,149
)


279



(6,367
)Inventories


(303
)


(2,495
)


(3,953
)Prepaid expenses


174



(724
)


390Other assets


(423
)


(2,420
)


(59
)Increase (decrease) in liabilities:Accounts payable


1,045



2,830



(641
)Accrued salaries and vacations


2,026



2,174



267Liability for insurance


1,105



156



1,498Accrued commissions and royalties


1,410



5,471



1,532Other liabilities


(1,382
)


3,291



(37
)Non-cash effect of foreign currency translation on assets and
    liabilities


157



9



697Net cash provided by operating activities


28,408



39,356



21,708CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment


(14,712
)


(13,752
)


(15,390
)Proceeds from sale of property and equipment


338



250



134Contract rights acquired


(10,363
)


(14,014
)


(21,690
)Return of unamortized capital investment






1,828



(Increase) decrease in restricted cash






(13,080
)


11,934Net cash used in investing activities


(24,737
)


(38,768
)


(25,012
)    F-7




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS (CONTINUED)
    YEARS ENDED JANUARY 3, 2006, JANUARY 2, 2007 AND JANUARY 1,
    2008
  Years EndedJanuary 3,


January 2,


January 1,2006


2007


2008(In thousands)CASH FLOWS FROM FINANCING ACTIVITIES:Repayments  revolving loans

$
(44,250
)

$
(10,000
)

$
(74,500
)Borrowings  revolving loans


44,250



25,000



85,000Net borrowings  swingline loans










4,000Principal payments on long-term debt


(806
)


(1,075
)


(806
)Proceeds from issuance of long-term debt


107,500







Retirement of existing long-term borrowings


(65,000
)






Payments of financing costs


(7,266
)Restricted cash proceeds from IDS issuance










(807
)Increase (decrease) in bank overdrafts


(3,626
)


1,508



1,928Dividend payments


(17,840
)


(17,840
)


(17,738
)Net cash provided by (used in) financing activities


12,962



(2,407
)


(2,923
)EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH










489INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


16,633



(1,819
)


(5,738
)CASH AND CASH EQUIVALENTS:Beginning of year


24,777



41,410



39,591End of year

$
41,410


$
39,591


$
33,853SUPPLEMENTAL CASH FLOW INFORMATION:Interest paid

$
27,563


$
25,123


$
28,488Income taxes paid

$
31


$
402


$
739SUPPLEMENTAL NON CASH FLOW INVESTING AND FINANCING ACTIVITIES:Capital investment commitments accrued

$
200


$
2,742


$
2,259Dividends declared and unpaid

$
1,487


$
1,487


$
1,385    F-8




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
    ENDED JANUARY 3, 2006, JANUARY 2, 2007 AND JANUARY 1,
    2008
  1.
    GENERAL      2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Principles of Consolidation
  Fiscal Year 52-53 week
  Cash and Cash Equivalents
  Restricted Cash
  Revenue Recognition
  Inventories first-in,
  Depreciation
  
    Leasehold improvements  10 years 
    limited by the lease term or contract term, if applicable
    Merchandising equipment  5 to
    10 years  limited by the contract term, if
    applicable
    Vehicles and other equipment  2 to
    10 years  limited by the contract term, if
    applicable F-9




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Contract Rights
  Cost in Excess of Net Assets Acquired and Trademarks Goodwill and Other
    Intangible Assets
  Deferred Financing Costs
  Impairment of Long-Lived Assets and Contract Rights
  Accounting Treatment for IDSs, Common Stock Owned by Initial
    Equity Investors and Derivative Financial
    Instruments 10-year 10-year Accounting for Derivative Instruments and Hedging
    Activities
 F-10




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Redeemable Preferred Stocks.
       F-11




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Insurance
    Cash Overdrafts
  Dividends
    Net Income (Loss) per share
  Foreign Currency
    Transaction Related Expenses
 F-12




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Interest
  Income Taxes
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
    Segment Reporting
  Reclassifications
  New Accounting Standards Fair Value
    Measurement
  Fair Value Option for Financial
    Assets and Financial Liabilities including an amendment of FASB
    Statement No. 115
 F-13




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business Combinations
  3.
    SIGNIFICANT
    RISKS AND UNCERTAINTIES  Use of Estimates
  Concentration Risks
         F-14




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008(1)

$
144.02009


106.62010


92.62011


12.02012 and thereafter


380.1Total

$
735.3     (1)
    
    Includes NY Yankees    4.
    DEBT    2006


2007(In thousands)Term Loans  Credit Agreement

$
105,619


$
104,813Subordinated notes


105,245



119,596210,864



224,409Less  current portion of long-term debt


1,075



1,075Total long-term debt

$
209,789


$
223,334   Credit Agreement
  thirty-day
 F-15




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    the incurrence of additional indebtedness
    the issuance of preferred stock and certain redeemable common
    stock;
    the payment of dividends;
    the purchase or redemption of the Companys outstanding
    common stock;
    specified sales of assets    and/or
     F-16




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2008

$
1,0752009


1,0752010


102,6632011


2012


Thereafter


119,596Total

$
224,409   Subordinated Notes non-U.S. subsidiary.
  5.
    INCOME
    TAXES    January 3,


January 2,


January 1,2006


2007


2008(In thousands)Federal current provision (benefit)

$
(42
)

$
118


$
(122
)State current provision (benefit)


(213
)


(10
)


322Deferred benefit


(3,546
)


(401
)


(2,320
)Foreign provision


(52
)


63



492Total benefit for income taxes

$
(3,853
)

$
(230
)

$
(1,628
)  F-17




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year EndedJanuary 3,


January 2,


January 1,2006


2007


2008Statutory rate


(34
)%


34
%


(34
)%Differences:State and local income taxes, net of Federal benefit


(6
)


3



(2
)Nondeductible expenses (meals and entertainment, etc.)


1



17



19Non-cash interest (income) expense






(35
)


(9
)Federal tax credits


(4
)


(23
)


(29
)Change in valuation allowance










10Change in statutory tax rates


(4
)


8



Adjustment to
    non-U.S.
    deferred taxes






(8
)


(1
)Other


1



(3
)


Total benefit for income taxes


(46
)%


(7
)%


(46
)%  F-18




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2007(In thousands)Deferred tax liabilities :Intangibles (goodwill, contract rights and trademarks)

$
(7,151
)

$
(8,063
)Other


(905
)


(805
)(8,056
)


(8,868
)Deferred tax assets :Differences between book and tax basis of property


182



383Bad debt reserves


354



279Inventory reserves


170



209Insurance reserves


4,903



5,413Other reserves and accrued liabilities


1,237



1,171General business and AMT credit carryforwards


9,170



9,467Accrued compensation and vacation


1,380



2,535Net operating loss carryforwards


8,411



9,633Other






19925,807



29,289Valuation allowance






(350
)25,807



28,939Net deferred tax asset

$
17,751


$
20,071Net deferred tax asset is recognized as follows in the
    accompanying 2006 and 2007 consolidated balance sheets:Current deferred tax asset

$
3,139


$
4,204Noncurrent deferred tax asset


14,612



15,867Net deferred tax asset

$
17,751


$
20,071       Valuation Allowance
   F-19




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Unrecognized Tax Benefits
    Balance at January 3, 2007

$
2,104,455Additions for tax positions related to the current year


1,222,271Reductions for tax positions related to prior years


(1,195,119
)Balance at January 1, 2008

$
2,131,607     non-U.S. income
    Tax Treatment of IDSs
   F-20




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          6.
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS    Long-Term Debt
  Fair value of Financial Instruments
  7.
    COMMITMENTS
    AND CONTINGENCIES  Leases and Client Contracts
 F-21




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Operating


CommissionsYear

Leases


and Royalties(In thousands)2008

$
1,095


$
10,5932009


813



9,5142010


556



8,3042011


259



6,9042012


228



6,263Thereafter






20,034Total

$
2,951


$
61,612     Employment Contracts
  Litigation
  8.
    RELATED
    PARTY TRANSACTIONS    Credit Agreement
 F-22




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ,
  Consulting Fees
  Leasing Services
  9.
    BENEFIT
    PLANS    Multi-Employer Pension Plans
  Annual Bonus Plan
  Long-Term Performance Plan 
    10.
    DEMAND
    FOR REGISTRATION   F-23




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          11.
    QUARTERLY
    RESULTS OF OPERATIONS (UNAUDITED)    First


Second


Third


FourthYear Ended January 2, 2007

Quarter


Quarter


Quarter


Quarter


Total(In thousands, except per share data)Net sales

$
113,505


$
190,699


$
218,929


$
157,987


$
681,120Cost of sales


95,660



154,174



175,999



128,919



554,752Selling, general, and administrative


14,683



17,413



19,588



18,854



70,538Depreciation and amortization


7,051



7,074



7,212



7,517



28,854Transaction related expenses(1)














700



700Contract related losses


100











258



358Operating income (loss)


(3,989
)


12,038



16,130



1,739



25,918Interest expense


6,539



6,207



5,502



6,112



24,360Other income, net


(322
)


(341
)


(501
)


(526
)


(1,690
)Income (loss) before income taxes


(10,206
)


6,172



11,129



(3,847
)


3,248Income tax provision (benefit)


(4,608
)


6,238



(1,140
)


(720
)


(230
)Net income (loss)

$
(5,598
)

$
(66
)

$
12,269


$
(3,127
)

$
3,478Basic and Diluted Net Income (Loss) per share with and without
    conversion option

$
(0.25
)

$
0.00


$
0.54


$
(0.14
)

$
0.15     (1)
    
    Reflects fees and expenses incurred in connection with the
    secondary offering.  F-24




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  First


Second


Third


FourthYear Ended January 1, 2008

Quarter


Quarter


Quarter


Quarter


Total(In thousands, except per share data)Net sales

$
125,333


$
200,839


$
246,141


$
168,373


$
740,686Cost of sales


106,258



162,948



197,357



138,222



604,785Selling, general, and administrative


17,200



20,161



23,112



19,167



79,640Depreciation and amortization


7,382



7,713



7,995



8,353



31,443Transaction related expenses(1)






333



667



660



1,660Operating income (loss)


(5,507
)


9,684



17,010



1,971



23,158Interest expense


8,052



7,079



7,329



6,045



28,505Other income, net


(502
)


(542
)


(470
)


(327
)


(1,841
)Income (loss) before income taxes


(13,057
)


3,147



10,151



(3,747
)


(3,506
)Income tax provision (benefit)


(5,009
)


907



4,155



(1,681
)


(1,628
)Net income (loss)

$
(8,048
)

$
2,240


$
5,996


$
(2,066
)

$
(1,878
)Basic and Diluted Net Income (Loss) per share with and without
    conversion option

$
(0.36
)

$
0.10


$
0.27


$
(0.09
)

$
(0.08
)     (1)
    
    Reflects fees and expenses incurred in connection with the
    secondary offering. F-25




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    CONDENSED
    CONSOLIDATING INFORMATION  non-U.S. subsidiary.
  Consolidating
    Condensed Statement of Operations and Comprehensive Income
    (Loss), Year Ended January 3, 2006
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$



$
594,146


$
48,966


$



$
643,112Cost of sales (excluding D&A)






478,677



40,382



336



519,395Selling, general, and administrative


1,146



65,380



4,879







71,405Depreciation and amortization


106



27,875



1,274







29,255Transaction related expenses


1,006















1,006Contract related losses






369











369Operating income (loss)


(2,258
)


21,845



2,431



(336
)


21,682Interest expense


15,367



15,907











31,274Intercompany interest, net


(15,876
)


15,876











Other income, net


(4
)


(1,134
)


(13
)






(1,151
)Income (loss) before income taxes


(1,745
)


(8,804
)


2,444



(336
)


(8,441
)Income tax benefit


(349
)


(3,504
)










(3,853
)Equity in earnings of subsidiaries


(3,192
)


2,108







1,084



Net income (loss)


(4,588
)


(3,192
)


2,444



748



(4,588
)Other comprehensive income foreign currency translation
    adjustment










157







157Comprehensive income (loss)

$
(4,588
)

$
(3,192
)

$
2,601


$
748


$
(4,431
)  F-26




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Statement of Cash Flows, Year Ended January 3,
    2006
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Consolidated(In thousands)Cash flows Provided by (used in) operating activities

$
(381
)

$
25,276


$
3,513


$
28,408Cash flows from investing activities:Purchase of property and equipment






(13,823
)


(889
)


(14,712
)Proceeds from sale of property, plant and equipment






338







338Contract rights acquired






(10,363
)






(10,363
)Net cash used in investing activities






(23,848
)


(889
)


(24,737
)Cash flows from financing activities:Repayments  revolving loans






(44,250
)






(44,250
)Borrowings  revolving loans






44,250







44,250Principal payments on long-term debt






(806
)






(806
)Proceeds from long-term borrowings






107,500







107,500Retirement of existing long-term borrowings






(65,000
)






(65,000
)Payments of financing costs






(7,266
)






(7,266
)Decrease in bank overdrafts






(3,626
)






(3,626
)Change in intercompany, net


18,225



(16,760
)


(1,465
)


Dividend payments


(17,840
)










(17,840
)Net cash provided by (used in) financing activities


385



14,042



(1,465
)


12,962Increase in cash


4



15,470



1,159



16,633Cash and cash equivalents:Beginning of period


195



24,142



440



24,777End of period

$
199


$
39,612


$
1,599


$
41,410  F-27




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Balance Sheet, January 2, 2007
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
210


$
36,631


$
2,750


$



$
39,591Accounts receivable






21,780



1,392







23,172Other current assets


24



37,923



1,484







39,431Total current assets


234



96,334



5,626







102,194Property and equipment






48,295



2,389







50,684Contract rights, net


54



78,699



456







79,209Cost in excess of net assets acquired, net


6,974



34,168











41,142Intercompany receivable (payable)


116,286



(122,640
)


208



6,146



Investment in subsidiaries


(6,390
)


6,146







244



Other assets


8,533



49,818



790







59,141Total assets

$
125,691


$
190,820


$
9,469


$
6,390


$
332,370LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current liabilities

$
4,844


$
90,858


$
2,230


$
768


$
98,700Long-term debt


105,245



104,544











209,789Other liabilities






8,279











8,279Total liabilities


110,089



203,681



2,230



768



316,768Common stock with conversion option, par value  $0.01
    exchangeable for subordinated debt, net of discount


14,352















14,352Stockholders equity (deficiency):Common stock


400















400Additional paid-in capital


218,331















218,331Accumulated deficit


(97,282
)


(12,861
)


6,498



6,363



(97,282
)Treasury stock and other


(120,199
)






741



(741
)


(120,199
)Total stockholders equity (deficiency)


1,250



(12,861
)


7,239



5,622



1,250Total liabilities and stockholdersequity (deficiency)

$
125,691


$
190,820


$
9,469


$
6,390


$
332,370  F-28




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Statement of Operations and Comprehensive Income
    (Loss), Year Ended January 2, 2007
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$



$
629,595


$
51,525


$



$
681,120Cost of sales (excluding D & A)






512,266



42,114



372



554,752Selling, general, and administrative


1,928



62,075



6,535







70,538Depreciation and amortization


93



27,458



1,303







28,854Transaction related expenses


700















700Contract related losses






358











358Operating income (loss)


(2,721
)


27,438



1,573







25,918Interest expense


12,151



12,067



142







24,360Intercompany interest, net


(15,700
)


15,700











Other income, net


(10
)


(1,627
)


(53
)






(1,690
)Income (loss) before income taxes


838



1,298



1,484







3,248Income tax benefit


(293
)


63











(230
)Equity in earnings of subsidiaries


2,347



1,112







(3,459
)


Net income (loss)


3,478



2,347



1,484



(3,459
)


3,478Other comprehensive income foreign currency translation
    adjustment










9







9Comprehensive income (loss)

$
3,478


$
2,347


$
1,493


$
(3,459
)

$
3,487  F-29




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Statement of Cash Flows, Year Ended January 2,
    2007
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Consolidated(In thousands)Cash flows Provided by (used in) operating activities

$
(537
)

$
33,292


$
6,601


$
39,356Cash flows from investing activities:Purchase of property and equipment






(13,647
)


(105
)


(13,752
)Proceeds from sale of property, plant and equipment






250







250Contract rights acquired






(14,014
)






(14,014
)Return of unamortized capital investment






1,828







1,828Restricted cash






(13,080
)






(13,080
)Net cash used in investing activities






(38,663
)


(105
)


(38,768
)Cash flows from financing activities:Repayments  revolving loans






(10,000
)






(10,000
)Borrowings  revolving loans






25,000







25,000Principal payments on long-term debt






(1,075
)






(1,075
)Increase in bank overdrafts






1,508







1,508Change in intercompany, net


18,388



(13,043
)


(5,345
)


Dividend payments


(17,840
)










(17,840
)Net cash provided by (used in) financing activities


548



2,390



(5,345
)


(2,407
)Increase in cash


11



(2,981
)


1,151



(1,819
)Cash and cash equivalents:Beginning of period


199



39,612



1,599



41,410End of period

$
210


$
36,631


$
2,750


$
39,591  F-30




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Balance Sheet, January 1, 2008
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
218


$
25,120


$
8,515


$



$
33,853Accounts receivable






26,058



3,481







29,539Other current assets


4



30,289



1,832







32,125Total current assets


222



81,467



13,828







95,517Property and equipment






49,884



2,102







51,986Contract rights, net


18



84,534



631







85,183Cost in excess of net assets acquired, net


6,974



34,168











41,142Intercompany receivable (payable)


96,219



(100,738
)


(3,756
)


8,275



Investment in subsidiaries


(5,473
)


8,275







(2,802
)


Other assets


6,745



50,546



1,232







58,523Total assets

$
104,705


$
208,136


$
14,037


$
5,473


$
332,351LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current liabilities

$
2,643


$
107,574


$
4,108


$
667


$
114,992Long-term debt


119,596



103,738











223,334Other liabilities






11,559











11,559Total liabilities


122,239



222,871



4,108



667



349,885Stockholders equity (deficiency):Common stock


400















400Additional paid-in capital


218,331















218,331Accumulated deficit


(117,375
)


(14,735
)


7,879



6,856



(117,375
)Treasury stock and other


(118,890
)






2,050



(2,050
)


(118,890
)Total stockholders equity (deficiency)


(17,534
)


(14,735
)


9,929



4,806



(17,534
)Total liabilities and stockholders equity (deficiency)

$
104,705


$
208,136


$
14,037


$
5,473


$
332,351  F-31




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Statement of Operations and Comprehensive Income
    (Loss), 
    Year Ended January 1, 2008
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$



$
682,554


$
58,132


$



$
740,686Cost of sales (excluding D & A)






555,383



49,196



206



604,785Selling, general, and administrative


1,727



72,465



5,448







79,640Depreciation and amortization


36



30,046



1,361







31,443Transaction related expenses


1,660















1,660Contract related losses


















Operating income (loss)


(3,423
)


24,660



2,127



(206
)


23,158Interest expense


14,578



13,841



86







28,505Intercompany interest, net


(15,700
)


15,700











Other income, net


(8
)


(1,697
)


(136
)






(1,841
)Income (loss) before income taxes


(2,293
)


(3,184
)


2,177



(206
)


(3,506
)Income tax benefit


(230
)


(1,887
)


489







(1,628
)Equity in earnings of subsidiaries


185



1,482







(1,667
)


Net income (loss)


(1,878
)


185



1,688



(1,873
)


(1,878
)Other comprehensive income foreign currency translation
    adjustment










1,309







1,309Comprehensive income (loss)

$
(1,878
)

$
185


$
2,997


$
(1,873
)

$
(569
)  F-32




---



##### Table of Contents



CENTERPLATE,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Condensed Statement of Cash Flows, Year Ended January 1,
    2008
  Combined


CombinedGuarantor


Non-guarantorCenterplate


Subsidiaries


Subsidiaries


Consolidated(In thousands)Cash flows provided by (used in) operating activities

$
(2,897
)

$
22,347


$
2,258


$
21,708Cash flows from investing activities:Purchase of property and equipment






(14,444
)


(946
)


(15,390
)Proceeds from sale of property, plant and equipment






134







134Contract rights acquired






(21,690
)






(21,690
)Restricted cash






11,934







11,934Net cash used in investing activities






(24,066
)


(946
)


(25,012
)Cash flows from financing activities:Repayments  revolving loans






(74,500
)






(74,500
)Borrowings  revolving loans






85,000







85,000Borrowings  swingline loans






4,000







4,000Principal payments on long-term debt






(806
)






(806
)Restricted cash  proceeds from IDS issuance






(807
)






(807
)Increase in bank overdrafts






1,928







1,928Change in intercompany, net


20,643



(24,607
)


3,964



Dividend payments


(17,738
)










(17,738
)Net cash provided by (used in) financing activities


2,905



(9,792
)


3,964



(2,923
)Effect of foreign currency translation on cash










489



489Increase (decrease) in cash


8



(11,511
)


5,765



(5,738
)Cash and cash equivalents:Beginning of period


210



36,631



2,750



39,591End of period

$
218


$
25,120


$
8,515


$
33,853  F-33




---



##### Table of Contents



Item 9.  Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure
    Item 9A.  Controls
    and Procedures
  Evaluation of disclosure controls and
    procedures.
  Changes in internal control over financial
    reporting. Form 10-K
  Managements Report on Internal Control Over Financial
    Reporting. Rule 13a-15(f)
  
    pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of our assets;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of management and
    directors; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    our assets that could have a material effect on the consolidated
    financial statements.    Internal Control  Integrated
    Framework.
   54




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control  Integrated Framework
        Internal Control  Integrated Framework
     
    55




---



##### Table of Contents



Item 9B.
    Other
    Information.   PART III    Item 10.
    Directors,
    Executive Officers and Corporate Governance.  Item 11.
    Executive
    Compensation.  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.  Item 14.
    Principal
    Accounting Fees and Services. PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Page F-1
        ExhibitNumber

Description of Exhibit3
.1(1)

Restated Certificate of Incorporation of Centerplate, Inc.3
.2(2)

Amendments to Restated Certificate of Incorporation adopted on
    October 13, 2004.3
.3(3)

Amended and Restated By-Laws of Centerplate, Inc.3
.4(2)

Amendments to Amended and Restated By-Laws adopted on
    October 13, 2004.4
.1(4)

Indenture, dated as of December 10, 2003, among Volume
    Services America Holdings, Inc., the guarantors thereto and The
    Bank of New York, as Trustee.4
.2(16)

First Amendment to Indenture, dated as of October 24, 2006.4
.3(4)

Form of Subordinated Note (included in Exhibit 4.3).4
.6(5)

Form of stock certificate for common stock.4
.7(4)

Global IDS Certificate.10
.1(6)

Credit Agreement, dated as of April 1, 2005, among Volume
    Services America, Inc., Volume Services, Inc., and Service
    America Corporation as Borrowers, Centerplate, Inc. as
    Guarantor, certain financial institutions as the Lenders, GECC
    Capital Markets Group, Inc. as Lead Arranger and Book Runner and
    General Electric Capital Corporation as Administrative Agent and
    Lender.10
.2(7)

Form of Centerplate Deferred Compensation Plan.*10
.3(8)

Employment Agreement dated as of September 29, 1998, by and
    between VSI Acquisition II Corporation and Janet L.
    Steinmayer (the September 29, 1989 Employment
    Agreement).*10
.4(9)

Amendment, dated September 7, 2005, to the
    September 29, 1998 Employment Agreement.*10
.5(14)

Second Amendment, dated as of March 1, 2006, to the
    September 29, 1998 Employment Agreement.*10
.6(15)

Employment Agreement, dated as of October 25, 2006, between
    Centerplate, Inc. and William H. Peterson.*10
.7(15)

Employment Agreement dated as of October 25, 2006, between
    Centerplate, Inc. and Kevin McNamara.*10
.7(10)

Centerplate, Inc. Long-Term Performance Plan.* 56




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.8(11)

Form of Award Letter under Long-Term Performance Plan for senior
    executive officers.*10
.9(11)

Form of Award Letter under Long-Term Performance Plan for
    participants other than senior executive officers.*10
.10(12)

First Amendment to Credit Agreement, dated as of April 15,
    2005, by and among Volume Services America, Inc., Volume
    Services, Inc. and Service America Corporation, as the
    Borrowers, Centerplate, Inc., the Lenders party to the Credit
    Agreement, Wachovia Bank, National Association, as a Lender and
    Syndication Agent, and General Electric Capital Corporation, as
    a Lender and as Administrative Agent.10
.11(13)

Form of Consent and Amendment, dated as of September 30,
    2005, by and among Volume Services America, Inc., Volume
    Services, Inc., Service America Corporation, Centerplate, Inc.,
    the Lenders signatory thereto, and General Electric Capital
    Corporation, as a Lender and as the Administrative Agent10
.12(18)

Form of Third Amendment to Credit Agreement made and entered
    into as of June 8, 2007, by and among Volume Services
    America, Inc., Volume Services, Inc., Service America
    Corporation, Centerplate, Inc., the Lenders signatory thereto,
    and General Electric Capital Corporation.10
.13

Form of Waiver and Fourth Amendment to Credit Agreement made and
    entered into as of March 10, 2008, by and among Volume
    Services America, Inc., Volume Services, Inc., Service America
    Corporation, Centerplate, Inc., the Lenders signatory thereto,
    and General Electric Capital Corporation, as a Lender and as the
    Administrative Agent.12
.1

Computation of Ratio of Earnings to Fixed Charges21
.1(17)

Subsidiaries of Centerplate, Inc.31
.1

Certification of Principal Executive Officer of Centerplate,
    Inc. pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Principal Financial Officer of Centerplate,
    Inc. pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of Principal Executive Officer of Centerplate,
    Inc. pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Principal Financial Officer of Centerplate,
    Inc. pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Incorporated by reference to the
    Form S-1/A
    filed on December 4, 2003.(2)
    
    Incorporated by reference to the
    Form 10-Q
    for the quarterly period ended September 28, 2004.(3)
    
    Incorporated by reference to the
    Form 10-K
    filed for the fiscal year ended December 30, 2003.(4)
    
    Incorporated by reference to the
    Form 8-K
    filed on December 22, 2003.(5)
    
    Incorporated by reference to the
    Form S-1/A
    filed on November 7, 2003.(6)
    
    Incorporated by reference to the
    Form 8-K
    filed on April 6, 2005.(7)
    
    Incorporated by reference to the
    Form 10-K
    for the fiscal year ended December 28, 2004.(8)
    
    Incorporated by reference to the
    Form S-1/A
    filed on May 14, 2003.(9)
    
    Incorporated by reference to the
    Form 8-K
    filed on September 7, 2005.(10)
    
    Incorporated by reference to the
    Form 8-K
    filed on October 18, 2004.(11)
    
    Incorporated by reference to the
    Form 8-K
    filed on November 23, 2004.(12)
    
    Incorporated by reference to the
    Form 10-Q
    for the quarterly period ended March 29, 2005.(13)
    
    Incorporated by reference to the
    Form 10-K
    for the fiscal year ended January 3, 2006.(14)
    
    Incorporated by reference to the
    Form 10-Q
    for the quarterly period ended April 4, 2006.(15)
    
    Incorporated by reference to the
    Form 8-K
    filed on October 31, 2006.(16)
    
    Incorporated by reference to the
    Form 8-K
    filed on October 27, 2006.(17)
    
    Incorporated by reference to the
    Form 10-K
    for the fiscal year ended January 2, 2007.(18)
    
    Incorporated by reference to the
    Form 8-K
    filed on June 12, 2007.  *
    
    Management contract or compensatory plan or arrangement required
    to be filed and herein incorporated as an exhibit. 57




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##### Table of Contents



SIGNATURES
             Name

Title

Date/s/  Janet
    L. SteinmayerJanet
    L. Steinmayer

President, Chief Executive Officer and Director (Principal
    Executive Officer)

March 17, 2008/s/  Kevin
    F. McNamaraKevin
    F. McNamara

Executive Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 17, 2008/s/  David
    M. WilliamsDavid
    M. Williams

Director and Chairman of the Board

March 17, 2008/s/  Felix
    P. CheeFelix
    P. Chee

Director

March 17, 2008/s/  Sue
    Ling GinSue
    Ling Gin

Director

March 17, 2008/s/  Alfred
    PoeAlfred
    Poe

Director

March 17, 2008/s/  Glenn
    R. ZanderGlenn
    R. Zander

Director

March 17, 2008  58