Blood-testing startup Theranos reportedly to dissolve

Holmes who was once considered a wunderkind of Silicon Valley launched Theranos in 2003 in Palo Alto California pitching its technology as a cheaper way to run dozens of blood tests

Theranos, the once-celebrated Silicon Valley blood testing firm, is about to dissolve itself months after top executives were indicted for defrauding investors, the Wall Street Journal reported on Wednesday.

The pair has denied the charges and faces potential decades in prison and massive fines.

The company did not immediately respond to Ars' request for comment.

Theranos, the blood testing startup accused of an elaborate fraud, told shareholders it will be shutting down.

Theranos founder Elizabeth Holmes was once lauded as the youngest self-made female billionaire.

Over time, the company also anticipated making the nanotainers available in major store chains like Walgreens, allowing patients to carry out their own blood tests and saving them a trip to the doctor. The news was first reported by The Wall Street Journal, which published the letter. But her net worth was later revised down to nothing.

Big name investors had reportedly lost about $1 billion. As the former CEO Elizabeth Holmes is facing fraud charges, the company has been mired in a myriad of scandals.

Holmes and Balwani both pleaded not guilty at their arraignment.

The indictment by the U.S. Attorney in San Francisco alleging wire fraud follows claims by the U.S. Securities and Exchange Commission that Theranos, Holmes and Balwani lied about its technology while raising more than $700 million to build the medical-testing startup.

Theranos was once valued at $9 billion.

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. "We are now out of time", he wrote.

"Because the Company's cash is not almost sufficient to pay all of its creditors in full, there will be no distributions to shareholders", the letter states.

Theranos's other, unsecured creditors are owed at least $60 million, and the company is trying to negotiate a deal with Fortress that would see those creditors get the $5 million in cash that Theranos still holds.

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