Titan Pharmaceuticals Inc (TTNP)

[Doctor Detroit]

I get what you are saying, but remember Apple Tree Partners is a venture fund. They are looking for a huge return from the operations of their funded companies, not by their funded companies having investments in other companies. Eventually, they will want to exit their investment, either by Braeburn going public or by selling their interest in Braeburn. Sales and profitability drive valuation. You get a price based off a multiple of earnings. They don't give you a price based off a multiple of your invested capital.

Apple Tree doesn't want to fund Braeburn anymore than they have to in order for its to be successful. Even if Braeburn wanted to keep the stake in Titan, it's conceivable they asked for some draw down funding from Apple Tree, who said..."I see you have a bunch of Titan stock on your books, use that for part of your funding."