Theranos — the Silicon Valley blood-testing startup whose former top executives are accused of carrying out a massive, years-long fraud — is shutting down.
David Taylor, who became CEO in June, said Theranos will dissolve after it attempts to pay creditors with its remaining cash. The news was first reported by The Wall Street Journal, which published the letter.
The letter explains that the company "intends to enter into an assignment for the benefit of creditors." This arrangement would allow for all of Theranos' assets, other than its intellectual property, to be assigned to a third party in trust for the company's creditors. The company says it has about $5 million remaining in cash.
"Because the Company's cash is not nearly sufficient to pay all of its creditors in full, there will be no distributions to shareholders," the letter states. After the assignment process, the company intends to dissolve. The Journal reports that most of the company's remaining employees worked their last day on Aug. 31, while Taylor and a few others have just a few more days on the payroll.
Under founder and now-former CEO Elizabeth Holmes, Theranos raised more than $700 million from investors and was valued at $9 billion at its peak.