Blood-testing company Theranos is set to dissolve

Ebony Scott
September 6, 2018

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.

Scandal-hit United States blood-testing start-up Theranos is to formally dissolve, the firm's chief executive David Taylor has told shareholders in an email.

The Silicon Valley firm will attempt to pay unsecured creditors its remaining cash in the coming months, the report said, adding that big name investors had lost about $1 billion.

In May, it was announced that a movie based on a book by Wall Street Journal writer John Carreyrou was in the works and would star Jennifer Lawrence as Holmes.

The announcement of the closure comes almost three months after Theranos founder Holmes and Chief Operating Officer Ramesh Balwani were charged with criminal fraud.

She and Mr Balwani still face up to 20 years in prison and fines of millions of dollars if convicted of fraud.

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The indictments followed months of reporting by The Wall Street Journal that raised questions about the company's technology and practices. At the height of her fame, the Stanford University dropout claimed to have invented groundbreaking new technology that could run the full range of laboratory tests on just a drop or two of blood pricked from a finger.

Ms Holmes herself became a business pin-up, wearing a black turtleneck jumper that drew comparisons with Steve Jobs, while profiles regularly pointed out that, like other successful tech entrepreneurs such as Bill Gates and Mark Zuckerberg, she was a college drop-out.

The once-heralded blood-testing startup Theranos is now set to formally dissolve just weeks after its CEO was charged with criminal fraud. The pharmacy chain has said it was misled by Theranos about its technology and prospects.

Mr Taylor said the firm had breached the terms of its loan agreement with investor Fortress Investment Group, meaning the firm was now entitled to sell or take ownership of Theranos' intellectual property and assets.

It was briefly one of the most celebrated companies in Silicon Valley - but Theranos, a company valued at $9bn (£7bn) at its peak, will soon be no more.

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