Blood-testing firm Theranos to dissolve

Blood-testing firm Theranos to dissolve

Blood-testing firm Theranos to dissolve

Theranos hit its commercial peak in 2013-14, amassing a $10 billion (£7.7 billion) valuation.

The executives have denied the charges and face a coming criminal trial.

Holmes was succeeded as CEO by Taylor in June this year, after the former was indicted with nine counts of wire fraud and two counts of conspiracy to commit wire fraud by a USA grand jury.

Theranos, which owes at least $60 million to unsecured creditors, will turn over its assets and intellectual property to credit and investment firm Fortress, says the e-mailed letter, first reported by The Wall Street Journal.

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Investors bought what Holmes was selling and invested hundreds of millions of dollars in the company. "Despite our careful cash management, we are in default under the Fortress credit facility", Taylor wrote.

However, the rise of Theranos quickly unravelled after a Wall Street Journal article questioned the validity of its technology.

The company, founded in 2003, became a darling of investors with its promise to perform tests on only a tiny amount of patients' blood, eventually scoring a partnership with Walgreens, the nation's largest drug store chain, even though it had to void or correct thousands of inaccurate test results.

It said acting chief and general counsel David Taylor sent an email to shareholders explaining that it has no choice but to shut its doors due to complex terms of a deal with Fortress Investment Group which saved it from bankruptcy a year ago.

The unraveling of Theranos came after reports alleged it was not using its own technology in numerous blood tests it performed. In 2015, Forbes declared Holmes to be the world's youngest self-made female billionaire - with a personal net worth of $4.5 billion. Most of the company's employees worked their last days on the previous Friday, August 31, with CEO David Taylor and a few support staff remaining on payroll for a few more days.

Holmes, who was once considered a wunderkind of Silicon Valley, and Balwani were charged with conspiracy to commit wire fraud and nine counts of wire fraud each.

Theranos did not immediately respond to Reuters' request for comment. Holmes settled with the SEC by agreeing to pay $500,000 in fines and penalties, while Balwani is fighting the charges.

What happened? How did Theranos's investors and believers get it so wrong?

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