Theranos is expected to shut down for good

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Theranos the blood-testing company founded by Elizabeth Holmes is going out of business. Gilbert Carrasquillo Getty Images

Theranos (THERA) the once-celebrated Silicon Valley blood-testing firm, is about to dissolve itself months after top executives were indicted for defrauding investors.

Theranos will attempt to pay unsecured creditors its remaining cash in the coming months, WSJ reports, adding that big name investors had lost about $1B. Holmes, who did not admit wrongdoing, was fined $500,000 and ordered to relinquish 18.9 million shares in the company.

But Theranos came under scrutiny after the Journal published articles questioning its claims.

In March, Ms Holmes settled charges with the Securities and Exchange Commission, a top United States financial regulator.

Sidenote for the uninitiated: Taylor's predecessor, Elizabeth Holmes, is facing fraud charges after the Wall Street Journal reported in 2015 that the company's breakthrough technology was nothing more than smoke and mirrors.

While Theranos touted its technology as revolutionary, the blood analyzer had only been successfully tested a few times, the Securities and Exchange Commission concluded.

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Since founded in 2003, Theranos raised more than US$700 million from venture capitalists and private investors, putting the blood testing startup at $10 billion valuation at its peak in 2013 and 2014. The company plans to get everything finished as soon as possible, proceeding next Monday with a complete dissolution of the organization.

She carefully crafted her image as well, wearing nearly entirely black turtleneck sweaters that earned her the moniker in Silicon Valley as 'the next Steve Jobs'.

In July 2016, the Centers for Medicare and Medicaid Services (CMS) revoked Theranos' CLIA license and prohibited Holmes from owning and operating a laboratory for two years.

"I write with hard news about the future of the Company", the letter from CEO David Taylor began. The SEC claimed that she and Ramesh Balwani, her romantic partner and former president of Theranos, had engaged in "an elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance".

Theranos was in default under its credit facility with Fortress Investment Group, Taylor said in the letter. She eventually convinced her chemical engineering professor to join her, and he gave up his Stanford tenure to join her new company Theranos, which is an amalgam of the words "therapy" and "diagnosis".

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