United States blood-testing startup Theranos to fold

Leslie Hanson
September 5, 2018

Once a Silicon Valley darling, the startup blood-testing company became mired in scandal over the last few years.

The company's dissolution comes months after its top two executives, ex-CEO Elizabeth Holmes, and former president Ramesh "Sunny" Balwani, were federally prosecuted for criminal wire fraud.

Holmes and Balwani both pleaded not guilty at their arraignment.

The biotech company, which was once valued at $9 billion, built its reputation on the claim that it had come up with a cheaper, more efficient alternative to traditional medical tests.

Holmes and Balwani are accused of faking demonstrations of the technology, lying to investors about the anticipated returns, lying to the media, lying about the deployment of the technology on the battlefield, using third-party equipment to conduct tests while claiming to use Theranos's own gear, and misrepresenting the progress of a partnership with Walgreens (wba).

Theranos founder Elizabeth Holmes was once lauded as the youngest self-made female billionaire.

He said the company was attempting to reach an agreement with Fortress to give it ownership of Theranos's patents but leaving its remaining cash of about $5 million for distribution to other unsecured creditors.

She carefully crafted her image as well, wearing nearly entirely black turtleneck sweaters that earned her the moniker in Silicon Valley as 'the next Steve Jobs'.

Investors bought what Holmes was selling and invested hundreds of millions of dollars in the company.

The Fortress Investment Group loaned $65 million to Theranos past year, with one condition being that Theranos maintain a cash level that has now been breached-hence the dissolution process that will play out over the coming months.

The Wall Street Journal began investigating and published a series of exposes starting from October 2015.

Holmes and Balwani in March were also charged by the Securities and Exchange Commission with "massive fraud".

As part of the settlement, Ms Holmes had to return millions of shares to the privately held company and pay a $500,000 fine.

Other reports by Iphone Fresh

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