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FIRSTPENNYPICKS Newsletter

The penny markets have been brutal this past month and we have fallen victim to shorts and market makers on a couple of our picks. Although, you know if you are a long time loyal follower this is rare for us! Cause let`s face it everyone wants to be like us. Our group is growing very fast and becoming better more informed traders. So…

It`s time to be who we are and kick off our Sunday uncompensated watchlist. This is just another service that sets us apart from the competetion. This new watchlist will include Small-caps ($.50-$5.00/share) Micro-caps/penny stocks with chart setup`s, FDA approvals, new product launches, 3D printing and peripherial sectors, reverse merger watch, medical marijuana and much more.

Before we get to our first Sunday watch list, make no mistake we are still covering  EAPH as a feature and updates are coming this week. We may be kicking off a new feature with less than 8M outstanding shares trading unnoticed with recent news around .03/share this week. This new report will most likely be coming mid-week. Stay tuned…

Our first Sunday watch report includes two great stories:

FULL REPORT: Elite Pharmaceuticals, Inc. (OTCQB:  ELTP ) Note = delisted from NYSE Alternext on 05/21/09 Because of our commitment to our members and their loyalty to us we have become an extremely high quality newsletter over the years. Though some may disagree,  ELTP in our opinion just needs their story told to more investors.  ELTP currently showing a bottomed chart with a reversal in progress. These shares have been beat down over the last 52 weeks dropping from a high of .17/share to a current PPS of approximately .07/share.

ELTP Recent News: 03/11/13 Northvale, New Jersey, April 11 2013: Elite Pharmaceuticals, Inc. (“Elite” or the “Company”) (OTCBB:  ELTP ) today announced the initial shipment of phentermine HCl capsules 15 mg and 30 mg under the License, Manufacturing and Supply Agreement with its sales and marketing partner, triggering a milestone payment.

Elite’s sales and marketing partner will distribute the product as part of a multi-product distribution agreement.

Phentermine is a member of the bariatric class of drugs intended to aid in weight loss. For the twelve months ending December 31, 2012, Adipex-P® 15 mg and 30 mg and its generic equivalents had total U.S. sales of approximately $2.5 million and $5 million respectively according to IMS Health Data. U.S. sales of this product are thought to be greater than the IMS data due to its distribution through channels that are not included in IMS data.

Quote from CEO:

“Elite has successfully launched another product line, this one encompassing two dose strengths. Management remains dedicated to enhancing shareholder value by expanding our generic portfolio of products, continuing the development of our abuse-resistant opioid line of products, enhancing our intellectual property, and strengthening the balance sheet”, commented Jerry Treppel, Elite’s Chairman and CEO.

The Numbers:

ELTP had as of Dec. 31st 2012, 65K in cash, 526K in receivables and $10.3M in assets.

Share structure and market cap:

356M outstanding shares PPS .071 Market Cap $25.3M Overview:

Consolidated loss from operations was $(0.3 million) for this quarter, compared with a loss from operations $(0.4 million) in the comparable quarter of the prior year. GAAP net income for the quarter, including non-cash expenses relating to the accounting treatment of preferred share and warrant derivatives was $9.4 million, compared to a GAAP net income of $8.8 million for the comparable quarter of the prior year, with the difference mostly being due to changes in the value of preferred shares and warrant derivatives. Basic earnings per share was $0.03, on a weighted average of 350.2 million common shares outstanding, compared to a basic earnings per common share of $0.03 and a weighted average common shares outstanding of 262.1 million in the comparable quarter of the prior year. Fully diluted earnings per share was $0.02, on a weighted average diluted shares of 486.2 million, compared to fully diluted earnings per share of $0.02 and a weighted average diluted shares of 427.0 million in the comparable quarter of the prior year. The increase in common shares outstanding is primarily due to conversion of preferred shares into common shares during the last 12 months.

Conclusion:

If facebook can IPO for 103 x EPS why can’t  ELTP trade for at least 10 x EPS I believe we have all seen OTC stocks trade at 10-300 x EPS and more with little to no assets. The chart shows a reversal could be coming and we will be looking for a .10/share break and possible retest of the .17/share mark. 10 x EPS would put  ELTP in the .20/share range.