To OTC Journal Members:
 

As A Pickle Shareholder, I Am Learning To Love Texas

These were the words of iconic American novelist John Steinbeck (The Grapes of Wrath) out of his rather whimsical 1962 novel, Travels With Charley. In the waning years of his life, Steinbeck, who had made a living writing about America, decided to go see the whole country through the windshield of a specially designed motor home. He was accompanied by his faithful standard French Poodle- Charley.

Steinbeck observed that visitors either loved or hated Texas, and, for selfish reasons, I am rapidly evolving a great love for the state. Why?- because Texans seem to be falling in love with Spicy Pickle, and any group of consumers who loves the faire of my favorite microcap company deserves to have the feeling returned in kind.

Today, just post close, SPKL announced it has inked a seven store franchise agreement in San Antonio, Texas. In total, Texas is now accounting for 25 current and future Spicy Pickle locations, more than the 23 in home state Colorado. With the Dallas/Ft Worth area still to go, Texas is proving to be fertile ground for the expansion of this concept.

Of late, a few folks have asked me if I feel SPKL is a buy, as it has given some ground along with every non commodity related domestic stock. Here's the answer I have shared one on one.

We are in the middle of a Bear Market, and there is a buyer's strike. Buy side volume is anemic. Sellers are in the majority on these negative days, but there doesn't seem to be a lot of stock for sale. Shareholders who are watching the company's progress recognize this could turn into something very special longer term, and are reluctant to part with their positions.

The stock would be vulnerable should one of the shareholders decide to use the SPKL shares as a source of revenues to meet some need unrelated to the progress of Spick Pickle. If someone were to try to sell a large block very quickly, the stock would no doubt swoon.

On the other hand, I also believe that should some shareholder decide to sell a block of shares in unrealistically short order, there are a number of investors following this story who are looking to pounce on any sort of sell off and pick up shares at a bargain basement price.

Once we get past this Bear Market, SPKL will likely go on to make new all time highs, and then move much higher if the current trend continues. The recession might work in the company's favor. If you ask CEO Marc Geman about the company's greatest weakness, he will tell you the biggest challenge is locating the right commercial real estate at a reasonable price. Rapid expansion during a recession might be possible as retail space could be more readily available. Get the stores open at reasonable rates today, and they will make a lot more money as same store sales grow in a more robust economy.

Today, SPKL is trading to a new 2008 low as investors were once again greeted with a bloody market headline. The once mighty Wall Street institution Bear Stearns has been reduced to rubble in the liquidity crises, and Morgan Stanley is supposed to be buying the company for $2 per share. It was $70 in February. Investors are in the "cash at any cost" mentality, and buyers are no where to be found.

In the last three months multi store commitments have been signed in Chicago, Los Angeles, Houston, Michigan, and now San Antonio. Those signings are just this year, and we're not even in Q2 yet. This progress is not going unnoticed by investors.

A quick look at the chart reveals that the current market environment has led us into the mid $.80 range. It's worth noting December's financing was of $6 million was priced at $.85- investors included sophisticated fund manages, two board members, and myself to the tune of $102,000. For me, the participation in this round of financing is a long term investment. I don't really care if the stock wants to trade poorly for a while. I'd prefer it traded better, by I won't lose any sleep over it. I know what the company is delivering on the corporate progress side, and don't mind waiting out the Bear Market.

When the 2007 audited numbers are released, you will see very strong balance sheet improvements. When Q1 and Q2 numbers come out, you will see huge percentage gains in the top line as the company puts December's cash balances to work. In Q3 and Q4, profitability should start to become visible.

Growth through 2009 and 2010 is already on the books with the current slate of development agreements. All in all, I'm not sure what else you could ask for in a microcap growth story.

Do you agree? Send me your thoughts: editor@otcjournal.com.

Here is the complete text of today's news release for your review:

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Go Here to view our compensation on every company we have ever covered, or visit the following web address: http://www.otcjournal.com/disclosure/compensation/section/profile/ for our full profiles and http://www.otcjournal.com/disclosure/compensation/section/alert/ for Trading Alerts. Larry Isen, the editor and publisher of the OTC Journal, through various entities he controls, has purchased 1,200,441 shares of Spicy Pickle at an average cost of $.2125 per share. These purchases were made in Spicy Pickle private offerings. The aforementioned purchases were made between August of 2005 and August of 2006. On 12/15/07, on entity controlled by Larry Isen participated in an additional financing wherein 12 shares of convertible preferred, converting at $.85 into 120,000 shares and 90,000 warrants with an exercise price of $1.60 were purchased. In addition, Larry Isen has received 785,000 shares of Spicy Pickle common stock for consulting services. In addition, MarketByte LLC, an entity controlled by Larry Isen, has received a fee of $30,000 cash, and 300,000 newly issued restricted shares for coverage of Spicy Pickle. TGR Group LLC, the publisher of the Small Cap Network, has received $30,000 and 300,000 newly issued restricted shares for coverage of Spicy Pickle. Mr. Isen is an affiliate of TGR Group. In addition, two other individuals affiliated with TGR Group have purchased a total of 300,000 shares at $.25 per share and received an additional 70,000 for consulting services.

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