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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended January 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from          to
 Commission file number: 000-21287
 Peerless Systems Corporation
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    95-3732595(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)2381 Rosecrans Avenue, El Segundo, CA
    
    90245(Address of Principal Executive Offices)
    
    (Zip Code)
 (310) 536-0908  Registrants telephone number, including area code
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on which RegisteredCommon Stock, $.001 par value
    
    The NASDAQ Stock Market LLCPreferred Stock Purchase Rights
    
    The NASDAQ Stock Market LLC
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    4Item 1A. Risk Factors
    
    
    8Item 1B. Unresolved Staff Comments
    
    
    14Item 2. Properties
    
    
    14Item 3. Legal Proceedings
    
    
    15Item 4. Submission of Matters to a Vote of Security Holders
    
    
    15PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    16Item 6. Selected Financial Data
    
    
    18Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 8. Financial Statements and Supplementary Data
    
    
    25Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    25Item 9A. Controls and Procedures
    
    
    26Item 9B. Other Information
    
    
    28PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    28Item 11. Executive Compensation
    
    
    28Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    28Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    28Item 14. Principal Accountant Fees and Services
    
    
    28PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    29EXHIBIT 21EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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FORWARD-LOOKING STATEMENTS
  3




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PART I
 
 Item 1. Business
 Company Overview
  www.peerless.com
  Recent Developments
 Asset Sale with KMC
  Asset Purchase with Prism Software Corporation
 DocForm, DocRecord, DocSystem, DocTransform
  4




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Formation of Cue Imaging Corporation
  Adobe Systems Incorporated
  Summary of Recent Developments
  Services Provided
  Customers
 .
    Market Segments and Geographic Areas
  5




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Industry Overview
  Technology
 Digital Imaging Products.
 
    
    PeerlessPrint Family of SDKsis a fully compatible Peerless implementation of HP PCL
Page Description Languages. The majority of PeerlessPrint sales are sold in conjunction
with other Peerless technology or third party technology.
    
    Peerless XPSis a complete embedded rendering solution for applications that use
Microsofts XPS Page Description Language.
    
    PeerlessTrappingis an imaging technology designed to improve print quality of color
images.
    
    Peerless Software Print Serveris a complete software based print server with all
networking protocols that enables secure and reliable network print and scan
connectivity.
    
    PeerlessNet Web Services SDKprovides advanced device control and Microsoft Windows
Vista support.
    
    PeerlessNet Securityprovides advanced network security functions for digital imaging
devices.
    6




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Strategy for Business
  Reduction of Expenses.
 Maximizing value of our core technologies.
 Strategic Acquisitions and Growth Opportunities.
  Intellectual Property and Proprietary Rights
     7




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Competition
  Employees
  Available Information
   
 Item 1A. Risk Factors
  As a result of completing the asset sale with KMC, we may encounter difficulties in leveraging our
remaining assets and continuing operations at a profitable level.
  8




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We have certain indemnification obligations under the Asset Purchase Agreement with KMC that might
result in us not receiving all of the proceeds of the asset sale.
  Our current growth strategy depends in part on our ability to successfully invest in and/or acquire
the assets or businesses of other companies. Our failure to complete transactions that accomplish
these objectives could reduce our earnings and slow our growth.
  The Adobe License Agreement is set to expire on June 30, 2008, and we do not expect that this
agreement will be renewed.
  We may be unable to meet certain conditions of closing the Prism transaction which will slow our
realization of certain financial and strategic goals.
   We may be unsuccessful in realizing our financial and strategic objectives with respect to our
acquisition of substantially all of the assets of Prism.
  We rely on relationships with certain customers and any adverse change in those relationships will
harm our business.
    9




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We are involved in a contract dispute, which, if not remedied, could result in the loss of the
Adobe agreement and could harm our business.
  If we are not in compliance with our license agreements, we may lose our rights to sublicense
technology; our competitors are aggressively pursuing the sale of licensed third party technology.
  We may become subject to litigation as a result of an intellectual property infringement claim
asserted by Screentone Systems Corporation against one of our customers.
  If we enter new markets or distribution channels this could result in higher operating expenses
that may not be offset by increased revenue.
  10




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Our licensing revenue is subject to significant fluctuations which may materially and adversely
affect our operating results.
  Our revenue from engineering services is subject to significant fluctuations.
  
    
    product development delays;
    
    potential non-recurring engineering reduction for product customization;
    
    third party delays;
    
    loss of new engineering services contracts;
    
    globalization of the engineering workforce; and
    
    the transfer of certain of our employees and other assets to KMC in connection with the IP sale.
  The future demand for our products is uncertain.
  The industry for imaging systems for digital document products involves intense competition and
rapid technological changes, and our business may suffer if our competitors develop superior
technology.
  If we fail to adequately protect our intellectual property or face a claim of intellectual property
infringement by a third party, we could lose our intellectual property rights or be liable for
damages.
   11




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Our international activities may expose us to risks associated with international business.
  
    
    major currency rate fluctuations;
    
    changes in the economic condition of foreign countries;
    
    the imposition of government controls;
    
    tailoring of products to local requirements;
    
    trade restrictions;
    
    changes in tariffs and taxes; and
    
    the burdens of complying with a wide variety of foreign laws and
regulations, any of which could have a material adverse effect on
our operating results.
  We rely on the services of our executive officers and other key personnel, whose knowledge of our
business and industry would be extremely difficult to replace.
  12




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Our stock price may experience extreme price and volume fluctuations.
  
    
    macroeconomic conditions;
    
    actual or anticipated fluctuations in quarterly results of operations;
    
    announcements of new products or significant technological innovations by us or our competitors;
    
    developments or disputes with respect to proprietary rights;
    
    losses of major OEM customers;
    
    general trends in the industry;
    
    overall market conditions and other factors;
    
    change in executive management; and
    
    other risk factors described herein.
  Failure to maintain our Nasdaq listing would adversely affect the trading price and liquidity of
our common stock.
  13




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If we fail to maintain an effective system of internal control over financial reporting or discover
material weaknesses in our internal control over financial reporting or financial reporting
practices, we may not be able to report our financial results accurately or detect fraud, which
could harm our business and the trading price of our stock.
  Recent and proposed regulations related to equity incentives could adversely affect our
ability to attract and retain key personnel.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  14




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Owned /Leased
    
    Approximate size
    
    ApproximateUse
    
    Address
    
    Expiration
    
    (sq. ft.)
    
    Rental / MoPeerless System
    
    2381 Rosecrans Avenue
    
    Leased
    
    
    44,653
    
    
    $
    105,526Corporation
    
    El Segundo, California
    
    June, 201690245Peerless Systems
    
    20415
72ndAvenue S. Suite 400
    
    Leased
    
    
    10,756
    
    
    $
    11,205Imaging Products
    
    Kent, Washington 98032
    
    Oct, 2009Peerless Systems KK
    
    AIOS Gotanda 405
    
    Leased
    
    
    426
    
    
    $
    3,2991-10-7 Higashi- Gotanda
    
    Oct, 2009Shinagawa-kuTokyo 141-0022, Japan
   
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  15




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  Fiscal Year Ended January 31,2008
    
    2007Quarter
    
    High
    
    Low
    
    High
    
    LowFirst
    
    $
    3.52
    
    
    $
    1.86
    
    
    $
    10.00
    
    
    $
    5.81Second
    
    $
    3.70
    
    
    $
    2.02
    
    
    $
    7.60
    
    
    $
    4.15Third
    
    $
    3.01
    
    
    $
    2.01
    
    
    $
    5.00
    
    
    $
    2.55Fourth
    
    $
    2.85
    
    
    $
    1.69
    
    
    $
    4.23
    
    
    $
    2.15
  Securities Authorized for Issuance Under Equity Compensation Plans
  Dividend Policy
  16




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COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG PEERLESS SYSTEMS CORPORATION,
NASDAQ MARKET INDEX (U.S.) AND HEMSCOTT GROUP INDEX
 
 
  Years Ended January 31,2008


    

2007





    2006


    
    2005


    
    2004


    
    2003Company/index/market:Peerless Systems Corporation
    
    $
    160.81
    
    
    $
    154.73
    
    
    $
    441.22
    
    
    $
    89.19
    
    
    $
    172.30
    
    
    $
    100.00Application Software
    
    $
    169.80
    
    
    $
    158.39
    
    
    $
    142.82
    
    
    $
    129.56
    
    
    $
    127.89
    
    
    $
    100.00NASDAQ US only
    
    $
    192.43
    
    
    $
    198.09
    
    
    $
    181.86
    
    
    $
    159.62
    
    
    $
    159.02
    
    
    $
    100.00
 17




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Item 6. Selected Financial Data
  Years Ended January 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands)Statement of Operations Data:Net sales
    
    $
    28,443
    
    
    $
    33,383
    
    
    $
    36,157
    
    
    $
    23,078
    
    
    $
    25,254Income (loss) from operations
    
    
    4,345
    
    
    
    2,841
    
    
    
    4,347
    
    
    
    (5,677
    )
    
    
    (5,793
    )Net income (loss)
    
    
    10,147
    
    
    
    3,286
    
    
    
    4,314
    
    
    
    (5,805
    )
    
    
    (4,861
    )Basic earnings (loss) per share
    
    
    0.59
    
    
    
    0.19
    
    
    
    0.26
    
    
    
    (0.37
    )
    
    
    (0.31
    )Diluted earnings (loss) per share
    
    
    0.56
    
    
    
    0.17
    
    
    
    0.23
    
    
    
    (0.37
    )
    
    
    (0.31
    )
 Years Ended January 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands)Balance Sheet Data:Total assets
    
    $
    33,230
    
    
    $
    23,601
    
    
    $
    20,034
    
    
    $
    12,647
    
    
    $
    19,307Long-term obligations
    
    
    551
    
    
    
    459
    
    
    
    275
    
    
    
    418
    
    
    
    366
 Selected Quarterly Financial Data (Unaudited):
 Year Ended January 31, 2008
    
    Year Ended January 31, 2007(In thousands)Quarter
    
    Fourth
    
    Third
    
    Second
    
    First
    
    Fourth
    
    Third
    
    Second
    
    FirstNet sales
    
    $
    9,325
    
    
    $
    7,429
    
    
    $
    6,942
    
    
    $
    4,747
    
    
    $
    8,704
    
    
    $
    7,980
    
    
    $
    7,896
    
    
    $
    8,804Gross margin
    
    
    7,093
    
    
    
    4,468
    
    
    
    4,785
    
    
    
    2,204
    
    
    
    5,495
    
    
    
    3,374
    
    
    
    4,276
    
    
    
    6,190Gross margin %
    
    
    76.06
    %
    
    
    60.14
    %
    
    
    68.93
    %
    
    
    46.43
    %
    
    
    63.13
    %
    
    
    42.28
    %
    
    
    54.15
    %
    
    
    70.31
    %Income (loss) from operations
    
    $
    3,264
    
    
    $
    1,081
    
    
    $
    1,049
    
    
    $
    (1,048
    )
    
    $
    1,460
    
    
    $
    (128
    )
    
    $
    (438
    )
    
    $
    1,946Net income (loss)
    
    $
    8,484
    
    
    $
    1,279
    
    
    $
    1,213
    
    
    $
    (829
    )
    
    $
    1,588
    
    
    $
    (18
    )
    
    $
    (327
    )
    
    $
    2,043Basic earnings (loss) per share
    
    
    0.49
    
    
    
    0.07
    
    
    
    0.07
    
    
    
    (0.05
    )
    
    
    0.09
    
    
    
    
    
    
    
    (0.02
    )
    
    
    0.12Diluted earnings (loss) per share
    
    
    0.47
    
    
    
    0.07
    
    
    
    0.07
    
    
    
    (0.05
    )
    
    
    0.09
    
    
    
    
    
    
    
    (0.02
    )
    
    
    0.11
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  18




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Highlights
   
    
    On April 30, 2008, we consummated the transactions contemplated by that certain Asset
Purchase Agreement, dated as of January 9, 2008, between KMC and Peerless, pursuant to
which we sold substantially all of our IP to KMC, transferred to KMC thirty eight
(38) of our employees, licensed the IP back from KMC on a nonexclusive, worldwide,
perpetual and royalty free basis subject to certain restrictions, entered into a
sublease pursuant to which we are subleasing to a subsidiary of KMC 16,409 square feet
of office space at our executive offices for a period of forty (40) months at a monthly
rent equal to the allocable portion of the rent and common charges payable by us under
our lease for the property, and terminated substantially all of our existing agreements
with KMC. As consideration for the sale, KMC assumed certain of our liabilities, and
paid us approximately $37.0 million, less a holdback amount of $4.0 million relating to
potential indemnification obligations. The cash proceeds generated from the KMC transaction will position us to continue
executing our strategic plan.
    
    On February 22, 2008, we entered into an Asset Purchase Agreement with Prism Software
Corporation to acquire substantially all of the assets of Prism, a provider of print and
document-management software products. Under the terms of the agreement we will pay
Prism $1.75 million in cash, subject to adjustment as provided in the Asset Purchase
Agreement and will deposit into escrow either (a) 526,000 shares of our common stock, if
the closing price of our stock is $2.85 or less on the day before the closing date or
(b) a lesser number of shares determined by dividing $1,499,100 by the closing price of
the our common stock on the day before the closing date, if such closing price is $2.85
or more. The shares will be held in escrow to satisfy any potential indemnity claims
until the later of (a) one year following the closing date or (b) the date the business
acquired from Prism first achieves cumulative net income in excess of $275,000. The
Asset Purchase Agreement also contains an earn out provision, under which Prism may
receive an additional payment (in cash, stock or any combination thereof, at our option)
based on the total net income of the business acquired from Prism over the first three
years following closing. Completion of this transaction is subject to customary closing
conditions.
    
    In January, 2008, we formed a wholly owned subsidiary, Cue Imaging Corporation, to
investigate and explore potential opportunities in the AiO market with new technologies.
    
    Year over year operating expenses were reduced by 14%. It is our intent to continue
to manage our operating costs, selling, and general and administrative expenses as we
move in a new direction.
    
    The Adobe License Agreement is set to expire on June 30, 2008, and we do not expect
that this agreement will be renewed. The Adobe License Agreement provides that there is
a period of twelve to eighteen months following the expiration of the agreement by which
we continue to license and provide services to our existing OEM customers.
  Critical Accounting Policies
  19




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Results of Operations
  Percentage ChangePercentage of Total
    
    Years EndedRevenues Years Ended
    
    January 31,January 31,
    
    2008 vs.
    
    2007 vs.2008
    
    2007
    
    2006
    
    2007
    
    2006Statements of Operations Data:Revenues:Product licensing
    
    
    63
    %
    
    
    65
    %
    
    
    58
    %
    
    
    (18
    )%
    
    
    4
    %Engineering services and maintenance
    
    
    37
    
    
    
    34
    
    
    
    33
    
    
    
    (5
    )
    
    
    (6
    )Other
    
    
    
    
    
    
    1
    
    
    
    9
    
    
    
    (99
    )
    
    
    (88
    )Total revenues
    
    
    100
    
    
    
    100
    
    
    
    100
    
    
    
    (15
    )
    
    
    (8
    )Cost of revenues:Product licensing
    
    
    12
    
    
    
    14
    
    
    
    18
    
    
    
    (28
    )
    
    
    (29
    )Engineering services and maintenance
    
    
    23
    
    
    
    26
    
    
    
    22
    
    
    
    (25
    )
    
    
    8Other
    
    
    
    
    
    
    2
    
    
    
    7
    
    
    
    (100
    )
    
    
    (73
    )Total cost of revenues
    
    
    35
    
    
    
    42
    
    
    
    47
    
    
    
    (30
    )
    
    
    (18
    )Gross margin
    
    
    65
    
    
    
    58
    
    
    
    53
    
    
    
    (4
    )
    
    
    1Operating expenses:Research and development
    
    
    15
    
    
    
    20
    
    
    
    16
    
    
    
    (34
    )
    
    
    17Sales and marketing
    
    
    9
    
    
    
    9
    
    
    
    10
    
    
    
    (16
    )
    
    
    (13
    )General and administrative
    
    
    26
    
    
    
    20
    
    
    
    15
    
    
    
    8
    
    
    
    21Total operating expenses
    
    
    50
    
    
    
    49
    
    
    
    41
    
    
    
    (14
    )
    
    
    12Income (loss) from operations
    
    
    15
    
    
    
    9
    
    
    
    12
    
    
    
    56
    
    
    
    (35
    )Other income
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    78
    
    
    
    *Income (loss) before income taxes
    
    
    18
    
    
    
    10
    
    
    
    12
    
    
    
    56
    
    
    
    (24
    )Provision for income taxes
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    *
    
    
    
    (21
    )Net income (loss)
    
    
    36
    %
    
    
    10
    %
    
    
    12
    %
    
    
    209
    %
    
    
    (24
    )%
 
 *
    
    Percentage change calculations not meaningful. Net Income
  Revenues
   22




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Cost of Revenues
  Gross Margin
  Operating Expenses
  
    
    Research and development expenses were $4.4 million in fiscal year
2008, compared to $6.7 million in fiscal year 2007, and $5.7 million
in fiscal year 2006. The decrease in fiscal year 2008 over fiscal year
2007 was due to a decrease in staffing. The increase in fiscal year
2007 expenses compared to the previous fiscal year was the result of
development efforts associated with the System on a Chip (SoC)
networking and new color technologies.
    
    Sales and marketing expenses were $2.5 million in fiscal year 2008,
compared to $3.0 million in fiscal year 2007, and $3.5 million in
fiscal year 2006. The decreases over the last two fiscal years were
the result of a reduction in staffing levels and sales commission
expense. We continued to focus on the launch of new Peerless imaging
and networking technologies and on developing new OEM customers,
attending industry trade shows, and evaluating other opportunities to
promote our core and new color imaging and network solutions.
    
    General and administrative expenses were $7.3 million in fiscal year
2008, compared to $6.7 million in fiscal year 2007, and $5.6 million
in fiscal year 2006. The fiscal 2008 increase was due mainly to
increased legal fees related to the KMC transaction, an R&D tax study
and a proxy contest during the year. The fiscal 2007 increase was
primarily due to a one-time charge associated with our expense
reduction program, a one-time charge associated with the consultancy
agreement with our former CEO, stock-based compensation expense that
has not been required to be recorded in the statement of operations in
previous years, Sarbanes-Oxley compliance expenses resulting from our
classification as an accelerated-filer during fiscal 2008 and
non-recurring legal fees associated with contractual matters related
to agreements with some of our larger customers.
 Interest Income, Other Income and Expenses, and Taxes
  23




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Contractual Obligations
  Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 Years(In thousands)Operating lease obligations
    
    $
    12,399
    
    
    $
    1,465
    
    
    $
    2,904
    
    
    $
    2,831
    
    
    $
    5,199Outstanding purchase orders
    
    
    30
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    12,429
    
    
    $
    1,495
    
    
    $
    2,904
    
    
    $
    2,831
    
    
    $
    5,199
  Liquidity and Capital Resources
     24




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  25




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Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    Managements Report on Internal Control over Financial Reporting
 Internal
ControlIntegrated Framework
   Changes in Internal Control over Financial Reporting
  Management Certifications
  26




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Inherent Limitations on Effectiveness of Controls
  27




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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 Accountant Fees and Services
  28




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PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  Financial Statements:
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Statements of Income
    
    F-3Consolidated Balance Sheets
    
    F-4Consolidated Statements of Stockholders Equity
    
    F-5Consolidated Statements of Cash Flows
    
    F-6Notes to Consolidated Financial Statements
    
    F-7
 Financial Statement Schedule:
  Schedule
    
    PageII Valuation and Qualifying Accounts
    
    S-1
  Exhibits
  Exhibits:
  ExhibitNumber3.1(1)
    
    Certificate of Incorporation of the Company.3.2(33)
    
    Amended Bylaws.4.1
    
    Instruments defining the rights of security holders. Reference is made to Exhibits 3.1 and 3.2.4.2(4)
    
    Rights Agreement, dated October 7, 1998, between the Company and Wells Fargo Shareowner
Services, a division of Wells Fargo Bank Minnesota, N.A., formerly known as Norwest Shareowner
Services, as Rights Agent.10.1(10)(2)
    
    1996 Equity Incentive Plan, as amended and form of stock option agreements thereunder.
 29




---



##### Table of Contents



ExhibitNumber10.2(11)(2)
    
    1996 Employee Stock Purchase Plan, as amended.10.3(1)(3)
    
    Reference Post Appendix No. 2 to the Adobe Third Party License dated February 11, 1993.10.4(1)
    
    Amendment No. 1 to the Adobe Third Party License dated November 29, 1993.10.5(1)(3)
    
    PCL Development and License Agreement (the PCL License) dated June 14, 1993, between the
Registrant and Adobe.10.6(1)(3)
    
    Amendment No. 1 to the PCL License dated October 31, 1993.10.7(1)(3)
    
    Letter Modification to the PCL License dated August 5, 1994.10.8(1)(3)
    
    Addendum No. 1 to the PCL License dated March 31, 1995.10.9(1)(3)
    
    Letter Modification to the PCL License dated August 30, 1995.10.10(1)
    
    Lease Agreement between the Company and Continental Development Corporation dated February 6,
1992, and Addendum, dated February 6, 1992.10.11(1)
    
    First Amendment to Office Lease dated December 1, 1995, between the Company and Continental
Development Corporation.10.12(5)
    
    Second Amendment to Office Lease dated April 8, 1997, between the Company and Continental
Development Corporation.10.13(5)
    
    Third Amendment to Office Lease dated December 16, 1997, between the Company and Continental
Development Corporation.10.14(6)
    
    Fourth Amendment to Office Lease dated April 22, 1998, between the Company and Continental
Development Corporation.10.15(7)
    
    Agreement and Plan of reorganization and Merger by and among Peerless Systems Corporation,
Auco Merger and Auco, Inc. dated as of April 6, 1999.10.16(8)
    
    Marubun Supplier/Distribution Agreement dated December 14, 1999.10.17(8)
    
    Lease PSN McKelvy Family Trust (386 Main Street) Standard Industrial/Commercial Single-Tenant
dated March 14, 1997.10.18(8)
    
    Lease PSIP Kent Centennial Limited Partnership dated January 31, 1996.10.19(2)(12)
    
    Form of Indemnification Agreement, effective as of March 12, 2001.10.20(13)
    
    Settlement Agreement and Mutual Release dated April 11, 2001 between Peerless Systems
Corporation and Gordon L. Hanson.10.21(9)
    
    Settlement Agreement and Mutual Release, effective as of April 27, 2001, by and among the
State of Wisconsin Investment Board, Peerless Systems Corporation and Edward A. Gavaldon.
 30




---



##### Table of Contents



ExhibitNumber10.22(14)
    
    Series A Preferred Stock Purchase Agreement dated January 29, 2002 by and among Netreon, Inc.,
a Delaware corporation, Netreon, Inc., a California corporation and each of the several
purchasers named therein.10.23(14)
    
    Series A Preferred Stock Contribution Agreement dated January 29, 2002 by and between Netreon,
Inc., a Delaware corporation and Peerless Systems Corporation.10.24(3)(15)
    
    Postscript Software Development License and Sublicense
Agreement between Adobe Systems Incorporated and the Company
effective as of July 23, 1999.10.25(3)(15)
    
    Custom Sales Agreement between the Company and International
Business Machines effective as of April 23, 2001.10.26(3)(15)
    
    Master Technology License Agreement dated January 16, 2000
between Konica Corporation and Peerless Systems Corporation.10.27(3)(15)
    
    License Software Addendum #1 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 16, 2000.10.28(3)(15)
    
    License Software Addendum #2 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 19, 2000.10.29(3)(15)
    
    License Software Addendum #3 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of July 21, 2000.10.30(3)(15)
    
    License Software Addendum #4 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of March 1, 2001.10.31(3)(15)
    
    License Software Addendum #5 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of July 1, 2001.10.32(3)(15)
    
    License Software Addendum #7 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 1, 2002.10.33(3)(15)
    
    License Software Addendum #8 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 1, 2002.10.34(3)(15)
    
    License Software Addendum #9 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 1, 2002.10.35(15)
    
    Master Technology License Agreement dated April 1, 1997
between Kyocera Corporation and Peerless Systems Corporation.10.36(3)(15)
    
    Licensed Software Addendum #1 to Master Technology License
Agreement by and between Kyocera Corporation and the Company
effective as of December 28, 1999.10.37(3)(15)
    
    Amendment #3 to Licensed Software Addendum #1 to Master
Technology License Agreement by and between Kyocera
Corporation and the Company effective as of September 28,
2001.
 31




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##### Table of Contents



ExhibitNumber10.38(3)(15)
    
    Licensed Software Addendum #3 to Master Technology License
Agreement by and between Kyocera-Mita Corporation and the
Company effective as of May 1, 2002.10.39(3)(15)
    
    Master Technology License Agreement between Oki Data
Corporation and Peerless Systems Imaging Products, Inc.10.40(3)(15)
    
    Licensed System Addendum No. 1 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc.10.41(3)(15)
    
    Licensed System Addendum No. 2 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc.10.42(3)(15)
    
    Licensed System Addendum No. 3 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc. effective as of August 25, 2000.10.43(3)(15)
    
    Attachment #1 to Licensed System Addendum #3 by and between
Oki Data Corporation and Peerless Systems Imaging Products,
Inc. dated March 1, 2001.10.44(3)(15)
    
    Attachment #2 to Licensed System Addendum #3 by and between
Oki Data Corporation and Peerless Systems Imaging Products,
Inc. dated July 1, 2001.10.45(3)(15)
    
    Licensed System Addendum No. 4 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc. effective as of February 1, 2002.10.46(15)
    
    Master Technology License Agreement dated April 1, 2000 between Seiko Epson Corporation and Peerless
Systems Imaging Products, Inc.10.47(3)(15)
    
    Licensed System Addendum #1 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. dated April 1, 2000.10.48(3)(15)
    
    Licensed System Addendum #2 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc.10.49(3)(15)
    
    Licensed System Addendum #3 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc.10.50(3)(15)
    
    Attachment #1 to Licensed System Addendum #3 by and between Seiko Epson Corporation and Peerless
Systems Imaging Products, Inc. dated May 1, 2001.10.51(3)(15)
    
    Attachment #2 to Licensed System Addendum #3 by and between Seiko Epson Corporation and Peerless
Systems Imaging Products, Inc. dated July 23, 2001.10.52(3)(15)
    
    Licensed System Addendum #4 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. effective as of October 19, 2001.10.53(3)(15)
    
    Licensed System Addendum #5 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. effective as of December 1, 2001.
 32




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##### Table of Contents



ExhibitNumber10.54(3)(15)
    
    Licensed System Addendum #6 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. effective as of April 30, 2002.10.55(3)(15)
    
    Nest Office SDK Development and Reseller Agreement Statement of Work 8 to BDA No. N-A-1 between and
Novell, Inc. and Peerless Systems Networking effective as of August 17, 1999.10.56(3)(15)
    
    Amendment No. 1 to Nest Office SDK Development and Reseller Agreement Statement of Work 8 to BDA No.
N-A-1 between and Novell, Inc. and Peerless Systems Networking effective as of August 17, 1999.10.57(15)
    
    Business Development Agreement by and between Novell and Auco, Inc effective as of September 6, 1996.10.58(16)
    
    Amendment No. 4 to Licensed System Addendum No. 4 dated February 1, 2002 by and between Oki Data
Corporation and Peerless Systems Imaging Products, Inc. dated September 1, 2002.(15)10.59(16)
    
    Amendment No. 3 to Postscript Software Development Agreement by and between Adobe Systems
Incorporated and the Company dated October 25, 2002.10.60(3)(17)
    
    Amendment No. 1 to Licensed System Agreement No. 7 dated November 1, 2001 by and between Konica
Corporation and Peerless Systems Corporation dated January 1, 2003.10.61(3)(17)
    
    Licensed System Agreement Addendum No. 10 to Master Technology License Agreement dated January 16,
2000 by and between Konica Corporation and Peerless Systems Corporation dated January 17, 2003.10.62(3)(17)
    
    Licensed System Addendum #8 to Master Technology License Agreement dated April 1, 2000 by and
between Seiko Epson Corporation and Peerless Systems Imaging Products, Inc. effective as of January
6, 2003.10.63(3)(18)
    
    Amendment No. 4 to the Postscript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of July 31, 2003.10.64(3)(18)
    
    Amendment No. 10 to the Postscript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of July 31, 2003.10.65(3)(19)
    
    Amendment No. 5 to Licensed System Addendum No. 4 between Oki Data Corporation and Peerless Systems
Imaging Products, Inc. dated February 1, 2002.10.66(3)(19)
    
    Amendment No. 8 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of September 30, 2003.10.67(3)(19)
    
    Amendment No. 9 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of September 15, 2003.10.68(3)(19)
    
    Amendment No. 12 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of September 22, 2003.
 33




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##### Table of Contents



ExhibitNumber10.69(20)
    
    Licensed Software Addendum No. 14 to Master Technology License Agreements
dated January 16, 2000 and June 12, 1997 by and between Konica Minolta
Business Technologies, Inc. and Peerless Systems Corporation, effective as
of October 31, 200310.70(20)
    
    Amendment #2 to the LSA #9 by and between Konica Minolta Business
Technologies, Inc. and Peerless Systems Corporation, effective as of
November 1, 200310.71(20)
    
    Amendment No. 5 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of December 16, 2003.10.72(20)
    
    Amendment No. 6 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of July 31, 2002.10.73(20)
    
    Amendment No. 7 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of May 22, 2003.10.74(20)
    
    Amendment No. 11 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of February 9, 2004.10.75(20)
    
    Amendment No. 14 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of December 16, 2003.10.76(20)
    
    Amendment No. 15 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of January 6, 2004.10.77(2)(20)
    
    Change in Control Agreement of Chief Executive Officer.10.78(2)(20)
    
    Form of Change in Control Agreement of certain members of senior management.10.79(2)(20)
    
    Form of Transaction Incentive Plan of certain members of senior management.10.80(21)
    
    Amendment No. 16 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of January 6, 2004.10.81(21)
    
    Licensed Software Addendum #5 to Master Technology License Agreement dated
April 1, 1997, entered into as of February 17, 2004.10.82(21)
    
    Amendment No. 19 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of April 1, 2004.10.83(22)
    
    Amendment to Lease between BIT Holdings Forty-Eight, Inc. and Peerless
Systems Imaging Products, Inc. as of October 1, 2004.10.84(22)
    
    Amendment No. 17 to the Postscript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, Effective as of 15 October, 2004.10.85(22)
    
    Silicon Valley Bank Loan and Security Agreement between Silicon Valley Bank and Peerless Systems
Corporation dated October 27, 2004.
 34




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##### Table of Contents



ExhibitNumber10.86(23)
    
    Memorandum of Understanding by and between Kyocera-Mita Corporation and Peerless Systems
Corporation, effective as of February 1, 2005.10.87(23)
    
    Amendment No. 21 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of January 1, 2005.10.91(23)
    
    Amendment No. 18 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of January 1, 2005.10.92(23)
    
    Peerless Systems Corporation 2005 Incentive Award Plan10.93(23)
    
    Amendment No. 23 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of January 1, 2005.10.94(23)
    
    Peerless Systems Corporation Amended and Restated Transaction Incentive Plan.10.95(24)
    
    Amendment No. 22 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of October 14, 2005.10.96(24)
    
    Amendment No. 24 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of October 14, 2005.10.97(24)
    
    Amendment No. 26 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of October 13, 2005.10.98(24)
    
    Amendment No. 27 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of November 1, 2005.10.99(25)
    
    Development Agreement between PMC-Sierra Corporation and Peerless Systems Corporation, dated
March 27, 2006.10.100(26)(2)
    
    Letter of agreement relating to the employment of John V. Rigali as Vice President and Chief
Financial Officer10.101(27)
    
    Lease agreement dated as of August 1, 2006, between Company and Continental 2361/2381 LLC10.102(28)
    
    Letter dated December 7, 2006 from Adobe Systems Incorporated to Peerless Systems Corporation
extending the term of PostScript Software Development License and Sublicense Agreement.10.103(29)(2)
    
    Consulting Agreement dated December 15, 2006, between the Company and Howard J. Nellor10.104(29)(2)
    
    Employment Agreement dated as of December 15, 2006, between the Company and Richard L. Roll10.105(29)(2)
    
    Indemnification Agreement dated as of December 15, 2006, between the Company and Richard L. Roll10.106(29)(2)
    
    Time-Vested Option Agreement dated as of December 15, 2006, between the Company and Richard L.
Roll.
 35




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##### Table of Contents



ExhibitNumber10.107(29)(2)
    
    Price-Contingent Option Agreement dated as of December 15, 2006, between the Company and Richard
L. Roll10.108(30)
    
    Amendment No. 1, dated May 17, 2007, to Employment Agreement between the Company and Richard L.
Roll.10.109(31)
    
    Settlement Agreement dated as of June 4, 2007, by and between Peerless Systems Corporation and
Peerless Full Value Committee.10.110(32)(2)
    
    KMC Master Development Agreement10.111(32)(2)
    
    KMC Licensed Software Addendum10.112(32)(2)
    
    KMC Master Maintenance and Support Agreement10.113(34)(2)
    
    Licensed Software Addendum #7 to Master Technology License Agreement, by and between Kyocera-Mita
Corporation and Peerless Systems Corporation.10.114(35)(2)
    
    Licensed Software Addendum #20 to Master Technology License Agreement, by and between Konica
Minolta Business Technologies, Inc. and Peerless Systems Corporation.10.115(36)
    
    Letter dated June 28, 2007 from Adobe Systems Incorporated to Peerless Systems Corporation
extending the term of the PostScript Software Development License and Sublicense Agreement.10.116(37)
    
    Separation Agreement and Release dated as of December 5, 2007, between the Company and Alan Curtis10.117(38)(2)
    
    Asset Purchase Agreement by and between Kyocera-Mita Corporation and Peerless Systems Corporation.10.118(39)(2)
    
    Amendment #1 to Licensed Software Addendum #6 and Amendment #1 to Licensed Software Addendum #7
to Master Technology License Agreement, by and between Kyocera-Mita Corporation and Peerless
Systems Corporation.10.119(40)
    
    Asset Purchase Agreement dated as of February 22, 2008, by and among the Company, Prism Software
Corporation, Peerless Document Management Corporation and Certain Stockholders of Prism Software
Corporation.10.120(41)
    
    Employment Agreement, entered into as of February 26, 2008, by and among Peerless Systems
Corporation, T1 Delaware Corporation and Andrew Lombard.10.121(41)
    
    Stock Option Agreement by and among Peerless Systems Corporation and Andrew Lombard.10.122(41)
    
    Restricted Stock and Repurchase Agreement, made as of February 26, 2008, by and between T1
Delaware Corporation and Andrew Lombard.10.123(41)
    
    Change in Control Severance Agreement, dated as of February 26, 2008, by and among Peerless
Systems Corporation, T1 Delaware Corporation and Andrew Lombard.10.124(42)
    
    Separation Agreement and Release between the Company and Cary Kimmel21
    
    Registrants Wholly-Owned Subsidiaries.23.1
    
    Consent of Independent Registered Public Accounting Firm.24.1
    
    Power of Attorney. Reference is made to the signature page to this Annual Report on Form 10-K.31.1
    
    Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
 36




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##### Table of Contents






(1)
    
    Previously filed in the Companys Registration Statement on Form S-1
(File No. 333-09357), as amended and incorporated herein by reference.(2)
    
    Management contract or compensatory plan or arrangement.(3)
    
    Subject to a Confidential Treatment Order.(4)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
October 13, 1999, and incorporated herein by reference.(5)
    
    Previously filed in the Companys 1998 Annual Report filed on Form
10-K, filed April 24, 1998, and incorporated herein by reference.(6)
    
    Previously filed in the Companys 1999 Annual Report filed on Form
10-K, filed April 26, 1999, and incorporated herein by reference.(7)
    
    Previously filed in the Companys Registration Statement on Form S-4
(File No. 333-77049) as amended and incorporated herein by reference.(8)
    
    Previously filed in the Companys 2000 Annual Report filed on Form
10-K, filed April 28, 2000, and incorporated herein by reference.(9)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 2, 2001, and incorporated herein by reference.(10)
    
    Previously filed in the Companys Registration Statement on Form S-8
(File No. 333-73562), filed November 16, 2001, and incorporated
herein by reference.(11)
    
    Previously filed in the Companys Registration Statement on Form S-8
(File No. 333-57362), filed March 21, 2001, and incorporated herein
by reference.(12)
    
    Previously filed in the Companys Amendment No. 4 to its Registration
Statement on Form S-3 (File No. 333-60284), filed July 27, 2001, and
incorporated herein by reference.(13)
    
    Previously filed in the Companys 2001 Annual Report filed on Form
10-K, filed May 1, 2001, and incorporated herein by reference.
 37




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##### Table of Contents



(14)
    
    Previously filed in the Companys 2002 Annual Report on Form 10-K,
filed May 1, 2002, and incorporated herein by reference.(15)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2002, filed September 16, 2002, and incorporated
herein by reference.(16)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2002, filed December 16, 2002, and incorporated
herein by reference.(17)
    
    Previously filed in the Companys 2003 Annual Report on Form 10-K
filed May 1, 2003, and incorporated herein by reference.(18)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2003, filed September 15, 2003, and incorporated
herein by reference.(19)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2003, filed December 15, 2003, and incorporated
herein by reference.(20)
    
    Previously filed in the Companys 2004 Annual Report on Form 10-K
filed April 30, 2004, and incorporated herein by reference.(21)
    
    Previously filed in the Companys Quarterly Report for the period
ended April 30, 2004, filed June 14, 2004, and incorporated herein by
reference.(22)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2004, filed December 15, 2004, and incorporated
herein by reference.(23)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2005, filed December 15, 2004, and incorporated herein
by reference.(24)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2005, filed December 15, 2004, and incorporated
herein by reference.(25)
    
    Confidential treatment has been requested with respect to the omitted
portions of this Exhibit, which portions have been filed separately
with the SEC. Previously filed in Amendment No. 1 to the Companys
Annual Report for the year ended December 31, 2006, filed October 26,
2006.
 38




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##### Table of Contents



(26)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2006, filed September 14, 2006, and incorporated
herein by reference.(27)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2006, filed December 14, 2006, and incorporated
herein by reference.(28)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
December 18, 2006, and incorporated herein by reference.(29)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
December 19, 2006, and incorporated herein by reference.(30)
    
    Previously filed in the Companys Current Report on Form 8-K, filed May 18, 2007, and incorporated herein by reference.(31)
    
    Previously filed in the Companys Current Report on Form 8-K, filed June 6, 2007, and incorporated herein by reference.(32)
    
    Previously filed in the Companys Quarterly Report for the period
ended April 30, 2007, filed June 11, 2007, and incorporated herein by
reference.(33)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 11, 2007, and incorporated herein by reference.(34)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 23, 2007, and incorporated herein by reference.(35)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 31, 2007, and incorporated herein by reference.(36)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
August 21, 2007, and incorporated herein by reference.(37)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
December 6, 2007, and incorporated herein by reference.(38)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
January 10, 2008, and incorporated herein by reference.(39)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
January 10, 2008, and incorporated herein by reference.(40)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
February 27, 2008, and incorporated herein by reference.(41)
    
    Previously filed in the Companys Current Report on Form 8-K, filed April 3, 2008, and incorporated herein by reference.(42)
    
    Previously filed in the Companys Current Report on Form 8-K, filed May 1, 2008, and incorporated herein by reference.
 39




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##### Table of Contents



SIGNATURES
  Peerless Systems CorporationBy:
    
    /s/ JOHN V. RIGALIJohn V. RigaliVice President of Finance and
Chief Financial Officer
   Signature
    
    Title
    
    Date/s/ RICHARD L. ROLL
    
    Chief Executive Officer & President
    
    May 12, 2008Richard L. Roll
    
    (Principal Executive Officer)/s/ Timothy Brog
    
    Director
    
    May 12, 2008Timothy Brog/s/ Louis C. Cole

Louis C. Cole
    
    Director
    
    May 12, 2008/s/ William Patton

William Patton
    
    Director
    
    May 12, 2008/s/ Steven J. Pully

Steven J. Pully
    
    Director
    
    May 12, 2008/s/ John C. Reece

John C. Reece
    
    Director
    
    May 12, 2008/s/ John Thomas Zender

John Thomas Zender
    
    Director
    
    May 12, 2008/s/ JOHN V. RIGALI
    
    Vice President of Finance & Chief Financial
Officer
    
    May 12, 2008John V. Rigali
    
    (Principal Financial and Accounting Officer)
 40




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Statements of Income
    
    
    F-3Consolidated Balance Sheets
    
    
    F-4Consolidated Statements of Stockholders Equity
    
    
    F-5Consolidated Statements of Cash Flows
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      /s/ Ernst & Young LLPLos Angeles, CaliforniaMay 8, 2008
 F-2




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 
 CONSOLIDATED STATEMENTS OF INCOME
 Years Ended January 31,2008
    
    
    2007
    
    
    2006(In thousands, except per share amounts)Revenues:Product licensing
    
    $
    17,809
    
    
    $
    21,758
    
    
    $
    21,021Engineering services and maintenance
    
    
    10,632
    
    
    
    11,232
    
    
    
    11,921Hardware sales
    
    
    2
    
    
    
    393
    
    
    
    3,215Total revenues
    
    
    28,443
    
    
    
    33,383
    
    
    
    36,157Cost of revenues:Product licensing
    
    
    3,339
    
    
    
    4,612
    
    
    
    6,499Engineering services and maintenance
    
    
    6,554
    
    
    
    8,768
    
    
    
    8,085Hardware sales
    
    
    
    
    
    
    670
    
    
    
    2,464Total cost of revenues
    
    
    9,893
    
    
    
    14,050
    
    
    
    17,048Gross margin
    
    
    18,550
    
    
    
    19,333
    
    
    
    19,109Operating expenses:Research and development
    
    
    4,394
    
    
    
    6,706
    
    
    
    5,728Sales and marketing
    
    
    2,539
    
    
    
    3,040
    
    
    
    3,481General and administrative
    
    
    7,272
    
    
    
    6,746
    
    
    
    5,553Total operating expenses
    
    
    14,205
    
    
    
    16,492
    
    
    
    14,762Income from operations
    
    
    4,345
    
    
    
    2,841
    
    
    
    4,347Interest income (expense), net
    
    
    833
    
    
    
    468
    
    
    
    (4
    )Income
before provision (benefit) for income taxes
    
    
    5,178
    
    
    
    3,309
    
    
    
    4,343Provision (benefit) for income taxes
    
    
    (4,969
    )
    
    
    23
    
    
    
    29Net income
    
    $
    10,147
    
    
    $
    3,286
    
    
    $
    4,314Basic earnings per share
    
    $
    0.59
    
    
    $
    0.19
    
    
    $
    0.26Diluted earnings per share
    
    $
    0.56
    
    
    $
    0.17
    
    
    $
    0.23Weighted average common shares outstanding  basic
    
    
    17,321
    
    
    
    17,100
    
    
    
    16,496Weighted average common shares outstanding  diluted
    
    
    18,154
    
    
    
    18,912
    
    
    
    18,465
  F-3




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 
 CONSOLIDATED BALANCE SHEETS
 January 31,2008
    
    
    2007(In thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    23,136
    
    
    
    $16,378Trade accounts receivable, less allowance
for doubtful accounts of $7 and $19 in
2008 and 2007, respectively
    
    
    2,784
    
    
    
    1,748Unbilled receivables
    
    
    845
    
    
    
    4,011Deferred tax assets
    
    
    4,940
    
    
    
    Prepaid expenses and other current assets
    
    
    949
    
    
    
    747Total current assets
    
    
    32,654
    
    
    
    22,884Property and equipment, net
    
    
    333
    
    
    
    558Other assets
    
    
    243
    
    
    
    159Total assets
    
    $
    33,230
    
    
    $
    23,601LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    289
    
    
    $
    233Accrued wages
    
    
    569
    
    
    
    637Accrued compensated absences
    
    
    731
    
    
    
    932Accrued product licensing costs
    
    
    1,609
    
    
    
    3,035Other current liabilities
    
    
    785
    
    
    
    1,315Deferred revenue
    
    
    914
    
    
    
    807Total current liabilities
    
    
    4,897
    
    
    
    6,959Other liabilities
    
    
    551
    
    
    
    459Total liabilities
    
    
    5,448
    
    
    
    7,418Stockholders equity:Common stock, $.001 par value, 30,000
shares authorized, 17,657 and 17,303
shares issued in 2008 and
2007, respectively
    
    
    18
    
    
    
    17Additional paid-in capital
    
    
    53,340
    
    
    
    51,908Accumulated deficit
    
    
    (25,492
    )
    
    
    (35,639
    )Accumulated other comprehensive income
    
    
    29
    
    
    
    10Treasury stock, 150 shares in 2008 and 2007
    
    
    (113
    )
    
    
    (113
    )Total stockholders equity
    
    
    27,782
    
    
    
    16,183Total liabilities and stockholders equity
    
    $
    33,230
    
    
    $
    23,601
  F-4




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Treasury Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    Equity(In thousands)Balances, January
31, 2005
    
    
    16,172
    
    
    
    16
    
    
    
    150
    
    
    
    (113
    )
    
    
    49,761
    
    
    
    (43,239
    )
    
    
    39
    
    
    
    6,464Issuance of common
stock
    
    
    335
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    440
    
    
    
    
    
    
    
    
    
    
    
    440Exercise of stock
options
    
    
    509
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    738
    
    
    
    
    
    
    
    
    
    
    
    739Exercise of common
stock warrants
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive
income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,314
    
    
    
    
    
    
    
    4,314Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    (18
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,296Balances, January
31, 2006
    
    
    17,041
    
    
    $
    17
    
    
    
    150
    
    
    $
    (113
    )
    
    $
    50,939
    
    
    $
    (38,925
    )
    
    $
    21
    
    
    $
    11,939Exercise of stock
options
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    357
    
    
    
    
    
    
    
    
    
    
    
    357Share-based
compensation
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    612
    
    
    
    
    
    
    
    
    
    
    
    612Comprehensive
income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,286
    
    
    
    
    
    
    
    3,286Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11
    )
    
    
    (11
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,275Balances, January
31, 2007
    
    
    17,303
    
    
    $
    17
    
    
    
    150
    
    
    $
    (113
    )
    
    $
    51,908
    
    
    $
    (35,639
    )
    
    $
    10
    
    
    $
    16,183Exercise of stock
options
    
    
    354
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    472
    
    
    
    
    
    
    
    
    
    
    
    473Share-based
compensation
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    960
    
    
    
    
    
    
    
    
    
    
    
    960Comprehensive
income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,147
    
    
    
    
    
    
    
    10,147Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    19Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,166Balances, January
31, 2008
    
    
    17,657
    
    
    $
    18
    
    
    
    150
    
    
    $
    (113
    )
    
    $
    53,340
    
    
    $
    (25,492
    )
    
    $
    29
    
    
    $
    27,782
  F-5




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended January 31,2008
    
    
    2007
    
    
    2006(In thousands)Cash flows from operating activities:Net income
    
    $
    10,147
    
    
    $
    3,286
    
    
    $
    4,314Adjustments to reconcile net income to net cash
provided by operating activitiesDepreciation and amortization
    
    
    842
    
    
    
    906
    
    
    
    1,332Share-based compensation
    
    
    960
    
    
    
    612
    
    
    
    Deferred income taxes
    
    
    (5,022
    )
    
    
    
    
    
    
    Other
    
    
    19
    
    
    
    (11
    )
    
    
    (5
    )Changes in operating assets and liabilities:Trade accounts receivable
    
    
    (1,036
    )
    
    
    380
    
    
    
    (91
    )Unbilled receivables
    
    
    3,166
    
    
    
    (979
    )
    
    
    (2,080
    )Prepaid expenses and other assets
    
    
    (212
    )
    
    
    (146
    )
    
    
    751Accounts payable
    
    
    56
    
    
    
    (246
    )
    
    
    (391
    )Accrued product licensing costs
    
    
    (1,426
    )
    
    
    (1,290
    )
    
    
    1,961Deferred revenue
    
    
    107
    
    
    
    99
    
    
    
    (189
    )Other liabilities
    
    
    (707
    )
    
    
    760
    
    
    
    531Net cash provided by operating activities
    
    
    6,894
    
    
    
    3,371
    
    
    
    6,133Cash flows from investing activities:Purchases of property and equipment
    
    
    (131
    )
    
    
    (217
    )
    
    
    (210
    )Proceeds from sales of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    1,384Purchases of software licenses
    
    
    (478
    )
    
    
    (353
    )
    
    
    (385
    )Net cash provided (used) by investing activities
    
    
    (609
    )
    
    
    (570
    )
    
    
    789Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    
    
    
    
    
    
    
    
    440Proceeds from exercise of common stock options
    
    
    473
    
    
    
    357
    
    
    
    739Net cash provided by financing activities
    
    
    473
    
    
    
    357
    
    
    
    1,179Net increase in cash and cash equivalents
    
    
    6,758
    
    
    
    3,158
    
    
    
    8,101Cash and cash equivalents, beginning of period
    
    
    16,378
    
    
    
    13,220
    
    
    
    5,099Cash and cash equivalents, end of period
    
    $
    23,136
    
    
    $
    16,378
    
    
    $
    13,200Supplemental disclosure of cash flow information:Cash paid during the year for:Income taxes
    
    $
    11
    
    
    $
    54
    
    
    $
    30
  F-6




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    Organization, Business and Summary of Significant Accounting Policies:
 Organization and Business:
  Liquidity:
  Principles of Consolidation and Basis of Presentation:
 Use of Estimates:
  F-7




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Reclassifications:
 Cash and Cash Equivalents:
 Fair Value of Financial Investments:
 Property and Equipment:
 Computers and other equipment
    
    3 to 5 yearsFurniture
    
    10 yearsLeasehold improvements
    
    Shorter of useful life or lease term
  Long-Lived Assets:
 Capitalization of Software Development Costs:
 Revenue Recognition:
  F-8




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
       Research and Development Costs:
 Advertising Costs:
 Income Taxes:
 F-9




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Comprehensive Income:
 Earnings Per Share:
 Foreign Currency Translation:
 Recent Accounting Pronouncements: Business Combinations
    F-10




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  2.
    
    Stock Option and Purchase Plan
        F-11




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Year EndedJanuary 31, 2006(In thousands,except per shareamounts)Net income as reported
    
    
    4,314Stock-based compensation, net of taxes
    
    
    (466
    )Pro forma net income
    
    
    3,848Basic earnings per share as reported
    
    
    0.26Pro forma basic earnings per share
    
    
    0.24Diluted earnings per share as reported
    
    
    0.23Pro forma diluted earnings per share
    
    
    0.21
  1992 Stock Option Plan:
 1996 Incentive Plan:
  2005 Incentive Stock Option Plan:
  F-12




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Weighted AverageWeighted
    
    
    RemainingAverage Exercise
    
    
    Contractual
    
    
    AggregateOptions
    
    
    Price
    
    
    Term (Years)
    
    
    Intrinsic Value(In thousands, except per share amounts)Beginning outstanding balance at
January 31, 2005
    
    
    3,773
    
    
    $
    2.32Granted
    
    
    145
    
    
    $
    3.52Exercised
    
    
    (508
    )
    
    $
    1.46Canceled or expired
    
    
    (100
    )
    
    $
    2.85Balance outstanding January 31, 2006
    
    
    3,310
    
    
    $
    2.47Granted
    
    
    1,356
    
    
    $
    3.79Exercised
    
    
    (262
    )
    
    $
    1.36Canceled or expired
    
    
    (220
    )
    
    $
    4.79Balance outstanding January 31, 2007
    
    
    4,184
    
    
    $
    2.86Granted
    
    
    508
    
    
    $
    2.38Exercised
    
    
    (354
    )
    
    $
    1.34Canceled or expired
    
    
    (665
    )
    
    $
    4.01Balance outstanding January 31, 2008
    
    
    3,673
    
    
    $
    2.73
    
    
    
    6.11
    
    
    $
    2,025Options exercisable, January 31, 2008
    
    
    2,383
    
    
    $
    2.63
    
    
    
    4.67
    
    
    $
    1,828
  CEO Restricted Stock and Incentive Stock Option Grant:
 (i)
    
    The death or disability of the CEO.(ii)
    
    The CEOs employment relationship is terminated by the Company without cause.
 F-13




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (iii)
    
    The Company changes the CEOs title, effectuates a significant
change in the CEOs duties, effectuates a reduction in the CEOs
present base salary, or relocates its principal place of business
to a location that is 25 miles more than from the distance between
the CEOs current residence and the Companys existing offices.(iv)
    
    The Company undergoes a transaction where there is a sale of the
Companys assets or a merger, business transaction or such other
similar transaction, the consummation of which requires the approval
of the Companys stockholders under Delaware law.(v)
    
    The acquisition by any person, entity or group (other than the
Company, its subsidiaries or any employee benefit plan of the Company)
of 50% or more of the combined voting power of the Companys then
outstanding securities.
   3. Property and Equipment:
  2008
    
    
    2007(In thousands)Computers and other equipment
    
    $
    9,032
    
    
    $
    8,635Furniture
    
    
    526
    
    
    
    502Leasehold improvements
    
    
    2,379
    
    
    
    2,37911,937
    
    
    
    11,516Less, accumulated depreciation and amortization
    
    
    (11,604
    )
    
    
    (10,958
    )$
    333
    
    
    $
    558
  F-14




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 4. Other Current Liabilities
  2008
    
    
    2007(In thousands)Professional Service Fees
    
    $
    685
    
    
    $
    793Restructuring Charges
    
    
    
    
    
    
    358Other
    
    
    100
    
    
    
    164Total other current liabilities
    
    $
    785
    
    
    $
    1,315
  5. Deferred Revenues:
   2008
    
    
    2007(In thousands)Product licensing
    
    $
    270
    
    
    $
    180Engineering services and maintenance
    
    
    644
    
    
    
    627$
    914
    
    
    $
    807
 6. Income Taxes:
  F-15




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2008
    
    
    2007
    
    
    2006(In thousands)Current:Federal
    
    $
    
    
    
    $
    
    
    
    $
    State
    
    
    18
    
    
    
    14
    
    
    
    26Foreign
    
    
    9
    
    
    
    9
    
    
    
    3$
    27
    
    
    $
    23
    
    
    $
    29Deferred:Federal
    
    $
    1,647
    
    
    $
    (307
    )
    
    $
    2,984State
    
    
    (557
    )
    
    
    47
    
    
    
    (144
    )1,090
    
    
    
    (260
    )
    
    
    2,840Less: Change in Valuation Allowance
    
    
    (6,086
    )
    
    
    260
    
    
    
    (2,840
    )Income Tax Provision
    
    $
    (4,969
    )
    
    $
    23
    
    
    $
    29
  2008
    
    
    2007(In thousands)Deferred tax assets:Net operating loss carryforwards
    
    $
    
    
    
    $
    1,816Accrued liabilities
    
    
    308
    
    
    
    462Allowance for doubtful accounts
    
    
    3
    
    
    
    5Property and equipment
    
    
    810
    
    
    
    740Inventory
    
    
    
    
    
    
    72Deferred expenses
    
    
    224
    
    
    
    231Deferred Tax Asset  FAS 123R
    
    
    195
    
    
    
    Tax credit carryforwards
    
    
    10,185
    
    
    
    9,479Other
    
    
    308
    
    
    
    294Total deferred tax assets
    
    
    12,033
    
    
    
    13,099Deferred tax liabilities:State income taxes
    
    
    3
    
    
    
    1Subtotal
    
    
    12,036
    
    
    
    13,100Valuation allowance
    
    
    (7,014
    )
    
    
    (13,100
    )Net deferred income tax asset
    
    $
    5,022
    
    
    $
    
  F-16




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##### Table of Contents



2008
    
    2007
    
    2006Statutory federal income tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %Foreign provision
    
    
    0.2
    
    
    
    0.3
    
    
    
    0.1Research & Development Credits
    
    
    (24.3
    )
    
    
    
    
    
    
    Stock Based Compensation
    
    
    4.8
    
    
    
    
    
    
    
    State tax
    
    
    5.2
    
    
    
    4.6
    
    
    
    5.8Change in valuation allowance
    
    
    (106.6
    )
    
    
    (36.0
    )
    
    
    (37.3
    )Other
    
    
    (0.3
    )
    
    
    (2.2
    )
    
    
    (1.9
    )Provision
(benefit) for income taxes
    
    
    (87.0
    )%
    
    
    0.7
    %
    
    
    0.7
    %
    (In thousands)Balance at February 1, 2007
    
    $
    2,000Additions based on tax positions related to current year
    
    
    167Additions for tax positions of prior years
    
    
    614Balance at January 31, 2008
    
    $
    2,781
    7. Earnings Per Share:
  F-17




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2008
    
    
    2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    Per
    
    
    
    
    
    
    
    
    
    
    PerNet
    
    
    
    
    
    
    Share
    
    
    Net
    
    
    
    
    
    
    Share
    
    
    Net
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share amounts)Basic EPSEarnings available to common
stockholders
    
    $
    10,147
    
    
    
    17,321
    
    
    $
    0.59
    
    
    $
    3,286
    
    
    
    17,100
    
    
    $
    0.19
    
    
    $
    4,314
    
    
    
    16,496
    
    
    $
    0.26Effect of Dilutive SecuritiesOptions
    
    
    
    
    
    
    833
    
    
    
    
    
    
    
    
    
    
    
    1,812
    
    
    
    
    
    
    
    
    
    
    
    1,969
    
    
    
    Diluted EPSEarnings available to common
stockholders with assumed
conversions
    
    $
    10,147
    
    
    
    18,154
    
    
    $
    0.56
    
    
    $
    3,286
    
    
    
    18,912
    
    
    $
    0.17
    
    
    $
    4,314
    
    
    
    18,465
    
    
    $
    0.23
  8. Shareholder Rights Plan:
  9. Employee Savings Plan:
  F-18




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 10. Segment Reporting:
   Years Ended January 31,2008
    
    
    2007
    
    
    2006(In thousands)United States
    
    $
    2,894
    
    
    $
    3,055
    
    
    $
    3,550Japan
    
    
    25,535
    
    
    
    30,309
    
    
    
    31,596Australia
    
    
    
    
    
    
    
    
    
    
    751Other
    
    
    14
    
    
    
    19
    
    
    
    260$
    28,443
    
    
    $
    33,383
    
    
    $
    36,157
 11. Commitments:
 Operating Leases:
 F-19




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##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Operating(In thousands)
    
    Leases2009
    
    $
    1,4642010
    
    
    1,4952011
    
    
    1,4092012
    
    
    1,3972013
    
    
    1,434Thereafter
    
    
    5,199$
    12,399
  Purchase Orders:
 12. Risks and Uncertainties:
 Concentration of Credit Risk:
  2008
    
    
    2007
    
    
    2006(In thousands)Customer A
    
    $
    13,830
    
    
    
    49
    %
    
    $
    15,766
    
    
    
    47
    %
    
    $
    11,070
    
    
    
    31
    %Customer B
    
    
    4,894
    
    
    
    17
    %
    
    
    7,654
    
    
    
    23
    %
    
    
    7,037
    
    
    
    19
    %Customer C
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,651
    
    
    
    10
    %$
    18,724
    
    
    
    66
    %
    
    $
    23,420
    
    
    
    70
    %
    
    $
    21,758
    
    
    
    60
    %
  Litigation:
 F-20




---



##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 13. Subsequent Events
   F-21




---



##### Table of Contents



PEERLESS SYSTEMS CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 AdditionsBalance at
    
    Charged to
    
    
    
    
    
    Balance atBeginning
    
    Costs and
    
    
    
    
    
    End ofAllowances for uncollectible accounts receivable:
    
    of Period
    
    Expenses
    
    Deductions(a)
    
    Period(In thousands)Year Ended January 31, 2006Reserves deducted from assets to which they apply:Allowances for uncollectible accounts receivable
    
    $
    125
    
    
    $
    62
    
    
    $
    (19
    )
    
    $
    168Year Ended January 31, 2007Reserves deducted from assets to which they apply:Allowances for uncollectible accounts receivable
    
    $
    168
    
    
    $
    19
    
    
    $
    (168
    )
    
    $
    19Year Ended January 31, 2008Reserves deducted from assets to which they apply:Allowances for uncollectible accounts receivable
    
    $
    19
    
    
    $
    7
    
    
    $
    (19
    )
    
    $
    7
 
 (a)
    
    Accounts written off, net of recoveries. F-22




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber3.1(1)
    
    Certificate of Incorporation of the Company.3.2(33)
    
    Amended Bylaws.4.1
    
    Instruments defining the rights of security holders. Reference is made to Exhibits 3.1 and 3.2.4.2(4)
    
    Rights Agreement, dated October 7, 1998, between the Company and Wells Fargo Shareowner
Services, a division of Wells Fargo Bank Minnesota, N.A., formerly known as Norwest Shareowner
Services, as Rights Agent.10.1(10)(2)
    
    1996 Equity Incentive Plan, as amended and form of stock option agreements thereunder.10.2(11)(2)
    
    1996 Employee Stock Purchase Plan, as amended.10.3(1)(3)
    
    Reference Post Appendix No. 2 to the Adobe Third Party License dated February 11, 1993.10.4(1)
    
    Amendment No. 1 to the Adobe Third Party License dated November 29, 1993.10.5(1)(3)
    
    PCL Development and License Agreement (the PCL License) dated June 14, 1993, between the
Registrant and Adobe.10.6(1)(3)
    
    Amendment No. 1 to the PCL License dated October 31, 1993.10.7(1)(3)
    
    Letter Modification to the PCL License dated August 5, 1994.10.8(1)(3)
    
    Addendum No. 1 to the PCL License dated March 31, 1995.10.9(1)(3)
    
    Letter Modification to the PCL License dated August 30, 1995.10.10(1)
    
    Lease Agreement between the Company and Continental Development Corporation dated February 6,
1992, and Addendum, dated February 6, 1992.10.11(1)
    
    First Amendment to Office Lease dated December 1, 1995, between the Company and Continental
Development Corporation.10.12(5)
    
    Second Amendment to Office Lease dated April 8, 1997, between the Company and Continental
Development Corporation.10.13(5)
    
    Third Amendment to Office Lease dated December 16, 1997, between the Company and Continental
Development Corporation.10.14(6)
    
    Fourth Amendment to Office Lease dated April 22, 1998, between the Company and Continental
Development Corporation.




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##### Table of Contents



ExhibitNumber10.15(7)
    
    Agreement and Plan of reorganization and Merger by and among Peerless Systems Corporation,
Auco Merger and Auco, Inc. dated as of April 6, 1999.10.16(8)
    
    Marubun Supplier/Distribution Agreement dated December 14, 1999.10.17(8)
    
    Lease PSN McKelvy Family Trust (386 Main Street) Standard Industrial/Commercial Single-Tenant
dated March 14, 1997.10.18(8)
    
    Lease PSIP Kent Centennial Limited Partnership dated January 31, 1996.10.19(2)(12)
    
    Form of Indemnification Agreement, effective as of March 12, 2001.10.20(13)
    
    Settlement Agreement and Mutual Release dated April 11, 2001 between Peerless Systems
Corporation and Gordon L. Hanson.10.21(9)
    
    Settlement Agreement and Mutual Release, effective as of April 27, 2001, by and among the
State of Wisconsin Investment Board, Peerless Systems Corporation and Edward A. Gavaldon.10.22(14)
    
    Series A Preferred Stock Purchase Agreement dated January 29, 2002 by and among Netreon, Inc.,
a Delaware corporation, Netreon, Inc., a California corporation and each of the several
purchasers named therein.10.23(14)
    
    Series A Preferred Stock Contribution Agreement dated January 29, 2002 by and between Netreon,
Inc., a Delaware corporation and Peerless Systems Corporation.10.24(3)(15)
    
    Postscript Software Development License and Sublicense
Agreement between Adobe Systems Incorporated and the Company
effective as of July 23, 1999.10.25(3)(15)
    
    Custom Sales Agreement between the Company and International
Business Machines effective as of April 23, 2001.10.26(3)(15)
    
    Master Technology License Agreement dated January 16, 2000
between Konica Corporation and Peerless Systems Corporation.10.27(3)(15)
    
    License Software Addendum #1 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 16, 2000.10.28(3)(15)
    
    License Software Addendum #2 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 19, 2000.10.29(3)(15)
    
    License Software Addendum #3 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of July 21, 2000.10.30(3)(15)
    
    License Software Addendum #4 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of March 1, 2001.10.31(3)(15)
    
    License Software Addendum #5 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of July 1, 2001.




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##### Table of Contents



ExhibitNumber10.32(3)(15)
    
    License Software Addendum #7 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 1, 2002.10.33(3)(15)
    
    License Software Addendum #8 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 1, 2002.10.34(3)(15)
    
    License Software Addendum #9 to Master Technology License
Agreement by and between Konica Corporation and the Company
effective as of January 1, 2002.10.35(15)
    
    Master Technology License Agreement dated April 1, 1997
between Kyocera Corporation and Peerless Systems Corporation.10.36(3)(15)
    
    Licensed Software Addendum #1 to Master Technology License
Agreement by and between Kyocera Corporation and the Company
effective as of December 28, 1999.10.37(3)(15)
    
    Amendment #3 to Licensed Software Addendum #1 to Master
Technology License Agreement by and between Kyocera
Corporation and the Company effective as of September 28,
2001.10.38(3)(15)
    
    Licensed Software Addendum #3 to Master Technology License
Agreement by and between Kyocera-Mita Corporation and the
Company effective as of May 1, 2002.10.39(3)(15)
    
    Master Technology License Agreement between Oki Data
Corporation and Peerless Systems Imaging Products, Inc.10.40(3)(15)
    
    Licensed System Addendum No. 1 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc.10.41(3)(15)
    
    Licensed System Addendum No. 2 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc.10.42(3)(15)
    
    Licensed System Addendum No. 3 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc. effective as of August 25, 2000.10.43(3)(15)
    
    Attachment #1 to Licensed System Addendum #3 by and between
Oki Data Corporation and Peerless Systems Imaging Products,
Inc. dated March 1, 2001.10.44(3)(15)
    
    Attachment #2 to Licensed System Addendum #3 by and between
Oki Data Corporation and Peerless Systems Imaging Products,
Inc. dated July 1, 2001.10.45(3)(15)
    
    Licensed System Addendum No. 4 to Master Technology License
Agreement between Oki Data Corporation and Peerless Systems
Imaging Products, Inc. effective as of February 1, 2002.10.46(15)
    
    Master Technology License Agreement dated April 1, 2000 between Seiko Epson Corporation and Peerless
Systems Imaging Products, Inc.10.47(3)(15)
    
    Licensed System Addendum #1 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. dated April 1, 2000.




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##### Table of Contents



ExhibitNumber10.48(3)(15)
    
    Licensed System Addendum #2 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc.10.49(3)(15)
    
    Licensed System Addendum #3 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc.10.50(3)(15)
    
    Attachment #1 to Licensed System Addendum #3 by and between Seiko Epson Corporation and Peerless
Systems Imaging Products, Inc. dated May 1, 2001.10.51(3)(15)
    
    Attachment #2 to Licensed System Addendum #3 by and between Seiko Epson Corporation and Peerless
Systems Imaging Products, Inc. dated July 23, 2001.10.52(3)(15)
    
    Licensed System Addendum #4 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. effective as of October 19, 2001.10.53(3)(15)
    
    Licensed System Addendum #5 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. effective as of December 1, 2001.10.54(3)(15)
    
    Licensed System Addendum #6 to Master Technology License Agreement by and between Seiko Epson
Corporation and Peerless Systems Imaging Products, Inc. effective as of April 30, 2002.10.55(3)(15)
    
    Nest Office SDK Development and Reseller Agreement Statement of Work 8 to BDA No. N-A-1 between and
Novell, Inc. and Peerless Systems Networking effective as of August 17, 1999.10.56(3)(15)
    
    Amendment No. 1 to Nest Office SDK Development and Reseller Agreement Statement of Work 8 to BDA No.
N-A-1 between and Novell, Inc. and Peerless Systems Networking effective as of August 17, 1999.10.57(15)
    
    Business Development Agreement by and between Novell and Auco, Inc effective as of September 6, 1996.10.58(16)
    
    Amendment No. 4 to Licensed System Addendum No. 4 dated February 1, 2002 by and between Oki Data
Corporation and Peerless Systems Imaging Products, Inc. dated September 1, 2002.(15)10.59(16)
    
    Amendment No. 3 to Postscript Software Development Agreement by and between Adobe Systems
Incorporated and the Company dated October 25, 2002.10.60(3)(17)
    
    Amendment No. 1 to Licensed System Agreement No. 7 dated November 1, 2001 by and between Konica
Corporation and Peerless Systems Corporation dated January 1, 2003.10.61(3)(17)
    
    Licensed System Agreement Addendum No. 10 to Master Technology License Agreement dated January 16,
2000 by and between Konica Corporation and Peerless Systems Corporation dated January 17, 2003.10.62(3)(17)
    
    Licensed System Addendum #8 to Master Technology License Agreement dated April 1, 2000 by and
between Seiko Epson Corporation and Peerless Systems Imaging Products, Inc. effective as of January
6, 2003.10.63(3)(18)
    
    Amendment No. 4 to the Postscript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of July 31, 2003.




---



##### Table of Contents



ExhibitNumber10.64(3)(18)
    
    Amendment No. 10 to the Postscript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of July 31, 2003.10.65(3)(19)
    
    Amendment No. 5 to Licensed System Addendum No. 4 between Oki Data Corporation and Peerless Systems
Imaging Products, Inc. dated February 1, 2002.10.66(3)(19)
    
    Amendment No. 8 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of September 30, 2003.10.67(3)(19)
    
    Amendment No. 9 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of September 15, 2003.10.68(3)(19)
    
    Amendment No. 12 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of September 22, 2003.10.69(20)
    
    Licensed Software Addendum No. 14 to Master Technology License Agreements
dated January 16, 2000 and June 12, 1997 by and between Konica Minolta
Business Technologies, Inc. and Peerless Systems Corporation, effective as
of October 31, 200310.70(20)
    
    Amendment #2 to the LSA #9 by and between Konica Minolta Business
Technologies, Inc. and Peerless Systems Corporation, effective as of
November 1, 200310.71(20)
    
    Amendment No. 5 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of December 16, 2003.10.72(20)
    
    Amendment No. 6 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of July 31, 2002.10.73(20)
    
    Amendment No. 7 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of May 22, 2003.10.74(20)
    
    Amendment No. 11 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of February 9, 2004.10.75(20)
    
    Amendment No. 14 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of December 16, 2003.10.76(20)
    
    Amendment No. 15 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of January 6, 2004.10.77(2)(20)
    
    Change in Control Agreement of Chief Executive Officer.10.78(2)(20)
    
    Form of Change in Control Agreement of certain members of senior management.10.79(2)(20)
    
    Form of Transaction Incentive Plan of certain members of senior management.10.80(21)
    
    Amendment No. 16 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of January 6, 2004.




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##### Table of Contents



ExhibitNumber10.81(21)
    
    Licensed Software Addendum #5 to Master Technology License Agreement dated
April 1, 1997, entered into as of February 17, 2004.10.82(21)
    
    Amendment No. 19 to the PostScript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, effective as of April 1, 2004.10.83(22)
    
    Amendment to Lease between BIT Holdings Forty-Eight, Inc. and Peerless
Systems Imaging Products, Inc. as of October 1, 2004.10.84(22)
    
    Amendment No. 17 to the Postscript Software Development License and
Sublicense Agreement between Adobe Systems Incorporated and Peerless
Systems Corporation, Effective as of 15 October, 2004.10.85(22)
    
    Silicon Valley Bank Loan and Security Agreement between Silicon Valley Bank and Peerless Systems
Corporation dated October 27, 2004.10.86(23)
    
    Memorandum of Understanding by and between Kyocera-Mita Corporation and Peerless Systems
Corporation, effective as of February 1, 2005.10.87(23)
    
    Amendment No. 21 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of January 1, 2005.10.91(23)
    
    Amendment No. 18 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of January 1, 2005.10.92(23)
    
    Peerless Systems Corporation 2005 Incentive Award Plan10.93(23)
    
    Amendment No. 23 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of January 1, 2005.10.94(23)
    
    Peerless Systems Corporation Amended and Restated Transaction Incentive Plan.10.95(24)
    
    Amendment No. 22 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of October 14, 2005.10.96(24)
    
    Amendment No. 24 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of October 14, 2005.10.97(24)
    
    Amendment No. 26 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of October 13, 2005.10.98(24)
    
    Amendment No. 27 to the PostScript Software Development License and Sublicense Agreement between
Adobe Systems Incorporated and Peerless Systems Corporation, effective as of November 1, 2005.10.99(25)
    
    Development Agreement between PMC-Sierra Corporation and Peerless Systems Corporation, dated
March 27, 2006.10.100(26)(2)
    
    Letter of agreement relating to the employment of John V. Rigali as Vice President and Chief
Financial Officer




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##### Table of Contents



ExhibitNumber10.101(27)
    
    Lease agreement dated as of August 1, 2006, between Company and Continental 2361/2381 LLC10.102(28)
    
    Letter dated December 7, 2006 from Adobe Systems Incorporated to Peerless Systems Corporation
extending the term of PostScript Software Development License and Sublicense Agreement.10.103(29)(2)
    
    Consulting Agreement dated December 15, 2006, between the Company and Howard J. Nellor10.104(29)(2)
    
    Employment Agreement dated as of December 15, 2006, between the Company and Richard L. Roll10.105(29)(2)
    
    Indemnification Agreement dated as of December 15, 2006, between the Company and Richard L. Roll10.106(29)(2)
    
    Time-Vested Option Agreement dated as of December 15, 2006, between the Company and Richard L.
Roll.10.107(29)(2)
    
    Price-Contingent Option Agreement dated as of December 15, 2006, between the Company and Richard
L. Roll10.108(30)
    
    Amendment No. 1, dated May 17, 2007, to Employment Agreement between the Company and Richard L.
Roll.10.109(31)
    
    Settlement Agreement dated as of June 4, 2007, by and between Peerless Systems Corporation and
Peerless Full Value Committee.10.110(32)(2)
    
    KMC Master Development Agreement10.111(32)(2)
    
    KMC Licensed Software Addendum10.112(32)(2)
    
    KMC Master Maintenance and Support Agreement10.113(34)(2)
    
    Licensed Software Addendum #7 to Master Technology License Agreement, by and between Kyocera-Mita
Corporation and Peerless Systems Corporation.10.114(35)(2)
    
    Licensed Software Addendum #20 to Master Technology License Agreement, by and between Konica
Minolta Business Technologies, Inc. and Peerless Systems Corporation.10.115(36)
    
    Letter dated June 28, 2007 from Adobe Systems Incorporated to Peerless Systems Corporation
extending the term of the PostScript Software Development License and Sublicense Agreement.10.116(37)
    
    Separation Agreement and Release dated as of December 5, 2007, between the Company and Alan Curtis10.117(38)(2)
    
    Asset Purchase Agreement by and between Kyocera-Mita Corporation and Peerless Systems Corporation.10.118(39)(2)
    
    Amendment #1 to Licensed Software Addendum #6 and Amendment #1 to Licensed Software Addendum #7
to Master Technology License Agreement, by and between Kyocera-Mita Corporation and Peerless
Systems Corporation.10.119(40)
    
    Asset Purchase Agreement dated as of February 22, 2008, by and among the Company, Prism Software
Corporation, Peerless Document Management Corporation and Certain Stockholders of Prism Software
Corporation.10.120(41)
    
    Employment Agreement, entered into as of February 26, 2008, by and among Peerless Systems
anCorporation,T1 Delaware Corporation and Andrew Lombard.10.121(41)
    
    Stock Option Agreement by and among Peerless Systems Corporation and Andrew Lombard.10.121(41)
    
    Restricted Stock and Repurchase Agreement, made as of February 26, 2008, by and between T1
Delaware Corporation and Andrew Lombard.10.123(41)
    
    Change in Control Severance Agreement, dated as of February 26, 2008, by and among Peerless
Systems Corporation, T1 Delaware Corporation and Andrew Lombard.




---



##### Table of Contents



ExhibitNumber10.123(41)
    
    Change in Control Severance Agreement, dated February 26, 2008, by and among Peerless Systems10.124(42)
    
    Separation Agreement and Release between the Company and Cary Kimmel21
    
    Registrants Wholly-Owned Subsidiaries.23.1
    
    Consent of Independent Registered Public Accounting Firm.24.1
    
    Power of Attorney. Reference is made to the signature page to this Annual Report on Form 10-K.31.1
    
    Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Previously filed in the Companys Registration Statement on Form S-1
(File No. 333-09357), as amended and incorporated herein by reference.(2)
    
    Management contract or compensatory plan or arrangement.(3)
    
    Subject to a Confidential Treatment Order.(4)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
October 13, 1999, and incorporated herein by reference.(5)
    
    Previously filed in the Companys 1998 Annual Report filed on Form
10-K, filed April 24, 1998, and incorporated herein by reference.(6)
    
    Previously filed in the Companys 1999 Annual Report filed on Form
10-K, filed April 26, 1999, and incorporated herein by reference.(7)
    
    Previously filed in the Companys Registration Statement on Form S-4
(File No. 333-77049) as amended and incorporated herein by reference.(8)
    
    Previously filed in the Companys 2000 Annual Report filed on Form
10-K, filed April 28, 2000, and incorporated herein by reference.(9)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 2, 2001, and incorporated herein by reference.




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##### Table of Contents



(10)
    
    Previously filed in the Companys Registration Statement on Form S-8
(File No. 333-73562), filed November 16, 2001, and incorporated
herein by reference.(11)
    
    Previously filed in the Companys Registration Statement on Form S-8
(File No. 333-57362), filed March 21, 2001, and incorporated herein
by reference.(12)
    
    Previously filed in the Companys Amendment No. 4 to its Registration
Statement on Form S-3 (File No. 333-60284), filed July 27, 2001, and
incorporated herein by reference.(13)
    
    Previously filed in the Companys 2001 Annual Report filed on Form
10-K, filed May 1, 2001, and incorporated herein by reference.(14)
    
    Previously filed in the Companys 2002 Annual Report on Form 10-K,
filed May 1, 2002, and incorporated herein by reference.(15)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2002, filed September 16, 2002, and incorporated
herein by reference.(16)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2002, filed December 16, 2002, and incorporated
herein by reference.(17)
    
    Previously filed in the Companys 2003 Annual Report on Form 10-K
filed May 1, 2003, and incorporated herein by reference.(18)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2003, filed September 15, 2003, and incorporated
herein by reference.(19)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2003, filed December 15, 2003, and incorporated
herein by reference.(20)
    
    Previously filed in the Companys 2004 Annual Report on Form 10-K
filed April 30, 2004, and incorporated herein by reference.(21)
    
    Previously filed in the Companys Quarterly Report for the period
ended April 30, 2004, filed June 14, 2004, and incorporated herein by
reference.(22)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2004, filed December 15, 2004, and incorporated
herein by reference.




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##### Table of Contents



(23)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2005, filed December 15, 2004, and incorporated herein
by reference.(24)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2005, filed December 15, 2004, and incorporated
herein by reference.(25)
    
    Confidential treatment has been requested with respect to the omitted
portions of this Exhibit, which portions have been filed separately
with the SEC. Previously filed in Amendment No. 1 to the Companys
Annual Report for the year ended December 31, 2006, filed October 26,
2006.(26)
    
    Previously filed in the Companys Quarterly Report for the period
ended July 31, 2006, filed September 14, 2006, and incorporated
herein by reference.(27)
    
    Previously filed in the Companys Quarterly Report for the period
ended October 31, 2006, filed December 14, 2006, and incorporated
herein by reference.(28)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
December 18, 2006, and incorporated herein by reference.(29)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
December 19, 2006, and incorporated herein by reference.(30)
    
    Previously filed in the Companys Current Report on Form 8-K, filed May 18, 2007, and incorporated herein by reference.(31)
    
    Previously filed in the Companys Current Report on Form 8-K, filed June 6, 2007, and incorporated herein by reference.(32)
    
    Previously filed in the Companys Quarterly Report for the period
ended April 30, 2007, filed June 11, 2007, and incorporated herein by
reference.(33)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 11, 2007, and incorporated herein by reference.(34)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 23, 2007, and incorporated herein by reference.(35)
    
    Previously filed in the Companys Current Report on Form 8-K, filed July 31, 2007, and incorporated herein by reference.(36)
    
    Previously filed in the Companys Current Report on Form 8-K, filed August 21, 2007, and incorporated herein by reference.(37)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
December 6, 2007, and incorporated herein by reference.




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##### Table of Contents



(38)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
January 10, 2008, and incorporated herein by reference.(39)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
January 10, 2008, and incorporated herein by reference.(40)
    
    Previously filed in the Companys Current Report on Form 8-K, filed
February 27, 2008, and incorporated herein by reference.(41)
    
    Previously filed in the Companys Current Report on Form 8-K, filed April 3, 2008, and incorporated herein by reference.(42)
    
    Previously filed in the Companys Current Report on Form 8-K, filed May 1, 2008, and incorporated herein by reference.