The embattled Silicon Valley blood-testing company Theranos Inc. told its investors this week that it has secured a $100 million loan from Fortress Investment Group LLC, averting for now a possible bankruptcy filing as its remaining cash dwindled.
The loan is “subject to achieving certain product and operational milestones,” Theranos’s founder and chief executive officer, Elizabeth Holmes, told the company’s shareholders in an email Friday evening that was reviewed by The Wall Street Journal. A spokeswoman for the company didn’t respond to requests for comment.
Theranos was once one of Silicon Valley’s best-funded startups, having raised a total of $900 million at a peak valuation of $10 billion, but an investigation by the Journal that raised questions about its technology and practices sent it into a downward spiral.
The Centers for Medicare and Medicaid Services banned Ms. Holmes from owning or operating clinical laboratories for two years. In addition, investors and former partners sued Theranos, alleging fraud, and the U.S. attorney’s office in San Francisco and the Securities and Exchange Commission both launched investigations into the company.
Theranos has since settled lawsuits brought by a San Francisco hedge fund and by its former retail partner, Walgreens Boots Alliance Inc. WBA, -0.74% , and it has refunded all its customers in Arizona under a deal with the state’s attorney general after it voided nearly a million blood-test results.
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