Theranos dodges bankruptcy after $100 million loan: Report
- Theranos received a $100 million loan from Fortress Investment Group, the Wall Street Journal says.
- Cash is dwindling at the once-soaring biotechnology startup.
- CEO Elizabeth Holmes says in an email to shareholders the deal provides Theranos with "sufficient liquidity through 2018."
Theranos received a $100 million loan from Fortress Investment Group to avert a possible bankruptcy filing, The Wall Street Journal reported Tuesday.
Cash has dwindled at the distraught biotechnology company as investigations have gutted what was once one of Silicon Valley's most well-funded startups, according to the WSJ. Theranos CEO Elizabeth Holmes said in an email to company shareholders the loan is "subject to achieving certain product and operational milestones," the WSJ reported.
Theranos did not immediately respond to CNBC's request for comment.
An investigation by the Journal in October 2015 sparked a wave of scrutiny about Theranos' practices, at a time when the company had a valuation of around $10 billion. Holmes has continued to lead Theranos through settling multiple lawsuits. However, investigations opened by both the Justice Department and the Securities and Exchange Commission are ongoing.
Holmes told shareholders in the email that the company continues to cooperate with the investigations, writing that Theranos would also combat further class action allegations "vigorously."
The loan grants Fortress — which specializes in distressed asset investing — 4 percent of Theranos' equity, according to the Journal, and is backed by the company's patent portfolio. Holmes email says the deal provides Theranos with "sufficient liquidity through 2018," the WSJ reported.
Theranos has continued to downsize, the Journal reports, most recently moving its operations and staff from luxurious Palo Alto to a manufacturing facility in Newark, California, across the San Francisco Bay.
Read The Wall Street Journal's full report here.