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Theranos to formally dissolve

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The news was first reported by The Wall Street Journal, which published the letter.

The announcement comes almost three months after Theranos founder and former CEO Elizabeth Holmes and former Chief Operating Officer Ramesh Balwani were charged with criminal fraud.

Scandal-hit USA blood-testing start-up Theranos is to formally dissolve, the firm's chief executive David Taylor has told shareholders in an email. Holmes said she was inspired to start the company in response to her fear of needles.

The indictment by the U.S. Attorney in San Francisco alleging wire fraud follows claims by the U.S. Securities and Exchange Commission that Theranos, Holmes and Balwani lied about its technology while raising more than $700 million to build the medical-testing startup.

Theranos Chief Executive Officer Elizabeth Holmes speaks on stage at the Glamour Women of the Year Awards where she receives an award, in the Manhattan borough of NY, U.S., November 9, 2015.

But Theranos' blood-testing machines weren't reliable, and the company itself relied on other companies' devices to run blood tests.

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Taylor's email to shareholders was also reported by the Financial Times.

The Fortress Investment Group loaned $65 million to Theranos a year ago, with one condition being that Theranos maintain a cash level that has now been breached-hence the dissolution process that will play out over the coming months.

"Holmes and Balwani knew that many of their representations about the analyzer were false", the Justice Department said when the charges were announced in June.

Holmes and Balwani are accused of faking demonstrations of the technology, lying to investors about the anticipated returns, lying to the media, lying about the deployment of the technology on the battlefield, using third-party equipment to conduct tests while claiming to use Theranos's own gear, and misrepresenting the progress of a partnership with Walgreens (wba).

In March, Ms Holmes settled charges with the Securities and Exchange Commission, a top United States financial regulator. Holmes settled with the SEC by agreeing to pay $500,000 in fines and penalties, while Balwani is fighting the charges.

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