Elizabeth A. Holmes — Cross (Continued)
3,179 linesCROSS-EXAMINATION (RESUMED) BY MR. LEACH:
MR. LEACH: GOOD MORNING, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD MORNING.
MR. LEACH: YESTERDAY YOU TESTIFIED THAT WHEN YOU LEARNED "THE WALL STREET JOURNAL" MIGHT BE WRITING A NEGATIVE STORY ABOUT THERANOS IN 2015, YOUR RESPONSE WAS AGGRESSIVE. DO YOU RECALL THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: I'D LIKE TO EXPLORE A LITTLE BIT ABOUT WHAT THAT MEANS. YOU LEARNED THAT JOHN CARREYROU, A REPORTER WITH "THE WALL STREET JOURNAL," WAS WORKING ON SOME FORM OF STORY IN OR ABOUT APRIL OF 2015; IS THAT CORRECT?
MR. LEACH: AND AFTER LEARNING THIS, YOU AND MR. BALWANI TOOK STEPS TO CONTROL MR. CARREYROU'S EXPERIENCE AT A WELLNESS CENTER IN ARIZONA; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: WELL, LET'S LOOK AT THAT. YOU WERE WORRIED THAT MR. CARREYROU MIGHT GO TO A WELLNESS CENTER AND GET A VEIN DRAW, WEREN'T YOU?
ELIZABETH A. HOLMES: I DON'T REMEMBER THAT.
MR. LEACH: OKAY. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) MR. HOLMES, I'VE PLACED BEFORE YOU A BINDER OF DOCUMENTS, AND I'D LIKE TO DRAW YOUR ATTENTION TO WHAT IS IN EVIDENCE AS 5387D. IF YOU COULD PLEASE GO TO PAGE 50. MS. HOLLIMAN, IF WE CAN DISPLAY THAT ON THE SCREEN?
ELIZABETH A. HOLMES: GOT IT. OKAY.
MR. LEACH: ONE MOMENT WHILE WE PULL IT UP ON THE SCREEN.
ELIZABETH A. HOLMES: WAS THERE A PAGE?
MR. LEACH: PAGE 50.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND TO THE RIGHT YOU SHOULD SEE PRH 175, AND YOU ALSO SHOULD HAVE THAT ON YOUR SCREEN. MS. HOLLIMAN, IF WE COULD PLEASE EXPAND THE SUBSTANCE OF THE TEXT WITH THE DATE. DO YOU SEE WHERE YOU TEXTED, "RE YOUR EMAIL"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN YOU WROTE "WSJ GUY MIGHT SHOW UP TOMORROW"?
MR. LEACH: AND THAT'S A REFERENCE TO MR. CARREYROU, ISN'T IT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND THEN YOU WROTE, "THAT IS THE THING." AND MR. BALWANI RESPONDS, "WE NEED TOMORROW TO TEST AND THEN THE TEAM CAN PUSH IT IN PRODUCTION TOMORROW NIGHT." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE, "OK. "COULD JUST DO FOR HIM ONLY IF HE SHOWS UP --" AND MR. BALWANI SAYS, "HARD TO KNOW WHO HE IS AND WHAT ORDER HE BRINGS. "BETTER A PERFECT VENIPUNCTURE THAN BAD FINGERSTICK." DOES THIS REFRESH YOUR RECOLLECTION THAT YOU AND MR. BALWANI WERE TAKING STEPS TO CONTROL MR. CARREYROU'S EXPERIENCE AT THE WELLNESS CENTER?
MR. LEACH: YOU GO ON TO WRITE, "IT'S POSSIBLE HE TALKS TO DOCS FIRST DAY AND DOES DRAW SECOND DAY." YOU'RE TALKING ABOUT MR. CARREYROU GOING TO A DOCTOR FIRST AND THEN GOING TO GET A DRAW ON THE SECOND DAY OF HIS VISIT IN ARIZONA, AREN'T YOU?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: OKAY. "SEEMS LIKE THIS GUY IS LOOKING TO WRITE SOMETHING NEGATIVE." IS THAT WHAT MR. BALWANI WROTE TO YOU?
MR. LEACH: AND "THAT'S WHAT HE DOES." IS THAT ALSO A REFERENCE TO MR. CARREYROU?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: "EVEN THEN. WE DON'T WHAT TESTS HE WILL DO. "BUT WE CAN TURN IT INTO PIECE ABOUT WHAT" -- AND THEN CAN YOU HELP US OUT WITH THAT ACRONYM THERE?
ELIZABETH A. HOLMES: I THINK IT SAYS SQL.
MR. LEACH: OKAY. YOU THEN WROTE, "OUR OPPO GUY KNOWS HIM WELL. "I KNOW." THE OPPO GUY IS PETER FRITSCH, ISN'T IT?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: AND HE WORKS WITH A COMPANY CALLED FUSIONGPS; IS THAT CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND YOU AND THERANOS ENGAGED FUSIONGPS TO DO OPPOSITION RESEARCH ON JOHN CARREYROU WHEN YOU LEARNED HE WAS WRITING A NEGATIVE STORY?
MR. LEACH: WELL, LET'S LOOK AT THE TEXT. I'LL DRAW YOUR ATTENTION TO PAGE 53. DO YOU HAVE THAT IN FRONT OF YOU, MS. HOLMES?
ELIZABETH A. HOLMES: I'M JUST LOOKING AT THE SCREEN.
MR. LEACH: OKAY. DO YOU SEE THE TEXT AT 4-25-2015, "HAVE A 10:00 A.M. WITH FUSIONGPS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT IS A REFERENCE TO MR. FRITSCH?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: AND YOU HIRED THEM AFTER LEARNING THAT MR. CARREYROU WAS WRITING THIS STORY?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: WELL, LET'S LOOK FURTHER. YOU WRITE DOWN AT THE BOTTOM, "WE'LL GET KILLER PACKAGE FOR WHEN MEET WITH CARREYROU TO TURN THIS INTO OUR STORY. "GOOD." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S A REFERENCE TO YOUR WORK WITH FUSIONGPS?
ELIZABETH A. HOLMES: I CAN'T TELL FROM THESE TEXT MESSAGES.
MR. LEACH: AFTER RETAINING FUSIONGPS YOU AND MR. BALWANI JOKED ABOUT MR. CARREYROU'S HERITAGE; IS THAT CORRECT?
ELIZABETH A. HOLMES: COULD YOU TELL ME WHAT YOU MEAN?
MR. LEACH: DO YOU REMEMBER JOKING AT ALL ABOUT HIS HERITAGE?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: LET'S LOOK AT PAGE 63 OF 5387D. DO YOU SEE THE TEXT AT 4-29-2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE "CARREYROU IS FRENCH"?
MR. LEACH: AND SUNNY BALWANI RESPONDED, "VERY FUNNY. EXPLAIN EVERYTHING"?
MR. LEACH: "HE IS PROUD OF BEING FRENCH?" IS THAT WHAT MR. BALWANI WROTE?
MR. LEACH: AND YOU WROTE "I KNOW. "AND PROUD OF IT. PROUD CYNIC." THOSE WERE YOUR WORDS; RIGHT?
MR. LEACH: AND YOU AND MR. BALWANI ATTEMPTED TO FIGURE OUT WHO MR. CARREYROU'S SOURCES FOR HIS ARTICLE WERE, DIDN'T YOU?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: YOU EXPRESSED A NEED TO GET AHEAD OF IT; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I'M NOT QUITE SURE WHAT YOU MEAN BY THAT, BUT WE WERE CERTAINLY ACTIVELY ENGAGED WITH MR. CARREYROU ON HIS REPORTING.
MR. LEACH: OKAY. YOU WANTED TO GET AHEAD OF THE STORY, DIDN'T YOU?
ELIZABETH A. HOLMES: WE WANTED TO MAKE SURE OUR TRADE SECRETS WEREN'T DISCLOSED.
MR. LEACH: I UNDERSTAND YOUR ANSWER ABOUT TRADE SECRETS. I'D LIKE AN ANSWER TO MY QUESTION, PLEASE. YOU WANTED TO GET AHEAD OF IT, DIDN'T YOU?
ELIZABETH A. HOLMES: I'M SORRY. I DON'T QUITE KNOW WHAT YOU MEAN BY "AHEAD OF IT."
MR. LEACH: WELL, LET'S LOOK AT YOUR TEXTS. IF I COULD DRAW YOUR ATTENTION TO PLEASE TO PAGE 76 --
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: -- OF 5387D. AND I DRAW YOUR ATTENTION TO THE BOTTOM EMAIL FROM MR. BALWANI ON MAY 13TH, 2015. DO YOU SEE WHERE HE WRITES, "I AM NARROWING THIS DOWN IN CLIA. DOWN TO 5 PEOPLE. WILL NAIL THIS," AND THEN THERE'S AN EXPLETIVE. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN IF WE CAN LOOK AT THE NEXT PAGE, PAGE 77. AM I RIGHT YOU RESPOND, "WHO DO U THINK. "NOW WE HAVE LEGAL GROUNDS." AND MR. BALWANI RESPONDS, "YES." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S A REFERENCE TO YOUR EFFORT TO FIGURE OUT WHO MR. CARREYROU'S SOURCES ARE, ISN'T IT?
ELIZABETH A. HOLMES: NO. I THINK THAT WAS REFERRING TO SUNNY'S COMMENTS ABOUT A GLASS DOOR POST.
MR. LEACH: YOU SAW WHERE HE WROTE, "I'M NARROWING THIS DOWN IN CLIA, DOWN TO 5 PEOPLE. WILL NAIL THIS," AND THEN THE EXPLETIVE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOUR REFERENCE, THAT'S TO A GLASS DOOR POST?
ELIZABETH A. HOLMES: I THINK SO. IF YOU COULD SWITCH BACK TO THE OTHER TEXT RIGHT ABOVE IT, IT WAS TALKING ABOUT GLASS DOOR.
MR. LEACH: AND YOU'RE PAYING ATTENTION, WHATEVER THE CONTEXT OF THIS TEXT, YOU'RE PAYING ATTENTION TO THE GLASS DOOR REVIEWS BECAUSE YOU KNEW THAT WAS SOMETHING THAT MR. CARREYROU MIGHT BE LOOKING AT?
MR. LEACH: LET'S LOOK FURTHER ON PAGE 77. DO YOU SEE WHERE IT SAYS, "IF TYLER THINKING ABT GEORGE FYI AT RIGHT TIME." YOU WROTE THAT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: TYLER IS A REFERENCE TO TYLER SHULTZ?
MR. LEACH: AND YOU TESTIFIED ABOUT MR. SHULTZ ON DIRECT EXAMINATION?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THE GEORGE IS A REFERENCE TO GEORGE SHULTZ?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS IS YOU EXPRESSING YOU MIGHT GO TO GEORGE SHULTZ AT SOME POINT IF THE SOURCE IS TYLER?
ELIZABETH A. HOLMES: IT COULD BE.
MR. LEACH: YOU THEN WROTE, "BUT ALSO LOTS OF LEGAL ELEMENTS HERE. "NEED TO GET AHEAD OF ALL OF IT." DOES THAT REFRESH YOUR MEMORY THAT YOU WERE TRYING TO GET AHEAD OF ALL OF IT?
ELIZABETH A. HOLMES: IT DOESN'T.
MR. LEACH: READING THESE WORDS ON THE PAGE DOESN'T REFRESH YOUR MEMORY AT ALL?
ELIZABETH A. HOLMES: I HAVE MEMORY OF THIS, BUT I DON'T KNOW EXACTLY WHAT I MEANT BY GETTING AHEAD OF IT.
MR. LEACH: OKAY. YOU WEREN'T WORRIED ABOUT MR. CARREYROU'S STORY?
ELIZABETH A. HOLMES: WE WERE VERY WORRIED ABOUT MR. CARREYROU'S STORY.
MR. LEACH: YOU THEN WROTE, "OUT OF ALL CHALLENGES ARE GREATEST OPPORTUNITIES." AND MR. BALWANI RESPONDS, "ABSOLUTELY. THIS ONE IS FAIRLY EASY TO GET AHEAD OF. THIS ENTIRE EMAIL IS BASED ON TYLER," AND THEN WE'VE REDACTED, "AND MAYBE ADAM." THE ADAM IS DR. ROSENDORFF; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND MR. BALWANI THEN WROTE FURTHER DOWN, "EXTREMELY SERIOUS LEGAL IMPLICATIONS. HE BASICALLY VIOLATED AND SHARED OUR TRADE SECRETS DOWN TO MACHINE NAMES. "AND ASSAYS IN WHAT DEVICE. "IT IS TYLER, ERIKA, AND ADAM." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU AND MR. BALWANI SURMISED THAT ERIKA CHEUNG WAS ONE OF JOHN CARREYROU'S SOURCES?
MR. LEACH: AND THE ERIKA THERE IS ERIKA CHEUNG; AM I RIGHT ABOUT THAT?
ELIZABETH A. HOLMES: IT IS, YES.
MR. LEACH: AND SO AT THIS POINT YOU KNEW WHO ERIKA CHEUNG WAS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU DON'T RESPOND BY WRITING SOMETHING LIKE, WHO IS ERIKA AND WHY WOULD MR. CARREYROU WANT TO BE TALKING TO HER?
ELIZABETH A. HOLMES: NO, I DID NOT.
MR. LEACH: AND YOU RECALL THAT MS. CHEUNG TESTIFIED IN THIS TRIAL; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: SHE WORKED AT THERANOS FROM 2013 TO 2014?
ELIZABETH A. HOLMES: THAT SOUNDS ABOUT RIGHT.
MR. LEACH: DO YOU RECALL HER TESTIFYING ABOUT EXAMPLES OF THERANOS RUNNING PATIENT SAMPLES AFTER FAILING QUALITY CONTROL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RECALL HER TESTIFYING ABOUT HOW THERANOS'S TSPU, THE EDISON DEVICE, WAS FAILING QUALITY CONTROL REPEATEDLY. YOU RECALL THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU KNOW THAT IN 2015 AND 2016, THOSE TWO ISSUES WERE ALSO RAISED BY CMS IN THEIR REPORT TO YOU; IS THAT CORRECT?
MR. LEACH: ERIKA CHEUNG WAS RIGHT WHEN SHE WAS RAISING ISSUES ABOUT THE 3.5, WASN'T SHE?
ELIZABETH A. HOLMES: I DON'T THINK SHE WAS RIGHT ABOUT THE SPECIFIC ISSUES THAT SHE WAS RAISING BASED ON MY UNDERSTANDING, BUT I SURE AS HELL WISH WE HAD TREATED HER DIFFERENTLY AND LISTENED TO HER.
MR. LEACH: YOU DON'T THINK THE CMS REPORT VINDICATES HER IN ANY WAY?
ELIZABETH A. HOLMES: I THINK IN A WAY IT DOES.
MR. LEACH: BUT THERANOS CHOSE NOT TO LISTEN TO HER AT THE TIME?
ELIZABETH A. HOLMES: MY UNDERSTANDING IS THAT WE DID LISTEN TO HER, BUT THE TEAM BELIEVED THE SPECIFIC ISSUES SHE HAD IDENTIFIED WERE NOT ACTUALLY CORRECTLY IDENTIFIED.
MR. LEACH: THERANOS CHOSE NOT TO LISTEN TO HER; ISN'T THAT CORRECT, MS. HOLMES?
MR. LEACH: THERANOS DIDN'T MAKE A DECISION NOT TO LISTEN TO HER? THAT'S YOUR TESTIMONY?
ELIZABETH A. HOLMES: THAT'S NOT MY MEMORY OF IT.
MR. LEACH: OKAY. YOU CHOSE NOT TO LISTEN TO ERIKA CHEUNG AND WHAT SHE WAS RAISING?
ELIZABETH A. HOLMES: I DON'T THINK I THOUGHT THAT THERE WERE ISSUES AT THAT TIME. I THOUGHT THAT THE TEAM'S ANALYSIS WAS THAT THOSE WERE ACTUALLY NOT ISSUES THAT SHE WAS RAISING.
MR. LEACH: YOU DIDN'T ASK MR. BALWANI AT THE TIME, WHAT IS SHE TALKING ABOUT?
ELIZABETH A. HOLMES: I ASKED DR. YOUNG TO MAKE -- TO LOOK INTO IT, AND MY UNDERSTANDING WAS THAT THE ISSUES THAT SHE WAS RAISING WERE NOT ISSUES THAT DR. YOUNG AGREED WITH.
MR. LEACH: OKAY. BUT YOU KNOW TODAY THAT MS. CHEUNG WAS RIGHT; ISN'T THAT FAIR?
MR. LEACH: AND INSTEAD OF LISTENING TO MS. CHEUNG, THERANOS CHOSE TO RETALIATE AGAINST HER; ISN'T THAT CORRECT?
MR. LEACH: THERANOS DIDN'T HIRE DAVID BOIES'S LAW FIRM TO TRACK HER DOWN AND SERVE HER WITH LEGAL PROCESS?
ELIZABETH A. HOLMES: WE DID HIRE DAVID BOIES'S LAW FIRM TO SERVE HER WITH THE SUBPOENA.
MR. LEACH: OKAY. YOU CHOSE TO THREATEN HER?
MR. LEACH: THERANOS CHOSE TO THREATEN HER?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: THERANOS CHOSE TO THREATEN HER WITH A LAWSUIT; IS THAT FAIR?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, LET'S LOOK. CAN I DRAW YOUR ATTENTION TO PAGE 85 OF THE TEXTS?
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE THE DATE OF JUNE 26TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE WHERE IT SAYS, "I AM OK SENDING LETTER TO ERIKA AS IN HEATHERS EMAIL."
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S FROM MR. BALWANI?
MR. LEACH: AND HEATHER IS A REFERENCE TO HEATHER KING, THE GENERAL COUNSEL?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. I'D LIKE TO SHOW YOU WHAT IS IN EVIDENCE AS EXHIBIT 2567.
ELIZABETH A. HOLMES: OKAY. GOT IT.
MR. LEACH: DO YOU SEE THE DATE OF JUNE 26TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THAT'S THE SAME DATE OF THE TEXT THAT WE WERE JUST LOOKING AT?
ELIZABETH A. HOLMES: I DIDN'T REMEMBER THAT, BUT I'M SURE YOU'RE RIGHT.
MR. LEACH: OKAY. AND DO YOU SEE THE HEADING BOIES, SCHILLER & FLEXNER AT THE TOP?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S DAVID BOIES'S LAW FIRM?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: ONE OF THE MOST POWERFUL LAW FIRMS IN THE WORLD?
ELIZABETH A. HOLMES: I THOUGHT THAT.
MR. LEACH: YOU THOUGHT THAT AT THE TIME?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THAT'S WHY YOU WERE SENDING THEM AFTER ERIKA CHEUNG?
MR. LEACH: WELL, DOESN'T THIS SAY THAT "YOU'RE DIRECTED TO IMMEDIATELY CEASE AND DESIST FROM THESE ACTIVITIES. UNLESS THIS IS RESOLVED, WE'LL CONSIDER ALL APPROPRIATE REMEDIES IN FILING SUIT AGAINST YOU"? DIDN'T THERANOS THREATEN HER WITH A LAWSUIT IN OR AROUND JUNE OF 2015?
ELIZABETH A. HOLMES: I SEE THAT HERE.
MR. LEACH: AND YOU KNEW IT WAS HAPPENING AT THE TIME?
ELIZABETH A. HOLMES: I KNEW OUR LAWYERS WERE FOLLOWING UP WITH HER TO MAKE SURE THAT SHE STOPPED DISCLOSING TRADE SECRET INFORMATION.
MR. LEACH: YOU KNEW IT WAS HAPPENING AT THE TIME. THAT WAS MY QUESTION. IS THAT FAIR?
ELIZABETH A. HOLMES: AGAIN, I KNEW OUR LAWYERS WERE FOLLOWING UP WITH HER TO MAKE SURE SHE STOPPED DISCLOSING TRADE SECRET INFORMATION.
MR. LEACH: YOU KEEP INJECTING THAT COMMENT OF TRADE SECRETS INTO YOUR ANSWER, AND WE'LL GET TO THAT. MY QUESTION IS THAT YOU WERE AWARE THAT THIS WAS HAPPENING AT THE TIME?
ELIZABETH A. HOLMES: THAT BOIES SCHILLER WAS SENDING HER A LETTER? YES.
MR. LEACH: WERE YOU ALSO AWARE THAT THERANOS PAID TWO PRIVATE INVESTIGATION FIRMS NEARLY $150,000 TO AID IN THIS EFFORT TO RETALIATE AGAINST MS. CHEUNG?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, LET ME SEE IF I CAN REFRESH YOUR RECOLLECTION. LET ME DRAW YOUR ATTENTION TO PAGE -- OR EXHIBIT 5482.
ELIZABETH A. HOLMES: I'M NOT SURE IF I HAVE 5482.
MR. LEACH: MAY I APPROACH THE WITNESS, YOUR HONOR?
JUDGE DAVILA: YES.
ELIZABETH A. HOLMES: OH, I'M SORRY. I DO. SORRY.
BY MR. LEACH:
MR. LEACH: I'M NOT SURE I HAVE 5482, SO IF I CAN LOOK AT YOURS?
ELIZABETH A. HOLMES: OH, YES. IT'S RIGHT HERE (HANDING).
MR. LEACH: MS. HOLMES, I'D LIKE TO DRAW YOUR ATTENTION TO THE FIRST PAGE OF EXHIBIT 5482, AND I'LL RETURN THIS TO YOU IN A SECOND.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND THERE'S A LINE IN ROUGHLY THE MIDDLE OF THE PAGE WITH A REFERENCE TO SOME NAMES AND SOME DOLLAR FIGURES. AND MY QUESTION TO YOU IS, DOES THIS REFRESH YOUR RECOLLECTION?
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: YOU'RE WELCOME. HAVE YOU HAD AN OPPORTUNITY TO REVIEW THE LINE THAT I REFERRED TO?
ELIZABETH A. HOLMES: YOU SAID THE FIRST PAGE?
MR. LEACH: FIRST PAGE?
MR. LEACH: ROUGHLY HALFWAY DOWN?
ELIZABETH A. HOLMES: YES, I SEE IT. I SEE IT.
MR. LEACH: OKAY. DOES THIS REFRESH YOUR RECOLLECTION THAT THERANOS PAID TWO PRIVATE INVESTIGATION FIRMS NEARLY $150,000 TO AID IN ITS EFFORT AGAINST MS. CHEUNG?
ELIZABETH A. HOLMES: IT DOES NOT.
MR. LEACH: AFTER THE CARREYROU ARTICLE CAME OUT IN OCTOBER OF 2015, YOU TRIED TO DISMISS ERIKA CHEUNG AS A LOW LEVEL DISGRUNTLED EMPLOYEE; IS THAT CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: IS THAT ANOTHER THING YOU WISH YOU HAD DONE DIFFERENTLY?
ELIZABETH A. HOLMES: 100 PERCENT. I THINK I MISHANDLED THE ENTIRE PROCESS OF "THE WALL STREET JOURNAL" REPORTING.
MR. LEACH: YOU ALSO SURMISED THAT ONE OF MR. CARREYROU'S SOURCES WAS TYLER SHULTZ; ISN'T THAT RIGHT?
MR. LEACH: AND TYLER SHULTZ WAS THE GRANDSON OF GEORGE SHULTZ?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: GEORGE SHULTZ WAS ONE OF YOUR MENTORS; IS THAT CORRECT?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: HE WAS ON YOUR BOARD?
MR. LEACH: YOU WERE VERY CLOSE TO HIM?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: YOU WERE ALSO VERY CLOSE WITH HIS WIFE, CHARLOTTE; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I, I WOULD LIKE TO THINK SO. I KNEW HER LESS WELL.
MR. LEACH: YOU HAD WEEKLY MEETINGS AT GEORGE AND CHARLOTTE SHULTZ'S HOUSE?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU WOULD MEET WITH HIM ONE ON ONE ALMOST EVERY WEEK?
MR. LEACH: AND HE WOULD GIVE YOU ADVICE ON HOW TO RUN THE BUSINESS?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: YOU ATTENDED HOLIDAY PARTIES AT THE SHULTZ'S RESIDENCE; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND TYLER CAME TO WORK AT THERANOS IN 2013. DOES THAT SOUND ABOUT RIGHT?
MR. LEACH: AND HE WENT DIRECTLY TO YOU WITH PROBLEMS THAT HE WAS OBSERVING WITH THE THERANOS DEVICE, THE EDISON 3.5; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO WHAT IS IN EVIDENCE AS EXHIBIT 7421. THIS IS A DOCUMENT THAT MR. DOWNEY SHOWED YOU THE OTHER DAY. IT'S NOT IN YOUR BINDER, BUT PERHAPS WE CAN SHOW IT ON THE SCREEN.
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: MAYBE THE ELMO IS THE BEST WAY TO GO FOR THIS. MAY I HAVE A MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(PAUSE IN PROCEEDINGS.)
MR. LEACH: THANK YOU, YOUR HONOR.
MR. LEACH: MS. HOLMES, ARE YOU ABLE TO SEE 7421 ON THE SCREEN?
ELIZABETH A. HOLMES: I AM.
MR. LEACH: AND THIS STARTS WITH AN EMAIL FROM DANIEL YOUNG TO YOU AND MR. BALWANI REGARDING SYPHILIS VALIDATIONS; IS THAT CORRECT?
MR. LEACH: AND GOING ON PAGE 1 LATER THAT DAY, OR LATER IN FEBRUARY, DR. YOUNG REPORTS ON A CONVERSATION THAT HE HAD HAD WITH TYLER REGARDING SYPHILIS; IS THAT FAIR?
MR. LEACH: AND MR. DOWNEY ASKED YOU SOME QUESTIONS ABOUT SOME OF THE BULLETS ON THIS. I'D LIKE TO DRAW YOUR ATTENTION TO THE FIFTH BULLET WHERE IT SAYS, "REGARDING PERFORMANCE CLAIMS, HE SEEMED VERY SURPRISED AND I ASKED HIM WHERE HE THOUGHT WE CLAIMED SUPERIOR PERFORMANCE OVER OTHER TESTS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN DR. YOUNG REPORTED, "THE BEST HE" -- THAT'S A REFERENCE TO TYLER -- "THE BEST HE COULD COME UP WITH WAS SAYING HE THOUGHT SUPERIOR ACCURACY WAS MENTIONED IN SOME OF THE ARTICLES THAT HAVE BEEN WRITTEN ABOUT THERANOS. I ASKED HIM TO FOLLOW UP AND HIGHLIGHT THESE SPECIFICALLY FOR ME." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTOOD THAT MR. SHULTZ, IN ADDITION TO RAISING ISSUES ABOUT SYPHILIS AND PT, HE WAS ALSO RAISING ISSUES ABOUT SOME OF THE PUBLIC CLAIMS THAT WERE OUT THERE ABOUT THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: FURTHER UP IN THE CHAIN, MR. BALWANI ASKED, "HOW LONG DID YOU SPEND WITH HIM? THIS SEEMS TO BE AN OVERKILL." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND WHAT DID YOU UNDERSTAND "OVERKILL" TO MEAN?
ELIZABETH A. HOLMES: THAT SUNNY THOUGHT THAT DANIEL WAS SPENDING TOO MUCH TIME WITH HIM.
MR. LEACH: TOO MUCH TIME RESPONDING TO TYLER SHULTZ'S COMPLAINTS?
MR. LEACH: YOU THEN WROTE, "DID HE UNDERSTAND WITH THE PT POINT? AGREE WITH THE BELOW." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THAT'S A REFERENCE TO THE ISSUE WHERE THERANOS SPLIT SOME OF THE PT SAMPLES -- THAT'S A REFERENCE TO AN EVENT IN 2014 WHEN THERANOS SPLIT SOME OF THE PT SAMPLES AND RAN THEM ON THE EDISON DEVICE; IS THAT RIGHT?
ELIZABETH A. HOLMES: YES. I THINK IT WAS AN EXPERIMENT, NOT ACTUAL PT SAMPLES.
MR. LEACH: I'D NEXT LIKE TO DRAW YOUR ATTENTION IN THIS CONVERSATION ABOUT MR. SHULTZ, MS. HOLMES, TO EXHIBIT 1660.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I BELIEVE 1660 IS IN EVIDENCE.
JUDGE DAVILA: YES, IT IS.
MR. LEACH: IF WE COULD PLEASE DISPLAY THAT, MS. HOLLIMAN. ARE YOU ABLE TO DISPLAY THAT? GREAT.
MR. LEACH: DO YOU SEE THIS IS AN EMAIL FROM TYLER SHULTZ TO YOU ON APRIL 11TH, 2014, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND SO THIS IS AFTER THE EXCHANGE THAT WE JUST SAW IN THE PRIOR EXHIBIT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND MR. SHULTZ STILL HAS CONCERNS ABOUT WHAT IS GOING ON OVER AT THERANOS; IS THAT FAIR?
MR. LEACH: AND LET ME START AT THE BEGINNING OF THE EMAIL CHAIN. IF WE COULD PLEASE GO TO PAGE 6. DO YOU SEE WHERE HE WROTE, "WHEN YOU HAVE TIME COULD I POSSIBLY HAVE HALF AN HOUR TO FOLLOW UP ON OUR PREVIOUS MEETING ABOUT RPR TEST? I KNOW YOU ARE EXTREMELY BUSY, SO I WOULDN'T MIND WAITING UNTIL AN EVENING AFTER THE CRAZINESS OF THE WORK DAY DIES DOWN." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND NOW IF WE COULD GO TO PAGE 5 -- OR EXCUSE ME, PAGE 1. AND I DRAW YOUR ATTENTION TO THE SECOND PARAGRAPH. DO YOU SEE WHERE HE WROTE, "WHILE I UNDERSTAND THAT CALCULATING CV BASED ON THE MEDIANS IS RELEVANT FOR COMPARING OUR SYSTEM TO SYSTEMS OF OUR COMPETITORS, THE FACT THAT THE CV OF OUR CUT OFF LEVEL FOR SYPHILIS RPR DROPS FROM 43 PERCENT TO LESS THAN 20 PERCENT BY MOVING FROM CV OF THE ENTIRE DATA SET TO CV OF THE MEDIANS TELLS ME THAT THE SIGNIFICANT PORTION OF OUR DATA IS JUST NOISE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT WAS THE THRUST OF THE CONCERN THAT MR. SHULTZ WAS RAISING ABOUT SYPHILIS?
ELIZABETH A. HOLMES: I DON'T REMEMBER THAT. I REMEMBER IT BEING A CONCERN OF HOW WE WERE SETTING OUR EQUIVOCAL ZONE, BUT I SEE THAT HE'S ALSO RAISING THIS CONCERN.
MR. LEACH: OKAY. AND IF WE GO TO THE NEXT PARAGRAPH. DO YOU SEE WHERE HE WROTE, "IN OUR VALIDATION REPORTS," ROUGHLY IN THE MIDDLE, "THERE IS NEVER ANY MENTION OF HOW MANY ATTEMPTS OF PRECISION OR COMPARABILITY TESTING IT TOOK TO GET THE DATA THAT'S PRESENTED." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: I NEXT WANT TO DRAW YOUR ATTENTION TO THE FOURTH PARAGRAPH. MR. SHULTZ IS WRITING, "I THEN ASKED DANIEL IF HE THOUGHT OUR SYPHILIS TEST WAS TRULY THE MOST ACCURATE AND MOST PRECISE SYPHILIS TEST ON THE MARKET. HE SAID THAT THERANOS DOES NOT CLAIM TO HAVE THE MOST ACCURATE OR PRECISE TESTS, AND THAT IF I COULD FIND ANY MARKETING MATERIALS THAT MAKE SUCH CLAIMS, THAT I SHOULD FORWARD THEM TO HIM." DID I READ THAT CORRECTLY?
MR. LEACH: "A QUICK GOOGLE SEARCH YIELDS A HANDFUL OF ARTICLES THAT EXPLICITLY MAKE THESE CLAIMS. DANIEL AGREED THAT THE AUTHORS MAKE SWEEPING STATEMENTS ABOUT OUR ASSAYS PERFORMANCES, BUT NOTED THAT THERANOS NEVER DIRECTLY MADE ANY OF THESE CLAIMS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "IF WELL-ESTABLISHED INSTITUTIONS SUCH AS 'THE WALL STREET JOURNAL' HAVE PUBLISHED MISINFORMATION ABOUT THERANOS, IT SEEMS IT WOULD BE IN OUR BEST LONG-TERM INTEREST TO CORRECT THIS INFORMATION IN ORDER TO UPHOLD OUR IMAGE OF BRINGING TRANSPARENCY TO BLOOD TESTING." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THE TIMING OF THIS IS APRIL OF 2014; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: SO THIS IS AFTER MR. RAGO WROTE HIS PIECE ABOUT THERANOS IN "THE WALL STREET JOURNAL" IN SEPTEMBER OF 2013?
MR. LEACH: THIS WAS AFTER YOU SAT DOWN WITH ERIC TOPOL AND TALKED TO HIM ABOUT THERANOS'S TECHNOLOGY AND WHAT YOU THOUGHT IT COULD DO?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS IS AFTER THE PRESS RELEASES ABOUT THE WALGREENS RELATIONSHIP; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. THIS IS BEFORE YOU TALKED TO ROGER PARLOFF. AM I RIGHT ABOUT THAT PART?
ELIZABETH A. HOLMES: I THINK -- YES.
MR. LEACH: OKAY.
ELIZABETH A. HOLMES: RIGHT AROUND THE SAME TIME.
MR. LEACH: RIGHT AROUND THE SAME TIME?
MR. LEACH: TYLER SHULTZ IS SAYING THERE'S STUFF IN THE PUBLIC DOMAIN ABOUT ACCURACY, THERANOS IS NOT SAYING THIS, BUT MAYBE WE SHOULD BE WORRIED ABOUT THAT. IS THAT A FAIR SUMMARY OF HIS CONCERNS?
MR. LEACH: HE THEN WROTE, "I THEN THOUGHT BACK TO OUR PREVIOUS DISCUSSION WHEN I ASKED ABOUT OUR CLAIM OF HAVING LESS THAN 10 PERCENT CV FOR ASSAYS." MAYBE IF WE COULD PULL THAT UP, MS. HOLLIMAN. DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND HAVING A LOW CV IS GENERALLY DESIRABLE FOR A BLOOD TESTING COMPANY?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: "WE CHECKED THE THERANOS WEBSITE TOGETHER AND FOUND THAT WE ONLY MAKE THIS CLAIM FOR VITAMIN D. I CHECKED THE 2-TIP VALIDATION DATA (WE WERE RUNNING 2-TIP PROTOCOL AT THE TIME) AND FOUND THAT THE CV'S FOR OUR 3 LEVELS WERE 18 PERCENT, 16 PERCENT, AND 19 PERCENT WHEN CALCULATED BASED ON THE MEDIAN OF EACH PRECISION RUN AND 23 PERCENT, 23 PERCENT, AND 25 PERCENT WHEN CALCULATED BASED ON THE ENTIRE DATA SET." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: "HERE ARE SCATTER PLOTS FOR THE RESULTS OF VITAMIN D PRECISION TESTING, THEY DON'T SEEM TO MEET THE STANDARD WE CLAIM ON OUR WEBSITE FOR VITAMIN D." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THERANOS ALSO MADE CLAIMS ABOUT ITS CV FOR VITAMIN D IN INVESTOR POWERPOINTS?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: YOU'VE SEEN SOME OF THOSE SLIDES IN THIS TRIAL, HAVEN'T YOU, MS. HOLMES?
MR. LEACH: AFTER RECEIVING THIS EMAIL FROM MR. SHULTZ, I UNDERSTAND YOU FORWARDED THIS TO SUNNY BALWANI AND DANIEL YOUNG. AM I RIGHT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU ASKED DR. YOUNG TO LOOK INTO THIS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND I DRAW YOUR ATTENTION TO EXHIBIT 67 -- 1675.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: IS THIS AN EMAIL EXCHANGE BETWEEN TYLER SHULTZ, YOU, MR. BALWANI, AND DANIEL YOUNG ON OR ABOUT APRIL 15TH, 2014?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: YOUR HONOR, I MOVE THE ADMISSION OF EXHIBIT 1675.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 1675 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: LET ME DRAW YOUR ATTENTION TO THE SECOND EMAIL FROM THE TOP, MS. HOLMES, THE ONE FROM SUNNY BALWANI AT 4:48 P.M. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. BALWANI WROTE TO MR. SHULTZ WITH A COPY TO YOU, "TYLER. "WE SAW YOUR EMAIL TO ELIZABETH. "BEFORE I GET INTO SPECIFICS, LET ME SHARE WITH YOU THAT HAD THIS EMAIL COME FROM ANYONE ELSE IN THE COMPANY, I WOULD HAVE ALREADY HELD THEM ACCOUNTABLE FOR THE ARROGANT AND PATRONIZING TONE AND RECKLESS COMMENTS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOU REVIEWED THIS AND COMMENTED ON IT BEFORE IT WENT TO MR. SHULTZ; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I'M NOT SURE IF IT WAS THIS EMAIL SPECIFICALLY, BUT ON THE SUBSTANCE OF THE TECHNICAL QUESTIONS THAT WERE IN MR. SHULTZ EMAIL.
MR. LEACH: WELL, LET'S SEE IF I CAN REFRESH YOUR MEMORY. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: YOU'RE WELCOME. MS. HOLMES, I'VE PLACED BEFORE YOU WHAT WE HAVE MARKED AS EXHIBIT 5645. DOES THIS APPEAR TO BE AN EARLIER ITERATION OF THE EMAIL THAT WE'RE LOOKING AT IN 1675 WITH SOME COMMENTS TO THE RIGHT?
MR. LEACH: YOUR HONOR, I MOVE THE ADMISSION OF 5645.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5645 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: AND DO YOU SEE UP AT THE TOP, MS. HOLMES -- AND IF WE COULD, MS. HOLLIMAN, ALSO GRAB THE COMMENTS TO THE RIGHT. DO YOU SEE THIS PARAGRAPH BEGINS, "BEFORE I GET INTO SPECIFICS, LET ME SHARE WITH YOU HAD THIS EMAIL COME FROM ANYONE ELSE IN THE COMPANY, I WOULD HAVE ALREADY" -- AND THERE'S REFERENCE TO THE ARROGANT AND INSULTING ATTITUDE. DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS YOUR COMMENT IN THE RIGHT IN THE EH1 BOX?
ELIZABETH A. HOLMES: IT LOOKS LIKE IT, YES.
MR. LEACH: OKAY. YOUR COMMENT WAS, "STRONGER - EMPHASIZE WHAT HE DID FIRST ESPECIALLY IN LIGHT OF MY COMMENT ON ACCURACY BELOW." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I SEE THAT.
MR. LEACH: SO YOU'RE ENCOURAGING MR. BALWANI TO BE FORCEFUL WITH MR. SHULTZ IN THIS EMAIL. IS THAT FAIR?
ELIZABETH A. HOLMES: I THINK I'M TRYING TO SAY WE NEED TO EXPLAIN WHAT THE ISSUE IS, WHAT HE DID IN THE CONTEXT OF THE EMAIL BELOW.
MR. LEACH: WELL, LET'S GO BACK TO 1565. AND IF WE CAN ZOOM BACK IN ON THE SECOND EMAIL FROM THE TOP. DO YOU SEE AFTER MR. BALWANI WRITES, "I WOULD HAVE ALREADY HELD THEM ACCOUNTABLE FOR THE ARROGANT AND PATRONIZING TONE AND RECKLESS COMMENTS," HE WROTE, "IN YOUR CASE, I AM GIVING YOU THE BENEFIT OF THE DOUBT THAT YOUR INTENTIONS ARE IN THE RIGHT PLACE, AND AM TAKING THE TIME TO RESPOND, EVEN THOUGH YOUR TONE IN THIS EMAIL ALL OF THE WAY THROUGH THE LAST PARAGRAPH IS NOT THAT OF SOMEONE SEEKING TO UNDERSTAND, BUT RATHER SOMEONE STANDING AT HIGHER PERCH OF MORALITY AND BUSINESS WISDOM." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU APPROVED THIS GOING OUT TO MR. SHULTZ BEFORE MR. BALWANI SENT THIS?
ELIZABETH A. HOLMES: I KNEW IT WAS GOING OUT, YES.
MR. LEACH: FURTHER DOWN BELOW DOES MR. BALWANI INTERLINEATE RESPONSES TO TYLER SHULTZ, CERTAIN POINTS THAT TYLER SHULTZ IS MAKING IN HIS EMAIL?
ELIZABETH A. HOLMES: HE DOES.
MR. LEACH: AND LET'S LOOK BRIEFLY DOWN AT THAT AT THE BOTTOM. SO DO YOU SEE THE FIRST PARAGRAPH, "HI ELIZABETH. "IN MY MEETINGS WITH DANIEL."
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S IN MR. SHULTZ'S EMAIL TO YOU?
MR. LEACH: AND YOUR NEXT PARAGRAPH BEGINS, "YOUR BASIC UNDERSTANDING OF STATISTICS IS STILL LOW." THAT'S SOMETHING THAT MR. BALWANI INTERLINEATED IN HIS RESPONSE TO MR. SHULTZ; IS THAT CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: LET'S GO BACK UP TO THE TOP. AND IN RESPONSE TO THE EMAIL FROM MR. BALWANI, YOU, AND DR. YOUNG, MR. SHULTZ REPLIED, "I DO NOT EXPECT TO BE TREATED ANY DIFFERENTLY BECAUSE OF WHO I AM RELATED TO. THERANOS IS CLEARLY NOT THE PLACE FOR ME. CONSIDER THIS MY TWO WEEK NOTICE. IF YOU PREFER I LEAVE TODAY THAT'S FINE WITH ME TOO." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. SHULTZ LEFT SHORTLY AFTER THIS EMAIL; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: NOW, SITTING HERE TODAY, YOU KNOW THAT IN 2016 FOLLOWING THE CMS INSPECTION, THERANOS VOIDED ALL OF THE VITAMIN D TESTS THAT WERE RUN ON THE TSPU OR THE EDISON 3.5?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: YOU KNOW THAT SITTING HERE TODAY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. TYLER SHULTZ WAS RIGHT ABOUT PROBLEMS WITH THE EDISON 3.5, WASN'T HE?
ELIZABETH A. HOLMES: I DON'T THINK THE CONCERNS HE RAISED WERE CORRECT.
MR. LEACH: HE WAS RAISING CONCERNS ABOUT VITAMIN D; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND THERANOS ULTIMATELY VOIDED ALL OF THE VITAMIN D TESTS; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: AND THERANOS CHOSE NOT TO LISTEN TO HIM AT THE TIME; CORRECT?
MR. LEACH: YOU CHOSE NOT TO LISTEN TO HIM AT THE TIME?
MR. LEACH: INSTEAD YOU ELECTED TO RETALIATE AGAINST MR. SHULTZ; IS THAT RIGHT?
MR. LEACH: YOU DIDN'T HIRE DAVID BOIES'S FIRM TO THREATEN A LAWSUIT AGAINST MR. SHULTZ?
ELIZABETH A. HOLMES: WE DID HIRE DAVID BOIES'S FIRM, AND WE DID ASK DAVID BOIES'S FIRM TO FOLLOW UP ON THE DISCLOSURE OF TRADE SECRETS. I SAW THE LANGUAGE IN THE LETTER THAT YOU JUST POINTED TO, AND IT WOULDN'T SURPRISE ME IF THERE WAS A SIMILAR LETTER THAT WENT TO MR. SHULTZ.
MR. LEACH: AND IT WOULDN'T SURPRISE YOU, SITTING HERE TODAY, THAT DAVID BOIES'S LAW FIRM LURED TYLER SHULTZ TO HIS GRANDFATHER'S HOUSE TO TRY TO GET HIM TO SIGN DOCUMENTS IDENTIFYING CARREYROU SOURCES?
ELIZABETH A. HOLMES: I DON'T THINK THAT'S HOW IT HAPPENED.
MR. LEACH: DIDN'T YOU GET A CALL FROM GEORGE SHULTZ THE NIGHT THAT THAT HAPPENED?
ELIZABETH A. HOLMES: I'M SURE I DID.
MR. LEACH: OKAY. DIDN'T GEORGE SHULTZ CALL YOU FROM HIS HOUSE AND TELL YOU THAT THERE WERE LAWYERS FROM BOIES SCHILLER TRYING TO GET TYLER TO SIGN DOCUMENTS IN AN INTIMIDATING WAY?
ELIZABETH A. HOLMES: THAT'S NOT MY MEMORY OF IT.
MR. LEACH: WELL, LET'S SEE IF WE CAN REFRESH YOUR MEMORY. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, I'VE PLACED BEFORE YOU A DOCUMENT THAT WE'VE MARKED AS EXHIBIT 5520. DO YOU HAVE A GENERAL UNDERSTANDING OF WHAT IS ON THE COVER PAGE OF 5520?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. SO YOU UNDERSTAND THE CONTEXT FOR WHAT THIS IS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF I COULD DRAW YOUR ATTENTION TO THE THIRD PAGE, DO YOU SEE THE BATES NUMBER IN THE BOTTOM 14159?
MR. LEACH: AND DO YOU SEE THE WORD "APPEARANCES" UP AT THE TOP?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE GO TO THE NEXT PAGE, 14160, DO YOU SEE A REFERENCE TO YOUR NAME?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND AN INDIVIDUAL ASSOCIATED WITH YOU?
MR. LEACH: LET ME DRAW YOUR ATTENTION TO PAGE 55 OF WHAT WE'RE LOOKING AT, AND THE BATES NUMBER IN THE BOTTOM RIGHT CORNER IS 14210.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I'D LIKE FOR YOU TO READ TO YOURSELF LINE 7, CONTINUING TO PAGE 56, LINE 15?
ELIZABETH A. HOLMES: OKAY. I'M SORRY. YOU WERE ASKING ABOUT 14210?
MR. LEACH: I'M SORRY. 14211?
ELIZABETH A. HOLMES: 14211. OKAY.
MR. LEACH: IF YOU COULD READ FROM LINE 7?
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: TO THE NEXT PAGE AT LINE 15?
ELIZABETH A. HOLMES: OKAY.
(PAUSE IN PROCEEDINGS.)
ELIZABETH A. HOLMES: OKAY.
BY MR. LEACH:
MR. LEACH: DOES THIS REFRESH YOUR RECOLLECTION THAT BOIES SCHILLER LAWYERS WENT TO GEORGE SHULTZ'S HOUSE IN AN EFFORT TO HAVE TYLER SHULTZ SIGN AN AFFIDAVIT DISCLOSING JOHN CARREYROU SOURCES?
ELIZABETH A. HOLMES: I KNOW THAT THAT HAPPENED, YES.
MR. LEACH: OKAY. AND YOU KNOW THAT GEORGE SHULTZ CALLED YOU THAT NIGHT AND SAID THAT THIS IS UNACCEPTABLE?
MR. LEACH: YOU KNOW THAT GEORGE SHULTZ CALLED YOU AND SAID THAT THE BOIES SCHILLER LAWYERS WERE ACTING IN A TOTALLY UNACCEPTABLE WAY?
ELIZABETH A. HOLMES: I KNOW THAT I LATER FELT THAT.
MR. LEACH: HE LATER STORMED OUT OF A BOARD MEETING BECAUSE OF THAT; ISN'T THAT RIGHT?
MR. LEACH: HE LATER COMPLAINED TO YOU ABOUT THAT; ISN'T THAT RIGHT?
MR. LEACH: AND DIDN'T GEORGE SHULTZ TELL YOU IT WAS ONE OF THE WORST LITTLE THINGS HE HAD SEEN ANYBODY TRY TO DO?
MR. LEACH: YOU DENY THAT HE SAID THAT?
ELIZABETH A. HOLMES: I DON'T REMEMBER THAT.
MR. LEACH: YOU CAN'T SAY ONE WAY OR THE OTHER IF HE SAID THAT?
ELIZABETH A. HOLMES: AGAIN, IT'S NOT MY MEMORY OF THE INTERACTIONS WITH HIM.
MR. LEACH: BUT YOU KNEW HE WAS ANGRY ABOUT IT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE TO MR. BALWANI ABOUT SOME OF THESE INTERACTIONS IN THE TEXT MESSAGES; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, LET'S LOOK. IF WE CAN GO BACK TO 5387D, AND I DRAW YOUR ATTENTION TO PAGE 82.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE THE TEXT ON MAY 31ST, 2015 FROM MR. BALWANI, "YOU NOT CALLING GEORGE BACK ALSO SENDS A MESSAGE THAT WE ARE ABOUT TO SUIT." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: GEORGE IS A REFERENCE TO GEORGE SHULTZ; CORRECT?
ELIZABETH A. HOLMES: I'M NOT SURE, BUT IT COULD BE.
MR. LEACH: OKAY. THIS IS THE GENERAL TIME PERIOD OF WHEN THE BOIES SCHILLER LAWYERS AMBUSHED TYLER AT GEORGE SHULTZ'S HOUSE, ISN'T IT?
ELIZABETH A. HOLMES: I DON'T THINK THEY AMBUSHED HIM, BUT, YES, THIS IS GENERALLY THE TIME PERIOD THAT THEY MET WITH TYLER.
MR. LEACH: YOU AGREE WITH ME THAT THEY TRIED TO FORCE HIM TO SIGN DOCUMENTS IDENTIFYING CARREYROU SOURCES; CORRECT?
ELIZABETH A. HOLMES: I KNOW THAT THEY ASKED HIM TO SIGN DOCUMENTS. MY MEMORY WAS THAT IT WAS AN AGREEMENT TO STOP DISCLOSING TRADE SECRETS TO "THE JOURNAL."
MR. LEACH: OKAY. AND YOU KNOW THAT HE ULTIMATELY AGREED NOT TO DO THAT?
ELIZABETH A. HOLMES: I THINK THAT'S RIGHT, YEAH.
MR. LEACH: AND YOU WROTE IN RESPONSE TO MR. BALWANI'S TEXT, "EXACTLY WAS THINKING SAME."
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: LET'S PLEASE LOOK AT PAGE 84. DO YOU SEE A TEXT A FEW DAYS LATER ON JUNE 5TH, 2015, "DON'T TALK IN THIS MEETING. U SHD TALK TO DAVID FIRST."
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RESPOND, "GEORGE WANTS TO KNOW WHAT TYLER HAS DONE. WOULD YOU ASK DAVID IF I SHOULD SAY OR TELL HIM WE'LL LET HIM KNOW," I THINK YOU MEANT LATER, "AND TEXT ME BACK." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THE REFERENCE TO GEORGE THERE IS A REFERENCE TO GEORGE SHULTZ; CORRECT?
MR. LEACH: AND THE REFERENCE TO DAVID THERE IS A REFERENCE TO DAVID BOIES; IS THAT CORRECT?
MR. LEACH: AFTER THE CARREYROU ARTICLE CAME OUT IN 2015, YOU CONTINUED TO DISMISS TYLER SHULTZ AS A LOW LEVEL DISGRUNTLED EMPLOYEE; IS THAT CORRECT?
MR. LEACH: AND SITTING HERE TODAY, YOU KNOW THAT YOUR INTERACTIONS WITH TYLER SHULTZ CAUSED SIGNIFICANT ANGST IN THE RELATIONSHIP BETWEEN TYLER AND HIS GRANDFATHER?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOU KNOW THAT TODAY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: IS THAT ANOTHER THING THAT YOU WISH YOU WOULD HAVE DONE DIFFERENTLY?
ELIZABETH A. HOLMES: AGAIN, I COULDN'T SAY MORE STRONGLY THE WAY WE HANDLED "THE WALL STREET JOURNAL" PROCESS WAS A DISASTER. WE TOTALLY MESSED IT UP.
MR. LEACH: YOU ALSO TRIED TO INTIMIDATE MR. CARREYROU; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: YOU TRIED TO QUASH THE STORY; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: YOU HAD DAVID BOIES GO TO "THE WALL STREET JOURNAL"'S OFFICES AND THREATEN LITIGATION, DIDN'T YOU?
ELIZABETH A. HOLMES: I'M NOT SURE HE THREATENED LITIGATION, BUT I KNOW HE MET WITH PEOPLE AT "THE JOURNAL."
MR. LEACH: YOU HAD DAVID BOIES WRITE LETTERS TO "THE JOURNAL" THREATENING LITIGATION, DIDN'T YOU?
ELIZABETH A. HOLMES: AGAIN, I DON'T KNOW IF HE WAS THREATENING LITIGATION, BUT I KNOW THAT HE WAS ACTIVELY MEETING WITH PEOPLE AT "THE JOURNAL."
MR. LEACH: AND WRITING TO THEM?
MR. LEACH: AND WHEN NONE OF THAT WORKED, YOU PERSONALLY WENT TO THE OWNER OF "THE WALL STREET JOURNAL" TO TRY TO GET HIM TO QUASH THE STORY; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: LET'S LOOK AT THAT. I DRAW YOUR ATTENTION TO PAGE 110 OF THE TEXT MESSAGES AT 5387D. I'M SORRY. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: I'VE PLACED BEFORE YOU, MS. HOLMES, WHAT WE HAVE MARKED AS EXHIBIT 5074. DO YOU SEE YOUR NAME AT THE TOP OF THIS EMAIL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE RUPERT MURDOCH'S NAME IN THE TO LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE WAS THE OWNER OF "THE WALL STREET JOURNAL" IN SEPTEMBER OF 2015?
MR. LEACH: AND WAS THIS PART OF YOUR EFFORT TO GET MR. MURDOCH TO QUASH THE STORY THAT JOHN CARREYROU WAS WRITING?
ELIZABETH A. HOLMES: IT WAS PART OF MY EFFORT TO GET MR. MURDOCH TO MAKE SURE THAT OUR TRADE SECRETS WERE NOT PUBLISHED.
MR. LEACH: YOU KEEP INJECTING TRADE SECRETS, AND I PROMISE WE WILL GET TO TRADE SECRETS. MY QUESTION WAS, YOU TESTIFIED THAT YOU ATTEMPTED TO QUASH THE STORY. I'M JUST TRYING TO UNDERSTAND, IS THIS PART OF THAT EFFORT?
ELIZABETH A. HOLMES: NO. I THINK AT THIS POINT WE WERE NOT TRYING TO QUASH IT.
MR. LEACH: YOU WERE TRYING TO QUASH IT SOMETIME LATER?
ELIZABETH A. HOLMES: ONCE WE UNDERSTOOD THAT OUR TRADE SECRETS WERE GOING TO BE DISCLOSED.
MR. LEACH: WELL, LET'S LOOK AT WHAT YOU WROTE. YOUR HONOR, I NEED TO DISPLAY IT ON THE ELMO. I'M PUTTING A POST IT OVER SOMETHING THAT I DON'T THINK IS PUBLIC.
JUDGE DAVILA: ARE YOU MOVING THIS IN?
MR. LEACH: IF I HAVE NOT MOVED IT IN, I MOVE IT IN.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: AND JUST TO BE CLEAR, THIS IS EXHIBIT 5704?
MR. LEACH: YES, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5704 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: DO YOU SEE YOUR NAME AT THE TOP, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE MR. MURDOCH'S NAME IN THE TO LINE?
MR. LEACH: AND THE DATE IS SEPTEMBER 8TH, 2015. THAT'S ROUGHLY A MONTH BEFORE "THE WALL STREET JOURNAL" ARTICLE COMES OUT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND AT THIS POINT IN TIME, YOU KNOW THAT CMS INSPECTORS ARE COMING TO LOOK AT THE CALIFORNIA CLIA LAB; CORRECT?
ELIZABETH A. HOLMES: I KNOW IT WAS SOMETIME IN SEPTEMBER.
MR. LEACH: OKAY. YOU ALSO KNOW THAT THIS IS AFTER AN FDA INSPECTION OF YOUR CLIA LAB; CORRECT?
ELIZABETH A. HOLMES: I THINK IT'S ONGOING AT THIS POINT, YEAH.
MR. LEACH: ONGOING OR AROUND THE SAME TIME?
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: OKAY. AND THIS IS AFTER TYLER SHULTZ IS -- HAD A CONFRONTATION AT GEORGE SHULTZ'S HOUSE ABOUT SIGNING DOCUMENTS; IS THAT CORRECT?
MR. LEACH: AND YOU WROTE -- AND YOU KNEW MR. MURDOCH WAS ALSO A SHAREHOLDER OF THERANOS AT THE TIME?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: A SIGNIFICANT SHAREHOLDER?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: MORE THAN $100 MILLION?
MR. LEACH: YOU WROTE, "I HOPE ALL IS WONDERFUL WITH YOU AND THAT YOU HAD A WONDERFUL LABOR DAY. I HAVE VERY MUCH BEEN LOOKING FORWARD TO SEEING YOU WHEN YOU ARE OUT THIS WAY AGAIN. "FOR PURPOSE OF KEEPING YOU IN THE LOOP, I WANTED TO SHARE THE ATTACHED DOCUMENTS WITH YOU, INCLUDING A BRIEFING DOCUMENT THAT WAS SENT FROM DAVID TO GERARD AT WSJ TODAY IN THE HOPES THAT GERARD MIGHT MEET WITH OUR TEAM."
MR. LEACH: AND DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DAVID IS A REFERENCE TO DAVID BOIES?
MR. LEACH: AND GERARD IS A REFERENCE TO A SENIOR OFFICER WITHIN "THE WALL STREET JOURNAL"?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THEN YOU SAID, "I'VE ALSO ATTACHED THE MATERIAL THAT THERANOS HAS SHARED WITH WSJ (RESPONSIVE TO QUESTIONS FROM JOHN CARREYROU) SINCE THE MATERIALS I GAVE YOU IN JULY. AS I'VE REFLECTED ON THIS, I THOUGHT THAT WERE I IN YOUR SHOES I WOULD WANT TO KNOW/BE IN THE LOOP ON THIS ONE, AND SINCE YOU HAD THE PRIOR MATERIALS FROM JULY, WANTED TO GIVE YOU THE COMPLETE SET." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AFTER "THE WALL STREET JOURNAL" ARTICLE BY MR. CARREYROU CAME OUT IN OCTOBER OF 2015, YOU ALSO WROTE MR. MURDOCH EXPRESSING YOUR DISPLEASURE; IS THAT FAIR?
ELIZABETH A. HOLMES: I'M NOT SURE, BUT I COULD HAVE.
MR. LEACH: NO REASON TO DOUBT THAT YOU DID THAT?
ELIZABETH A. HOLMES: NO REASON TO DOUBT IT.
MR. LEACH: NOW, MR. DOWNEY ASKED YOU ON DIRECT EXAMINATION HOW MANY ASSAYS WERE OFFERED WHERE THE ANALYSIS WAS PERFORMED ON A MINIATURIZED THERANOS DEVICE IN THE CLIA LAB. DO YOU REMEMBER THAT QUESTION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOUR ANSWER WAS 12?
MR. LEACH: IS THAT CORRECT?
MR. LEACH: IS IT ALSO CORRECT THAT THAT WAS ONE OF THE CENTRAL QUESTIONS RAISED BY "THE WALL STREET JOURNAL"?
ELIZABETH A. HOLMES: THAT WAS ONE OF THE QUESTIONS.
MR. LEACH: OKAY. AND YOU WERE ASKED POINT-BLANK BY JIM CRAMER ON "MAD MONEY" WHETHER IT WAS TRUE THAT IT WAS ONLY 12 OR 15 TESTS ON YOUR DEVICE; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I DON'T REMEMBER THE QUESTION, BUT I REMEMBER HE WAS ASKING ME ABOUT THE CONTENT OF "THE WALL STREET JOURNAL" ARTICLE.
MR. LEACH: WELL, LET'S PLAY THE CLIP WHICH IS IN EVIDENCE AS EXHIBIT 2851-3.
JUDGE DAVILA: IS THIS THE VIDEO CLIP?
MR. LEACH: YES.
JUDGE DAVILA: AND THIS IS THE VIDEO CLIP THAT WAS PREVIOUSLY PLAYED?
MR. LEACH: YES.
JUDGE DAVILA: ALL RIGHT. THANK YOU. THERE WILL BE NO TRANSCRIPTION OF THIS AGAIN.
MR. LEACH: YES, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. LADIES AND GENTLEMEN, WE'LL PLAY THIS CLIP.
(VIDEO PLAYING OFF THE RECORD.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, THAT WAS YOU ON THAT VIDEO; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND YOU HEARD MR. CRAMER ASK YOU THE QUESTION HOW MANY TESTS COULD BE PERFORMED ON THE EDISON?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND I DIDN'T HEAR THE NUMBER 12 IN THAT CLIP. DID YOU HEAR IT?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: OKAY. YOU WERE THE FOUNDER OF THERANOS; CORRECT?
ELIZABETH A. HOLMES: I -- YES.
MR. LEACH: YOU WERE ITS CHIEF EXECUTIVE OFFICER?
MR. LEACH: THROUGH 2016, YOU WERE THE ONLY CHIEF EXECUTIVE OFFICER THAT THERANOS EVER HAD; IS THAT CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: OKAY. AND BEFORE 2016 YOU OWNED A MAJORITY OF THE VOTING SHARES?
ELIZABETH A. HOLMES: AT VARIOUS POINTS IN TIMES, YES.
MR. LEACH: NO ONE WAS MORE INVESTED IN THE COMPANY THAN YOU WERE; IS THAT FAIR?
ELIZABETH A. HOLMES: I TRIED TO BE. WE HAD A LOT OF PEOPLE WORKING REALLY HARD.
MR. LEACH: NO ONE OWNED MORE STOCK THAN YOU; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU TAKE RESPONSIBILITY FOR THE COMPANY; IS THAT YOUR TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU AGREE WITH ME THAT ANYTHING THAT HAPPENS IN YOUR COMPANY IS YOUR RESPONSIBILITY AT THE END OF THE DAY; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: THAT'S HOW I FELT.
MR. LEACH: YOU COULD FIRE THE BOARD OF DIRECTORS, COULDN'T YOU?
ELIZABETH A. HOLMES: I MEAN, TECHNICALLY, YES. THEY COULD ALSO FIRE ME.
MR. LEACH: WELL, YOU OWNED 51 PERCENT OF THE COMPANY, RIGHT, MS. HOLMES?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND AS THE 51 PERCENT SHAREHOLDER OF THE COMPANY, YOU COULD OUTVOTE ANYBODY ON WHO WAS ON THE BOARD; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I COULD.
MR. LEACH: OKAY. AND IF YOU DIDN'T WANT GEORGE SHULTZ THERE, YOU COULD, THROUGH THE WORKING OF THE LEGAL DOCUMENTS, GET HIM OFF THE BOARD; ISN'T THAT RIGHT?
MR. LEACH: AND YOU COULD DO THAT FOR ANY OF THE BOARD MEMBERS AT THERANOS?
ELIZABETH A. HOLMES: WE COULD.
MR. LEACH: YOU COULD; CORRECT?
ELIZABETH A. HOLMES: I COULD.
MR. LEACH: OKAY. NOW, SUNNY BALWANI REPORTED TO YOU; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND HE WAS AN AT WILL EMPLOYEE; IS THAT RIGHT?
MR. LEACH: YOU COULD FIRE HIM AT ANY TIME?
MR. LEACH: AND YOU AGREE WITH ME THAT YOU AND MR. BALWANI WERE MANAGING THE COMPANY TOGETHER AND MAKING DECISIONS FOR THE COMPANY TOGETHER; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: IT'S YOUR TESTIMONY, IS IT NOT, THAT YOU LET HIM RUN THE COMPANY AND RUN OPERATIONS?
MR. LEACH: YOU ALSO COULD HIRE OR FIRE THE LAB DIRECTOR; ISN'T THAT CORRECT?
MR. LEACH: IF YOU WERE UNHAPPY WITH ARNOLD GELB'S PERFORMANCE, YOU COULD FIRE HIM?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IF YOU WERE UNHAPPY WITH ADAM ROSENDORFF'S PERFORMANCE, YOU COULD FIRE HIM?
MR. LEACH: AND IF YOU WERE UNHAPPY WITH LYNETTE SAWYER'S PERFORMANCE, YOU COULD FIRE HER?
MR. LEACH: AND IF YOU WERE UNHAPPY WITH SUNIL DHAWAN'S PERFORMANCE, YOU COULD FIRE HIM, TOO; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU WERE RESPONSIBLE AT THE END OF THE DAY FOR ALLOCATING RESOURCES TO ALL OF THE DEPARTMENTS WITHIN THERANOS SO THAT THEY COULD DO THEIR JOBS EFFECTIVELY; IS THAT CORRECT?
ELIZABETH A. HOLMES: ULTIMATELY, YES. THEY CAN'T ALL REPORT TO ME, BUT YES.
MR. LEACH: OKAY. BUT NOT EVERYBODY IN A COMPANY REPORTS DIRECTLY TO THE CEO; RIGHT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: BUT ULTIMATELY ALL ROADS, AS THE CEO, LEAD TO YOU?
MR. LEACH: AND IS IT FAIR THAT THE BUCK STOPS WITH YOU?
ELIZABETH A. HOLMES: I FELT THAT.
MR. LEACH: YOU COULD HIRE OR FIRE DANISE YAM IF YOU WANTED TO?
MR. LEACH: AND YOU COULD HIRE OR FIRE A CFO IF YOU WANTED TO?
MR. LEACH: AND FROM 2010 TO APPROXIMATELY 2016, THERANOS HAD NO CFO?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU MADE A DECISION TO HIRE CHIAT/DAY; ISN'T THAT RIGHT?
MR. LEACH: AND IF YOU WERE UNHAPPY WITH ANYTHING CHIAT/DAY WAS DOING, YOU COULD FIRE THEM, TOO; CORRECT?
MR. LEACH: YOU ALSO COULD HIRE OR FIRE THE HEAD OF MARKETING; ISN'T THAT RIGHT?
MR. LEACH: IF YOU WERE UNHAPPY WITH THE DECISIONS YOUR MARKETING DIRECTOR WAS MAKING, YOU COULD GET RID OF THE MARKETING DIRECTOR; IS THAT FAIR?
ELIZABETH A. HOLMES: YES, YES.
MR. LEACH: YOU HAD THAT POWER?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU ALSO MADE THE DECISION TO HIRE BOIES SCHILLER; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU MADE THE DECISION TO HIRE THERANOS'S LEGAL TEAM?
MR. LEACH: YOU BROUGHT IN HEATHER KING AS THE GENERAL COUNSEL IN 2015?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU MADE THAT DECISION?
MR. LEACH: AND YOU'RE THE ONE WHO SIGNED SUNIL DHAWAN'S OFFER LETTER; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: DO YOU AGREE WITH ME THAT YOU WERE GENERALLY KEPT APPRISED OF DEVELOPMENTS IN THE PRODUCTS AREA AND IN THE CLINICAL LAB?
ELIZABETH A. HOLMES: DEFINITELY IN THE PRODUCTS AREA, AND AT A HIGH LEVEL IN THE CLINICAL LAB.
MR. LEACH: WELL, YOU WERE ASKED THAT QUESTION BEFORE, WEREN'T YOU, MS. HOLMES?
ELIZABETH A. HOLMES: I COULD HAVE BEEN.
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: YOU'RE WELCOME. MS. HOLMES, THIS IS NOT THE FIRST TIME THAT YOU'VE TESTIFIED IN MATTERS RELATING TO THERANOS; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: IT'S NOT.
MR. LEACH: YOU TESTIFIED BEFORE THE SECURITIES AND EXCHANGE COMMISSION IN JULY OF 2017 AND AUGUST OF 2017; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU PROVIDED TESTIMONY OVER THE COURSE OF THREE DAYS IN JULY AND AUGUST OF 2017; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND OVER THE COURSE OF THOSE THREE DAYS, YOU TOOK AN OATH?
MR. LEACH: AND YOU SWORE TO TELL THE TRUTH?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU TOOK THAT OATH SERIOUSLY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THE SAME OATH THAT YOU'RE TAKING TODAY?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: EXACTLY THE SAME OATH. AND YOU WERE REPRESENTED BY COUNSEL AT THAT TIME; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: YOU HAD SIX LAWYERS STANDING BY YOUR SIDE; IS THAT CORRECT?
ELIZABETH A. HOLMES: SOUNDS RIGHT.
MR. LEACH: OKAY. A GENTLEMAN NAMED STEVE NEAL FROM COOLEY GODWARD?
MR. LEACH: A VERY RESPECTED TRIAL LAWYER?
ELIZABETH A. HOLMES: I THOUGHT SO.
MR. LEACH: AND A LAWYER NAMED BILL MCLUCAS, FORMER HEAD OF ENFORCEMENT AT THE S.E.C., IN D.C.?
MR. LEACH: AND A VERY RESPECTED LAWYER?
MR. LEACH: AND ALL SIX OF THOSE LAWYERS WERE THERE IN THE S.E.C. TESTIMONY GIVING YOU ADVICE?
ELIZABETH A. HOLMES: THEY WERE THERE IN THE S.E.C. TESTIMONY.
MR. LEACH: OKAY. AND IF I COULD DRAW YOUR ATTENTION, PLEASE, TO -- I'VE PLACED BEFORE YOU A RED BINDER. DOES THIS APPEAR TO BE A TRANSCRIPT OF YOUR TESTIMONY BEFORE THE S.E.C.?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. I WANT TO DRAW YOUR ATTENTION TO THE BATES NUMBER ENDING 5268. IT SHOULD BE ON THE FIRST DAY.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I WANT TO DRAW YOUR ATTENTION TO PAGE 58 OF THIS TRANSCRIPT.
MR. DOWNEY: WHAT'S THE BATES NUMBER?
MR. LEACH: 5268.
JUDGE DAVILA: AND THE PAGE NUMBER?
MR. LEACH: 48.
JUDGE DAVILA: 48. THANK YOU.
MR. LEACH: YOUR HONOR, I SEEK PERMISSION TO READ LINES 10 THROUGH 12 ON PAGE 48.
JUDGE DAVILA: THIS IS IN REGARDS TO THE WITNESS'S LAST ANSWER TO YOUR QUESTION?
MR. LEACH: YES, YOUR HONOR.
JUDGE DAVILA: YOU MAY READ THAT.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, YOU WERE ASKED THE QUESTION, "WERE YOU KEPT APPRISED OF DEVELOPMENTS IN THE PRODUCTS AREA AND IN THE CLINICAL LAB?" AND YOUR ANSWER WAS "GENERALLY YES." WAS THAT CORRECT?
MR. LEACH: I'D LIKE TO TALK WITH YOU A LITTLE BIT ABOUT HOW YOU WERE COMPENSATED AT THERANOS. AM I RIGHT THAT YOUR WAGES IN 2010 WERE ABOUT $200,000?
MR. LEACH: AND YOUR WAGES IN 2011 WERE APPROXIMATELY $200,000?
MR. LEACH: AND YOUR WAGES IN 2012 WERE APPROXIMATELY $200,000?
MR. LEACH: YOUR WAGES IN 2013 WERE ABOUT $200,000?
MR. LEACH: YOUR WAGES IN 2014 WERE ABOUT $360,000?
ELIZABETH A. HOLMES: THAT SOUNDS RIGHT.
MR. LEACH: WELL, I'D LIKE TO BE SURE. WHY DON'T YOU LOOK IN YOUR BINDER AT EXHIBIT 3249, PARTICULARLY PAGE 7.
ELIZABETH A. HOLMES: 3249?
MR. LEACH: 3249, PAGE 7.
ELIZABETH A. HOLMES: GOT IT. OKAY.
MR. LEACH: DO YOU SEE A TABLE DOWN AT THE BOTTOM OF PAGE 7?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU RECOGNIZE THIS AS A SWORN STATEMENT THAT YOU PROVIDED IN PRIOR LITIGATION?
ELIZABETH A. HOLMES: I DON'T, BUT I DON'T HAVE ANY REASON TO DOUBT IT.
MR. LEACH: OKAY. WELL, LET'S LOOK AT THE LAST PAGE. IS THAT YOUR SIGNATURE ON PAGE 29 OF 3249?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. ARE YOU SATISFIED THAT THIS IS A SWORN STATEMENT THAT YOU PROVIDED IN PRIOR LITIGATION?
ELIZABETH A. HOLMES: YEAH, I DON'T HAVE ANY REASON TO DOUBT IT.
MR. LEACH: OKAY. DOES THIS REFRESH YOUR RECOLLECTION THAT YOUR WAGES IN 2014 WERE $360,229.36?
ELIZABETH A. HOLMES: AGAIN, IT SOUNDS RIGHT, YES.
MR. LEACH: AND YOUR WAGES IN 2015 WERE APPROXIMATELY $390,182.80?
MR. LEACH: AND AT THE END OF 2016 YOU HELD MORE THAN 250 MILLION SHARES OF CLASS B COMMON STOCK AT THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: THAT WAS MORE THAN 51 PERCENT OF THE SHARES?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: YESTERDAY YOU SAID CLOSE TO 50 PERCENT. LET'S BE CLEAR. IT WAS ABOVE 50 PERCENT; RIGHT?
ELIZABETH A. HOLMES: IT PROBABLY WAS.
MR. LEACH: WELL, LOOK AT 3249, PAGE 7.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: WERE YOU ASKED THE QUESTION, DESCRIBE YOUR OWNERSHIP STAKE IN THERANOS INCLUDING WITHOUT LIMITATION ANY STOCK OPTIONS?
MR. LEACH: AND WAS YOUR ANSWER, "SHE HOLDS 250,658,055 SHARES OF CLASS B COMMON STOCK, APPROXIMATELY 51 PERCENT OF THERANOS'S OUTSTANDING SHARES"?
MR. LEACH: THAT WAS YOUR ANSWER THEN?
MR. LEACH: AND NO REASON TO DOUBT THAT NOW?
ELIZABETH A. HOLMES: NO REASON.
MR. LEACH: AND NO ONE AT THE COMPANY OWNED MORE THAN YOU DID?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND I BELIEVE YOU TESTIFIED THAT YOU UNDERSTOOD AT LEAST BY THE END OF 2014, OR THE LAST ROUND OF C-2 INVESTMENT, THAT YOUR SHARES WERE VALUED AT MORE THAN $4 BILLION?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: I'D LIKE TO TALK TO YOU A LITTLE BIT ABOUT WHAT I HOPE ARE AGREEMENTS THAT WE MAY HAVE ABOUT SOME OF THE DEVICES AND SOME TESTING AND SOME OF THE MATTERS THAT YOU TESTIFIED TO IN YOUR DIRECT EXAMINATION. YOU RECALL TALKING AT LENGTH WITH MR. DOWNEY ABOUT A MINILAB; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S PART OF THE 4 SERIES?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THE MINILAB AND THE 4 SERIES WERE NEVER USED FOR PATIENT TESTING; IS THAT CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: THE MINILAB AND THE 4S WERE NEVER PUT IN THE CLIA LAB IN CALIFORNIA?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: THEY WERE NEVER PUT IN THE CLIA LAB IN ARIZONA?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: JOHN CARREYROU'S ARTICLE CAME OUT ON OCTOBER 15TH, 2015. AT THAT POINT IN TIME, THE FDA HAD APPROVED USE OF THE MINILAB FOR A SINGLE ASSAY; IS THAT CORRECT?
MR. LEACH: AND THAT ASSAY WAS THE HERPES ASSAY?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OTHER THAN THAT ONE ASSAY, THE MINILAB AND THE 4S WERE NOT APPROVED BY THE FDA?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND THE ONLY THERANOS MANUFACTURED ANALYZER THAT WAS EVER USED IN THE CLIA LAB IN CALIFORNIA WAS THE EDISON 3.5?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND THE EDISON 3.5 WAS LIMITED TO IMMUNOASSAYS?
ELIZABETH A. HOLMES: YES. WELL, THAT'S HOW WE USED IT.
MR. LEACH: YOU DIDN'T USE IT FOR ANY PURPOSE OTHER THAN IMMUNOASSAYS?
ELIZABETH A. HOLMES: IN THE CLINICAL LAB.
MR. LEACH: IN THE CLINICAL LAB YOU DIDN'T USE IT FOR GENERAL CHEMISTRY?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: YOU DIDN'T USE IT FOR CYTOMETRY?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU DID NOT USE IT FOR NUCLEIC ACID AMPLIFICATION?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: JUST IMMUNOASSAYS?
MR. LEACH: AND THE EDISON 3.5 WAS ONLY USED FOR 12 ASSAYS IN THE CALIFORNIA CLIA LAB BETWEEN SEPTEMBER 2013 AND JUNE OF 2015; IS THAT CORRECT?
ELIZABETH A. HOLMES: I BELIEVE SO, THAT'S CORRECT.
MR. LEACH: AND THAT'S THE 12 NUMBER THAT YOU STARTED WITH IN YOUR TESTIMONY?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: THE ONE THAT YOU DIDN'T GIVE TO JIM CRAMER WHEN HE ASKED YOU ABOUT IT?
MR. LEACH: AND BY THE TIME OF THE CMS INSPECTION IN SEPTEMBER OF 2015, THERANOS HAD STOPPED USING THE EDISON 3.5 IN THE CLIA LAB ALTOGETHER?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: IT WASN'T USING IT AT ALL?
MR. LEACH: SO THERANOS WASN'T USING ANY OF ITS MANUFACTURED ANALYZERS IN THE CLIA LAB AT THE TIME THAT THE CMS INSPECTORS COME IN?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AFTER THE CARREYROU ARTICLE YOU WERE ASKED SOME QUESTIONS PUBLICLY ABOUT EDISON AND EDISON 3.5. DO YOU RECALL GETTING QUESTIONS ABOUT THOSE?
ELIZABETH A. HOLMES: GENERALLY, YES.
MR. LEACH: OKAY. AND YOU TOLD PEOPLE IN LATE 2015 AFTER THE CARREYROU ARTICLE CAME OUT THAT EDISON WAS A CODE NAME FOR ONE OF THERANOS'S EARLIEST VERSIONS OF YOUR DEVICES AND YOU HAD NOT BEEN USING EDISON FOR ANYTHING FOR A FEW YEARS. DO YOU RECALL SAYING THAT PUBLICLY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THAT WAS LESS THAN FORTHRIGHT, WASN'T IT?
ELIZABETH A. HOLMES: IT WAS TOO DEEP IN THE WEEDS. IT WAS HOW I WAS THINKING ABOUT WHAT THE EDISON WAS, BUT, OF COURSE WE WERE USING THE 3.5 IN THE CLINICAL LAB.
MR. LEACH: OKAY. IS THAT ANOTHER THING YOU WISHED YOU HAD DONE DIFFERENTLY?
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: YOU -- SO YOU HAD BEEN USING THE EDISON 3.5 IN THE CALIFORNIA CLIA LAB IN 2015?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: THE SAME YEAR THAT YOU GOT ASKED THAT QUESTION?
MR. LEACH: AND YOU STOPPED USING THE EDISON. YOU ONLY EVER USED IT FOR 12 TESTS, BUT YOU WEREN'T USING IT IN SEPTEMBER OF 2015?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND THE NEWER VERSION, THE 4 SERIES, YOU NEVER USED THAT IN THE CLIA LAB?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: NOW, ON TOP OF THE 12 EDISON 3.5 TESTS IN THE CALIFORNIA CLIA LAB, THERANOS AT ITS PEAK PERFORMED AN ADDITIONAL 58 ASSAYS ON MODIFIED THIRD PARTY MACHINES LIKE THE SIEMENS ADVIA; IS THAT CORRECT?
ELIZABETH A. HOLMES: THAT SOUNDS RIGHT.
MR. LEACH: AND FOR THOSE TESTS YOU WERE DEPENDENT ON THIRD PARTY EQUIPMENT?
MR. LEACH: YOU WERE DEPENDENT ON DEVICES FROM THE LIKES OF SIEMENS?
MR. LEACH: AND YOU WERE DEPENDENT ON THE DEVICES FROM THE LIKES OF BECKMAN COULTER?
ELIZABETH A. HOLMES: I DON'T THINK WE USED BECKMAN COULTER MACHINES, BUT WE WERE MODIFYING THIRD PARTY MACHINES.
MR. LEACH: OKAY. GIVE ME ANOTHER EXAMPLE OF A THIRD PARTY MACHINE YOU MODIFIED.
ELIZABETH A. HOLMES: BECTON DICKINSON.
MR. LEACH: OKAY. AND YOU WERE RELYING ON THOSE PRODUCTS TO DO THE TESTING?
MR. LEACH: AM I RIGHT THAT THERANOS'S OVERALL TEST MENU IN OR ABOUT OCTOBER OF 2015 WAS SOMEWHERE IN THE NEIGHBORHOOD OF 200 TESTS?
ELIZABETH A. HOLMES: IT SOUNDS RIGHT.
MR. LEACH: SO THE MAJORITY OF THOSE 200 TESTS WERE DONE ON ORDINARY COMMERCIAL EQUIPMENT. CAN WE AGREE ON THAT?
MR. LEACH: NOW, YOU ALSO HAD AN ARIZONA LAB?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: WHEN DID THE ARIZONA LAB OPEN?
ELIZABETH A. HOLMES: I THINK IN 2014. MAYBE 2015.
MR. LEACH: AND THAT WAS WHAT IS CALLED A MODERATE COMPLEXITY LAB?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: AND IT ONLY USED COMMERCIALLY AVAILABLE EQUIPMENT; CORRECT?
MR. LEACH: IT ONLY USED FDA APPROVED MACHINES USING FDA CHEMISTRIES IN WAYS IN ACCORDANCE WITH THE FDA APPROVAL?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: NO MAGICAL THERANOS TECHNOLOGY IN THE ARIZONA LAB?
MR. LEACH: AND YOU NEVER PUT A MINILAB IN THE ARIZONA LAB?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: YOU NEVER PUT AN EDISON 3.5 IN THE ARIZONA LAB?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: YOU NEVER USED MODIFIED SIEMENS ADVIAS IN THE CLIA LAB -- THE ARIZONA CLIA LAB?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU NEVER DID SMALL SAMPLE TESTING ON MODIFIED THIRD PARTY MACHINES IN THE ARIZONA LAB?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: YOU DIDN'T DO ANYTHING IN THE ARIZONA LAB THAT ANY OTHER LAB PROVIDER COULD DO; ISN'T THAT FAIR?
ELIZABETH A. HOLMES: WE INVESTED A LOT IN AUTOMATION IN THE LABORATORY THAT WE THOUGHT AT THE TIME WAS CUTTING EDGE, BUT IT WAS ALL COMMERCIALLY AVAILABLE MACHINES THAT WE WERE RUNNING.
MR. LEACH: OKAY. AND YOU TESTIFIED YESTERDAY TO AN 8 MILLION NUMBER IN TERMS OF TESTS THAT THERANOS HAD PERFORMED; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. YOU KNOW AT THE TIME OF JOHN CARREYROU'S ARTICLE IN OCTOBER OF 2015 THAT THAT NUMBER WAS 3.5 MILLION?
ELIZABETH A. HOLMES: I DID NOT KNOW THAT, BUT I DON'T DOUBT YOU.
MR. LEACH: WELL, LET'S SEE IF WE CAN REFRESH YOUR MEMORY. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) I'VE PLACED BEFORE YOU A DOCUMENT THAT WE HAVE MARKED FOR IDENTIFICATION PURPOSES AS EXHIBIT 5702. DO YOU HAVE THAT IN FRONT OF YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE A HEADING AT THE TOP OF THIS MEMO?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE A DATE OF OCTOBER 22ND, 2015?
MR. LEACH: OKAY. AND I DRAW YOUR ATTENTION TO THE THIRD PARAGRAPH KIND OF INDENTED BELOW THE LINE, "AS WE PROVIDE THESE ANSWERS," AND TAKE A MOMENT TO READ THAT THIRD PARAGRAPH TO YOURSELF, THAT FIRST LINE.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DOES THIS REFRESH YOUR MEMORY THAT AT THE TIME OF THE CARREYROU ARTICLE THERANOS HAD PERFORMED 3.5 MILLION TESTS?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: SO 4.5 MILLION OF THE 8 MILLION NUMBER THAT YOU TALKED ABOUT YESTERDAY, THAT'S DONE AFTER THE CARREYROU ARTICLE COMES OUT?
MR. LEACH: AND YOU KNOW THAT BY OCTOBER OF 2015 THERANOS WAS NOT DOING ANY SMALL SAMPLE TESTING IN THE CALIFORNIA CLIA LAB?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND YOU KNOW THAT THE 4.5 MILLION THAT COME AFTER OCTOBER OF 2015, THAT IS ALL RUN ON COMMERCIALLY AVAILABLE EQUIPMENT; IS THAT RIGHT?
MR. LEACH: YOU ALSO KNOW THAT 90 PERCENT OF THE TESTING WAS DONE IN THE ARIZONA LAB?
ELIZABETH A. HOLMES: I DON'T KNOW THAT.
MR. LEACH: MAYBE AFTER A BREAK WE'LL REFRESH YOUR MEMORY ABOUT THAT POINT. BUT CAN WE AGREE THAT THE VAST MAJORITY OF THE TESTING WAS DONE IN THE ARIZONA CLIA LAB?
ELIZABETH A. HOLMES: I MEAN, I DON'T HAVE ANY REASON TO DOUBT IT. I JUST DIDN'T KNOW THAT STAT.
MR. LEACH: YOU KNEW THAT THE ANNUAL VOLUME OF TESTS IN THE CALIFORNIA CLIA LAB WHERE YOU WERE USING THE EDISON 3.5 AND THE MODIFIED THIRD PARTY MACHINES WAS ONLY DOING ABOUT 800,000 ANNUAL VOLUME? YOU KNOW THAT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, YOU WERE HERE WHEN DR. DAS TESTIFIED TO THAT, WEREN'T YOU?
ELIZABETH A. HOLMES: I WAS. I HEARD THAT.
MR. LEACH: AND SITTING HERE TODAY, YOU DON'T HAVE ANY REASON TO DOUBT THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU KNOW THAT THE VAST MAJORITY OF THE 8 MILLION NUMBER THAT YOU TESTIFIED TO YESTERDAY HAS ABSOLUTELY NOTHING TO DO WITH THE MINILAB?
MR. LEACH: AND IT HAS ABSOLUTELY NOTHING TO DO WITH THE EDISON 3.5?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IT HAS NOTHING TO DO WITH THE TSPU?
MR. LEACH: YOUR HONOR, I'M ABOUT TO MOVE INTO A NEW TOPIC AREA. THIS MIGHT BE A GOOD TIME FOR A BREAK.
JUDGE DAVILA: LET'S TAKE OUR BREAK. WE'LL TAKE A 30 MINUTE MORNING BREAK. WE'LL TAKE A MORNING BREAK OF 30 MINUTES, PLEASE.
(RECESS FROM 10:56 A.M. UNTIL 11:33 A.M.)
JUDGE DAVILA: PLEASE BE SEATED. WE'RE BACK ON THE RECORD. ALL COUNSEL ARE PRESENT. OUR JURY IS PRESENT. MR. LEACH, YOU'D LIKE TO CONTINUE?
MR. LEACH: I WOULD, YOUR HONOR. THANK YOU.
MR. LEACH: GOOD MORNING AGAIN, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD MORNING.
MR. LEACH: BEFORE THE BREAK, WE WERE TALKING A LITTLE BIT ABOUT 90 PERCENT OF THE TESTING AND WHETHER YOU REMEMBERED THAT NUMBER OR NOT. I'D LIKE TO SHOW YOU A DOCUMENT AND SEE IF THIS REFRESHES YOUR RECOLLECTION. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) DO YOU SEE THAT THIS APPEARS TO BE A MESSAGE FROM BROOKE BUCHANAN TO YOU ON OR ABOUT JANUARY 28TH, 2016, MS. HOLMES?
MR. LEACH: AND MS. BUCHANAN IS WRITING BACK TO AN EMAIL THAT YOU SENT ON AT 7:41 ON THAT DATE?
MR. LEACH: I MOVE THE ADMISSION OF 5254, YOUR HONOR.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5254 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, IF I COULD PLEASE DRAW YOUR ATTENTION -- MAY I USE THE ELMO, MS. KRATZMANN?
COURT CLERK: SURE.
BY MR. LEACH:
MR. LEACH: DO YOU SEE THE EMAIL AT 7:41 A.M. TO YOU FROM BROOKE BUCHANAN?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOU HIRED MS. BUCHANAN IN LATE 2015 TO HELP WITH MEDIA RESPONSE?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU WROTE HERE -- LET ME ASK A BETTER QUESTION AND USE THE MICROPHONE. YOU WROTE HERE, "THIS WORK HERE IS INDEPENDENT OF THERANOS'S ARIZONA LAB WHICH IS CLIA CERTIFIED AND GOOD STANDING WHERE OVER 90 PERCENT OF ALL THERANOS SAMPLES ARE PROCESSED." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DOES THIS REFRESH YOUR MEMORY THAT 90 PERCENT OF THE TESTING WAS DONE IN THE ARIZONA LAB?
ELIZABETH A. HOLMES: IT DOES AS OF THAT TIME.
MR. LEACH: NOW, I NEED TO ASK YOU SOME QUESTIONS ABOUT YOUR RELATIONSHIP WITH MR. BALWANI. DO YOU RECALL TESTIFYING ABOUT THAT YESTERDAY, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: IS IT FAIR TO SAY THAT YOUR RELATIONSHIP WITH SUNNY WAS AT TIMES LOVING AND AT TIMES NOT SO LOVING?
MR. LEACH: THERE WERE TIMES WHEN HE WAS COMPLIMENTARY AND LOVING OF YOU?
ELIZABETH A. HOLMES: THERE WERE.
MR. LEACH: AND THERE WERE TIMES WHEN HE WAS LESS SO?
MR. LEACH: AND YOU WERE OFTEN COMPLIMENTARY AND LOVING TO HIM; IS THAT RIGHT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND AT TIMES IT WAS LESS SO?
ELIZABETH A. HOLMES: I WOULD GET UPSET SOMETIMES.
MR. LEACH: I'D LIKE TO LOOK AT SOME EXAMPLES OF THOSE. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) MS. HOLMES, I'VE PLACED BEFORE YOU WHAT WAS MARKED FOR IDENTIFICATION PURPOSES EARLIER AS EXHIBIT 5387. YOU WERE HERE WHEN MR. OFFEN TESTIFIED ABOUT 5387?
ELIZABETH A. HOLMES: I WAS HERE WHEN MR. OFTEN TESTIFIED. I DON'T REMEMBER 5387, BUT --
MR. LEACH: DO YOU REMEMBER HIM TESTIFYING TO THE PROCESS BY WHICH HE IDENTIFIED TEXT MESSAGES BETWEEN YOU AND MR. BALWANI?
ELIZABETH A. HOLMES: I DO. I DO.
MR. LEACH: OKAY. AND DO YOU UNDERSTAND THE DOCUMENT THAT I'VE PLACED BEFORE YOU TO BE TEXTS, IOS AND SKYPE MESSAGES, OR IOS MESSAGES INVOLVING YOU AND MR. BALWANI?
MR. LEACH: AND YOU UNDERSTAND THAT THESE MESSAGES WERE OBTAINED FROM DEVICES THAT YOU USED WHILE YOU WERE AT THERANOS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THESE DEVICES INCLUDED AN IPHONE 6S THAT YOU USED?
ELIZABETH A. HOLMES: IT INCLUDED AN IPHONE. I DON'T KNOW WHAT IPHONE IT WAS.
MR. LEACH: OKAY. THIS EXHIBIT IS 449 PAGES LONG. IS THAT CORRECT?
ELIZABETH A. HOLMES: OKAY, YES.
MR. LEACH: AND DO YOU RECALL MR. OFFEN TESTIFYING THAT THERE WERE OVER 12,000 INDIVIDUAL MESSAGES IN THIS DOCUMENT?
ELIZABETH A. HOLMES: I RECALL HIM TESTIFYING. I DIDN'T REMEMBER THAT EXACT NUMBER.
MR. LEACH: AND DO YOU AGREE WITH ME THAT YOU DON'T HAVE ANY REASON TO DOUBT THAT THE NUMBER OF TEXT MESSAGES IN 5387?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU AGREE THAT WHATEVER THE NUMBER, 12,000, THEY SPAN A TIME PERIOD 2011 ALL OF THE WAY THROUGH 2016?
MR. LEACH: SO APPROXIMATELY FIVE YEARS OF YOUR RELATIONSHIP?
MR. LEACH: AND CAN WE AGREE THAT THERE ARE MANY MESSAGES IN HERE WHERE MR. BALWANI IS EXPRESSING LOVE AND AFFECTION TO YOU?
MR. LEACH: BEFORE WE LOOK AT 5387, THERE ARE SOME ADDITIONAL MESSAGES THAT I WANT TO GO THROUGH THAT HAVEN'T BEEN ADMITTED, BUT I'D LIKE TO DRAW YOUR ATTENTION TO, IN YOUR BINDER, 5387D AT PAGE 19, AND THIS IS ALREADY IN EVIDENCE, YOUR HONOR. AND IF WE CAN DISPLAY THAT, MS. HOLLIMAN.
(PAUSE IN PROCEEDINGS.)
MR. LEACH: MS. HOLLIMAN, CAN WE GO BACK A COUPLE OF PAGES. ONE MORE. ONE MORE. OR ONE MORE.
MR. LEACH: WELL, MS. HOLMES, LET ME -- I'LL USE 5387. IF I COULD DRAW YOUR ATTENTION TO PAGE 19 OF 5387.
ELIZABETH A. HOLMES: THERE'S NOTHING ON MY MONITOR. I DON'T KNOW IF IT SHOULD BE.
MR. LEACH: IT'S NOT IN EVIDENCE YET.
ELIZABETH A. HOLMES: OH, OKAY.
MR. LEACH: SO WE'RE GOING TO USE THIS UNTIL WE GET TO --
ELIZABETH A. HOLMES: GOT IT. OKAY.
MR. LEACH: -- UNTIL ANYTHING HAS BEEN ADMITTED OR WE HAVE PERMISSION TO DISPLAY.
ELIZABETH A. HOLMES: PAGE 19?
MR. LEACH: YES, PLEASE. YOUR HONOR, I'M -- YOUR HONOR, MY INTENTION IS TO MOVE TO ADMIT A NUMBER OF ADDITIONAL PAGES FROM 5387 THAT ARE NOT ALREADY IN EVIDENCE. RATHER THAN DO IT ONE BY ONE, I'D SEEK PERMISSION TO DISPLAY WHAT I INTEND TO ADMIT, AND THEN AT THE END ADMIT IT IN ONE DOCUMENT SO WE DON'T HAVE MORE PIECES OF PAPER THAN NECESSARY FOR THE JURY.
JUDGE DAVILA: SURE. THAT'S FINE.
MR. DOWNEY: YOUR HONOR, THE ONLY ISSUE IS THAT I HAVE NOT HAD A CHANCE -- I DON'T KNOW THESE PAGES OR THESE SEGMENTS, SO I DON'T KNOW WHAT IS COMING.
JUDGE DAVILA: I WAS GOING TO ASK IF YOU HAD SHARED THIS WITH DEFENSE COUNSEL.
MR. LEACH: I HAVE, YOUR HONOR.
JUDGE DAVILA: YOU HAVE?
MR. LEACH: I HAVE, YOUR HONOR. IT IS CROSS-EXAMINATION, SO I DIDN'T --
JUDGE DAVILA: OKAY. THAT'S FINE.
MR. LEACH: AND I'M HAPPY TO WORK WITH MR. DOWNEY ON RULE 106 COMPLETIONS.
JUDGE DAVILA: THAT'S FINE.
MR. LEACH: MAY I DISPLAY PAGE 19.
MR. LEACH: MS. HOLMES, DO YOU SEE ON THE LEFT SIDE OF THE DOCUMENT, THERE'S NUMBERS FOR THE PARTICULAR TEXT MESSAGES?
MR. LEACH: OKAY.
ELIZABETH A. HOLMES: WAIT, SORRY. THE RECORD?
MR. LEACH: YEAH, THERE'S A HOLMES, MACBOOKAIR_SKYPE AND THEN?
ELIZABETH A. HOLMES: OKAY, I DO.
MR. LEACH: I WANT TO DRAW YOUR ATTENTION TO THE TEXT STARTING ON 129.
MR. LEACH: PERFECT. THANK YOU. DO YOU SEE THE MESSAGE ON MAY 9TH, 2020, 12 --
JUDGE DAVILA: I'M SORRY. WHAT IS THE DATE AGAIN?
MR. LEACH: MAY 9TH, 2020 -- 2012. I'M SORRY. EXCUSE ME.
MR. LEACH: DO YOU SEE THE MESSAGE I'M TALKING ABOUT, MS. HOLMES?
MR. LEACH: WOULD YOU MIND READING ME FOR THE MESSAGES DOWN FROM 129 TO MESSAGE 121?
ELIZABETH A. HOLMES: 129 TO 121?
MR. LEACH: YES?
ELIZABETH A. HOLMES: YES. I GUESS I CAN DO IT HERE. "MISSING YOU. THIS BUSINESS CANNOT BE BUILD BY EITHER YOU OR I ALONE. THAT'S WHY THE UNIVERSE BROUGHT US TOGETHER (AMONG OTHER BILLION REASONS). NO ONE BUT YOU AND I CAN BUILD THIS BUSINESS. "TOGETHER. "I KNOW. "WE HAVE TO WORK TOGETHER ON THE REV PIECE. "WITHOUT, SEEMS LIKE HALF MY ENERGY IS GONE AND THE BUILDING IS AN EMPTY SHELL. "WITHOUT U." AND THEN I'M NOT SURE WHAT THAT IS. "I KNOW THE FEELING. "YOU ARE THE COMPANY. WE NEED REVENUE PLUS FEW SENIOR LEVEL MANAGERS - EXPERIENCED EVEN IF THEY ONLY WORK 11 HOURS TIMES 5."
MR. LEACH: THANK YOU. YOU WROTE "WE HAVE TO WORK TOGETHER ON THE REV PIECE." IS THAT A REFERENCE TO REVENUE?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: FURTHER DOWN BELOW, MR. BALWANI WROTE, "YOU ARE THE COMPANY. WE NEED REVENUE PLUS FEW SENIOR LEVEL MANAGERS." DOES THAT HELP YOU UNDERSTAND THAT THE REV PIECE ABOVE REFERS TO REVENUE?
ELIZABETH A. HOLMES: IT COULD.
MR. LEACH: YOU HAVE NO REASON TO DOUBT THAT SITTING HERE TODAY?
ELIZABETH A. HOLMES: WHEN I READ IT THE FIRST TIME I WAS THINKING REV LIKE REVISIONS OF TECHNOLOGY, BUT IT TOTALLY COULD BE REVENUE.
MR. LEACH: OKAY. LET ME NEXT DRAW YOUR ATTENTION, PLEASE, TO PAGE 341 OF 5387. YOUR HONOR, PERMISSION TO DISPLAY 341?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: I WANT TO DRAW YOUR ATTENTION TO MESSAGE 4698 BEGINNING, "ALL MY LOVE."
ELIZABETH A. HOLMES: I'M SORRY, WHAT? I DON'T -- WHICH ONE IS IT.
MR. LEACH: PAGE 341?
ELIZABETH A. HOLMES: IT'S NOT WHAT IS ON THE SCREEN?
MR. LEACH: IT'S NOT WHAT IS ON THE SCREEN. I THINK WE HAVE 248 ON THE SCREEN.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: WE'RE LOOKING FOR PAGE 341.
ELIZABETH A. HOLMES: GOT IT. YEP.
MR. LEACH: AND JUST ONE MOMENT WHILE -- MS. HOLLIMAN, IF WE CAN GO TO 341.
(PAUSE IN PROCEEDINGS.) MS. KRATZMANN, MAY I TRY THE ELMO?
(PAUSE IN PROCEEDINGS.)
MR. LEACH: I'M NOT SEEING ANYTHING ON MY SCREEN.
COURT CLERK: LET ME DO A QUICK RESET.
BY MR. LEACH:
MR. LEACH: ARE YOU ABLE TO SEE THAT ON THE SCREEN, MS. HOLMES?
ELIZABETH A. HOLMES: I AM.
MR. LEACH: OKAY. AND DO YOU SEE THE MESSAGE AT 10-21-2015 STARTING "ALL MY LOVE" FROM MR. BALWANI?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: AND WOULD YOU PLEASE READ FOR US DOWN TO THE BOTTOM IN THE LAST TEXT MESSAGE ON THE PAGE.
ELIZABETH A. HOLMES: "I LOVE YOU. "LOVE YOU. I PRAYED FROM THE BOTTOM OF MY HEART FOR YOU. I HAVE NEVER PRAYED WITH THIS INTENSITY IN MY LIFE FOR ANYTHING AND ANYONE. YOU WILL SHINE. "WAS JUST THINKING ABOUT YOU AND MEDITATING ON MY TIGRESS. "GOOD. "I LOVE THIS. "IT IS US TOGETHER. "PERFECTION. "AND DIVINITY. "ON WAY TO HOTEL TO DO NYT. "GOOD CALL WITH AZ REPUBLIC AND DEUCY. "SMILEY FACE. "MY NIRVANA."
MR. LEACH: AND THAT'S YOU WRITING "MY NIRVANA" AT THE END; RIGHT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: NOW, IF WE COULD PLEASE CONTINUE ON TO THE NEXT PAGE, 342. DO YOU SEE THERE ARE SOME ADDITIONAL TEXT MESSAGES ON 10-21?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE AT THE TOP MR. BALWANI IS WRITING "U R GOD'S TIGRESS AND WARRIOR. YOU ARE EXTRAORDINARY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. WOULD YOU CONTINUE READING WITH YOUR RESPONSE ALL OF THE WAY DOWN TO THE MESSAGE "WORRIED ABOUT YOUR ALL FINGERSTICKS ON TECHNOLOGY" COMMENT?
ELIZABETH A. HOLMES: "YOU ARE GOD'S TIGRESS AND WARRIOR. YOU ARE EXTRAORDINARY. "COMING FROM MY TIGER MEANS THE WHOLE UNIVERSE TO ME. "I LOVE YOU. "I WORSHIP YOU. BE YOURSELF. "ME AMORE. "ALL MY AND THE INFINITE STRENGTH OF THE UNIVERSE WITH U. "I LOVE YOU. "I LOVE YOU. "VERY CHOPPY. "YOU SEEMED AWESOME. "DID YOU SEE IT? "HOW DID PEOPLE REACT? "HMFR. "HMFR TIGER. "WORRIED ABOUT YOUR ALL FINGERSTICKS ON OUR TECHNOLOGY COMMENT. SENT AN EMAIL. THE WEB DOCUMENT IS FINE."
MR. LEACH: YOU CAN STOP THERE, MS. HOLMES. THAT'S WHERE I WAS LOOKING FOR. THERE ARE A COUPLE OF COMMENTS I WANT TO MAKE SURE WE UNDERSTAND. THERE'S AN ACRONYM, HMFR. WHAT DOES THAT MEAN?
ELIZABETH A. HOLMES: IT'S ARABIC. IT'S A PRAYER IN ARABIC. IN ARABIC IT'S HADHA MIN FADLI RABBI, WHICH MEANS THIS TOO IS MY GOD'S GLORY.
MR. LEACH: AND IS THIS -- FAIR TO SAY THIS IS AN EXAMPLE OF MR. BALWANI EXPRESSING LOVE AND AFFECTION TOWARDS YOU?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THERE'S A COMMENT, "WORRIED ABOUT YOUR ALL FINGERSTICKS ON OUR TECHNOLOGY" COMMENT." DO YOU SEE THAT?
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: AND YOU KNOW ON THIS DAY YOU WERE GIVING A SPEECH AT A CONFERENCE BY "THE WALL STREET JOURNAL" WHERE YOU WERE RESPONDING TO SOME OF THE CRITICISMS IN MR. CARREYROU'S ARTICLE; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DIDN'T KNOW IT WAS THAT DAY, BUT IT'S AROUND THAT TIME, YES.
MR. LEACH: OKAY. AND MR. BALWANI IS EXPRESSING CONCERN ABOUT ONE OF THE STATEMENTS THAT YOU MADE; IS THAT FAIR?
ELIZABETH A. HOLMES: IT LOOKS LIKE IT, YES.
MR. LEACH: OKAY. AND HE'S NOT CONCEALING ANYTHING FROM YOU THERE, IS HE?
ELIZABETH A. HOLMES: WHAT DO YOU MEAN BY THAT?
MR. LEACH: HE'S NOT HIDING FROM YOU THE FACT THAT HE'S WORRIED ABOUT A COMMENT THAT YOU MADE THERE?
MR. LEACH: LET ME DRAW YOUR ATTENTION TO WHAT IS IN EVIDENCE AT 5387D. BEFORE I GO THERE, LET ME DRAW YOUR ATTENTION TO PAGE 72.
ELIZABETH A. HOLMES: OF THIS DOCUMENT?
MR. LEACH: YES, PLEASE. MS. HOLMES, ARE THESE ADDITIONAL TEXT MESSAGES BETWEEN YOU AND MR. BALWANI IN THE NOVEMBER 27TH, 2014 TIME PERIOD?
ELIZABETH A. HOLMES: THEY ARE.
MR. LEACH: AND MR. BALWANI TALKS ABOUT, FIRST OF ALL, MESSAGE 20398, IT SAYS, "RUPERT SAID SAME THING AS YOU AND I TALKED ABOUT ON SEPARATE R&D BUCKET." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IN OR AROUND THIS TIME WERE YOU SEEKING A POTENTIAL INVESTMENT FROM MR. MURDOCH?
MR. LEACH: AND MR. BALWANI WRITES "AWESOME." YOU REPLY, "I KNOW. FURTHER DOWN YOU ASK, "QUESTION: PROMISE HONEST ANSWER?" DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. BALWANI WRITES, "OF COURSE. WHEN HAVE I NOT?" DO YOU SEE THAT LANGUAGE?
MR. LEACH: AND THEN YOU HAVE A SMILEY FACE?
MR. LEACH: AND THEN YOU WROTE, "WHY I LOVE YOU, AMONGST ALL OTHER REASONS. COULDN'T STOP THINKING ABOUT YOU WHOLE TIME I WAS THERE TODAY. "I LOVE YOU TOO DARLING. "WHAT'S UR QUESTION?" YOUR QUESTION WAS, "WOULD YOU BE OK IF I SAW JESSE AND LAURA SEPARATELY IN THE A.M. TOMORROW, HOME BY LATEST 11:15
ELIZABETH A. HOLMES: M." DO YOU SEE THAT? A. I DO.
MR. LEACH: AND WHO WAS LAURA?
ELIZABETH A. HOLMES: LAURA WAS A FRIEND OF MINE.
MR. LEACH: AND "WHEN YOU FINISH THE GEORGE THING," WHAT WAS THAT A REFERENCE TO?
ELIZABETH A. HOLMES: I DON'T KNOW. I ASSUME SOMETHING WITH GEORGE.
MR. LEACH: GEORGE SHULTZ?
MR. LEACH: AND IS THIS TEXT MESSAGE EXCHANGE ANOTHER EXAMPLE OF MR. BALWANI BEING LOVING TO YOU?
ELIZABETH A. HOLMES: I THINK IT'S ME ASKING HIM FOR PERMISSION TO SEE MY FRIENDS.
MR. LEACH: OKAY. IS IT REPRESENTATIVE OF MANY OTHER TEXTS IN EXHIBIT 5387?
ELIZABETH A. HOLMES: I DON'T KNOW BECAUSE I HAVEN'T GONE THROUGH THE WHOLE THING, BUT I WOULD OFTEN TRY TO ASK HIM IF IT WOULD BE OKAY IF I COULD SEE A FRIEND BEFORE GOING BACK TO THE OFFICE OR GOING TO A WORK MEETING.
MR. LEACH: LET ME DRAW YOUR ATTENTION, PLEASE, TO PAGE 129.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: PERMISSION TO DISPLAY, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: DO YOU SEE THE MESSAGE AT THE TOP, "LOVE U TOO" FROM MR. BALWANI?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND WOULD YOU PLEASE READ FOR ME DOWN TO THE BOTTOM OF THE PAGE STARTING WITH YOUR RESPONSE?
ELIZABETH A. HOLMES: "I LOVE YOU. "XX. "LET'S GO TO JAPAN TOGETHER THIS YEAR. "OK. "HEADING TO AIRPORT. "LOVING YOU. "ME TOO. "WAS JUST THINKING ABOUT U. "I MISS YOU. "ME MORE. "CAN YOU RESPOND TO MY SLIM AND WISENBAKER EMAILS? "CAN YOU TALK. "WASN'T SURE WHAT YOU WERE ASKING FOR."
MR. LEACH: YOU JUST SAID CAN YOU RESPOND TO MY SLIM AND WISENBAKER EMAIL. "CAN YOU TALK? "WASN'T SURE WHAT YOU WERE ASKING FOR. "HOME. "WILL DROP BY FOR A BIT. "LOVING YOU. "ON MY WAY HEADING HOME TO RECEIVE MY MOM. "YOU EATING THERE I ASSUME? "YES. RAJU AND HIS FAMILY HERE ALSO JUST FYI. "I HAVE ORDERED JANTA FOR THEM BUT SAPNA BROUGHT FOOD ALSO. "K. "HERE LOVING YOU. "ALL MY LOVE AND HUGS FOR MY QUEEN. "GETTING ON CVS CALL. "ABOUT TO LEAVE. CONGRESS UNANIMOUS VOTE IN FAVOR. "UNANIMOUS VOTE IN FAVOR OF YOU BABY. "TAKING OFF TO COME HOME. "OK." IS THIS ANOTHER EXAMPLE OF MR. BALWANI BEING LOVING AND SUPPORTING OF YOU?
MR. LEACH: AND WOULD YOU AGREE WITH ME THAT THERE ARE MANY TIMES IN THESE TEXT MESSAGES WHERE YOU ARE LOVING AND SUPPORTIVE TO HIM?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: LET ME PLEASE DRAW YOUR ATTENTION TO PAGE 208.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: PERMISSION TO DISPLAY, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: IS THIS A STRING OF MESSAGES, MS. HOLMES, FROM THE MAY 2015 TIME PERIOD?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND I THINK YOU MAY HAVE TALKED A LITTLE BIT WITH MR. DOWNEY ABOUT SOME OF THIS, BUT DO YOU SEE WHERE IT SAYS UP AT THE TOP, "BEING YOUR MADIBA MATTERS MORE THAN ANYTHING TO ME"?
MR. LEACH: AND FURTHER DOWN YOU WROTE -- DO YOU SEE THE MESSAGE RELATING TO "WHAT AN AMAZING GIFT TO MEET A MAN I FALL MADLY IN LOVE WITH"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S YOU EXPRESSING LOVE AND AFFECTION TO MR. BALWANI?
MR. LEACH: FURTHER DOWN THERE'S A MESSAGE, "DID YOU GET MY TEXT A WHILE AGO ABOUT FALLING IN LOVE W YOU?" DO YOU SEE THAT?
MR. LEACH: AND HE WRITES BACK TO YOU ABOUT HIS KIND WORDS OF AFFECTION FOR YOU. IS THAT FAIR?
MR. LEACH: WOULD YOU AGREE WITH ME THAT THERE ARE MANY OTHER EXAMPLES WITHIN 5387 OF YOU EXPRESSING LOVE AND AFFECTION TO MR. BALWANI?
ELIZABETH A. HOLMES: I'M SURE THERE ARE.
MR. LEACH: OKAY. DO YOU KNOW HOW MANY TIMES THE WORD "LOVE" APPEARS IN 5387?
MR. LEACH: WOULD IT SURPRISE YOU TO LEARN THAT THE WORD "LOVE" APPEARS MORE THAN 594 TIMES?
MR. LEACH: HAVE YOU EVER TRIED TO COUNT THEM UP?
MR. LEACH: ANY REASON TO DOUBT THAT IT'S IN THE 500'S?
MR. LEACH: OKAY. WOULD IT SURPRISE YOU TO LEARN THAT THE WORD "LOVING" IS IN THERE 105 TIMES?
MR. LEACH: IS IT FAIR TO SAY THAT YOU AND MR. BALWANI HAD A SPIRITUAL CONNECTION?
ELIZABETH A. HOLMES: I THOUGHT WE DID.
MR. LEACH: YOU BELIEVED THAT AT THE TIME?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. CAN I ASK YOU, PLEASE, TO LOOK AT PAGE 11 TO 12 OF 5387. DO YOU HAVE THAT IN FRONT OF YOU, MS. HOLMES?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: DOWN AT THE BOTTOM DO YOU SAY -- AND IS THIS A SKYPE EXCHANGE FROM THE 2011 TIME PERIOD?
MR. LEACH: AND DO YOU SEE WHERE IT SAYS, "THRU SKYPE WE R TOGETHER. CAN'T BE APART FROM U FOR EVEN FEW HOURS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S SOMETHING THAT MR. BALWANI WROTE?
MR. LEACH: YOU REPLY WITH AMAZEMENT AND THEN MR. BALWANI SAYS, "ULTIMATE BLESSINGS." DO YOU SEE THOSE WORDS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THIS A SPIRITUAL CONNECTION THAT YOU FELT WITH MR. BALWANI AT THE TIME?
ELIZABETH A. HOLMES: I THINK THE SPIRITUAL CONNECTION WAS MORE BELIEVING THAT GOD HAD PUT HIM IN MY LIFE AT A TIME THAT IT REALLY MATTERED.
MR. LEACH: YOU AND MR. BALWANI WERE ROMANTICALLY INVOLVED FOR MORE THAN TEN YEARS?
MR. LEACH: AND YOUR RELATIONSHIP WAS ON AND OFF TO THE TIME PERIOD PRIOR TO HIM JOINING THE COMPANY AND THEN AFTER HE JOINED THE COMPANY?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: ON AND OFF DURING BOTH OF THOSE PERIODS OF TIME?
MR. LEACH: AND YOU LIVED TOGETHER FROM 2005 TO 2016?
MR. LEACH: AND THE ROMANTIC RELATIONSHIP DIED BEFORE HE LEFT THE COMPANY?
MR. LEACH: AND YOU ENDED THE RELATIONSHIP WITH MR. BALWANI?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU MADE THAT CHOICE?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: HOW DID IT END?
ELIZABETH A. HOLMES: WHAT PART?
MR. LEACH: THE ROMANTIC RELATIONSHIP?
ELIZABETH A. HOLMES: COULD YOU TELL ME WHAT YOU WOULD LIKE ME TO TALK ABOUT?
MR. LEACH: I'M ASKING A QUESTION. HOW DID THE ROMANTIC RELATIONSHIP END?
ELIZABETH A. HOLMES: UM, I THINK WHEN I STARTED TO REALIZE THAT THIS PERSON THAT I HAD BELIEVED IN MORE THAN ANYTHING WASN'T WHO HE WAS TO ME, THEN NOTHING WAS REAL ANYMORE. MY WHOLE FOUNDATION FOR LIFE, WHAT I BELIEVED IN, THE DEVOTION TO THE COMPANY WAS BASED ON BELIEVING THAT HE WAS THIS PERSON THAT HE HAD CONVEYED HIMSELF TO BE TO ME, AND WHEN I STARTED TO REALIZE THAT, THEN I REALIZED THAT NOT ONLY WAS HE NOT THE PERSON WHO HE SAID HE WAS TO ME PERSONALLY, BUT ALSO THAT THERE WAS NO WAY I COULD SAVE OUR COMPANY IF HE WAS THERE. AND SO THAT WAS IT.
MR. LEACH: I APPRECIATE THAT ANSWER, MS. HOLMES. YOU, YOU KNOW YOU'VE BEEN ASKED THAT QUESTION BEFORE, HOW DID THE RELATIONSHIP END; IS THAT CORRECT?
ELIZABETH A. HOLMES: I'M SURE I HAVE.
MR. LEACH: WOULD YOU PLEASE LOOK AT YOUR RED BINDER?
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: IF I COULD DRAW YOUR ATTENTION TO THE BATES NUMBER ENDING 5567.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: EXCUSE ME. 55 -- PAGE 5568, PAGE 853?
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: YOUR HONOR, I SEEK PERMISSION TO READ FROM LINE 13 THROUGH LINE 1 ON 854.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, WERE YOU ASKED THE FOLLOWING QUESTION AND DID YOU GIVE THE FOLLOWING ANSWER: "QUESTION: HOW DID IT END? "ANSWER: THE PERSONAL RELATIONSHIP? "QUESTION: YES. "ANSWER: YOU KNOW, I THINK WHEN HE JOINED THE COMPANY IT WAS -- WE HAD SPENT I THINK IT WAS FOUR OR FIVE YEARS TOGETHER BY THAT POINT AND REALLY UNDERSTOOD THAT OUR CONNECTION WAS ABOUT TRYING TO CREATE AND WORK TOGETHER. IT WASN'T REALLY ABOUT THE ROMANTIC PART. "AND ONCE WE STARTED WORKING TOGETHER, IT WAS A VERY INTENSE WORKING RELATIONSHIP. AND THERE -- THE ROMANTIC PIECE THAT WAS THERE AT THE VERY BEGINNING DIED. "I DIDN'T THINK IT HAPPENED IN ONE MOMENT, BUT IT WAS VERY CLEAR THAT WE WERE COLLEAGUES." WAS THAT YOUR TESTIMONY BEFORE THE S.E.C.?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND WHEN YOU TESTIFIED ABOUT YOUR ROMANTIC RELATIONSHIP WITH MR. BALWANI, AM I RIGHT YOU DIDN'T MENTION THE CMS INSPECTION?
ELIZABETH A. HOLMES: I THINK THIS IS TALKING ABOUT WHEN HE JOINED THE COMPANY, WHAT WAS THE TERMINATION OF THE ROMANTIC RELATIONSHIP AT THAT POINT.
MR. LEACH: YOU WERE ASKED A NUMBER OF QUESTIONS ABOUT THE PERSONAL RELATIONSHIP, AND YOU DID NOT MENTION CMS; IS THAT FAIR?
ELIZABETH A. HOLMES: I DON'T THINK SO. I HAVEN'T RE-READ MY TESTIMONY, BUT I DON'T THINK SO.
MR. LEACH: YOU'RE SAYING THAT YOU HAVEN'T RE-READ YOUR TESTIMONY IN PREPARING FOR TODAY?
ELIZABETH A. HOLMES: I'VE LOOKED AT PORTIONS OF IT, BUT I HAVE NOT READ ALL OF MY TESTIMONY.
MR. LEACH: OKAY. BUT SITTING HERE TODAY, YOU DON'T HAVE A MEMORY OF TELLING THE S.E.C. THAT CMS HAD SOMETHING TO DO WITH THE END OF THE RELATIONSHIP?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: WHEN YOU BROKE OFF THE RELATIONSHIP IN 2016, YOU WERE NOT SEEING ANY MENTAL HEALTH PROFESSIONALS; IS THAT RIGHT?
ELIZABETH A. HOLMES: I WAS NOT.
MR. LEACH: OKAY. YOU WEREN'T SEEING A PSYCHOLOGIST?
MR. LEACH: YOU WEREN'T SEEING A PSYCHIATRIST?
MR. LEACH: WHATEVER WAS KEEPING YOU AND MR. BALWANI TOGETHER, YOU WERE ABLE TO MAKE A BREAK IN 2016?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND IS IT TRUE THAT MR. BALWANI DID NOT CONCEAL FROM YOU THE REALITY OF WHAT WAS HAPPENING AT THERANOS?
ELIZABETH A. HOLMES: WHAT DO YOU MEAN BY THAT?
MR. LEACH: PROBLEMS IN THE LAB, ISSUES WITH WALGREENS, FRUSTRATIONS WITH THERANOS NOT HAVING A PRODUCT, HE DIDN'T CONCEAL THESE THINGS FROM YOU, DID HE?
ELIZABETH A. HOLMES: I DIDN'T THINK HE DID.
MR. LEACH: WELL, LET'S LOOK AT A DOCUMENT THAT YOUR ATTORNEY SHOWED YOU YESTERDAY. IF WE COULD GO TO EXHIBIT 7534. DO YOU HAVE THAT, MS. HOLMES? IT WAS IN YOUR, IN YOUR COUNSEL'S BINDER YESTERDAY.
ELIZABETH A. HOLMES: I DON'T HAVE THOSE ANYMORE.
JUDGE DAVILA: THAT WAS COLLECTED, I THINK.
JUDGE DAVILA: AND THIS IS IN EVIDENCE.
MR. LEACH: YEAH, PERHAPS WE CAN DISPLAY IT. AND IF WE CAN GO TO PAGE 3, PLEASE, MS. HOLLIMAN.
MR. LEACH: THIS IS A NOTE THAT YOU MADE TO YOURSELF IN THE APRIL 2015 TIME PERIOD, MS. HOLMES?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND YOU'RE TRYING TO RECOUNT A CONVERSATION THAT YOU HAD HAD WITH MR. BALWANI?
ELIZABETH A. HOLMES: I'M TAKING NOTES AS HE'S TALKING TO ME.
MR. LEACH: OKAY. INCLUDING STATEMENTS THAT HE'S MAKING TO YOU?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: OKAY. AND YOU WROTE, "CONVINCED NEVER HAPPEN EVER. NOT THANKSGIVING NOT EVER. PUT HIS DOLLARS ON IT." DO YOU SEE THAT LANGUAGE?
MR. LEACH: THOSE WERE WORDS THAT MR. BALWANI WAS EXPRESSING TO YOU IN THE APRIL 2015 TIME PERIOD?
MR. LEACH: AND THEN THERE'S A PARAGRAPH, "FOCUS. CLARITY. DIRECTION. COMMUNICATION. BRINGING EVERYONE TOGETHER AND EXECUTION. PLANS COME TO FRUITION. GC AND ELISA AND CBC." YOU RECOGNIZE GC AND ELISA AND CBC TO BE REFERENCE TO ASSAYS WITHIN THE LAB?
ELIZABETH A. HOLMES: I THINK HE'S TALKING ABOUT R&D HERE. BUT, YES, I RECOGNIZE THOSE THREE METHODS.
MR. LEACH: OKAY. THEN YOU SEE A REFERENCE TO A PRODUCT PERSON. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "KNOW HOW TO SHIP. BASIC THINGS. FLAWLESS. ENOUGH FOCUS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THEN IN THE NEXT PARAGRAPH, DO YOU SEE WHERE YOU WROTE, "NOT FOCUS ANY TIME ON NONCRITICAL PATH PLAN. NOT TAKING TANGENT. NOT TRY SOLVE EVERY PROBLEM UP FRONT BEFORE PROCEED. SOLVE ONCE DONE. PREPARING 3 YEARS NOT WORRIES ABT." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. THOSE ARE WORDS THAT MR. BALWANI SAID TO YOU?
MR. LEACH: AND THEN THERE'S A REFERENCE, "EAH GETTING PRODUCT DONE. SUNNY SW." IS THAT A REFERENCE TO SOFTWARE?
MR. LEACH: "RULE WORLD." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN THE WORD "COMMAND"?
MR. LEACH: AND THEN DOWN TOWARDS THE BOTTOM, DO YOU SEE WHERE HE WROTE -- OR YOU WROTE, "SO ANGRY AT MYSELF FOR COMING. SO ANGRY SPENT 5 YEARS OF MY LIFE. BIGGEST FAILURE OF MY LIFE. REGRET COMING. STAYED BECAUSE I LOVE YOU." THOSE ARE WORDS THAT MR. BALWANI SAID TO YOU?
MR. LEACH: "NO ONE TOLD RESPONSIBLE." AND THEN THERE'S AN EXPLETIVE, "MEDIOCRE QUALITY OF THIS," AND THERE'S A REFERENCE TO THE COMPANY; CORRECT?
MR. LEACH: AND THE COMPANY THERE IS THERANOS; RIGHT?
MR. LEACH: AND HE'S NOT HIDING FROM YOU HIS VIEWS OF THE COMPANY DURING THIS TIME PERIOD, IS HE?
ELIZABETH A. HOLMES: HE'S NOT.
MR. LEACH: HE'S BEING OPEN WITH YOU ABOUT PROBLEMS THAT HE'S SEEING?
ELIZABETH A. HOLMES: HE'S VERY ANGRY WITH ME BECAUSE HE FEELS LIKE I HAVE CREATED MEDIOCRITY.
MR. LEACH: AND HE'S TELLING YOU THAT?
MR. LEACH: HE'S TELLING YOU ABOUT PROBLEMS AT THERANOS?
ELIZABETH A. HOLMES: HE'S TELLING ME ABOUT PROBLEMS WITH ME.
MR. LEACH: DO YOU SEE THE REFERENCE TO "COMPANY" THERE?
MR. LEACH: OKAY. THAT'S NOT A REFERENCE TO YOU, THAT'S A REFERENCE TO THE COMPANY, ISN'T IT?
ELIZABETH A. HOLMES: THAT IS A REFERENCE TO THE COMPANY.
MR. LEACH: OKAY. IF WE CAN PLEASE DISPLAY WHAT IS IN EVIDENCE AT EXHIBIT 5387D, PAGE 58 AND 59. MS. HOLMES, DO YOU SEE THE DATE OF THESE TEXT MESSAGES FROM APRIL 28TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. SO THIS IS AFTER THE EXHIBIT THAT WE JUST LOOKED AT WHERE MR. BALWANI IS DESCRIBING HIS VIEW OF THE COMPANY IN THE APRIL 2015 TIME PERIOD?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND HE WROTE TO YOU, "IT IS MOST MADDENING THERE IS NO FOCUS IN ANY CHEM TEAMS AND NO PRODUCT COMING OUT." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE BACK, "I KNOW;" CORRECT?
MR. LEACH: AND YOU REPLIED, "LEADERSHIP;" CORRECT?
MR. LEACH: AND THE REFERENCE TO "NO PRODUCT COMING OUT," THAT'S A REFERENCE TO THE MINILAB OR THE TSPU?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. HE'S NOT HIDING HIS VIEW OF THAT FROM YOU HERE, IS HE?
ELIZABETH A. HOLMES: I THINK -- I'M NOT SURE IF IT'S A REFERENCE TO THE MINILAB. NO, HE'S NOT HIDING HIS VIEW.
MR. LEACH: COULD WE PLEASE LOOK AT PAGE 77 TO 78. AND WE LOOKED A LITTLE BIT AT THIS EARLIER. DO YOU SEE WHERE YOU WROTE "WHO DO U THINK. "NOW WE HAVE LEGAL GROUNDS." THIS IS IN THE MAY 2015 TIME PERIOD?
MR. LEACH: THIS IS A REFERENCE TO YOUR EFFORT TO FIND OUT WHO'S ONE OF MR. CARREYROU'S RESOURCES?
ELIZABETH A. HOLMES: I'M NOT SURE ABOUT THAT.
MR. LEACH: IS THIS ROUGHLY IN THAT TIME PERIOD?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: IF WE COULD GO DOWN, PLEASE, MS. HOLLIMAN. AND DO YOU SEE MORE REFERENCES TO TYLER AND ERIKA AND ADAM?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. HE'S GIVING YOU HIS VIEWS ABOUT WHO MIGHT BE BEHIND THE CARREYROU ARTICLE?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: OKAY. AND IF WE CAN GO DOWN FURTHER, PLEASE. DO YOU SEE WHERE HE WROTE, "YEAH. AND WE WILL ALSO TAKE LEGAL ACTION ONCE THIS IS BEHIND US. VIOLATING TRADE SECRETS IS NOT OK." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. LET'S CONTINUE TO PAGE 78. ZOOM IN ON THE TOP. DO YOU SEE WHERE MR. BALWANI WROTE, "SECONDLY. WE NEED A BETTER STRATEGY FOR NORMANDY. FOR A LONG TIME TO COME WE WILL HAVE HYBRID SOLUTIONS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND YOU KNEW NORMANDY WAS THE PORTION OF THE CALIFORNIA CLIA LAB WHERE THERANOS PERFORMED ITS LDT'S?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: THE TESTS ON THE MODIFIED DEVICE, THE TEST ON THE SIEMENS DEVICE?
MR. LEACH: AND MR. BALWANI IS TELLING YOU HERE THAT YOU'RE GOING TO HAVE HYBRID SOLUTIONS FOR A LONG TIME TO COME?
MR. LEACH: MEANING YOU'RE NOT GOING TO BE ABLE TO RUN TESTS JUST ON THE MINILAB, YOU'RE GOING TO HAVE A NUMBER OF DIFFERENT SOLUTIONS FOR A LONG PERIOD OF TIME?
ELIZABETH A. HOLMES: I THINK HE'S SAYING THAT WE SHOULD HAVE THOSE SOLUTIONS FOR A LONG PERIOD OF TIME.
MR. LEACH: HE'S SAYING YOU WILL HAVE THESE HYBRID SOLUTIONS, NOT --
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: -- NOT ONE DEVICE THAT YOU WERE TRYING TO DO IN PHASE II?
ELIZABETH A. HOLMES: RIGHT.
MR. LEACH: OKAY. AND HE'S SAYING THAT IS GOING TO TAKE A LONG TIME?
ELIZABETH A. HOLMES: NO. HE'S SAYING THAT FOR A LONG TIME WE'RE GOING TO BE DOING THIS TESTING ON THESE MODIFIED TYPE INVENTIONS IN THE CLIA LAB.
MR. LEACH: I THINK WE'RE SAYING THE SAME THING.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: BUT YOU AGREE WITH ME HE'S BEING OPEN ABOUT THAT HERE?
MR. LEACH: HE'S TELLING THAT TO YOU?
MR. LEACH: HE'S NOT DECEIVING YOU ABOUT THAT?
MR. LEACH: FURTHER DOWN YOU WROTE, "MOST LIKELY 2 PLUS WE NEED TO SUE FOR DEFAMATION." YOU WROTE, "I MEANT NORMANDY." AND THEN "I AGREE." AM I RIGHT YOU BOTH HERE ARE TALKING ABOUT THE HYBRID SOLUTIONS THAT ARE GOING TO BE THERE FOR A LONG TIME TO COME AND THE EFFORT TO FIND OUT WHO IS BEHIND THE CARREYROU ARTICLE?
ELIZABETH A. HOLMES: I'M NOT SURE I UNDERSTOOD THOSE PORTIONS OF THE PRIOR TEXT. I DON'T KNOW IF I FOLLOW THIS EXACTLY.
MR. LEACH: WELL, YOU UNDERSTAND "I MEANT NORMANDY" TO BE A REFERENCE TO THE CALIFORNIA CLIA LAB?
MR. LEACH: OKAY. LET'S LOOK AT PAGE 54. DO YOU SEE THE TEXT, "PETER (ONE OF THESE 2 GUYS) MET WITH RON CONWAY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IT GOES ON TO SAY "RON COMMENTED THAT THERE IS TOO MUCH HYPE AROUND THERANOS AND YOU." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: MR. BALWANI IS COMMUNICATING THIS TO YOU?
MR. LEACH: HE'S NOT HIDING IT FROM YOU?
MR. LEACH: "I AM WORRIED ABOUT OVER EXPOSURE WITHOUT SOLID SUBSTANCE WHICH IS LACKING RIGHT NOW. WE CAN TALK TOMORROW ABOUT OVER EXPOSURE." DO YOU SEE THAT LANGUAGE?
MR. LEACH: HE'S NOT HIDING FROM YOU HIS VIEW THAT HE THOUGHT THERANOS WAS OVER EXPOSURE WITHOUT SOLID SUBSTANCE?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: IF WE COULD SCROLL DOWN A LITTLE BIT MORE, MS. HOLLIMAN. YOU WROTE BACK AT 7:54, "THAT MEDIA IS WHY WE'RE GETTING AMERICARE." DO YOU SEE THAT?
MR. LEACH: AND YOU'RE SAYING THE MEDIA EXPOSURE IS A REASON WHY THERANOS MIGHT HAVE POTENTIAL BUSINESS?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: OKAY. YOU AREN'T TALKING ABOUT POTENTIAL UPSIDE OF THE MEDIA STRATEGY THAT YOU AND MR. BALWANI DISAGREED ON?
ELIZABETH A. HOLMES: I COULD BE. I'M JUST NOT SURE WHAT THIS IS REFERRING TO.
MR. LEACH: SITTING HERE TODAY, YOU DON'T HAVE AN EXPLANATION OTHER THAN THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: FURTHER DOWN MR. BALWANI WROTE, "WE NEED FDA CLEARANCE AND CTN CLEARANCE B." DO YOU SEE THAT?
MR. LEACH: CTN IS A REFERENCE TO THE NANOTAINER?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THE COLLECTION -- OR WHERE THE BLOOD WAS STORED FOR USE IN EDISONS OR MINILABS?
MR. LEACH: OKAY. AND HE'S NOT HIDING FROM YOU HIS VIEW, "WE NEED FDA CLEARANCE AND CTN CLEARANCE" HERE, IS HE?
ELIZABETH A. HOLMES: HE'S NOT.
MR. LEACH: LET'S LOOK AT PAGE 56 TO 57. DO YOU SEE WHERE IT SAYS, "PHENOMENAL CRAMER STORY"?
MR. LEACH: OKAY. YOU WERE ON "MAD MONEY" AND THE JIM CRAMER SHOW SOME TIME BEFORE OCTOBER OF 2015 AND YOU WERE REFERENCING A CONVERSATION YOU HAD WITH MR. CRAMER?
ELIZABETH A. HOLMES: I'M NOT SURE IT WAS WITH MR. CRAMER, BUT IT WAS A STORY THAT I HEARD WHEN I WAS AT THAT INTERVIEW.
MR. LEACH: OKAY. AND IF WE COULD SCROLL DOWN, PLEASE, MS. HOLLIMAN. DO YOU SEE WHERE MR. BALWANI WROTE, "YOU WERE FLAWLESS IN MAD MONEY. JUST PERFECT. "IF I WAS COMPETING WITH YOU I WOULD BE SCARED." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN RIGHT AFTER HE WRITES, "GOT TO GET MORE ASSAYS ON FINGERSTICK." DO YOU SEE THAT?
MR. LEACH: AND HE'S EXPRESSING A VIEW THAT THERANOS NEEDS TO BUMP UP THE NUMBER OF SMALL SAMPLE TESTING THAT IT'S DOING IN ITS CLIA LAB?
MR. LEACH: HE'S NOT HIDING FROM YOU THE NEED TO DO THAT, IS HE?
MR. LEACH: HE THEN SAYS, "YOU CAME ACROSS AS A PURE STATESMAN." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU REPLIED, "LOVED SEEING THIS SO MUCH. "EXACTLY. "THAT IS OUR KEY POINT NOW." IS THAT WHAT YOU WROTE?
MR. LEACH: LET'S LOOK AT PAGE 42 TO 44. DO YOU SEE WHERE MR. BALWANI WROTE, "WHEN WE LAUNCH IN NY WE CAN LAUNCH WITH CVS AND GIVE THEM ONCE WE HAVE 50 E DONE, WE WILL BE INVINCIBLE." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND WHAT IS 50 E?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: OKAY. AND IN THIS TIME PERIOD, ARE YOU HAVING DISCUSSIONS WITH CVS ABOUT A POTENTIAL BUSINESS RELATIONSHIP?
ELIZABETH A. HOLMES: I'M NOT SURE. I -- I'M NOT SURE.
MR. LEACH: OKAY. YOU RECALL AT SOME POINT HAVING A CONVERSATION WITH CVS ABOUT A POTENTIAL RELATIONSHIP?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: OKAY. AFTER YOU HAD A DEAL WITH WALGREENS?
ELIZABETH A. HOLMES: AND BEFORE.
MR. LEACH: AND AS THE WALGREENS RELATIONSHIP WAS -- I'LL USE MY WORD -- SLOWING IN 2014, YOU STARTED TO TURN TO CVS IN ORDER TO STRIKE UP A BUSINESS RELATIONSHIP WITH THEM; ISN'T THAT RIGHT?
MR. LEACH: YOU DIDN'T HAVE CONVERSATIONS WITH CVS IN THE 2015 TIME PERIOD?
ELIZABETH A. HOLMES: WE PROBABLY DID. WE HAD CONVERSATIONS WITH THEM FROM THE DAY WE MET THEM ALL OF THE WAY THROUGH TO THE DAY WE SHUT DOWN OUR LAB.
MR. LEACH: EVEN AS YOU'RE WORKING ON HYBRID SOLUTIONS WITHIN THE CLIA LAB, YOU WERE TRYING TO INDUCE CMS -- CVS INTO SOME TYPE OF BUSINESS ARRANGEMENT?
MR. LEACH: IF WE COULD SCROLL DOWN, PLEASE, TO THE BOTTOM PORTION, MS. HOLLIMAN. DO YOU SEE AT THE BOTTOM WHERE IT SAYS, "THE POINT ABOUT NARROWING DOWN MENU TO HIT HIGH FS PERCENTAGE CAME LIKE A GIFT FROM GOD"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S MR. BALWANI EXPRESSING TO YOU HIS IDEA TO INCREASE THE FINGERSTICK PERCENTAGE AT WALGREENS STORES?
MR. LEACH: AND HE'S NOT HIDING FROM YOU HIS IDEAS ABOUT HOW TO DO THAT, IS HE?
MR. LEACH: HE'S BEING OPEN WITH YOU ABOUT IDEAS ON HOW TO INCREASE THE FINGERSTICK PERCENTAGE AT WALGREENS?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: HE'S TALKING OPENLY ABOUT THIS ISSUE IN THE 2015 TIME PERIOD WITH YOU?
MR. LEACH: LET'S GO ON TO THE NEXT PAGE, PLEASE. DO YOU SEE WHERE HE WROTE, "I WAS MEDITATING ON THIS MEETING ALL NIGHT AND ALL DAY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU REPLIED TO HIM, "YOU NAILED IT"?
MR. LEACH: AND MR. BALWANI SAYS, "WE MUST HIT OUR VOLUME GOALS NOW. "WE NEED TO MAKE IT A MATTER OF LIFE AND DEATH. "SURVIVAL. WE MUST NOT LOSE." THAT'S WHAT MR. BALWANI WROTE?
MR. LEACH: LET'S LOOK AT PAGE 44, PLEASE. AND IF WE CAN ZOOM IN ON THE SUBSTANCE, MS. HOLLIMAN. DO YOU SEE THE FIRST TEXT ON APRIL 11TH, 2015, "I HAVE EXTREME CLARITY ON HOW WE WILL WIN AGAINST QUEST AND LABCORP"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN HE WROTE, "EXTREME HARD WORK BUT NO SHORTCUTS ON THIS ONE ANYWAY"?
MR. LEACH: "FOR NEXT 3 YEARS 2015-16-17 DO ONLY CALIFORNIA NY AZ AND CENTRAL PEN." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S LIMITING THE NATIONAL ROLLOUT OR THE NATIONAL AMBITIONS THAT YOU HAD, AT LEAST WITH WALGREENS, IN THE 2015 TIME PERIOD?
ELIZABETH A. HOLMES: THAT WOULD HAVE.
MR. LEACH: AND YOU WROTE, "I SO AGREE." IS THAT CORRECT?
MR. LEACH: "CAN'T WAIT TO DISCUSS." IS THAT WHAT YOU WROTE?
MR. LEACH: "HAVE A LOT OF IDEAS ON THAT BTW FROM THESE LAST COUPLE DAYS." AND THEN YOU WROTE "EXACTLY." AND THEN MR. BALWANI WROTE, "BUILD INCREDIBLE SOFTWARE." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND WHAT IS THE NEXT ACRONYM?
MR. LEACH: WHAT IS D2C?
ELIZABETH A. HOLMES: DIRECT TO CONSUMER.
MR. LEACH: "SOCRATES." WHAT IS THAT A REFERENCE TO?
ELIZABETH A. HOLMES: IT'S A PIECE OF SOFTWARE THAT WE BUILT THAT DID DECISION SUPPORT FOR PEOPLE TO BE ABLE TO UNDERSTAND THEIR LAB DATA.
MR. LEACH: AND THEN HE WROTE, "100 TO 200 FINGERSTICKS ON 4.1." IS THAT A REFERENCE TO THE MINILAB AND THE 4 SERIES?
MR. LEACH: "AND CAPTURE 100 PERCENT CA AND MY." DO YOU THINK THAT'S NY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE'S BEING OPEN ABOUT HIS PLANS AND HIS IDEAS HERE, IS HE NOT?
ELIZABETH A. HOLMES: YES. I WOULDN'T CALL THIS A PLAN, BUT THIS IDEA, YES.
MR. LEACH: OKAY. HE'S COMMUNICATING WITH YOU OPENLY ABOUT IDEAS AND POSSIBILITIES AND WAYS TO MOVE THE BUSINESS?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: OKAY. LET'S LOOK AT PAGES 46 AND 48. IS THIS ANOTHER EXCHANGE BETWEEN YOU AND MR. BALWANI IN LATE APRIL 2015?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: YOU WROTE, "WE NEED TO DECIDE AND THEN OPERATIONALIZE THE STRATEGY WE WERE TALKING ABOUT REWORKING WITH MANY." WHO IS THE MANY?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: MR. BALWANI WROTE, "FS IS OUR COMPETITIVE ADVANTAGE AND PRICE TRANSPARENCY." FS, THAT'S A REFERENCE TO FINGERSTICK?
MR. LEACH: AND THEN FURTHER DOWN YOU WROTE, "AND GET FS LIVE NMW." WHAT IS NMW?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: ARE YOU EXPRESSING A NEED TO GET FINGERSTICK LIVE WITHIN THE CLIA LAB?
ELIZABETH A. HOLMES: YES. I'M NOT SURE IF THIS IS TALKING ABOUT THE CLIA LAB, BUT DEFINITELY GETTING FINGERSTICK LIVE.
MR. LEACH: OKAY. LET'S GO TO PAGE 48. DO YOU SEE WHERE YOU WROTE, "CAN WE TAKE FS LIE TOMORROW"? DID YOU MEAN LIVE?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND THEN MR. BALWANI RESPONDS QUESTION MARK. "U MEAN GC?" DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN MR. BALWANI RESPONDS "VERY RISKY. WE NEED MORE SOFTWARE TESTING." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU REPLY "YES"?
MR. LEACH: AND THEN MR. BALWANI WRITES, "CHECKING BUT VERY RISKY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. BALWANI IS TALKING OPENLY WITH YOU ABOUT RISKS HE SEES HERE WITH SOMETHING THAT YOU HAD PROPOSED?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: LET'S LOOK AT PAGES 87 TO 89 OF 5387D. DO YOU SEE WHERE MR. BALWANI ASKS THE QUESTION "BOARD MEETING OK?"
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOUR RESPONSE IS "WE'LL CATCH UP"?
MR. LEACH: AND DO YOU RECALL THAT THERE WAS A CONTENTIOUS BOARD MEETING IN JULY OF 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: LET'S LOOK AT THE NEXT PAGE, PLEASE. DO YOU SEE WHERE MR. BALWANI WROTE, "LOVE YOU. BE STRONG TODAY. MY ADVISE. DON'T TALK TO HEATHER ABOUT YESTERDAY MEETING. MAKE THIS SOMETHING ABOVE HER ROLE." DO YOU SEE THAT?
MR. LEACH: AND HEATHER THERE IS A REFERENCE TO HEATHER KING?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND THEN MR. BALWANI WROTE, "I WORKED FOR 6 YEARS DAY AND NIGHT TO HELP YOU. I AM SAD AT WHERE YOU AND I ARE. I THOUGHT IT WOULD BE BETTER. I KNOW U R ANGRY IN UR WAY. AND UPSET WITH ME FOR NOT DOING EVERYTHING YOU WANTED ME TO DO." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RESPOND WITH SOME QUESTION MARKS?
MR. LEACH: LATER ON YOU WROTE, "IT'S JUST HARD TO TRANSITION." DO YOU SEE THAT LANGUAGE?
MR. LEACH: AND MR. BALWANI REPLIES, "I AM RESPONSIBLE FOR EVERYTHING AT THERANOS. ALL HAVE BEEN MY DECISIONS TOO." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. HE'S SAYING YOUR DECISIONS ARE HIS DECISIONS, TOO.
ELIZABETH A. HOLMES: HE'S SAYING THAT ALL OF THE THERANOS DECISIONS WERE HIS DECISIONS TOO.
MR. LEACH: OKAY. AND THEY WERE YOUR DECISIONS TOO?
MR. LEACH: BECAUSE YOU'RE THE CEO?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: "BUT GETTING THROUGH YESTERDAY WILL MAKE IT EASIER TO DO SO NOW. "I WON'T TRANSITION UNTIL U R IN A PERFECT PLACE. U KNOW THAT." DO YOU SEE WHERE MR. BALWANI WROTE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IF WE CAN BLOW UP THE SECOND HALF OF THE PAGE, MS. HOLLIMAN. AND IF WE CAN GET -- CAN YOU JUST READ THIS TEXT EXCHANGE FOR US, MS. HOLMES?
ELIZABETH A. HOLMES: "NO SUCH THING... THAT WAS THE POINT WE TALKED ABOUT. "IT'S OK - JUST EMOTIONAL BUT AM READY. "AND I COMPLETELY GET IT. "ON THE CHALLENGES. "UNFORTUNATELY U DON'T AND BRAKES MY HEART TO SEE U LIKE THIS. "QUESTION MARK. "I AM NOT LEAVING UNTIL WE BREAK EVEN. WE WILL DO THIS TOGETHER AND I WILL BE BY YOURSELF UNTIL THEN. CAN'T LEAVE LIKE THIS. "U R WRONG THAT YESTERDAYS MEETING MAKES IT EASIER. IT DIDN'T. "FOR ME TO EMOTIONALLY HANDLE IT. "THE TRANSITION. "NO. U R UNDERESTIMATING. "I CAN LEAVE IT IF THAT GIVES U EMOTIONAL PEACE BUT YOU KNOW WE HAVE TO SACRIFICE."
MR. LEACH: MR. BALWANI IS TELLING YOU HERE YOU ARE UNDERESTIMATING; IS THAT RIGHT?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: LET'S ZOOM OUT. AND IF WE CAN GO TO THE NEXT PAGE. DO YOU SEE WHERE HE WROTE, "AND YES. I DO DISLIKE THE DIRECTION U HAVE TAKEN WITH ALL THIS PR AND ALL LEGAL WORK AND A LOT OF OTHER THINGS BUT HOPEFULLY WE CAN TALK AND FIND PERFECT FOCUS AND PERFECT PLAN AND EXECUTE HEADS DOWN AND BUILD PRODUCT AND BREAK EVEN. "I CAN LEAVE THEN." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE'S REFERRING TO HIS DISLIKE FOR THE DIRECTION THAT YOU TOOK ON PR AND LEGAL MATTERS; IS HE NOT?
ELIZABETH A. HOLMES: AND A LOT OF OTHER THINGS.
MR. LEACH: SO THE ANSWER TO MY QUESTION WAS YES?
MR. LEACH: OKAY. THANK YOU. HE THEN WRITES, "THINGS ARE DIFFERENT NOW. WE NEED TO GET THE BUSINESS TO BREAK EVEN AND THEN I WILL LEAVE. WE R DIFFERENT WHEN IT COMES TO BUSINESS. WE WILL BE HAPPIER THAT WAY. BUT FOR NOW, U AND I BOTH ARE ON THE SAME PAGE BECAUSE OF YESTERDAY THAT WE NEED TO BREAK EVEN." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN WHAT WAS YOUR REPLY?
ELIZABETH A. HOLMES: "I THOUGHT THE THING WAS IF WE DID THAT THEN YOU WOULDN'T WANT TO LEAVE."
MR. LEACH: AND THEN HE REPLIES, "STAY INTERNALLY FOCUSSED AND ONLY MEET WITH PEOPLE WHO HAVE DEALS IN HAND. THE PR STRATEGY IS WRONG AND I HAVE BEEN SAYING THAT. WE NEED TO GO ON OFFENSE AND NOT BE DEFENSIVE." IS THIS AGAIN MR. BALWANI DISAGREEING WITH YOU ABOUT THE PR STRATEGY THAT YOU WERE IMPLEMENTING?
MR. LEACH: LET'S GO TO THE NEXT PAGE, PLEASE. DO YOU SEE A SERIES OF TEXTS FROM JULY 28TH, 2015, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS ROUGHLY TWO WEEKS AFTER THE EXCHANGE THAT WE JUST LOOKED AT FOLLOWING THE CONTENTIOUS BOARD MEETING?
MR. LEACH: AND MR. BALWANI WROTE TO YOU, "WE NEED TO COMMIT TO EACH OTHER AND GET OUT OF THIS HELL SO WE CAN LIVE IN PARADISE WE BOTH HAVE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE BACK TO HIM, "I HAVE LITERALLY BEEN MEDITATING ON EXACT SAME. WHOLE TIME I WAS RUNNING WAS THINKING OF THAT." IS THAT WHAT YOU WROTE?
MR. LEACH: AND MR. BALWANI WROTE, "WE NEED TO COMMIT TO FOCUSSING AND GETTING IN PARADISE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "PRODUCT COMPANY. WINNING." THOSE WERE YOUR WORDS; RIGHT?
MR. LEACH: LET'S GO TO PAGE 8, PLEASE. IS IT ALSO THE CASE, MS. HOLMES, THAT MR. BALWANI SPEAKS OPENLY TO YOU ABOUT PROBLEMS HE'S SEEING IN THE CLIA LAB?
MR. LEACH: LET'S LOOK AT EXAMPLES OF THOSE. DO YOU SEE THIS TEXT EXCHANGE FROM MAY OF 2012?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE WHERE -- AND THIS 2012 TIME PERIOD, THIS IS BEFORE THERANOS IS DOING ANY LDT'S IN THE CLIA LAB; IS THAT FAIR?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: HE WROTE, "ARNE" -- THAT'S A REFERENCE TO DR. GELB?
MR. LEACH: -- "CALLED JUST NOW. FREAKING OUT BECAUSE DIANA" -- WHO IS DIANA?
ELIZABETH A. HOLMES: I'M NOT SURE. I'M JUST READING IT.
MR. LEACH: IS IT DIANA DUPUY?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: -- "CAUGHT AN ERROR BY HOAI (AND ARNE) AND SHE BROUGHT A HUNTER LAB CONFIDENTIAL SOP TO HIM TO TELL HIM WHY SHE WAS RIGHT. HE TOLD HER NEVER TO BRING ANY CONFIDENTIAL MATERIAL TO THE BUILDING AND WAS TELLING ME HE MADE A MISTAKE IN KEEPING HER." DO YOU SEE THAT MESSAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "HOWEVER, THE ISSUE SHE BROUGHT UP WAS A SERIOUS ONE." DO YOU SEE THAT LANGUAGE?
MR. LEACH: IS THIS AN EXAMPLE OF MR. BALWANI RAISING ISSUES THAT ARE GOING ON IN THE CLIA LAB WITH YOU?
MR. LEACH: SPEAKING OPENLY WITH YOU ABOUT THAT?
MR. LEACH: HE'S NOT HIDING ANYTHING FROM YOU HERE?
ELIZABETH A. HOLMES: HE'S NOT.
MR. LEACH: AND YOU UNDERSTOOD MR. BALWANI LARGELY CAME FROM A SOFTWARE BACKGROUND; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU KNEW HE WASN'T A PATHOLOGIST?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU KNEW HE WASN'T A MEDICAL DOCTOR?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. YOU KNEW HE HAD NO EXPERIENCE RUNNING A CLINICAL LAB; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU ADMIRED HIS BUSINESS ACUMEN FROM HIS SOFTWARE DAYS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: LET'S LOOK AT PAGES 14 TO 15, AND I DRAW YOUR ATTENTION TO THE FIRST TEXT. DO YOU SEE THE DATE NOVEMBER 20TH, 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THIS IS A FEW MONTHS AFTER THERANOS HAS ANNOUNCED ITS PARTNERSHIP WITH WALGREENS PUBLICLY?
MR. LEACH: OKAY. AND MR. BALWANI IS WRITING UP AT THE TOP, "BTW. WHEN WE DO THE PATCH, CHEM8 OR CHEM14 IS THE MOST IMPORTANT AND FIRST THING TO MONITOR." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN DOWN AT THE BOTTOM HE WROTE, "PISSING ME OFF WE DON'T HAVE ANYONE MANAGING PSC, CTN PRODUCTION, CART PRODUCTION, ELISA ASSAYS, TSH." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: WHAT IS PSC?
ELIZABETH A. HOLMES: I THINK IT'S THE PATIENT SERVICE CENTER, OR WELLNESS CENTERS.
MR. LEACH: AND CTN PRODUCTION, THAT'S A REFERENCE TO THE NANOTAINER PRODUCTION?
MR. LEACH: AND CART PRODUCTION, WHAT IS THAT?
ELIZABETH A. HOLMES: I'M ASSUMING IT'S CART PRODUCTION.
MR. LEACH: AND ELISA ASSAYS, THAT'S A REFERENCE TO THE IMMUNOASSAYS?
MR. LEACH: AND THE TSH, THAT'S A REFERENCE TO ONE OF THE ASSAYS?
ELIZABETH A. HOLMES: EXACTLY, YES.
MR. LEACH: AND MR. BALWANI IS EXPRESSING FRUSTRATION ABOUT THE LACK OF ANYONE MANAGING THESE ISSUES?
ELIZABETH A. HOLMES: YES, THAT'S WHAT HE'S SAYING.
MR. LEACH: HE'S SPEAKING OPENLY TO YOU ABOUT THAT?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: HE'S NOT HIDING ANYTHING FROM YOU HERE?
MR. LEACH: LET'S LOOK AT THE NEXT PAGE, PAGE 15. DO YOU SEE YOUR REPLY "I KNOW. "RECRUITING. "AND BETTER MANAGEMENT. "FULL TIME JOB."
MR. LEACH: YOU'RE CONCURRING WITH WHAT MR. BALWANI IS BRINGING TO YOUR ATTENTION HERE?
MR. LEACH: LET ME DRAW YOUR ATTENTION TO PAGES 23 THROUGH 25. DO YOU SEE THE DATE NOVEMBER 19TH, 2014, MS. HOLMES?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: AND THIS IS RIGHT AROUND THE TIME THAT DR. ROSENDORFF IS LEAVING THE COMPANY?
MR. LEACH: AND MR. BALWANI IS WRITING TO YOU, "NEED TO FOCUS ON OPS. GETTING HURT IN MARKET." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "CUSTOMER SERVICE SEEMS TO BE TERRIBLE. EVERYONE COMPLAINING." AND YOU WRITE BACK, "YES. "WE HAVE TO OWN THIS." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: "LAB, CUSTOMER SERVICE, TAT, ALL NEED DIRECTOR LEVEL PEOPLE." THAT'S WHAT MR. BALWANI CONVEYED TO YOU IN THIS NOVEMBER 2014 TIME PERIOD; CORRECT?
MR. LEACH: HE'S NOT HIDING THAT FROM YOU?
ELIZABETH A. HOLMES: HE'S NOT.
MR. LEACH: HE'S NOT CONCEALING THAT FROM YOU?
MR. LEACH: HE'S NOT MISLEADING YOU?
ELIZABETH A. HOLMES: HE'S DEFINITELY NOT HIDING ANYTHING FROM ME IN THIS TEXT.
MR. LEACH: OKAY. AND IF WE CAN SCROLL DOWN EVEN FURTHER, PLEASE. DO YOU SEE WHERE HE WROTE, "WE NEED. THE LAB AND CALL CENTER FIXED..." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "NEED PROFESSIONALS ACROSS THE BOARD. NEED PMS AND ALLISON OUT ASAP. "WASTE OF TIME IMP." AND THEN I THINK HE CORRECTS HIMSELF "IMO." IN MY OPINION?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: AND YOUR RESPONSE WAS "EXACTLY"?
MR. LEACH: HE WAS SPEAKING OPENLY WITH YOU ABOUT PROBLEMS?
MR. LEACH: AND YOU'RE AGREEING WITH HIM?
MR. LEACH: IF WE CAN GO DOWN FURTHER, PLEASE, TO PAGE 24. DO YOU SEE WHERE MR. BALWANI -- AND THESE MESSAGES ARE FROM NOVEMBER 19TH, 2014?
MR. LEACH: AND THIS IS ROUGHLY THE SAME TIME PERIOD IN THE CONTEXT OF THE MESSAGES THAT WE WERE JUST LOOKING AT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND HE WROTE TO YOU, "WE NEED CALL CENTER MANAGER, NEW CALL CENTER TEAM, GET RECURRENT CREW OUT OF DOCS FACING COMMUNICATIONS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE WROTE, "FUNDAMENTALLY WE NEED TO STOP FIGHTING FIRES BY NOT CREATING THEM." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOUR RESPONSE WAS, "YES"?
MR. LEACH: "CALL CENTER, TECH SUPPORT, EVERYTHING. "REBUILD. "NEW LAB DIRECTORS, LAB MANAGER LIKE TRACY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE NEXT TEXT, "18C." WHAT IS 18C A REFERENCE TO?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: BUT YOU KNOW THAT CTN IS THE NANOTAINER?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND TIP COATING, IS THAT A REFERENCE TO THE TIP IN THE EITHER TECAN OR THE EDISON DEVICE?
ELIZABETH A. HOLMES: IT'S THE TIP IN THE EDISON OR THE MINILAB DEVICE, YES.
MR. LEACH: AND YOU WROTE, "FUNDAMENTALLY, WE NEED TO STOP FIGHTING FIRES BY NOT CREATING THEM." DID I READ THAT CORRECTLY?
MR. LEACH: YOU WROTE, "NEED TO FIX ROOT CAUSE HERE"?
MR. LEACH: YOU'RE AGREEING WITH MR. BALWANI?
ELIZABETH A. HOLMES: I'M REPEATING BACK TO HIM WHAT HE SAID TO ME.
MR. LEACH: OKAY. WELL, YOUR WORDS ARE "YES" AND "EXACTLY." AM I RIGHT?
MR. LEACH: YOUR WORDS IN THE MOMENT?
MR. LEACH: LET'S LOOK AT PAGE 25, PLEASE. DO YOU SEE WHERE MR. BALWANI WROTE, "NEED CTN FIXED. OUR ROOT CAUSE OF ISSUES"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND CTN AGAIN IS A REFERENCE TO THE NANOTAINER?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. LET'S GO TO THE NEXT PAGE, PLEASE. SO, MS. HOLMES, THE DATE OF THESE EMAILS OR TEXTS ARE NOVEMBER 27TH, 2014, ROUGHLY TWO WEEKS FROM THE EXCHANGES THAT WE JUST LOOKED AT. AM I RIGHT ABOUT THAT?
ELIZABETH A. HOLMES: OKAY. YES.
MR. LEACH: AND IN THIS TIME PERIOD WHERE MR. BALWANI IS RAISING ISSUES ABOUT WHAT HE'S SEEING IN THE LAB IN THIS TIME PERIOD WHEN DR. ROSENDORFF IS LEAVING, YOU'RE ALSO RAISING MONEY; IS THAT CORRECT?
MR. LEACH: AND WE KNOW THAT BECAUSE YOU WRITE HERE, IN RESPONSE TO MR. BALWANI'S TEXT, "WE NEED TO LOCK ON A BILLION OR MORE NOW SO WE HAVE LEVERAGE OVER BOTH. AND TIME TO OPERATIONALIZE NORMANDY AND THEN DAY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN HE CORRECTS HIMSELF LATER AND SAID "DDAY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU HAD REFERENCED D DAY INTERNALLY AS WHEN THERANOS WOULD DO PHASE II?
MR. LEACH: AND MR. BALWANI IS SAYING THE BILLION DOLLARS OR MORE WOULD GIVE THEM TIME TO OPERATIONALIZE NORMANDY; CORRECT?
ELIZABETH A. HOLMES: UM, I THINK HE'S SAYING THAT WE ALSO NEED TIME TO OPERATIONALIZE NORMANDY.
MR. LEACH: OKAY. NORMANDY IS THE CLIA LAB WHERE YOU'RE DOING THE TESTING ON THE EDISON AND THE MODIFIED SIEMENS MACHINES?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: AND YOU REPLY, "DRIVING HOME. "AMAZING MEETING. "HE IS IN." IS THAT A REFERENCE TO RUPERT MURDOCH?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, LET'S LOOK AT THE NEXT PAGE. DO YOU SEE WHERE MR. BALWANI WROTE, "AWESOME. I KNEW ALREADY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE WHERE HE WROTE, "WE NEED LEVERAGE ALWAYS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE WHERE YOU WROTE, "RUPERT SAID SAME THING AS YOU AND I TALKED ABOUT ON SEPARATE R&D BUCKET"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DOES THIS REFRESH YOUR MEMORY THAT THE "HE IS IN" IS A REFERENCE TO RUPERT MURDOCH?
ELIZABETH A. HOLMES: IT DOESN'T.
MR. LEACH: YOU AGREE WITH ME THAT THIS IS ALL IN THE CONTEXT OF A TEXT EXCHANGE?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: LET'S LOOK AT PAGE 38, PLEASE. DO YOU SEE THAT THIS IS ANOTHER TEXT EXCHANGE BETWEEN YOU AND MR. BALWANI IN THE MARCH 2015 TIME PERIOD?
MR. LEACH: AND HE'S WRITING TO YOU, "I AM BLOCKING EVERYONE INVOLVED WITH DEVICE IN SOFTWARE ALL NEXT WEEK AND I WILL ONLY DO THIS ALSO. NOTHING ELSE. THIS IS THE ONLY WAY TO GET THIS DONE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. BALWANI IS NOT HIDING ANYTHING FROM YOU HERE, IS HE?
ELIZABETH A. HOLMES: I DON'T KNOW WHAT HE'S TALKING ABOUT.
MR. LEACH: OKAY. HE'S NOT CONCEALING WITH YOU THE NEED TO GET DEVICE AND SOFTWARE NEXT WEEK AND TO MAKE PROGRESS ON THE PRODUCT, IS HE?
MR. LEACH: OKAY. AND IF WE CAN GO BACK, PLEASE, MS. HOLLIMAN, TO PAGE 23. ONE MORE PAGE. ONE MORE PAGE, PLEASE. ONE MORE. ONE MORE. OKAY. ONE MORE, PLEASE. LET ME DRAW YOUR ATTENTION, PLEASE, TO THIS TEXT EXCHANGE FROM THE NOVEMBER 2013 TIME PERIOD, MS. HOLMES. DO YOU SEE WHERE YOU WROTE, "LET'S BUILD THE TRUE AMERICAN EMPIRE." OR EXCUSE ME, MR. BALWANI WROTE, "THEN LET'S BUILD THE TRUE AMERICAN EMPIRE. A MONOPOLY. OUR OBLIGATION TO U.S.A. "THAT'S WHAT WE'RE DOING."
MR. LEACH: AND THIS IS AN EXPRESSION FOR WHAT YOU WANTED TO DO WITH THERANOS?
MR. LEACH: ISN'T IT TRUE, MS. HOLMES, THAT YOU AND MR. BALWANI SPOKE OPENLY AT INSPECTIONS WITH GOVERNMENT REGULATORS ABOUT WHAT THEY WERE FINDING.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO PAGE 97 OF 387D. DO YOU SEE THE DATE OF THESE TEXT EXCHANGES IS AUGUST 28TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND YOU RECALL THAT THE FDA CONDUCTED AN INSPECTION OF THERANOS IN OR AROUND THAT TIME PERIOD?
MR. LEACH: THAT INSPECTION WAS UNEXPECTED?
MR. LEACH: THEY SHOWED UP UNANNOUNCED?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: THEY DIDN'T CALL BEFORE THEY CAME?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: THEY WERE THERE IN ARIZONA AND CALIFORNIA?
MR. LEACH: AND THEY WERE ASKING QUESTIONS ABOUT PRODUCTION OF THE NANOTAINER AND THE USE OF THE NANOTAINER IN CONNECTION WITH YOUR LDT'S?
ELIZABETH A. HOLMES: THEY WERE ASKING QUESTIONS ABOUT OUR QUALITY SYSTEM FOR THE NANOTAINER.
MR. LEACH: OKAY. AND WHILE THIS WAS GOING ON, YOU WERE TEXTING BACK AND FORTH TO MR. BALWANI ABOUT WHAT HE WAS LEARNING AND WHAT YOU WERE LEARNING?
MR. LEACH: YOU SPOKE OPENLY ABOUT THOSE THINGS?
MR. LEACH: HE DIDN'T HIDE FROM YOU WHAT THE FDA WAS SAYING TO HIM; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND YOU DIDN'T HIDE FROM HIM WHAT THE FDA WAS SAYING TO YOU?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: OKAY. UP AT THE TOP HE WROTE, "THEY ARE ASKING IF IN OUR IDEAL WORLD FOR CTN 510K IF WE USED OUR LDT." WHAT IS A 510K?
ELIZABETH A. HOLMES: AN FDA APPROVAL.
MR. LEACH: "LDT AS METHOD VERSUS PREDICATE WE WOULD LIKE THAT AND NOT HAVE TO DO WHAT THEY HAVE ASKED US TO DO (POOL 8 CTN'S AND RUN ON ADVIA INSTEAD OF JUST 1-2 CTN AND RUN ON CLIA AS LDT)." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU AND HE ARE SPEAKING OPENLY ABOUT WHAT THE FDA IS ASKING FOR AND WHAT THERANOS MIGHT BE ABLE TO PROVIDE?
MR. LEACH: GO TO THE TOP, MS. HOLLIMAN. IS THIS ANOTHER TEXT IN THE CONTEXT OF THE FDA CONVERSATION, MS. HOLMES?
MR. LEACH: LET'S LOOK AT THE NEXT PAGE, PLEASE. DO YOU SEE WHERE YOU WROTE, "WE ARE PREPARING FOR DAN TO CALL SOMEONE HE KNOWS AT THE TOP OF FDA BECAUSE HE KNOWS HIM. MAY RUFFLE FEATHERS BUT WE THINK HE WILL GET THAT 483 WILL BE BAD FOR FDA ARE ALSO DRAFTING EMAIL TO ALBERTO TO LET HIM KNOW WE'RE FOLLOWING UP WITH COUNSEL ON THIS (LEAVE DOOR OPEN FOR DAN)." THOSE ARE YOUR WORDS; CORRECT?
MR. LEACH: DAN IS A REFERENCE TO YOUR LAWYER?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: A LAWYER IN WASHINGTON, D.C. THAT YOU HIRED TO INTERACT WITH THE FDA?
MR. LEACH: OKAY. AND ALBERTO IS A REFERENCE TO ALBERTO GUTIERREZ?
MR. LEACH: HE'S A SENIOR OFFICIAL WITHIN THE FDA WHO HAD A HAND IN WHETHER THERANOS TECHNOLOGY WOULD BE FDA APPROVED?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND YOU'RE EXPRESSING A VIEW HERE THAT DAN CALLING AT THE TOP OF THE FDA MIGHT RUFFLE FEATHERS?
MR. LEACH: AND MR. BALWANI SAYS, "I THINK THIS IS NOW OUTRAGEOUS WHAT THEY ARE DOING." YOU WROTE BACK "AGREE." THOSE ARE YOUR WORDS?
MR. LEACH: AND THAT'S A REFERENCE TO THE FDA INSPECTION THAT IS GOING ON?
ELIZABETH A. HOLMES: I THINK IT'S A REFERENCE TO THE REGULATION OF LDT'S IN A WAY THAT WAS DIFFERENT THAN THE POLICY.
MR. LEACH: DIFFERENT FROM THE POLICY AS YOU UNDERSTOOD IT?
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: DOWN AT THE BOTTOM MR. BALWANI SAYS, "WE NEED TO CHANGE .COM PROVIDER SECTION. IT TALKS ABOUT MICRO SAMPLES AND REFLECT TESTING ON MICRO SAMPLES." AND YOU WROTE BACK WITH A QUESTION, "IS THAT FROM AUDIT?" DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THAT'S A REFERENCE TO THE ONGOING FDA INSPECTION?
MR. LEACH: OKAY. AND MR. BALWANI IS EXPRESSING CONCERN HERE THAT YOU MIGHT NEED TO CHANGE SOME OF THE LANGUAGE ON THE WEBSITE IN LIGHT OF WHAT IS GOING ON WITH THE FDA OR POSSIBLE CONCERNS ABOUT ITS ACCURACY?
ELIZABETH A. HOLMES: UM, HE SAYS HE'S JUST SAYING IT'S A DISASTER, IT'S NOT FROM THE FDA AUDIT.
MR. LEACH: OKAY. BUT HE'S NOT HIDING THAT FROM YOU HERE?
MR. LEACH: HE'S SPEAKING WITH YOU OPENLY ABOUT THAT?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: LET'S GO TO THE NEXT PAGE, PLEASE. DO YOU SEE WHERE YOU WROTE, "DANIEL INCLUDED ADVIA NUMBERS OF TESTS RUN SINCE 2013, BUT TECHNICALLY THOSE WERE THE DIFFERENT LDT'S THAN THE ADVIA ONES RUN NOW. LET ME KNOW YOUR THOUGHTS ON WHETHER YOU'D USE THE BIGGER NUMBER." DO YOU SEE THAT LANGUAGE?
MR. LEACH: THE DANIEL THERE WAS A REFERENCE TO DANIEL YOUNG?
MR. LEACH: HE WAS AIDING YOU IN GATHERING DOCUMENTS FOR THE FDA?
MR. LEACH: AND YOU'RE SPEAKING HERE OPENLY WITH MR. BALWANI ABOUT HOW TO RESPOND TO THE FDA?
MR. LEACH: LET'S GO TO THE NEXT PAGE, PLEASE. DO YOU SEE WHERE MR. BALWANI WROTE, "WE SHOULD DISCUSS TONIGHT TURNING CTN OFF"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THAT'S A REFERENCE TO THE NANOTAINER?
MR. LEACH: AND YOU HAD BEEN THINKING ABOUT DOING THAT, TOO?
ELIZABETH A. HOLMES: I SEE THAT.
MR. LEACH: DO YOU HAVE A MEMORY OF THAT?
MR. LEACH: OKAY. AND THE REASON YOU WANTED TO DO THAT WAS BECAUSE THE FDA WAS SUGGESTING TO YOU THAT THE CTN NEEDED TO BE FDA APPROVED; IS THAT CORRECT?
MR. LEACH: WHAT WAS YOUR UNDERSTANDING?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT WE WERE USING THE CTN AS PART OF OUR LDT CONSISTENT WITH THE FDA'S GUIDANCE ON LDT'S, AND THAT AS SUCH WE WOULD NOT NEED TO BE COMPLIANT WITH CERTAIN FDA QUALITY STANDARDS UNTIL WE GOT APPROVAL, AND WE GOT DIFFERENT GUIDANCE IN THIS INSPECTION.
MR. LEACH: AND I THINK WE'RE TALKING PAST EACH OTHER, BUT YOU'RE EXPRESSING NOW IN THE SEPTEMBER 2015 TIME PERIOD THE NEED TO STOP USING THE NANOTAINER BECAUSE OF FDA CONCERNS?
MR. LEACH: AND YOU ULTIMATELY DID THAT?
MR. LEACH: YOU ALSO SPOKE TO MR. BALWANI ABOUT WHAT WAS GOING ON DURING THE CMS INSPECTION; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION, PLEASE, TO 106. DO YOU SEE THE DATE OF SEPTEMBER 22ND, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE WHERE MR. BALWANI WROTE, "VERY HOSTILE SO FAR. THEY HAVE COMPLAINTS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S A REFERENCE TO THE CMS INSPECTORS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: "THEY SHOULD KNOW THE ENTIRE LAB INDUSTRY IS AND WILL BE SEEDING EVERYONE THEY CAN TO GET AT TO FILE COMPLAINTS." IS THAT HOW YOU RESPONDED?
MR. LEACH: AND THEN YOU WROTE, "I'M SURE TYLER IS ONE THEY PROB GOT FROM NY. ADAM IS THE OTHER." IS THAT A REFERENCE TO DR. ROSENDORFF?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. YOU KNEW ENOUGH IN THIS SEPTEMBER 2015 TIME PERIOD TO THINK THAT DR. ROSENDORFF WAS ONE OF MR. CARREYROU'S SOURCES AND A POSSIBLE REASON FOR THE CMS INSPECTION?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. "JC HIMSELF PLAYING LITERALLY OFF LAB COMMENTS IS LIKELY THE OTHER." JC IS A REFERENCE TO JOHN CARREYROU; CORRECT?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: AND THEN YOU WROTE HMFR; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THAT'S AN ACRONYM FOR A RELIGIOUS TERM THAT YOU WOULD YOU USE WITH MR. BALWANI?
ELIZABETH A. HOLMES: IT'S AN ACRONYM FOR A PRAYER, YES.
MR. LEACH: OKAY. EXPRESSING GRATITUDE TO GOD?
MR. LEACH: AND YOU WROTE, "PRAYING LITERALLY NONSTOP"?
MR. LEACH: AND THAT'S A REFERENCE TO THE CMS INSPECTION?
ELIZABETH A. HOLMES: YES. I DON'T KNOW THAT IT'S A REFERENCE TO THE CMS INSPECTION. IT'S SAYING THAT I'M PRAYING.
MR. LEACH: "DO YOU WANT ME TO STEP OUT OF FDA CALL? "NO." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: IN THIS TIME PERIOD, YOU WERE ALSO DEALING WITH THE FDA?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: OKAY. LET'S LOOK AT THE NEXT PAGE. DO YOU SEE WHERE MR. BALWANI WROTE, "OUR VALIDATION REPORTS ARE TERRIBLE. REALLY PAINFUL GOING THRU THIS PROCESS. SAME ISSUES FDA POINTED OUT." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE'S BEING OPEN WITH YOU ABOUT WHAT CMS IS FINDING IN THIS TIME PERIOD?
MR. LEACH: HE'S NOT HIDING ANYTHING FROM YOU HERE?
ELIZABETH A. HOLMES: NO. I'M NOT SURE IF THIS IS WHAT CMS IS FINDING OR WHAT HE'S SAYING TO ME.
MR. LEACH: OKAY. HE'S REPORTING TO YOU WHAT HE'S SEEING FROM CMS?
ELIZABETH A. HOLMES: I THINK HE'S REPORTING TO ME HIS OPINION.
MR. LEACH: OKAY. AND YOU TOLD US YESTERDAY THAT AT SOME POINT IN JANUARY OF 2016, YOU REALIZED THE GRAVITY OF THE CMS INSPECTION AND FORCED MR. BALWANI OUT?
ELIZABETH A. HOLMES: I REALIZED THE GRAVITY OF THE CMS INSPECTION IN JANUARY, OR AROUND JANUARY OF 2016, STARTING IN NOVEMBER OF 2015, AND MR. BALWANI LEFT THE COMPANY IN MAY.
MR. LEACH: OKAY. YOU PUSHED HIM OUT; ISN'T THAT FAIR?
ELIZABETH A. HOLMES: I ASKED HIM TO LEAVE, YES.
MR. LEACH: OKAY. YOU MADE THAT CHOICE TO GET HIM OUT OF THE COMPANY?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: IN 2016 AFTER GETTING THE CMS REPORT?
MR. LEACH: OKAY. AND MR. BALWANI IN THIS SEPTEMBER TIME PERIOD IS REPORTING TO YOU HIS OPINIONS ABOUT WHAT CMS IS FINDING HERE?
ELIZABETH A. HOLMES: HE IS.
MR. LEACH: OKAY.
ELIZABETH A. HOLMES: AGAIN, I DON'T KNOW THAT THIS IS WHAT CMS IS FINDING, BUT HE'S REPORTING TO ME HIS OPINIONS.
MR. LEACH: OKAY. LET'S GO DOWN, PLEASE. DO YOU SEE WHERE YOU WROTE, "WILL MAKE SURE ALL TEAMS ARE REVIEWING REPORTS. LET ME KNOW ANYTHING ELSE CAN DO TO SUPPORT." IS THAT A REFERENCE TO YOUR EXPRESSION OF WILLINGNESS TO BRING RESOURCES TO THE CMS INSPECTION?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND BALWANI, MR. BALWANI WRITES BACK, "GOING BAD SO FAR. PRAY. "DANIEL HAS NOTHING READY. "TOLD ME EVERYTHING IS IN THE BINDERS. "NOT THERE." AND WHAT WAS YOUR RESPONSE, MS. HOLMES?
ELIZABETH A. HOLMES: "PRAYING."
MR. LEACH: YOU THEN WROTE, "AT MY DESK. "TELL ME HOW I CAN HELP."
MR. LEACH: THE REFERENCE HERE IS TO THE CMS INSPECTION; CORRECT?
MR. LEACH: AND DOES THIS REFRESH YOUR RECOLLECTION THAT THE EARLY ONE IS IN RELATION TO THE CMS INSPECTION?
ELIZABETH A. HOLMES: IT DOESN'T.
MR. LEACH: OKAY. MR. BALWANI WAS ALSO OPEN WITH YOU ABOUT WHAT WAS HAPPENING WITH WALGREENS; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. LET'S LOOK AT SOME OF THAT. IF WE CAN GO TO PAGE 39. DO YOU SEE THE DATE OF APRIL 7TH, 2015, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU'RE WRITING TO MR. BALWANI, "DEEP CONCERN ABOUT SENSE WE'RE GETTING THAT TRYING TO MANIPULATE TO FAIL. CAN ASSURE NOT THE CASE. FIX STORES SUCCEED. THERANOS OFFERED PAY." YOU'RE TALKING ABOUT A CONVERSATION RELATING TO WALGREENS HERE, AREN'T YOU?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: DID YOU HAVE STORES IN ANY OTHER PLACE IN APRIL OF 2015?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: OKAY. "ANYTIME ASK DON'T RESPOND. SIGNAGE. LOGOS. CAN'T FIND. CONFUSE HCC." YOU DIDN'T HAVE SIGNAGE AND LOGOS ANYWHERE ELSE OTHER THAN WALGREENS STORES, DID YOU?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: "TEAM NOT MAKING ANY PROGRESS. DELIBERATE FAIL. NOT -- DON'T NEED EXCLUSIVITY AZ. "CAN'T SPEND DOLLARS ON MARKETING DON'T BUILD OUTRIGHT. PATIENTS COMPLAIN." DO YOU SEE THAT?
MR. LEACH: DOES THIS REFRESH YOUR RECOLLECTION THAT YOU'RE TALKING ABOUT WALGREENS HERE WITH MR. BALWANI?
MR. LEACH: LET'S LOOK AT THE NEXT PAGE, PLEASE. DO YOU SEE THE DATE OF APRIL 9TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. BALWANI WRITES, "GOING THRU CVS CONTRACT. WE CAN'T WORK WITH WAG OR CVS. BOTH ARE SAME." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE'S BEING OPEN WITH YOU ABOUT HIS VIEWS OF WHAT IS POSSIBLE WITH WALGREENS, ISN'T HE?
ELIZABETH A. HOLMES: I THINK HE'S EXPRESSING HIS FRUSTRATIONS WITH WALGREENS AND CVS.
MR. LEACH: OKAY. BUT HE'S NOT HIDING THAT FROM YOU HERE, IS HE?
MR. LEACH: HE'S NOT CONCEALING FROM YOU WHAT IS GOING ON WITH WALGREENS?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. LET ME NEXT DRAW YOUR ATTENTION TO EXHIBIT 5653.
ELIZABETH A. HOLMES: I DON'T THINK I HAVE THAT ONE.
MR. LEACH: MAY I HAVE A MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: IS THIS IN VOLUME 2 OF YOUR BINDERS?
MR. LEACH: IT IS, YOUR HONOR, BUT I'M NOT PREPARED TO USE THE REMAINDER OF THE DOCUMENTS.
(PAUSE IN PROCEEDINGS.)
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) THERE YOU GO.
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: YOU'RE WELCOME. DO YOU SEE YOUR NAME AT THE TOP OF THIS EMAIL, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE MR. BALWANI'S NAME IN THE FROM LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS DATED AUGUST 15TH, 2014?
MR. LEACH: AND DOES THIS EMAIL RELATE TO THOUGHTS AND GOALS RELATING TO WALGREENS?
ELIZABETH A. HOLMES: IS IT OKAY IF I READ IT REALLY FAST?
MR. LEACH: YES, PLEASE.
ELIZABETH A. HOLMES: OKAY.
(PAUSE IN PROCEEDINGS.)
MR. LEACH: YOUR HONOR, I MOVE THE ADMISSION OF 5663.
JUDGE DAVILA: 5663?
MR. LEACH: YES.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: THAT'S ADMITTED, 5663.
(GOVERNMENT'S EXHIBIT 5663 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: I THINK THAT'S THE WRONG DOCUMENT, MS. HOLLIMAN. THERE WE GO.
MR. LEACH: LET ME DRAW YOUR --
COURT CLERK: EXCUSE ME.
JUDGE DAVILA: 5663, NOT 5653; IS THAT CORRECT?
MR. LEACH: I THINK WE MAY HAVE A NUMBERING ISSUE WITH OUR ELECTRONIC COPY. YOUR HONOR, I'LL DISPLAY IT ON THE ELMO.
JUDGE DAVILA: OKAY.
MR. LEACH: OR MAY I USE?
JUDGE DAVILA: YES.
MR. LEACH: AND JUST TO BE CLEAR, THE DOCUMENT I MOVED INTO EVIDENCE IS 5663, AND MS. HOLLIMAN HAS THE COPY WITH A DIFFERENT NUMBER THAN WE'RE DISPLAYING.
JUDGE DAVILA: OKAY.
MR. LEACH: MS. HOLLIMAN, YOU CAN DISPLAY WHAT WE'RE LOOKING AT.
MR. LEACH: DO YOU SEE AN EMAIL FROM NIMESH JHAVERI DATED AUGUST 15TH, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE SCROLL DOWN TO THE SUBSTANCE OF MR. JHAVERI'S EMAIL, DO YOU SEE WHERE HE'S WRITING, "IT WILL BE IMPORTANT THAT WE DRIVE A SINGLE FOCUS TOGETHER. THE 2 AREAS WHICH MUST BE FOCUSSED ON ARE:" AND THEN HE WROTE, "PATIENTS PER DAY WITH A 4 PERCENT EXPERIENCE. "VENOUS PERCENT IN THE 10 PERCENT RANGE." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN MR. JHAVERI WROTE, "WE NEED TO HAVE A DOCUMENTED DETAILED PLAN ON BOTH OR IT WILL BE DIFFICULT FOR ME TO CONVINCE EXPANSION BEYOND AZ." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. BALWANI FORWARDS THIS TO YOU; DOESN'T HE?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND HE WROTE, "WE CAN DISCUSS THIS TODAY. GIVES US HUGE OPENING FOR WHAT WE WANT TO DO." IF WE CAN ZOOM OUT, MS. HOLLIMAN. DO YOU SEE THAT LANGUAGE AT THE TOP, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND SO MR. BALWANI IS NOT HIDING FROM YOU INFORMATION THAT HE'S GETTING FROM WALGREENS?
MR. LEACH: AND HE'S OFFERING TO DISCUSS WHAT HE'S LEARNING FROM WALGREENS WITH YOU THAT DAY?
MR. LEACH: AND HE'S EXPLAINING THAT THIS MIGHT ALSO GIVE YOU AN OPPORTUNITY TO EXPLORE RELATIONSHIPS WITH OTHER RETAILERS; ISN'T THAT RIGHT? ISN'T THAT THE OPPORTUNITY THAT HE'S TALKING ABOUT?
ELIZABETH A. HOLMES: I THINK HE'S TALKING ABOUT EXPANDING WITH WALGREENS.
MR. LEACH: OKAY. EVEN THOUGH HE'S FORWARDING MR. JHAVERI'S COMPLAINTS ABOUT THE PERCENTAGE OF VENOUS DRAWS WITHIN THE STORE?
ELIZABETH A. HOLMES: I READ THIS TO SAY THAT IF WE HAD A DETAILED PLAN WITHIN THE NEXT 30 DAYS, THEY COULD MEET WITH MANAGEMENT ABOUT EXPANSION BEYOND ARIZONA.
MR. LEACH: OKAY. AND YOU NEVER DID EXPAND BEYOND ARIZONA?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: OKAY. WERE THERE TIMES IN YOUR WORKING RELATIONSHIP WITH MR. BALWANI WHERE YOU GAVE HIM DIRECTION ON WHAT TO DO?
ELIZABETH A. HOLMES: I'M SURE THERE WAS.
MR. LEACH: THERE WERE TIMES WHERE YOU TOLD HIM WHAT TO DO?
ELIZABETH A. HOLMES: I'M SURE THERE COULD HAVE BEEN.
MR. LEACH: OKAY. WELL, LET'S LOOK AT SOME EXAMPLES. AND HE REPORTED DIRECTLY TO YOU; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: HE WAS THE CHIEF OPERATING OFFICER?
MR. LEACH: AND THE PRESIDENT?
MR. LEACH: AND YOU WERE THE CEO?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. AND HE WAS AN AT WILL EMPLOYEE?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: OKAY. YOU COULD FIRE HIM AT ANY TIME?
ELIZABETH A. HOLMES: I COULD.
MR. LEACH: LET'S LOOK AT EXHIBIT 5629.
ELIZABETH A. HOLMES: I DON'T KNOW IF I HAVE THAT ONE HERE.
MR. LEACH: I'M MOVING INTO A SLIGHTLY DIFFERENT TOPIC, YOUR HONOR, IF NOW MIGHT BE A CONVENIENT TIME FOR A BREAK?
JUDGE DAVILA: DOES THIS WORK FOR A BREAK, FOLKS? MR. DOWNEY, ANY OPPOSITION TO A BREAK NOW?
MR. DOWNEY: NO.
JUDGE DAVILA: ALL RIGHT. LET'S TAKE A 30 MINUTE BREAK NOW.
(RECESS FROM 1:17 P.M. UNTIL 1:56 P.M.)
JUDGE DAVILA: ALL RIGHT. THANK YOU. WE'RE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT AGAIN. OUR JURY IS PRESENT. MR. LEACH, WOULD YOU LIKE TO CONTINUE?
MR. LEACH: YES. THANK YOU.
MR. LEACH: GOOD AFTERNOON, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD AFTERNOON.
MR. LEACH: WOULD YOU AGREE WITH ME THAT THERE WERE ASPECTS OF YOUR BUSINESS RELATIONSHIP WHERE MR. BALWANI DEFERRED TO YOU?
ELIZABETH A. HOLMES: I'M SURE THERE WERE.
MR. LEACH: YOU'RE SURE THAT THERE ARE AREAS WHERE HE DEFERRED TO YOU ON ASPECTS OF THERANOS'S BUSINESS?
MR. LEACH: AND WOULD ONE OF THOSE AREAS BE SAFEWAY?
ELIZABETH A. HOLMES: THAT'S POSSIBLE.
MR. LEACH: WELL, YOU HAD A VERY CLOSE RELATIONSHIP WITH STEVE BURD, THE CEO OF SAFEWAY?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND ON THE THERANOS SIDE, YOU WERE RESPONSIBLE FOR THE SAFEWAY RELATIONSHIP AT LEAST UNTIL MR. BURD LEFT THE COMPANY IN MAY OF 2013?
MR. LEACH: AND IF THE TWO OF YOU -- IF YOU AND MR. BALWANI DISAGREED ON A MATTER PERTAINING TO SAFEWAY PRIOR TO MAY OF 2013, IT WAS PROBABLY YOU WHO WOULD MAKE THE ULTIMATE DECISION?
ELIZABETH A. HOLMES: POTENTIALLY.
MR. LEACH: WELL, YOU RECALL BEING ASKED THAT QUESTION BEFORE, RIGHT, MS. HOLMES?
ELIZABETH A. HOLMES: I DON'T, BUT I'M SURE I HAVE BEEN.
MR. LEACH: OKAY. WELL, LET ME DRAW YOUR ATTENTION TO THE RED BINDER.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND IF YOU COULD PLEASE LOOK AT PAGE 5270, AND I WOULD DRAW YOUR ATTENTION TO PAGE 55 OF THE TRANSCRIPT.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND, YOUR HONOR, I SEEK PERMISSION TO READ FROM PAGE 55, LINE 20 TO PAGE 56, LINE 4.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, YOU WERE ASKED THE QUESTION, "SO I THINK WE MENTIONED A NUMBER OF DIFFERENT AREAS OF THE COMPANY, BUT, FOR INSTANCE, ON BUSINESS PARTNERSHIPS, YOU KNOW, WHO WOULD BE THE ONE WHO WOULD MAKE THE ULTIMATE DECISION IF THE TWO OF YOU DISAGREED? "ANSWER: IF IT PERTAINED TO WALGREENS, IT WAS SUNNY. "IF IT PERTAINED TO SAFEWAY, PROBABLY ME. "BUT IT DEPENDS ON WHAT THE ISSUE WAS. IF IT HAD TO DO WITH SOMETHING THAT WAS IN A FUNCTIONAL AREA THAT HE WAS MANAGING, I WOULD DEFER TO HIM." THAT WAS YOUR TESTIMONY BEFORE THE S.E.C.; CORRECT?
MR. LEACH: AND YOU TOOK AN OATH EACH OF THE THREE DAYS YOU WERE THERE WITH THE S.E.C.?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: THE SAME ONE THAT YOU'RE TAKING TODAY?
MR. LEACH: AND ISN'T IT TRUE THAT MR. BALWANI DEFERRED TO YOU ON DEALINGS WITH THE MILITARY?
ELIZABETH A. HOLMES: I THINK PROBABLY IN MANY OF THEM, YES.
MR. LEACH: OKAY. YOU WERE HERE WHEN MR. EDLIN TESTIFIED?
ELIZABETH A. HOLMES: YES, I WAS.
MR. LEACH: OKAY. AND DO YOU RECALL HIM SAYING SHE WAS HIGHLY -- THAT YOU WERE HIGHLY INVOLVED IN MATTERS WITH THE MILITARY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF HE HAD ANY FORM OF SUBSTANTIVE COMMUNICATION WITH THE MILITARY, HE CAME TO YOU?
MR. LEACH: NOT MR. BALWANI?
MR. LEACH: ISN'T IT TRUE THAT MR. BALWANI DEFERRED TO YOU ON ASPECTS OF INVENTIONS AT THERANOS?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: IF YOU THOUGHT THE MINILAB SHOULD WORK IN A PARTICULAR WAY, YOU WEREN'T GOING TO TAKE ADVICE FROM MR. BALWANI ON THAT; IS THAT FAIR?
ELIZABETH A. HOLMES: I WOULD TAKE HIS ADVICE, BUT HE WOULD DEFER TO ME.
MR. LEACH: FAIR ENOUGH. HE WOULD DEFER TO YOU ON THAT ASPECT OF THERANOS'S BUSINESS?
MR. LEACH: OKAY. HOW ABOUT WITH REGULATORY MATTERS? ISN'T IT THE CASE THAT YOU AND MR. BALWANI WERE JOINTLY INVOLVED IN THE REGULATORY STRATEGY?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: AND GENERALLY, YOU AND MR. BALWANI WOULD BE INVOLVED IN FIRING PERSONNEL?
ELIZABETH A. HOLMES: WE COULD BE.
MR. LEACH: DO YOU HAVE THE RED BINDER THERE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION, PLEASE, TO 5269. YOUR HONOR, I SEEK PERMISSION TO READ FROM PAGE 53, LINE 19 TO LINE 21.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: YOU WERE ASKED THE QUESTION, "SO GENERALLY YOU AND MR. BALWANI WOULD BE INVOLVED IN FIRING PERSONNEL? "ANSWER: I THINK SO, YEAH." THAT WAS YOUR TESTIMONY BEFORE THE S.E.C.; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND ISN'T IT TRUE THAT YOU -- OR THAT MR. BALWANI DEFERRED TO YOU ON MARKETING MATTERS?
ELIZABETH A. HOLMES: IN CERTAIN CIRCUMSTANCES, YES.
MR. LEACH: ISN'T IT TRUE THAT ON SOME OCCASIONS MR. BALWANI COMPLETELY DISENGAGED FROM MARKETING SO THAT YOU COULD MANAGE IT?
ELIZABETH A. HOLMES: PROBABLY.
MR. LEACH: WELL, LET'S LOOK AT AN EXAMPLE. IF YOU CAN LOOK IN YOUR BINDER AT EXHIBIT 5541. THIS MIGHT BE ONE THAT YOU DON'T HAVE.
ELIZABETH A. HOLMES: YEAH, I DON'T THINK I HAVE THAT ONE.
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: YOU'RE WELCOME. DO YOU SEE YOUR NAME AT THE TOP OF THIS EMAIL, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THAT MR. BALWANI'S NAME IS IN THE FROM LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE DATE OF THIS IS MAY 21ST, 2013?
MR. LEACH: AND THE SUBJECT IS CHIAT/DAY?
MR. LEACH: AND CHIAT/DAY WAS YOUR MARKETING FIRM?
ELIZABETH A. HOLMES: THEY WERE.
MR. LEACH: OKAY. I MOVE THE ADMISSION OF EXHIBIT 5541, YOUR HONOR.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5541 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: IF I COULD DRAW YOUR ATTENTION TO THE BOTTOM EMAIL, MS. HOLMES, DO YOU SEE THERE'S A MESSAGE FROM SUNNY BALWANI ON MAY 21ST, 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DO YOU SEE THE SECOND PARAGRAPH WHERE HE WROTE, "I WOULD LIKE TO COMPLETELY DISENGAGE MYSELF FROM ALL THINGS CHIAT DAY SO YOU AND THE GUYS CAN MANAGE ALL THAT IS ASKED FROM THEM, ALL THAT IS NEEDED TO BE DELIVERED, ET CETERA, AND ALL COMMUNICATIONS AND I CAN FOCUS ON OPERATIONS MANUFACTURING, SUPPLY CHAIN, MATERIALS MANAGEMENT, WALGREENS, CAPSYS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AM I RIGHT THAT YOU HAD MANY BUSINESS MENTORS BESIDES MR. BALWANI?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. ONE OF THOSE BUSINESS MENTORS WAS DON LUCAS?
MR. LEACH: YOU TALKED A LOT ABOUT -- IT'S DON LUCAS, SENIOR; RIGHT?
MR. LEACH: THERE'S A DON LUCAS, JUNIOR?
MR. LEACH: HE WAS AN INVESTOR IN THERANOS TOO, RIGHT?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: BUT DON LUCAS WAS A BUSINESS MENTOR OF YOURS; CORRECT?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: HE CHAIRED YOUR BOARD FOR A NUMBER OF YEARS?
MR. LEACH: YOU WOULD GO TO HIM FOR BUSINESS ADVICE FREQUENTLY?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU VIEWED HIM AS VERY KNOWLEDGEABLE IN FINANCE AREAS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND HE WAS A VERY SUCCESSFUL ORACLE EXECUTIVE; CORRECT?
ELIZABETH A. HOLMES: HE WAS ON THE ORACLE BOARD, YES.
MR. LEACH: OKAY. BUT HE KNEW HOW TO BUILD A BUSINESS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND HE PASSED AWAY AT SOME POINT IN 2019?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. AND HE STEPPED DOWN FROM THERANOS ACTIVITIES AROUND 2012, 2013?
ELIZABETH A. HOLMES: 2013, YEP.
MR. LEACH: YOU WERE ALSO VERY CLOSE TO CHANNING ROBERTSON; RIGHT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: HE WAS A MENTOR TO YOURS?
MR. LEACH: EXCUSE ME. HE WAS A MENTOR TO YOU?
MR. LEACH: YOU FELT LIKE YOU COULD GO TO HIM ON ANY ASPECT OF THERANOS'S BUSINESS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU FELT HE WAS VERY, VERY KNOWLEDGEABLE ON HOW TO BUILD DEVICES AND HOW TO BUILD A COMPANY?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND IF THERE WERE ISSUES ON HOW TO BUILD THE BUSINESS AND AN ASPECT OF WHERE TO GO, YOU FELT FREE ON GOING TO HIM FOR ADVICE AND WISDOM?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: I THINK WE TALKED ABOUT GEORGE SHULTZ EARLIER. YOU WERE VERY CLOSE TO HIM?
MR. LEACH: AND GEORGE SHULTZ WAS THE FORMER SECRETARY OF THE TREASURY?
MR. LEACH: AND HE WAS THE FORMER SECRETARY OF STATE?
MR. LEACH: HE STARED DOWN THE SOVIET UNION IN THE COLD WAR?
ELIZABETH A. HOLMES: I'VE BEEN TOLD THIS.
MR. LEACH: YOU'VE BEEN TOLD THAT?
MR. LEACH: AND YOU HAD GREAT RESPECT FOR HIS BUSINESS EXPERIENCE AND HIS POLITICAL WISDOM?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU WOULD MEET WITH HIM ALMOST WEEKLY? AM I RIGHT ABOUT THAT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU FELT LIKE YOU COULD GO TO HIM WITH ANY ISSUE RELATING TO THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. YOU FELT IF THERE WAS SOME ASPECT OF THE BUSINESS, BE IT FINANCE, MILITARY, YOU COULD GO TO HIM WITH QUESTIONS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU WERE ALSO CLOSE TO HENRY KISSINGER; IS THAT CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND HENRY KISSINGER WAS A FORMER NATIONAL SECURITY ADVISOR?
MR. LEACH: HE WAS A FORMER SECRETARY OF STATE?
MR. LEACH: HE WON THE NOBEL PEACE PRIZE?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: VERY DISTINGUISHED STATESMAN; IS THAT FAIR?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: AND HE SERVED ON OTHER BOARDS; CORRECT?
MR. LEACH: AND YOU HAD TREMENDOUS RESPECT FOR HIS WISDOM AND ABILITIES AND ABILITY TO GUIDE YOU IN RUNNING THE THERANOS BUSINESS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND IF THERE WERE ANY ASPECT OF OPERATIONS AT THERANOS OR MANAGEMENT ISSUES OR ANYTHING RELATING TO THE BUSINESS, YOU FELT COMFORTABLE GOING TO HIM?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU WERE ALSO CLOSE TO WILLIAM PERRY; IS THAT CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: WILLIAM PERRY WAS A FORMER SECRETARY OF DEFENSE?
MR. LEACH: AND HE JOINED THE BOARD AT SOME POINT IN 2013?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. AND YOU HAD TREMENDOUS RESPECT FOR HIS ABILITY TO GIVE YOU ADVICE AND WISDOM ABOUT HOW TO OPERATE AND MANAGE THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: IF THERE WERE ANY ISSUE, YOU FELT YOU COULD GO TO HIM?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU ALSO TALKED ABOUT WILLIAM FOEGE. DO YOU RECALL MENTIONING WILLIAM FOEGE?
MR. LEACH: HE WAS A FORMER LEADER AT THE CDC?
MR. LEACH: AND HE JOINED YOUR BOARD AT SOME POINT AFTER 2013?
MR. LEACH: AND YOU HAD TREMENDOUS RESPECT FOR HIS ABILITIES TO GUIDE THE THERANOS BUSINESS?
ELIZABETH A. HOLMES: I DID, YES.
MR. LEACH: AND IF THERE WERE ANY ASPECTS OF THERANOS'S OPERATIONS, YOU FELT COMFORTABLE GOING TO HIM?
MR. LEACH: YOU ALSO HAD A RELATIONSHIP WITH SAM NUNN; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND SAM NUNN IS A FORMER SENATOR FROM GEORGIA?
MR. LEACH: AND SERVED ON THE BOARD OF COCA-COLA?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: YOU HAD TREMENDOUS RESPECT FOR HIS BUSINESS ACUMEN?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU FELT YOU COULD GO TO FORMER SENATOR NUNN WITH ANY QUESTION YOU HAD ABOUT HOW TO OPERATE THERANOS, RUN THE BUSINESS, MANAGE THE FINANCES, NO RESTRICTION; IS THAT FAIR?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU'VE ALSO TALKED ABOUT RICHARD KOVACEVICH. DO YOU RECALL TALKING ABOUT HIM?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND HE WAS THE FORMER CEO OF WELLS FARGO?
MR. LEACH: AND A VERY RESPECTED BUSINESSMAN?
MR. LEACH: AND HE JOINED YOUR BOARD -- HE RETIRED FROM WELLS FARGO IN OR AROUND 2009?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND HE JOINED YOUR BOARD AT SOME POINT, WAS IT AFTER 2013?
ELIZABETH A. HOLMES: 2013 OR 2014. ONE OF THOSE TWO.
MR. LEACH: OKAY. AND YOU HAD TREMENDOUS RESPECT FOR HIS BUSINESS ACUMEN?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU FELT YOU COULD GO TO HIM WITH ANY QUESTION YOU HAD ABOUT THERANOS'S FINANCES, THERANOS'S OPERATIONS, ANY ASPECT OF ITS BUSINESS?
MR. LEACH: OKAY. YOU ALSO FORMED A RELATIONSHIP WITH JIM MATTIS; IS THAT FAIR?
MR. LEACH: GENERAL MATTIS?
MR. LEACH: WENT ON TO BECOME THE SECRETARY OF DEFENSE?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. HE WAS THE LEADER AT CENTCOM?
MR. LEACH: AND HE JOINED YOUR BOARD IN 2013?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND RESIGNED AT SOME POINT IN 2016?
MR. LEACH: AND YOU WOULD MEET WITH GENERAL MATTIS REGULARLY; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU WOULD GO TO HIS OFFICE AT STANFORD, OR HIS RESIDENCE AT STANFORD, AND HAVE WEEKLY MEETINGS WITH HIM?
ELIZABETH A. HOLMES: I NEVER WENT TO HIS OFFICE AT STANFORD, BUT I MET WITH HIM REGULARLY. HE WOULD COME TO THERANOS.
MR. LEACH: OH, SO GENERAL MATTIS CAME TO YOU?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. AND HE GAVE YOU ADVICE ABOUT MANY MATTERS RELATING TO THERANOS'S BUSINESS?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: HE GAVE YOU ADVICE RELATING TO HR ISSUES RELATING TO THERANOS?
ELIZABETH A. HOLMES: ABOUT MANAGEMENT, YES.
MR. LEACH: OKAY. AND YOU FELT FREE TO GO WITH HIM -- AND YOU HAD RESPECT FOR HIS ACUMEN AS A LEADER?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU FELT IF THERE WAS ANY ISSUE RELATING TO THERANOS'S OPERATIONS, ITS FINANCES, ITS BUSINESS, YOU COULD GO TO HIM FOR ADVICE?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: IS IT TRUE THAT IN JULY OF 2013 YOU AND MR. BALWANI AGREED TO FORM A LIMITED LIABILITY COMPANY TOGETHER?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: OKAY. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: I'VE PLACED BEFORE YOU, MS. HOLMES, WHAT HAS BEEN MARKED AS 5652. DO YOU RECOGNIZE THIS AS AN OPERATING AGREEMENT FOR A LIMITED LIABILITY COMPANY THAT YOU AND MR. BALWANI FORMED?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND ONE OF THE PURPOSES OF THIS LIMITED LIABILITY COMPANY WAS TO OWN THE HOME WHERE YOU AND MR. BALWANI LIVED?
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5652.
MR. DOWNEY: NO OBJECTION, YOUR HONOR, TO THIS EXHIBIT. NO OBJECTION TO THIS ONE.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5652 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: AND MAY WE PUBLISH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: DO YOU SEE THE HEADING AT THE TOP, MS. HOLMES, OPERATING AGREEMENT OF HMFR LLC?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THAT'S THE ACRONYM THAT WE'VE SEEN IN SOME OF THE TEXT MESSAGES THAT IS SOME FORM OF PRAYER, OR GIVING THANKS TO GOD?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION TO PAGE 3. IS THAT YOUR SIGNATURE?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: IS THAT MR. BALWANI'S SIGNATURE?
MR. LEACH: OKAY. YOU SIGNED THIS VOLUNTARILY?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: IT WAS NOT AGAINST YOUR WILL?
MR. LEACH: AND IF WE COULD GO TO -- BACK TO THE FIRST PAGE, THE TWO MEMBERS OF THIS LIMITED LIABILITY COMPANY ARE YOU AND MR. BALWANI. AM I RIGHT ABOUT THAT?
MR. LEACH: AND ON PAGE 4, DOES IT SPELL OUT THE RESPECTIVE MEMBERSHIP INTERESTS, PERCENTAGE INTEREST OF THE LLC?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: OKAY. THERE'S A MAILING ADDRESS 227 PARK LANE, ATHERTON, CALIFORNIA 94027. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S THE HOME WHERE YOU AND MR. BALWANI LIVED?
MR. LEACH: AND TO THE RIGHT IT ASSIGNS TO MR. BALWANI A 50 PERCENT INTEREST FOR THIS LIMITED LIABILITY COMPANY?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: IN THE MAILING ADDRESS 855 EL CAMINO REAL, SUITE 13A, THAT'S A P.O. BOX, ISN'T IT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND AM I RIGHT THAT ONE OF THE ASSETS HMFR OWNED WAS 227 PARK LANE IN ATHERTON?
MR. LEACH: I'D LIKE TO DRAW YOUR ATTENTION TO WHAT HAS BEEN MARKED AS EXHIBIT 5512.
ELIZABETH A. HOLMES: I DON'T KNOW THAT I HAVE THAT ONE.
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) DO YOU RECOGNIZE THE IMAGE ON EXHIBIT 5512?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU RECOGNIZE THE IMAGE ON THE SECOND PAGE OF EXHIBIT 5512?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: IS THIS 227 PARK LANE, ATHERTON?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS IS THE HOME THAT YOU AND MR. BALWANI SHARED?
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5512.
MR. DOWNEY: YOUR HONOR, 403, AND CONTRARY TO ORDER AT DOCKET 798.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: THANK YOU. I DON'T SEE THIS AS -- MAYBE YOU COULD LAY A LITTLE MORE FOUNDATION, IF YOU WILL, AS TO THE ISSUE THAT WAS RAISED IN 798 AND THE COURT'S RULING ON 798.
MR. LEACH: OKAY.
MR. LEACH: YOU WERE AN EQUAL MEMBER OF THIS LLC, MS. HOLMES; IS THAT CORRECT?
ELIZABETH A. HOLMES: I THOUGHT I WAS.
MR. LEACH: OKAY. YOU HAD A 50 PERCENT INTEREST IN THIS?
ELIZABETH A. HOLMES: I THOUGHT SO.
MR. LEACH: AND SO 50 PERCENT OF THE ASSETS OF THIS LLC WERE YOUR ASSETS THAT YOU FELT YOU COULD USE HOW YOU SAW FIT?
ELIZABETH A. HOLMES: I THOUGHT SO.
MR. LEACH: AND THIS WAS THE HOME WHERE YOU AND MR. BALWANI LIVED FROM 2013 THROUGH 2016?
MR. LEACH: YOU TALKED ABOUT MOVING OUT. IS THIS THE PLACE THAT YOU MOVED OUT FROM?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND I KNOW YOU TALKED ABOUT SOME EXPERIENCES WITH MR. BALWANI IN YOUR DIRECT TESTIMONY, BUT DID SOME OF THOSE EVENTS OCCUR AT 227 PARK LANE IN ATHERTON?
ELIZABETH A. HOLMES: THEY DID.
MR. LEACH: OKAY. AND YOU WOULD HAVE FOLKS FROM THERANOS COME AND VISIT YOU FROM TIME TO TIME AT THIS ADDRESS. IS THAT FAIR?
MR. LEACH: OKAY. FOR EXAMPLE, MR. EDLIN WAS THERE?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: AND DO YOU RECALL TESTIMONY FROM MR. EDLIN WHEN HE WOULD COME TO DINNER PARTIES AT YOUR HOUSE WHERE HE WOULD HAVE AN OPPORTUNITY TO OBSERVE YOUR INTERACTIONS WITH MR. BALWANI IN A SOCIAL SETTING?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOUR HONOR, I RENEW OUR MOTION TO ADMIT 5512.
JUDGE DAVILA: ALL RIGHT.
MR. DOWNEY: SAME OBJECTION, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. FIRST OF ALL, I DO THINK THAT THERE'S RELEVANCE TO THIS. UNDER 403, AND REFERENCING DOCKET 798, SPECIFICALLY LINE 19 ON PAGE 9 OF THE COURT'S PREVIOUS ORDER, I DO THINK THAT THE PROBATIVE VALUE OF THIS, BASED ON THE FOUNDATION LAID, OUTWEIGHS ANY PREJUDICIAL EFFECT. AND THE REFERENCE THE PARTIES TO THOSE LINES IN THE COURT'S ORDER. SO IT WILL BE ADMITTED, AND IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5512 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: OKAY. THANK YOU, YOUR HONOR.
MR. LEACH: MS. HOLMES, DO YOU SEE AN IMAGE ON THE SCREEN NOW?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND THAT'S THE RESIDENCE THAT WE'VE BEEN TALKING ABOUT, 227 PARK LANE IN ATHERTON?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND IF WE COULD LOOK BRIEFLY AT THE SECOND PAGE. WERE THERE OCCASIONS WHEN AN INVESTOR NAMED KENDRA FADIL WOULD COME TO YOUR HOUSE AND PERFORM SERVICES FOR YOU AT THIS ADDRESS?
MR. LEACH: SHE WAS A CONTRACTOR OF YOURS?
MR. LEACH: AND SHE ALSO BECAME AN INVESTOR AT SOME POINT IN TIME?
ELIZABETH A. HOLMES: SHE DID.
MR. LEACH: AND SHE WOULD COME TO YOUR HOUSE AND PERFORM SERVICES, AND IN CONNECTION WITH GETTING TO KNOW YOU, SHE EXPRESSED AN INTEREST IN INVESTING IN THERANOS?
ELIZABETH A. HOLMES: I THINK DON LUCAS HAD GIFTED HER SOME OF HIS SHARES, AND SHE WANTED TO BE ABLE TO BUY ADDITIONAL SHARES.
MR. LEACH: AND THAT WAS AT SOME POINT IN 2013, 2014?
MR. LEACH: OKAY. AND AT SOME POINT IN 2016, DID SHE COME TO YOU ATTEMPTING TO SELL HER SHARES BACK TO THE COMPANY?
ELIZABETH A. HOLMES: SHE DID.
MR. LEACH: AND YOU TOLD HER NO?
ELIZABETH A. HOLMES: WE COULDN'T, YES.
MR. LEACH: YOU TOLD HER NO?
MR. LEACH: IS IT TRUE -- WE CAN TAKE THIS DOWN, MS. HOLLIMAN. IS IT TRUE, MS. HOLMES, THAT YOU WERE AWAY FROM MR. BALWANI FOR LARGE PERIODS OF TIME IN THE 2010 TO 2015 TIME PERIOD?
MR. LEACH: YOU TRAVELLED ON BUSINESS REGULARLY; IS THAT FAIR?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU TRAVELLED WITHOUT MR. BALWANI ON MANY, IF NOT MOST, OF THOSE OCCASIONS?
ELIZABETH A. HOLMES: CERTAINLY ON MANY.
MR. LEACH: OKAY. IF WE LOOK AT EXHIBIT 5387, THERE WOULD BE MANY INSTANCES OF YOU TEXTING MR. BALWANI FROM THE PLANE SAYING "I'M ON MY WAY HOME," LOTS OF EVIDENCE IN THE TEXTS THAT YOU TWO WERE PHYSICALLY SEPARATED FOR WEEKS OR DAYS ON END; IS THAT FAIR?
ELIZABETH A. HOLMES: I'M SURE THERE IS, YES.
MR. LEACH: AM I RIGHT THAT YOU WERE ALSO INVOLVED IN ANOTHER ROMANTIC RELATIONSHIP DURING THE TIME PERIOD 2010 TO 2015?
MR. LEACH: DID YOU EVER TELL ANYBODY YOU WERE IN ANOTHER ROMANTIC RELATIONSHIP DURING THAT TIME PERIOD?
ELIZABETH A. HOLMES: I'M SORRY, 2010 TO 2015? I THINK FOR PART OF THAT.
MR. LEACH: WHICH PART OF THAT?
ELIZABETH A. HOLMES: THE BEGINNING PART.
MR. LEACH: SO THE BEGINNING PART OF 2010?
ELIZABETH A. HOLMES: YES. YES.
MR. LEACH: OKAY. HOW LONG DID THAT RELATIONSHIP LAST?
ELIZABETH A. HOLMES: IT DIDN'T.
MR. LEACH: OKAY. I UNDERSTAND IT DIDN'T LAST, BUT MY QUESTION IS, HOW LONG DID IT LAST?
ELIZABETH A. HOLMES: IT WAS NOT ACTUALLY A FORMAL RELATIONSHIP.
MR. LEACH: OKAY. BUT YOU WERE ROMANTIC WITH SOMEBODY OTHER THAN MR. BALWANI DURING THE TIME PERIOD 2010 TO 2015?
MR. LEACH: AND IN 2016 YOU, YOU PUSHED MR. BALWANI OUT OF THE COMPANY; IS THAT FAIR?
ELIZABETH A. HOLMES: I ASKED HIM TO LEAVE.
MR. LEACH: YOU ASKED HIM TO LEAVE?
MR. LEACH: AND THE BOARD SUPPORTED THAT DECISION?
MR. LEACH: I'D LIKE TO SHOW -- TALK TO YOU ABOUT SOME ADVICE THAT YOU RECEIVED PRIOR TO THE WALGREENS LAUNCH IN SEPTEMBER OF 2013. DO YOU HAVE THAT TIME PERIOD IN MIND?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO WHAT IS IN THE BINDER AS EXHIBIT 3970. DO YOU SEE YOUR NAME IN THE FROM LINE OF THIS EMAIL?
ELIZABETH A. HOLMES: I'M JUST FINDING IT. OKAY, YES.
MR. LEACH: AND DO YOU SEE YOUR NAME IN THE FROM LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS APPEARS TO BE AN EMAIL TO MR. BALWANI?
MR. LEACH: AND DO YOU SEE THE DATE SEPTEMBER 5TH, 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOUR HONOR, I DON'T BELIEVE THIS IS IN EVIDENCE, SO I MOVE THE ADMISSION OF EXHIBIT 3970.
MR. DOWNEY: I DON'T HAVE IT AS BEING IN EVIDENCE, BUT I HAVE NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 3970 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: LET ME DRAW YOUR ATTENTION TO THE BOTTOM EMAIL, MS. HOLMES. DO YOU SEE THERE'S AN EMAIL FROM YOU TO SOMEONE NAMED KATE BEARDSLEY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND KATE BEARDSLEY WAS A LAWYER YOU HIRED TO REVIEW THERANOS'S MARKETING MATERIAL?
MR. LEACH: AND THE SUBJECT OF THIS IS "FORWARD DOT COM PDF." WERE YOU FORWARDING A COPY OF WHAT WOULD HAVE BEEN THERANOS'S WEBSITE AROUND THE TIME OF THE WALGREENS LAUNCH?
MR. LEACH: I'D LIKE TO MOVE UP IN THE CHAIN AND FOCUS ON MS. BEARDSLEY'S RESPONSE ON THURSDAY, SEPTEMBER 5TH, AT 8:58 A.M. DO YOU SEE THAT HEADING THERE?
MR. LEACH: AND SHE WROTE TO YOU, "I HAVEN'T QUITE WORKED MY WAY THROUGH THE WHOLE WEBSITE, BUT I'M WORRIED." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND SHE WENT ON TO WRITE, "UNLESS SOMEONE ELSE HAS WORKED THROUGH THIS WITH YOU, THE WHOLE THING NEEDS TO BE CAREFULLY REVIEWED." DID I READ THAT CORRECTLY?
MR. LEACH: AND THERE'S A -- "HERE ARE A FEW OF THE GENERAL ISSUES THAT NEED TO BE DISCUSSED." AND I WANT TO DRAW YOUR ATTENTION TO SOME OF THE BULLETS HERE IN MS. BEARDSLEY'S EMAIL. DO YOU SEE NUMBER 4, "THERE ARE MANY COMPARATIVE CLAIMS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "FOR EXAMPLE, EVERY TIME YOU SAY BETTER WITHOUT SPECIFYING WHAT IT IS BETTER THAN, YOU ARE MAKING A COMPARATIVE CLAIM AT LEAST TO ALL MARKET LEADERS. YOU MUST BE ABLE TO SUBSTANTIATE THESE CLAIMS. I DON'T KNOW IF WE HAVE SUBSTANTIATION FOR ALL OF THESE, BUT I AM VERY WORRIED THAT WE ARE OPENING THE DOOR TO BIG TROUBLE FROM COMPETITORS. ALSO, THE WORDS THAT END IN "EST" (EG HIGHEST QUALITY) CREATE PARITY CLAIMS AT LEAST AS TO ALL OTHER MARKET LEADERS. WE NEED TO BE ABLE TO BE SURE THAT WE CAN SUBSTANTIATE THOSE AS WELL." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THIS IS ADVICE THAT YOU'RE GETTING FROM MS. BEARDSLEY AROUND THE WALGREENS LAUNCH AROUND SEPTEMBER 10TH, SOMETIME IN EARLY SEPTEMBER?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND MS. BEARDSLEY WRITES DIRECTLY TO YOU, AM I RIGHT, IN THIS EMAIL?
ELIZABETH A. HOLMES: SHE DID.
MR. LEACH: YOU'RE PASSING THAT ON TO MR. BALWANI?
MR. LEACH: LET ME NEXT DRAW YOUR ATTENTION TO EXHIBIT 3981. AND I BELIEVE THIS IS IN EVIDENCE, YOUR HONOR, BUT IF NOT, I MOVE IT IN.
MR. DOWNEY: IT IS, I THINK.
COURT CLERK: IT IS.
MR. LEACH: OKAY. PERMISSION TO DISPLAY?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: DO YOU HAVE 3981 IN FRONT OF YOU, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DO YOU RECALL TESTIMONY FROM DAN EDLIN ABOUT THIS EMAIL RELATING TO THERANOS WEBSITE COMMENTS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: LET ME START FROM THE -- ON PAGE 5, IF WE COULD. DO YOU SEE THERE'S THE INITIAL EMAIL THAT YOU SENT TO MS. BEARDSLEY ON SEPTEMBER 4TH?
MR. LEACH: AND MS. BEARDSLEY FORWARDS YOUR EMAIL TO ROBERT DORMER AND JAIME WOLSZON. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTOOD MR. DORMER AND MS. WOLSZON TO BE ATTORNEYS WITH HYMAN PHELPS & MCNAMARA IN WASHINGTON, D.C.?
MR. LEACH: AND THEY WERE ALSO BROUGHT ON TO REVIEW YOUR WEBSITE AND PROVIDE FEEDBACK ABOUT WHAT WAS APPROPRIATE; IS THAT FAIR?
MR. LEACH: MS. BEARDSLEY WRITES, "THIS IS THE THERANOS WEBSITE THAT NEEDS TO BE REVIEWED. IT IS SCHEDULED TO GO LIVE TOMORROW NIGHT, SO THERE IS SOME URGENCY. I THINK WE WILL NEED TO GET ON THE PHONE WITH THE CLIENT ONCE WE KNOW WHAT WE WANT TO SAY. YOU CAN REACH ME," AND THEN THERE'S A BUSINESS NUMBER. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. LET ME NEXT DRAW YOUR ATTENTION TO MR. WOLSZON'S RESPONSE, W-O-L-S-Z-O-N? AND IF WE CAN ZOOM OUT, MS. HOLLIMAN, TO ALSO CAPTURE THE NEXT MESSAGE IN THE CHAIN, PLEASE. DO YOU SEE THAT JAIME WOLSZON REPLIES ON SEPTEMBER 5TH, 2013, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS ULTIMATELY FORWARDED TO YOU; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND JAIME WOLSZON WRITES, "PLEASE FIND BELOW MY COMMENTS TO THE THERANOS WEBSITE," AND DO THOSE COMMENTS CONTINUE ON TO THE NEXT PAGE?
MR. LEACH: LET'S LOOK AT THE NEXT PAGE, PLEASE. AND I WANT TO DRAW YOUR ATTENTION TO THE TOP BULLET. DO YOU SEE WHERE IT SAYS, "PLEASE REMOVE REFERENCES TO 'ALL' TESTS AND REPLACE WITH STATEMENTS SUCH AS 'MULTIPLE' OR 'SEVERAL.' IT IS HIGHLY UNLIKELY THAT THE LABORATORY CAN PERFORM EVERY CONCEIVABLE TEST, BOTH FROM A LOGISTICAL STANDPOINT AND BECAUSE THE CLIA CERTIFICATION DESIGNATES SPECIFIC SPECIALTIES OF TESTS THE LAB PERFORMS." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND FURTHER DOWN THERE'S A BULLET THAT SAYS, "REPLACE 'HIGHEST QUALITY' WITH 'HIGH QUALITY.'" DO YOU SEE THAT RECOMMENDATION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND BENEATH THAT IT SAYS, "ENSURE SUBSTANTIATION FOR '4 HOURS OR LESS.'" DID I READ THAT CORRECTLY?
MR. LEACH: AND IF WE CAN ZOOM OUT, MS. HOLLIMAN, AND GO DOWN TO THE NEXT SERIES OF BULLETS. DO YOU SEE WHERE THE ATTORNEYS AT HYMAN PHELPS ARE SAYING, "REPLACE 'HIGHEST LEVELS OF ACCURACY' WITH 'HIGH LEVELS OF ACCURACY,'" THE THIRD BULLET FROM THE BOTTOM?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE CAN GO TO THE NEXT PAGE, PLEASE. DO YOU SEE THE THIRD BULLET WHERE ONE OF THE RECOMMENDED CHANGES WAS, "CHANGE 'MORE PRECISE' TO 'PRECISE'"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE THE BULLET FOR "ENSURE SUBSTANTIATION FOR 'IT'S A LESS INVASIVE, AND LESS PAINFUL EXPERIENCE'"?
MR. LEACH: IF WE COULD ZOOM OUT, PLEASE, MS. HOLLIMAN, AND THEN LOOK AT THE REMAINING BULLET. DO YOU SEE THE FOURTH FROM THE BOTTOM IT SAYS, "ENSURE SUBSTANTIATION FOR DRAMATICALLY LOWER"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THESE WERE ALL COMMENTS THAT YOU WERE RECEIVING ON THE EVE OF LAUNCHING YOUR PUBLIC WEBSITE ABOUT THERANOS'S WALGREENS RELATIONSHIP?
ELIZABETH A. HOLMES: THEY ARE.
MR. LEACH: AND THESE ARE GOING IN THE FIRST INSTANCE TO YOU; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND YOU SHARE THEM WITH CHRISTIAN HOLMES AND MR. BALWANI AND OTHER MEMBERS OF YOUR TEAM?
ELIZABETH A. HOLMES: I THINK SO, YES. YES, I SHARED THEM WITH CHRISTIAN AND SUNNY, YES.
MR. LEACH: OKAY. I'D NOW LIKE TO SHOW YOU SOME OF THE INVESTOR POWERPOINTS THAT HAVE BEEN ADMITTED INTO EVIDENCE, AND I'D LIKE TO START WITH EXHIBIT 4077.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU RECALL MR. GROSSMAN TESTIFYING ABOUT EXHIBIT 4077?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION, PLEASE, TO PAGE 17. AND IF I COULD DRAW YOUR ATTENTION TO THAT LAST LANGUAGE ON THE SLIDE, DO YOU SEE WHERE IT SAYS, "THERANOS PROVIDES THE HIGHEST LEVEL OF OVERSIGHT, AUTOMATION, AND STANDARDIZATION IN OUR PRE- AND POST-ANALYTIC PROCESSES, ENSURING THE HIGHEST LEVELS OF ACCURACY AND PRECISION." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THIS IS GOING TO MR. GROSSMAN IN JANUARY OF 2014?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: SO ROUGHLY THREE OR FOUR MONTHS AFTER THE WALGREENS LAUNCH?
MR. LEACH: AND THREE OR FOUR MONTHS AFTER YOU RECEIVED ADVICE FROM THE ATTORNEYS AT HYMAN PHELPS?
MR. LEACH: LET'S LOOK AT PAGE 21 OF THIS. DO YOU SEE THE HEADING, "A NEW STANDARD IN QUALITY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE BENEATH THAT THERE'S A BULLET, OR THE LINE, "THE HIGHEST LEVELS OF ACCURACY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IN THE REMAINDER OF THE TEXT IT SAYS, "BY SYSTEMATICALLY CONTROLLING AND STANDARDIZING OUR PROCESSES, THERANOS OFFERS TESTS WITH THE HIGHEST LEVELS OF ACCURACY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THIS IS, AGAIN, IN JANUARY OF 2014?
MR. LEACH: AFTER YOU GOT THE ADVICE FROM HYMAN & PHELPS?
MR. LEACH: AND THERE'S ALSO THAT LESS THAN 10 PERCENT COEFFICIENT OF VARIATION OF VITAMIN D. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND VITAMIN D WAS THE SAME ASSAY THAT MR. SHULTZ STARTS RAISING CONCERNS ABOUT IN THE APRIL 2014 TIME PERIOD?
MR. LEACH: AND LET'S LOOK NOW AT 4858.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND THIS IS IN EVIDENCE, SO WE CAN DISPLAY IT. DO YOU SEE THE BATES LABEL IN THE BOTTOM RDV, MS. HOLMES?
ELIZABETH A. HOLMES: OH, SORRY. I'M ON THE WRONG ONE.
MR. LEACH: IT'S ALSO ON THE SCREEN IF THAT'S EASIER FOR YOU.
ELIZABETH A. HOLMES: OKAY. I DON'T HAVE A 4858.
MR. LEACH: ARE YOU COMFORTABLE?
ELIZABETH A. HOLMES: YEAH, YEAH, TOTALLY COMFORTABLE.
MR. LEACH: OKAY. DO YOU SEE IN THE BOTTOM RIGHT-HAND CORNER THERE'S A NUMBER RDV WITH SOME NUMBERS BY IT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND YOU WERE HERE WHEN LISA PETERSON TESTIFIED ABOUT RDV'S INVESTMENT IN THERANOS?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU WERE HERE WHEN SHE TESTIFIED ABOUT THIS POWERPOINT?
MR. LEACH: LET'S GO TO PAGE 5, PLEASE. DO YOU SEE THE SLIDE, "THERANOS IS CERTIFIED AS A HIGH COMPLEXITY CLIA LABORATORY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND WE TALKED EARLIER ABOUT HOW THE CALIFORNIA LABORATORY IS HIGH COMPLEXITY. AT SOME POINT YOU ALSO HAVE AN ARIZONA LAB THAT IS MODERATE COMPLEXITY?
MR. LEACH: AND HERE YOU'RE TALKING ABOUT THE HIGH COMPLEXITY?
MR. LEACH: AND YOU'RE HOLDING THIS OUT AS PART OF THE INFORMATION FOR INVESTORS TO GET COMFORT THAT YOUR TECHNOLOGY WORKS; IS THAT FAIR?
ELIZABETH A. HOLMES: I THINK WE WERE TRYING TO DESCRIBE WHAT A HIGH COMPLEXITY LAB WAS HERE IN TERMS OF WHAT REQUIREMENTS WERE IN PLACE FOR ONE.
MR. LEACH: OKAY. AND THIS WAS PART OF THE WAY THAT YOU PERSUADED INVESTORS THAT THERANOS'S TECHNOLOGY WAS ACCURATE; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: IT WAS PART OF WHY I BELIEVED IN OUR TECHNOLOGY, YES.
MR. LEACH: LET'S LOOK AT PAGE 7, PLEASE. DO YOU SEE THE SLIDE TITLED "THERANOS PROFICIENCY TESTING AND AUDITS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND I THINK YOU TALKED TO MR. DOWNEY ABOUT THE CONCEPT OF PROFICIENCY TESTING IN YOUR DIRECT EXAMINATION. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DID, YES.
MR. LEACH: AND PROFICIENCY TESTING WAS WHERE YOU, IF YOU HAVE AN FDA APPROVED MACHINE IN A LAB, YOU RUN YOUR SAMPLES, REPORT THE RESULTS TO SOME AGENCY, AND THOSE ARE COMPARED AGAINST OTHERS RUNNING THAT SAME DEVICE?
MR. LEACH: AND YOU TOOK THE POSITION AT THERANOS THAT BECAUSE THERE WAS NO COMPARATOR FOR THE EDISON 3.5, OR THE MODIFIED SIEMENS TEST, THAT YOU WERE GOING TO DO SOMETHING CALLED ALTERNATIVE ASSESSMENT OF PROFICIENCY?
MR. LEACH: AND THOSE WERE CONCEPTS THAT YOU WERE FAMILIAR WITH IN 2013 AND 2014?
MR. LEACH: NOW, THIS SLIDE TALKS ABOUT PROFICIENCY TESTING THAT IS OCCURRING IN 2011, 2012, AND 2013 BEFORE THE WALGREENS LAUNCH. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AM I RIGHT THAT ANY PROFICIENCY TESTING THAT WAS DONE AT THERANOS IN 2011 RELATED ONLY TO THE FDA APPROVED MACHINES?
MR. LEACH: OKAY. SO THIS BULLET API HEMATOLOGY, THAT DOESN'T SAY ANYTHING ABOUT HOW THE EDISON 3.5 OR HOW THE MODIFIED SIEMENS TESTS ARE PERFORMING?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND THAT WOULD ALSO BE RIGHT FOR THE PROFICIENCY TESTING IN 2012?
MR. LEACH: THOSE WOULD RELATE ONLY TO FDA APPROVED MACHINES RUNNING FDA APPROVED TESTS?
MR. LEACH: THEY DON'T SAY ANYTHING AT ALL ABOUT PROFICIENCY TESTING ON THE EDISON, OR PROFICIENCY TESTING ON THE MODIFIED SIEMENS MACHINES?
MR. LEACH: OKAY. AND THAT WOULD BE THE SAME FOR THE 2013 PROFICIENCY TESTING THAT IS REPORTED HERE. THESE WOULD RELATE ONLY TO FDA APPROVED MACHINES?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: IN OTHER WORDS, THEY DON'T SAY ANYTHING ABOUT PROFICIENCY TESTING ON YOUR MINILAB, ON YOUR EDISON 3.5, OR THE MODIFIED SIEMENS MACHINES?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. HOW ABOUT 2014, CHLAMYDIA, YOU DIDN'T TEST FOR CHLAMYDIA ON THE EDISON?
MR. LEACH: THAT'S NOT AN IMMUNOASSAY?
ELIZABETH A. HOLMES: IT IS NOT.
MR. LEACH: HOW ABOUT HEPATITIS VIRAL LOAD-B? THAT WAS NOT SOMETHING YOU RAN ON THE EDISON, IS IT?
ELIZABETH A. HOLMES: IT IS NOT.
MR. LEACH: OKAY. SO EVEN THE 2014 NUMBERS HERE DON'T SAY ANYTHING ABOUT PROFICIENCY TESTING ON THE EDISON DEVICE OR YOUR MINILAB?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU WERE HOLDING THIS OUT TO INVESTORS SO THAT THEY COULD BE COMFORTABLE WITH THERANOS BECAUSE THEY HAD PASSED PROFICIENCY TESTING IN 2011, 2012, AND 2013?
ELIZABETH A. HOLMES: YES, I WAS SHARING OUR PROFICIENCY TESTING SCORES FOR THOSE YEARS.
MR. LEACH: AND YOU NEVER TOLD THE INVESTORS THAT THE NUMBERS ON THIS SLIDE HAD ZERO TO DO WITH EDISON, DID YOU?
ELIZABETH A. HOLMES: WE DID NOT. I DON'T REMEMBER EVER DISCUSSING THE NUMBERS ON THIS SLIDE.
MR. LEACH: AND YOU NEVER TOLD AN INVESTOR THAT THE NUMBERS ON THIS SCREENS HAVE ZERO TO DO WITH THE MODIFIED SIEMENS MACHINES?
ELIZABETH A. HOLMES: NO, I DON'T THINK WE DISCUSSED THE SLIDE.
MR. LEACH: YOU DIDN'T TALK ABOUT MODIFIED SIEMENS MACHINES WITH ANY INVESTORS. AM I RIGHT ABOUT THAT?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: LET ME NEXT ASK YOU TO LOOK AT EXHIBIT 39, OR ACTUALLY IF WE COULD LOOK AT PAGE 28 OF THIS EXHIBIT. IS THIS ANOTHER SLIDE THAT IS SIMILAR TO THE ONE THAT WE SAW IN THE PFM PRESENTATION IN THE PRIOR EXHIBIT?
MR. LEACH: OKAY. AND THIS SLIDE ALSO HAS IN THAT THIRD LINE, "THERANOS PROVIDES THE HIGHEST LEVEL OF OVERSIGHT, AUTOMATION, AND STANDARDIZATION IN OUR PRE- AND POST-ANALYTIC PROCESSES, ENSURING THE HIGHEST LEVELS OF ACCURACY AND PRECISION." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THIS IS GOING TO RDV AT SOME POINT IN SEPTEMBER OR OCTOBER OF 2014?
ELIZABETH A. HOLMES: I THINK SO. I DON'T HAVE THE EMAIL, BUT THAT SOUNDS RIGHT.
MR. LEACH: WELL, YOU REMEMBER THE BDT CONFERENCE IN SEPTEMBER OR OCTOBER OF 2014?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU ASSOCIATE THAT WITH THE RDV INVESTMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: SO ARE YOU COMFORTABLE THAT THIS PRESENTATION IS SOMETIME IN THE FALL OF 2014?
MR. LEACH: AND MORE THAN A YEAR AFTER THE LAUNCH?
MR. LEACH: AND MORE THAN A YEAR AFTER YOU GOT THE ADVICE FROM HYMAN PHELPS ABOUT THE HIGHEST LEVELS OF ACCURACY?
MR. LEACH: LET'S LOOK AT PAGE 30. IS THIS SLIDE SIMILAR TO THE SLIDE THAT WE SAW IN THE PFM PRESENTATION?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IT ALSO INCLUDES TWICE HIGHEST LEVELS OF ACCURACY?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: OKAY. DAN YOUNG DIDN'T GO TO INVESTOR PRESENTATIONS; IS THAT CORRECT?
ELIZABETH A. HOLMES: NOT GENERALLY. HE MAY HAVE BEEN AT SOME.
MR. LEACH: YOU DON'T HAVE A SPECIFIC MEMORY OF DAN YOUNG EVER GOING TO AN INVESTOR PRESENTATION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: WHICH ONE?
ELIZABETH A. HOLMES: WHEN WE STARTED DOING SHAREHOLDER MEETINGS, DR. YOUNG WOULD JOIN US IN THOSE SHAREHOLDER MEETINGS.
MR. LEACH: OKAY. THAT'S 2016?
MR. LEACH: RIGHT. LET'S FOCUS ON THE TIME PERIOD PRIOR TO OCTOBER 2015. YOU HAVE NO MEMORY OF DAN YOUNG EVER GOING TO AN INVESTOR PRESENTATION?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: HE WASN'T THERE WHEN YOU PRESENTED TO PFM?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: HE WASN'T THERE WHEN YOU PRESENTED TO RDV?
MR. LEACH: AND HE WASN'T THERE FOR MEETINGS THAT YOU HAD WITH BDT?
ELIZABETH A. HOLMES: I'M SORRY. WITH?
MR. LEACH: BDT.
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: HE WASN'T THERE FOR MEETINGS YOU HAD WITH RUPERT MURDOCH?
ELIZABETH A. HOLMES: HE WAS NOT.
MR. LEACH: HE WASN'T THERE FOR MEETINGS THAT YOU HAD WITH THE DEVOS FAMILY?
ELIZABETH A. HOLMES: HE WAS NOT.
MR. LEACH: HIS JOB WAS TO RUN R&D. AM I RIGHT?
ELIZABETH A. HOLMES: IT WAS, YES.
MR. LEACH: AND NOT INVESTOR RELATIONS?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: THANK YOU, MS. HOLLIMAN. WE CAN TAKE THAT DOWN. AM I RIGHT IT'S YOUR TESTIMONY THAT YOU TOLD THE BOARD OF DIRECTORS THERANOS WAS USING MODIFIED COMMERCIAL ANALYZERS TO DO THE PHASE I TESTING?
ELIZABETH A. HOLMES: I TOLD THE BOARD OF DIRECTORS THAT WE HAD AN INVENTION AROUND MODIFIED COMMERCIAL ANALYZERS.
MR. LEACH: OKAY. AND YOU -- YOUR TESTIMONY IS THAT YOU TOLD THE BOARD OF DIRECTORS THAT IN OCTOBER OF 2013?
MR. LEACH: OKAY. AND WE SAW DURING YOUR DIRECT EXAMINATION THE MINUTES OF THAT MEETING; CORRECT?
MR. LEACH: OKAY. AND YOU POINTED TO SOME LANGUAGE ABOUT TRADE SECRETS, BUT THERE'S NO REFERENCE IN THE MINUTES TO MODIFIED COMMERCIAL MACHINES. CAN WE AGREE ON THAT?
ELIZABETH A. HOLMES: I THINK THAT'S RIGHT. I HAVEN'T REREAD THEM, BUT THAT WOULD MAKE SENSE.
MR. LEACH: OKAY. WE HAVE YOUR MEMORY FOR THAT POINT. IT'S NOT SOMETHING IN THE MINUTES?
ELIZABETH A. HOLMES: I THINK THAT'S RIGHT.
MR. LEACH: OKAY. AND YOU WERE HERE WHEN GENERAL MATTIS TESTIFIED THAT HE WAS UNAWARE THAT THE COMPANY WAS USING THIRD PARTY COMMERCIAL MACHINES TO DO THIS TESTING?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: OKAY. AND CAN WE AGREE THAT YOU HAD NO REASON TO KEEP FROM THE -- THE BOARD OF DIRECTORS IS A -- CAN BE TRUSTED TO KEEP SECRETS, CAN WE AGREE ON THAT?
MR. LEACH: AND SO I KNOW YOU'VE MENTIONED TRADE SECRETS IN THE PAST, BUT YOU CAN SHARE YOUR TRADE SECRETS FREELY WITH YOUR BOARD OF DIRECTORS; CORRECT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: SO THERE WAS NOTHING IN YOUR VIEW OF TRADE SECRETS THAT GOT IN THE WAY OF YOU TELLING MEMBERS OF THE BOARD, WE'RE MODIFYING SIEMENS MACHINES, THAT THIS IS HOPEFULLY JUST PART OF PHASE I. THERE WAS NOTHING IN THE WAY OF YOU TELLING THEM THAT?
ELIZABETH A. HOLMES: I UNDERSTOOD DESCRIBING THAT WE HAD THIS INVENTION THAT WE HAD A TRADE SECRET WAS TOTALLY APPROPRIATE.
MR. LEACH: AND YOU WERE ALSO SHOWN SOME PATENT PORTFOLIOS THAT WERE PROVIDED TO THE BOARD?
MR. LEACH: OKAY. YOU DON'T HAVE A MEMORY OF GOING THROUGH THE PATENT PORTFOLIO WITH MEMBERS OF YOUR BOARD OF DIRECTORS, DO YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOU WENT THROUGH LINE BY LINE AND TOLD THEM THIS RELATES TO THAT, THIS RELATES TO THIS?
ELIZABETH A. HOLMES: I WOULD GO THROUGH SECTIONS OF IT, SO WE WOULD DESCRIBE GENERAL SECTIONS RELATED TO DIFFERENT TOPICS, LIKE IN THAT CASE COLLECTION DEVICES ASSOCIATED WITH THE LAUNCH OR OTHER TECHNOLOGIES THAT WERE ASSOCIATED WITH THE LAUNCH THAT WE WERE TRYING TO PROTECT IN ANTICIPATION OF THE PUBLIC ANNOUNCEMENT.
MR. LEACH: BUT YOU AGREE WITH ME THAT THERE'S NO RECORD OF THE SPECIFIC PORTION OF THE DOCUMENT THAT YOU WALKED THROUGH WITH THE BOARD OF DIRECTORS IN OCTOBER OF 2013?
ELIZABETH A. HOLMES: I THINK YOU'RE RIGHT. AGAIN, I HAVEN'T READ THOSE MINUTES IN THEIR ENTIRETY.
MR. LEACH: OKAY. WE HAVE YOUR MEMORY FOR THAT?
MR. LEACH: AND WE HAVE GENERAL MATTIS'S MEMORY OF THAT?
ELIZABETH A. HOLMES: WE DO.
MR. LEACH: OKAY. I'D LIKE TO DRAW YOUR ATTENTION TO -- WELL, ISN'T IT RIGHT AFTER "THE WALL STREET JOURNAL" ARTICLE COMES OUT IN 2015, MS. HOLMES, MEMBERS OF THE BOARD ASK YOU QUESTIONS ABOUT WHAT ARE WE TESTING AND WHAT ARE WE TESTING ON?
ELIZABETH A. HOLMES: THEY DID.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO EXHIBIT 4553.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: IS THAT YOUR EMAIL ADDRESS?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND DO YOU SEE THE DATE SATURDAY, OCTOBER 17TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE EMAIL ADDRESSES FOR A NUMBER OF YOUR BOARD MEMBERS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOUR HONOR, I MOVE THE ADMISSION OF EXHIBIT 4553.
COURT CLERK: THAT WAS PREVIOUSLY ADMITTED. IT'S PREVIOUSLY ADMITTED, YOUR HONOR.
MR. LEACH: EVEN BETTER. THANK YOU, MS. KRATZMANN.
JUDGE DAVILA: IT LOOKS LIKE IT HAS BEEN PREVIOUSLY ADMITTED, SO IT CAN BE PUBLISHED.
BY MR. LEACH:
MR. LEACH: LET ME DRAW YOUR ATTENTION, MS. HOLMES, TO THE BOTTOM EMAIL. THERE'S AN EMAIL FROM -- IS THAT MR. KOVACEVICH'S EMAIL IN THE FROM LINE AT WELLS FARGO?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND YOU SEE THE DATE OCTOBER 16TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS AFTER MR. CARREYROU HAS COME OUT WITH HIS ARTICLE?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND MR. KOVACEVICH IS WRITING, "THIS WAS WELL DONE. I AM STILL CONFUSED, HOWEVER, REGARDING MY PREVIOUS EMAIL. AT THIS MOMENT, HOW MANY OF OUR CUSTOMER SUBMISSIONS ARE BEING TESTED ON LAB EQUIPMENT VERSUS EDISON? I UNDERSTAND WHAT IS BEING SAID THERE IS VERY LITTLE." DO YOU SEE THAT LANGUAGE?
MR. LEACH: AND IS THIS CONSISTENT WITH OTHER QUESTIONS THAT YOU RECEIVED FROM YOUR BOARD IN THIS TIME PERIOD ABOUT WHAT EXACTLY THERANOS WAS TESTING AND ON WHAT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: LET'S LOOK AT YOUR RESPONSE. CAN WE AGREE, MS. HOLMES, THAT YOU DON'T USE THE WORD "SIEMENS" IN YOUR RESPONSE TO YOUR BOARD OF DIRECTORS HERE?
ELIZABETH A. HOLMES: I HAVEN'T READ IT YET, BUT I PROBABLY DIDN'T.
MR. LEACH: OKAY. AND CAN WE AGREE THAT YOU DID NOT USE THE WORD "BECTON DICKINSON" IN YOUR RESPONSE TO THE BOARD OF DIRECTORS?
ELIZABETH A. HOLMES: I'M SURE I DIDN'T.
MR. LEACH: AND YOU DO WRITE IN THAT THIRD PARAGRAPH -- I DON'T KNOW THE PARAGRAPHS, BUT IT'S THE LINE BEGINNING DURING, "DURING THE TIME WE ARE TRANSITIONING THE NANOTAINERS OPERATIONS, WE ARE STILL ABLE TO USE ALL OF OUR PROPRIETARY TECHNOLOGY, INCLUDING OUR DEVICES, WHICH WERE APPROVED FOR USE THIS SUMMER BASED ON THE STUDIES WITH APPROXIMATELY 900 PATIENT SAMPLES." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THEN YOU WROTE, "NOTE THE NAME EDISON WAS THE NAME OF THE COMPANY'S VERY FIRST DEVICE (NOT OUR CURRENT SYSTEMS) - THIS IS ONE OF MANY INCORRECT STATEMENTS BY THE FORMER EMPLOYEE WHO COMMUNICATED THIS INFORMATION TO THE WSJ REPORTER." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THIS SIMILAR TO COMMENTS THAT YOU MADE PUBLIC ABOUT EDISON BEING SOMETHING THAT YOU HAD USED WAY IN THE PAST?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THAT WASN'T COMPLETELY FORTHRIGHT; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DEFINITELY WOULDN'T SAY IT THAT WAY NOW. WHAT I WAS ATTEMPTING TO EXPRESS IS THAT I THOUGHT OF EDISON AS AN EARLIER VERSION OF THE 3 SERIES.
MR. LEACH: SO THIS IS ANOTHER THING THAT YOU WISH YOU DID DIFFERENTLY?
ELIZABETH A. HOLMES: YES. THERE ARE MANY THINGS THAT I WISH I DID DIFFERENTLY.
MR. LEACH: INCLUDING THIS ONE?
MR. LEACH: OKAY. THANK YOU. THANK YOU, MS. HOLLIMAN. WE CAN TAKE THAT DOWN. I'D LIKE TO DRAW YOUR ATTENTION, MS. HOLMES, TO SOME OF YOUR DIRECT TESTIMONY ABOUT PHARMACEUTICAL COMPANIES. DO YOU RECALL TESTIFYING ABOUT PHARMACEUTICAL COMPANIES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND I UNDERSTAND YOU'VE SEEN, THROUGH A NUMBER OF WITNESSES, A REPORT THAT YOU SENT TO INVESTORS AND TO WALGREENS BEARING THE PFIZER LOGO. DO YOU RECALL TESTIMONY AROUND THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOUR TESTIMONY ON DIRECT EXAMINATION WAS YOU APPLIED THAT LOGO TO THE DOCUMENT?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: OKAY. AND IF WE COULD PLEASE DISPLAY WHAT IS IN EVIDENCE AS TRIAL EXHIBIT 291 AT PAGE 8. DO YOU RECOGNIZE THIS AS THE ATTACHMENT THAT YOU SENT TO WALGREENS IN ADVANCE OF OR IN CONNECTION WITH DISCUSSIONS ABOUT A POTENTIAL PARTNERSHIP?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DO YOU AGREE WITH ME THAT THIS DOCUMENT IS NOT FROM PFIZER?
ELIZABETH A. HOLMES: NO. IT'S FROM THERANOS.
MR. LEACH: IT'S FROM THERANOS, NOT PFIZER?
MR. LEACH: WE CAN AGREE ON THAT?
MR. LEACH: OKAY. AND YOU PUT THE PFIZER LOGO ON THIS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU DID NOT SEEK PFIZER'S PERMISSION TO DO THAT?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: NO ONE FROM PFIZER AUTHORIZED YOU TO DO THAT?
ELIZABETH A. HOLMES: AGAIN, I DON'T KNOW. I CAN'T REMEMBER. I CAN'T REMEMBER DOING THIS.
MR. LEACH: NO ONE FROM PFIZER ORALLY TOLD YOU THAT YOU HAD PFIZER'S PERMISSION TO PUT THE PFIZER LOGO ON A THERANOS REPORT; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: AND NO ONE TOLD YOU IN WRITING THAT YOU HAD PERMISSION TO PUT THE PFIZER LOGO ON THE THERANOS REPORT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: BEFORE GIVING THE DOCUMENT TO WALGREENS, YOU DID NOT TELL PFIZER YOU WERE ADDING ITS LOGO TO A DOCUMENT THAT THERANOS PREPARED; AM I RIGHT?
ELIZABETH A. HOLMES: I DON'T KNOW. I DON'T REMEMBER THIS PROCESS.
MR. LEACH: AND YOU NEVER TOLD WALGREENS THAT YOU PUT THE PFIZER LOGO ON THIS?
ELIZABETH A. HOLMES: I'M SURE WE DIDN'T.
MR. LEACH: DO YOU AGREE WITH ME THAT THIS IS NOT AN INDEPENDENT DUE DILIGENCE REPORT?
ELIZABETH A. HOLMES: I THOUGHT IT WAS.
MR. LEACH: SITTING HERE TODAY, DO YOU AGREE WITH ME THAT THIS IS NOT AN INDEPENDENT DUE DILIGENCE REPORT?
ELIZABETH A. HOLMES: I STILL THINK IT WAS.
MR. LEACH: IT'S NOT AN INDEPENDENT DUE DILIGENCE REPORT FROM PFIZER; IS THAT FAIR? WILL YOU AGREE WITH ME ON THAT?
ELIZABETH A. HOLMES: IT IS WRITTEN BY THERANOS. IT WAS FROM THE PROGRAM THAT WE DID WITH PFIZER.
MR. LEACH: OKAY. BUT IT'S NOT FROM PFIZER? THAT WAS YOUR TESTIMONY A FEW MINUTES AGO?
ELIZABETH A. HOLMES: CORRECT. IT WAS -- I SENT IT TO WALGREENS. THERANOS SENT IT TO WALGREENS, NOT PFIZER. PFIZER DID NOT SEND IT TO WALGREENS.
MR. LEACH: NOW, THERANOS DID MORE THAN SIMPLY AFFIX THE PFIZER LOGO TO THIS; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, LET'S LOOK. IF WE CAN COMPARE EXHIBIT 291, PAGE 8 WITH EXHIBIT 143, PAGE 3. THESE ARE IN EVIDENCE.
(PAUSE IN PROCEEDINGS.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, DO YOU SEE ON THE SCREEN ON THE LEFT SIDE EXHIBIT 291, PAGE 8?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS WAS WHAT WAS SENT TO WALGREENS?
MR. LEACH: AND DO YOU SEE ON THE RIGHT EXHIBIT 143, PAGE 3, THIS IS THE DOCUMENT THAT YOU HAD INITIALLY SENT TO PFIZER?
MR. LEACH: AND DO YOU SEE HOW THE WORDS "PREPARED FOR DR. AIDAN POWER" ARE ABSENT FROM EXHIBIT 291 ON PAGE 8?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DID YOU DELETE THOSE WORDS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: YOU DIDN'T MENTION THAT IN YOUR DIRECT EXAMINATION, DID YOU?
ELIZABETH A. HOLMES: NO, I DON'T THINK WE TALKED ABOUT THAT EXPLICITLY.
MR. LEACH: OKAY. DO YOU AGREE WITH ME THAT EXPLICITLY STATING THAT THIS WAS PREPARED FOR DR. AIDAN POWER MIGHT MAKE IT EASIER FOR A READER TO DETERMINE THAT THIS WAS PREPARED BY THERANOS?
ELIZABETH A. HOLMES: IT COULD.
MR. LEACH: IS DELETING THOSE WORDS ANOTHER THING YOU WISH YOU HAD DONE DIFFERENTLY?
ELIZABETH A. HOLMES: I DO. I WISH I HAD HANDLED THIS DIFFERENTLY, YES.
MR. LEACH: OKAY. LET'S LOOK AT EXHIBIT 174, WHICH IS IN EVIDENCE. I THINK IT'S ALSO IN YOUR BINDER, MS. HOLMES. DO YOU RECALL TESTIMONY FROM SHANE WEBER RELATING TO THIS EXHIBIT, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. DO YOU RECALL SHANE WEBER TELLING YOU PFIZER DID NOT HAVE AT THAT TIME A FORESEEABLE USE FOR THE THERANOS DEVICE?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: IN THIS DOCUMENT IT SAYS, "TODAY I SPOKE WITH ELIZABETH HOLMES, CEO, THERANOS AND EXPLAINED TO HER THAT PFIZER DID NOT HAVE AT THIS TIME A FORESEEABLE USE FOR THE THERANOS IMMUNOASSAY DEVICE FOR AT PATIENT SELF USE AT HOME BUT SHE AND I AGREED TO STAY IN TOUCH EVERY SIX MONTHS." DO YOU RECALL DR. WEBER TELLING YOU THAT YOU AGREED TO STAY IN TOUCH EVERY SIX MONTHS?
ELIZABETH A. HOLMES: I REMEMBER GENERALLY THAT I HAD A CALL WITH PFIZER AND THAT WE WERE GOING TO CONTINUE TALKING.
MR. LEACH: YOU ALSO TESTIFIED ABOUT INTERACTIONS THAT YOU HAD WITH PFIZER AFTER JANUARY OF 2009. DO YOU RECALL THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND LET'S BE 100 PERCENT CLEAR. NONE OF THOSE INTERACTIONS WITH PFIZER RESULTED IN ANY REVENUE GENERATING CONTRACT WITH THERANOS; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: NOTHING EVER CAME OF THAT TALK?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: IT WAS JUST TALK?
ELIZABETH A. HOLMES: IT WAS TALK AND WORK, BUT WE DIDN'T GET REVENUE FROM IT.
MR. LEACH: YOU NEVER HAD ANOTHER AGREEMENT WITH PFIZER AFTER THE 2009 REPORT; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: PFIZER DIDN'T PAY THERANOS ANOTHER DIME AFTER JANUARY OF 2009; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION TO EXHIBIT 1504, 15041, WHICH I THINK WAS ADMITTED DURING YOUR DIRECT EXAMINATION. AND IF WE COULD -- MS. HOLLIMAN, IS THERE A WAY TO BE ABLE TO PULL THAT UP? AND IF WE CAN ALSO DISPLAY THIS NEXT TO EXHIBIT 291, PAGE 33. MS. HOLMES, DO YOU SEE ON THE SCREEN ON THE LEFT EXHIBIT 15041?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RECALL TESTIFYING ABOUT THIS ON YOUR DIRECT EXAMINATION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND I JUXTAPOSED THIS AGAINST PAGE 33 OF EXHIBIT 291. THAT'S THE DOCUMENT THAT YOU SENT TO WALGREENS WITH THE PFIZER LOGO ON IT?
MR. LEACH: AND THIS PAGE OF EXHIBIT 291 LISTS A NUMBER OF CONCLUSIONS. DO YOU SEE THAT TO THE RIGHT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: FOCUSSING ON EXHIBIT 15041, THERE WERE A COUPLE NAMES, DAVID LESTER. DAVID LESTER WAS SOMEBODY WHO HAD WORKED AT PFIZER?
MR. LEACH: AND THEN HE CAME TO THERANOS?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND HE LEFT PRETTY SHORTLY AFTER COMING TO THERANOS; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: YEAH. I DON'T REMEMBER WHEN HE LEFT, BUT HE WASN'T THERE VERY LONG.
MR. LEACH: A MATTER OF MONTHS MAYBE?
ELIZABETH A. HOLMES: I REMEMBER IT AS LONGER, BUT I DON'T KNOW.
MR. LEACH: NOT MORE THAN THREE OR FOUR YEARS?
MR. LEACH: AND HE CERTAINLY WASN'T THERE IN 2011, 2012, 2013?
ELIZABETH A. HOLMES: HE WASN'T.
MR. LEACH: AND THINGS JUST DIDN'T WORK OUT WITH MR. LESTER?
ELIZABETH A. HOLMES: THEY DID NOT.
MR. LEACH: AND THE EMAIL -- AND WE CAN ZOOM OUT, MS. HOLLIMAN. THE EMAIL DOWN AT THE BOTTOM FROM CRAIG LIPSET, THAT WAS ANOTHER CONTACT THAT YOU HAD WITH PFIZER; IS THAT CORRECT?
ELIZABETH A. HOLMES: YES, HE OVERSAW OUR PROGRAM THAT WE DID WITH THEM.
MR. LEACH: OKAY. AND YOU RECALL MR. WEBER TESTIFYING ABOUT HIS INTERACTIONS WITH CRAIG LIPSET WHEN HE CAME TO PFIZER?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND THIS EMAIL RELATES TO MODELING CAPABILITIES; CORRECT?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: THERANOS IN THIS TIME PERIOD WAS TRYING TO DEVELOP MODELS TO HELP PHARMACEUTICAL COMPANIES ASSESS DRUG CONCENTRATIONS AND IDENTIFY BIOMARKERS. AM I SUMMARIZING IT AT A HIGH LEVEL CORRECTLY?
ELIZABETH A. HOLMES: YES. OTHER THINGS, TOO, BUT YES.
MR. LEACH: BUT IT RELATES TO MODELING?
MR. LEACH: IT'S NOT RELATED TO THE DEVICE. IS THAT FAIR?
ELIZABETH A. HOLMES: I THINK HE'S SAYING UNLESS SAMPLES BECOME AVAILABLE. IF SAMPLES BECOME AVAILABLE, THEN IT WOULD.
MR. LEACH: YOU AGREE WITH ME THAT NOWHERE IN EXHIBIT 15041 DOES MR. LIPSET SAY THAT HE AGREES WITH THE CONCLUSIONS IN EXHIBIT 291?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND NOWHERE HERE DOES MR. LIPSET SAY THAT PFIZER HAS VALIDATED THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: HE DOES NOT.
MR. LEACH: AND NOWHERE IN 15041 DOES MR. LIPSET SAY THAT PFIZER HAS COMPREHENSIVELY VALIDATED THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: HE DOES NOT.
MR. LEACH: AND NOWHERE IN HERE DOES MR. LIPSET AUTHORIZE YOU TO AFFIX THE PFIZER LOGO TO DOCUMENTS?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND NOTHING EVER CAME OF THIS EMAIL EXCHANGE ABOUT MODELING CAPABILITIES; CORRECT?
ELIZABETH A. HOLMES: ULTIMATELY, NO.
MR. LEACH: OKAY. THERE WAS NO CONTRACT RELATING TO MODELING CAPABILITIES?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. THERE WAS SOME TALK?
ELIZABETH A. HOLMES: YES. WE DID SOME WORK ON THIS, AND ULTIMATELY THE DRUG WAS DISCONTINUED.
MR. LEACH: OKAY. AND PFIZER DIDN'T PAY MONEY TO THERANOS AS A RESULT OF THIS EMAIL EXCHANGE, DID THEY?
ELIZABETH A. HOLMES: THEY DID NOT.
MR. LEACH: OKAY. LET'S LOOK AT EXHIBIT 15047, WHICH I THINK YOU COVERED WITH MR. DOWNEY. AND IF WE CAN ALSO DISPLAY THAT SIDE-BY-SIDE WITH 291, PAGE 33. THIS IS AN EMAIL DATED OCTOBER 29TH, 2013. DO YOU SEE THAT ON THE SCREEN, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RECALL TESTIFYING ABOUT THIS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND THIS IS AN EMAIL EXCHANGE BETWEEN YOU AND SOMEONE NAMED HAKAN SAKUL?
MR. LEACH: AND EARLIER IN THE EXCHANGE THERE'S ALSO REFERENCE TO MORTEN SOGAARD?
ELIZABETH A. HOLMES: YES. I DON'T KNOW IF I HAVE A COPY OF IT. OH, I CAN SEE IT, YES.
MR. LEACH: IF YOU LOOK AT THE VERY BOTTOM.
ELIZABETH A. HOLMES: YEP, YEP.
MR. LEACH: AND THIS IS FROM OCTOBER OF 2013; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND MR. SAKUL WROTE TO YOU, "IT WAS VERY NICE TO MEET WITH YOU AND SEEING YOU AGAIN ELIZABETH, AND LEARN ABOUT THE GREAT PROGRESS THERANOS HAS MADE OVER THE YEARS." DO YOU RECALL TESTIFYING ABOUT THIS EXCHANGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: LET'S BE CLEAR ABOUT THE TIMING OF THIS EMAIL. THIS WAS AFTER THE SEPTEMBER 23RD, OR 2013 JOE RAGO PIECE IN "THE WALL STREET JOURNAL"; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: SO THIS IS AFTER THERANOS HAS VERY PUBLICLY TOLD THE WORLD ABOUT ITS TECHNOLOGY AND WHAT IT WAS HOPING TO DO?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND THIS IS AFTER WALGREENS HAS ISSUED A PRESS RELEASE SAYING THAT WE HAVE A RELATIONSHIP WITH THERANOS?
MR. LEACH: AND AFTER THERANOS HAD ISSUED A PRESS RELEASE SAYING WE ARE DOING TESTING WITH WALGREENS?
ELIZABETH A. HOLMES: I THINK IT WAS THE SAME PRESS RELEASE, BUT YES.
MR. LEACH: I THINK WE'VE SEEN TWO.
ELIZABETH A. HOLMES: I'D DEFER TO YOU.
MR. LEACH: NOT MATERIAL FOR OUR DISCUSSION?
MR. LEACH: THIS EMAIL COMES AFTER THAT; CORRECT?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: SO THERE'S NEW INFORMATION OUT IN THE WORLD AND PFIZER IS EMAILING YOU AND MEETING WITH YOU IN THIS TIME PERIOD?
MR. LEACH: OKAY. AND THIS WAS AFTER MR. RAGO HAD WRITTEN IN HIS ARTICLE "THERANOS TECHNOLOGY ELIMINATES MULTIPLE LAB TRIPS BECAUSE IT CAN RUN ANY COMBINATION OF TESTS AT ONCE VERY QUICKLY ALL FROM A SINGLE MICRO SAMPLE"? THIS IS AFTER THAT?
MR. LEACH: AND THIS IS AFTER MR. RAGO HAD SAID "THERANOS'S PROCESSES ARE FASTER, CHEAPER AND MORE ACCURATE THAN CONVENTIONAL METHODS"?
ELIZABETH A. HOLMES: YES. I DON'T HAVE THE ARTICLE IN FRONT OF ME, BUT I'M ASSUMING THAT'S FROM THE ARTICLE.
MR. LEACH: THAT SOUNDS RIGHT TO YOU?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: OKAY. AND THAT WAS AN ARTICLE THAT YOU HAD AN OPPORTUNITY TO REVIEW AND COMMENT ON?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU DON'T DISPUTE THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: NOW, NOWHERE IN EXHIBIT 15047 DO MR. SAKUL OR MR. SOGAARD SAY PFIZER AGREES WITH THE CONCLUSIONS IN EXHIBIT 291; IS THAT CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND IF WE CAN ZOOM OUT, MS. HOLLIMAN. NOWHERE IN EXHIBIT 15047 DO DR. SAKUL OR DR. SOGAARD SAY PFIZER HAS VALIDATED THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND NOWHERE IN EXHIBIT 15047 DO DR. SAKUL OR DR. SOGAARD SAY PFIZER HAS COMPREHENSIVELY VALIDATED THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND NOWHERE IN HERE DO THOSE TWO INDIVIDUALS AUTHORIZE YOU TO AFFIX THE PFIZER LOGO TO DOCUMENTS. AM I RIGHT ABOUT THAT?
MR. LEACH: AND NOTHING EVER CAME OF THIS EXCHANGE EITHER, DID IT?
ELIZABETH A. HOLMES: AGAIN, I THINK THERE'S ONGOING MEETINGS AND DISCUSSIONS ABOUT CLINICAL TRIALS AT RETAIL.
MR. LEACH: MEETINGS AND DISCUSSIONS AND TALK; RIGHT?
MR. LEACH: BUT PFIZER DIDN'T PAY ANY MONEY TO THERANOS AS A RESULT OF THIS EMAIL EXCHANGE?
ELIZABETH A. HOLMES: THEY DID NOT.
MR. LEACH: OKAY. LET'S LOOK AT EXHIBIT 15039. AND IF WE CAN JUXTAPOSE THEN AGAINST 291, PAGE 33. MS. HOLMES, DO YOU SEE ON THE SCREEN AN EMAIL EXCHANGE THAT STARTS FROM CRAIG LIPSET IN OR AROUND FEBRUARY 20TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND I DRAW YOUR ATTENTION TO THE SUBJECT LINE "TOUCHING BASE; OPPORTUNITIES." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND MR. LIPSET WRITES, "HI, ELIZABETH. IT HAS BEEN YEARS," ALL CAPS, "SINCE WE LAST TOUCHED BASE, BUT YOU HAVE CLEARLY BEEN BUSY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: WAS IT TRUE THAT IT HAD BEEN YEARS SINCE YOU AND MR. LIPSET HAD LAST TOUCHED BASE?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND LET'S BE CLEAR ON THE TIMING OF THIS EMAIL, FEBRUARY OF 2015. THIS WAS MORE THAN A YEAR AND A COUPLE MONTHS AFTER THERANOS AND WALGREENS ANNOUNCED THEIR PARTNERSHIP; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS WAS AFTER ROGER PARLOFF'S ARTICLE IN JUNE OF 2014?
MR. LEACH: THIS IS AFTER MR. PARLOFF HAD REPORTED THAT THERANOS DID NOT BUY COMMERCIALLY AVAILABLE ANALYZERS; CORRECT?
ELIZABETH A. HOLMES: I SAW THAT IN HIS ARTICLE, YES.
MR. LEACH: AND THIS IS AFTER THAT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS IS AFTER, FAIR TO SAY, A LOT OF PUBLICITY ABOUT THERANOS?
MR. LEACH: AND SO BY FEBRUARY OF 2015, THERE'S SIGNIFICANT NEW INFORMATION OUT THERE ABOUT THERANOS?
ELIZABETH A. HOLMES: THERE IS.
MR. LEACH: AND MR. LIPSET IS REACHING OUT TO YOU IN THAT CONTEXT SAYING IT'S BEEN YEARS SINCE YOU'VE BEEN IN TOUCH?
MR. LEACH: AND IF WE CAN ZOOM OUT, MS. HOLLIMAN. AM I RIGHT THAT NOWHERE IN EXHIBIT 15039 DOES MR. LIPSET SAY PFIZER AGREES WITH THE CONCLUSIONS IN EXHIBIT 291?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND NOWHERE IN EXHIBIT 15039 DOES MR. LIPSET SAY PFIZER HAS VALIDATED THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND NOWHERE IN HERE DOES MR. LIPSET SAY PFIZER HAS COMPREHENSIVELY VALIDATED THERANOS'S TECHNOLOGY?
MR. LEACH: AND NOWHERE IN HERE DOES MR. LIPSET AUTHORIZE YOU TO AFFIX THE PFIZER LOGO TO DOCUMENTS?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: OKAY. AND NOTHING EVER CAME OF THIS EXHIBIT; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: IT WAS TALK?
ELIZABETH A. HOLMES: IT WAS WORK TOWARD SEEING IF WE COULD DO CLINICAL TRIALS IN THE STORES, BUT WE NEVER DID THAT.
MR. LEACH: OKAY. AND PFIZER DIDN'T PAY MONEY TO THERANOS AS A RESULT OF THIS EXCHANGE?
ELIZABETH A. HOLMES: THEY DID NOT.
MR. LEACH: YOU ALSO TESTIFIED ABOUT SCHERING-PLOUGH. DO YOU RECALL SOME TESTIMONY ABOUT SCHERING-PLOUGH?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IF WE COULD DISPLAY EXHIBIT 291, WHICH WE'VE BEEN ON, PAGE 34. AND WE CAN TAKE DOWN 15039, MS. HOLLIMAN. DO YOU RECALL TESTIFYING, MS. HOLMES, THAT YOU WERE THE INDIVIDUAL WHO APPLIED THE SCHERING-PLOUGH LOGO TO THIS DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. DID YOU DO THAT AT OR AROUND THE TIME THAT YOU APPLIED THE LOGO FOR THE PFIZER DOCUMENT?
ELIZABETH A. HOLMES: I BELIEVE SO.
MR. LEACH: OKAY. DO YOU AGREE WITH ME THAT THIS DOCUMENT IS NOT FROM SCHERING-PLOUGH?
ELIZABETH A. HOLMES: NO. IT IS WRITTEN BY THERANOS.
MR. LEACH: IT'S FROM THERANOS?
MR. LEACH: AND YOU DON'T HAVE A MEMORY OF SEEKING SCHERING-PLOUGH'S PERMISSION TO DO THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: YOU DON'T HAVE A MEMORY OF SOMEONE FROM SCHERING-PLOUGH AUTHORIZING YOU TO DO THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: YOU DON'T HAVE A MEMORY OF SOMEONE FROM SCHERING-PLOUGH ORALLY TELLING YOU THAT YOU HAD SCHERING-PLOUGH'S PERMISSION TO PUT THE SCHERING-PLOUGH LOGO ON THIS THERANOS REPORT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU DON'T HAVE A MEMORY OF SOMEONE FROM SCHERING-PLOUGH TELLING YOU IN WRITING THAT YOU HAD SCHERING-PLOUGH'S PERMISSION TO APPLY THE SCHERING-PLOUGH LOGO TO THE THERANOS REPORT; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: BEFORE GIVING THE DOCUMENT TO WALGREENS, YOU DON'T HAVE A MEMORY OF TELLING SCHERING-PLOUGH YOU WERE ADDING ITS LOGO TO A DOCUMENT THAT YOU PREPARED?
ELIZABETH A. HOLMES: I DON'T HAVE A MEMORY.
MR. LEACH: AND YOU NEVER TOLD WALGREENS YOU PUT THE SCHERING-PLOUGH LOGO ON THIS?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND JUST TO BE 100 PERCENT CLEAR, THERE ARE SOME WORDS IN THIS DOCUMENT BENEATH THE LOGO, IT SAYS SCHERING-PLOUGH CORPORATION, SCHERING-PLOUGH RESEARCH, AND THEN THERE'S SOME ADDITIONAL LANGUAGE. DID YOU WRITE THAT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND THERANOS DID MORE THAN SIMPLY AFFIX THE SCHERING-PLOUGH LOGO TO THIS AND ADD THOSE WORDS; ISN'T THAT RIGHT, MS. HOLMES?
MR. LEACH: LET'S LOOK AT PAGE, IF WE CAN SCROLL DOWN, MS. HOLLIMAN, TO THE CONCLUSIONS PORTION OF THIS AND COMPARE IT WITH 259. SO, MS. HOLLIMAN, IF WE COULD PLEASE COMPARE EXHIBIT 291 AT PAGE 51 TO 259, PAGE 19. OKAY. MS. HOLMES, DO YOU SEE ON THE LEFT-HAND SIDE OF THE PAGE WE HAVE EXHIBIT 291, PAGE 51?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THE SCHERING-PLOUGH LOGO AT THE TOP?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THAT'S THE LOGO THAT YOU AFFIXED?
MR. LEACH: OKAY. AND TO THE RIGHT, DO YOU SEE EXHIBIT 259, PAGE 19?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE JUST THE THERANOS LOGO IN THE UPPER LEFT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS THE VERSION OF THE REPORT THAT YOU SENT TO SCHERING-PLOUGH?
MR. LEACH: 259?
ELIZABETH A. HOLMES: I THINK SO. I DON'T HAVE THEM IN FRONT OF ME, BUT I ASSUME SO.
MR. LEACH: OKAY. AND, MS. HOLLIMAN, IF WE COULD PLEASE ZOOM OUT. THERE ARE SOME DIFFERENCES IN THE CONCLUSIONS PARAGRAPH OF THIS -- OF THESE TWO DOCUMENTS. DO YOU SEE HOW ON 291 IT SAYS, "THE THERANOS IL-6, TNF-A, CRP ASSAY MULTIPLEX HAS BEEN SHOWN TO GIVE MORE ACCURATE AND PRECISE RESULTS FOR THREE INDEPENDENTLY CALIBRATED CARTRIDGE LOTS AND ALL OF THE MANY INSTRUMENTS USED THAN CURRENT 'GOLD STANDARD' REFERENCE METHODS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND I PROBABLY DIDN'T READ THAT AS WELL AS I SHOULD HAVE. BUT DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE HOW THOSE WORDS, "GOLD STANDARD REFERENCE METHODS," ARE NOT ON THE CONCLUSIONS IN THE REPORT THAT GOES TO SCHERING-PLOUGH?
MR. LEACH: DID YOU ADD THOSE WORDS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND YOU DIDN'T TESTIFY TO THAT IN YOUR DIRECT EXAMINATION; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: IS MAKING THE CHANGE TO THE CONCLUSIONS PARAGRAPH ALSO SOMETHING THAT YOU WISH YOU HAD DONE DIFFERENTLY?
ELIZABETH A. HOLMES: I THINK THIS WAS ACCURATELY REFLECTING THE DATA IN THE DOCUMENT. BUT, YES, I THINK THAT THE WAY THAT THESE REPORTS WERE COMMUNICATED, I ABSOLUTELY WISH IT HAD BEEN BOLDED THAT THEY WERE WRITTEN BY US.
MR. LEACH: LET'S TALK ABOUT GSK. DO YOU RECALL TESTIFYING ABOUT GSK?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IF WE COULD LOOK AT EXHIBIT 291, PAGE 2. IS THIS ANOTHER ONE OF THE ATTACHMENTS THAT WENT TO WALGREENS?
MR. LEACH: AND DO YOU SEE THE GLAXOSMITHKLINE LOGO IN THE TOP LEFT PORTION OF THIS DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THE HEADING "EXCERPTS FROM GSK METABOLIC STUDY REPORT"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: NOW, GSK, UNLIKE SCHERING-PLOUGH AND PFIZER, GSK HAD PROVIDED TO THERANOS AN EMAIL TITLED "THERANOS EVALUATION." YOU RECALL SEEING THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT WAS FROM SOMEONE NAMED NELSON RHODES?
MR. LEACH: AND HE EMAILED YOU A WORD DOCUMENT WITH INFORMATION FROM THAT EVALUATION?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND THE WORD DOCUMENT INCLUDED A SUMMARY OF THERANOS SYSTEMS BY SOMETHING CALLED THE GSK METABOLIC BIOMARKER. DOES THAT SOUND RIGHT?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: AND YOU REVIEWED THAT DOCUMENT WHEN YOU RECEIVED IT?
ELIZABETH A. HOLMES: I'M SURE I DID.
MR. LEACH: YOU WERE PLEASED WITH THE FEEDBACK?
MR. LEACH: AND SO UNLIKE PFIZER, GSK HAD PROVIDED A WRITTEN DOCUMENT SETTING FORTH AT LEAST SOME OF ITS VIEWS?
MR. LEACH: AND UNLIKE SCHERING-PLOUGH, GSK HAD PROVIDED A DOCUMENT SETTING FORTH SOME OF ITS VIEWS?
MR. LEACH: LET'S LOOK AT EXHIBIT 142, WHICH IS IN EVIDENCE. LET ME CONFIRM, MS. KRATZMANN, IS 142 IN EVIDENCE?
COURT CLERK: 142? NO.
MR. LEACH: IS 112 IN EVIDENCE?
COURT CLERK: THERE'S 112 AND --
MR. LEACH: OKAY. LET'S TRY 112.
MR. LEACH: MS. HOLMES, DO YOU SEE EXHIBIT 112 ON THE SCREEN?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: AND THIS IS THE EMAIL THAT WE HAVE BEEN TALKING ABOUT FROM NELSON RHODES AT GSK?
MR. LEACH: AND IF WE COULD PLEASE GO TO PAGE 2. AND IF WE CAN SPLIT THE SCREEN, MS. HOLLIMAN, WITH EXHIBIT 291, PAGE 2. DO YOU SEE ON THE LEFT SCREEN THE SECOND PAGE OF EXHIBIT 112, MS. HOLMES?
ELIZABETH A. HOLMES: I'M SORRY, WHICH ONE?
MR. LEACH: ON THE LEFT SIDE OF THE SCREEN --
MR. LEACH: -- DO YOU SEE THE SECOND PAGE OF EXHIBIT 112?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND TO THE RIGHT IS THE SECOND PAGE OF EXHIBIT 291 AT PAGE 2?
MR. LEACH: AND 291 IS THE DOCUMENT THAT GOES TO WALGREENS?
MR. LEACH: OKAY. THERE'S A LOGO FOR GSK AT THE TOP LEFT OF 291. DID YOU ADD THAT LOGO?
ELIZABETH A. HOLMES: I ASSUME SO.
MR. LEACH: AND DID YOU PROVIDE THE -- AND YOU PROVIDED THE DOCUMENT IN 291 TO WALGREENS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: DID YOU RECEIVE ANY PERMISSION FROM GSK TO ADD THE LOGO?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: AND YOU HAVE NO MEMORY OF RECEIVING ANY ORAL PERMISSION FROM GSK TO ADD THE LOGO?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU HAVE NO MEMORY OF ANY WRITTEN COMMUNICATION FROM GSK AUTHORIZING YOU TO ADD THE LOGO?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU DON'T HAVE A MEMORY OF TELLING ANYBODY FROM GSK THAT YOU HAD ALTERED THE DOCUMENT IN EXHIBIT 112?
ELIZABETH A. HOLMES: I'M NOT SURE. THERE WAS A GSK EXECUTIVE THAT CAME IN TO WORK WITH US WHO WAS IN ACTUAL COMMUNICATION WITH THEM.
MR. LEACH: BUT YOU DON'T HAVE A MEMORY OF HIM TELLING YOU TO AFFIX THE LOGO TO THIS AND DO WHAT YOU WILL TO IT?
MR. LEACH: DID YOU TELL ANYBODY FROM GSK THAT YOU MIGHT BE PROVIDING EXCERPTS OF A METABOLIC STUDY REPORT TO INVESTORS?
ELIZABETH A. HOLMES: WE MIGHT HAVE.
MR. LEACH: BUT YOU DON'T HAVE A MEMORY OF IT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: IF YOU COMPARE EXHIBIT 112 AT PAGE 2 ON THE LEFT TO 291-2 ON THE RIGHT, YOU'LL SEE THAT THE DATES ON MAY 27TH TO 28TH, 2008 ARE NOT PRESENT ON THE DOCUMENT WITH THE GSK LOGO. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DID YOU DELETE THOSE WORDS?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: IS THE REASON THAT THOSE WORDS ARE DELETED IS BECAUSE IT MIGHT SUGGEST THE LIMITS OF GSK'S EVALUATION?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: YOU DON'T RECALL TESTIFYING ABOUT ADDING THE GSK LOGO DURING YOUR DIRECT EXAMINATION, DO YOU?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND THERANOS DID MORE THAN SIMPLY DELETE DATES HERE. WHY DON'T -- CAN I DRAW YOUR ATTENTION, PLEASE, TO THE BULLETS?
MR. LEACH: IF WE COULD ZOOM OUT, MS. HOLLIMAN, AND GO TO PAGE 3 OF 112. DO YOU SEE IN 112 THERE'S A BULLET UNDER "GSK METABOLIC BIOMARKER LAB COMMENTS" THAT SAYS, "FINGER PRICK/BLOOD DRAW PROCEDURE WAS DIFFICULT (NEEDED LARGER LANCET AND BETTER SYRINGE SYSTEM)." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT COMMENT IS DELETED FROM THE DOCUMENT THAT GOES TO WALGREENS; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I DON'T KNOW. I HAVEN'T LOOKED AT IT, BUT -- BUT I TAKE YOUR WORD FOR IT.
MR. LEACH: DID YOU MAKE THAT DELETION?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: OKAY. IF WE COULD ZOOM OUT, MS. HOLLIMAN, SO WE MIGHT -- DO YOU SEE HOW ON THE 291 UNDER "GSK METABOLIC BIOMARKER LAB COMMENTS," THERE ARE THREE -- SIX BULLETS OR --
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE LAST ONE ENDS WITH "ASSAYS TOOK APPROXIMATELY ONE HOUR."
MR. LEACH: AND THE COMMENT ABOUT THE FINGER PRICK BEING DIFFICULT IS NOT THERE; AM I RIGHT ABOUT THAT?
ELIZABETH A. HOLMES: YOU ARE.
MR. LEACH: AND YOU DON'T KNOW WHO AT THERANOS MADE THE CHANGE TO THESE DOCUMENTS?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND DID YOU EVER TELL ANYONE AT THERANOS THAT WE CAN'T HAVE THE SLIGHTEST NEGATIVE COMMENT IN WHAT IS GOING OUT TO OUR PARTNERS?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AM I RIGHT THAT THE MEMO THAT DR. RHODES SENT YOU WAS NEVER INTENDED FOR USE OUTSIDE OF GSK?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: DIDN'T YOU UNDERSTAND THAT IT WAS A MEANS BY WHICH OTHER UNITS WITHIN GSK MIGHT HAVE SOME INFORMATION ABOUT THERANOS?
ELIZABETH A. HOLMES: I THINK THAT'S WHAT THE EVALUATION WAS FOR.
MR. LEACH: OKAY. LET'S LOOK AT THE EMAIL. IF WE CAN GO OUT TO 112. DO YOU SEE THE EMAIL FROM, IS IT SUSAN DIGIAIMO?
MR. LEACH: AND SHE WAS A SALESPERSON FOR THERANOS DURING THIS TIME PERIOD?
MR. LEACH: BY THE WAY, WE SAW DURING YOUR DIRECT SOME EMAILS TO HER PERSONAL EMAIL ADDRESS. DO YOU KNOW WHY SHE DID THAT?
ELIZABETH A. HOLMES: I THINK SHE LIKED TO MAINTAIN LOGS OF ALL OF HER CUSTOMER RELATIONSHIPS SO THAT SHE COULD USE THEM ON AN ONGOING BASIS.
MR. LEACH: DID YOU GIVE HER AUTHORITY TO DO THAT?
ELIZABETH A. HOLMES: TO DO WHAT?
MR. LEACH: FORWARD THERANOS PROPRIETARY INFORMATION TO HER PERSONAL EMAIL ADDRESS?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: SO THAT'S AN INSTANCE WHERE YOU WERE LESS CONCERNED ABOUT TRADE SECRETS?
ELIZABETH A. HOLMES: I DON'T REMEMBER ANY TRADE SECRETS IN THAT EMAIL.
MR. LEACH: YOU WOULD FEEL COMFORTABLE JUST PUTTING ON THE WEBSITE YOUR WORK WITH PFIZER AND YOUR WORK WITH GSK AND YOUR WORK WITH SCHERING-PLOUGH?
ELIZABETH A. HOLMES: IT DEPENDS ON WHAT IT IS.
MR. LEACH: OKAY. GOING BACK TO THE EMAIL, DO YOU SEE WHERE IT SAYS, "SEE ATTACHED SUMMARY OF GSK'S EVALUATION OF OUR SYSTEMS. I AM FOLLOWING UP WITH REBECCA HODGE AS WELL AS DEREK AND BOB DOBBINS IN REGARDS TO THE UP COMING AXOR STUDY AS WELL AS ADDITIONAL OPPORTUNITIES." YOU KNEW REBECCA HODGE AND DEREK AND BOB DOBBINS WERE GSK EMPLOYEES?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU UNDERSTOOD THAT WHAT DR. RHODES WAS DOING WAS SO OTHER UNITS WITHIN GSK MIGHT HAVE INFORMATION ABOUT THERANOS?
MR. LEACH: AND AM I RIGHT THAT YOUR CONTRACTS WITH PFIZER AND SCHERING-PLOUGH AND GSK PROHIBITED THERANOS FROM USING THE PFIZER -- THE RESPECTIVE LOGOS WITHOUT THEIR WRITTEN PERMISSION?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: WELL, LET'S LOOK. IF WE CAN GO TO WHAT IS IN EVIDENCE AS EXHIBIT 7753. AND IF WE CAN GO TO THE BATES ENDING 837, WHICH I BELIEVE IS PAGE 117 OF THE DOCUMENT. MS. HOLMES, DO YOU RECALL DURING MS. SPIVEY'S TESTIMONY A NUMBER OF CONTRACTS WITH PHARMACEUTICAL COMPANIES WERE INTRODUCED INTO EVIDENCE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DURING YOUR DIRECT EXAMINATION, YOU WERE SHOWN SOME OF THE CONTRACTS WITH YOUR PHARMACEUTICAL PARTNERS. DO YOU RECALL TESTIFYING TO THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. I'M SHOWING YOU A PORTION OF THE PFIZER CONTRACT, AND I DRAW YOUR ATTENTION TO THE PARAGRAPH 7.2 UNDER PUBLICITY. DO YOU SEE WHERE IT SAYS, "NEITHER PARTY WILL USE, OR AUTHORIZE OTHERS TO USE, THE NAME, SYMBOLS, OR MARKS OF THE OTHER PARTY IN ANY ADVERTISING OR PUBLICITY MATERIAL OR MAKE ANY FORM OF REPRESENTATION OR STATEMENT WITH REGARD TO THE SERVICES WHICH WOULD KNOWINGLY CONSTITUTE AN EXPRESS OR IMPLIED ENDORSEMENT BY THE OTHER PARTY OF ANY COMMERCIAL PRODUCT OR SERVICE WITHOUT THAT OTHER PARTY'S PRIOR WRITTEN APPROVAL." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF I UNDERSTAND YOUR TESTIMONY, BEFORE APPLYING THE LOGO, YOU DIDN'T LOOK AT THE CONTRACT TO MAKE SURE THAT IT WAS OKAY TO DO THAT?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: AND THIS WOULD BE THE TYPE OF THING THAT WOULD UPSET THERANOS IF ONE OF THERANOS'S COUNTER PARTIES DID THIS. IS THAT FAIR?
ELIZABETH A. HOLMES: I'M NOT SURE. IT DEPENDS ON THE CONTEXT.
MR. LEACH: YOU WERE VERY AGGRESSIVE WITH YOUR INTELLECTUAL PROPERTY; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: YOU WERE NOT AFRAID TO SUE PEOPLE YOU THOUGHT WERE INFRINGING PATENTS; IS THAT CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU WERE VERY, VERY AGGRESSIVE IN ENFORCING YOUR INTELLECTUAL PROPERTY?
MR. LEACH: AND IF SOMEBODY WAS USING YOUR LOGO WITHOUT YOUR CONSENT, YOU WOULD HAVE BEEN ANGRY ABOUT THAT?
ELIZABETH A. HOLMES: AGAIN, IT DEPENDS ON THE CONTEXT. WE HAD PHARMA PARTNERS WHO WERE REPRESENTING OUR WORK AT CONFERENCES WITH OUR LOGO I THINK.
MR. LEACH: LET'S LOOK AT THE SCHERING-PLOUGH AGREEMENT. IF WE CAN GO TO PAGE 135. AND I DRAW YOUR ATTENTION TO PARAGRAPH 7. DO YOU SEE THE REFERENCE TO SPRI?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THAT A REFERENCE TO A SCHERING-PLOUGH ENTITY?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND THIS SAYS, "PROVIDER AGREES" -- PROVIDER IN THIS IS THERANOS; RIGHT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: "PROVIDER AGREES THAT IT WILL NOT, WITHOUT THE PRIOR WRITTEN PERMISSION OF SPRI, USE INFORMATION AND DATA RECEIVED BY IT OR GENERATED PURSUANT TO THE PROJECT FOR ANY PURPOSE OTHER THAN IN CARRYING OUT THIS AGREEMENT. "NEITHER PARTY MAY USE THE NAME OF THE OTHER PARTY IN ANY PUBLICITY OR ADVERTISING NOR ISSUE A PRESS RELEASE OR OTHERWISE PUBLICIZE OR DISCLOSE ANY INFORMATION RELATED TO THE EXISTENCE OF THIS AGREEMENT OR THE TERMS AND CONDITIONS HEREOF, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU DIDN'T CONSULT WITH SCHERING-PLOUGH OR REVIEW THE CONTRACT BEFORE APPLYING THE SCHERING-PLOUGH LOGO?
ELIZABETH A. HOLMES: I DID NOT REVIEW THE CONTRACT.
MR. LEACH: AND AM I RIGHT THAT YOU DID NOT REVIEW THE GSK CONTRACT BEFORE DOING THAT?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: OKAY. AND WOULD IT SURPRISE YOU THAT THE GSK CONTRACT ALSO HAS LANGUAGE GOVERNING ITS USE OF TRADEMARKS?
ELIZABETH A. HOLMES: IT WOULD NOT.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO -- MS. HOLLIMAN, IS 5537 IN EVIDENCE? OR, I'M SORRY, MS. KRATZMANN?
COURT CLERK: 5537? NO.
MR. LEACH: OKAY. THANK YOU. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: I'M PLACING BEFORE YOU WHAT HAS BEEN MARKED AS EXHIBIT 5537. DO YOU HAVE THAT IN FRONT OF YOU, MS. HOLMES?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: AND THIS IS AN EMAIL EXCHANGE BETWEEN -- INVOLVING YOU AND DAN EDLIN?
MR. LEACH: AND IT RELATES TO INFORMATION THAT MR. EDLIN AT YOUR DIRECTION IS TO PROVIDE TO ROGER PARLOFF IN CONNECTION WITH HIS REPORTING?
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5537.
(PAUSE IN PROCEEDINGS.)
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5537 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: IF WE CAN ZOOM IN ON THE TOP HALF, MS. HOLLIMAN.
MR. LEACH: DO YOU SEE THERE'S AN EMAIL FROM YOU, MS. HOLMES, TO DAN EDLIN ON SUNDAY, JUNE 1ST, 2014?
MR. LEACH: AND THE SUBJECT IS "ROGER PARLOFF - AGGREGATED ACTION ITEMS"?
MR. LEACH: AND YOU GAVE GUIDANCE TO MR. EDLIN ABOUT HOW TO -- WHAT INFORMATION TO COMMUNICATE TO ROGER PARLOFF IN CONNECTION WITH HIS REPORTING; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND HERE DOES IT APPEAR THAT YOU ARE FORWARDING THE -- A VERSION OF THE DOCUMENT RELATING TO SCHERING-PLOUGH TO DAN EDLIN FOR HIM TO PROVIDE TO ROGER PARLOFF?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. IF WE CAN LOOK AT THE NEXT PAGE, MS. HOLLIMAN. AND THE NEXT ONE. LET'S GO TO THE ATTACHMENT IF WE COULD. AND THE VERSION THAT YOU ARE SENDING IS THE ONE WITH THE SCHERING-PLOUGH LOGO UP AT THE TOP; CORRECT?
MR. LEACH: AND THAT'S THE ONE THAT YOU APPLIED?
MR. LEACH: OKAY. AND YOU NEVER TOLD DAN EDLIN ABOUT THE APPLICATION OF THE SCHERING-PLOUGH LOGO TO THIS; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: YOU DON'T HAVE A MEMORY OF THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: OKAY. AND YOU DON'T HAVE A MEMORY OF INSTRUCTING DAN EDLIN TO LET ROGER PARLOFF KNOW THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: OKAY. LET'S LOOK AT EXHIBIT 553 -- CAN YOU ZOOM OUT, PLEASE, MS. HOLLIMAN. IF WE COULD PLEASE LOOK AT 5538.
ELIZABETH A. HOLMES: I DON'T THINK I HAVE THAT ONE.
MR. LEACH: THAT'S BECAUSE I DIDN'T PUT IT IN YOUR BINDER.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: I'LL BRING IT UP. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) IS THIS ANOTHER EMAIL EXCHANGE INVOLVING YOU AND MR. EDLIN RELATING TO INFORMATION TO PROVIDE TO ROGER PARLOFF?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: YOUR HONOR, I MOVE 5538 INTO EVIDENCE.
MR. DOWNEY: ARE THESE ALL THE SAME ATTACHMENTS, BOB? YEAH, NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5538 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: AND IF WE CAN ZOOM IN AT THE TOP. DO YOU SEE, MS. HOLMES, YOU'RE EMAILING MR. EDLIN ON THE SAME DAY AS THE PRIOR EXHIBIT, THIS TIME ATTACHING THE -- A REPORT RELATING TO PFIZER?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IS THIS SIMILAR TO THE EXHIBIT THAT WE SAW PREVIOUSLY WHERE YOU'RE PROVIDING SCHERING-PLOUGH RELATED DOCUMENTS TO MR. EDLIN TO PROVIDE TO MR. PARLOFF?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. FURTHER BELOW YOU WROTE, "WHAT CAN BE DISCLOSED IS DEVICES. "DECENTRALIZABLE. "WILL DECENTRALIZE. "WILL MAINTAIN CENTRALIZED OVERSIGHT." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RECALL SOME OF THE AUDIO CONVERSATIONS WITH MR. PARLOFF WHERE YOU TALKED TO MR. PARLOFF ABOUT THIS IDEA THAT YOU CAN REFER TO OUR SYSTEM AS DEVICES, BUT DON'T USE THE WORD "DEVICE." DO YOU RECALL THAT AUDIO?
MR. LEACH: AND YOU WERE BEING VERY CAREFUL IN YOUR WORD CHOICE IN THAT CONVERSATION. IS THAT FAIR, MS. HOLMES?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. YOU WERE PAYING ATTENTION TO THE DIFFERENCE BETWEEN "DEVICES" AND "DEVICE"?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: OKAY. AND THAT'S WHAT YOU'RE EXPRESSING HERE IN THIS EMAIL?
ELIZABETH A. HOLMES: I'M NOT SURE WHAT I'M EXPRESSING HERE.
MR. LEACH: OKAY. WELL, YOU'RE ALSO TALKING ABOUT WAYS TO USE THE FUTURE TENSE TO TALK ABOUT DECENTRALIZATION OF THE LAB, AREN'T YOU?
ELIZABETH A. HOLMES: YOU'RE REFERRING TO "WILL DECENTRALIZE"?
MR. LEACH: WELL, AREN'T ALL THREE OF THOSE WORDS A WAY TO EXPRESS THE ABILITY TO DECENTRALIZE SOMETHING?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND THIS WAS GUIDANCE THAT YOU WERE GIVING TO MR. EDLIN IN ANY CONVERSATIONS HE MIGHT HAVE WITH MR. PARLOFF?
ELIZABETH A. HOLMES: IT'S CERTAINLY RELATED TO MR. PARLOFF. IT'S NOTES OF SOMETHING. I'M NOT QUITE SURE WHAT THIS IS.
MR. LEACH: OKAY. ISN'T THIS AN EXAMPLE OF YOU BEING EXTRAORDINARILY CAREFUL WITH THE WAY YOU PUT PHRASES IN TERMS OF FUTURE USE, ASPIRATION, HISTORICAL USE?
ELIZABETH A. HOLMES: I DON'T KNOW. THIS IS -- IT LOOKS LIKE NOTES OF SOMETHING TO ME.
MR. LEACH: OKAY. ON YOUR DIRECT -- WE CAN TAKE THIS DOWN, MS. HOLLIMAN. ON YOUR DIRECT EXAMINATION YOU WERE ASKED A QUESTION, "AND AS OF DECEMBER 13TH, DECEMBER 2013, DID THERANOS NEED CAPITAL BY THE END OF 2013?" DO YOU RECALL THAT QUESTION BEING ASKED OF YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU ANSWERED, "WE HAD RECEIVED $75 MILLION IN CAPITAL FROM WALGREENS, SO WE DID NOT NEED CAPITAL AFTER THAT." THAT WAS YOUR TESTIMONY?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: OKAY. ISN'T IT TRUE THOUGH, MS. HOLMES, THAT YOU NEEDED CAPITAL IN SEPTEMBER OF 2013 AND AGAIN IN DECEMBER OF 2013?
MR. LEACH: LET'S LOOK AT SOME OF THE EXAMPLES OF THAT. IF WE CAN CALL UP WHAT IS IN EVIDENCE AS EXHIBIT 5172. AND I THINK WE NEED THE NATIVE FILE FOR THIS, MS. HOLLIMAN. MS. HOLMES, DO YOU RECALL TESTIMONY FROM MS. SPIVEY ABOUT CASH BALANCE SPREADSHEETS THAT SHE WOULD SHARE WITH YOU FROM TIME TO TIME?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND I BELIEVE YOU TESTIFIED THAT YOU PAID ATTENTION TO THE COMPANY'S CASH POSITION OVER TIME?
MR. LEACH: I WOULD LIKE -- MR. DOWNEY ASKED YOU QUESTIONS ABOUT THE END OF DECEMBER 2013. I'D LIKE TO FOCUS ON THE SEPTEMBER 2013 TIME PERIOD. AND IF WE CAN MOVE TO COLUMN EN, MS. HOLLIMAN. DO YOU SEE, MS. HOLMES, THAT THERE ARE ROWS FOR THE WEEK BEGINNING SEPTEMBER 23RD, 2013, AND ENDING SEPTEMBER 29TH, 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN DO YOU SEE A LISTING OF PARTICULAR ACCOUNTS IN ROWS 9 THROUGH 14, FIDELITY, MORGAN STANLEY-INVESTMENT, MORGAN STANLEY-LOC. DO YOU SEE THOSE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IN THE MORGAN STANLEY-LOC LINE, THAT LOC STANDS FOR LINE OF CREDIT; CORRECT?
MR. LEACH: AND THAT LINE OF CREDIT WAS SECURING THERANOS'S RENT OBLIGATIONS?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: OKAY. IT WAS SECURING SOMETHING; IS THAT FAIR?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: DO YOU GENERALLY HAVE A MEMORY THAT YOU WEREN'T SIMPLY FREE TO DRAW DOWN ON THE LETTER OF CREDIT?
ELIZABETH A. HOLMES: I THINK THAT'S RIGHT.
MR. LEACH: OKAY. SO DIPPING INTO THAT $7.5 MILLION WOULD NOT BE A HAPPY DAY FOR THERANOS?
ELIZABETH A. HOLMES: I THINK YOU'RE RIGHT.
MR. LEACH: OKAY. AND THIS SAYS THERE'S $5 MILLION IN A FIDELITY ACCOUNT. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND 85,700,000 IN ANOTHER -- IN A MORGAN STANLEY-INVESTMENT ACCOUNT?
MR. LEACH: AND AT THIS POINT IN TIME, THERANOS'S TOTAL CASH BALANCE IS DOWN TO APPROXIMATELY $14.46 MILLION; IS THAT CORRECT?
MR. LEACH: AND IF YOU SCROLL TO THE LEFT, DO YOU SEE AT THE END OF -- IN ROW EI THERE'S A DEBIT FOR $18.5 MILLION IN LINE 22? FURTHER DOWN, MS. HOLLIMAN. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT 18.5 MILLION DEBIT WAS TAKEN OUT OF YOUR FIDELITY ACCOUNT, DROPPING IT DOWN FROM $32 MILLION TO $12 MILLION IN THAT WEEK. DO YOU SEE THAT IN LINE 9?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT 18.5 MILLION, THAT WAS FROM BLUE CROSS BLUE SHIELD, WASN'T IT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: YOU HAD GOTTEN MONEY FROM BLUE CROSS BLUE SHIELD IN 2011 WITH THE HOPE THAT YOU WERE GOING TO FULFILL SOME CONTRACT OBLIGATIONS TO THEM?
MR. LEACH: AND AT SOME POINT IN THE SUMMER OF 2013, BLUE CROSS BLUE SHIELD TOLD YOU THERANOS HADN'T MET ITS OBLIGATIONS, WE WANT OUR 18.5 MILLION BACK?
ELIZABETH A. HOLMES: I THINK IT WAS WE HADN'T DEPLOYED IN THAT STATE.
MR. LEACH: OKAY. BUT IN ANY EVENT, THEY WANTED THEIR MONEY BACK?
ELIZABETH A. HOLMES: WE REFUNDED IT TO THEM.
MR. LEACH: AND THAT'S THE 18.5 MILLION THAT WE SEE HERE?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THAT PUT PRESSURE ON THE COMPANY; ISN'T THAT RIGHT?
MR. LEACH: THIS WAS A MATTER OF WEEKS BEFORE THE LAUNCH WITH WALGREENS?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: THIS WAS WHEN YOU WERE PUSHING YOUR TEAMS VERY, VERY HARD TO VALIDATE ASSAYS ON THE MODIFY SIEMENS MACHINES?
MR. LEACH: THIS WAS IN THE TIME PERIOD WHEN YOU WERE PUSHING YOUR TEAM TO VALIDATE ASSAYS ON THE 3.5 DEVICE?
ELIZABETH A. HOLMES: YES, WE WERE WORKING REALLY HARD ON THAT.
MR. LEACH: OKAY. AND YOU KNEW THAT THERANOS HAD A BURN RATE IN THE MILLIONS OF DOLLARS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: THERANOS WAS ALMOST OUT OF MONEY IN SEPTEMBER OF 2013; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I HAD NEVER THOUGHT OF IT LIKE THAT, NO.
MR. LEACH: OKAY. WELL, YOU RAISED MONEY FROM INVESTORS IN SEPTEMBER OF 2013, DIDN'T YOU?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: YOU RAISED OVER $21 MILLION FROM INVESTORS IN SEPTEMBER OF 2013; IS THAT FAIR?
ELIZABETH A. HOLMES: THAT SOUNDS RIGHT.
MR. LEACH: OKAY. WELL, LET'S LOOK AT THE SPREADSHEETS. DO YOU SEE IF WE MOVE -- IF WE LOOK DOWN AT THE CUSTOMER RECEIPTS FOR THE FOLLOWING WEEK, SEPTEMBER 30TH, 2013, DO YOU SEE THE $21 MILLION NUMBER THERE, ROW 27, COLUMN EO?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND LET'S JUST GIVE MS. HOLLIMAN A MOMENT TO GET THERE. DO YOU SEE $21,995,100 IN OPTION/STOCK PROCEEDS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE CAN GO TO, THERE'S A TAB IN THE EXCEL SPREADSHEET TO COMERICA. IF WE CAN CLICK ON THAT. AND IF WE CAN GO TO THE EO COLUMN. I THINK, MS. HOLLIMAN, IF YOU CLICK ON THIS, ON THE PLUS SIGN UP THERE, IT WILL EXPAND IT EVEN MORE. THERE YOU GO. AND DO YOU SEE THAT SAME NUMBER $21,995,100 IN ROW 23 EO?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF I COULD ASK MS. HOLLIMAN TO HIGHLIGHT ON THAT. DO YOU SEE HOW IT CALLS UP A COMMENT FROM MS. YAM, OR JUST CLICK ON THE CELL, 15 MILLION PEER? DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S A REFERENCE TO PEER VENTURES?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND PEER VENTURES WAS AN INVESTMENT FUND THAT INVESTED IN THERANOS?
MR. LEACH: AND THEY INVESTED IN 2010?
MR. LEACH: AND THEY INVESTED AGAIN IN 2013?
MR. LEACH: BASED IN PART ON THE PROMISE OF THE WALGREENS LAUNCH?
MR. LEACH: AND THERE'S ALSO A REFERENCE TO LVG XI AND LVG IV. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTAND THAT TO BE REFERENCE TO DON LUCAS, JUNIOR'S INVESTMENT FUNDS?
MR. LEACH: AND THOSE TWO FIRMS PUT IN ABOUT 21,995,000 AT OR AROUND THE TIME YOUR CASH BALANCE HAD DROPPED TO $14 MILLION?
ELIZABETH A. HOLMES: THEY DID.
MR. LEACH: AND YOU KNEW THAT PEER VENTURES WAS AN INVESTMENT FUND RUN BY JARED HUTCHINGS AND MARK CAMPBELL?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: THEY WERE 20 SOMETHINGS, 30 SOMETHINGS IN THE INVESTMENT BUSINESS?
ELIZABETH A. HOLMES: YOU MEAN YEARS OLD?
MR. LEACH: YES.
ELIZABETH A. HOLMES: YES, YES.
MR. LEACH: ENTREPRENEURS LIKE YOURSELF?
MR. LEACH: AND YOU AND MR. BALWANI WERE EXTREMELY RELIEVED WHEN THIS MONEY CAME IN; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I'M SURE WE WERE HAPPY WHEN IT CAME IN.
MR. LEACH: WELL, LET'S LOOK AT EXHIBIT 5646.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.) DO YOU RECOGNIZE THIS DOCUMENTS, MS. HOLMES?
ELIZABETH A. HOLMES: I DON'T REMEMBER IT, BUT I SEE IT'S AN EMAIL EXCHANGE.
MR. LEACH: OKAY. YOU HAVE NO REASON TO DOUBT THAT THIS IS A TRUE EMAIL EXCHANGE BETWEEN YOU AND MR. BALWANI IN SEPTEMBER OF 2014?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND THIS RELATES TO INVESTMENTS BY PEER AND DON LUCAS'S FUND?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5646.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5646 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: LET ME DRAW YOUR ATTENTION TO THE BOTTOM PORTION OF THIS EMAIL, MS. HOLMES. DO YOU SEE AN EMAIL FROM JARED HUTCHINGS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: IT SAYS, "BY THE WAY, WE ARE PLANNING TO LET A VERY CONTRITE MASSY INTO THIS CLOSING. I HAVE A CALL WITH HER TOMORROW TO CONFIRM. LET ME KNOW IF THAT GIVES YOU PAUSE." IS THAT A REFERENCE TO AN INVESTOR IN THE PEER VENTURES FUND?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: YOU WROTE BACK, "THAT IS FINE. LET ME KNOW HOW MUCH SHE WANTS TO BE ABLE TO COME IN FOR/WHAT TOTAL YOU'RE PLANNING FOR THIS CLOSE AND WE'LL PLAN ACCORDINGLY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND PEER VENTURES -- YOU UNDERSTOOD PEER VENTURES WOULD RAISE MONEY FROM ITS OWN INVESTORS OR EVEN HOSPITALS FOR THE WHOLE PURPOSE OF INVESTING IN THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND IF WE COULD MOVE UP THE CHAIN, PLEASE. DO YOU SEE WHERE MR. HUTCHINGS WRITES, "OK. I HAVE A CALL WITH INTERMOUNTAIN THIS MORNING TO FINALIZE EVERYTHING. IT LOOKS LIKES WE CLOSE THE PEER WIRES TOMORROW. I WILL SEND YOU A FINAL CONFIRMATION ON OUR TOTAL THIS AFTERNOON. WE SHOULD BE READY TO CLOSE WITH YOU ON MONDAY. LET ME KNOW IF THAT WORKS." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND YOU UNDERSTOOD THAT INTERMOUNTAIN WAS GOING TO INVEST IN PEER TO INVEST IN THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU FORWARDED THIS TO MR. BALWANI ON SEPTEMBER 26TH?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND HIS RESPONSE WAS HMFR, AND THAT'S THE ACRONYM THAT WE'VE SEEN BEFORE IN THE TEXT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THANKING GOD FOR THE MONEY THAT IS COMING IN NOW?
ELIZABETH A. HOLMES: I THINK IT'S THE PRAYER THAT HE WOULD RECITE ON A REGULAR BASIS.
MR. LEACH: OKAY. AND THAT'S A PRAYER THAT YOU WOULD RECITE ON A REGULAR BASIS?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: BUT THERANOS'S CASH CRUNCH DIDN'T END WITH PEER AND LUCAS'S FUND INVESTING AT THE END OF SEPTEMBER; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: AGAIN, I DIDN'T THINK ABOUT IT THAT WAY.
MR. LEACH: OKAY. WELL, LET'S LOOK AT THE CASH BALANCE SPREADSHEET. THIS IS EXHIBIT 5172, MS. HOLLIMAN. AND IF WE CAN GO BACK NEAR COLUMN EN. DO YOU SEE THE $14 MILLION NUMBER IN THE TOTAL CASH BALANCE FOR THE END OF SEPTEMBER, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE CAN SCROLL TO THE LEFT -- THE RIGHT, PLEASE. AND STOP RIGHT THERE, MS. HOLLIMAN. I DRAW YOUR ATTENTION TO THE TIME PERIOD -- WELL, LET ME FIRST ASK YOU, DO YOU SEE THAT THE TOTAL CASH BALANCES GET DOWN TO APPROXIMATELY 23 MILLION, 21 MILLION, 19 MILLION IN THE TIME PERIOD NOVEMBER 2013 TO DECEMBER 15TH OF 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE WERE TO DEDUCT THE AMOUNT OF THE LOC PAYMENT FROM THOSE AMOUNTS, THAT MEANS THAT THERANOS HAS IN THE NEIGHBORHOOD OF 14 -- $12- TO $16 MILLION OF FREE CASH?
ELIZABETH A. HOLMES: SOMETHING LIKE THAT, YEAH.
MR. LEACH: OKAY. LET'S LOOK AT SOME OF THE TEXT MESSAGES BETWEEN YOU AND MR. BALWANI IN THIS TIME PERIOD, AND IF WE CAN GO TO EXHIBIT 5387D, AND SPECIFICALLY PAGE 20. AND IF WE CAN ZOOM IN ON THE SUBSTANCE? DO YOU SEE THE DATE OF NOVEMBER 28TH, 2013, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE WHERE MR. BALWANI WROTE, "WE ARE AT 15M AS OF TODAY"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "FREE CASH," HE WROTE. AND YOU SAY "I SAW THAT. "DROP BY TO DISCUSS WHEN U CAN." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOUR HONOR, I'M ABOUT TO MOVE ON TO A DIFFERENT TOPIC, AND I HAVE ONE HOUSEKEEPING MATTER, WHICH IS TO MOVE INTO EVIDENCE PAGES 11, 12, 19, 72, 129, 208, 341, AND 342 OF EXHIBIT 5387. AND WE CAN PUT THAT IN ONE DOCUMENT CALLED 5387G.
JUDGE DAVILA: G? ANY OBJECTION?
MR. DOWNEY: YOUR HONOR, MR. LEACH AND I HAVE CONFERRED, AND IF THERE ARE ANY ADDITIONS AS A RESULT OF COMPLETENESS CONCERNS, I THINK WE'LL WORK THAT OUT AND SUPPLEMENT THE EXHIBIT. BUT SUBJECT TO THAT, NO OBJECTION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. THESE WILL BE ADMITTED THEN, SUBJECT TO ANY REVIEW, AND YOU CAN BRING THAT UP WITH THE COURT AS NEEDED.
(GOVERNMENT'S EXHIBIT 5387G WAS RECEIVED IN EVIDENCE.)
JUDGE DAVILA: LET'S TAKE OUR BREAK NOW. YOU HAVE ADDITIONAL QUESTIONS? LET'S TAKE OUR BREAK NOW?
MR. LEACH: I DO, YOUR HONOR.
JUDGE DAVILA: LET'S DO THAT THEN, LADIES AND GENTLEMEN. WE'LL RECESS FOR THE DAY. PLEASE RECALL THAT WE'RE NOT GOING TO SEE EACH OTHER FOR SOME TIME, I BELIEVE. I THINK OUR NEXT DATE TOGETHER IS THE 7TH, MS. KRATZMANN?
COURT CLERK: YES, YOUR HONOR.
JUDGE DAVILA: SO ONCE AGAIN, LADIES AND GENTLEMEN, WE HAVE A LARGE BREAK HERE. YOU WILL GO BACK TO YOUR REGULAR LIVES OUTSIDE OF THE TRIAL, AND AS YOU DO THAT WITH YOUR FAMILY, YOUR JOBS, AND YOUR SOCIAL ENGAGEMENTS, I'M GOING TO ASK YOU AGAIN TO PLEASE, PLEASE DO NOT IN ANY WAY DO ANY INVESTIGATION, DO NOT LISTEN TO, READ, OR IN ANY WAY TRY TO GAIN ANY INFORMATION ABOUT ANYTHING IN THIS CASE OR ANYTHING ABOUT IT OR ANY OF THE PARTIES INVOLVED. PLEASE PAY FIDELITY, CONTINUED FIDELITY TO THAT ADMONISHMENT, PLEASE. THE SECOND THING I'LL ASK YOU TO DO IS, THE WORLD IS AWARE OF NEW HEALTH CONCERNS, SO I'M GOING TO ASK YOU TO PLEASE, PLEASE BE CAREFUL, CONTINUE TO BE CAREFUL WITH YOU AND YOUR LOVED ONES. WE WANT ALL OF US TO STAY HEALTHY, AND THAT'S MY WISH FOR YOU AND ALL OF US HERE, AND PLEASE BE CAREFUL IN REGARDS TO YOUR SAFETY, YOUR PERSONAL SAFETY IN THAT REGARD. WITH THAT ADMONISHMENT, WE WILL SEE YOU -- I THINK WE'RE GOING TO BE BACK AT 9:00 A.M., MS. KRATZMANN, AND THAT'S GOING TO BE FOR A FULL DAY I'M HOPEFUL. PLEASE RECALL THAT WEEK IS THE WEEK OF DECEMBER 6TH. DECEMBER 7TH AGAIN IS OUR FIRST DAY. THAT WILL BE A BUSY WEEK. WE'LL BE IN SESSION THE 7TH, THE 8TH, THE 10TH. I DON'T BELIEVE WE'RE IN SESSION ON THE 9TH, AT LEAST AS FAR AS -- WE ARE. I HAVE A MISDATED CALENDAR IN FRONT OF ME. THAT'S A BUSY WEEK. WE'RE IN SESSION ALL WEEK, AND THAT'S TO ACCOMPLISH AS MUCH AS WE CAN DURING THIS SEASON. SO THANK YOU VERY MUCH. HAVE A GOOD TIME OFF. WITH THAT ADMONISHMENT, WE'LL SEE YOU THEN. THANK YOU. MS. HOLMES, YOU CAN STAND DOWN. THANK YOU.