Theranos was handed the best Christmas gift it could have imagined.
The disgraced medical technology company that inflated capabilities of its different devices, was able to secure new funding of $100 million. The funding was given to Theranos as a loan.
The loan was given to Theranos by Fortress Investment Group. Other underdogs that Fortress has bet on include a private passenger rail line being built in Florida. Softbank, the Japanese giant, is preparing to acquire Fortress.
Reports say that Theranos was close to filing for bankruptcy protection prior to obtaining the new funding from Fortress. From 2004 to 2015, Theranos was able to raise over $900 million with the help of promises made by CEO Elizabeth Holmes that she was going to revolutionize the industry of blood testing.
However, in 2015 a discovery was made that showed the company had been using machines of their competitors to run part of their tests, amongst other indiscretions.
Before the end of last year, the company was reported to still have over $200 million in cash reserves, but its prospects had become severely limited for attracting additional capital.
Since the end of 2016, the company was able to settle a lawsuit with drugstore giant Walgreens, one of its former clients. No figures were disclosed as to how much the settlement was between Theranos and Walgreens, but most reports said the sum was likely substantial.
According to one report the new loan from Fortress should keep Theranos solvent for all of 2018.
That gives the company additional time in its continuing effort to become a medical device maker, instead of being a testing service. The shift came after the U.S. Food and Drug Administration revoked the laboratory license of Theranos as well as banned Holmes from being involved with any laboratories for a period of two years.
Thus far, Theranos has been unsuccessful in gaining approval by FDA for even one of its new tests it has proposed. It has also repeatedly downplayed what was at one time its hallmark, an ability to conduct blood testing using only small fingerstick-sized samples.
Statements made by Theranos say that the loan from Fortress will be conditional on the company achieving specific operational and product milestones. It was not clear if those included positive outcomes in the multiple lawsuits and investigations the company still faces.