*By Kavitha Shastry*
Blood-testing company Theranos is reportedly closing up shop.
And for John Carreyrou, the Wall Street Journal reporter who first [exposed the alleged fraud](https://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901) at the once high-flying start-up back in 2015, the news was a long time coming.
"Elizabeth Holmes, the founder of Theranos, had an opportunity that day to say, 'Okay, game is up. I still have $400 million or so in the bank. I'm going to apologize to every, especially patients who I put in harm's way, and I'm going to return that money to investors on a prorated basis,'" he told Cheddar in an interview Wednesday.
"Instead what she did was she dug in her heels, and she proceeded to use that money over the past almost three years to pay lawyers to hide the ball and to try to ward off lawsuits and generally try to keep the news from emerging."
The dissolution of Theranos highlights the spectacular fall from grace for the company and former CEO Holmes, once [touted](http://fortune.com/2014/06/12/theranos-blood-holmes/) as a rising star in Silicon Valley. Through 2015 the company raised almost a billion dollars from the likes of former Oracle CEO Larry Ellison and media mogul Rupert Murdoch and was worth as much as $9 billion at its peak.
But reports, led by Carreyrou, that Theranos's blood-testing technology didn't live up to its hype, sent that valuation crashing down. Doctors and patients were allegedly misled, and investors lost millions of dollars. In June, Holmes and her former boyfriend Ramesh "Sunny" Balwani, who also served as the company's president, were indicted on criminal fraud and conspiracy charges. They each face the possibility of 20 years in jail.
Despite all the scandals, Theranos tried to stay afloat. It secured a $100 million loan from private equity firm Fortress Investment Group last December and appointed its general counsel David Taylor to replace Holmes as CEO after the latest charges were filed.
But in a [letter to investors](http://online.wsj.com/public/resources/documents/Theranos_Stockholders_Letter_2018.pdf?mod=article_inline) obtained by Carreyrou, Taylor said the company had defaulted on its agreement with Fortress after failing to raise more cash or find a buyer. Theranos is negotiating with the company to cede control of its patents and distribute the $5 million in cash it has left to creditors.
"We are now out of time," Taylor wrote.
Theranos expects to begin winding down operations on Monday.
For full interview [click here](https://cheddar.com/videos/the-official-fall-of-theranos).
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