Embattled blood-testing agency Theranos to dissolve: WSJ
(Reuters) – Theranos Inc, the once-celebrated Silicon Valley blood-testing agency, is about to dissolve itself months after prime executives have been indicted for defrauding traders, the Wall Avenue Journal reported on Wednesday.
The transfer follows a failed try by Theranos to promote itself, throughout which it reached out to greater than 80 potential consumers by way of Jefferies Group, the Journal reported, citing an electronic mail to shareholders from Chief Govt David Taylor.
“Unfortunately, none of those leads has materialized into a transaction. We are now out of time,” Taylor wrote within the letter, a duplicate of which was printed by the WSJ.
The agency will try and pay unsecured collectors its remaining money within the coming months, the Journal reported, including that massive title traders had misplaced about $1 billion.
Neither Taylor nor representatives for Palo Alto, California-based Theranos instantly responded to Reuters’ requests for remark.
Theranos founder Elizabeth Holmes, who began the corporate when she was 19, was celebrated as a rising Silicon Valley star till it grew to become clear that most of the claims concerning the firm’s supposedly revolutionary blood take a look at have been bogus.
In June this yr, Holmes and former Theranos president Ramesh “Sunny” Balwani have been indicted on prices that they engaged in schemes to defraud traders, medical doctors and sufferers.
They used promoting and solicitations to encourage medical doctors and sufferers to make use of Theranos’s blood testing laboratory providers regardless of realizing the corporate couldn’t produce correct and dependable outcomes persistently, prosecutors had stated.
Theranos was in default beneath its credit score facility with Fortress Funding Group, Taylor stated within the letter.
He stated the corporate was making an attempt to achieve an settlement with Fortress to present it possession of Theranos’ patents however leaving its remaining money of about $5 million for distribution to different unsecured collectors.
In addition to Fortress, Theranos owes at the least $60 million to unsecured collectors, Taylor stated. “Because the company’s cash is not nearly sufficient to pay all of its creditors in full, there will be no distributions to shareholders,” he added.
The corporate goals to hunt board and shareholder consent for the Fortress settlement and company dissolution later this week and proceed with the actions beginning Monday, Taylor stated.
Reporting by Kanishka Singh in Bengaluru; Enhancing by Sai Sachin Ravikumar