So-Han Spivey — Direct - Day 4 - Federal Criminal Trial

So-Han Spivey testified about Theranos's finances, auditing history, cash shortages, and declining revenue before the court ended the day with a jury admonition and a scheduling inquiry for Juror 7.

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Proceedings

DirectSo-Han Spivey — DirectLine 14

Procedural 1End-of-Day Jury AdmonitionLine 18

Procedural 2Juror 7 Hardship Inquiry — End-of-Day Follow-UpLine 16

DirectDirect So-Han Spivey Robert S. Leach

MR. LEACH: YES, YOUR HONOR. THE UNITED STATES CALLS SO HAN SPIVEY.

JUDGE DAVILA: THANK YOU. LET ME REMIND THE PARTIES, THERE IS A WITNESS EXCLUSION ORDER IN PLAY, SO IF YOU CAN COMPLY WITH THAT. YOU HAVE SOMEONE COLLECTING YOUR WITNESS?

MR. LEACH: I EXPECT SO. LET ME MAKE SURE.

JUDGE DAVILA: FOLKS, YOU CAN STAND UP IF YOU WOULD LIKE TO STRETCH YOUR LEGS BEFORE THE WITNESS COMES IN.

(STRETCHING.)

JUDGE DAVILA: GOOD AFTERNOON. IF YOU WOULD PLEASE COME FORWARD -- PLEASE BE SEATED, LADIES AND GENTLEMEN. PLEASE COME FORWARD. IF YOU WOULD STAND AND FACE OUR COURTROOM DEPUTY. RAISE YOUR RIGHT HAND. SHE HAS A QUESTION FOR YOU.

(PLAINTIFF'S WITNESS, SO HAN SPIVEY, WAS SWORN.)

SO-HAN SPIVEY: YES.

JUDGE DAVILA: PLEASE HAVE A SEAT UP HERE. FEEL FREE TO ADJUST THE CHAIR AND THE MICROPHONE AS YOU NEED. I'LL ENCOURAGE YOU TO SPEAK DIRECTLY INTO THAT MICROPHONE. IF YOU'D LIKE, I THINK THERE'S A CLEAR FACE SHIELD THERE. IS THERE ONE? YES, GO AHEAD AND PUT THAT ONE ON IF YOU WOULD LIKE.

SO-HAN SPIVEY: DO I HAVE TO PUT IT ON?

JUDGE DAVILA: OH, YOU DON'T WANT TO PUT IT ON. THAT'S FINE. DO YOU WANT TO KEEP YOUR MASK ON OR TAKE IT OFF?

SO-HAN SPIVEY: I'LL DO THIS.

JUDGE DAVILA: THAT'S GREAT. THANK YOU. ALL RIGHT. WHEN YOU ARE COMFORTABLE, WOULD YOU PLEASE STATE YOUR NAME AND THEN SPELL IT, PLEASE.

SO-HAN SPIVEY: MY OFFICIAL NAME IS SO HAN SPIVEY. IT'S S-O, H-A-N, S-P-I-V-E-Y. I WAS KNOWN AS DANISE YAM AT THERANOS.

JUDGE DAVILA: ALL RIGHT. THANK YOU. IT'S GOING TO BE CHALLENGING, SO IF YOU COULD PULL THAT MICROPHONE CLOSER TO YOU, OR SPEAK INTO IT THAT WOULD BE HELPFUL. MAYBE UNDERNEATH. WE'RE ALL TRYING TO LEARN. YEAH, IT WON'T GO IN. THAT'S GOOD RIGHT THERE ACTUALLY. ALL RIGHT. COUNSEL.

MR. LEACH: THANK YOU, YOUR HONOR.

DIRECT EXAMINATION BY MR. LEACH:

MR. LEACH: GOOD AFTERNOON, MS. SPIVEY. CAN YOU HEAR ME OKAY?

SO-HAN SPIVEY: YES.

MR. LEACH: WOULD YOU PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND AND PROFESSIONAL BACKGROUND FOR US?

SO-HAN SPIVEY: YES. I GOT MY UNDERGRADUATE DEGREE IN ACCOUNTING AT CARLTON UNIVERSITY, AND I GRADUATED IN 1998, AND THEN I GOT MY MBA AT THE UNIVERSITY OF ROCHESTER, GRADUATED IN 2005.

MR. LEACH: THANK YOU. CARLTON UNIVERSITY. IS THAT IN THE UNITED STATES?

SO-HAN SPIVEY: IN OTTAWA, CANADA.

MR. LEACH: OTTAWA, CANADA. OKAY. AFTER RETAINING YOUR DEGREE FROM CARLTON UNIVERSITY, DID YOU GO TO WORK?

SO-HAN SPIVEY: YES. I WORKED AT DELOITTE HONG KONG.

MR. LEACH: DELOITTE HONG KONG. WHAT IS THAT?

SO-HAN SPIVEY: DELOITTE IS A PUBLIC ACCOUNTING FIRM.

MR. LEACH: OKAY. AND WHAT WERE YOUR -- WHAT WAS YOUR JOB RESPONSIBILITY AT DELOITTE HONG KONG?

SO-HAN SPIVEY: I WAS A SENIOR AUDITOR WHEN I LEFT DELOITTE HONG KONG.

MR. LEACH: TELL ME A LITTLE BIT ABOUT THE RESPONSIBILITIES OF A SENIOR AUDITOR AT A FIRM SUCH AS DELOITTE?

SO-HAN SPIVEY: IN GENERAL, MY ROLE WAS TO EXAMINE RECORDS AND DOCUMENTS FROM OUR AUDIT CLIENTS AND TO MAKE SURE THAT THEY ARE FAIRLY REPORTING THEIR FINANCIAL STATEMENTS.

MR. LEACH: WHEN YOU ARE WORKING FOR AN ACCOUNTING FIRM LIKE DELOITTE, ARE YOU SOMEWHAT OUTSIDE OF THE COMPANY OR DO YOU WORK WITHIN THE COMPANY?

SO-HAN SPIVEY: CAN YOU REPEAT THAT?

MR. LEACH: WHEN YOU'RE WITH DELOITTE, ARE YOU PART OF THE COMPANIES THAT YOU'RE AUDITING OR ARE YOU SOMEWHAT SEPARATE AND MORE OF AN ADVISOR? DESCRIBE THAT ROLE FOR US, PLEASE, IF YOU COULD.

SO-HAN SPIVEY: YEAH. SO I -- WHEN I WORKED AT DELOITTE, I WAS AN EMPLOYEE AT DELOITTE, AND SO WE WERE INDEPENDENT FROM THE COMPANY THAT WE AUDIT.

MR. LEACH: AND WHEN YOU'RE AUDITING A COMPANY SUCH AS DELOITTE, WHAT TYPES OF DOCUMENTS ARE YOU REVIEWING?

SO-HAN SPIVEY: THAT WOULD BE INCLUDING THEIR GENERAL LEDGER, THEIR INVOICES, THEIR PAYROLL RECORDS AND CUSTOMER CONTRACTS, SOMETHING LIKE THAT.

MR. LEACH: AND TO WHAT END ARE YOU REVIEWING THESE DOCUMENTS? WHY WERE YOU REVIEWING THESE DOCUMENTS AS A SENIOR AUDITOR AT DELOITTE?

SO-HAN SPIVEY: THIS IS TO VERIFY THAT WHAT THE CLIENT PRESENTED IN THEIR FINANCIAL STATEMENTS WE HAVE WITH -- THEY HAVE THE PROPER DOCUMENTS TO SUPPORT WHERE THE NUMBER IS COMING FROM AND THAT'S FAIRLY PRESENTED.

MR. LEACH: AND AT THE END OF THE AUDIT THAT YOU'RE PERFORMING AS THE SENIOR AUDITOR, WOULD DELOITTE RENDER OPINIONS ON THE FINANCIAL STATEMENTS OF THE COMPANIES THAT IT WAS AUDITING?

SO-HAN SPIVEY: YES.

MR. LEACH: OKAY. YOU TALKED A LITTLE BIT ABOUT FINANCIAL STATEMENTS. CAN YOU -- FOR THOSE OF US WHO ARE NOT FAMILIAR WITH FINANCIAL STATEMENTS THAT COMPANIES MIGHT HAVE, CAN YOU TALK ABOUT SOME OF THE TRADITIONAL ONES THAT YOU MIGHT REVIEW?

SO-HAN SPIVEY: YES. THAT WOULD INCLUDE A BALANCE SHEET WHICH STATED THE COMPANY'S FINANCIAL STATUS AS OF ANY GIVEN DATE. THAT INCLUDES THEIR ASSET BALANCE, LIABILITIES, AND THEIR EQUITY. ANOTHER ONE WOULD BE THEIR STATEMENT OF INCOME, AND THAT WOULD -- THAT WOULD SHOW THEIR REVENUE AND EXPENSES OF THE GIVEN PERIOD OF TIME FOR THE COMPANY. AND THERE WOULD BE STATEMENT OF CASH FLOW, WHICH SHOWS WHAT THE CASH IS COMING IN AND OUT, THE ACTIVITIES COMING IN AND OUT OF THE COMPANY. AND THEN THERE WOULD BE STATEMENT OF EQUITIES.

MR. LEACH: THANK YOU. WHEN DID YOU LEAVE DELOITTE HONG KONG?

SO-HAN SPIVEY: IN 2003.

MR. LEACH: AND WHY DID YOU LEAVE DELOITTE HONG KONG?

SO-HAN SPIVEY: I WENT TO THE UNIVERSITY OF ROCHESTER TO GET MY MBA.

MR. LEACH: OKAY. AND DID YOU SUCCEED IN GETTING YOUR MBA DEGREE?

SO-HAN SPIVEY: YES.

MR. LEACH: EXCELLENT. DO YOU HOLD ANY PROFESSIONAL LICENSES?

SO-HAN SPIVEY: YES, I HAVE A CPA LICENSE.

MR. LEACH: AND WHAT IS A CPA LICENSE?

SO-HAN SPIVEY: IT'S CERTIFIED PUBLIC ACCOUNTANT.

MR. LEACH: AND WHAT DOES THAT LICENSE GIVE YOU AUTHORITY OR PERMISSION TO DO?

SO-HAN SPIVEY: SO I CAN SIGN OFF ON OUR CLIENT'S ACCOUNTS IF I DECIDED TO GO, LIKE, BE AN AUDITOR.

MR. LEACH: AND SO YOU OBTAINED YOUR MBA DEGREE FROM THE UNIVERSITY OF ROCHESTER IN 2005. WHAT DID YOU DO AFTER THAT?

SO-HAN SPIVEY: I JOINED DELOITTE'S SAN JOSE OFFICE.

MR. LEACH: DELOITTE'S SAN JOSE OFFICE HERE IN CALIFORNIA?

SO-HAN SPIVEY: CORRECT.

MR. LEACH: I SEE. AND WHAT DID YOU DO FOR THEM?

SO-HAN SPIVEY: I WAS ALSO A SENIOR AUDITOR.

MR. LEACH: OKAY. AND WERE YOU DOING WORK SIMILAR TO WHAT YOU WERE DOING FOR DELOITTE IN HONG KONG?

SO-HAN SPIVEY: CORRECT.

MR. LEACH: AND WERE YOU DOING THAT FOR COMPANIES BASED HERE IN THE UNITED STATES?

SO-HAN SPIVEY: CORRECT.

MR. LEACH: AND WERE YOU DOING THAT FOR PUBLIC COMPANIES, COMPANIES WHO ARE TRADED ON THE STOCK MARKET?

SO-HAN SPIVEY: BOTH PUBLIC COMPANY AND PRIVATE COMPANY.

MR. LEACH: OKAY. AND WHAT IS THE DIFFERENCE BETWEEN A PUBLIC COMPANY AND A PRIVATE COMPANY IN YOUR MIND?

SO-HAN SPIVEY: FROM THE AUDIT PERSPECTIVE, THERE'S NOT MUCH DIFFERENCE. WE PERFORM THE SAME PROCEDURES.

MR. LEACH: SO YOU REVIEW THE BALANCE SHEET?

SO-HAN SPIVEY: CORRECT.

MR. LEACH: DO YOU REVIEW THE INCOME STATEMENT?

SO-HAN SPIVEY: CORRECT.

MR. LEACH: AND DID YOU REVIEW STATEMENTS OF CASH FLOWS?

SO-HAN SPIVEY: YES.

MR. LEACH: OKAY. HOW LONG WERE YOU WITH DELOITTE IN SAN JOSE?

SO-HAN SPIVEY: ABOUT ONE YEAR.

MR. LEACH: OKAY. WHAT DID YOU DO AFTER THAT?

SO-HAN SPIVEY: I JOINED THERANOS.

MR. LEACH: OKAY. AND WHAT YEAR WAS THAT?

SO-HAN SPIVEY: IN 2006.

MR. LEACH: AND WHAT WERE YOU ARE HIRED TO DO AT THERANOS IN 2006?

SO-HAN SPIVEY: I WAS HIRED AS A CORPORATE CONTROLLER.

MR. LEACH: AS A CORPORATE CONTROLLER? AM I HEARING THAT RIGHT?

SO-HAN SPIVEY: YES.

MR. LEACH: WONDERFUL. THANK YOU. CAN YOU TELL US A LITTLE BIT ABOUT WHAT YOUR DUTIES WERE AS THE CORPORATE CONTROLLER OF THERANOS?

SO-HAN SPIVEY: SO I MANAGE AND DIRECT ALL ASPECTS OF THE ACCOUNTING OPERATIONS. THAT WOULD INCLUDE PROCESSING INVOICES AND DESIGN THE INTERNAL CONTROL, PREPARE THE FINANCIAL STATEMENTS, AND HANDLE PAYROLL AND KEEPING TRACK OF THEIR EQUITY RECORDS.

MR. LEACH: OKAY. YOU MENTIONED SOMETHING CALLED DESIGNING INTERNAL CONTROLS. WHAT DOES THAT MEAN?

SO-HAN SPIVEY: IT'S ACCOUNTING PROCESSES AND PROCEDURES AND MAKING SURE WE HAVE CHECKS AND BALANCES IN PLACE.

MR. LEACH: AND DID I HEAR YOU SAY YOU PREPARED FINANCIAL STATEMENTS WHILE THE CORPORATE CONTROLLER AT THERANOS?

SO-HAN SPIVEY: YES.

MR. LEACH: AND DID THAT INCLUDE BALANCE SHEETS?

SO-HAN SPIVEY: YES.

MR. LEACH: AND DID THAT INCLUDE INCOME STATEMENTS?

SO-HAN SPIVEY: YES.

MR. LEACH: AND DID THAT INCLUDE STATEMENTS OF CASH FLOW?

SO-HAN SPIVEY: YES.

MR. LEACH: YOU ALSO SAID THAT YOU DID WORK AROUND THE EQUITY. CAN YOU EXPLAIN FOR US WHAT YOU MEANT BY THAT?

SO-HAN SPIVEY: SO MOSTLY IT WOULD BE IF THE COMPANY GRANTS OPTION TO EMPLOYEES, CONSULTING DIRECTORS, THEN I WOULD KEEP TRACK OF THE NUMBER OF OPTIONS THAT WE GRANT AND THE VALUE THAT WE GRANT IT AT AND THE DATE AND ALL OF THESE RECORDS OF OPTIONS. I ALSO KEEP TRACK OF THE CAPITALIZATION SUMMARY FOR THE COMPANY. SO WHO -- THERE ARE SHAREHOLDERS WHO INVEST IN WHAT SERIES OF THE PREFERRED STOCK.

100

MR. LEACH: I JUST WANT TO MAKE SURE THAT I'M TRACKING YOU, MS. SPIVEY. WHEN YOU SAY THE CAPITALIZATION RECORD, WHAT DO YOU MEAN BY THAT?

101

SO-HAN SPIVEY: THAT MEANS THE NUMBER OF SHARES AND THE SHAREHOLDER IN EACH CLASSIFICATION OF THE COMPANY STOCK.

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MR. LEACH: AND YOU WERE RESPONSIBLE FOR KEEPING TRACK OF THAT?

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SO-HAN SPIVEY: CORRECT.

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MR. LEACH: HOW LONG DID YOU WORK AT THERANOS AS THE CORPORATE CONTROLLER?

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SO-HAN SPIVEY: FROM 2006 TO 2017.

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MR. LEACH: WHY DID YOU LEAVE THERANOS IN MARCH OF 2017?

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SO-HAN SPIVEY: THEY DECIDED TO OUTSOURCE THE ACCOUNTING FUNCTIONS, SO THEY LAID OFF THE WHOLE ACCOUNTING TEAM.

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MR. LEACH: WHEN YOU STARTED AS THE CORPORATE CONTROLLER OF THERANOS IN 2006, WHO DID YOU REPORT TO?

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SO-HAN SPIVEY: THE CFO AT THAT TIME.

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MR. LEACH: CFO, IS THAT AN ACRONYM?

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SO-HAN SPIVEY: YES. IT'S CHIEF FINANCIAL OFFICER.

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MR. LEACH: THE CHIEF FINANCIAL OFFICER?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND WHO WAS THE CHIEF FINANCIAL OFFICER AT THE TIME THAT YOU STARTED AT THERANOS?

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SO-HAN SPIVEY: HOWARD BAILEY.

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MR. LEACH: HOW LONG DID YOU WORK UNDER MR. BAILEY?

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SO-HAN SPIVEY: HE LEFT AFTER -- A FEW MONTHS AFTER I JOINED THE COMPANY.

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MR. LEACH: A FEW MONTHS AFTER YOU JOINED?

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SO-HAN SPIVEY: YES.

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MR. LEACH: DO YOU HAVE ANY INSIGHT AS TO WHY MR. BAILEY LEFT THE COMPANY?

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SO-HAN SPIVEY: NO.

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MR. LEACH: AND AFTER MR. BAILEY LEFT THERANOS, DID THERANOS REPLACE HIM WITH A CHIEF FINANCIAL OFFICER?

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SO-HAN SPIVEY: NO.

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MR. LEACH: AFTER MR. BAILEY LEFT THE COMPANY, WHO DID YOU START REPORTING TO?

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SO-HAN SPIVEY: RIGHT AFTER HE LEFT, I STARTED REPORTING TO ELIZABETH HOLMES.

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MR. LEACH: AND FOR WHAT PERIOD OF TIME DID YOU REPORT TO MS. HOLMES?

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SO-HAN SPIVEY: SO AFTER HOWARD BAILEY LEFT THE COMPANY, I STARTED REPORTING TO ELIZABETH HOLMES. AND SOMETIME IN 2007, THERE WAS A SENIOR FINANCE, OR SENIOR DIRECTOR OF FINANCE, AND I REPORTED TO HER FOR ABOUT ONE YEAR. AND THEN SHE LEFT THE COMPANY, AND THEN I REPORT TO ELIZABETH HOLMES AGAIN UNTIL I LEFT THE COMPANY.

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MR. LEACH: SO AM I RIGHT THAT ROUGHLY THE TIME PERIOD 2008-2009 ALL OF THE WAY TO YOUR DEPARTURE IN 2017, YOU REPORTED DIRECTLY TO ELIZABETH HOLMES?

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SO-HAN SPIVEY: YES.

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MR. LEACH: IN BETWEEN THE TIME MR. BAILEY LEFT IN ROUGHLY 2007 UP UNTIL THE TIME THAT YOU LEFT IN MARCH OF 2017, IN THAT TIME PERIOD, DID THERANOS HIRE A CHIEF FINANCIAL OFFICER TO REPLACE HIM?

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SO-HAN SPIVEY: NO.

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MR. LEACH: DID IT HIRE SOME FORM OF SENIOR DIRECTOR OF FINANCE LIKE MS. SINGHAL WHO YOU MENTIONED?

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SO-HAN SPIVEY: THAT'S THE ONLY ONE.

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MR. LEACH: SHE'S THE ONLY EXAMPLE OF THAT?

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SO-HAN SPIVEY: YES.

136

MR. LEACH: AND SHE LEFT SOMETIME IN 2007 OR 2008?

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SO-HAN SPIVEY: CORRECT.

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MR. LEACH: AND WERE YOU THE MOST SENIOR FINANCIAL OFFICER WITHIN THERANOS FROM ROUGHLY 2008 UP UNTIL 2017?

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SO-HAN SPIVEY: SORRY. LET ME BACKTRACK A LITTLE BIT.

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MR. LEACH: SURE.

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SO-HAN SPIVEY: BECAUSE I THINK IN 2016 THE COMPANY HAS AN INTERIM CFO.

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MR. LEACH: OKAY. I DIDN'T MEAN TO INTERRUPT YOU. THANK YOU FOR POINTING THAT OUT. LET ME ASK A BETTER QUESTION. UP UNTIL THIS TIME PERIOD IN ROUGHLY 2016, BETWEEN -- FROM 2008 UNTIL THAT POINT, WERE YOU THE MOST SENIOR FINANCE OFFICER WITHIN THERANOS?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND I THINK YOU MENTIONED, DID YOUR DUTIES INCLUDE PREPARING FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: YES.

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MR. LEACH: DID YOUR DUTIES ENSURE, ENSURING THAT TRANSACTIONS WERE APPROPRIATELY ENTERED INTO THE FINANCIAL SYSTEM?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND WHAT FINANCIAL SYSTEM DID THERANOS USE DURING YOUR TENURE AS CORPORATE CONTROLLER?

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SO-HAN SPIVEY: QAD. QAD.

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MR. LEACH: HOW REGULARLY DID YOU INTERACT WITH THE DEFENDANT WHEN YOU WERE THE CORPORATE CONTROLLER?

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SO-HAN SPIVEY: IT'S NOT REGULAR.

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MR. LEACH: DID YOU MEET WITH HER WEEKLY?

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SO-HAN SPIVEY: IT'S NOT REGULAR. SOMETIMES IT'S WEEKLY. IT MAY BE BIWEEKLY. SOMETHING LIKE THAT.

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MR. LEACH: SO IT VARIED? IS THAT WHAT YOU'RE SAYING?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND SOMETIMES IT WAS WEEKLY?

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SO-HAN SPIVEY: RIGHT.

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MR. LEACH: AND SOMETIMES IT WAS MORE THAN THAT? SOMETIMES IT WAS LESS THAN THAT?

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SO-HAN SPIVEY: RIGHT.

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MR. LEACH: DID YOU REGULARLY PROVIDE MS. HOLMES WITH DOCUMENTS SUMMARIZING THE COMPANY'S FINANCIAL CONDITION?

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SO-HAN SPIVEY: YES.

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MR. LEACH: DID YOU REGULARLY PROVIDE MS. HOLMES WITH DOCUMENTS SUMMARIZING THE COMPANY'S CASH POSITION?

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SO-HAN SPIVEY: YES.

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MR. LEACH: OKAY. WAS IT PART OF YOUR JOB TO MAKE SURE THAT MS. HOLMES WAS AWARE OF THE FINANCIAL STATE OF THE COMPANY?

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SO-HAN SPIVEY: YES.

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MR. LEACH: WHEN YOU JOINED THERANOS IN 2006, DID THERANOS HAVE AN OUTSIDE AUDITOR?

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SO-HAN SPIVEY: YES.

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MR. LEACH: WHO WAS THE OUTSIDE AUDITOR?

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SO-HAN SPIVEY: AT THE TIME I JOINED, IT WAS ERNST & YOUNG.

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MR. LEACH: WHAT IS ERNST & YOUNG?

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SO-HAN SPIVEY: ERNST & YOUNG IS A PUBLIC ACCOUNTING FIRM.

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MR. LEACH: ARE THEY A COMPETITOR OF DELOITTE'S?

SO-HAN SPIVEY: YES.

(LAUGHTER.)

BY MR. LEACH:

MR. LEACH: ARE THERE FOUR BIG FIRM -- OR ARE THERE SOMETHING KNOWN AS THE BIG FOUR ACCOUNTING FIRMS IN THE UNITED STATES?

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SO-HAN SPIVEY: YES.

178

MR. LEACH: AND IS DELOITTE ONE OF THEM?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND IS ERNST & YOUNG ONE OF THEM?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND I USED THAT TERM "OUTSIDE AUDITOR." EXPLAIN FOR US AGAIN, WHAT IS AN OUTSIDE AUDITOR? WHAT WAS ERNST & YOUNG DOING FOR THERANOS?

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SO-HAN SPIVEY: SO THEY WERE THERE TO, SIMILAR TO WHAT I DID AT DELOITTE. SO THEY EXAMINED THE ACCOUNTING RECORDS TO MAKE SURE THAT WHAT WE PRESENTED TO -- THAT THE FINANCIAL STATEMENT THAT WE PRESENTED TO THEM WAS FAIRLY STATED.

184

MR. LEACH: AND DID ERNST & YOUNG GIVE AN OPINION ON THERANOS'S FINANCIAL STATEMENTS FOR THE YEAR 2006?

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SO-HAN SPIVEY: YES.

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MR. LEACH: ERNST & YOUNG WAS ABLE TO COME TO AN OPINION AND SAY THESE ARE CORRECT IN ALL MATERIAL RESPECTS; IS THAT RIGHT?

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SO-HAN SPIVEY: CORRECT.

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MR. LEACH: AND DID ERNST & YOUNG GIVE AN OPINION ON THERANOS'S FINANCIAL STATEMENTS IN 2007?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND HOW ABOUT 2008?

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SO-HAN SPIVEY: THEY DID.

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MR. LEACH: OKAY. HOW ABOUT 2009?

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SO-HAN SPIVEY: THEY WERE NO LONGER THE AUDITOR FOR THERANOS.

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MR. LEACH: OKAY. IN 2009, DID THERANOS STOP USING ERNST & YOUNG?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AND DID YOU HAVE ANY ROLE IN DECIDING TO NO LONGER ENGAGE ERNST & YOUNG?

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SO-HAN SPIVEY: NO.

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MR. LEACH: DID THERANOS START USING A NEW AUDITOR AT THAT POINT IN TIME?

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SO-HAN SPIVEY: YES. THERANOS ENGAGED KPMG.

200

MR. LEACH: IS THAT ANOTHER ONE OF THE BIG FOUR?

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SO-HAN SPIVEY: YES.

202

MR. LEACH: AND DID YOU WORK WITH KPMG AUDITORS DURING THE TIME PERIOD 2009 TO 2015?

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SO-HAN SPIVEY: YES.

204

MR. LEACH: OKAY. AT ANY POINT IN TIME, DID KPMG RENDER AN OPINION ON THERANOS'S 2009 FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: NO.

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MR. LEACH: WHY DID KPMG NOT RENDER AN OPINION ON THERANOS'S 2009 FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: SO THEY REVIEWED IT, THE FINANCIAL STATEMENTS FOR 2009, AND BECAUSE OF THE TIMING, IT WAS ALREADY TOWARDS THE END OF 2010, AND SO THEY DECIDED TO AUDIT THE FINANCIAL STATEMENT FOR 2010 SO THAT THEY CAN ISSUE ONE FINANCIAL STATEMENT FOR BOTH YEARS.

208

MR. LEACH: OKAY. SO KPMG EXPRESSED A DESIRE TO RENDER AN OPINION ON TWO YEARS OF FINANCIAL STATEMENTS GIVEN THE TIMING OF THE ENGAGEMENT?

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SO-HAN SPIVEY: CORRECT.

210

MR. LEACH: OKAY. DID KPMG EVER RENDER AN OPINION ON THE 2010 FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: NO.

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MR. LEACH: AND WHY WAS THAT?

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SO-HAN SPIVEY: MY RECOLLECTION OF THAT IS THAT THERE'S SOME ISSUES WITH THE OPTION VALUATION.

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MR. LEACH: WHEN YOU SAY THERE WAS AN ISSUE WITH THE OPTION VALUATION, WHAT DO YOU MEAN BY THAT?

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SO-HAN SPIVEY: SO THERANOS GRANTED SOME OPTION IN MAY OF 2010, AND THEN IN 2000 -- OR IN JULY OF 2010, THERANOS HAS A NEW ROUND OF FINANCING. SO KPMG SAID, WOULD THE FAIR MARKET -- OR THE VALUE THAT WE GRANTED THE OPTION AT IN MAY OF 2010 WAS TOO LOW BECAUSE WE -- THE COMPANY SHOULD HAVE TAKEN INTO ACCOUNT THE FUNDING FROM THE FINANCING.

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MR. LEACH: WHEN YOU SAY THERE WAS A FUNDING BY FINANCING IN THE JULY 2010 TIME PERIOD, DOES THAT MEAN THERANOS RAISED MONEY FROM INVESTORS?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AT A PARTICULAR PRICE PER SHARE. IS THAT FAIR?

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SO-HAN SPIVEY: YES.

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MR. LEACH: OKAY. AND THERANOS HAD GRANTED SOME STOCK OPTIONS BEFORE THAT FINANCING? IS THAT WHAT YOU'RE SAYING?

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SO-HAN SPIVEY: YES.

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MR. LEACH: OKAY. WHO HAD THERANOS GRANTED THOSE OPTIONS TO?

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SO-HAN SPIVEY: IN MAY IT WAS GRANTED TO ELIZABETH HOLMES, AND THEN THERE'S ALSO SOME FOR A LIST OF EMPLOYEES.

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MR. LEACH: AND WHEN YOU SAY "GRANTED OPTIONS," WHAT DO YOU MEAN BY THAT. LET ME ASK A BETTER QUESTION. WHAT IS A STOCK OPTION?

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SO-HAN SPIVEY: A STOCK OPTION IS GIVING THE EMPLOYEES OR THE OPTIONEE, WHOEVER THAT WAS, AN OPTION TO BUY THE COMPANY STOCK AT A GIVEN PRICE.

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MR. LEACH: SO THERANOS HAD GRANTED AN OPTION TO MS. HOLMES AT A PARTICULAR PRICE TO BUY THE SHARES, AND THEN LATER IT HAD A FINANCING AT A DIFFERENT PRICE? WAS THAT WHAT WAS CAUSING THE ISSUE?

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SO-HAN SPIVEY: SO WHEN THE PRICE WAS -- WHEN THE OPTION WAS GRANTED IN MAY, BECAUSE THERE WAS NO -- THERE'S NO SUCH FINANCING, SO THE COMPANY'S FINANCIAL POSITION WOULD DICTATE THAT THE VALUE OF THE COMPANY AT THAT TIME WOULD BE LOW. AND BECAUSE OF THE FINANCING, THEN THE COMPANY'S FINANCIAL POSITION WOULD HAVE IMPROVED AND THE VALUE OF THE COMPANY WOULD HAVE INCREASED.

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MR. LEACH: AND KPMG FELT WHAT ABOUT THIS? WHAT DID THEY SAY TO YOU?

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SO-HAN SPIVEY: AND KPMG FELT THAT THE OPTION GRANTED SHOULD HAVE REFLECTED THE VALUE OF THE FINANCING, SO IT SHOULD HAVE BEEN HIGHER.

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MR. LEACH: SO WAS THIS ISSUE ABOUT THE STOCK OPTION VALUATION EVER RESOLVED WITH KPMG?

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SO-HAN SPIVEY: NO.

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MR. LEACH: DID IT EVER RENDER AN OPINION ON THERANOS'S 2009 OR 2010 FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: NO.

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MR. LEACH: HOW ABOUT IN 2011? DID KPMG RENDER AN OPINION ON THE FINANCIAL STATEMENTS FOR THAT YEAR?

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SO-HAN SPIVEY: NO.

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MR. LEACH: HOW ABOUT 2012?

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SO-HAN SPIVEY: NO.

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MR. LEACH: HOW ABOUT 2013?

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SO-HAN SPIVEY: NO.

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MR. LEACH: HOW ABOUT 2014?

SO-HAN SPIVEY: NO.

MR. LEACH: 2015?

SO-HAN SPIVEY: NO.

MR. LEACH: AND YOU CONTINUED TO WORK WITH KPMG AUDITORS THROUGHOUT THAT TIME PERIOD, BUT FROM 2009 TO 2015, THEY NEVER RENDERED AN OPINION ON THERANOS'S FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: CORRECT.

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MR. LEACH: OKAY. WAS THAT UNUSUAL IN YOUR EXPERIENCE?

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SO-HAN SPIVEY: YES.

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MR. LEACH: HOW SO?

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SO-HAN SPIVEY: USUALLY A COMPANY, FOR A PRIVATE COMPANY OR A SMALLER PRIVATE COMPANY, WE USUALLY HAVE A FINANCIAL STATEMENT, AN AUDITED FINANCIAL STATEMENT ONCE A YEAR.

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MR. LEACH: AND WHAT ARE THE BENEFITS OF THE COMPANY OF HAVING AN AUDITED FINANCIAL STATEMENT AS OPPOSED TO JUST THEIR OWN FINANCIAL STATEMENTS?

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SO-HAN SPIVEY: IT GIVES CREDIBILITY.

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MR. LEACH: THE AUDIT OPINION GIVES CREDIBILITY?

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SO-HAN SPIVEY: CORRECT.

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MR. LEACH: OKAY. I'D LIKE TO FOCUS YOUR ATTENTION, MS. SPIVEY, IF WE COULD, ON THE TIME PERIOD OF 2009. YOU WERE THE CORPORATE CONTROLLER IN THAT TIME PERIOD?

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SO-HAN SPIVEY: YES.

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MR. LEACH: AS THE CORPORATE CONTROLLER, WERE YOU FAMILIAR WITH THE COMPANY'S CASH POSITION IN EARLY 2009?

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SO-HAN SPIVEY: YES.

258

MR. LEACH: HOW WOULD YOU DESCRIBE THE COMPANY'S CASH POSITION FOR US IN EARLY 2009?

259

SO-HAN SPIVEY: THE COMPANY HAD PROBLEMS, OR ISSUES, WITH PAYING VENDOR AT THAT TIME.

260

MR. LEACH: WHEN YOU SAY "THE COMPANY HAD PROBLEMS OR ISSUES PAYING VENDORS AT THAT POINT IN TIME," WHAT DO YOU MEAN?

261

SO-HAN SPIVEY: SO DURING THAT, DURING THAT PERIOD, SO WE WOULD -- DURING OUR NORMAL COURSE OF BUSINESS WE BUY, WE BUY SUPPLIES, WE BUY EQUIPMENTS, WE BUY, YOU KNOW -- OR WE HAVE TO PAY RENT AND SOMETHING LIKE THAT, AND WE USUALLY HAVE CREDIT TERMS LIKE THE VENDOR WOULD GIVE US 30 DAYS OR 60 DAYS TO PAY THE BILL. BUT WHEN THAT BILL COMES DUE SOMETIMES DURING THIS FIRST HALF OF 2009, AND SOMETIMES I -- WE JUST DO NOT HAVE THE CASH TO PAY ALL OF THEM ON TIME, SO I WOULD HAVE TO PICK AND CHOOSE WHICH ONE WE WANT TO PAY FIRST.

262

MR. LEACH: SO YOU WERE PICKING AND CHOOSING WHICH VENDORS THERANOS WOULD PAY IN THIS EARLY 2009 TIME PERIOD?

263

SO-HAN SPIVEY: CORRECT.

264

MR. LEACH: DID YOU HAVE DISCUSSIONS WITH MS. HOLMES ABOUT THE COMPANY'S CASH POSITION IN EARLY 2009?

265

SO-HAN SPIVEY: YES.

266

MR. LEACH: AT A HIGH LEVEL, WHAT WAS THE SUBSTANCE OF THOSE DISCUSSIONS?

267

SO-HAN SPIVEY: I LET HER KNOW THAT WE WOULD NOT BE ABLE TO PAY ALL OF THE VENDORS AND IN ONE INSTANCE THAT I ALSO TOLD HER THAT WE WOULDN'T, YOU KNOW -- I ALSO SUGGEST TO HER THAT WE MAY HAVE TO WITHHOLD HER PAYROLL SO THAT WE COULD PAY A FEW MORE VENDOR WITH THE MONEY. AND THERE'S ALSO A SITUATION THAT WE HAVE TO CONTACT THE BANKER TO CLEAR A CHECK SO THAT WE CAN MAKE THE NEXT PAYROLL.

268

MR. LEACH: WHEN YOU SAY "WE HAD TO CONTACT A BANKER TO MAKE SURE THAT WE WOULD MAKE THE NEXT PAYROLL," WHAT DO YOU MEAN? TELL US WHAT HAPPENED.

269

SO-HAN SPIVEY: SO FOR THAT TIME I ALREADY SUBMITTED THE PAYROLL RECORD, AND SO THE NEXT DAY WE NEED TO HAVE MONEY IN THE BANK ACCOUNT FOR THAT -- FOR THE PAYROLL COMPANY TO DRAW THE FUND TO PAY OUR EMPLOYEES. AND THEN WE FIND OUT THAT THE BANK DID NOT CLEAR THE CHECK BECAUSE THEY HAVE TO HOLD THE CHECK FOR A CERTAIN PERIOD OF TIME WHEN WE DON'T HAVE OUR MONEY IN THE BANK ACCOUNT TO SUPPORT THAT. AND SO I BROUGHT THAT UP TO ELIZABETH HOLMES, AND WE WERE IN A CONFERENCE ROOM TOGETHER, AND WE CALLED THE BANKER AND TRIED TO CONVINCE HIM TO LET THAT GO ONE TIME WITHOUT A WAITING PERIOD, AND HE REFUSED TO DO THAT. SO I HAVE TO CONTACT THE -- OUR CUSTOMER WHO CUT THE CHECK TO US, AND I HAVE TO CONTACT THE CUSTOMER AND HAVE HER CONTACT THE BANKER TO PROVE THAT THEY -- THE ACTUAL -- THE CHECK WILL BE CLEARED AS A LEGITIMATE CHECK.

270

MR. LEACH: WAS MS. HOLMES AWARE THAT YOU WERE DOING THAT?

271

SO-HAN SPIVEY: YES. WE WERE IN THE CONFERENCE ROOM TOGETHER.

272

MR. LEACH: OKAY. AND WAS ALL OF THIS AS PART OF AN EFFORT TO MAKE SURE THAT THERANOS COULD PAY ITS EMPLOYEES AND MEET ITS PAYROLL?

273

SO-HAN SPIVEY: YES.

274

MR. LEACH: LET ME MOVE FORWARD IN TIME IN 2009. AT SOME POINT IN 2009 DID THE COMPANY RECEIVE SOME FORM OF LOAN THAT ALLEVIATED SOME OF ITS CASH PROBLEMS?

275

SO-HAN SPIVEY: YES, AND THEN WE WERE ABLE TO GET A LOAN FROM FIDELITY.

276

MR. LEACH: WAS THAT -- WHAT IS FIDELITY?

277

SO-HAN SPIVEY: FIDELITY IS AN INVESTMENT BANK.

278

MR. LEACH: AND WAS THIS LOAN FROM FIDELITY SECURED IN ANY WAY OR DID SOMEONE ASSIST ENABLING FIDELITY TO LOAN THAT TO THE COMPANY?

279

SO-HAN SPIVEY: YES. MY UNDERSTANDING WAS THAT SUNNY BALWANI USED HIS PERSONAL FUNDS TO GUARANTEE OR USED THIS AS A COLLATERAL SO THAT THERANOS COULD DRAW THE LOAN.

280

MR. LEACH: AND DID YOU TESTIFY EARLIER THAT SOME TIME IN 2010 THERANOS RAISED MONEY FROM INVESTORS?

281

SO-HAN SPIVEY: YES.

282

MR. LEACH: AND DO YOU RECALL APPROXIMATELY HOW MUCH MONEY THERANOS RAISED FROM INVESTORS IN 2010?

283

SO-HAN SPIVEY: IT'S 45 MILLION.

284

MR. LEACH: I'D LIKE TO DRAW YOUR ATTENTION, MS. SPIVEY, TO A DOCUMENT THAT WE'VE MARKED AS EXHIBIT 758. MS. HOLLIMAN, IF YOU COULD CALL THAT UP FOR THE WITNESS ONLY.

285

COURT CLERK: WE CAN'T DO THAT, YOUR HONOR.

286

(DISCUSSION OFF THE RECORD.)

287

MR. LEACH: YOUR HONOR, IS IT THE COURT'S PREFERENCE THAT WE USE THE ELECTRONIC COPY OR A HARD COPY?

288

JUDGE DAVILA: ARE WE ABLE TO CALL IT UP JUST FOR THE WITNESS?

289

(DISCUSSION OFF THE RECORD.)

290

JUDGE DAVILA: WE'LL NEED TO USE A HARD COPY IF YOU HAVE ONE. I'M SORRY.

291

MR. LEACH: OKAY. MAY I APPROACH THE WITNESS, YOUR HONOR?

292

JUDGE DAVILA: OF COURSE.

293

MR. LEACH: (HANDING.)

294

(DISCUSSION OFF THE RECORD.)

295

MR. LEACH: YOUR HONOR, I THINK THE WITNESS IS REQUESTING TO TAKE THE FACE SHIELD OFF BECAUSE IT'S GETTING BLURRY.

296

JUDGE DAVILA: IT'S GETTING FOGGY?

297

SO-HAN SPIVEY: NO. I CANNOT SEE.

298

JUDGE DAVILA: OH, WITH THE MASK.

299

SO-HAN SPIVEY: WITH THIS THING.

300

JUDGE DAVILA: THANK YOU. I THINK WE HAVE AN AIR FILTER ON BELOW YOU; IS THAT CORRECT?

301

SO-HAN SPIVEY: YES.

302

JUDGE DAVILA: YES. YOU CAN TAKE THAT OFF. THANK YOU.

303

SO-HAN SPIVEY: THANK YOU.

304

BY MR. LEACH:

305

MR. LEACH: IS THAT BETTER, MS. SPIVEY?

306

SO-HAN SPIVEY: YES.

307

MR. LEACH: THANK YOU FOR DRAWING THAT TO OUR ATTENTION. I'D LIKE TO DRAW YOUR ATTENTION TO WHAT IS IN THE BINDER AS EXHIBIT 578. IS THIS A TRUE AND CORRECT COPY OF AN EMAIL THAT YOU SENT TO KPMG IN 2012 ATTACHING CERTAIN FINANCIAL INFORMATION FOR THERANOS?

308

SO-HAN SPIVEY: YES.

309

MR. LEACH: AND AT THIS TIME WAS KPMG ENGAGED BY THERANOS TO ATTEMPT TO AUDIT THE RECORDS OF THERANOS?

310

SO-HAN SPIVEY: YES.

311

MR. LEACH: AND FOR THE ATTACHMENT, WAS THIS PREPARED IN THE ORDINARY COURSE OF THERANOS'S BUSINESS?

312

SO-HAN SPIVEY: YES.

313

MR. LEACH: WAS IT PREPARED FROM RECORDS MAINTAINED IN THE REGULAR COURSE OF THERANOS BUSINESS?

314

SO-HAN SPIVEY: YES.

315

MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 578 INTO EVIDENCE.

316

MR. WADE: NO OBJECTION, YOUR HONOR.

317

JUDGE DAVILA: IT'S ADMITTED. WOULD YOU LIKE TO PUBLISH IT?

318

MR. LEACH: YES, IF WE COULD PUBLISH IT.

319

JUDGE DAVILA: IT WILL BE PUBLISHED AT THIS TIME.

320

(GOVERNMENT'S EXHIBIT 578 WAS RECEIVED IN EVIDENCE.)

321

BY MR. LEACH:

322

MR. LEACH: MS. SPIVEY, I SEE AT THE TOP OF THIS DOCUMENT THE NAME DANISE YAM. WAS THAT THE NAME THAT YOU USED WHILE AT THERANOS?

323

SO-HAN SPIVEY: YES.

324

MR. LEACH: SO AS WE'RE LOOKING THROUGH SOME OF YOUR THERANOS RECORDS IN YOUR EXAMINATION, WILL IT CONSISTENTLY BE DANISE YAM?

325

SO-HAN SPIVEY: YES.

326

MR. LEACH: OKAY. AND THIS IS IN 2012 YOU'RE SENDING SOME 2010 FINANCIAL INFORMATION TO KPMG; IS THAT CORRECT?

327

SO-HAN SPIVEY: YES.

328

MR. LEACH: OKAY. COULD WE PLEASE LOOK AT THE ATTACHMENT. MS. SPIVEY, UP IN THE LEFT-HAND CORNER IT SAYS THERANOS INC. YE 12/31/2011 TRIAL BALANCE. DO YOU SEE THAT?

329

SO-HAN SPIVEY: YES.

330

MR. LEACH: AND WHAT DOES YE STAND FOR?

331

SO-HAN SPIVEY: YEAR END.

332

MR. LEACH: AND TRIAL BALANCE, WHAT IS THAT?

333

SO-HAN SPIVEY: IT'S THE COMPANY, IT'S THE COMPANY FINANCIAL BALANCE OF EACH ACCOUNT THAT IS INCLUDING ALL OF THE FINANCIAL ACCOUNTS INCLUDING THE ASSETS AND LIABILITY AND INCOME AND EXPENSES AND EQUITY.

334

MR. LEACH: AND WAS THE TRIAL BALANCE SOMETHING THAT YOU MAINTAINED IN THE ORDINARY COURSE OF YOUR BUSINESS?

335

SO-HAN SPIVEY: YES.

336

MR. LEACH: AND WAS THAT AN IMPORTANT DOCUMENT FOR YOU IN MAINTAINING THERANOS'S FINANCIAL RECORDS?

337

SO-HAN SPIVEY: YES.

338

MR. LEACH: OKAY. I DRAW YOUR ATTENTION DOWN TO THE LEFT PORTION OF THE SCREEN THERE'S SOME TABS IN THE EXCEL FILE. ONE SAYS TB. IS THAT AN ABBREVIATION FOR TRIAL BALANCE?

339

SO-HAN SPIVEY: YES.

340

MR. LEACH: AND TO THE RIGHT IT SAYS 2-BS. ARE YOU ABLE TO SEE THAT?

341

SO-HAN SPIVEY: YES.

342

MR. LEACH: AND WHAT DOES THAT REFER TO?

343

SO-HAN SPIVEY: BALANCE SHEETS.

344

MR. LEACH: THERE'S ALSO ONE 3-IS. WHAT IS THAT?

345

SO-HAN SPIVEY: INCOME STATEMENTS.

346

MR. LEACH: THAT'S THE FINANCIAL STATEMENT THAT MEASURES REVENUE LESS EXPENSES FOR A PARTICULAR PERIOD?

347

SO-HAN SPIVEY: YES. SORRY, YES.

348

MR. LEACH: AND THEN TO THE RIGHT PL BY GROUP. WHAT DOES THAT MEAN?

349

SO-HAN SPIVEY: PROFIT AND LOSS BY GROUP.

350

MR. LEACH: AND THEN IS QAD. QAD IS YOUR ACCOUNTING SYSTEM?

351

SO-HAN SPIVEY: YES.

352

MR. LEACH: AND I'D LIKE TO FOCUS ON THE TAB 3-IS IF WE COULD.

353

JUDGE DAVILA: SO, MR. LEACH, WE'RE ABOUT 2:00 O'CLOCK RIGHT NOW. ARE YOU GOING TO -- DO YOU INTEND TO GO THROUGH SOMETHING? IS THIS A GOOD TIME TO BREAK OR DO YOU WANT TO ASK A COUPLE OF INITIAL QUESTIONS?

354

MR. LEACH: I HAVE SOMEWHERE ABOUT FIVE TO TEN INITIAL QUESTIONS ABOUT THIS TAB AND NOT THE OTHERS.

355

JUDGE DAVILA: WHY DON'T WE DO THAT AND JUST EXHAUST THOSE. LADIES AND GENTLEMEN, WE'RE GOING TO TAKE A FEW MINUTES TO ALLOW MR. LEACH TO EXAMINE THIS TOPIC, AND THEN WE'LL BREAK FOR THE DAY.

356

BY MR. LEACH:

357

MR. LEACH: WERE YOU INTENDING BY THIS EXCEL SPREADSHEET, MS. YAM, TO PROVIDE ACCURATE INFORMATION TO KPMG ABOUT THERANOS'S INCOME STATEMENT FOR 2009, 2010, AND 2011?

358

SO-HAN SPIVEY: YES.

359

MR. LEACH: WHAT WAS THERANOS'S REVENUE FOR 2009?

360

SO-HAN SPIVEY: IT WAS $2,793,846.

361

MR. LEACH: AND WAS THERANOS'S REVENUE FOR 2010 $1,401,305?

362

SO-HAN SPIVEY: YES.

363

MR. LEACH: AND WAS THERANOS'S REVENUE FOR 2011 $518,248?

364

SO-HAN SPIVEY: YES.

365

MR. LEACH: AND IF WE SCROLL DOWN IN THE COLUMN B FOR THE INCOME STATEMENT THERE'S A LINE FOR NET LOSS. DO YOU SEE THAT?

366

SO-HAN SPIVEY: YES.

367

MR. LEACH: AND WHAT IS THE NET LOSS?

368

SO-HAN SPIVEY: THAT'S THE REVENUE AFTER SUBTRACTING FOR ALL OF THE EXPENSES, AND THAT'S WHAT THE COMPANY BASICALLY WAS LOSING FOR THAT YEAR.

Procedural 1Proc. 1End-of-Day Jury Admonition

369

MR. LEACH: YOUR HONOR, THIS IS A CONVENIENT STOPPING POINT?

370

JUDGE DAVILA: ALL RIGHT. WE WILL BREAK NOW. MS. SPIVEY, WE'RE GOING TO ASK YOU TO RETURN FRIDAY, FRIDAY, IF YOU COULD BE HERE, WE'LL CONTINUE WITH YOUR TESTIMONY AT 9:00 A.M., PLEASE. SO IF YOU COULD PLEASE BE AVAILABLE AND BE AVAILABLE IN THE COURTHOUSE. YOU CAN STAND DOWN NOW. THANK YOU. JUST LEAVE THAT THERE.

371

SO-HAN SPIVEY: OKAY.

372

JUDGE DAVILA: THANK YOU.

373

SO-HAN SPIVEY: THANK YOU.

374

JUDGE DAVILA: LADIES AND GENTLEMEN, WE'RE GOING TO RECESS FOR THE DAY. AS I INDICATED TO THE WITNESS, WE WILL NOT BE HERE TOMORROW, THURSDAY. WE WILL BEGIN ON FRIDAY AT 9:00 A.M. I HOPE TO HAVE YOU IN YOUR SEATS AND TO HAVE WITNESSES READY TO TESTIFY AT 9:00 A.M. LET ME JUST -- I AM GOING TO READ TO YOU AGAIN AN ADMONITION, AND I DO THIS BECAUSE I HOPE YOU REALIZE HOW IMPORTANT IT IS. THE GIST OF THIS IS THAT YOU NOT, NOT INDULGE IN ANY MATERIAL REGARDING THIS CASE OUTSIDE OF THIS COURTROOM. AS I INDICATED BEFORE THE TRIAL STARTED, YOU, AS JURORS, WILL DECIDE THIS CASE BASED SOLELY ON THE EVIDENCE PRESENTED IN THIS COURTROOM. THIS MEANS THAT AFTER YOU LEAVE HERE FOR THE NIGHT, YOU MUST NOT CONDUCT ANY INDEPENDENT RESEARCH ABOUT THIS CASE, THE MATTERS IN THE CASE, THE LEGAL ISSUES IN THE CASE, OR THE INDIVIDUALS OR OTHER ENTITIES INVOLVED IN THE CASE. THIS IS IMPORTANT FOR THE SAME REASON THAT JURORS HAVE LONG BEEN INSTRUCTED TO LIMIT THEIR EXPOSURE TO TRADITIONAL FORMS OF MEDIA SUCH AS TELEVISIONS AND NEWSPAPERS. YOU ALSO MUST NOT COMMUNICATE WITH ANYONE IN ANY WAY ABOUT THIS CASE, AND YOU MUST IGNORE ANY INFORMATION ABOUT THE CASE THAT YOU MIGHT SEE WHILE BROWSING THE INTERNET OR ON YOUR SOCIAL MEDIA FEEDS. PLEASE RECALL WHEN WE WERE TALKING DURING THE JURY SELECTION PROCESS I SUGGESTED THAT I THINK YOU CANNOT DELETE NOTIFICATIONS BUT SOMEHOW DISABLE YOUR NOTIFICATIONS. I WOULD SUGGEST AND ENCOURAGE YOU TO THINK ABOUT THAT. THAT MIGHT HELP YOU TO AVOID ANY UNWANTED NOTIFICATIONS OR EXPOSURE TO INFORMATION. ANYTHING BEFORE I ASK THE JURY TO LEAVE FOR THE DAY, COUNSEL?

375

MR. LEACH: NO, YOUR HONOR.

376

JUDGE DAVILA: ALL RIGHT. I'M GOING TO ASK AGAIN JUROR NUMBER 7 IF YOU CAN REMAIN. MS. HERNANDEZ-PEREZ, I HAVE A FEW QUESTIONS FOR YOU. AND LET ME ADVISE YOUR COLLEAGUES, SHE'S NOT IN TROUBLE. NOT AT ALL. THIS IS ABOUT SCHEDULING ISSUES.

377

(LAUGHTER.)

378

JUDGE DAVILA: ONE THING I WOULD LIKE YOU TO THINK ABOUT, TOO, LADIES AND GENTLEMEN OF THE JURY, THE TIMING AND I KNOW SOME OF YOU LIVE FAR AND OVER THE HILL AS THEY SAY. AS WE GO FORWARD, I'D LIKE YOU TO THINK ABOUT WHETHER OR NOT, I THINK I MENTIONED THIS AT SOME POINT EARLIER, THINK ABOUT SHOULD WE START EARLIER AT 8:30, SHOULD WE END LATER, THOSE TYPES OF THINGS. I WANT TO ADJUST THE SCHEDULE SUCH THAT WE CAN EFFICIENTLY CAPTURE EVERYTHING WE NEED HERE, BUT I WANT TO DO IT THAT'S COMFORTABLE FOR YOU AS WELL AND LESS INTRUSIVE AS POSSIBLE. THAT'S SOMETHING I MIGHT EXPLORE. SO BE THINKING ABOUT THAT, PLEASE. WE'LL TALK ABOUT THAT LATER ON. FOR NOW, HAVE A GOOD EVENING. PLEASE REMEMBER THE ADMONITION. WE'LL SEE YOU FRIDAY MORNING. WHERE SHOULD THEY REPORT, MS. KRATZMANN? UPSTAIRS?

379

COURT CLERK: FRIDAY MORNING, YES, THEY CAN REPORT UPSTAIRS.

380

JUDGE DAVILA: OKAY. AND THEN YOU WILL BE IN THE JURY ROOM. HAVE WE MISSED THE BREAKFAST ITEMS?

381

COURT CLERK: THEY RECEIVED BREAKFAST THIS MORNING, YOUR HONOR.

382

JUDGE DAVILA: OH. GOOD. OKAY. THAT'S WHY THEY LOOK WELL FORTIFIED. GREAT. HAVE A GOOD EVENING FOLKS. WE WILL SEE YOU FRIDAY.

Procedural 2Proc. 2Juror 7 Hardship Inquiry — End-of-Day Follow-Up

383

(JURY OUT AT 2:04 P.M.)

384

(PROCEEDINGS HELD IN THE PRESENCE OF JUROR 7.)

385

JUDGE DAVILA: ALL RIGHT. PLEASE BE SEATED. THANK YOU. THE RECORD SHOULD REFLECT THAT OUR JURORS AND ALTERNATES HAVE LEFT. JUROR NUMBER 7, MS. HERNANDEZ-PEREZ, REMAINS. I'M SORRY YOU WEREN'T ABLE TO GET AHOLD OF YOUR SUPERVISOR. SHE'S BACK FRIDAY?

386

JUROR: YES.

387

JUDGE DAVILA: SO WHAT SHOULD WE DO, MS. HERNANDEZ-PEREZ? CAN YOU COME ON FRIDAY AND THEN CHECK WITH HER ON FRIDAY MORNING? WOULD THAT WORK?

388

JUROR: I CAN TRY AND CALL AND SEE IF SHE'S THERE IN THE MORNING. BUT THEY DON'T OPEN THE STORE UNTIL 10:00 I THINK, SO THAT WOULD BE LIKE IN THE MIDDLE OF THE --

389

JUDGE DAVILA: I SEE. IS SHE EXPECTING YOU? ARE YOU EXPECTED TO BE AT WORK ON FRIDAY MORNING?

390

JUROR: I SWITCHED A SHIFT, LIKE, WITH SOMEONE SO IT'S AT 3:00.

391

JUDGE DAVILA: OH. LOVELY. THANK YOU FOR DOING THAT. THAT WAS KIND OF YOU. SO WE'LL SEE YOU ON FRIDAY MORNING AT 9:00 O'CLOCK THEN. CAN YOU BE HERE?

392

JUROR: YES.

393

JUDGE DAVILA: GREAT. AND THEN SOME TIME DURING THE BREAK CAN YOU REACH OUT TO HER?

394

JUROR: YES. OR I CAN ALSO TRY TALKING TO HER AT WORK, WHICHEVER IS --

395

JUDGE DAVILA: OH.

396

JUROR: WELL, I'M GOING TO WORK ON FRIDAY SO SHE SHOULD BE THERE.

397

JUDGE DAVILA: OKAY. WELL, MAYBE IT'S -- YOU KNOW, THAT MIGHT MAKE IT EASIER FOR YOU, YOU PUT THE PERSONAL TOUCH ON HER AND THAT SOMETIMES WORKS.

398

JUROR: YEAH.

399

(LAUGHTER.)

400

JUDGE DAVILA: GOOD IDEA. THANK YOU. THANK YOU SO MUCH FOR ARRANGING YOUR SCHEDULE. HAVE A GOOD EVENING.

401

JUROR: THANK YOU.

402

(PROCEEDINGS HELD OUT OF THE PRESENCE OF JUROR NUMBER 7.)

403

JUDGE DAVILA: PLEASE BE SEATED. THE RECORD SHOULD REFLECT THAT JUROR NUMBER 7 HAS LEFT. ALL COUNSEL AND MS. HOLMES REMAIN. I SHOULD HAVE ASKED YOU IF YOU HAD ANY QUESTIONS FOR MS. PEREZ. ANYTHING YOU WANTED TO ASK, MR. SCHENK?

404

MR. SCHENK: NO, YOUR HONOR.

405

JUDGE DAVILA: MR. DOWNEY?

406

MR. DOWNEY: NO.

407

JUDGE DAVILA: GREAT. IT LOOKS LIKE SHE'S MAKING GREAT EFFORTS TO SEE IF SHE CAN ARRANGE THINGS. WE WILL SEE WHAT HAPPENS ON FRIDAY. ANYTHING BEFORE WE ADJOURN FOR THE DAY?

408

MR. LEACH: NO, YOUR HONOR.

409

MR. WADE: NO, YOUR HONOR.

410

JUDGE DAVILA: ALL RIGHT. THANK YOU. HAVE A GOOD EVENING AND A GOOD DAY OFF. WE'LL SEE YOU FRIDAY MORNING. THANK YOU.

411

MR. SCHENK: THANK YOU.

412

(COURT ADJOURNED AT 2:07 P.M.)

← Opening Statement by the Defense5 of 5Day 5 →Juror Communications, COVID-19 Exposure, and a Schedule Change