##### Table of Contents



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
    April 1, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file number: 0-50387
  RedEnvelope, Inc.
 (Exact name of Registrant as
    Specified in Its Charter)
  Delaware

33-0844285(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)   149 New Montgomery Street, San Francisco, California
    94105
 (Address of Principal Executive
    Offices and Zip Code)
  (415) 371-9100
 (Registrants Telephone
    Number, Including Area Code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
 Common Stock, par value $0.01 per share
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o o þ
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 



RedEnvelope,
    Inc.
  TABLE OF
    CONTENTS TO
    FORM 10-K
    For Fiscal Year Ended April 1, 2007
  PagePART IItem 1.

Business

2Item 1A.

Risk
    Factors

8Item 1B.

Unresolved Staff
    Comments

19Item 2.

Properties

19Item 3.

Legal
    Proceedings

19Item 4.

Submission of
    Matters to a Vote of Security Holders

20PART IIItem 5.

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

20Item 6.

Selected Financial
    Data

23Item 7.

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

23Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk

31Item 8.

Financial
    Statements and Supplementary Data

32Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure

49Item 9A.

Controls and
    Procedures

49Item 9B.

Other
    Information

49PART IIIItem 10.

Directors and
    Executive Officers and Corporate Governance

51Item 11.

Executive
    Compensation

51Item 12.

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

51Item 13.

Certain
    Relationships and Related Transactions and Director
    Independence

51Item 14.

Principal
    Accountant Fees and Services

51PART IVItem 15.

Exhibits and
    Financial Statement Schedules

52Signatures

55EXHIBIT 10.66EXHIBIT 10.67EXHIBIT 10.68EXHIBIT 10.69EXHIBIT 10.70EXHIBIT 10.71EXHIBIT 10.72EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   1




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##### Table of Contents



PART I  Item 1.
    Business  This Annual Report on
    Form 10-K
    and the documents incorporated herein by reference contain
    forward-looking statements based on expectations, estimates and
    projections as of the date of this filing. Actual results may
    differ materially from those expressed in forward-looking
    statements. See Item 7 of Part II 
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Forward-Looking
    Statements.
  Overview
      www.redenvelope.com
    
    Focus our strategic attention on re-energizing the
    RedEnvelope brand  by centering our catalog and
    online creative assets on stories that inspire our customers to
    celebrate their relationships through giving and supporting this
    effort with world-class lifestyle and product photography.
    Focus on refreshing the RedEnvelope product
    offering  by incorporating innovative,
    design-driven market product into the assortment, collaborating
    with third-party designers and continuing our in-house
    development in categories where we have a competitive advantage.
    Improve marketing efficiency and customer retention by increasing our focus on cost effective
    customer acquisition and retention, primarily through our
    catalog circulation strategy, product assortment and creative
    presentation   2




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Merchandising
    and Sourcing
        Marketing
  e-mail e-mail
 3




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Fulfillment
    and Distribution
    Customer
    Sales and Service
        Competition
    
    other online retailers, such as Amazon.com and eBay
    major department stores, such as Macys,
    Bloomingdales, Neiman Marcus and their online
    storefronts
    physical and online stores and catalog retailers that sell
    popular gift items such as Pottery Barn, Brookstone, The Sharper
    Image, Tiffanys, Harry & David, J Crew,
    1-800-Flowers and Williams-Sonoma
    Internet portals and online service providers and other
    comparison shopping sites, such as AOL, Yahoo! and Google.   4




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Intellectual
    Property and Proprietary Rights
      Information
    Technology and Systems
       5




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Seasonality
    Employees
    Executive
    Officers
    Name

Age


Position(s)John Pound


52


Executive ChairmanFrank Buettner


51


President and Chief Operating
    OfficerWilliam T. Gochnauer


60


Interim Chief Financial OfficerChristopher E. Nordquist


41


Chief Administrative Officer and
    General CounselScott Sanborn


37


Chief Marketing Officer  6




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John Pound
  Frank Buettner
  William T. Gochnauer
  Christopher E. Nordquist
  Scott Sanborn
 7




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Item 1A.
    Risk
    Factors  You should consider carefully the risks and uncertainties
    relating to our business including those described below,
    together with all of the other information included or
    incorporated by reference in this Annual Report on
    Form 10-K.
    Additional risks and uncertainties not currently known to us or
    that we currently do not deem material could also become
    important factors that may harm our business. The trading price
    of our common stock could decline due to any of these risks and
    uncertainties, and you could lose all or part of your
    investment.
  If we
    fail to meet the borrowing requirements under our loan and
    security agreement, we may be unable to obtain necessary
    short-term financing and if we default on a secured loan,
    material assets of ours could be subject to
    forfeiture.
        We may
    need additional financing and may not be able to raise
    additional financing on favorable terms or at all, which could
    increase our costs, limit our ability to grow and dilute the
    ownership interests of existing stockholders.
   8




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We are
    dependent on the success of our advertising and marketing
    efforts which are costly and may not achieve desired
    results.
      We
    have a history of significant losses. If we do not achieve or
    sustain profitability, our financial condition and stock price
    could suffer.
    Because
    we experience seasonal fluctuations in our net sales, our
    quarterly results will fluctuate and our annual performance will
    depend largely on results from one quarter.
    Our
    operating results are volatile and difficult to predict and may
    adversely affect our stock price.
   9




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Our
    computer and communications hardware and software systems are
    vulnerable to damage and interruption, which could harm our
    business.
  and/or
  If we
    fail to offer a broad selection of innovative merchandise that
    consumers find attractive, our revenues could decline or fail to
    reach anticipated levels.
    Failure
    to successfully manage or expand our fulfillment and
    distribution operation would have a material adverse effect on
    us.
   10




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If we
    do not manage our inventory levels successfully, our operating
    results may be adversely affected.
    We may
    have difficulty in product sourcing.
       11




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and/or
  Our
    facilities and systems are vulnerable to natural disasters or
    other catastrophic events.
  and/or
  If we
    fail to manage our growth and successfully integrate our
    management team, our business will suffer.
    We
    experience intense competition in the rapidly changing retail
    gift market.
   12




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
    other online retailers, such as Amazon.com and eBay
    major department stores, such as Macys,
    Bloomingdales, Neiman Marcus and their online
    storefronts
    physical and online stores and catalog retailers that sell
    popular gift items such as Pottery Barn, Brookstone, The Sharper
    Image, Tiffanys, Harry & David, J Crew,
    1-800-Flowers and Williams-Sonoma
    Internet portals and online service providers and other
    comparison shopping sites, such as AOL, Yahoo! and Google.      If we
    do not successfully expand our website and order processing
    systems or respond to rapid technological changes, we could lose
    customers and our net revenues could decline.
     13




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Delivery
    of our merchandise could be delayed or disrupted by factors
    beyond our control, and we could lose customers as a
    result.
    The
    loss of our senior management or other key personnel could harm
    our current and future operations and prospects.
    We
    rely on seasonal and temporary employees during periods of peak
    activity and any failure by such employees to adequately perform
    their jobs could adversely affect our operations.
   14




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If we
    are unable to successfully manage the costs of our catalog
    operations or our catalogs fail to produce sales at satisfactory
    levels it could adversely affect our business.
    
    effective management of costs associated with the production and
    distribution of our catalog
    achievement of adequate response rates to our mailings
    displaying a mix of merchandise in our catalog that is
    attractive to our customers
    production of aesthetically appealing catalogs
    timely delivery of catalog mailings to our customers    If we
    are unable to provide satisfactory customer service, we could
    lose customers.
      If the
    protection of our trademarks and proprietary rights is
    inadequate, our brand and reputation could be impaired and we
    could lose customers.
   15




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Intellectual
    property and other claims against us could be costly and could
    impair our business.
      Poor
    economic conditions may constrain discretionary consumer
    spending on retail products such as ours.
   16




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We may
    incur significant costs or experience delays in product
    availability due to regulations applicable to the sale of food
    products and live plants, which may hurt our
    business.
    Our
    charter documents, Delaware law and third-party contractual
    restrictions may make an acquisition of us more difficult, even
    if an acquisition would be beneficial to our
    stockholders.
      Our
    directors, executive officers and significant stockholders hold
    a substantial portion of our stock, which may lead to conflicts
    with other stockholders over corporate transactions and other
    corporate matters.
    The
    security risks of online commerce, including credit card fraud,
    may discourage customers from purchasing goods from
    us.
   17




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Existing
    or future government regulation could harm our
    business.
  e-mail
    e-mail e-mail e-mail
 18




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Laws
    or regulations relating to privacy and data protection may
    adversely affect the growth of our Internet business or our
    marketing efforts.
  and/or and/or
  Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings   19




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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    Fiscal 2006

High


Low1st Quarter

$
10.86


$
7.692nd Quarter


10.98



9.553rd Quarter


12.98



10.004th Quarter


10.94



9.05   Fiscal 2007

High


Low1st Quarter

$
10.83


$
9.652nd Quarter


9.97



7.953rd Quarter


9.05



7.064th Quarter


8.40



6.28     Stockholders
    Dividend
    Policy
    Equity
    Compensation Plan Information
   20




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Stock
    Performance Graph
    
  *
    
    $100 invested on September 25, 2003 in stock or
    index-including reinvestment of dividends. RedEnvelope has never
    paid dividends on our common stock and do not have present plans
    to do so.  9/25/03


12/31/03


3/26/04


12/31/04


4/1/05


12/31/05


4/2/06


12/31/06


3/30/07RedEnvelope, Inc.



100.00




114.78




62.89




84.19




50.86




71.89




69.42




48.52




55.40Nasdaq Global Market (U.S.) Index



100.00




103.95




102.64




113.89




103.90




116.43




123.48




129.51




130.61Peer Group  Nasdaq
    Retail Index



100.00




110.50




109.11




152.21




124.78




138.68




138.56




132.73




138.20  21




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##### Table of Contents



Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    Issuer
    Purchases of Equity Securities
  (d) MaximumNumber(or Approximate(c) Total


DollarNumber of


Value) ofShares


SharesPurchased


thatas Part of


May Yet be(a) Total





Publicly


PurchasedNumber of


(b) Average


Announced


Under theShares


Price Paid


Plans or


Plans orPeriod

Purchased


per Share


Programs


Programs1/1/2007-1/28/2007













$
1/29/2007-2/25/2007













$
2/26/2007-4/1/2007


123,988
(1)

$
5.38






$
Total


123,988


$
5.38






$
     (1)
    
    Represents 14,613 shares of common stock delivered to
    RedEnvelope as consideration for the payment of taxes upon the
    vesting of a portion of the restricted common stock granted to
    Ken Constable on March 1, 2006 and 109,375 shares of
    common stock repurchased from Ken Constable upon his resignation
    as President and Chief Executive Officer pursuant to
    RedEnvelopes right to repurchase unvested shares at the
    original purchase price under the terms of the restricted stock
    award agreement. 22




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Item 6.
    Selected
    Financial Data  The table below shows selected financial data for our last
    five fiscal years. Our fiscal year is based on a 52 or
    53 week year and ends on the Sunday closest to the last day
    in March. The following selected financial data should be read
    in conjunction with the financial statements and the notes
    thereto on Item 8 of Part II, Financial
    Statements and Supplementary Data, and the information
    contained in Item 7 of Part II,
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations. Historical results
    are not necessarily indicative of future results.
  Fiscal Year Ended (Number of Weeks)April 1,


April 2,


April 3,


March 28,


March 30,2007 (52)


2006 (52)


2005 (53)


2004 (52)


2003 (52)(In thousands, except per share data)Statements of Operations
    Data:Net revenues

$
121,273


$
113,175


$
101,418


$
79,308


$
70,059Cost of sales


57,729



55,279



48,694



39,594



36,577Gross profit


63,544



57,896



52,724



39,714



33,482Operating expenses:Fulfillment


17,050



16,092



15,631



12,206



10,769Marketing


27,209



26,284



24,425



16,680



15,280General and administrative


23,142



21,462



17,894



15,677



14,598Total operating expenses


67,401



63,838



57,950



44,563



40,647Loss from operations


(3,857
)


(5,942
)


(5,226
)


(4,849
)


(7,165
)Interest income


499



567



352



170



160Interest expense


(177
)


(247
)


(279
)


(449
)


(706
)Net loss

$
(3,535
)

$
(5,622
)

$
(5,153
)

$
(5,128
)

$
(7,711
)Net loss per share 
    basic and diluted

$
(0.38
)

$
(0.62
)

$
(0.59
)

$
(1.16
)

$
(24.48
)Weighted average shares
    outstanding  basic and diluted


9,400



9,007



8,749



4,422



315   As ofApril 1,


April 2,


April 3,


March 28,


March 30,2007


2006


2005


2004


2003(In thousands)Balance Sheet Data:Cash and cash equivalents

$
13,245


$
3,277


$
4,807


$
2,653


$
4,997Working capital


18,336



19,435



23,038



27,638



7,179Total assets


39,411



40,977



46,268



45,176



22,126Capital lease obligations


557



448



869



1,412



1,775Total indebtedness


















1,123Mandatorily redeemable convertible
    preferred stock


















82,556Stockholders equity (deficit)

$
25,889


$
25,990


$
30,034


$
33,917


$
(71,451
)   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K,
 23




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Forward-Looking
    Statements
  This report, together with the documents incorporated herein
    by reference, contains forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended, and Section 21E of the Securities and Exchange Act
    of 1934, as amended, including without limitation projections
    regarding future performance. Such statements are based upon
    current expectations and involve risks and uncertainties. Any
    statements contained in this report that are not purely
    statements of historical fact may be deemed to be
    forward-looking statements. Such forward-looking statements may
    include but are not limited to statements regarding our future
    operations and enhancements, product offerings, business,
    financial condition, results of operations and prospects.
    Additionally, statements concerning possible changes in
    applicable rules or legislation are forward-looking statements.
    Words such as expects, anticipates,
    intends, plans, believes,
    seeks, estimate, may,
    might, should, would,
    could and similar expressions or variations of such
    words are intended to identify forward-looking statements, but
    are not the exclusive means of identifying forward-looking
    statements in this report. All forward-looking statements in
    this report are based upon information available to us as of the
    date hereof, and we assume no obligation to revise or update any
    such forward-looking statements in order to reflect any event or
    circumstance that may arise after the date of this report.
    Actual results and the timing of certain events could differ
    materially from our current expectations. Factors that could
    cause or contribute to such differences include, but are not
    limited to, those set forth above in this report under
    Item 1A  Risk Factors, and elsewhere
    in this report, and those contained from time to time in our
    other filings with the SEC. We caution investors that our
    business and financial performance are subject to substantial
    risks and uncertainties.
  Overview
  www.redenvelope.com
      Form 10-K.
 24




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Results
    of Operations
    Fiscal Year EndedApril 1,


April 2,


April 3,2007


2006


2005(As percentage of net revenues)Statements of Operation Data:Net revenues


100.0
%


100.0
%


100.0
%Cost of sales


47.6



48.8



48.0Gross profit


52.4



51.2



52.0Operating expenses:Fulfillment


14.1



14.2



15.4Marketing


22.4



23.2



24.1General and administrative


19.1



19.0



17.6Total operating expenses


55.6



56.4



57.1Loss from operations


(3.2
)


(5.2
)


(5.1
)Interest income, net


0.3



0.2



0.0Net loss


(2.9
)%


(5.0
)%


(5.1
)%   Comparison
    of Years Ended April 1, 2007 and April 2,
    2006
  Net
    Revenues
     25




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Cost of
    Sales
      Operating
    Expenses
  Fulfillment.
    Marketing.
    General and Administrative.
    Other
    Income and Expenses
  Interest Income.
  Interest Expense.
 26




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Income Taxes.
  Comparison
    of Years Ended April 2, 2006 and April 3,
    2005
  Net
    Revenues
    Cost of
    Sales
    Operating
    Expenses
  Fulfillment.
  Marketing.
  General and Administrative.
 27




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Other
    Income and Expenses
  Interest Income.
  Interest Expense.
  Liquidity
    and Capital Resources
    Cash Flows From Operating Activities
  Cash Flows From Investing Activities
  Cash Flows From Financing Activities
  Revolving Credit Facility
 28




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Contractual
    Obligations
    Payments Due by PeriodLess Than








AfterTotal


1 Year


1-3 Years


4-5 Years


5 Years(In thousands)Capital leases

$
636


$
243


$
258


$
135


$
Operating leases


2,394



1,076



1,318







Purchase obligations


8,520



8,520











Total

$
11,550


$
9,839


$
1,576


$
135


$
   Capital Leases
  Operating Leases
  Purchase Obligations
  Other Contractual Arrangements
  Revolving Credit Facility
 29




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Critical
    Accounting Policies
    Revenue recognition.
  Shipping and Handling Costs.
  Inventory. first-in-first-out
  Accounting for income taxes.
  Catalog Amortization.
 30




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Stock-Based Compensation.
  Recently
    Issued Accounting Standards
  Accounting for Income Tax Uncertainties
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest Rate Risk
      (In thousands)Cash and cash equivalents

$
13,245Short-term investments


Total

$
13,245     Foreign Currency Risk
 31




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Item 8.
    Financial
    Statements and Supplementary Data  PageReport of
    Independent Registered Public Accounting Firm


33Balance
    Sheets


34Statements of
    Operations


35Statements of
    Stockholders Equity


36Statements of Cash
    Flows


37Notes to Financial
    Statements


38  32




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  33




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RedEnvelope,
    Inc.
  BALANCE
    SHEETS
  April 1,


April 2,2007


2006(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
13,245


$
3,277Short-term investments






6,762Accounts receivable, net


1,050



1,054Inventory


14,288



19,690Prepaid catalog costs and other
    current assets


2,423



2,793Total current assets


31,006



33,576Property and equipment, net


8,221



7,255Other assets


184



146Total assets

$
39,411


$
40,977LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
7,092


$
9,759Accrued expenses and other current
    liabilities


3,084



2,699Accrued compensation


2,287



1,371Capital lease obligations, current


207



312Total current liabilities


12,670



14,141Capital lease obligations,
    long-term


350



136Deferred rent


502



710Total liabilities


13,522



14,987Commitments and
    contingencies  (See Note 7)Stockholders equity:Common stock, $0.01 par
    value; 100 million shares authorized; 9.5 million and
    9.3 million issued and outstanding as of April 1, 2007
    and April 2, 2006, respectively


96



94Additional paid-in capital


118,800



116,739Deferred compensation


(1
)


(1,372
)Notes receivable from stockholders


(44
)


(44
)Accumulated deficit


(92,962
)


(89,427
)Total stockholders equity


25,889



25,990Total liabilities and
    stockholders equity

$
39,411


$
40,977    34




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RedEnvelope,
    Inc.
 STATEMENTS OF OPERATIONS  Fiscal Year EndedApril 1,


April 2,


April 3,2007


2006


2005(In thousands, except per share data)Net revenues

$
121,273


$
113,175


$
101,418Cost of sales


57,729



55,279



48,694Gross profit


63,544



57,896



52,724Operating expenses:Fulfillment


17,050



16,092



15,631Marketing


27,209



26,284



24,425General and administrative


23,142



21,462



17,894Total operating expenses


67,401



63,838



57,950Loss from operations


(3,857
)


(5,942
)


(5,226
)Interest income


499



567



352Interest expense


(177
)


(247
)


(279
)Net loss

$
(3,535
)

$
(5,622
)

$
(5,153
)Net loss per share 
    basic and diluted

$
(0.38
)

$
(0.62
)

$
(0.59
)Weighted average shares
    outstanding  basic and diluted


9,400



9,007



8,749    35




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##### Table of Contents



RedEnvelope,
    Inc.
 STATEMENTS OF STOCKHOLDERS EQUITY  Notes





AccumulatedAdditional





Receivable





OtherCommon Stock


Paid-In


Deferred


from


Accumulated


Comprehensive


Stockholders


ComprehensiveShares


Amount


Capital


Compensation


Stockholder


Deficit


Income/(Loss)


Equity


LossBalance at March 28, 2004


8,544


$
86


$
112,728


$
(197
)

$
(44
)

$
(78,652
)

$
(4
)

$
33,917



Exercise of common stock options


302



4



1,123



















1,127



Exercise of common stock warrants


22































ESPP distribution


15







110



















110Unrealized gain


























9



9


$
9Issuance of warrants w/loan


11































Amortization of deferred stock
    compensation














24















24



Reversal of deferred compensation










(130
)


130



















Net loss






















(5,153
)






(5,153
)


(5,153
)Comprehensive loss

































$
(5,144
)Balance at April 3, 2005


8,894



90



113,831



(43
)


(44
)


(83,805
)


5



30,034Exercise of common stock options


213



2



1,104



















1,106



ESPP distribution


18







137



















137



Unrealized loss


























(5
)


(5
)

$
(5
)Amortization of deferred stock
    compensation














503















503



Reversal of deferred compensation










(26
)


26



















Issuance of restricted stock award


200



2



1,858



(1,858
)














2



Repurchase of restricted stock


(18
)






(165
)


















(165
)


Net loss






















(5,622
)






(5,622
)


(5,622
)Comprehensive loss

































$
(5,627
)Balance at April 2, 2006


9,307



94



116,739



(1,372
)


(44
)


(89,427
)






25,990Exercise of common stock options


313



3



688



















691



ESPP distribution


19







157



















157



Amortization of deferred stock
    compensation














355















355



Reversal of deferred compensation










(1
)


















(1
)


Forfeiture of restricted stock


(109
)


(1
)


(1,016
)


1,016















(1
)


Repurchase of restricted stock


(15
)






(118
)


















(118
)


Amortization of stock- based
    compensation










2,351



















2,351



Net loss and comprehensive loss






















(3,535
)






(3,535
)

$
(3,535
)Balance at April 1, 2007


9,515


$
96


$
118,800


$
(1
)

$
(44
)

$
(92,962
)

$



$
(25,889
)    36




---



##### Table of Contents



RedEnvelope,
    Inc.
 STATEMENTS OF CASH FLOWS  Fiscal Year EndedApril 1,


April 2,


April 3,2007


2006


2005(In thousands)Cash Flows From Operating
    Activities:Net loss

$
(3,535
)

$
(5,622
)

$
(5,153
)Adjustments to reconcile net loss
    to net cash provided by (used in) operating activities:Depreciation


3,024



3,119



2,820Stock-based compensation


2,705



503



24Loss on disposal of property and
    equipment


2



217



61Other non-cash charges


(153
)


(29
)


312Changes in operating assets and
    liabilities:Accounts receivable, net


4



(62
)


63Inventory


5,402



(5,642
)


(4,439
)Prepaid catalog costs and other
    current assets


421



1,401



(2,073
)Accounts payable


(2,991
)


(677
)


4,505Accrued expenses and other current
    liabilities


1,302



(545
)


142Net cash provided by (used in)
    operating activities


6,181



(7,337
)


(3,738
)Cash Flows From Investing
    Activities:Maturities of short-term
    investments


11,619



61,664



37,459Purchases of short-term investments


(4,857
)


(54,075
)


(27,244
)Purchases of property and equipment


(3,171
)


(2,367
)


(4,957
)Net cash provided by investing
    activities


3,591



5,222



5,258Cash Flows From Financing
    Activities:Proceeds from issuance of common
    stock


848



1,245



1,233Forfeiture of restricted stock


(1
)






Repurchase of restricted stock


(118
)






Principal payments on capital
    lease obligations


(389
)


(660
)


(599
)Proceeds from line of credit


6,700







Repayment of line of credit


(6,700
)






Payment of debt issuance costs


(144
)






Net cash provided by financing
    activities


196



585



634Net increase (decrease) in cash
    and cash equivalents


9,968



(1,530
)


2,154Cash and cash equivalents at
    beginning of period


3,277



4,807



2,653Cash and cash equivalents at end
    of period

$
13,245


$
3,277


$
4,807Supplemental Cash Flow
    Information:Cash paid for interest

$
121


$
109


$
142Cash paid for income taxes


1



1



1Supplemental Non cash Investing
    and Financing Activities:Property improvements paid by
    landlord










700Equipment acquired through capital
    lease transactions


498



311



57    37




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO FINANCIAL STATEMENTS
  1.
    Summary
    of Significant Accounting Policies  Description of Business
  Fiscal Year 52-week
  Use of Estimates
  Cash Equivalents
  Concentration of Credit Risk
  Allowance for Doubtful Accounts
  Inventory. first-in-first-out
  Prepaid Catalog Costs
  Property and Equipment
  Capitalized Software and Website Development
    Costs 98-1, Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use No. 00-2, Accounting for Website Development Costs.
 38




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Valuation of Long-Lived Assets
  Revenue recognition
    Shipping and Handling Costs
  Provision for Sales Returns and Allowances
    Provision forBalance at


Sales Returns


Actual


Balance atBeginning of


and


Returns and


End ofPeriod


Allowances


Allowances


Period(In thousands)Year Ended April 1, 2007
    sales returns and allowances

$
430


$
5,142


$
(5,145
)

$
427Year Ended April 2, 2006
    sales returns and allowances


501



4,552



(4,623
)


430Year Ended April 3, 2005
    sales returns and allowances


181



4,862



(4,542
)


501   Advertising Expense
  Income Taxes
 39




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Stock-Based Compensation
    Fiscal Year Ended2006


2005(In thousands, except per share data)Net loss  as reported

$
(5,622
)

$
(5,153
)Stock-based employee compensation
    included in reported net loss


503



24Stock-based compensation expense
    determined under fair value method


(2,141
)


(1,125
)Pro forma net loss

$
(7,260
)

$
(6,254
)Basic and diluted earnings per
    share:As reported

$
(0.62
)

$
(0.59
)Pro forma

$
(0.81
)

$
(0.71
)   Loss Per Share
  Comprehensive Loss
  Fair Value of Financial Instruments
  New Accounting Pronouncements Accounting for Income Tax Uncertainties
 40




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    2.
    Results
    of Operations for Fiscal 2007 and Discussion of Liquidity in
    Fiscal 2008      3.
    Investments     41




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  4.
    Property
    and Equipment    April 1,


April 2,2007


2006(In thousands)Machinery and computer equipment
    (3 years)

$
8,204


$
8,126Software (3 years)


6,676



5,368Fulfillment equipment under
    capital lease (3-7 years)


2,125



1,615Furniture and fixtures
    (5 years)


399



611Leasehold improvements
    (3-5 years)


3,201



2,375Software development in progress


3,292



2,180Total


23,897



20,275Less: accumulated depreciation and
    amortization


(15,676
)


(13,020
)Total

$
8,221


$
7,255     5.
    Income
    Taxes    2007


2006


2005Federal statutory rate


(34.0
)%


(34.0
)%


(34.0
)%State taxes and other


(4.8
)


(4.8
)


(4.8
)Valuation allowance


38.8



38.8



38.80.0
%


0.0
%


0.0
%     April 1,


April 2,2007


2006(In thousands)Deferred tax assets:Net operating loss carryforwards

$
29,995


$
29,224Allowance and accruals


2,093



1,233Total


32,088



30,457Less: valuation allowance


(32,088
)


(30,457
)Net deferred tax assets

$



$
    42




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    and/or
  6.
    Borrowing
    Arrangements      7.
    Commitments
    and Contingencies  Leases
 43




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Capital


OperatingLeases


Leases(In thousands)Fiscal 2008

$
243


$
1,076Fiscal 2009


134



809Fiscal 2010


124



509Fiscal 2011


118



Fiscal 2012


17



Total minimum lease payments


636


$
2,394Less: Amount representing interest


(79
)Present value of capital lease
    obligations


557Less: Current portion of capital
    lease obligations


(207
)Long-term portion of capital lease
    obligations

$
350   Legal Proceedings
    8.
    Stock
    Option and Benefit Plans    Accounting for Stock Issued to Employees
 44




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Stock
    Options
               45




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Fiscal Year Ended2007

2006

2005Stock Option Valuation Assumptions:Expected volatility

51.9% - 56.8%

59.3%

68.2%Dividend yield

0.0%

0.0%

0.0%Expected term

3.3 - 5.7 years

4.0 years

4.0 yearsRisk-free interest rate

4.5% - 5.2%

4.2%

3.6%       WeightedWeighted


AverageAverage


RemainingExercise


Contractual


AggregateOptions


Price


Term


IntrinsicOutstanding


per Share


(Years)


Value(In thousands)








(In thousands)Balance, March 28, 2004


1,189


$
6.09Granted (weighted average fair
    value of $4.71)


683



8.96Cancelled


(182
)


9.25Exercised


(302
)


3.79






$
2,116Balance, April 3, 2005


1,388



7.47Granted (weighted average fair
    value of $4.84)


809



9.96Cancelled


(424
)


9.14Exercised


(213
)


5.18






$
1,019Balance, April 2, 2006


1,560



8.63Granted (weighted average fair
    value of $3.89)


532



8.49Cancelled


(444
)


10.35Exercised


(313
)


2.22






$
2,384Balance, April 1, 2007


1,335


$
9.50



8.02


$
145Exercisable, April 1, 2007


562


$
9.95



7.17


$
103  46




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Options Outstanding


Options ExercisableWeighted


Weighted





WeightedAverage


Average





AverageRemaining


Exercise





ExerciseNumber


Contractual


Price


Number


PriceExercise Price

Outstanding


Life (Years)


per Share


Exercisable


per Share(In 000s)








(In 000s)$0.59  $8.43


535



8.5


$
7.88



175


$
7.50$8.44  $10.11


414



8.2



9.43



175



9.54$10.12  $13.48


290



7.6



11.01



143



11.36$13.49  $16.85


96



5.9



14.28



69



14.221,335



8.0


$
9.50



562


$
9.95   Employee Stock Purchase Plan
    (ESPP)
    Expected volatility

32.6%  40.5%Dividend yield

0%Expected term

0.5 yearsRisk-free interest rate

4.1%  5.0%       01(k) Savings Plan
  9.
    Related
    Party Transactions   47




---



##### Table of Contents



RedEnvelope,
    Inc.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  10.
    Quarterly
    Financial Information (Unaudited)    Fiscal 2007 Quarter EndedJuly 2,


October 1,


December 31,


April 1,


20072006


2006


2006


2007


Total(In thousands, except per share amounts)Net revenues

$
26,858


$
15,531


$
56,987


$
21,897


$
121,273Gross profit


14,250



7,727



30,830



10,737



63,544Operating income (loss)


(943
)


(3,732
)


5,293



(4,475
)


(3,857
)Net income (loss)


(900
)


(3,688
)


5,307



(4,254
)


(3,535
)Basic income (loss) per share

$
(0.10
)

$
(0.39
)

$
0.56


$
(0.45
)

$
(0.38
)Diluted income (loss) per share

$
(0.10
)

$
(0.39
)

$
0.56


$
(0.45
)

$
(0.38
)   Fiscal 2006 Quarter EndedJuly 3,


October 2,


January 1,


April 2,


20062005


2005


2006


2006


Total(In thousands, except per share amounts)Net revenues

$
24,978


$
13,124


$
53,029


$
22,044


$
113,175Gross profit


13,249



6,178



27,721



10,748



57,896Operating income (loss)


(1,830
)


(3,562
)


4,075



(4,625
)


(5,942
)Net income (loss)


(1,752
)


(3,489
)


4,102



(4,483
)


(5,622
)Basic income (loss) per share

$
(0.20
)

$
(0.39
)

$
0.45


$
(0.49
)

$
(0.62
)Diluted income (loss) per share

$
(0.20
)

$
(0.39
)

$
0.43


$
(0.49
)

$
(0.62
)  48




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure Controls and Procedures Form 10-K. Rules 13a-15(e) 15d-15(e),
  Item 9B.
    Other
    Information  Form 10-K.
   49




---



##### Table of Contents



Form 10-K.
  Form 10-K.
  8-K Form 10-K.
  Proposal PM07-6636
 50




---



##### Table of Contents



Form 10-K.
  Form 10-K.
  th Form 10-K.
 PART III  Item 10.
    Directors
    and 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
    Accountant Fees and Services   51




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    1.
    Financial Statements                2.
    Financial Statement Schedules      Number

Description3
.2

Amended and Restated Certificate
    of Incorporation of the Registrant(1)3
.4

Amended and Restated Bylaws of the
    Registrant.(1)4
.1

Specimen stock certificate for the
    Registrants common stock.(1)4
.2

Amended and Restated
    Investors Rights Agreement dated April 17, 2002
    between the Registrant and certain investors.(1)4
.3

Omnibus Amendment to
    Investors Rights Agreement, Right of First Refusal and
    Co-Sale Agreement and Voting Agreement dated May 29, 2003
    between the Registrant and certain investors.(1)4
.9

Warrant Agreement dated
    February 10, 2000 issued to Comdisco, Inc.(1)4
.10

Restricted Stock Award Agreement
    with Kenneth Constable dated March 1, 2006 (incorporated by
    reference to Exhibit 4.1 to the Companys Registration
    Statement on
    Form S-8
    filed February 28, 2006)4
.11

Stock Option Agreement, dated
    March 3, 2006, with Frank Buettner (incorporated by
    reference to Exhibit 4.3 to the Companys Current
    Report on
    Form 8-K
    filed May 31, 2006).10
.10

Lease dated March 28, 2000
    between RedEnvelope and Four Amigos.(1)10
.11

First Amendment to Lease Agreement
    between The Four Amigos, a California Limited Partnership, and
    RedEnvelope, Inc., dated as of January 1, 2004.(3)10
.20

1999 Stock Plan, as amended on
    April 11, 2003, and form agreements thereunder.(1)10
.21

2003 Directors Stock
    Option Plan and form agreements thereunder.(1)10
.22

2003 Employee Stock Purchase Plan
    and form agreements thereunder.(1)10
.37*

Software License, Services,
    Support and Enhancements Agreement dated December 29, 2003
    between RedEnvelope, Inc. and Manhattan Associates, Inc.(2)10
.39

Lease Agreement between
    Creekside III LLC and RedEnvelope, Inc. effective as of
    April 1, 2004 (incorporated by reference to
    Exhibit 99.1 to the Companys Current Report on
    Form 8-K
    filed November 22, 2004).10
.40

Lease Agreement dated
    July 22, 2004 between 149 New Montgomery, LLC and
    RedEnvelope, Inc. (incorporated by reference to the identically
    numbered exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the period ended June 27, 2004). 52




---



##### Table of Contents



Number

Description10
.45

Employment offer letter dated
    March 28, 2005 between RedEnvelope, Inc. and Polly Boe
    (incorporated by reference to the identically numbered exhibit
    to the Companys Current Report on
    Form 8-K
    filed March 31, 2005).10
.46

Employment Offer Letter dated
    October 7, 2003 between RedEnvelope, Inc. and Christopher
    Nordquist.(4)10
.50*

License Agreement between Harrison
    160, LLC and RedEnvelope, Inc., dated as of May 31, 2005.(3)10
.51

Second Amendment to Lease
    Agreement between The Four Amigos, a California Limited
    Partnership, and RedEnvelope, Inc., dated as of January 25,
    2005 (incorporated by reference to Exhibit 99.1 to the
    Companys Current Report on
    Form 8-K
    filed January 28, 2005).10
.52

Agreement between Scott Galloway
    and RedEnvelope, Inc. dated July 13, 2005 (incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K
    filed on July 15, 2005).10
.53

Form of Indemnification Agreement
    for Executive Officers and Directors (in use from
    August 15, 2005) (incorporated by reference to
    Exhibit 10.53 to the Companys Quarterly Report of
    Form 10-Q
    for the period ended July 3, 2005).10
.54

Employment Agreement dated
    February 18, 2006 between RedEnvelope, Inc. and Ken
    Constable (incorporated by reference to Exhibit 10.54 of
    the Companys Current Report on
    Form 8-K
    filed February 23, 2006).10
.55

Employment offer letter dated
    February 10, 2006 between RedEnvelope, Inc. and Frank
    Buettner (incorporated by reference to Exhibit 10.55 to the
    Companys Current Report on
    Form 8-K
    filed February 23, 2006).10
.58

RedEnvelope, Inc. Fiscal 2007
    Bonus Plan.(4)10
.59

Loan and Security Agreement dated
    June 26, 2006 between RedEnvelope, Inc. and Wells Fargo
    Retail Finance LLC.(4)10
.60

Collateral Assignment of License
    Agreement dated June 26, 2006 between RedEnvelope, Inc. and
    Wells Fargo Retail Finance, LLC.(4)10
.61

Revolving Credit Note dated
    June 26, 2006 executed by RedEnvelope, Inc.(4)10
.62*

Fee Letter dated June 26,
    2006 between RedEnvelope, Inc. and Wells Fargo Retail Finance,
    LLC.(4)10
.63

Intellectual Property Security
    Agreement dated June 26, 2006 between RedEnvelope, Inc. and
    Wells Fargo Retail Finance, LLC.(4)10
.64*

Software License and Service
    Agreement dated March 31, 2000 between BroadVision, Inc.
    and RedEnvelope, Inc. (including Attachment D-2 thereto dated
    September 26, 2002 and Attachment
    D-3 thereto
    dated October 31, 2005).(4)10
.65

First Amendment to Lease Agreement
    effective August 1, 2006 between DCT Creekside III LLC
    and RedEnvelope, Inc.(5)10
.66

Amended and restated employment
    offer letter dated January 24, 2007 with Chirstopher
    Nordquist.10
.67

Amended and restated employment
    offer letter dated January 24, 2007 with Frank Buettner.10
.68

Employment offer letter dated
    March 13, 2007 with Scott Sanborn.10
.69

Separation Agreement and General
    Release dated April 19, 2007 with Kenneth Constable.10
.70

Separation Agreement and General
    Release dated June 15, 2007 with Scott Loly.10
.71**

Deigned Conveyor Systems
    Proposal PM07-6636
    and Proposal Acceptance dated June 6, 2007.10
.72

Subordinated Promissory Note dated
    June 29, 2007 executed by RedEnvelope, Inc.23
.1

Consent of Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney (See
    Page 55).31
.1

John Pounds Certification
    pursuant to 13a-14(a) as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002.31
.2

William Gochnauers
    Certification pursuant to 13a-14(a) as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002. 53




---



##### Table of Contents



Number

Description32
.1

John Pounds Certification
    pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

William Gochnauers
    Certification pursuant to 18 U.S.C. 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Registration Statement on
    Form S-1,
    which became effective on September 24, 2003.(2)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Annual Report on
    Form 10-K
    for the period ended March 28, 2004.(3)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Annual Report on
    Form 10-K
    for the period ended April 3, 2005.(4)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Annual Report on
    Form 10-K
    for the period ended April 2, 2006.(5)
    
    Incorporated by reference to identically numbered exhibit to
    RedEnvelopes Quarterly Report on
    Form 10-Q
    for the period ended October 1, 2006.*
    
    Confidential treatment granted with respect to certain portions
    of this Exhibit.**
    
    Material has been omitted pursuant to a request for confidential
    treatment. Omitted portions have been filed separately with the
    Securities and Exchange Commission. 54




---



##### Table of Contents



SIGNATURES      By:
    /s/  WILLIAM
    T. GOCHNAUER    Interim Chief Financial Officer
    Form 10-K
    Signature

Title

Date/s/  John
    C. PoundJohn
    C. Pound

Executive Chairman of the Board
    (Principal Executive Officer)

July 2, 2007/s/  William
    T. GochnauerWilliam
    T. Gochnauer

Interim Chief Financial Officer
    (Principal Financial and Accounting Officer)

July 2, 2007/s/  Michael
    E. DunnMichael
    E. Dunn

Director

July 2, 2007/s/  Karen
    EdwardsKaren
    Edwards

Director

July 2, 2007/s/  Joseph
    C. GandolfoJoseph
    C. Gandolfo

Director

July 2, 2007/s/  Scott
    GallowayScott
    Galloway

Director

July 2, 2007/s/  Daniel
    R. LyleDaniel
    R. Lyle

Director

July 2, 2007/s/  Gregory
    ShoveGregory
    Shove

Director

July 2, 2007  55




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##### Table of Contents



EXHIBIT INDEX
  Number

Description3
.2

Amended and Restated Certificate
    of Incorporation of the Registrant(1)3
.4

Amended and Restated Bylaws of the
    Registrant.(1)4
.1

Specimen stock certificate for the
    Registrants common stock.(1)4
.2

Amended and Restated
    Investors Rights Agreement dated April 17, 2002
    between the Registrant and certain investors.(1)4
.3

Omnibus Amendment to
    Investors Rights Agreement, Right of First Refusal and
    Co-Sale Agreement and Voting Agreement dated May 29, 2003
    between the Registrant and certain investors.(1)4
.9

Warrant Agreement dated
    February 10, 2000 issued to Comdisco, Inc.(1)4
.10

Restricted Stock Award Agreement
    with Kenneth Constable dated March 1, 2006 (incorporated by
    reference to Exhibit 4.1 to the Companys Registration
    Statement on
    Form S-8
    filed February 28, 2006).4
.11

Stock Option Agreement, dated
    March 3, 2006, with Frank Buettner (incorporated by
    reference to Exhibit 4.3 to the Companys Current
    Report on
    Form 8-K
    filed May 31, 2006).10
.10

Lease dated March 28, 2000
    between RedEnvelope and Four Amigos.(1)10
.11

First Amendment to Lease Agreement
    between The Four Amigos, a California Limited Partnership, and
    RedEnvelope, Inc., dated as of January 1, 2004.(3)10
.20

1999 Stock Plan, as amended on
    April 11, 2003, and form agreements thereunder.(1)10
.21

2003 Directors Stock
    Option Plan and form agreements thereunder.(1)10
.22

2003 Employee Stock Purchase Plan
    and form agreements thereunder.(1)10
.37*

Software License, Services,
    Support and Enhancements Agreement dated December 29, 2003
    between RedEnvelope, Inc. and Manhattan Associates, Inc.(2)10
.39

Lease Agreement between
    Creekside III LLC and RedEnvelope, Inc. effective as of
    April 1, 2004 (incorporated by reference to
    Exhibit 99.1 to the Companys Current Report on
    Form 8-K
    filed November 22, 2004).10
.40

Lease Agreement dated
    July 22, 2004 between 149 New Montgomery, LLC and
    RedEnvelope, Inc. (incorporated by reference to the identically
    numbered exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the period ended June 27, 2004).10
.45

Employment offer letter dated
    March 28, 2005 between RedEnvelope, Inc. and Polly Boe
    (incorporated by reference to the identically numbered exhibit
    to the Companys Current Report on
    Form 8-K
    filed March 31, 2005).10
.46

Employment Offer Letter dated
    October 7, 2003 between RedEnvelope, Inc. and Christopher
    Nordquist.(4)10
.50*

License Agreement between Harrison
    160, LLC and RedEnvelope, Inc., dated as of May 31, 2005.(3)10
.51

Second Amendment to Lease
    Agreement between The Four Amigos, a California Limited
    Partnership, and RedEnvelope, Inc., dated as of January 25,
    2005 (incorporated by reference to Exhibit 99.1 to the
    Companys Current Report on
    Form 8-K
    filed January 28, 2005).10
.52

Agreement between Scott Galloway
    and RedEnvelope, Inc. dated July 13, 2005 (incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K
    filed on July 15, 2005).10
.53

Form of Indemnification Agreement
    for Executive Officers and Directors (in use from
    August 15, 2005) (incorporated by reference to
    Exhibit 10.53 to the Companys Quarterly Report of
    Form 10-Q
    for the period ended July 3, 2005).10
.54

Employment Agreement dated
    February 18, 2006 between RedEnvelope, Inc. and Ken
    Constable (incorporated by reference to Exhibit 10.54 of
    the Companys Current Report on
    Form 8-K
    filed February 23, 2006).10
.55

Employment offer letter dated
    February 10, 2006 between RedEnvelope, Inc. and Frank
    Buettner (incorporated by reference to Exhibit 10.55 to the
    Companys Current Report on
    Form 8-K
    filed February 23, 2006).10
.58

RedEnvelope, Inc. Fiscal 2007
    Bonus Plan.(4)10
.59

Loan and Security Agreement dated
    June 26, 2006 between RedEnvelope, Inc. and Wells Fargo
    Retail Finance LLC.(4)




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##### Table of Contents



Number

Description10
.60

Collateral Assignment of License
    Agreement dated June 26, 2006 between RedEnvelope, Inc. and
    Wells Fargo Retail Finance, LLC.(4)10
.61

Revolving Credit Note dated
    June 26, 2006 executed by RedEnvelope, Inc.(4)10
.62*

Fee Letter dated June 26,
    2006 between RedEnvelope, Inc. and Wells Fargo Retail Finance,
    LLC.(4)10
.63

Intellectual Property Security
    Agreement dated June 26, 2006 between RedEnvelope, Inc. and
    Wells Fargo Retail Finance, LLC.(4)10
.64*

Software License and Service
    Agreement dated March 31, 2000 between BroadVision, Inc.
    and RedEnvelope, Inc. (including Attachment D-2 thereto dated
    September 26, 2002 and Attachment
    D-3 thereto
    dated October 31, 2005).(4)10
.65

First Amendment to Lease Agreement
    effective August 1, 2006 between DCT Creekside III LLC
    and RedEnvelope, Inc.(5)10
.66

Amended and restated employment
    offer letter dated January 24, 2007 with Chirstopher
    Nordquist.10
.67

Amended and restated employment
    offer letter dated January 24, 2007 with Frank Buettner.10
.68

Employment offer letter dated
    March 13, 2007 with Scott Sanborn.10
.69

Separation Agreement and General
    Release dated April 19, 2007 with Kenneth Constable.10
.70

Separation Agreement and General
    Release dated June 15, 2007 with Scott Loly.10
.71**

Deigned Conveyor Systems
    Proposal PM07-6636
    and Proposal Acceptance dated June 6, 2007.10
.72

Subordinated Promissory Note dated
    June 29, 2007 executed by RedEnvelope, Inc.23
.1

Consent of Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney (See
    Page 55).31
.1

John Pounds Certification
    pursuant to 13a-14(a) as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002.31
.2

William Gochnauers
    Certification pursuant to 13a-14(a) as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

John Pounds Certification
    pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

William Gochnauers
    Certification pursuant to 18 U.S.C. 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Registration Statement on
    Form S-1,
    which became effective on September 24, 2003.(2)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Annual Report on
    Form 10-K
    for the period ended March 28, 2004.(3)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Annual Report on
    Form 10-K
    for the period ended April 3, 2005.(4)
    
    Incorporated by reference to identically numbered exhibits to
    RedEnvelopes Annual Report on
    Form 10-K
    for the period ended April 2, 2006.(5)
    
    Incorporated by reference to identically numbered exhibit to
    RedEnvelopes Quarterly Report on
    Form 10-Q
    for the period ended October 1, 2006.*
    
    Confidential treatment granted with respect to certain portions
    of this Exhibit.**
    
    Material has been omitted pursuant to a request for confidential
    treatment. Omitted portions have been filed separately with the
    Securities and Exchange Commission.