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Theranos avoids bankruptcy thanks to a last-minute loan
Engadget ^ | December 23, 2017 | Jon Fingas

Posted on 12/23/2017 9:53:56 PM PST by Enchante

Theranos has come a long way from the days when it was a darling in the biotech industry. The Wall Street Journal's sources have claimed that the blood-testing firm has avoided bankruptcy by securing a $100 million loan from Fortress Investment Group. The move should keep Theranos afloat "through 2018," founder Elizabeth Holmes reportedly said in an email. Naturally, though, there are strings attached -- Fortress wants to see a return on its investment.

Holmes reportedly said that Theranos has up its patent library as collateral, and that Fortress gets 4 percent equity. The loan is also subject to "certain product and operational milestones," she added. If Fortress doesn't see enough progress, in other words, it could easily pull the rug from Theranos' feet with relatively little warning.

Theranos hasn't commented so far. However, it's safe to say that the company sorely needed the cash infusion. With mounting financial troubles from settlements and lost business, it was quickly running out of options. The 2-year ban on owning or running clinical labs hasn't helped, either. The extra money could not only help it last long enough to think about opening labs again, but could make sure that the company's fingerprick-testing miniLab device has a shot at making it to market. The company definitely isn't out of the woods yet, but it might have a path to safety.


TOPICS: Business/Economy; Crime/Corruption; Culture/Society; News/Current Events
KEYWORDS: business; health; investing; medicine; stocks; tech; theranos
Theranos stays afloat with emergency loan, but for how long?

Hard to believe anyone was willing to sink $100 million into this fraud story at this point.

1 posted on 12/23/2017 9:53:56 PM PST by Enchante
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To: All

I have to wonder if the angel investor group just wants to grab the patent library (if it really is valuable), and will pull the plug within a matter of months, before their $100 million can be consumed...???


2 posted on 12/23/2017 9:55:16 PM PST by Enchante (FusionGPS "dirty dossier" scandal links Hillary, FBI, CIA, Dept of Justice... "Deep State" is real)
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To: Enchante
Why. The HELL. Would ANYONE keep Theranos afloat?!?

That's an investment more fraught with peril than Bitcoin. Or state lottery tickets. Or emu farming. Or betting that Hillary will get elected in 2020. Or...

3 posted on 12/23/2017 9:57:23 PM PST by Ciaphas Cain (Liberalism, as with all else evil, can never create. It can only corrupt.)
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To: Enchante

Naturally, though, there are strings attached — Fortress wants to see a return on its investment.
= = = = = = = = = = = = = =
I realize I am probably overthinking this BUT if you or I were to make (or receive) a 100 mil loan, is the lender seeking a return something to ridicule or take lightly?

OR are these people so naive (I am being polite) that they figure it is just play money?


4 posted on 12/23/2017 10:00:08 PM PST by xrmusn ((6/98)""In todays world:::WE, THE USofA are Rudyard Kiplings 'Tommy'")
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To: Enchante

Indeed - my understanding was Theranos’ claim of being able to do hundreds of immediate analysis done with just a pinprick wasn’t just faulty, it was a complete fraud.

do they actually have a working product?


5 posted on 12/23/2017 10:03:11 PM PST by PGR88
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To: PGR88

Yes, my impression has been that their main technology claims proved to be total fraud, i.e., they never had the technology to quickly and accurately conduct blood tests from a finger “pin prick” to avoid the usual blood-draw method. While they were conducting blood tests they mainly used conventional laboratory equipment and lied about it. I’m amazed they haven’t been taken down yet, but I guess they had enough money from their previous “investors” to keep the thing going until now.

I don’t know what all the “patents” might be or whether they do have any valuable technologies, but they don’t seem to have accomplished anything except scandal up until now.


6 posted on 12/23/2017 10:16:04 PM PST by Enchante (FusionGPS "dirty dossier" scandal links Hillary, FBI, CIA, Dept of Justice... "Deep State" is real)
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To: Enchante

They should rename to Theranos Blockchain if they want money.


7 posted on 12/24/2017 12:00:24 AM PST by BinaryBoy ("Immigration Reform" is ballot stuffing)
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To: Ciaphas Cain

The big money always has an angle.


8 posted on 12/24/2017 2:59:19 AM PST by Poison Pill
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To: Enchante

Thanks for the post. I’ll have to see if there was anything in Saturday’s Wall Street Journal, or Friday’s, if it’s still in the garage bin. I’ve been too busy for newspaper-reading the last few days!

I agree with you and some others that it’s hard to figure out what Theranos has that’s worth anything at all ... but there’s a reason these people are rich, so one can’t just write it off as stupidity ...


9 posted on 12/24/2017 3:44:38 AM PST by Tax-chick ("The world is a dangerous place, and it's more dangerous if you have something worth stealing."~KW)
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To: Enchante

Elizabeth Holmes should be in jail rather than continuing to run this fraudulent company. What kind of an idiot would throw $100m at this?


10 posted on 12/24/2017 6:11:39 AM PST by KevinB (When you drink the water, remember the men or women who dug the well.)
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To: Enchante

Fraud is fraud but for me the most insulting little aspect of all this were those stupid black turtlenecks and her completely Shameless and unoriginal aping of so many Steve Jobs-isms.

It was like a little girl playing house or dress up in mommy’s clothes and jewelry, but with a lot of abuse and needless browbeating flown in on the side.

I’m clapping my hands with Glee until finally the whole house of cards Falls in on itself.

justice has been slow but in the end there absolutely will be JUSTICE.

Usually when there are claims that a CEO is evil I smell a leftist lie, but in this case it’s all absolutely true.

I hate that b*tch.


11 posted on 12/24/2017 6:31:55 AM PST by gaijin
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To: Enchante

Hard to believe anyone was willing to sink $100 million into this fraud story at this point.

...

My only guess for an explanation is the political connections.


12 posted on 12/24/2017 6:36:33 AM PST by Moonman62 (Make America Great Again!)
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