Re: [DIYbio] Re: "Theranos, CEO Holmes, and Former President Balwani Charged With Massive Fraud"

It's not just journalists... here in Cleveland Ohio the current darling startup is a multi analyte from really small volume of blood testing device company. $1.3 Million in and the founder could tell if the technology works or not ... but guess who is cleaning up at all the stupid 'Startup competitions'. So judges and bureaucrats are capable of equal stupidity - do they NOT know they are getting suckered by Theranos 2.0 Redux???? If it wasn't so sad I would laugh at their ignorant stupidity ...

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On Apr 12, 2018, at 8:28 PM, Jonathan Cline <> wrote:

Most journalists reporting on Theranos were scientifically illiterate and complacent.  Were the journalists also complicit?  Where was the investigative reporting into the obvious fact that the company had no valid technology yet contracts to treat medical samples?  Yet most of the news articles focused more on Holmes' clothing choice of wearing turtlenecks rather than raise questions regarding the scientific research.  The journalists at Forbes for example, where Theranos was heavily favorited and flouted as having high valuation..where are they now?  

Theranos Lays Off Most of Its Remaining Workforce 

Tuesday's cuts take blood-testing firm's head count to two dozen or fewer employees

Blood-testing firm Theranos Inc. laid off most of its remaining workforce in a last-ditch effort to preserve cash and avert bankruptcy for a few more months, according to people familiar with the matter.

Tuesday's layoffs take the company's head count from about 125 employees to two dozen or fewer, according to the people familiar with the matter. As recently as late 2015, Theranos had about 800 employees.

Elizabeth Holmes, the Silicon Valley firm's founder and chief executive officer, announced the layoffs at an all-employee meeting at Theranos's offices in Newark, Calif., less than a month after settling civil fraud charges with the Securities and Exchange Commission.

Under the SEC settlement, she was forced to relinquish her voting control over the company she founded 15 years ago as a 19-year-old Stanford dropout, give back a big chunk of her stock and pay a $500,000 penalty. She also agreed to be barred from serving as an officer or director in a public company for 10 years.

Neither Ms. Holmes nor Theranos admitted or denied wrongdoing. Ms. Holmes and her former No. 2 executive, Sunny Balwani, remain under criminal investigation by the U.S. attorney's office in San Francisco, according to people familiar with the matter. Mr. Balwani has denied the SEC fraud charges, filed in a California federal court, and hasn't settled with the agency.

The company didn't respond to a request for comment.

The latest round of layoffs is the company's third since The Wall Street Journal revealed in October 2015 that it was misleading investors and the public about the state of its technology. At the time, Theranos was only using its proprietary blood-testing devices for a fraction of the nearly 250 tests it offered consumers and was performing the rest on commercial analyzers, the Journal revealed.

This belied Ms. Holmes's claims that she had invented groundbreaking new technology that enabled Theranos to run "the full range" of laboratory tests from just a drop or two of blood pricked from a patient's finger. Those claims had enabled her to raise hundreds of millions of dollars from investors at a more than $9 billion valuation, making her the world's youngest self-made female billionaire.

Theranos has since voided nearly one million blood-test results in Arizona and California. Federal inspections of its two labs uncovered numerous problems, including data showing that its proprietary machines were producing unreliable test results. The company shut the labs down in late 2016 and pivoted to trying to commercialize a new device called the miniLab.

At the end of last year, Theranos secured a $100 million loan from the private equity firm Fortress Investment Group LLC to keep it afloat, but it received just $65 million of that upfront, according to an email Ms. Holmes sent to her investors Tuesday.

To access the next tranches of the loan, Theranos has to meet certain product and operational milestones. One of them is obtaining Food and Drug Administration approval for a blood test to detect Zika, the mosquito-borne virus that deforms the brains of infants, on the miniLab.

In her email to investors, Ms. Holmes said the company still was experiencing problems with the reliability of the Zika test's chemistry. She said the layoffs should enable Theranos to keep its cash reserves above $3 million until the end of July.

Once its cash falls under that threshold, the terms of the Fortress loan agreement allow the New York private-equity firm to seize the company's assets and to liquidate them, she said.

In the email, Ms. Holmes appealed to the company's investors for more funding, saying she was willing to sell a large stake at a favorable price. But she acknowledged that, even with a new cash injection, the company's future remained "highly uncertain."

Until Tuesday, Ms. Holmes still had two personal assistants and two security guards who drove her around in a black Cadillac Escalade SUV, according to the people familiar with the matter. 

Write to John Carreyrou at

Appeared in the April 11, 2018, print edition as 'Theranos Deepens Workforce Cuts.'

## Jonathan Cline
## Mobile: +1-805-617-0223

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