The story A cautionary tale about what can happen when Silicon Valley sets its sights on disrupting . ’s first idea: the TheraPatch.

25 CONFIDENTIAL

Figure 3: Patch Reader and Assay

Figure 4: TheraBox Schematic

C:\NrPortbl\PALIB2\WB3\2908151_1.DOC -25- The Theranos 1.0: a microfluidic system.

What is our system?

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www.theranos.com

Confidential & Proprietary 5 The Fisnar glue-dispensing robot The Edison prototype

s.f. bayarea craigslist san francisco prototype medical diagnostic equipment

Avoid scams and by dealing locally! Beware any deal involving Western Union, Moneygram, wire transfer, cashier check, money order, shipping, escrow, or any promise of transaction protection/certification/guarantee. More info

Theranos Edison 1.0 “readers” - mostly functional - $10,000 OBO (mission district)

Up for grabs is a rare matching set of Theranos point-of-care diagnostic “Edison” devices. Billed as the ‘iPod of healthcare’, the Edison is a semi-portable immunochemistry platform capable of performing multiplexed protein assays on a fingerstick sample of human or animal whole blood. According to the manufacturer’s website “Theranos is pioneering the integration of technology with medical therapies and delivery...we’re building a completely new infrastructure to enable our vision of real-time testing, informed decision-making, and individualized care.”

I bought these units recently when I thought I was at risk of succumbing to septic shock. Now that I’ve tested my protein C and realized that I’m safely in the 4ug/mL range, I no longer need a pre-production blood analytic device. My loss is your gain!

$10k for the pair, $6000 apiece, OBO - would also be willing to consider trade for a comparable pre-clinical diagnostic device (i.e. Roche, Becton-Coulter, Abaxis, Biosite, etc.). Comes with a supply of single use cartridges, pelican shipping cases, AC adapter, EU power adapters, and assorted blood collection accessories, leeches, etc. The Edison with its Yves Béhar case The miniLab The Siemens ADVIA 1800 Theranos goes live with its tests at Elizabeth Holmes on the cover of Fortune Elizabeth Holmes on the cover of Forbes Holmes’s secret boyfriend: Sunny Balwani Tyler Shultz Vice President Joe Biden visits Theranos The fake automated lab Biden is shown Holmes appeals to publishes Fake it until you make it: did it. Larry Ellison did it did it says Holmes did everything right Silicon Valley culture

• Vaporware: Hype and overpromise to get funding • Fail fast and often • Iterate • Go to market fast, even if it’s with a buggy product • Disrupt, apologize later

• The Silicon Valley playbook is ill-suited to health care. That’s a lesson to bear in mind as the Valley and medtech increasingly converge. What’s at stake: Patient lives Theranos voided 1 million blood tests

• The last laboratory director Holmes hired in late 2015 to try to clean up the Theranos lab lobbied her to void many more results, having concluded that quality control was non-existent. She declined. DOJ filed criminal charges v. Holmes, Balwani

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFOL., 0

JUN, 7 4 20f8 SAN JOSE DIVISION N ct.t;F? susAN ORrHc11 MBrRf RtgG :SAN &Of:cBlJ. /l'r THE OF AMERICA 4! ""IVl4 vs. ELIZABETH A. HOLMES & RAMESH ''SUNNY'' BALWANI

INDICTMENT

COUNT : 18 U.S.C. § 1349 - Conspiracy to Commit Wire Fraud against Theranos

COUNT 2: 18 U.S.C. § 1349 - Conspiracy to Commit Wire Fraud against Doctors and Theranos Patients

COUNTS 3-8: 18 U.S.C. § 1343 -Wire Fraud

COUNTS 9-11: 18 U.S.C. § 1343 -Wire Fraud

A true bill.

United States Magistrate Judge

Charges of defrauding patients and doctors

with potential investors both directly and via the Theranos website, knowing their statements to

2 members of the media were false and misleading.

3 13. After receivi ng false and misleading statements, misrepresentations, and omissions from

4 HOLMES and BA LWANl, persons known to the Grand Jury as Investors 1, 2, 3, 4, and 5 initiated

5 electronic wire transfers for the purpose of investing money in Theranos. These wires, specifically

6 alleged in paragraph 24 of this Indictment, used a domest ic electronic fonds transfer system known as

7 the Fedwire system, which is owned and operated by the Uni ted States Federal Reserve System. All

8 Fedwire wire transfers alleged in this Indictment were electronically routed th.rough Fedwire centers in

9 East Rutherford, New Jersey and/or Dallas, Texas and into Theranos's bank account in the Northern

10 District of . All of the wire transfers alleged in this Indictment travelled between one state and

11 another state.

12 The Scheme to Defraud Doct ors and Patients

13 14. Between approxi mately 2013 and 2016, HOLMES and BALWANI, through

14 advertisements and solicitations, encouraged and induced doctors and patients to use Theranos's bl ood

15 testing laboratory services.

16 15. HOLMES and BALWAN1devised a scheme to defraud doctors and patients, through

17 advertisements and marketing material s, through explicit and implicit claims concerning Thcranos's

18 ability to provide accurate, fast, reliable, and cheap blood tests and test results, and through omissions

19 concerning the limits of and problems with Theranos's technologies. Based on these representations,

20 many hundreds of patients paid, or caused their medical insurance companies to pay, Theranos, or

21 Wal.greens acting on behalf of Theranos, for blood tests and test resu lts, sometim es follovving referrals

22 from their defrauded doctors.

23 16. Despite representing to doctors and patients that Theranos could provide accurate, fast,

24 reliable, and cheap blood tests and test results, HOLMES and BALWANI knew that Theranos's

25 technology was, in fact, not capable of consistently producing accurate and reliable results. In

26 particular, HOLMES and BALWANI knew that Theranos was not capable of consistently producing

27 accurate and reliable results for certain blood tests, including but not limited to calcium, chloride,

28 potassium, bicarbonate, HIV, Hba l C, hCG, and sodium.

INDICTMENT 6