Attribute the statement to:
Jeffrey B. Coopersmith
Partner, Davis Wright Tremaine/Seattle and Los Angeles
We believe the enforcement action by the SEC is unwarranted. Sunny Balwani
accurately represented Theranos to investors to the best of his ability. He believed in
the potential and mission of the company and its technology to promote transparency
and benefit people by empowering them with access to their own health care
information at a low cost. In fact, I’d like to point out the following:
•

Just like other investors in Theranos, Sunny took on significant financial risk
investing in Theranos. He never benefited financially from his work at the
company and worked hard to maximize stockholder value. A few examples:
o Sunny invested millions of dollars of his own cash into the company. The
company provided common, not preferred stock, in exchange. Sunny
never attempted to sell any of this stock and continues to hold the stock to
this day. As a holder of common stock Sunny has far fewer rights than
preferred stockholders.
o In 2009, during the height of the economic downturn, Sunny also took a
major risk and personally guaranteed an unsecured multi-million dollar
loan to the company -- for which he neither asked nor received interest nor
other compensation, even though it is common for a guarantor in these
circumstances to get preferential benefits, such as fees and substantial
equity. He risked his own money to save the interests of all investors and
the jobs of Theranos employees without asking anything in return.
o Sunny devoted years to working exclusively with Theranos, giving up the
opportunity to pursue other, potentially lucrative opportunities based on his
past professional success. Sunny requested that he receive an annual
salary of $1, and at the insistence of the Board ended up receiving a
modest annual salary of $99,000 for nearly six years.

•

Sunny contributed tremendous value to Theranos. For example, Theranos has
more than 1,000 patents that he believes have great potential and value, and in
fact Sunny is a named inventor on 154 of these patents, an unusually significant
contribution for a company officer.