Theranos founder Elizabeth Holmes owes the blood-testing firm some $25 million, according to the Wall Street Journal.
At one point, Holmes' stake in the company was valued at $5 billion, but has since dwindled as the firm grappled with regulatory and legal issues, the Journal notes. The firm received a letter from the Centers for Medicare & Medicaid Services following the agency's inspection of Theranos's California lab that said it uncovered "condition-level deficiencies" at the site that posed "immediate jeopardy to patient health and safety." The agency later proposed banning Holmes from owning or operating a clinical lab for at least two years, and the company switched gears about six months ago from testing lab to a technology-development firm and closed its labs. The company received another CMS letter about violations at its Arizona lab around the time it was shuttered.
At the same time, federal criminal and Securities and Exchange Commission investigations were opened into some of the firm's practices, and its partner Walgreens has filed a lawsuit seeking damages, as have investors.
According to the Journal, the $25 million Holmes owes the firm stems from an agreement she made that enabled her to exercise options to buy more stock, but without paying upfront. She instead agreed to pay later, the Journal adds, noting that the company can release her from her debt or cancel the shares.
In exchange for agreeing not to sue, investors could receive much of Holmes's shares in the company, the Journal adds, noting that her holdings are more than 50 percent of the company. They have about a week to decide, it adds.