UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~March 2627, ~~2014~~2015

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

For the transition period from ______ to ______

Commission file number: 000-31715

Jagged Peak, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Nevada

91-2007478

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3000 Bayport Drive, Suite 250, Tampa, FL 33607

(Address of principal executive offices, including zip code)

(813) 637-6900

(Registrant's telephone number, including area code)

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

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

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

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐No ☒

The Registrant had 16,~~479~~356,~~074~~583 shares of common stock, par value $0.001 per share, outstanding as of ~~November~~May 1011, ~~2014~~2015.

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Table of Contents

Jagged Peak, Inc.

Contents

Part I - Financial Information		1
Item 1.	Unaudited Consolidated Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1615
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	2321
Item 4.	Controls and Procedures	2321
Part II - Other Information		2321
Item 1.	Legal Proceedings	2321
Item 1A.	Risk Factors	2321
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2321
Item 3.	Defaults Upon Senior Securities	2321
Item 4.	Mine Safety Disclosures	2422
Item 5.	Other Information	2422
Item 6.	Exhibits	2422
Signatures		2422

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PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

Jagged Peak, Inc.

Consolidated Financial Statements (Unaudited)

Quarterly Report on Form 10-Q

For the Quarterly Period ended ~~September~~March 2627, ~~2014~~2015

Contents

Unaudited Consolidated Financial Statements
Consolidated Balance Sheets	2
Consolidated Statements of Comprehensive Income	3
Consolidated Statements of Changes in Stockholders' Equity	4
Consolidated Statements of Cash Flows	5
Notes to the Unaudited Consolidated Financial Statements	6-1514

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Jagged Peak, Inc.

Consolidated Balance Sheets

	September 26, 2014 (Unaudited)			December 27, 2013 (Audited)
	March 27, 2015 (Unaudited)			December 26, 2014 (Audited)
Assets
Current assets:
Cash	$	~~317~~639,~~200~~600		$	~~652~~315,~~000~~900
Accounts receivable, net of allowance for doubtful accounts of $279,000 and $253,300 at September 26, 2014 and December 27, 2013, respectively		8,336,500			5,980,100
Accounts receivable, net of allowance for doubtful accounts of $563,100 and $513,100 at March 27, 2015 and December 26, 2014, respectively		11,332,400			12,171,400
Other receivables, net of allowance of $0 and $326,500 at September 26, 2014 and December 27, 2013, respectively		4,900			378,900
Other receivables		36,800			54,600
Work in process		~~242~~302,~~600~~100			~~150~~71,~~700~~900
Deferred tax asset - current portion		382,900			333,500
Deferred tax asset		935,500			792,200
Other current assets		~~506~~798,~~000~~900			~~273~~529,~~300~~500
Total current assets		914,~~790~~045,~~100~~300			713,~~768~~935,500
Property and equipment, net of accumulated depreciation of $1,116,000 and $2,393,800 at September 26, 2014 and December 27, 2013, respectively		4,964,700			4,092,100
Property and equipment, net of accumulated depreciation of $1,475,800 and $1,296,600 at March 27, 2015 and December 26, 2014, respectively		4,796,600			4,893,900
Other assets:
EDGE applications, net of accumulated amortization of $2,609,200 and $2,288,900 at September 26, 2014 and December 27, 2013, respectively		2,622,500			1,817,100
EDGE applications, net of accumulated amortization of $2,892,500 and $2,744,500 at March 27, 2015 and December 26, 2014, respectively		3,166,600			2,863,600
Deferred tax asset		56,600			266,500
Capitalized debt issuance costs		29,200			38,100
Capitalized debt issuance costs		47,000			57,300
Total long-term assets		7,992,400			7,795,600
Total long-term assets		7,690,800			6,233,000
Total assets	$	22,037,700		$	21,731,100
Total assets	$	17,480,900		$	14,001,500
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable, trade	$	56,~~194~~520,400		$	58,~~692~~119,~~700~~900
Accrued payroll and bonuses		~~235~~588,~~900~~500			~~721~~895,~~200~~700
Other accrued expenses		~~298~~691,~~200~~000			~~302~~370,~~000~~100
Deferred rent		~~175~~323,~~400~~100			20184,~~100~~800
Deferred revenue and customer deposits		3,~~343~~449,~~000~~600			23,~~733~~488,~~500~~400
Notes payable, current portion		619,400			~~119~~619,400
Total current liabilities		912,~~866~~192,~~300~~000			913,~~588~~678,~~900~~300
Long-term liabilities:
Notes Payable		5,621,000			2,669,500
Notes Payable, net of current portion		6,611,200			5,286,100
Total long-term liabilities		5,621,000			2,669,500
Deferred tax liability		870,600			585,000
Total long-term liabilities		7,481,800			5,871,100
Stockholders' equity:
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at September 26, 2014 and December 27, 2013		0			0
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at March 27, 2015 and December 26, 2014		0			0
Common stock, $.001 par value; 70,000,000 shares authorized; 16,479,074 and 16,279,074 shares issued at September 26, 2014 and December 27, 2013, respectively; 16,356,583 and 16,156,583 shares outstanding at September 26, 2014 and December 27, 2013, respectively		16,600			16,400
Common stock, $.001 par value; 70,000,000 shares authorized; 16,479,074 shares issued at March 27, 2015 and December 26, 2014; 16,356,583 shares outstanding at March 27, 2015 and December 26, 2014		16,600			16,600
Additional paid-in capital		3,877,900			3,~~764~~877,~~100~~900
Treasury stock, 122,491 shares		(9,000	)		(9,000	)
Accumulated deficit		(1,~~943~~656,~~200~~000	)		(21,~~007~~776,~~600~~700	)
Accumulated other comprehensive income/(loss)		51,300			(20,800	)
Accumulated other comprehensive income		134,400			72,900
Total stockholders' equity		12,~~993~~363,~~600~~900			12,~~743~~181,~~100~~700
Total liabilities and stockholders' equity	$	1722,~~480~~037,~~900~~700		$	1421,~~001~~731,~~500~~100

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

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Jagged Peak, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)

	Thirteen Week Period Ended						~~Thirty-Nine Week Period Ended~~
	September 26, 2014			September 27, 2013			September 26, 2014			September 27, 2013
	March 27, 2015			March 28, 2014
Revenue	$	1516,~~141~~151,~~000~~300		$	1114,~~319~~090,~~900~~700		$	~~42,856,500~~		$	~~32,388,200~~
Cost of revenue		12,~~333~~745,~~700~~400			811,~~982~~773,~~300~~800			~~35,822,400~~			~~25,743,200~~
Gross profit		23,~~807~~405,~~300~~900			2,~~337~~316,~~600~~900			~~7,034,100~~			~~6,645,000~~
Selling, general and administrative expenses		23,~~099~~094,~~700~~500			12,~~851~~058,~~900~~000			~~6,568,300~~			~~5,432,600~~
Income from operations		~~707~~311,~~600~~400			~~485~~258,~~700~~900			~~465,800~~			~~1,212,400~~
Other (expense) income, net		(53,900	)		23,900			(103,000	)		(38,000	)
Other expense, net		(47,700	)		(92,800	)
Interest expense		(5660,200	)		(5146,~~300~~800	)		~~(150,800~~	)		~~(155,700~~	)
Income before tax expense		~~597~~203,500			~~458~~119,300			~~212,000~~			~~1,018,700~~
Provision for income tax expense		(~~225~~82,~~900~~800	)		(~~179~~59,~~000~~100	)		~~(147,600~~	)		~~(416,600~~	)
Net income	$	~~371~~120,~~600~~700		$	~~279~~60,~~300~~200		$	~~64,400~~		$	~~602,100~~
Other comprehensive income (loss)		52,800			(6,500	)		113,700			31,000
Other comprehensive income		98,400			93,600
Tax (expense) benefit		(18,800	)		2,400			(41,600	)		(11,800	)
Tax expense		(36,900	)		(34,800	)
Other comprehensive income (loss), net of tax		34,000			(4,100	)		72,100			19,200
Other comprehensive income net of tax		61,500			58,800
Comprehensive Income	$	~~405~~182,~~600~~200		$	~~275~~119,~~200~~000		$	~~136,500~~		$	~~621,300~~
Weighted average number of common shares outstanding -basic		16,356,583			16,156,583			16,356,583			16,156,583
Weighted average number of common shares outstanding - basic	$	16,356,583		$	16,356,583
Net income per share - basic	$	0.0201		$	0.0200		$	~~0.00~~		$	~~0.04~~
Weighted average number of common shares outstanding and common equivalent shares outstanding		18,~~221~~183,~~396~~488			1718,~~750~~235,~~829~~145			~~18,221,396~~			~~17,665,156~~
Diluted income per common share	$	0.0201		$	0.0200		$	~~0.00~~		$	~~0.03~~

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

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Jagged Peak, Inc.

Consolidated Statements of Changes in Stockholders' Equity

3913 Weeks Ended ~~September~~March 2627, ~~2014~~2015 and ~~September~~March 2728, ~~2013~~2014

(Unaudited)

	Common Stock Shares		Common Stock Amount		Additional Paid in Capital		Treasury Stock			Accumulated Deficit			Accumulated Other ~~Compre-~~Comprehensive ~~hensive~~ Income/(Loss)			Total
Balance, December 28, 2012		16,279,074	$	16,400	$	3,764,100	$	(9,000	)	$	(2,854,900	)	$	(44,500	)	$	872,100
Change in fair value of interest rate swap														19,200			19,200
Net income for the period											602,100						602,100
Balance, September 27, 2013		16,279,074	$	16,400	$	3,764,100	$	(9,000	)	$	(2,252,800	)	$	(25,300	)	$	1,493,400
Balance, December 27, 2013		16,279,074	$	16,400	$	3,764,100	$	(9,000	)	$	(2,007,600	)	$	(20,800	)	$	1,743,100
Change in fair value of interest rate swap														82,~~000~~400			82,~~000~~400
Shares issued for ESOP contribution		200,000		200		113,800											114,000
Foreign currency translation adjustment														6456,~~100~~400			6456,~~100~~400
Net income for the period											6460,~~400~~200						6460,~~400~~200
Balance, September 26, 2014		16,479,074	$	16,600	$	3,877,900	$	(9,000	)	$	(1,943,200	)	$	51,300		$	1,993,600
Balance, March 28, 2014		16,479,074	$	16,600	$	3,877,900	$	(9,000	)	$	(1,947,400	)	$	38,000		$	1,976,100
Balance, December 26, 2014		16,479,074	$	16,600	$	3,877,900	$	(9,000	)	$	(1,776,700	)	$	72,900		$	2,181,700
Change in fair value of interest rate swap														4,000			4,000
Foreign currency translation adjustment														57,500			57,500
Net income for the period											120,700						120,700
Balance, March 27, 2015		16,479,074	$	16,600	$	3,877,900	$	(9,000	)	$	(1,656,000	)	$	134,400		$	2,363,900

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

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Jagged Peak, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	39 Week Period Ended
	13 Week Period Ended
	September 26, 2014			September 27, 2013
	March 27, 2015			March 28, 2014
Operating activities
Net income	$	64120,~~400~~700		$	~~602~~60,~~100~~200
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and software amortization		~~770~~327,~~000~~200			~~490~~213,~~800~~400
Amortization of debt costs		328,~~100~~200			5511,~~400~~000
Bad debt expense		216,600			24,300
Non-cash compensation expense		77,200			0
Bad debt expense		50,000			0
Changes in:
Accounts receivable		(21,~~417~~083,500	)		~~(866~~168,~~100~~300	)
Work in process		(91230,~~900~~200	)		~~(112~~1,~~700~~500	)
Other current assets		(~~212~~269,~~200~~400	)		(37281,~~000~~100	)
Other receivables		~~183~~17,~~100~~800			38(147,~~800~~200	)
Deferred tax asset		~~156~~(61,~~400~~700	)		~~389~~59,~~700~~000
Accounts payable and accrued expenses		(756,900	)		(479,200	)
Deferred tax liability		285,600			0
Deferred rent		155,300			1,400
Accounts payable and accrued expenses		(2,301,300	)		(1,575,200	)
Deferred revenue and customer deposits		609,500			528,000
Deferred rent		138,300			67,100
Net cash flows (used in) provided by operating activities		(1,291,100	)		635,500
Deferred revenue and customer deposits		(38,800	)		867,000
Net cash flows used in operating activities		(792,900	)		(556,000	)
Investing activities
Acquisition of property and equipment		(181,~~322,300~~900	)		(~~558~~154,~~200~~700	)
Acquisition/development of software - EDGE applications		(1451,~~125,700~~100	)		(~~659~~221,~~600~~400	)
Cash flows used in investing activities		(2533,~~448,~~000	)		(1376,~~217,800~~100	)
Financing activities
Net proceeds on term loan		2,000,000			0
Net proceeds on line of credit		1,480,000			760,000
Net proceeds on notes payable		1,541,000			780,000
Payments on loans		(154,900	)		(29,800	)
Payments on term loan		(89,600	)		(89,500	)
Cash flows provided by financing activities		1,325,100			730,200
Cash flows provided by financing activities		3,451,400			690,500
Net decrease in cash		(800	)		(201,900	)
Net (decrease) increase in cash		(287,700	)		108,200
Cash, beginning of period		315,900			652,000
Cash, beginning of period		652,000			15,200
Effect of exchange rate changes on cash		324,500			(45,000	)
Effect of exchange rate changes on cash		(47,100	)		0
Cash, end of period	$	639,600		$	405,100
Cash, end of period	$	317,200		$	123,400
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	~~118~~51,000		$	9436,000
Cash paid during the period for taxes	$	332,~~800~~200		$	3833,000
Non-cash financing activities:
Issuance of stock to fund ESOP contribution	$	~~114,000~~0		$	0114,000

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

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Jagged Peak, Inc.

Notes to the Unaudited Consolidated Financial Statements

For the 13 ~~and 39~~ Week Periods Ended ~~September~~March 2627, ~~2014~~2015 and ~~September~~March 2728, ~~2013~~2014

1. General Background Information

Jagged Peak, Inc. (the "Company" or "Jagged Peak") is a software and services company headquartered in Tampa, Florida, providing internally developed cloud-based enterprise e-commerce technology supporting the entire e-commerce life cycle including order, warehouse, and transportation management solutions. The Company's flagship product, EDGE™ (EDGE, Enterprise Dynamic Global Engine), is a web-based software application that enables companies to control and coordinate multi-channel orders, catalogs, multi-warehouse inventories, and fulfillment across multiple customers, suppliers, employees, locations, and partners in real-time. The Company enables clients to build and operate custom branded portals such as e-commerce, customer service, repair and reverse logistics, and marketing materials management, and automate other business processes through the use of the EDGE platform and its related software applications. The EDGE platform has been deployed in multiple vertical markets such as consumer goods, financial services, healthcare, distribution, travel and tourism and manufacturing.

With the EDGE platform, Jagged Peak has continued to market the launch of TotalCommerce™ (TotalCommerce), an end-to-end solution that enables a company to quickly and cost effectively launch a fully operational, best practices, e-commerce online channel direct to its consumers. TotalCommerce is an outsourced "managed services" solution that leverages Jagged Peak's extensive technology and supply chain infrastructure and provides manufacturers with a turnkey, rapidly deployable solution including e-commerce webstore(s); order, inventory and transportation management software; a network of twenty-five fulfillment centers throughout the United States, Canada, and ~~Canada~~the United Kingdom; back office program management; payment processing; and a range of online marketing services.

Jagged Peak operates two warehouses in Florida, and utilizes an expandable network of twenty-two independently owned fulfillment warehouses throughout North America, and one warehouse in the United Kingdom using the cloud-based EDGE platform. The EDGE application is able to automatically route orders to the optimal warehouse and transportation provider based on an established set of factors such as service, inventory, cost and priority. This enables the Company's clients to reduce customer wait times, while lowering overall delivery costs.

In July 2009, Jagged Peak began operations in Canada through its wholly owned subsidiary, Jagged Peak Canada, Inc. The operations provide similar services as in the United States through a network of independently owned fulfillment warehouses, which use the cloud-based EDGE platform to process orders for Jagged Peak clients.

The Company operates on a 52/53 week reporting year. Therefore, the period ended ~~September~~March 2627, ~~2014~~2015 and the period ended ~~September~~March 2728, ~~2013~~2014 each consists of 3913 weeks.

2. Significant Accounting Policies

Basis of Presentation

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of (a) the consolidated financial position at ~~September~~March 2627, ~~2014~~2015 and December 2726, ~~2013~~2014 and (b) the consolidated statements of comprehensive income, changes in stockholders' equity and cash flows for the 3913-week periods ended ~~September~~March 2627, ~~2014~~2015 and ~~September~~March 2728, ~~2013~~2014 have been made.

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All financial information has been rounded to the nearest hundred.

The unaudited consolidated financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted. The accompanying statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the 52-week period ended December 2726, ~~2013~~2014.

Use of Estimates

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

Revenue Recognition

There are multiple components in Jagged Peak's TotalCommerce solution, which are sold through a master agreement where each individual component is priced separately and distinctly from the other components, based on market prices at which we sell those services individually. The client is able to choose which services it wishes to purchase. The separate components can be added or deleted at any time during the contract period at pre-determined prices. The Company has a history of selling each element separately to establish the market price of each element.

Revenue from software development and technology services is recognized as services are provided or on the percentage of completion method for those arrangements with specified milestones. The percentage of completion is based on labor hours incurred to total labor hours expected to be incurred. Additional technology revenues are either paid monthly or on an annual basis. If paid on an annual basis, the revenue is recognized over the year, and if paid on a monthly basis, the revenue is recognized in the month in which the service was provided.

Hosting and managed services contracts range in length from one to three years, and are typically renewed annually after the initial term for subsequent one year periods. Revenue from hosting and managed services is recognized ratably over the period for which the services are provided. In most cases the fees are either a flat monthly fee or based on the client's use of the system (transactions).

The Company's EDGE software is a web-based product and is typically provided to its customers in a Software as a Service ("SaaS") model. Revenues are recognized ratably over the period the service is provided. The method of payment can be based on the clients' use of the system (transactions), a flat monthly fee or an annual fee. Revenue for all methods of payment is recognized over the period the software is available to the client and the Company is responsible for providing software updates.

7The Company has established vendor specific objective evidence for the individually priced elements in its contracts through the use of the market as each element in its contracts is sold both as a package and individually with the same pricing. For any element delivered for which vendor specific objective evidence ("VSOE") is not available, it uses the residual method. When applying the residual method, VSOE of fair value is allocated to each of the undelivered elements and the remaining consideration is allocated to the delivered elements.

The Company has established vendor specific objective evidence for the individually priced elements in its contracts through the use of the market as each element in its contracts is sold both as a package and individually with the same pricing. For any element delivered for which vendor specific objective evidence ("VSOE") is not available it uses the residual method. When applying the residual method, VSOE of fair value is allocated to each of the undelivered elements and the remaining consideration is allocated to the delivered elements.

Revenue is also derived from fulfillment service arrangements. Services included under fulfillment arrangements include account services, handling, order processing, packaging, storage and reporting. These services are based on established monthly charges as well as handling fees based on volume. These revenues are recognized based on the net value of the services provided.

Certain order processing services are contracted out by the Company to optimized independent distribution warehouses in North America and the United Kingdom. All of these services are managed by the Company through its order management platform. Because the Company has the exclusive responsibility to contract and to manage the services provided to its clients by these independent warehouses and the related transportation, the revenue and expenses are recognized based on the amount of services charged to the client and the related expenses are part of the Company's cost of services.

Work in process represents costs and services which have been provided and properly recognized based on the above policies, however have not been billed to the client.

Shipping and handling costs are classified as cost of revenues.

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Software and Development Enhancements

Software and development enhancement expenses include costs such as payroll and employee benefit costs associated with product development. The EDGE product platform, including the e-commerce, order management, warehouse management and transportation management systems, ~~are~~is continually being enhanced with new features and functions. Once technological feasibility of new features and functions is established, the costs incurred from release to production are capitalized and amortized over their useful life. The Company capitalized approximately $~~360~~451,~~200~~000 and $~~293~~221,~~200~~000 during the 13-week periods ended ~~September~~March ~~26, 2014 and September~~ 27, ~~2013,~~2015 ~~respectively. The Company capitalized approximately $1,125,700~~ and ~~$659,600~~March ~~during the 39-week periods ended September 26~~28, 2014 ~~and September 27~~, ~~2013,~~ respectively. Amortization expense related to capitalized software and charged to operations for the 13-week periods ended ~~September~~March ~~26, 2014 and September~~ 27, ~~2013~~2015 ~~was approximately $122,400~~ and ~~$68,800,~~March ~~respectively. Amortization expense related to capitalized software and charged to operations for the 39-week periods ended September 26~~28, 2014 ~~and September 27, 2013~~ was approximately $~~320~~148,~~300~~000 and $~~181~~92,~~800~~000, respectively.

Concentration of Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable.

Cash is maintained with one major financial institution in the United States and Canada. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk.

Revenue from a single, multi-national customer with several brands amounted to approximately $14.2 million, or approximately 88% of total revenue, and approximately $12.1 million, or approximately 86% of total revenue, during the 13-week periods ended March 27, 2015 and March 28, 2014, respectively. Accounts receivable from this customer were approximately $9.0 million, or approximately 80% of net accounts receivable and approximately $10.0 million, or approximately 82% of net accounts receivable, at March 27, 2015 and December 26, 2014, respectively. The risk of this concentration is mitigated as the deposits from this customer at March 27, 2015 and at December 26, 2014 were approximately $3.0 million and $2.8 million, respectively.

~~Revenue~~Accounts receivable result primarily from a ~~single,~~the ~~multi-national~~sales ~~customer~~of ~~with~~e-commerce ~~several~~and ~~brands~~fulfillment ~~amounted~~services to ~~approximately~~a ~~$12~~variety of customers.9 ~~million,~~Accounts orreceivable ~~approximately~~are ~~85%~~stated ofat ~~total~~cost ~~revenue,~~less ~~and~~an ~~approximately~~allowance ~~$9.6~~for ~~million,~~doubtful oraccounts. ~~approximately~~The ~~85%~~Company ofextends ~~total~~credit ~~revenue,~~to ~~during~~its ~~the~~various ~~13-week~~customers ~~periods~~based ~~ended~~on ~~September~~evaluation ~~26,~~of ~~2014~~the ~~and~~customer’s ~~September~~financial ~~27,~~condition ~~2013,~~and ~~respectively.~~ability ~~Revenue~~to ~~from~~pay athe ~~single,~~Company ~~multi-national~~in ~~customer~~accordance with ~~several~~the ~~brands~~payment ~~amounted~~terms. toThe ~~approximately~~Company ~~$37.6~~provides ~~million,~~for orestimated ~~approximately~~losses ~~88%~~on ofaccounts ~~total~~receivable ~~revenue,~~considering ~~and~~a ~~approximately~~number ~~$28.3~~of ~~million~~factors, orincluding ~~approximately~~the ~~87%~~overall aging of ~~total~~accounts ~~revenue~~receivable, ~~during~~ the ~~39-week~~customer’s ~~periods~~payment ~~ended~~history ~~September~~and ~~26,~~the ~~2014~~customer’s ~~and~~current ~~September~~ability ~~27,~~to ~~2013,~~pay ~~respectively~~its obligations. ~~Accounts~~Based ~~receivable~~on ~~from~~management’s ~~this~~review ~~customer~~of ~~were~~accounts ~~approximately~~receivable ~~$6.5~~and ~~million~~other receivables, oran ~~approximately~~allowance ~~78%~~for ofdoubtful ~~total~~ accounts ~~receivable~~of approximately $563,100 and ~~approximately~~ $~~3.4~~513,100 ~~million~~is orconsidered ~~approximately~~necessary ~~68%~~as of ~~total~~March ~~accounts receivable~~27, at2015 ~~September 26, 2014~~ and December 2726, ~~2013~~2014, respectively. The ~~risk~~Company ofcharges ~~this~~uncollectible ~~concentration~~accounts isagainst ~~mitigated as~~ the ~~deposits~~allowance ~~from~~account ~~this~~once ~~customer~~the atinvoices ~~September~~are ~~26,~~deemed ~~2014~~unlikely ~~and~~to atbe ~~December~~collectible. ~~27,~~The ~~2013~~Company ~~were~~does ~~approximately~~not ~~$2.8~~accrue ~~million~~interest ~~and~~on ~~$1.9~~past ~~million,~~due ~~respectively~~receivables.

Accounts receivable result primarily from the revenue from e-commerce and fulfillment services to a variety of customers. Accounts receivable are stated at cost less an allowance for doubtful accounts. The Company extends credit to its various customers based on evaluation of the customer's financial condition and ability to pay the Company in accordance with the payment terms. The Company provides for estimated losses on accounts receivable considering a number of factors, including the overall aging of accounts receivables; the customer's payment history and the customer's current ability to pay its obligations. Based on management's review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $279,000 and $579,800 is considered necessary as of September 26, 2014 and December 27, 2013, respectively. The Company charges uncollectible accounts against the allowance account once the invoices are deemed unlikely to be collectible. The Company does not accrue interest on past due receivables.

Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, principally one to ten years. Accelerated methods are used for tax depreciation. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Depreciation expense was $~~175~~179,~~100~~200 and $~~112~~121,400 for the 13-week periods ended ~~September~~March ~~26, 2014 and September~~ 27, ~~2013,~~2015 ~~respectively,~~ and ~~$449,700~~March ~~and $309~~28,~~000~~ ~~for the 39-week periods ended September 26,~~ 2014 ~~and September 27~~, ~~2013,~~ respectively. Depreciation expense is included in selling, general and administrative expenses.

Depreciation is calculated by the straight-line method over the following estimated useful lives of the related assets:

	Years
Building		7 - 20
Warehouse equipment		3 - 10
Furniture and equipment		3 - 7
Computer equipment and software		1 - 7
Leasehold improvements	Lease term

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Estimated Fair Value of Financial Instruments

The aggregated net fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include receivables, payables, accrued expenses and short-term borrowings. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company's debt is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities.

Uncertain Tax Positions

The Company periodically assesses its tax positions taken for all open tax years and has not identified any uncertain tax positions. The Company is not subject to examination by taxing authorities for years prior to 2011.

Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax return purposes. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date.

The Company periodically assesses the recoverability of its deferred tax assets, as necessary, when the Company experiences changes that could materially affect its determination of the recoverability of its deferred tax assets. In conducting this assessment, management considers a variety of factors, including the Company's operating profits, the reasons for the Company's operating losses in prior years, management's judgment as to the likelihood of profitability and expectations of future performance, and other factors. Management does not believe that a valuation allowance is necessary; however, the amount of deferred tax asset realizable could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. Net loss carry forwards do not begin to expire until ~~2030~~2029.

Interest Rate Swap

Derivative financial instruments are carried at fair value on the consolidated balance sheets. The Company's derivative instrument is an interest rate swap that hedges the interest payments of ~~certain~~the ~~debt~~Mortgage by effectively converting interest from a variable rate to a fixed rate. This instrument is considered fully effective and qualifies for hedge accounting with changes in the fair value recorded in other comprehensive income (loss). The Company does not enter into derivative agreements for trading purposes.

The swap agreement's fair value is calculated using Level 2 inputs. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities. Level 2 inputs are based on observable market inputs (other than those included in Level 1) and are provided by the Company's lender, Fifth Third Bank. Level 3 inputs include inputs that are not currently observable.

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Stock-Based Compensation

The Company has stock option and stock incentive plans for employees and non-employee directors that provide for grants of restricted stock awards and options to purchase shares of Jagged Peak common stock at exercise prices generally equal to the fair values of such stock at the dates of grant. The Company recognizes the cost of all share-based payments in the financial statements using a fair-value based measurement method. The Company uses a Black-Scholes model to value its stock option and restricted stock grants and expenses the related compensation cost using the straight-line method over the vesting period. The fair value of the stock compensation is determined on the grant date using assumptions for the expected term, volatility, dividend yield and the risk free interest rate. The period expense is then determined based on the valuation of the ~~options~~grants and on estimated forfeitures.

Foreign Currency

The functional currency of the Company's Canadian subsidiary, Jagged Peak Canada, Inc., is the local currency. The financial statements are translated to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs and expenses. Foreign currency translation gains and losses are recorded as a component of other comprehensive income. Net gains and losses resulting from foreign exchange transactions are recorded as a component of other ~~income (~~expenses).

Earnings per Share

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur upon issuance of certain additional potential common stock shares. Potential common stock shares consist of shares that may arise from outstanding dilutive common stock options (the number of which is computed using the "treasury stock method"). Diluted earnings per share considers the potential dilution that could occur if the Company's outstanding common stock options were exercised for common stock that then shared in the Company's earnings.

Recently Issued Financial Accounting Standards

Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force ("EITF"), the American Institute of Certified Public Accountants ("AICPA"), and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.

3. Equity

Common Stock

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors (the "Board"), subject to the prior rights of the holders of any outstanding senior classes of stock, of which there are currently none. The Company records stock as issued when the consideration is received or the obligation is incurred.

11On November 18, 2014, the Company granted 1,850,000 restricted shares of Jagged Peak to five executives and one director. The restricted stock vests ratably on an annual basis over a three-year period. The fair value of the common stock is $0.65 per share, which was the market value of the common stock at the date of grant, and is recognized on a straight-line basis over the vesting period.

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The following summarizes the Company's stock option activity and related information:

	Shares			Range of ExercisePrices		Weighted AverageExercise Price
Outstanding at December 28, 2012		2,335,782		$	0.01-0.30		0.14
Outstanding at December 27, 2013		2,260,782		$	0.01-0.25		0.13
Options granted		0			0		0
Options exercised		0			0		0
Options cancelled or expired		~~(75,000~~0	)		0.300		0.300
Outstanding at December 27, 2013		2,260,782		$	0.01-0.25	$	0.13
Outstanding at December 26, 2014		2,260,782		$	0.01-0.25	$	0.13
Options granted		0			0		0
Options exercised		0			0		0
Options cancelled or expired		0			0		0
Outstanding at September 26, 2014		2,260,782		$	0.01-0.25	$	0.13
Outstanding at March 27, 2015		2,260,782		$	0.01-0.25	$	0.13
Exercisable at September 26, 2014		2,260,782		$	0.01-0.25	$	0.13
Exercisable at March 27, 2015		2,260,782		$	0.01-0.25	$	0.13
Exercisable at December 27, 2013		2,260,782		$	0.01-0.25	$	0.13
Exercisable at December 26, 2014		2,260,782		$	0.01-0.25	$	0.13

The following table summarizes information about options outstanding and exercisable as of ~~September~~March 2627, ~~2014~~2015:

Outstanding and Exercisable Options	~~Outstanding and Exercisable Options~~
ExercisePrice	~~ExercisePrice~~		NumberOutstanding	~~NumberOutstanding~~		NumberExercisable	~~NumberExercisable~~		WeightedAverageRemainingLife (years)	~~WeightedAverageRemainingLife (years)~~		WeightedAveragePrice	~~WeightedAveragePrice~~
$	$0.01	~~0.01~~		10,782	~~10,782~~		10,782	~~10,782~~		35.7	~~36.2~~	$	$0.01	~~0.01~~
$	$0.13	~~0.13~~		2,150,000	~~2,150,000~~		2,150,000	~~2,150,000~~		1.1	~~1.6~~	$	$0.13	~~0.13~~
$	$0.25	~~0.25~~		100,000	~~100,000~~		100,000	~~100,000~~		6.7	~~7.2~~	$	$0.25	~~0.25~~

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Debt

Notes payable consist of:

	September 26, 2014		December 27, 2013
	March 27, 2015		December 26, 2014
5-year term loan related to purchase of warehouse	$	2,~~119~~059,~~400~~600	$	2,~~208~~089,~~900~~500
$5.0 million senior credit facility, two year revolving line of credit		23,~~121~~421,000		~~580~~1,941,000
$2.0 million, two year, term loan	$	21,~~000~~750,000		-1,875,000
Total notes payable		67,~~240~~230,~~400~~600		25,~~788~~905,~~900~~500
Less current portion		619,400		~~119~~619,400
Long-term portion of notes payable	$	56,~~621~~611,~~000~~200	$	25,~~669~~286,~~500~~100

On ~~June~~March 2523, 2012, the Company ~~purchased~~entered ~~its~~into ~~previously~~the ~~leased~~senior ~~warehouse~~credit facility ~~for~~(the ~~$3.0~~"Facility") ~~million. The purchase was financed~~ with aFifth ~~$2.388 million~~Third ~~5-year term loan (“Mortgage”) amortized over 20 years~~Bank. ~~Principal and interest are due monthly.~~ The ~~Mortgage~~Facility isprovides ~~secured~~for by a ~~first~~revolving ~~priority~~line ~~lien on substantially all~~ of ~~the~~credit ~~Company’s assets. Concurrent~~ with ~~the~~a ~~Mortgage, the Company entered into an interest rate swap agreement that expires in June 2017 concurrent with the~~ maturity of ~~the~~two ~~Company's~~years ~~Mortgage.~~and ~~The~~a ~~interest~~maximum ~~rate~~borrowing ~~swap~~capacity ~~agreement has an initial notional amount~~ of $23.~~388~~0 million ~~and provides for the Company to pay interest at a fixed rate of 1~~.~~43%~~ ~~while~~The ~~receiving~~Facility ~~interest~~is available for ~~the~~general ~~same~~corporate ~~period at the one-month LIBOR rate on the same notional principal amount~~purposes. The ~~Company~~Facility ~~entered~~is ~~into~~secured ~~the~~by ~~interest~~a ~~rate~~first ~~swap~~priority ~~agreement~~lien ~~to hedge against LIBOR movements~~ on ~~current~~substantially ~~variable~~all ~~rate~~of ~~indebtedness totaling $2.388 million at one-month LIBOR plus 2.50%, thereby fixing~~ the Company's ~~effective~~assets. ~~rate~~The onFacility ~~the~~contains ~~notional~~customary ~~amount~~events atof ~~3.93%.~~default ~~One-month~~and ~~LIBOR~~covenants ~~was~~including ~~0.15%~~among asother ~~of September 26~~things, ~~2014.~~covenants ~~The~~that ~~swap~~restrict ~~agreement~~but ~~qualifies~~do asnot anprevent ~~"effective"~~the ~~hedge~~Company ~~under~~from ~~U.S.~~incurring ~~GAAP.~~certain Asadditional ~~of September 26~~indebtedness, ~~2014,~~creating ~~the~~or ~~fair~~permitting ~~market~~liens ~~value~~on ofassets, ~~the~~paying ~~interest~~dividends ~~rate~~and ~~swap~~repurchasing ~~included~~stock, engaging in ~~other~~mergers ~~accrued~~or ~~expenses~~acquisitions ~~was~~and ~~approximately~~making ~~$21,400~~investments and loans.

On ~~March~~June 2325, 2012, the Company ~~entered~~purchased ~~into~~its ~~the~~previously ~~senior~~leased ~~credit~~warehouse facility ~~(the~~for $3.0 million. The purchase was financed with a $2.388 million 5-year term loan ("~~Facility~~Mortgage") ~~with~~amortized ~~Fifth~~over ~~Third~~20 ~~Bank~~years. Principal and interest are due monthly. The ~~Facility~~Mortgage ~~provides~~is ~~for~~secured by a ~~revolving~~first ~~line~~priority lien on substantially all of ~~credit~~the Company’s assets. Concurrent with athe Mortgage, the Company entered into an interest rate swap agreement that expires in June 2017 concurrent with the maturity of ~~two~~the ~~years~~Company's ~~and~~Mortgage. aThe ~~maximum~~interest ~~borrowing~~rate ~~capacity~~swap agreement has an initial notional amount of $32.0388 million. ~~The~~and ~~Facility~~provides isfor ~~available~~the ~~for~~Company ~~general~~to ~~corporate~~pay ~~purposes~~interest at a fixed rate of 1.43% ~~The~~while ~~Facility~~receiving isinterest ~~secured~~for bythe asame ~~first~~period ~~priority~~at ~~lien~~the onone-month ~~substantially~~LIBOR ~~all~~rate ofon the ~~Company's~~same ~~assets~~notional principal amount. The ~~Facility~~Company ~~contains~~entered ~~customary~~into ~~events~~the ofinterest ~~default~~rate ~~and~~swap ~~covenants~~agreement ~~including~~to ~~among~~hedge ~~other~~against ~~things,~~LIBOR ~~covenants~~movements ~~that~~on ~~restrict~~current ~~but~~variable dorate ~~not~~indebtedness ~~prevent~~totaling ~~the~~$2.388 ~~Company~~million ~~from~~at ~~incurring~~one-month ~~certain~~LIBOR ~~additional~~plus ~~indebtedness~~2.50%, ~~creating~~thereby orfixing ~~permitting~~the ~~liens~~Company's effective rate on ~~assets~~the notional amount at 3.93%. One-month LIBOR was 0.18% as of March 27, ~~paying~~2015. ~~dividends~~The ~~and~~swap ~~repurchasing~~agreement ~~stock~~qualifies as an "effective" hedge under U.S. GAAP. As of March 27, ~~engaging~~2015, inthe ~~mergers~~fair ormarket ~~acquisitions~~value ~~and~~of ~~make~~the ~~investments~~interest ~~and~~rate ~~loans~~swap included in other accrued expenses was approximately $30,100.

On March 22, 2013, the Company amended the Facility to reduce the interest rate to an applicable margin of one-month LIBOR plus 2.50%. Prior to this Amendment, borrowings under the Facility bore interest at a rate equal to an applicable margin of one-month LIBOR plus 3.00%. In addition to paying monthly interest on outstanding principal under the Facility, the Company is required to pay a quarterly unutilized 0.25% commitment fee to the lender, based on the daily unused balance of the Facility. The Company may voluntarily repay outstanding loans under the Facility at any time without premium or penalty.

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On August 27, 2013, the Company amended the Facility to increase the borrowing capacity to $5.0 million and to extend the maturity date to August 27, 2015.

On September 5, 2014, the Company amended the Facility to extend the maturity date to September 5, 2016.

On September 5, 2014 the Company entered into a term loan with Fifth Third Bank to fund operations. The term loan (“Term Loan”) provides for $2.0 million at an interest rate of one-month LIBOR plus 2.50% amortized over 4 years. One-month LIBOR was 0.1518% as of ~~September~~March 2627, ~~2014~~2015. Principal and interest are due monthly. The Term Loan matures in September 2018. The Term Loan isand Mortgage are secured by a first priority lien on substantially all of the Company’s assets.

The amount available for borrowing under the Facility was $21,~~879~~579,000 and $43,~~420~~059,000 as of ~~September~~March 2627, ~~2014~~2015 and December 2726, ~~2013~~2014, respectively.

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5. Related Party Transactions

None.

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5. Related Party Transaction

Jagged Peak's Chief Executive Officer, Chief Operations Officer, Chief Sales and Marketing Officer, a Director of the Company and the Employee Stock Option Plan (ESOP) collectively hold a majority of the common stock in an entity that was spun-off from the Company in 2010 and is now a variable interest of the Company. See Note 11, Variable Interest Entity, in the report on Form 10-K for the year ended December 27, 2013.

PART I - FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion is intended to further the reader's understanding of the Company's financial condition and results of operations and should be read in conjunction with the Company's financial statements and related notes included elsewhere herein. This discussion also contains forward-looking statements. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of the risks and uncertainties set forth elsewhere in this Quarterly Report and in the Company's other SEC filings. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The Company is not party to any transactions that would be considered "off balance sheet" pursuant to disclosure requirements under the SEC's Item 303(c) of Regulation S-K.

Overview

With the EDGE platform, Jagged Peak has continued to market the launch of TotalCommerce™ (TotalCommerce), an end-to-end solution that enables a company to quickly and cost effectively launch a fully operational, best practices, e-commerce online channel direct to its consumers. TotalCommerce is an outsourced "managed services" solution that leverages Jagged Peak's extensive technology and supply chain infrastructure and provides manufacturers with a turnkey, rapidly deployable solution including e-commerce webstore(s); order, inventory and transportation management software; a network of fulfillment centers throughout the United States and Canada; back office program management; payment processing; and a range of online marketing services.

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RESULTS OF OPERATIONS

For the 13-week period ended ~~September~~March 2627, ~~2014~~2015 compared to the 13-week period ended ~~September~~March 2728, ~~2013~~2014

Revenues increased $32,~~821~~060,~~100~~600, or 3415%, to $1516,~~141~~151,~~000~~300 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, as compared to $1114,~~319~~090,~~900~~700 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014. This increase is the result of higher e-commerce order processing volume. Revenues from implementation of new client sites and on-going development for existing clients were consistent across these periods.

Cost of revenue, which consists primarily of labor, fulfillment operations and facilities costs, increased by $3971,~~351~~600,~~400,~~ or 378%, to $12,~~333~~745,~~700~~400 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, as compared to $811,~~982~~773,~~300~~800 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014. As a percentage of revenue, cost of revenue was 8179% for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, as compared to 7984% for the 13-week period ended ~~September~~March 2728, ~~2013~~2014. This ~~increase~~decrease is primarily related to ~~the~~improved ~~increase~~management inof fulfillment ~~employees and contract~~ labor ~~needed~~utilizing toless ~~manage~~full ~~order~~time ~~growth and fulfillment-related costs incurred as part of the expanded warehouse space~~employees.

Selling, general and administrative expenses increased by $~~247~~1,~~800~~036,500, or 1350%, to $23,~~099~~094,~~700~~500 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, as compared to $12,~~851~~058,~~900~~000 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014. This increase was primarily related to ~~increases~~accelerated inhiring ~~staff~~of ~~costs~~experienced ~~due~~managers to ~~additional employees needed to grow client~~ support ~~teams~~our current and ~~the~~expected ~~rent of the expanded warehouse space~~growth.

Interest expense increased by $413,~~900~~400 to $5660,200 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, as compared to $5146,~~300~~800 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014.

The Company realized income before the provision for income taxes of $~~597~~203,500 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, as compared to income before provision for income taxes of $~~458~~119,300 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014.

Income tax expense was $~~225~~82,~~900~~800 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015 compared to an income tax expense of $~~179~~59,~~000~~100 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014. Differences between the taxable income and the effective tax rate used for ~~2014~~2015 and ~~2013~~2014, as compared to the U.S. federal statutory rate, are primarily due to permanent differences and taxes on foreign operations. ~~During~~ the quarter ended September 26, 2014 the Company evaluated the availability of the net operating loss carryforward balance. Based on this evaluation, the Company made a redetermination of amounts available and the related valuation allowance. As of the quarter ended ~~September~~March 2627, ~~2014,~~2015 the Company has a remaining U.S. (federal and state) net operating loss carry forwards of $1,~~326~~370,~~600~~700, which ~~does~~will ~~not~~expire ~~begin~~between to2031 ~~expire~~and ~~until~~ 2033. ~~This net operating loss carry forward is fully reserved.~~ The Company also has a Canadian net operating loss carry forward of $12,~~962~~232,300 which does not begin to expire until ~~2030~~2029. Management believes there will be sufficient future earnings to support the more than likely realization of deferred tax assets in excess of existing taxable temporary differences. The amount of deferred tax assets considered realizable, however, could be reduced in the near-term if estimates of future taxable income are reduced.

The Company realized net income of $~~371~~120,~~600~~700 for the 13-week period ended ~~September~~March 2627, ~~2014~~2015, compared with net income of $~~279~~60,~~300~~200 for the 13-week period ended ~~September~~March 2728, ~~2013~~2014.

Other income and expense consists of foreign currency gain or losses on transactions. Other Comprehensive income and loss is the result of changes in the value of the swap agreement and foreign currency translation gain or losses.

Basic income per share from operations for the 13-week period ended September 26, 2014 was $0.02 per weighted average share, compared with basic income of $0.02 per weighted average share for the 13-week period ended September 27, 2013.

For the 39-week period ended September 26, 2014 compared to the 39-week period ended September 27, 2013

Revenues increased $10,468,300, or 32%, to $42,856,500 for the 39-week period ended September 26, 2014, as compared to $32,388,200 for the 39-week period ended September 27, 2013. This increase is the result of higher e-commerce order processing volume. Revenues from implementation of new client sites and on-going development for existing clients were consistent across these periods.

Cost of revenue, which consists primarily of labor, fulfillment operations and facilities costs, increased by $10,079,200, or 39%, to $35,822,400 for the 39-week period ended September 26, 2014, as compared to $25,743,200 for the 39-week period ended September 27, 2013. As a percentage of revenue, cost of revenue was 84% for the 39-week period ended September 26, 2014, as compared to 79% for the 39-week period ended September 27, 2013. This increase is primarily related to the increase in fulfillment employees and contract labor needed to manage order growth and fulfillment-related costs incurred as part of the expanded warehouse space.

Selling, general and administrative expenses increased by $1,135,700, or 21%, to $6,568,300 for the 39-week period ended September 26, 2014, as compared to $5,432,600 for the 39-week period ended September 27, 2013. This increase was primarily related to increases in staff costs due to additional employees needed to grow client support teams and the rent of the expanded warehouse space.

Interest expense decreased by $4,900 to $150,800 for the 39-week period ended September 26, 2014, as compared to $155,700 for the 39-week period ended September 27, 2013.

The Company realized income from operations before provision for income taxes of $212,000 for the 39-week period ended September 26, 2014, as compared to income before provision for income taxes of $1,018,700 for the 39-week period ended September 27, 2013.

Income tax expense was $147,600 for the 39-week period ended September 26, 2014 compared to an income tax expense of $416,600 for the 39-week period ended September 27, 2013. The decrease in income tax expense is a function of the Company’s pre-tax net income. Differences between the taxable income and the effective tax rate used for 2014 and 2013, as compared to the U.S. federal statutory rate, are primarily due to permanent differences and taxes on foreign operations. During the quarter ended September 26, 2014 the Company evaluated the availability of the net operating loss carryforward balance. Based on this evaluation, the Company made a redetermination of amounts available and the related valuation allowance. As of quarter ended September 26, 2014 the Company has a remaining U.S. (federal and state) net operating loss carry forwards of $1,326,600 which does not begin to expire until 2033. The Company also has a Canadian net operating loss carry forward of $1,962,300 which does not begin to expire until 2030. Management believes there will be sufficient future earnings to support the more than likely realization of deferred tax assets in excess of existing taxable temporary differences. The amount of deferred tax assets considered realizable, however, could be reduced in the near-term if estimates of future taxable income are reduced.

The Company realized net income of $64,400 for the 39-week period ended September 26, 2014, compared with net income of $602,100 for the 39-week period ended September 27, 2013.

Other income and expense consists of foreign currency gain or losses on transactions. Other comprehensive income and loss is the result of changes in the value of the swap agreement and foreign currency translation gain or losses.

Basic income per share from operations for the 3913-week period ended ~~September~~March 2627, ~~2014~~2015 was $0.0001 per weighted average share, compared with basic income of $0.0400 per weighted average share for the 3913-week period ended ~~September~~March 2728, ~~2013~~2014.

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Liquidity and Capital Resources

The Company's cash needs consist of working capital, capital expenditures and debt service. The Company's working capital needs primarily depend on the timing of collections from customers and payments to vendors. Capital expenditures consist of building, computer, and warehouse equipment purchases and developer salaries for EDGE enhancements. The Company reduces capital expenditure requirements by utilizing independent fulfillment warehouses. Independent fulfillment warehouses typically provide their own equipment, which reduces capital investment requirements.

18For the 13-week period ended March 27, 2015, the Company's operations used cash of approximately $792,900. Cash used in operating activities increased primarily due to an increase in the accounts receivable balance and a decrease in the accounts payable and accrued liabilities balances. The increase in accounts receivable and decrease in accounts payable are primarily the result of timing of collections from clients and payments to vendors.

~~For~~Net ~~the~~cash ~~39-week~~used ~~period~~in ~~ended September 26, 2014,~~ the Company's ~~operations~~investing ~~used~~activities ~~cash~~totaled ~~of approximately~~ $1533,~~291,300.~~000 ~~Cash~~for ~~used~~the in13-week ~~operating~~period ~~activities~~ended ~~increased~~March ~~primarily~~27, ~~due~~2015 toconsisting anof ~~increase~~acquisition inof ~~the~~warehouse ~~accounts~~equipment, ~~receivable~~computer ~~balance~~hardware, ~~and~~building aimprovements ~~decrease~~to in the ~~accounts~~company-owned ~~payable~~warehouse ~~and~~in ~~accrued liabilities balances~~St. ~~The~~Petersburg, ~~increase~~and inenhancements ~~accounts~~to ~~receivable~~the ~~and~~Company's ~~decrease~~software. inThe ~~accounts~~Company ~~payable~~expects ~~are~~total ~~the~~capital ~~primarily~~expenditures ~~result~~for ofthe ~~timing~~year of2015 ~~collections~~will ~~from~~be ~~clients~~approximately ~~and~~$2,500,000 ~~payments~~ to ~~vendors~~$3,000,000.

~~Net~~The ~~cash used in the~~ Company'’s ~~investing~~financing activities ~~totaled~~provided cash of $21,~~448~~325,~~000~~100 for the 3913-week period ended ~~September~~March 2627, ~~2014~~2015 consisting of ~~acquisition~~net ofborrowings ~~warehouse~~on ~~equipment,~~the ~~computer~~Fifth ~~hardware,~~Third ~~and~~credit ~~building~~facility ~~improvements to~~ (the ~~company~~“Facility”) ~~owned~~and ~~warehouse~~Term inLoan ~~St. Petersburg~~ and ~~enhancements~~payments toon ~~the~~its ~~Company's~~Term ~~software.~~Loan ~~The Company expects total capital expenditures during the fourth quarter of the year 2014 will be approximately $0.5 million to complete the new warehouse infrastructure~~ and ~~additional software enhancements~~Mortgage.

The Company'’s ~~financing~~primary ~~activities~~sources ~~provided~~of cash offlow ~~$3,451,000~~were ~~for~~from ~~the 39-week period ended September 26, 2014 consisting of net~~ borrowings onunder ~~its~~the ~~line~~“Facility” ~~of credit~~ and the ~~$2.0~~Term ~~million~~Loan, ~~term loan. The term loan~~ and ~~borrowings~~cash onfrom ~~the line of credit were used to fund~~ operations.

On June 25, 2012, the Company purchased its previously leased warehouse facility for $3.0 million. The purchase was financed with a $2.388 million 5-year term loan ("Mortgage") amortized over 20 years. Principal and interest are due monthly. The Mortgage is secured by a first priority lien on substantially all of the Company's ~~primary~~assets. ~~uses~~Concurrent with the Mortgage, the Company entered into an interest rate swap agreement that expires in June 2017 concurrent with the maturity of ~~cash~~the ~~flow~~Company's ~~were~~Mortgage. toThe ~~fund~~interest ~~operations~~rate swap agreement has an initial notional amount of $2.388 million and ~~borrowings~~provides for the Company to pay interest at a fixed rate of 1.43% while receiving interest for the same period at the one-month LIBOR rate on the same notional principal amount. The Company entered into the interest rate swap agreement to hedge against LIBOR movements on current variable rate indebtedness totaling $2.388 million at one-month LIBOR plus 2.50%, thereby fixing the Company's effective rate on the notional amount at 3.93%. One-month LIBOR was approximately 0.18% as of March 27, 2015. The swap agreement qualifies as an "effective" hedge under U.S. GAAP. As of March 27, 2015, the ~~Fifth~~fair ~~Third~~market ~~Bank~~value ~~credit~~of ~~facility~~the interest rate swap included in other accrued expenses was approximately $30,100.

On ~~September~~March 522, ~~2014~~2013, the Company ~~entered~~amended ~~into~~the aFacility ~~term~~to ~~loan~~reduce ~~with~~the ~~Fifth~~interest ~~Third~~rate ~~Bank.~~to ~~The~~an ~~term~~applicable ~~loan~~margin ~~provides~~of ~~for~~one-month $LIBOR plus 2.050%. ~~million~~Prior atto anthis Amendment, borrowings under the Facility bore interest at a rate equal to an applicable margin of one-month LIBOR plus 23.500%. In addition to paying monthly interest on outstanding principal under the Facility, the Company is required to pay a quarterly unutilized 0.25% commitment fee to the lender, based on the average daily unused balance of the Facility. The ~~term~~Company ~~loan~~may ~~matures~~voluntarily inrepay ~~September~~outstanding ~~2018~~loans under the Facility at any time without premium or penalty.

On ~~March 23~~August 27, ~~2012~~2013, the Company ~~entered~~amended ~~into~~the ~~a Senior Credit~~ Facility ~~with~~to ~~Fifth~~increase ~~Third Bank (~~the ~~"Facility"). The Facility initially provided for a revolving line of credit with a maturity of two years and a maximum~~ borrowing capacity ofto $35.0 million. The Facility is available for general corporate purposes. The Facility is secured by a first priority lien on substantially all of the Company's assets. The Facility contains customary events of default and ~~covenants~~to ~~including~~extend ~~among other things, covenants that restrict but do not prevent~~ the ~~ability~~maturity ofdate ~~the Company~~ to ~~incur~~August ~~certain additional indebtedness~~27, ~~create~~2015. orOne-month ~~permit~~LIBOR ~~liens~~was onapproximately ~~assets,~~0.18% ~~pay~~as ~~dividends~~of ~~and~~March ~~repurchase stock~~27, ~~engage in mergers or acquisitions and make investments and loans~~2015.

On ~~March~~September 225, ~~2013~~2014, the Company amended the Facility to ~~reduce~~extend the ~~interest~~maturity ~~rate~~date to anSeptember ~~applicable margin of one-month LIBOR plus 2.50%. Prior to this Amendment~~5, ~~borrowings under the Facility bore interest at a rate equal to an applicable margin of one-month LIBOR plus 3~~2016.00%. In addition to paying monthly interest on outstanding principal under the Facility, the Company is required to pay a quarterly unused line fee of 0.25% to the lender, based on the average daily unused balance of the Facility. The Company may voluntarily repay outstanding loans under the Facility at any time without premium or penalty.

On ~~August~~September 275, ~~2013,~~2014 the Company ~~amended~~entered ~~the~~into ~~Facility~~a toTerm ~~increase~~Loan ~~the~~with ~~borrowing~~Fifth ~~capacity~~Third Bank to fund operations. The Term Loan provides for a principal amount of $52.0 million ~~and~~at toan ~~extend~~interest ~~the~~rate ~~maturity~~of ~~date~~one-month toLIBOR ~~August~~plus 2.50% amortized over 4 years. One-month LIBOR was approximately 0.18% as of March 27, 2015. OnPrincipal and interest are due monthly. The Term Loan matures in September 5,2018. ~~2014,~~The ~~the~~Term ~~Company~~Loan ~~amended~~and ~~the~~Mortgage ~~Facility~~are tosecured ~~extend~~by ~~the~~a ~~maturity~~first ~~date~~priority tolien ~~September~~on 5,substantially ~~2016~~all of the Company’s assets.

~~One-month~~At ~~LIBOR~~March ~~was~~27, ~~approximately~~2015, ~~0.15%~~the asbalances ofoutstanding ~~September~~on 26the Facility, ~~2014~~Mortgage, and the Term Loan were $2,059,600, $3,421,000 and $1,750,000, respectively.

The Company believes that, based on current operations and anticipated growth, cash flow from operations, together with the Facility, will be sufficient to fund anticipated capital expenditures, operating expenses and other anticipated liquidity needs for the next twelve months. ~~The~~Anticipated ~~anticipated~~ debt maturity of the Facility in 2016, and other unforeseen events may require the Company to seek alternative financing, such as restructuring or refinancing of its long-term debt, selling assets or operations or selling debt or equity securities. If these alternatives were not available in a timely manner or on satisfactory terms or are not permitted under the Facility and the Company defaulted on obligations, its debt could be accelerated and its lender may foreclose on its assets.

~~At September 26, 2014, the balance outstanding on the Facility was approximately $2,121,000.~~17

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Use of Estimates

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

Revenue Recognition

2018

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Work in process represents costs and services which have been provided and properly recognized based on the above policies, however have not been billed to the client.

Shipping and handling costs are classified as cost of revenues.

Concentration of Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable.

Revenue from a single, multi-national customer with several brands amounted to approximately $1214.92 million, or approximately 8588% of total revenue, and approximately $912.61 million, or approximately 8586% of total revenue, during the 13-week periods ended ~~September~~March ~~26, 2014 and September~~ 27, ~~2013,~~2015 ~~respectively. Revenue from a single, multi-national customer with several brands amounted to approximately $37.6 million, or approximately 88% of total revenue,~~ and ~~approximately~~March $28~~.3 million~~, ~~or approximately 87% of total revenue, during the 39-week periods ended September 26,~~ 2014 ~~and September 27~~, ~~2013,~~ respectively. Accounts receivable from this customer were approximately $69.50 million, or approximately 7880% of total accounts receivable, and approximately $310.40 million, or approximately 6882% of total accounts receivable, at ~~September~~March 2627, ~~2014~~2015 and December 2726, ~~2013~~2014, respectively. The risk of this concentration is mitigated as the deposits from this customer at ~~September~~March 2627, ~~2014~~2015 and at December 2726, ~~2013~~2014 were approximately $23.80 million and $12.98 million, respectively.

Accounts receivable result primarily from the revenue from e-commerce and fulfillment services to a variety of customers. Accounts receivable are stated at cost less an allowance for doubtful accounts. The Company extends credit to its various customers based on evaluation of the customer's financial condition and ability to pay the Company in accordance with the payment terms. The Company provides for estimated losses on accounts receivable considering a number of factors, including the overall aging of accounts receivable, the customer's payment history and the customer's current ability to pay its obligations. Based on management's review of accounts receivable and other receivables, an allowance for doubtful accounts of approximately $~~279~~563,~~000~~100 and $~~579~~513,~~800~~100 is considered necessary as of ~~September~~March 2627, ~~2014~~2015 and December 2726, ~~2013~~2014, respectively. The Company charges uncollectible accounts against the allowance account once the invoices are deemed unlikely to be collectible. The Company does not accrue interest on past due receivables.

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Income Taxes

USE OF U.S. GAAP AND NON-GAAP MEASURES

In addition to results presented in accordance with U.S. GAAP, the Company has included in this report "Adjusted EBITDA," with Adjusted EBITDA being defined by the Company as earnings before interest, taxes, depreciation and amortization, and non-cash compensation expense. For each non-GAAP financial measure, the Company has presented the most directly comparable U.S. GAAP financial measure and has reconciled the non-GAAP financial measure with such comparable U.S. GAAP financial measure.

These non-GAAP financial measures provide useful information to investors to assist in understanding the underlying operational performance of the Company. Specifically, Adjusted EBITDA is a useful measure of operating performance before the impact of investing and financing transactions, making comparisons between companies' earnings power more meaningful and providing consistent period-over-period comparisons of the Company's performance. In addition, the Company uses this non-GAAP financial measure internally to measure its on-going business performance and in reports to bankers to permit monitoring of the Company's ability to pay outstanding liabilities.

ADJUSTED EBITDA

Adjusted EBITDA for the 3913-week period ended ~~September~~March 2627, ~~2014~~2015 was approximately $1668,~~132,800~~100 compared to approximately $1379,~~665,200~~500 for the 3913-week period ended ~~September~~March 2728, ~~2013~~2014. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and non-cash compensation. To provide consistent comparisons of year-over-year Adjusted EBITDA, the following reconciliation is provided:

	For the 39-week period ended
	For the 13-week period ended
	September 26, 2014		September 27, 2013
	March 27, 2015		March 28, 2014
Net income as reported in accordance with US GAAP	$	64120,~~400~~700	$	~~602~~60,~~100~~200
Income tax expense		~~147~~82,~~600~~800		~~416~~59,~~600~~100
Interest expense		~~150~~60,~~800~~200		~~155~~46,~~700~~800
Depreciation and software amortization		~~770~~327,~~000~~200		~~490~~213,~~800~~400
Non-cash compensation		077,200		0
Adjusted EBITDA	$	1668,~~132,800~~100	$	1379,~~665,200~~500

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SEASONALITY

Historically, the Company's revenues and profitability have been subject to moderate quarterly seasonal trends. The first quarter has traditionally been the weakest and the fourth quarter has traditionally been the strongest. Typically, this pattern has been the result of factors such as, national holidays, customer demand and economic conditions. Additionally, significant portions of the Company's revenues are from clients whose business levels are impacted by seasonality and the economy.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September~~March 2627, ~~2014~~2015. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures were effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion by the Company's Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after ~~September~~March 2627, ~~2014~~2015.

(b) Changes in Internal Control over Financial Reporting. No change in the Company's internal control over financial reporting occurred during the quarter ended ~~September~~March 2627, ~~2014~~2015, that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not Applicable.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

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Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None.

Item 6. Exhibits

(a) Exhibits included herewith are:

(a)	Exhibits included herewith are:

31.1		Certification of the Chief Executive Officer dated May 11, 2015

31.2		Certification of the Chief Financial Officer dated May 11, 2015

32.1		Certification of the Chief Executive Officer, pursuant to 18 U.S.C. section 1350, dated May 11, 2015

32.2		Certification of the Chief Financial Officer, pursuant to 18 U.S.C. section 1350, dated May 11, 2015

Exhibit 101.1		Interactive Data File:

101.1NS		XBRL Instance Document

101.SCH		XBRL Schema Document

101.CAL		XBRL Calculation Linkbase Document

101.DEF		XBRL Definition Linkbase Document

101.LAB		XBRL Label Linkbase Document

101.PRE		XBRL Presentation Linkbase Document

10.29		Loan Agreement – Two year term loan dated September 5, 2014 between the Company and Fifth Third Bank
31.1		Certification of the Chief Executive Officer dated November 10, 2014
31.2		Certification of the Chief Financial Officer dated November 10, 2014
32.1		Certification of the Chief Executive Officer, pursuant to 18 U.S.C. section 1350, dated November 10, 2014
32.2		Certification of the Chief Financial Officer, pursuant to 18 U.S.C. section 1350, dated November 10, 2014
Exhibit 101.1		Interactive Data File:
101.1NS		XBRL Instance Document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.DEF		XBRL Definition Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation Linkbase Document

SIGNATURES

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

Jagged Peak, Inc.
Registrant
/s/ Paul B. Demirdjian		~~November~~May 1011, ~~2014~~2015
Paul B. Demirdjian		Date
Chairman of the Board of Directors, Chief Executive Officer (Principal Executive Officer)
/s/ Albert Narvades		~~November~~May 1011, ~~2014~~2015
Albert Narvades		Date
Senior Vice President, Chief Financial Officer,
Treasurer and Secretary (Principal Financial Officer)

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