Ex-Controller Testifies in Trial of Theranos CEO
Blood-screening startup Theranos furnished buyers with revenue projections that did not match the reality of its finances, the company’s previous controller has testified in the fraud trial of founder and CEO Elizabeth Holmes.
So Han Spivey, who also goes by Danise Yam, mentioned Holmes gave her a revenue estimate of $a hundred million for 2015 when she was doing work with an analytics organization on pricing inventory options for Holmes and other employees.
But Spivey mentioned she did not put together a document that Theranos gave to buyers displaying it anticipated to generate $140 million in revenue in 2014 and $990 million in 2015.
“Did you ever present economical projections to buyers?” asked prosecutor Robert Leach. “No,” Spivey replied.
The controller, who managed finances at Theranos from 2006 to 2017, was the to start with witness called by the government in the trial of Holmes, a onetime Silicon Valley darling who faces a dozen counts of wire fraud and conspiracy to dedicate wire fraud for allegedly building false statements about her company’s technological know-how.
Spivey’s testimony, which concluded on Tuesday, “supported 1 of prosecutors’ crucial contentions: That Ms. Holmes deliberately lied to buyers, business enterprise associates, and individuals to keep afloat a startup she mentioned would transform the planet by screening for sicknesses with just a couple drops of blood,” The Wall Road Journal mentioned.
In accordance to the government, Theranos’ real revenue fell from $one.4 million in 2010 to $518,000 in 2011 and down to zero in 2012 and 2013. By 2013, the business was burning approximately $2 million a week in cash. By 2015, Spivey mentioned, its accumulated deficit experienced achieved $575 million.
“Her testimony painted a image of a business that noticed its cash dwindling as revenues shrank,” Protocol documented.
Holmes’ lawyers countered that a lot of the discrepancy arrived from deferred revenue, noting that Theranos experienced signed revenue-building contracts with corporations like Merck and Pfizer and that the losses were being normal for a Silicon Valley startup with major R&D expenses.
Spivey testified very last week that Theranos went several years without having possessing its economical statements audited, which she imagined was uncommon for a private business.
