Coverage Initiated: UFood Grill (UFFC) For those of you who were reading our newsletter for a while, you'll also remember how Spicy Pickle (OTCBB: SPKL) shot up from our pick price of 69 cents to our target price of $1.40. The most impressive part about that rally, however, was that it took just three weeks to accomplish.  Who would have thought any restaurant stock could yield a 100% return in less than month? In fact, SPKL eventually went on to trade above $2.00... a 190% gain from where we recommended it.  Well, I believe lightning is about to strike again and reward restaurant investors in the same way.  Here's the deal - we've discovered a health-focused restaurant concept with huge growth potential. This restaurant chain opened three locations since July, and signed leases for two more, in an economic environment where expansion was supposed to be impossible. And as of today, the company's got the financing to maintain that strong rate of expansion.  This is the best part of all though - despite the company being about twice as big as it was a year ago, you can own the stock for less than 1/10 of what it was trading at then.... a value seeker's dream. And let me tell you, at a current trading level of 14 cents means there's next to no downside for this stock. On the flip side, the high above $2.00 from last year wouldn't be terribly difficult to revisit in the near future.  See the opportunity? Yes, the market simply let this one slip by last year, compliments of a hype-based, fear-mongering media and a federal government transition serving as distractions. You can take advantage of everyone else's mistake by riding shares back up to price levels that actually make sense for this company.  When all said and done, that return trip could translate into triple-digit gains for today's investors. Heck, a mere move from 14 cents to 28 cents would be a double for you. A rebound only to November's peak levels of 48 cents would almost be a quadruple in value. It's just wild how much bang you could get for your buck here.  And after 2008's market debacle, odds are that you want and need a big winner in your portfolio. We think this is it.    "Feel Great. Eat Smart." If you've not yet been introduced to UFood Grill (OTCBB:UFFC) as a customer, I think you will be pretty soon. UFood is one of the leaders in the move towards healthy restaurant food choices - the core reason for the company's growth, past and future. At the end of last year, 1600 of the American Culinary Federation's chefs were asked what they felt would be the major trends for restaurant food in 2009. The first two of the top ten anticipated trends were health-oriented; six of the top ten were also health-oriented.     Company Name: UFood Restaurant Group, Inc.  Stock Symbol : UFFC Coverage Initiated: March 19th, 2009 Current Price: $0.14 Avg. Volume (3 mo.): 39,477 52 Week Range: $0.10 - $2.10  Market Cap: $5.2M  Rating: Speculative Buy Translation? Consumers now expect healthier choices from the restaurants they visit, and they're willing to pay for it. In fact, three out of four adults acknowledge they're looking to change their diet to something healthier, and more than 1/4 of American adults have used the Internet to find nutrition information about restaurant's menus. UFood Grill's menu doesn't offer anything that's fried... literally. Everything is baked, grilled, or steamed. Fresh produce, whole grains, and organic ingredients are used whenever possible. However, the company has never lost sight of the fact that great flavors are the key to a restaurant's success. And if you asked anyone who's eaten at a UFood Grill, they can tell you the food does indeed taste great in addition to being healthy.  Here's a link to a company video below, if you really want the details. I highly recommend you check it out: http://access.smallcapnetwork.com/video/p/company/uffc/.  The company's slogan "Feel great. Eat Smart." is right on target - UFood is simply tapping into that revenue stream as one of the first and very few names in the health-oriented restaurant space.   Fundamental View As of our last count, there are fourteen UFood Grill locations in operation. Five of them are company-owned, and nine of them are franchised. The company added six of those units since the end of 2007. In terms of numbers, the company has been generating quarterly revenues around $1.5 million, though bear in mind rapid expansion in recent months could significantly boost this number in future quarters.  On the surface the revenue dollars may not seem commensurate with the number of units, but remember, most of the stores are franchises. These units contribute less to the corporate top line than a company-owned unit would, but the bottom line margins for franchise fees and royalties are tremendous. Therefore, the focus really should be on expenses, overhead and the bottom line. The balance sheet is clean too.  Per the most recent 10Q, UFood's got well over a million in cash, about 880K in near-term debt obligations, and another 445K in long-term debt obligations. There's also some convertible debt on the books, along with 34.8 million common shares issued and outstanding. At 14 cents per share, that translates into a non-diluted market cap of $5.2 million. Today's financing probably changed those numbers somewhat, but there's nothing unusual or alarming about the company's capitalization.  The company's growth trend and our realistic growth projections suggest profitability could be achieved in 2010. So why not wait until then? Experienced investing veterans will know that waiting for perfection will be too late - stocks move in anticipation of a company's success. If maximum profits are your goal (and why wouldn't they be?), we believe now is the ideal time to become an owner. A couple of SEC filings have offered subtle clues as to where the company is headed. Specifically, the 8K filing from February 2nd mentioned the company was in negotiations with a world-wide provider of food services that could put many more units in non-traditional locations. UFood had also requested locations at several more airports. If those are approved, those units could also open in 2009. And finally, the company cited their intent to enter the hospital market, which needless to say could be an enormous victory.  While none of those projects were guaranteed or specific, the fact that they were filed as part of an official document with the SEC adds a great deal of credibility to them. Therefore, even with a conservative interpretation of the message UFood was sending with the document, we believe the company's growth potential is enormous. We don't think it would be out of line to look for several dozen UFood Grills within the foreseeable future. That's great news for stock owners.    The Time is Now I've worked very hard to not utilize overused cliches, but there's one I can't avoid for anybody asking "Why now?"  The Chinese definition of 'crisis' translates into English as "dangerous opportunity". I know - it's cheesy. And for most companies, the financial crisis of 2008 clearly offered more danger than opportunity. In UFood's case though, the economic contraction created a disproportional amount of opportunity, for the company as well as investors. Why do I say this? Two reasons. First, the company has expanded in a nasty economic environment. Take a look. A unit in California was opened in November  A unit in Chicago was opened in January....the city's third.  A unit was opened in Draper, UT in February.  A unit opened at Dallas/Fort Worth Airport just a few days ago.  How many other organizations can you name that are growing right now? Merely surviving 2008 would be impressive, but UFood Grill has continued to maintain shareholder value just by growing. Again, I think the short film does the company justice: http://access.smallcapnetwork.com/video/p/company/uffc/.  And if you're wondering how they added stores in an ugly environment, it's actually pretty simple. Commercial real estate is very reasonably priced right now (particularly in airports, where UFood thrives), while the restaurants have managed to keep drawing a crowd despite the recession. Oh, and the concept was strong enough to continue attracting investment dollars to fund the expansion, which leads me to the second and bigger reason why I think now is the time become an owner... As you'll read in the press release below, UFood Grill just completed financing worth about $2.8 million. Yes, you read that right - a company just raised money in an environment where it's supposed to be impossible.  The private placement in itself could be reason enough to become an owner. Those investors are putting millions on the line, so obviously they see something well worth the risk. I'd be willing to line up side-by-side with someone putting up that kind of money. The exciting aspect of the fund raising, however, doesn't appear in the press release.  In 2008, UFood raised about $11 million at $1.00 per share. The company then parlayed that into real, tangible expansion. How so? UFood started last year with eight units, and now there are fourteen. In other words, the company actually put the money to good use, and directly benefited investors by opening more revenue-bearing units. I have no reason to think UFood won't do the same this time around too. Here's the sweetest part of all though.... you can own UFFC shares for less than 1/10 of last year's value, despite the company's growth in the meantime, and in front of what I think will be yet another strong growth wave. There's a lot to like about UFood's... the market cap of around $5 million, moderate debt financing, quarterly revenue of about $1.5 million (and growing), a clean balance sheet, and now the funding to continue their proven expansion. At 14 cents now versus $2.00 from the middle of last year - and factoring in the growth in the meantime - the stock simply looks undervalued.  In our opinion, we feel UFFC has the potential to more than double in value in less than a year... possibly a lot more. But, that only does you any good if you're actually a shareholder. We rate UFood Grill shares as a speculative buy, and suggest you become an owner today while shares are sub-20 cents. They aren't likely to stay that low much longer.   UFood Grill Announces $2.8 Million Proceeds of Private Placement Offering  BOSTON, MA--(MARKET WIRE)--Mar 20, 2009 -- UFood Restaurant Group, Inc. (OTC BB:UFFC) announces it has received proceeds of a Private Placement offering in the amount of $2.8 million, net of expenses, to fund its ongoing growth and operations. About UFood Restaurant Group, Inc. Headquartered in Boston, MA, UFood Restaurant Group, Inc. is a franchisor and operator of fast-casual food service restaurants. UFood Grill offers a healthy lifestyle alternative to consumers in the fast-casual restaurant space and is positioned to become a leading player in the "better-for-you" quick serve restaurant category. The Company is led by franchise innovator George Naddaff, who founded Boston Market and led the franchising of several companies including Sylvan Learning Center and Ranch*1. Mr. Naddaff has a veteran management team with a record of success in the franchise market. UFood is currently launching a growth plan to franchise nationwide. To learn more, please visit www.ufoodgrill.com.  Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 involving known and unknown risks, delays, and uncertainties that may cause our actual results or performance to differ materially from those expressed or implied by these forward-looking statements. These risks, delays, and uncertainties include, but are not limited to: risks associated with the uncertainty of future financial results, our reliance on our sole supplier, the limited diversification of our product offerings, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements. Contact:  Alexis Miminos  (617) 787-6000