Theranos to formally dissolve

Blood-testing startup Theranos reportedly to dissolve

The company plans to formally dissolve itself and pay unsecured creditors its remaining cash in coming months, the newspaper reported, citing an email sent to shareholders.

Theranos founder Elizabeth Holmes and former president Ramesh Balwani are facing criminal charges of wire fraud. Both executives have denied the charges, according to the Journal. Under the loan terms, Fortress was entitled to foreclose upon the company's assets if its cash fell beneath a certain threshold. He said it owes at least $60 million.

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.

The big-name investors who poured money into Theranos will get nothing.

Investors lost nearly $1 billion in the company, The Journal reported.

The announcement of the closure comes almost three months after Theranos founder Holmes and Chief Operating Officer Ramesh Balwani were charged with criminal fraud. If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of US$2.75 million each.

The indictments followed months of reporting by The Wall Street Journal that raised questions about the company's technology and practices.

The idea was that this would reduce sharply the cost of blood tests as well as making the process less unpleasant to patients with a phobia of needles.

Theranos and Ms Holmes, its founder, claimed that Edison, their invention, a portable blood analyser, could conduct comprehensive tests using tiny amounts of blood taken from a pinprick on the finger, rather than vials filled with blood taken from veins.

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 pharmacy chain has said it was misled by Theranos about its technology and prospects. Behind the scenes, it performed the vast majority of the tests with commercial analyzers purchased from other companies.

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