Theranos gets $100 million in debt financing to carry it through 2018, with some caveats

Space_Time · Dec 23, 2017

I was surprised the company still existed after its abrupt fall. Will acquiring this debt financing help them at all? Will having to service the debt become a problem?

https://www.yahoo.com/news/theranos-gets-100-million-debt-181505187.html

Theranos gets $100 million in debt financing to carry it through 2018, with some caveats
Sarah Buhr,TechCrunch 54 minutes ago

Theranos has secured $100 million in debt financing. Yes, someone gave the blood testing company known for handing out questionable test results money.

First reported by Business Insider, the company reportedly told investors it had secured the money from Fortress Investment Group, a New York-based private equity firm that was acquired by Softbank earlier this year.

Of course, this is debt financing, not equity and Theranos will surely need it as it has been bleeding money, laying off more than half its workforce this year and trying to come up with ways to keep it afloat.

Theranos was a once Silicon Valley darling valued at over $9 billion for its promise to detect more than 200 diseases on a single drop of blood. But the company fell from grace after it was discovered it was giving patients faulty test results. Theranos soon faced several lawsuits and came under federal investigation. It's co-founder and CEO Elizabeth Holmes was barred from entering her own labs, the labs soon shut down and the company had to pivot -- hard -- to a disease detecting box contraption instead.

The company has not raised funding since the mess began in 2015. But, last night Holmes reportedly told investors she believed the company would have "sufficient liquidity through 2018" thanks to the new cash infusion.

Of course, the funding is subject to hitting certain product and operational milestones and gives Fortress four percent of the company's equity, according to the BI report.

Holmes letter to investors also outlined several changes she's made in the last year to get the company back on track, including quality control and regulatory compliance. The company settled several lawsuits this year and with the Centers for Medicare and Medicaid Services (CMS), the government agency which first scrutinized Theranos' testing facilities, adding hope that the company may be able to operate its labs again in the future.
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waltky · Sep 5, 2018

Theranos founder Elizabeth Holmes is facing criminal charges of wire fraud...

Theranos: Scandal hit blood-testing firm to shut
5 September 2018 - Scandal-hit US blood-testing start-up Theranos is to formally dissolve, the firm's chief executive David Taylor has told shareholders in an email.

Mr Taylor said Theranos had run "out of time" to secure further investment or secure a buyer for its assets. Theranos founder Elizabeth Holmes and former president Ramesh Balwani are facing criminal charges of wire fraud. Prosecutors say they engaged in a multi-million dollar scheme to defraud investors, doctors and patients. Mr Taylor, who also serves as general counsel to the firm, said that Theranos had engaged the services of investment bank Jeffries to try to "maximise the value of the company" for shareholders.

Theranos founder Elizabeth Holmes is facing criminal charges of wire fraud

In the email obtained by the Wall Street Journal, he said the investment bank had "reached out" to over 80 potential buyers, but to no avail. "Unfortunately, none of those leads has materialized into a transaction. We are now out of time," he wrote. 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. Shareholders are expected to receive nothing after the firm's collapse.

Criminal charges

Theranos, founded in 2003 when Ms Holmes was 19, had claimed its Edison devices could test for conditions such as cancer and cholesterol with only a few drops of blood from a finger-prick, rather than taking full blood samples by needle from a vein. 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. The Wall Street Journal began investigating and published a series of exposes starting from October 2015. Theranos denounced these articles, but by June 2016 it was facing legal challenges from investors, medical authorities and five federal agencies.

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. In March, Ms Holmes settled charges with the Securities and Exchange Commission, a top US financial regulator. The regulator alleged that Theranos, Ms Holmes and Mr Balwani made a series of false and misleading statements in investor presentations, product demonstrations and interviews. As part of the settlement, Ms Holmes had to return millions of shares to the privately held company and pay a $500,000 fine. She was also banned from serving as an officer or director of a public company for 10 years.

https://www.bbc.co.uk/news/business-45418615
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Izzy · May 30, 2023

Her boyfriend and business partner, Balwani, is serving a 13-year prison sentence after being convicted of 12 counts of fraud and conspiracy.

'Former Theranos CEO Elizabeth Holmes reports to prison to serve her 11-year sentence for fraud'
Source: CBS

BY ELIZABETH NAPOLITANO
UPDATED ON: MAY 30, 2023 / 1:39 PM / MONEYWATCH

Former Theranos CEO Elizabeth Holmes was taken into custody Tuesday to begin serving her 11-year sentence at a Texas prison for swindling investors of hundreds of millions of dollars and lying about her biotech company's blood-testing technology.

A California court convicted Holmes, 39, on four counts of fraud and conspiracy. The judge presiding over the case recommended she serve time at a prison camp in Bryan, Texas. She leaves behind a nearly 2-year-old son, who was born weeks before the start of her trial; and a 3-month-old daughter, who was conceived after her conviction.

Holmes, 39, will be incarcerated in a minimum-security women's prison camp in Bryan, Texas, located about 95 miles northwest of Houston, where she grew up aspiring to become a technology visionary along the lines of Apple co-founder Steve Jobs.'

Read more: https://www.cbsnews.com/news/theranos-ceo-elizabeth-holmes-prison-sentence-trial/

Aleksander Ulyanov · Jun 1, 2023

Izzy said: ↑

Her boyfriend and business partner, Balwani, is serving a 13-year prison sentence after being convicted of 12 counts of fraud and conspiracy.

'Former Theranos CEO Elizabeth Holmes reports to prison to serve her 11-year sentence for fraud'
Source: CBS

BY ELIZABETH NAPOLITANO
UPDATED ON: MAY 30, 2023 / 1:39 PM / MONEYWATCH

Former Theranos CEO Elizabeth Holmes was taken into custody Tuesday to begin serving her 11-year sentence at a Texas prison for swindling investors of hundreds of millions of dollars and lying about her biotech company's blood-testing technology.

A California court convicted Holmes, 39, on four counts of fraud and conspiracy. The judge presiding over the case recommended she serve time at a prison camp in Bryan, Texas. She leaves behind a nearly 2-year-old son, who was born weeks before the start of her trial; and a 3-month-old daughter, who was conceived after her conviction.

Holmes, 39, will be incarcerated in a minimum-security women's prison camp in Bryan, Texas, located about 95 miles northwest of Houston, where she grew up aspiring to become a technology visionary along the lines of Apple co-founder Steve Jobs.'

Read more: https://www.cbsnews.com/news/theranos-ceo-elizabeth-holmes-prison-sentence-trial/
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She should have become a Republican pol. She'd be the Veep in 2024

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Theranos gets $100 million in debt financing to carry it through 2018, with some caveats

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