Theranos is finally dead, company to wind down

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In the email to shareholders, sent Tuesday, Theranos General Counsel and Chief Executive Officer David Taylor said the company is trying to negotiate a settlement with Fortress that would give the NY private-equity firm ownership of the company's patents but leave its remaining cash-estimated at about $5 million-for distribution to other unsecured creditors.

Theranos, the blood-testing company founded by Elizabeth Holmes, is going out of business.

The dissolution process was precipitated by the fact that Theranos breached a covenant governing a $65 million loan it received from Fortress Investment Group past year.

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. Founder and former CEO Elizabeth Holmes is facing criminal charges.

The company told shareholders in an email that it will dissolve and pay out the remaining cash to creditors, according to the Journal.

"For example, allegedly, Holmes and Balwani knew that the analyzer, in truth, had accuracy and reliability problems, performed a limited number of tests, was slower than some competing devices, and, in some respects, could not compete with existing, more conventional machines".

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.

The SEC also alleged that claims the company would generate more than $100 million in revenue in 2014 were false, as it generated a little more than $100,000.

Theranos was once valued at $9 billion.

Investors poured almost $1 billion into Theranos and three former U.S. cabinet secretaries, two former United States senators, a retired admiral and a retired Marine Corps general joined its board.

The Wall Street Journal began investigating and published a series of exposes starting from October 2015.

The Securities and Exchange Commission brought civil fraud charges against Holmes and Balwani earlier this year.