To OTC Journal Members:
 

I hope at least of few of you followed my weekend trade and took a shot at my suggested option trade on the Time Warner (NYSE: TWX) calls. I bought first thing Monday morning, and closed out yesterday with a one day $1,000 profit on a $6500 investment. That's 15.3% in one day, or 5600% on an annualized basis, which is of course an absurd way to look at it. I also closed out a position I opened last week in QQQQ calls for a $1700 investment on $8200.

While we continue to flounder in this anemic microcap environment, I will continue to offer up these high risk, short term trading ideas for your entertainment and hopefully profit. As I pointed out last weekend, you can get notification of these ideas by using the RSS feeds, and/or keeping an eye on the Short Term Trades section in the BLOG.
 

Pickle Buys Back Four Units: Equates To 20 Fold Top Line Increase

I have received very positive feedback from OTC Journal members of late, commenting that we are really onto something with Spicy Pickle. I feel  most investors are prepared to accept the recent anemic trading volume as a consequence of a Bear Market, and are focusing more on the company's successive corporate developments as their cue to stay engaged.

To that end, Spicy Pickle was out today with another very substantive event which changes the landscape of future financial performance in a very positive way. 

I am going to provide a fairly long explanation, as I want to be certain everyone has a complete understanding of where the company stands today, and what the future looks like at the current time.

Here's where we were up to today:

• Up until today, there were a total of 123 franchises sold.
• Of the 123, 35 are open and operational, 4 are under construction, and 5 new leases have been signed and are going through the permitting phase. The real estate division is seeking out other locations all over the country right now.
• One company owned store which doubles as a franchise training facility is operational now, making the total number of stores open today 36.

• 119 franchises sold
• 5 company owned stores opened an operational
• 31 franchises opened and operational
• 2 company owned stores under construction, which will bring the total to 7 over the next several months.
• 88 more franchises to open, 4 currently under construction, and 5 under lease preconstruction. Therefore, there are 78 more locations to find over the next couple of years, a number which will go up as more franchisees sign on.

This move benefits shareholders in several ways. First and foremost, the top line moves up quite dramatically. Assuming the average revenue per store is about $650,000, 5 stores equals $2.6 million in annual revenues, or $650,000 per quarter.

Each franchise generates roughly $50,000 in annual revenues, so the current royalty revenue stream should be about $1.55 million, or $390k quarterly. 

One can also sprinkle in franchise fees which are booked as stores open. Therefore, SPKL's Q2 revenue run rate, as the company stands today, should be somewhere in the $1 million range, or $4 million annually. This might not seem like a huge number, but it will be compared to about $350k from the same quarter last year. Therefore, the top line will be 3 to 4 times the level it was one year ago.

Here's what to expect: Top line year end numbers will not show any great improvements over the previous year, but the balance sheet, especially the cash, will be greatly improved. The first big top line improvements will come in Q1, and it is now a certainty those improvements will continue into Q2. The bottom line should start to improve considerably throughout the second half of '08 as many of the costs associated with being public in the early stage are absorbed in the financials.

Here's where we are with the stock:

As you can see, the triangle continues to extend to its apex. Early in February, the stock was bumping up against the top line. Now it is bumping along the bottom line within the same range.

As I have said in the past, the recent slight downturn in price is probably directly related to the recent effectiveness of the registration statement and a little excess supply hitting the market. It's not a lot of stock, but enough to keep the stock headed down a penny or two each day. It's really the absence of buyers that are affecting the price, as the microcap switch is currently in the "off position". 

SPKL is a bit of an enigma right now in that the company is doing just great, but the stock is languishing. Technically, I feel the stock is vulnerable to slowly grinding down into the $.95 to $1.05 range.

The upside here is unlimited. On its current course, I believe the stock will eventually trade to $3 to $4. Very short term, its tough to say. It seems SPKL comes out with evidence of substantive positive developments nearly every week. One of these days, the stock could just turn around and break out.

If you can visualize 100 stores open and 400 in development, it's awfully easy to hold on to, accumulate more, and be patient.

Here is the complete text of today's news 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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