Tags: Theranos | Elizabeth Holmes | options | techology

WSJ: Theranos Founder Holmes Said to Owe Company $25 Million

WSJ: Theranos Founder Holmes Said to Owe Company $25 Million
Elizabeth Holmes (AP file)

By    |   Thursday, 06 April 2017 10:44 AM

Elizabeth Holmes, the founder of blood-testing startup Theranos Inc., owes the embattled company about $25 million, sources told The Wall Street Journal.

“The $25 million Ms. Holmes owes Theranos comes from an agreement between her and the company that allowed her to exercise options to buy more stock without having to pay upfront,” the newspaper reported. “Instead, she agreed to pay the company for the shares later, one of the people said.”

Holmes was once a billionaire and media darling whose pronouncements about the company’s technology ability to do dozens of tests with a single drop of blood went unquestioned by fawning reporters. Theranos withered under regulatory scrutiny and newspaper reports that revealed the company outsourced medical tests to another diagnostics lab. Forbes magazine estimated her net worth had dropped to zero.

The disclosure of Holmes’s debt was included in a deal document sent to a small group of investors. She incurred the debt in an agreement with Theranos that allowed her to exercise options to buy more stock without having to pay upfront. She agreed to pay the company for the shares later, a source told the WSJ.

Theranos isn’t publicly traded, which means the company isn’t subject to legal restrictions on stock options. Private companies often make loans and other agreements to top executives, Charles Elson, a management professor at the University of Delaware, told the newspaper.

Theranos faces multimillion-dollar lawsuits from investors and former business partners who claim they were misled about the company’s technology. U.S. inspectors found failures bad enough to jeopardize patients' health, leading to sanctions including banning Holmes from running a clinical lab.

The company fired about 40 percent of its employees earlier this year, leaving 220 workers to focus on developing a new tabletop blood testing product called the miniLab.

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Elizabeth Holmes, the founder of blood-testing startup Theranos Inc., owes the embattled company about $25 million, sources told The Wall Street Journal."The $25 million Ms. Holmes owes Theranos comes from an agreement between her and the company that allowed her to...
Theranos, Elizabeth Holmes, options, techology
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2017-44-06
Thursday, 06 April 2017 10:44 AM
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