Will Financing Make a Difference for These Small Cap OTC Stocks? BioRestorative Therapies (BRTX), Titan Pharmaceuticals (TTNP) & Omnitek Engineering (OMTK).

BioRestorative Therapies (BRTX), Titan Pharmaceuticals (OTC: TTNP) and Omnitek Engineering (OTC: OMTK) are three small cap OTC stocks that announced financing this week. That can be both good news for these companies if they properly use the funds to reach the next level but also bad news for existing investors should they have their investment in these stocks diluted. So do small cap OTC stocks BioRestorative Therapies (BRTX), Titan Pharmaceuticals (TTNP) and Omnitek Engineering (OMTK) have what it takes to get to that next level or will these stocks turn out to be duds for their investors and financers? Here is a closer look at all three to help you decide:

BioRestorative Therapies (BRTX)

BioRestorative Therapies stated goal is to become a medical center of excellence using cell and tissue protocols, primarily involving a patient's own adult stem cells, allowing them to undergo cellular-based treatments. BioRestorative Therapies’ has also launched the ThermoStem(TM) Program to focus on treatments for obesity, weight loss, diabetes, hypertension, other metabolic disorders and cardiac deficiencies plus the company offers facial creams and products under the Stem Pearls® brand. On Tuesday, BioRestorative Therapies reported that it had completed multiple rounds of private financing in 2012 to raise $2,100,000 with approximately $1,600,000 received as debt financing and another $500,000 raised as equity. Hence and on Tuesday, BioRestorative Therapies did not move and closed at $0.03 (BRTX has a 52 week trading range of $0.01 to $0.04 a range) for a market cap of $18.11 million plus the stock is up 66.7% since the start of the year and is up 50% since last September. It should be noted that while BioRestorative Therapies trades on the OTCBB, would-be investors will need to do some digging to turn up the stock’s financials. Moreover, it appears that no financials have been filed since early 2011.

Titan Pharmaceuticals (OTC: TTNP)

Titan Pharmaceuticals is a biopharmaceutical company focused in the development of products for the treatment of central nervous system (CNS) diseases. Specifically, Titan Pharmaceuticals's first out licensed product, Fanapt®, was approved in May 2009 for the treatment of schizophrenia in adult patients and its marketed in the US by Novartis Pharma AG with Titan entitled to receiving 8% to 10% of global annual sales as royalty revenue for the term of the licensed patents. Titan Pharmaceuticals’ second product, Probuphine, is nearing completion of the Phase 3 clinical development program for the treatment of opioid addiction. On Tuesday, Titan Pharmaceuticals announced definitive agreements to sell $5.5 million worth of common stock and warrants with Series A warrants having an exercise price of $1.15 per share starting in 6 months and lasting for 6 years while the Series B warrants have an exercise price of $0.85 and can be exercised for 6 months from their date of issue. Hence and on Tuesday, Titan Pharmaceuticals sank 38.27% to $0.679 (TTNP has a 52 week trading range of $0.63 to $2.22 a share) for a market cap of $40.32 million plus the stock is down 40.44% since the start of the year, down 51% over the past year and down 35% over the past five years. Investors should note that Titan Pharmaceuticals has reported revenues of $4,068k (2011), $10,093k (2010) and $79k (2009); net losses of $15,203k (2011), $6,834k (2010) and $5,886k (2009); and had $5,406k in cash and $3,720k in receivables to cover $5,123k in accounts payable and $30,296k in total liabilities. However, the key for investors in Titan Pharmaceuticals will be Probuphine’s approval and ultimate success – something that is hard to judge right now.

Omnitek Engineering (OTC: OMTK)

Omnitek Engineering develops and sells new natural gas engines, proprietary diesel-to-natural gas conversion systems and complementary products. On Tuesday after the market closed, Omnitek Engineering announced it had closed a private placement of common stock and warrants to raise $5,516,762 in gross proceeds. Under the terms of the financing deal, Omnitek Engineering issued 2,602,264 shares at a price of $2.12 and warrants to a group of investors who can also purchase up to 2,602,246 more shares at an exercise price of $3.88. On Tuesday, Omnitek Engineering fell 2.58% to $4.15 (OMTK has a 52 week trading range of $0.45 to $6.55 a share) for a market cap of $73.47 million plus the stock is up 125.5% since the start of the year and up 388% over the past year. Investors should be aware that Omnitek Engineering has reported inconsistent revenues of $1,547 (2011), $1,733k (2010) and $1,326k (2009) but also falling net losses of $442k (2011), $1,155k (2010) and $1,358k (2009). As of December 31st, Omnitek Engineering had $31k in cash and $30k in receivables to cover $699k in current liabilities. Moreover and in Omnitek Engineering’s press release about full year earnings, it noted that the company had a large influx of orders late in the fourth quarter worth approximately $550,000 that could not be filled last year. Hence and while I am no fan of clean tech stocks, I’d say that Omnitek Engineering is at least worth watching by investors.

The Bottom Line. I’d give small cap OTC stock BioRestorative Therapies (BRTX) a pass while investors who like to gamble might find Titan Pharmaceuticals (TTNP) an interesting bet while Omnitek Engineering (OMTK) is at least worth watching.