Time's up for Theranos: Blood-testing company to dissolve

Blood-testing firm Theranos to formally dissolve report says

Theranos was unable to sell itself and is now looking to pay unsecured creditors its remaining cash of about US$5 million in the upcoming months, according to an email The Wall Street Journal obtained that chief executive David Taylor sent to shareholders. Back in June, Elizabeth Holmes, Theranos founder and the company's former president, Ramesh "Sunny" Balwani, were indicted by a federal grand jury in California on charges of wire fraud.

At one point, the biotech company received a valuation of $9 billion, but Wall Street Journal investigative reporter John Carreyrou found that the company's claims of having new technology to radically change traditional medical testing that was cheaper and more efficient turned out to be lies. Inc Magazine described Holmes "as the world's youngest female self-made billionaire, she's stumbled into this rarefied position and is beginning to own it". She became a media darling, attracting millions of dollars in investment based on claims of innovative technology.

After the SEC charged her and the company with fraud earlier this year, Holmes was stripped of control and is barred from serving as an officer or director at any public company for the next decade.

The blood-testing firm Theranos had claimed that they have devised several important physiological tests with a simple pinprick of blood, which was false.

The dissolution process was precipitated by the fact that Theranos breached a covenant governing a $65 million loan it received from Fortress Investment Group previous year.

Ms Holmes raised over $700m in funding for Theranos, but when she tried to pitch the technology to the US Department of Defense in 2012, her pitch was rejected due to the devices' unpredictable results. Most of Theranos's two-dozen remaining employees worked their last day on Friday, Aug. 31.

The company did not immediately respond to Ars' request for comment.

She carefully crafted her image as well, often wearing black turtleneck sweaters that led some in Silicon Valley to describe her as "the next Steve Jobs", a reference to the Apple founder.

If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of $3.69m each.

In April 2017, the Centers for Medicare and Medicaid Services (CMS) sanctioned Theranos and revoked its clinical laboratory testing certificate, which caused the pharmacy chain Walgreens to terminate its partnership with the start-up and sue Theranos for $140m.



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