Theranos is expected to shut down for good

Blood-testing startup Theranos reportedly to dissolve

Blood-testing startup Theranos reportedly to dissolve

Theranos will begin its dissolution proceedings on September 10.

"We are now out of time", David Taylor, the company's chief executive and general counsel, informed investors in an email first reported Tuesday by The Wall Street Journal. Holmes and the company's former COO and president Ramesh "Sunny" Balwani allegedly engaged in a multimillion dollar scheme to defraud investors, as well as a scheme to defraud doctors and patients, according to prosecutors.

Theranos will seek to pay unsecured creditors its remaining cash in coming months, the email said.

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All of these titles and more were conferred on Elizabeth Holmes, founder and former CEO of Theranos, a clinical lab-testing business that just a few years ago was worth about $9 billion. "Despite our careful cash management, we are in default under the Fortress credit facility", Taylor wrote.

The turning point then came in October 2015, when investigative reporter John Carreyrou of The Wall Street Journal questioned the validity of Theranos' technology.

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.

Theranos, with Holmes at the helm, had claimed that it could run a slew of physiological tests with a simple pin-prick of blood. At one time, Holmes was the youngest self-made female billionaire.

A controversial health tech firm which made headlines after fraudulent claims over the accuracy of its blood-testing technology has reportedly closed its doors.

"Holmes and Balwani knew that many of their representations about the analyzer were false", the Justice Department said when the charges were announced in June. The Journal reports that most of the company's employees - reported to be down to fewer than two dozen as of April, a drastic fall from a peak of 800 - worked their last day on August 31. Both no longer work for the company. A notoriously secretive company, Theranos shared very little about its blood-testing machine, nicknamed Edison, with the public or medical community.

As part of the settlement, Ms Holmes had to return millions of shares to the privately held company and pay a $500,000 fine. In exchange, Fortress would get Theranos's patents. She eventually convinced her chemical engineering professor to join her, and he gave up his Stanford tenure to join her new company Theranos, which is an amalgam of the words "therapy" and "diagnosis".

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