Elizabeth A. Holmes — Cross/Redirect (Continued)
3,018 linesCROSS-EXAMINATION (RESUMED) BY MR. LEACH:
MR. LEACH: GOOD MORNING. MS. HOLMES.
ELIZABETH A. HOLMES: GOOD MORNING.
MR. LEACH: THERANOS ANALYZERS WERE NEVER PLACED ON MEDEVACS; IS THAT CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND THERANOS DID NOT ACTUALLY DEPLOY ITS ANALYZER ON A MILITARY HELICOPTER; IS THAT CORRECT?
ELIZABETH A. HOLMES: NOT FOR CLINICAL USE, NO.
MR. LEACH: DO YOU RECALL TELLING THE S.E.C. YOU DID NOT DEPLOY A THERANOS DEVICE ON HELICOPTERS?
ELIZABETH A. HOLMES: I RECALL GENERALLY TALKING TO THE S.E.C. ABOUT THAT TOPIC, YES.
MR. LEACH: DO YOU RECALL TELLING THEM THAT YOU DID NOT DEPLOY A THERANOS DEVICE ON HELICOPTERS?
ELIZABETH A. HOLMES: I DON'T REMEMBER THAT, BUT I KNOW THAT I TALKED TO THEM ABOUT IT.
MR. LEACH: WELL, LET ME DRAW YOUR ATTENTION TO THE RED BINDER. YOU RECALL GIVING TESTIMONY TO THE S.E.C.; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WERE ASKED QUESTIONS OVER THE COURSE OF THREE DAYS; RIGHT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU TOOK AN OATH BEFORE THE S.E.C.?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: THE SAME OATH THAT YOU'RE TAKING TODAY; CORRECT?
MR. LEACH: OKAY. AND IF I COULD DRAW YOUR ATTENTION TO THE RED BINDER, PLEASE, TO THE BATES NUMBER 5566, AND PAGE 84 -- OR 844.
ELIZABETH A. HOLMES: I'M SORRY. 5586?
MR. LEACH: 5566 DOWN IN THE RIGHT-HAND CORNER.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND IT'S PAGE 844.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND, YOUR HONOR, I ASK PERMISSION TO READ LINES 3 THROUGH 11 ON PAGE 844.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, ISN'T IT CORRECT THAT YOU WERE ASKED THE FOLLOWING QUESTIONS AND GAVE THE FOLLOWING ANSWERS: "QUESTION: DID YOU TELL WADE MIQUELON AT WALGREENS THAT THERANOS HAD DEPLOYED ITS TSPU ON MILITARY HELICOPTERS? "ANSWER: NO. "QUESTION: DID YOU HEAR MR. BALWANI TELL MR. MIQUELON THAT? "ANSWER: I DID NOT. "QUESTION: WOULD IT -- WOULD THAT HAVE BEEN TRUE ANY TIME FROM 2010 TO 2014? "ANSWER: WE DID NOT DEPLOY ON HELICOPTERS. "QUESTION: YOU DID NOT DEPLOY ON HELICOPTERS EVER? "ANSWER: CORRECT." DID I READ THAT CORRECTLY, MS. HOLMES?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: OKAY. AND THERANOS ANALYZERS WERE NEVER DEPLOYED ON THE BATTLEFIELD; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: THERANOS DID NOT ACTUALLY SEND ONE OF ITS ANALYZERS TO AFGHANISTAN; IS THAT CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. AND THERANOS DID NOT ACTUALLY SEND ONE OF ITS ANALYZERS TO THE MIDDLE EAST; IS THAT CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND THERANOS DID NOT ACTUALLY SEND ONE OF ITS ANALYZERS TO IRAQ; IS THAT CORRECT?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: OKAY. THERANOS ANALYZERS WERE NEVER USED FOR CLINICAL CARE FOR SOLDIERS ABROAD; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: NOW, IN THE TIME PERIOD 2013 TO 2015, YOU WERE AWARE THAT THERANOS ANALYZERS HAD NEVER BEEN PLACED ON MEDEVACS; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND NO ONE EVER TOLD YOU THAT THERANOS ANALYZERS HAD BEEN PLACED ON MEDEVACS?
ELIZABETH A. HOLMES: AGAIN, I THINK THERE WAS WORK DONE FOR TRANSPORT OF THE DEVICES ON MEDEVACS, BUT THEY WERE NOT USED FOR CLINICAL CARE ON MEDEVACS.
MR. LEACH: NO ONE EVER TOLD YOU THAT THERANOS ANALYZERS HAD ACTUALLY BEEN PLACED ON MEDEVACS; IS THAT CORRECT?
ELIZABETH A. HOLMES: FOR CLINICAL CARE, CORRECT.
MR. LEACH: AND SUNNY BALWANI NEVER TOLD YOU THAT THERANOS ANALYZERS HAD BEEN PLACED ON MEDEVACS; IS THAT CORRECT?
ELIZABETH A. HOLMES: AGAIN, NO FOR CLINICAL CARE.
MR. LEACH: IN THE TIME 2013 TO 2015, YOU WERE AWARE THAT THERANOS DID NOT ACTUALLY DEPLOY ITS ANALYZER ON A HELICOPTER; CORRECT?
ELIZABETH A. HOLMES: CORRECT, FOR CLINICAL CARE.
MR. LEACH: WELL, YOU DIDN'T QUALIFY YOUR ANSWERS WITH "FOR CLINICAL CARE" TO THE S.E.C.; ISN'T THAT RIGHT, MS. HOLMES?
ELIZABETH A. HOLMES: I THINK RIGHT AFTER THIS SECTION YOU READ, IT SAYS, "IS THAT RIGHT"?
MR. LEACH: I'M NOT ASKING YOU TO READ FROM THE S.E.C. TESTIMONY.
ELIZABETH A. HOLMES: OH, I'M SORRY.
MR. LEACH: I AM ASKING YOU ABOUT THE QUESTIONS YOU WERE ASKED, AND YOU SAID, "WE DID NOT DEPLOY ON HELICOPTERS." RIGHT?
ELIZABETH A. HOLMES: I SAID CORRECT. AND THEN, AM I ALLOWED TO READ WHAT I SAID, OR NO?
MR. LEACH: IF YOU COULD PLEASE FOCUS ON MY QUESTION.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND MY QUESTION IS REALLY, NO ONE EVER TOLD YOU THAT THE DEVICE HAD ACTUALLY BEEN DEPLOYED ON A MEDEVAC HELICOPTER; IS THAT RIGHT?
ELIZABETH A. HOLMES: FOR CLINICAL CARE.
MR. LEACH: AND NO ONE EVER TOLD YOU -- AND SUNNY BALWANI HAD NEVER TOLD YOU THAT THE THERANOS ANALYZER HAD BEEN DEPLOYED ON A HELICOPTER FOR CLINICAL CARE?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IN THE TIME PERIOD OF 2013 TO 2015, YOU WERE AWARE THAT THE THERANOS DEVICE HAD NEVER BEEN USED ON THE BATTLEFIELD?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND NO ONE EVER TOLD YOU THAT THE THERANOS DEVICE HAD ACTUALLY BEEN USED ON THE BATTLEFIELD?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND SUNNY BALWANI NEVER TOLD YOU THAT THE THERANOS DEVICE HAD ACTUALLY BEEN USED ON THE BATTLEFIELD; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IN THE TIME PERIOD OF 2013 TO 2015, YOU WERE AWARE THAT THERANOS HAD NOT ACTUALLY SENT ONE OF ITS ANALYZERS TO AFGHANISTAN; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: OKAY. NO ONE EVER TOLD YOU THAT THE ANALYZER HAD ACTUALLY BEEN SENT TO AFGHANISTAN?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND SUNNY BALWANI NEVER TOLD YOU THAT THE DEVICE HAD ACTUALLY BEEN SENT TO AFGHANISTAN?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IN THE TIME PERIOD 2013 TO 2015, YOU WERE AWARE THAT THERANOS DID NOT ACTUALLY SEND ONE OF ITS DEVICES TO THE MIDDLE EAST; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: NO ONE EVER TOLD YOU THAT THE DEVICE HAD BEEN SENT TO THE MIDDLE EAST; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND SUNNY BALWANI NEVER TOLD YOU THAT THE DEVICE HAD BEEN SENT TO THE MIDDLE EAST; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND YOU WERE ALSO AWARE THAT THE DEVICE HAD NEVER BEEN SENT TO IRAQ; CORRECT?
MR. LEACH: NO ONE EVER TOLD YOU THAT THE DEVICE HAD ACTUALLY BEEN SENT TO IRAQ?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND SUNNY BALWANI HAD NEVER ACTUALLY TOLD YOU THAT THE DEVICE HAD BEEN SENT TO IRAQ?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IN THE TIME PERIOD 2013 TO 2015, YOU WERE AWARE THAT THE THERANOS ANALYZERS WERE NEVER USED FOR CLINICAL CARE OF SOLDIERS ABROAD; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: NO ONE EVER TOLD YOU THAT THE DEVICE WAS BEING USED FOR CLINICAL CARE FOR SOLDIERS ABROAD; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND SUNNY BALWANI NEVER TOLD YOU THAT THAT HAD HAPPENED, THAT IT HAD BEEN USED FOR CLINICAL CARE FOR SOLDIERS ABROAD?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. YOU HOPED ONE DAY THAT THE MINILAB MIGHT BE USED ON A MEDEVAC HELICOPTER TO SAVE LIVES ABROAD; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: YOU WERE SPENDING MONEY TO TRY TO MAKE THAT HAPPEN; CORRECT?
MR. LEACH: AND THERE WAS SOME LEVEL OF INTEREST FROM THE DEPARTMENT OF DEFENSE?
MR. LEACH: THERANOS HAD AN AGREEMENT TO DO SIDE-BY-SIDE TESTING WITH CENTCOM WITH -- HAD AN AGREEMENT WITH CENTCOM TO DO SIDE-BY-SIDE TESTING; CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: AND IF THAT ACTUALLY HAPPENED AND WENT WELL, YOUR HOPE WAS SOME DAY IT MIGHT BE USED IN AFGHANISTAN TO SAVE LIVES; IS THAT CORRECT?
MR. LEACH: BUT THAT SIDE-BY-SIDE TESTING NEVER HAPPENED; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND WITH RESPECT TO AFRICOM, AM I RIGHT THAT AFRICOM TOOK ONE OR TWO DEVICES TO AFRICA TO LOOK AT THERMAL STABILITY AND THE USE FOR THE OPERATOR, BUT AGAIN, THEY WEREN'T USED FOR PATIENT TESTING AND DIAGNOSIS?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND YOU HAVE NO KNOWLEDGE OF THERANOS RECEIVING ANY REVENUE FROM AFRICOM?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND WITH RESPECT TO SOCOM, YOU SENT TWO DEVICES TO SOCOM IN THE UNITED STATES; CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: BUT YOU DON'T THINK THAT THEY ACTUALLY USED THEM IN DEPLOYMENT; CORRECT?
ELIZABETH A. HOLMES: I DON'T KNOW WHAT THEY DID WITH THEM.
MR. LEACH: OKAY. BUT YOUR BELIEF -- YOU DON'T THINK THAT THEY ACTUALLY USED THEM IN DEPLOYMENT; CORRECT?
ELIZABETH A. HOLMES: AGAIN, I DON'T KNOW WHAT THEY DID WITH THEM. IF I HAD TO GUESS, I WOULD GUESS THAT THEY DIDN'T.
MR. LEACH: I DON'T WANT YOU TO GUESS. BUT YOU WERE ASKED THIS QUESTION BEFORE, WEREN'T YOU, MS. HOLMES?
ELIZABETH A. HOLMES: I PROBABLY WAS.
MR. LEACH: OKAY. WELL, LET'S LOOK BACK AT YOUR TESTIMONY BEFORE THE S.E.C.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I DRAW YOUR ATTENTION TO PAGE 5519.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU HAVE THAT IN FRONT OF YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOUR HONOR, I SEEK PERMISSION TO READ FROM PAGE 656, LINE 24 TO LINE -- PAGE 657, LINE 3.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, YOU WERE ASKED THE FOLLOWING QUESTION AND GAVE THE FOLLOWING ANSWER: "QUESTION: WERE ANY OF THERANOS MANUFACTURED DEVICES EVER DEPLOYED BY SOCOM? "ANSWER: MY MEMORY IS THAT WE SENT THEM TWO OF THEM, BUT I DON'T THINK THEY ACTUALLY USED THEM IN ANY DEPLOYMENT." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: OKAY. AND YOU'RE NOT AWARE OF ANY REVENUE FROM SOCOM; CORRECT?
ELIZABETH A. HOLMES: I'M NOT.
MR. LEACH: YOU'RE NOT AWARE OF THERANOS EARNING ANY MONEY FROM ITS RELATIONSHIP WITH SOCOM?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: YOU ARE AWARE THAT THERANOS HAD A CONTRACT RELATING TO A BURN STUDY RUN BY DR. CHUNG; CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: AND THAT WAS HERE IN THE UNITED STATES; CORRECT?
MR. LEACH: AND THAT CONTRACT AMOUNTED TO SOMEWHERE IN THE NEIGHBORHOOD OF $200,000?
ELIZABETH A. HOLMES: SOMETHING LIKE THAT.
MR. LEACH: OKAY. AND YOU ADMIT THAT WITH RESPECT TO THE DOD, ASIDE FROM THAT BURN STUDY WITH THE INSTITUTE FOR SURGICAL RESEARCH, THERANOS DID NOT FULFILL ANY OF THE CONTRACT OPPORTUNITIES THAT IT HAD?
ELIZABETH A. HOLMES: I THINK WE FULFILLED THE AFRICOM, AND I THINK WE SUBMITTED AN INVOICE, BUT I DON'T THINK WE DID ANY WORK PAST THAT.
MR. LEACH: BUT YOU DIDN'T EARN ANY MONEY FROM AFRICOM; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. AND IN THE END, YOU WEREN'T ABLE TO DEPLOY THERANOS SERVICES WITH THE DOD AT THE END OF THE DAY?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: AND AM I RIGHT THAT YOUR TESTIMONY IS THAT YOU NEVER TOLD INVESTORS OR POTENTIAL INVESTORS IN 2013 OR 2014 THAT ANALYZERS THAT THERANOS MANUFACTURED WERE DEPLOYED IN THE BATTLEFIELD?
ELIZABETH A. HOLMES: I DON'T THINK I DID.
MR. LEACH: YOU NEVER TOLD INVESTORS OR POTENTIAL INVESTORS THAT?
ELIZABETH A. HOLMES: I DON'T THINK I DID.
MR. LEACH: OKAY. AND YOU WOULDN'T HAVE TOLD POTENTIAL INVESTORS THAT BECAUSE YOU KNEW IT WASN'T TRUE?
MR. LEACH: AND YOUR TESTIMONY IS YOU NEVER TOLD INVESTORS OR POTENTIAL INVESTORS IN 2013 OR 2014 THAT ANALYZERS THAT THERANOS MANUFACTURED WERE DEPLOYED IN AFGHANISTAN; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU NEVER TOLD INVESTORS OR POTENTIAL INVESTORS THAT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOUR TESTIMONY IS YOU DID NOT TELL STEVE BURD, SAFEWAY'S CEO, THAT THERANOS HAD DEPLOYED ITS TSPU ON THE BATTLEFIELD?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU NEVER HEARD SUNNY BALWANI SAY SOMETHING LIKE THAT TO MR. BURD; CORRECT?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: AND THAT STATEMENT WOULD NOT HAVE BEEN TRUE IN 2011; CORRECT?
ELIZABETH A. HOLMES: IT WAS NOT.
MR. LEACH: IT WOULDN'T HAVE BEEN TRUE IN 2012 OR 2013 OR 2014; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. NOW, MR. DOWNEY ASKED YOU ON DIRECT EXAMINATION IF YOU TOLD ANYONE THAT THERANOS DEVICES WERE USED FOR CLINICAL CARE ON MEDEVACS. HE ASKED YOU IF YOU TOLD ANYBODY THAT, AND I THINK YOUR ANSWER WAS "I DON'T THINK I DID;" CORRECT?
MR. LEACH: YOU WERE HERE WHEN MR. BURD TESTIFIED; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU RECALL STEVE BURD TESTIFYING, "SHE TOLD ME THAT THEY HAD BEEN DOING SOME WORK FOR THE DEPARTMENT OF DEFENSE, THAT HER DEVICE WAS IN MEDEVAC UNITS AROUND THE WORLD IN PLACES, YOU KNOW, A LOT OF AMERICANS DIDN'T KNOW WHERE WE WERE." YOU HEARD HIM TESTIFY TO THAT; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU WERE ALSO HERE WHEN LISA PETERSON TESTIFIED; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU RECALL MS. PETERSON TESTIFYING THAT YOU SAID THAT THERANOS WAS USING THEM ON MILITARY HELICOPTERS. YOU WERE HERE WHEN SHE SAID THAT; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU WERE HERE WHEN BRIAN GROSSMAN TESTIFIED; CORRECT?
MR. LEACH: AND YOU RECALL MR. GROSSMAN SAYING THAT MR. BALWANI AND YOU TOLD PFM THAT THE TECHNOLOGY HAD BEEN USED IN THE BATTLEFIELD ON MEDEVACS? YOU WERE HERE WHEN MR. GROSSMAN TESTIFIED TO THAT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU WERE ALSO HERE WHEN ROGER PARLOFF TESTIFIED; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU RECALL ROGER PARLOFF TESTIFYING THAT THE DEVICE HAD BEEN USED IN THE MILITARY, BY THE MILITARY IN AFGHANISTAN; CORRECT? YOU WERE HERE WHEN HE SAID THAT?
ELIZABETH A. HOLMES: I WAS HERE DURING ROGER'S TESTIMONY, YES.
MR. LEACH: OKAY. YOU RECALL HIM TESTIFYING THAT HE REMEMBERS YOU TELLING HIM THAT THE DEVICE HAD BEEN USED BY THE MILITARY IN AFGHANISTAN?
ELIZABETH A. HOLMES: MY MEMORY OF WHAT HE SAID IS A LITTLE BIT DIFFERENT THAN THAT.
MR. LEACH: YOU WERE HERE WHEN HE WAS TALKING ABOUT STATEMENTS THAT YOU MADE ABOUT THE MILITARY; CORRECT?
MR. LEACH: OKAY. AND YOU WERE ALSO HERE WHEN BRIAN TOLBERT TESTIFIED; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU RECALL THE RECORDING THAT MR. TOLBERT MADE OF THE CALL THAT YOU HAD WITH SOME POTENTIAL INVESTORS AT THE END OF 2013; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WERE NOT AWARE THAT MR. TOLBERT WAS RECORDING YOU AT THE TIME; CORRECT?
ELIZABETH A. HOLMES: I WASN'T.
MR. LEACH: OKAY. SO YOU WERE HERE FOR STEVE BURD, LISA PETERSON, AND BRIAN GROSSMAN AND BRIAN TOLBERT, BUT YOUR TESTIMONY IS THAT YOU DON'T THINK YOU TOLD ANYONE THAT THERANOS DEVICES WERE USED FOR CLINICAL CARE ON MEDEVACS; RIGHT?
ELIZABETH A. HOLMES: AGAIN, I DON'T THINK I DID.
MR. LEACH: AND YOU UNDERSTOOD AT THE TIME THAT IT WOULD BE WRONG TO TELL AN INVESTOR THAT A DEVICE WAS USED FOR CLINICAL CARE ON MEDEVACS?
MR. LEACH: THAT WOULD NOT BE TRUE?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU UNDERSTOOD THAT AT THE TIME?
MR. LEACH: OKAY. YOU ALSO SPOKE TO AN INVESTOR NAMED CRAIG HALL; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. AND YOU SPOKE TO CRAIG HALL AROUND THE TIME OF THE CALL WITH MR. TOLBERT THAT THE JURY HAS LISTENED TO; CORRECT?
MR. LEACH: AND DO YOU DISPUTE TELLING CRAIG HALL THAT THERANOS DEVICES WERE ON MEDEVAC HELICOPTERS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION, PLEASE, TO -- STRIKE THAT. YOUR TESTIMONY IS THAT SIMPLY DIDN'T HAPPEN, YOU WOULD NEVER TELL AN INVESTOR THAT?
ELIZABETH A. HOLMES: MY TESTIMONY IS THAT I DON'T THINK I SAID THAT. I'M HAPPY TO GO INTO WHAT I THINK I SAID IF YOU WOULD LIKE ME TO DO THAT.
MR. LEACH: I JUST WANT TO ESTABLISH THAT YOU UNDERSTOOD AT THE TIME THAT IT WOULD BE WRONG TO TELL SOMEBODY THAT THE DEVICE WAS ACTUALLY ON A MEDEVAC HELICOPTER.
ELIZABETH A. HOLMES: YES, OUR DEVICES WERE NOT BEING USED ON MEDEVAC HELICOPTERS.
MR. LEACH: OKAY. AM I RIGHT THAT FROM TIME TO TIME YOU WERE KEPT APPRISED OF THE CAPABILITIES OF THE MINILAB?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: WE SAW A LOT OF PHOTOS AND VIDEOS DURING YOUR DIRECT EXAMINATION OF THE INTERIOR OF THE DEVICE, OF THE MINILAB. AND THOSE WEREN'T THINGS THAT YOU'VE LEARNED ABOUT AS A RESULT OF THIS CASE; CORRECT?
MR. LEACH: THOSE ARE THINGS THAT YOU LIVED AND BREATHED DURING YOUR TIME OF WORK AT THERANOS?
MR. LEACH: AND YOU UNDERSTOOD WHAT THE MINILAB IN 2010 WAS CAPABLE OF, WHAT IT WAS CAPABLE OF IN 2011; IS THAT FAIR?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU UNDERSTOOD WHAT THE MINILAB WAS CAPABLE OF IN 2013 AND 2014?
MR. LEACH: AND THOSE WEREN'T THINGS THAT WERE HIDDEN FROM YOU DURING YOUR TIME AT THERANOS?
MR. LEACH: YOU UNDERSTOOD THAT THE MINILAB WAS NEVER USED FOR PATIENT TESTING?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU NEVER TOLD AN INVESTOR THAT THE MINILAB HAD ACTUALLY BEEN USED FOR PATIENT TESTING?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: BECAUSE YOU UNDERSTOOD THAT THAT WOULD BE NOT CORRECT?
MR. LEACH: AND FOR THE 2010 TIME PERIOD, DO YOU KNOW HOW MANY TESTS WERE ACTUALLY PUT ON THE MINILAB?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AM I RIGHT THAT YOU WERE FOCUSSED ON DEMONSTRATING THE ABILITY TO ADD ADDITIONAL DETECTION SYSTEMS AND ESSENTIALLY A PROOF OF CONCEPT FOR THE MINILAB IN THIS 2010 TIME PERIOD?
MR. LEACH: YOU WERE ALSO FAMILIAR WITH THE EDISON 3.5 DEVICE IN THE 2013 TIME PERIOD; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU WERE FAMILIAR WITH THE EDISON 3.5 IN THE 2014 TIME PERIOD?
MR. LEACH: AND THE SAME WOULD BE TRUE FOR THE 2015 TIME PERIOD?
MR. LEACH: YOU KNEW WHAT THE EDISON 3.5 COULD DO AND WHAT IT COULDN'T DO; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU UNDERSTOOD THAT THE 3.5 DEVICE WAS --
(CELL PHONE RINGING.)
JUDGE DAVILA: I'M SORRY. I BEG YOUR PARDON. WHOEVER HAS THAT DEVICE, PLEASE LEAVE THE COURTROOM. PLEASE LEAVE THE COURTROOM NOW.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: ALL RIGHT. THANK YOU. I APOLOGIZE, MR. LEACH.
MR. LEACH: NO. THANK YOU, YOUR HONOR.
MR. LEACH: SORRY FOR THAT INTERRUPTION, MS. HOLMES.
MR. LEACH: YOU WERE FAMILIAR WITH WHAT THE 3.5 DEVICE COULD DO AND COULDN'T DO IN THE 2015 TIME PERIOD?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: OKAY. YOU KNEW THAT IT WAS LIMITED TO IMMUNOASSAYS?
ELIZABETH A. HOLMES: THAT'S WHAT WE WERE DOING WITH IT, YES.
MR. LEACH: OKAY. AND YOU NEVER TOLD ANYONE THAT THE EDISON 3.5 DID SOMETHING OTHER THAN IMMUNOASSAYS; CORRECT?
ELIZABETH A. HOLMES: IT DEPENDS ON THE CONTEXT.
MR. LEACH: WHY DOES THAT DEPEND ON THE CONTEXT?
ELIZABETH A. HOLMES: BECAUSE THE EDISON 3.5 WAS CAPABLE OF DOING GENERAL CHEMISTRY AND ASSAYS, FOR EXAMPLE, BUT WE WEREN'T USING IT THAT WAY IN THE CLINICAL LAB.
MR. LEACH: OKAY. BUT YOU NEVER TOLD AN INVESTOR THAT THERANOS WAS ACTUALLY USING THE 3.5 DEVICE FOR SOMETHING OTHER THAN IMMUNOASSAYS?
MR. LEACH: BECAUSE THAT WOULD NOT BE A CORRECT STATEMENT; RIGHT?
ELIZABETH A. HOLMES: YOU MEAN IN THE CLINICAL LAB?
MR. LEACH: CORRECT.
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IT WOULD BE INCORRECT TO TELL SOMEBODY IN 2013 OR 2014 OR 2015 THAT THE EDISON 3.5 WAS BEING USED TO DO ALL OF THERANOS'S TESTING?
ELIZABETH A. HOLMES: IN THE CLINICAL LAB?
MR. LEACH: YES.
ELIZABETH A. HOLMES: CORRECT, YEAH.
MR. LEACH: THE CLINICAL LAB IS WHERE YOU'RE ACTUALLY PERFORMING THE SERVICE FOR PATIENTS; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: YOU CAN'T PERFORM THAT SERVICE ANY OTHER PLACE BUT THE CLINICAL LAB; IS THAT CORRECT?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: OKAY. IS IT FAIR TO SAY THAT YOU HAD A GENERAL SENSE OF WHAT ASSAYS WERE BEING BROUGHT UP IN THE CLINICAL LAB FROM TIME TO TIME?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: LET'S EXPLORE THAT. YOU SHOULD HAVE TWO WHITE BINDERS UP THERE, VOLUME 3 AND VOLUME 4.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: IF YOU COULD PLEASE LOOK IN VOLUME 3 FOR EXHIBIT 5126.
ELIZABETH A. HOLMES: YES. OKAY.
MR. LEACH: DO YOU HAVE THAT IN FRONT OF YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: GREAT. DOES EXHIBIT 5126, DO YOU SEE AT THE TOP THERE'S AN EMAIL MESSAGE FROM DANIEL YOUNG?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THE DATE OCTOBER 22ND, 2013?
MR. LEACH: AND DO YOU SEE YOUR NAME IN THE TO LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE SUBJECT HERE IS CLIA UPDATES?
MR. LEACH: OKAY. YOUR HONOR, I OFFER EXHIBIT 5126.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5126 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: SO, MS. HOLMES, WE'RE LOOKING AT AN EMAIL FROM OCTOBER OF 2013. THIS IS ABOUT A MONTH AFTER THERANOS ISSUED A PRESS RELEASE ANNOUNCING THE WALGREENS PARTNERSHIP; IS THAT CORRECT?
MR. LEACH: OKAY. AND IF I COULD DRAW YOUR ATTENTION DOWN TO THE BOTTOM OF THE PAGE, DO YOU SEE THERE'S AN EMAIL FROM DANIEL YOUNG THAT CONTINUES ON TO PAGE 2?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE COULD GO TO PAGE 2, PLEASE. DO YOU SEE WHERE DR. YOUNG WRITES, "I WANTED TO SEND A FEW UPDATES RELATED TO CLIA OPERATIONS TO MAKE SURE YOU ARE UPDATED"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND FURTHER DOWN IN PARAGRAPH E, DO YOU SEE WHERE HE WROTE, "WE DISCUSSED QC NEEDS FOR THE NEW THERANOS LDT'S." DO YOU SEE THAT LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND LDT STANDS FOR LAB DEVELOPED TEST?
MR. LEACH: AND A LAB DEVELOPED TEST IS SOMETHING THAT THERANOS CREATES IN ITS OWN LAB AND USES EITHER ON ITS EDISON DEVICE OR A MODIFIED THIRD PARTY DEVICE; IS THAT CORRECT?
ELIZABETH A. HOLMES: THAT'S WHAT WE DID, YES.
MR. LEACH: OKAY. AND AN LDT IS ANOTHER WAY OF SAYING THAT IT'S NOT APPROVED BY THE FDA YET; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND DR. YOUNG IS TALKING TO YOU ABOUT QC NEEDS FOR THE LDT'S. DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO, YES.
MR. LEACH: AND FURTHER DOWN THERE'S LANGUAGE FOR PROFICIENCY TESTING. DO YOU SEE THAT?
MR. LEACH: AND DO YOU SEE WHERE HE WROTE, "I HAVE NOT DISCUSSED PROFICIENCY TESTING YET WITH CLIA FOR LDT'S"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DR. YOUNG IN THIS TIME PERIOD, HE'S RUNNING R&D; CORRECT?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: HE DIDN'T HAVE A FORMAL ROLE WITHIN THE CLIA LAB; CORRECT?
ELIZABETH A. HOLMES: ONLY AS THE PERSON OVERSEEING THE LDT'S FROM THE R&D SIDE AS THEY WERE TRANSFERRED INTO THE CLIA LAB.
MR. LEACH: OKAY. SO HE'S ON THE R&D SIDE, IT MOVES INTO THE CLIA LAB, BUT OVER THERE HE DOESN'T HAVE SOME FORMAL ROLE THE WAY DR. ROSENDORFF WOULD?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: FURTHER DOWN THERE'S A SECTION "ELECTROLYTE/ISE." DO YOU SEE THAT AT THE BOTTOM OF PAGE 2?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DR. YOUNG WROTE "OUR NA, K, CL TEST RESULTS ARE STILL NOT AS RELIABLE AS I WOULD LIKE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND NA IS AN ABBREVIATION FOR SODIUM?
MR. LEACH: AND K IS AN ABBREVIATION FOR POTASSIUM?
MR. LEACH: AND CL, IS THAT CHLORIDE?
MR. LEACH: AND IF WE GO BACK TO PAGE 1, YOU WROTE BACK, "WHAT ARE THE ISSUES?" DO YOU SEE THAT IN THE MIDDLE OF THIS DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN AT THE TOP DO YOU SEE WHERE DANIEL YOUNG WROTE, "BASICALLY THERE HAVE BEEN RESULTS FOR WHICH ALL ISE RESULTS ARE OUT OF RANGE. FOR EXAMPLE, K IS HIGH, AND CL AND NA ARE LOW RELATIVE TO THE REFERENCE RANGE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS SODIUM AN EXAMPLE OF AN ISE?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND WHAT IS AN ISE?
ELIZABETH A. HOLMES: IT IS A TEST WHICH WAS RUN WITH ELECTRODES, ESSENTIALLY, AS THE WAY TO READ IT OUT.
MR. LEACH: OKAY. AND YOU WERE STARTING TO RUN ISE'S ON THE MODIFIED ADVIA MACHINES DURING THIS TIME PERIOD; IS THAT CORRECT?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: AND THIS IS AN EXAMPLE OF DANIEL YOUNG KEEPING YOU APPRISED OF UPDATES IN THE CLIA LAB; CORRECT?
ELIZABETH A. HOLMES: I THINK HE'S KEEPING ME APPRISED OF UPDATES WITH THE LDT'S THAT ARE TRANSITIONING INTO THE CLIA LAB.
MR. LEACH: OKAY. WELL, THE TITLE THIS EMAIL IS "CLIA UPDATES."
ELIZABETH A. HOLMES: SURE. YEAH, YEAH.
MR. LEACH: CORRECT. AND THIS IS YOU BEING KEPT APPRISED OF DEVELOPMENTS IN THE CLIA LAB; IS THAT FAIR?
MR. LEACH: LET'S LOOK AT THE NEXT DOCUMENT IN YOUR BINDER, EXHIBIT 5127.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE DANIEL YOUNG'S NAME IN THE FROM LINE ON THIS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE YOUR NAME IN THE TO LINE OF THIS EMAIL?
MR. LEACH: AND IS THIS DATED OCTOBER 22ND, 2013?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THE SUBJECT OF THIS EMAIL IS "TESTS IN THE CLIA LAB"?
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5127.
JUDGE DAVILA: IN ITS ENTIRETY, INCLUDING THE FOLLOWING PAGES?
MR. LEACH: YES, YOUR HONOR.
MR. DOWNEY: THAT'S FINE, YOUR HONOR. NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5127 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, LET ME DRAW YOUR ATTENTION TO THE BOTTOM PORTION OF THE PAGE. ACTUALLY, IF WE COULD GO TO PAGE 3, MS. HOLLIMAN. MS. HOLMES, DO YOU SEE THE EMAIL WHERE DANIEL YOUNG WRITES TO YOU, "HI ELIZABETH, "ATTACHED IS A SPREADSHEET THAT LISTS ALL TESTS THAT HAVE BEEN PERFORMED ON SUBJECTS SINCE 9/9/2013." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND 9/9/2013 IS ROUGHLY THE DATE THAT THERANOS ANNOUNCED ITS PARTNERSHIP WITH WALGREENS; CORRECT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND DR. YOUNG WROTE, "I ORGANIZED IT FOR NOW AS FOLLOWS:" AND THEN IF WE CAN GO TO PAGE 2, DOWN AT THE BOTTOM THERE'S A CHART. DO YOU SEE THAT, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DANIEL YOUNG WROTE, "HOW DOES THIS LOOK FOR THE 'HAVE DONE' TAB?" DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTOOD "HAVE DONE" TO MEAN TESTS THAT THERANOS HAD ACTUALLY PERFORMED IN THE CLIA LAB SINCE EARLY SEPTEMBER?
ELIZABETH A. HOLMES: I THINK SO. THAT'S HOW I READ IT NOW.
MR. LEACH: OKAY. TO THE LEFT THERE'S A COLUMN "TEST." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN THERE'S A COLUMN IN THE MIDDLE, "CHEMISTRY." DO YOU SEE THAT?
MR. LEACH: AND THE REFERENCE TO THERANOS WOULD MEAN A CHEMISTRY THAT THERANOS HAD DEVELOPED?
MR. LEACH: AS OPPOSED TO FDA APPROVED, WHICH WOULD BE A CHEMISTRY THAT SOME OTHER MANUFACTURER HAD DEVELOPED?
MR. LEACH: AND TO THE RIGHT THERE'S A COLUMN FOR "DEVICE." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT LANGUAGE "FDA APPROVED" WOULD BE A DEVICE THAT HAD BEEN NOT A THERANOS MANUFACTURED ANALYZER, BUT SOMETHING THAT HAD BEEN APPROVED BY THE FDA?
MR. LEACH: SUCH AS A SIEMENS ADVIA?
MR. LEACH: FURTHER DOWN THERE'S THE ACRONYM, TSPU. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S THERANOS SAMPLE PROCESSING UNIT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THAT'S A REFERENCE TO THE EDISON IN THIS CONTEXT, THE EDISON 3.5?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND AM I READING THIS RIGHT, THAT THIS REFLECTS IN THE OCTOBER 2013 TIME PERIOD FOUR ASSAYS ARE BEING RUN ON THE EDISON 3.5 OR THE TSPU?
ELIZABETH A. HOLMES: THERE'S -- I THINK THERE'S THREE THAT ARE LISTED HERE.
MR. LEACH: I STAND CORRECTED. SO THREE ASSAYS DURING THIS TIME PERIOD?
MR. LEACH: AND YOU KNEW THAT THAT GREW TO 12?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THAT WAS SOMETHING THAT YOU KNEW AND UNDERSTOOD AT THE TIME?
ELIZABETH A. HOLMES: I KNEW THAT THERE WERE THREE LISTED HERE, YES.
MR. LEACH: OKAY. BUT YOU ALSO WERE KEPT GENERALLY APPRISED OF WHAT WAS GOING ON IN CLIA THROUGHOUT 2014 AND 2015?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: THAT WASN'T HIDDEN FROM YOU?
MR. LEACH: AND YOU HAD A GENERAL SENSE AT ANY GIVEN POINT IN TIME HOW MANY ASSAYS THAT THERANOS WAS RUNNING ON THE EDISON 3.5 IN THE CLIA LAB?
ELIZABETH A. HOLMES: I'M NOT SURE ABOUT "ANY POINT IN TIME," BUT I WAS DEFINITELY GIVEN UPDATES ON AN ONGOING BASIS.
MR. LEACH: OKAY. SO IT MAY CHANGE FROM ONE MONTH HERE TO ONE MONTH THERE, BUT OVER THE COURSE, THAT 12 NUMBER WOULDN'T SURPRISE YOU IN 2015?
ELIZABETH A. HOLMES: I DON'T THINK IT WOULD HAVE.
MR. LEACH: LET ME DRAW YOUR ATTENTION -- MS. HOLLIMAN, CAN WE DRAW UP THE EXCEL, THE NATIVE FOR THIS ATTACHMENT. I WANT TO FOCUS ON THE ATTACHMENT TO THIS EMAIL, MS. HOLMES, AND I THINK IT MAY BE EASIER TO LOOK AT THE NATIVE ON THE SCREEN.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE DOWN AT THE BOTTOM THERE ARE TWO TABS TO THIS EXCEL WORKBOOK, "HAVE DONE" AND "PLAN TO DO"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND ON THE "PLAN TO DO" TAB, DO YOU SEE THAT THERE ARE SOME ROWS FOR CPT, TEST NAME, CHEMISTRY, DEVICE, METHOD, AND MATRIX?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND CHEMISTRY AND DEVICE, THOSE ARE THE SAME CATEGORIES THAT WE SAW IN THE TABLE OF THE BODY OF THE EMAIL?
MR. LEACH: AND METHOD REFERS TO IS THIS AN IMMUNOASSAY, IS THIS CYTOMETRY, IS THIS NUCLEIC ACID AMPLIFICATION? IS THAT WHAT THAT IS GETTING AT?
MR. LEACH: AND THE MATRIX, THIS IS GETTING AT WHETHER THIS IS BLOOD VERSUS URINE VERSUS SOME OTHER TYPE OF SAMPLE?
ELIZABETH A. HOLMES: YES, AND I THINK WHAT KIND OF BLOOD.
MR. LEACH: OKAY. AND NOW IF WE CAN GO TO THE -- AND AM I RIGHT THAT YOU UNDERSTOOD AT THE TIME THAT THESE WERE ASSAYS THAT WERE PLANNED FOR THE FUTURE, BUT WHICH THERANOS WASN'T ACTUALLY DOING AT THE TIME?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: THAT'S HOW YOU READ THIS SPREADSHEET?
MR. LEACH: OKAY. LET'S GO TO THE "HAVE DONE" TAB, PLEASE. AND DO YOU SEE AN IMAGE ON THAT TABLE DOWN AT THE BOTTOM ON THE "HAVE DONE," MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THE TABLE THAT IS IN THE BODY OF THE EMAIL?
MR. LEACH: AND IF WE CAN GO UP TO THE TOP, MS. HOLLIMAN. DO YOU SEE IN COLUMN A, THERE'S A SOURCE, WAGFS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DOES THAT REFER TO WAG FINGERSTICK?
ELIZABETH A. HOLMES: I WOULD ASSUME SO.
MR. LEACH: AND THE TEST IN COLUMN C, CBC, IS THAT COMPLETE BLOOD COUNT?
MR. LEACH: AND AIC, CAN YOU TELL US WHAT THAT IS?
ELIZABETH A. HOLMES: I'M ASSUMING IT'S HEMOGLOBIN AIC.
MR. LEACH: AND THE VISIT DATE AND THE REPORT DATE, DOES THAT REFLECT WHEN THE PATIENT CAME INTO A WELLNESS CENTER?
ELIZABETH A. HOLMES: I THINK THAT'S WHAT THE VISIT DATE REFLECTS, YES.
MR. LEACH: AND THE REPORT DATE, THAT'S WHEN THERANOS REPORTED RESULTS TO EITHER THE PHYSICIAN OR THE PATIENT? IS THAT HOW YOU READ THIS?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: OKAY. TO THE RIGHT THERE'S SOME COLUMNS, AGB, HCT, RBC.
MR. LEACH: ARE THOSE TYPES OF THIRD PARTY DEVICES?
ELIZABETH A. HOLMES: GENERALLY, YES.
MR. LEACH: AND IN COLUMN K, UNDER "WBC_DIFF," IS THAT WHOLE BLOOD COUNT?
ELIZABETH A. HOLMES: I THINK IT'S WHITE CELL BLOOD COUNTS.
MR. LEACH: OKAY. AND THE TEST IS A REFERENCE TO THE THIRD PARTY MACHINE THAT IS BEING USED FOR THAT ASSAY?
MR. LEACH: AND TO THE RIGHT, "MHC/MCHC," IS THAT ANOTHER REFERENCE TO AN ASSAY?
MR. LEACH: AND IS BECKMAN COULTER ANOTHER REFERENCE TO A THIRD PARTY DEVICE BEING USED FOR THAT ASSAY?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: IF WE CAN SCROLL DOWN A LITTLE BIT. AM I RIGHT TO READ THESE FIRST ROUGHLY 34 ROWS TO MEAN THERANOS IS DOING TESTING ON THIRD PARTY DEVICES FOR CBC AND AIC? IS THAT HOW YOU READ THIS?
ELIZABETH A. HOLMES: YES, THAT'S HOW I READ THIS.
MR. LEACH: AND IF WE CAN SCROLL -- AND I DIDN'T TALK ABOUT DCA VANTAGE, BUT IS THAT ANOTHER THIRD PARTY DEVICE?
MR. LEACH: AND IF WE CAN SCROLL DOWN, PLEASE, MS. HOLLIMAN. AND MOVE UP JUST A LITTLE BIT MORE. DO YOU SEE IN THE FAR RIGHT THERE ARE SOME NEW WORDS IN THE COLUMN O, P_ADVIA?
MR. LEACH: AND WHAT DOES P_ADVIA MEAN?
ELIZABETH A. HOLMES: SOMETHING RELATED TO THE ADVIA.
MR. LEACH: OKAY. THAT'S DISTINGUISHED FROM THE TH_ADVIA. IS THAT DRAWING A DISTINCTION BETWEEN THERANOS CHEMISTRIES AND A THIRD PARTY'S CHEMISTRIES?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: OKAY. AND THEN IN THE FAR RIGHT FOR VITAMIN D, THERE'S A COLUMN FOR EDISON. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S A REFERENCE TO THE EDISON 3.5?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND BY THIS OCTOBER OF 2013 TIME PERIOD, THREE ASSAYS ARE BEING USED ON THE EDISON 3.5?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND DR. YOUNG IS REPORTING THIS TO YOU IN OCTOBER OF 2013?
ELIZABETH A. HOLMES: YES. I SAW THOSE LISTED AS JUST DEMOS, SO I'M NOT SURE IF THEY WERE UP OR NOT. BUT I THINK THIS IS A REFERENCE TO EDISON AS THE DEVICE FOR THEM.
MR. LEACH: OKAY. AND THIS IS EXEMPLARY OF DR. YOUNG AND OTHERS KEEPING YOU APPRISED OF WHAT IS GOING ON IN THE CLIA LAB; CORRECT?
MR. LEACH: AND DR. YOUNG NEVER TOLD YOU, FOR EXAMPLE, WE'RE DOING ALL OF THE TESTING AT THERANOS ON SMALL SAMPLES; CORRECT?
ELIZABETH A. HOLMES: IN OUR CLIA LAB, NO.
MR. LEACH: AND HE NEVER TOLD YOU, IN THE CLIA LAB WE'RE DOING ALL OF THE TESTING ON THE EDISON 3.5?
MR. LEACH: AND WE'RE AGREED THAT BETWEEN 2010 AND 2014, THERANOS BOUGHT ANALYZERS FROM THIRD PARTIES?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: AND IT BOUGHT MACHINES FROM SIEMENS?
MR. LEACH: AND IT BOUGHT MACHINES FROM BECKMAN COULTER?
MR. LEACH: AND IT BOUGHT MACHINES FROM DCA VANTAGE?
MR. LEACH: AND THAT WASN'T HIDDEN FROM YOU?
MR. LEACH: AND YOU KNEW THAT ALL OF THOSE MACHINES WERE BEING USED TO DO SOME FORM OF PATIENT TESTING?
ELIZABETH A. HOLMES: I DON'T THINK I FOCUSSED ON ALL OF THEM, BUT THE INFORMATION WAS AVAILABLE HERE.
MR. LEACH: IT WASN'T A SURPRISE TO YOU THAT THERANOS WAS DOING TESTING ON THIRD PARTY MACHINES?
MR. LEACH: AND YOU KNEW IN THE 2014 TIME PERIOD THAT IT WOULD BE INCORRECT TO SAY THAT THERANOS DID NOT BUY ANALYZERS FROM THIRD PARTIES?
ELIZABETH A. HOLMES: CORRECT. WE BOUGHT ANALYZERS FROM THIRD PARTIES.
MR. LEACH: AND YOU KNEW IT WOULD BE INCORRECT TO TELL AN INVESTOR THAT?
MR. LEACH: YOU ALSO UNDERSTOOD IN 2014 THAT BECAUSE THERANOS WAS USING THIRD PARTY ANALYZERS AT THE TIME, LIKE FROM SIEMENS, IT WASN'T CURRENTLY THE CASE THAT THE FOOTPRINT IN YOUR LABORATORY WAS A SMALL FRACTION OF THE FOOTPRINT OF A TYPICAL CENTRAL LABORATORY?
ELIZABETH A. HOLMES: AS TO THOSE MACHINES, NO.
MR. LEACH: YOU KNEW AT THE TIME THAT YOU HAD THOSE MACHINES IN YOUR LAB; CORRECT?
MR. LEACH: AND YOU KNEW AT THE TIME THAT THE FOOTPRINT WAS ROUGHLY THE SAME AS A TYPICAL CENTRAL LABORATORY?
ELIZABETH A. HOLMES: OF COURSE.
MR. LEACH: AND YOU HAD ASPIRATIONS OF ONE DAY USING ONLY THE MINILAB; CORRECT?
MR. LEACH: AND YOU HAD ASPIRATIONS THAT ONE DAY, BECAUSE YOU WERE USING THE MINILAB, YOUR FOOTPRINT WOULD BE SUBSTANTIALLY LESS THAN THE FOOTPRINT OF A TRADITIONAL LAB; RIGHT?
ELIZABETH A. HOLMES: YES, A MINILAB OUTSIDE OF THE LAB.
MR. LEACH: BUT IN 2014, YOU HADN'T ACTUALLY DONE THAT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AM I RIGHT THAT YOUR TESTIMONY IS THAT IN 2014, THERANOS COULD RUN APPROXIMATELY 30 TESTS FROM A SINGLE FINGERSTICK BLOOD DRAW IF THE MAXIMUM AMOUNT OF BLOOD WAS EXTRACTED FROM THE FINGER?
ELIZABETH A. HOLMES: WHAT DO YOU MEAN BY THAT? LIKE IN THE CLINICAL LAB OR --
MR. LEACH: IN THE CLINICAL LAB.
ELIZABETH A. HOLMES: I DON'T HAVE REASON TO DOUBT THAT. YOU SAID 2014?
MR. LEACH: LET'S FOCUS ON THE 2013 TO 2014 TIME PERIOD.
MR. LEACH: AND I'M TRYING TO UNDERSTAND IF YOU KNEW THAT THERANOS COULD RUN APPROXIMATELY 30 TESTS FROM A SINGLE STICK BLOOD IN THE CLIA LAB.
ELIZABETH A. HOLMES: OKAY. I THINK SOMEWHERE IN THAT TIME PERIOD IT WAS MORE THAN THAT, BUT, YES, WE SHOULD HAVE BEEN ABLE TO RUN 30 TESTS.
MR. LEACH: WE TALKED EARLIER ABOUT THE TOTAL NUMBER OF SMALL SAMPLES THAT YOU DID FROM FINGERSTICKS IN THE CLIA LAB, AND I THINK WE SETTLED THAT THE NUMBER WAS ABOUT 70; CORRECT?
MR. LEACH: TWELVE ON THE 3.5, AND ANOTHER 58 ON MODIFIED SIEMENS MACHINES; CORRECT?
ELIZABETH A. HOLMES: OR OTHER MODIFIED MACHINES, YES.
MR. LEACH: THANK YOU. AND WHAT I'M TRYING TO GET AT IS HOW MANY TESTS YOU COULD DO FROM THAT, A SINGLE FINGERSTICK DRAW. AND I DON'T WANT YOU TO GUESS. I WANT TO MAKE SURE THAT WE'RE TALKING ABOUT THE SAME THING.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: BUT THE TOTAL NUMBER OF TESTS YOU COULD DO FROM THAT SINGLE DRAW WAS 30; ISN'T THAT RIGHT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: OKAY. DO YOU HAVE THE RED BINDER OF YOUR S.E.C. TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: LET'S ME DRAW YOUR ATTENTION, PLEASE, TO PAGE 200. IT'S PAGE 200 OF YOUR TESTIMONY, AND IT WOULD BE BATES NUMBER ENDING 5306.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I WOULD LIKE YOU TO READ TO YOURSELF LINES 24 TO 11.
MR. DOWNEY: I'M SORRY, MR. LEACH. WHICH PAGE?
MR. LEACH: BATES 5306, PAGE 200, LINE 24, TO PAGE 201, LINE 7.
MR. LEACH: HAVE YOU READ THAT TO YOURSELF, MS. HOLMES?
ELIZABETH A. HOLMES: I HAVE.
MR. LEACH: AND DOES THIS REFRESH YOUR RECOLLECTION THAT THERANOS WAS ABLE TO RUN 30-SOMETHING TESTS ON A SINGLE FINGERSTICK DRAW OF BLOOD SO LONG AS IT WAS THE MAXIMUM AMOUNT?
ELIZABETH A. HOLMES: YES, I THINK THIS TESTIMONY IS CORRECT.
MR. LEACH: AND THAT WAS YOUR UNDERSTANDING AT THE TIME?
ELIZABETH A. HOLMES: I ASSUME SO. I DON'T REMEMBER.
MR. LEACH: OKAY. YOU WERE HERE FOR LISA PETERSON'S TESTIMONY; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU REMEMBER SPEAKING TO MS. PETERSON ON THE PHONE IN SEPTEMBER OR OCTOBER OF 2014?
ELIZABETH A. HOLMES: GENERALLY, YES.
MR. LEACH: AND YOU REMEMBER MEETING WITH MS. PETERSON IN CALIFORNIA IN ABOUT OCTOBER OF 2014?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WERE HERE WHEN MS. PETERSON TESTIFIED THAT SHE LEARNED FROM CONVERSATIONS WITH YOU THAT THERANOS USES THEIR OWN ANALYZE EQUIPMENT; CORRECT?
MR. LEACH: YOU WERE HERE WHEN SHE SAID THAT?
MR. LEACH: AND YOU WERE HERE WHEN MS. PETERSON TESTIFIED THAT YOU SAID THAT THERANOS WAS USING ITS DEVICES ON MILITARY HELICOPTERS?
MR. LEACH: AM I RIGHT THAT YOU DON'T THINK YOU TOLD RDV IN LATE 2014 THAT THERANOS'S REVENUE FOR 2015 WAS PROJECTED TO BE $990 MILLION; CORRECT?
ELIZABETH A. HOLMES: I THINK THAT WAS THE OUTPUT OF THE MODEL THAT WAS DISCUSSED WITH THEM.
MR. LEACH: AND YOU RECALL DISCUSSING THE MODEL WITH THEM?
ELIZABETH A. HOLMES: I DON'T. I JUST HAVE SEEN THE TESTIMONY HERE.
MR. LEACH: SO DID YOU TELL RDV, THROUGH THE MODEL OR THROUGH CONVERSATIONS, THAT THERANOS'S REVENUE FOR 2015 WAS PROJECTED TO BE 990 MILLION?
ELIZABETH A. HOLMES: I DON'T THINK I DID, NO.
MR. LEACH: OKAY. AND YOU DON'T REMEMBER SUNNY BALWANI EVER MAKING THAT STATEMENT; CORRECT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND THAT'S BECAUSE YOU DON'T HAVE A MEMORY OF THE CONVERSATIONS WITH RDV?
ELIZABETH A. HOLMES: I REMEMBER SOME PARTS OF THAT CONVERSATION, BUT I DON'T REMEMBER TALKING ABOUT REVENUE WITH THEM.
MR. LEACH: YOUR TESTIMONY IS THAT YOU CAN'T REMEMBER TELLING RDV THAT THERANOS WOULD OPEN OR WAS ON THE PATH TO OPENING 900 WALGREENS STORES IN 2015?
ELIZABETH A. HOLMES: I DON'T REMEMBER THAT.
MR. LEACH: AND YOU DON'T REMEMBER MR. BALWANI MAKING THAT STATEMENT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOUR TESTIMONY IS THAT YOU DON'T KNOW IF YOU TOLD RDV IN LATE 2014 THAT THERANOS USES ITS OWN ANALYZER EQUIPMENT?
ELIZABETH A. HOLMES: I DON'T. AND WE WERE USING OUR OWN ANALYZER EQUIPMENT, SO I WOULDN'T BE SURPRISED IF I SAID THAT.
MR. LEACH: AND YOU DON'T KNOW IF SUNNY BALWANI SAID THAT BECAUSE YOU DON'T RECALL THE SPECIFICS OF THE CONVERSATION?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND AM I RIGHT THAT YOU CAN'T REMEMBER WHETHER YOU TOLD RDV IN LATE 2015 THAT THE THERANOS ANALYZER WAS A SMALL FRACTION OF THE SIZE OF THE CURRENT LAB?
ELIZABETH A. HOLMES: THAT'S SOMETHING THAT I WOULD HAVE SAID IN THE CONTEXT OF DISCUSSING THE MINILAB, BUT I DON'T THINK WE DISCUSSED THE CLINICAL LAB.
MR. LEACH: OKAY. AND YOU TOLD THE S.E.C. THAT YOU DON'T REMEMBER TELLING RDV IN LATE 2014 THAT THE THERANOS ANALYZER WAS A SMALL FRACTION OF THE SIZE OF A CURRENT LAB?
ELIZABETH A. HOLMES: THAT MAKES SENSE.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION -- THIS WILL BE IN VOLUME 4 OF YOUR WHITE BINDERS UP THERE -- TO WHAT IS IN EVIDENCE AS EXHIBIT 1853.
ELIZABETH A. HOLMES: OKAY. ONE SECOND. OKAY.
MR. LEACH: AND IT'S ON THE SCREEN IF THAT'S EASIER.
ELIZABETH A. HOLMES: YEAH. YEAH, THAT'S FINE.
MR. LEACH: YOU WERE HERE WHEN MS. PETERSON TESTIFIED ABOUT THIS PROJECTED STATEMENT OF INCOME THAT WAS PROVIDED TO RDV?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU SEE THE HANDWRITTEN NOTES UP AT THE TOP, 900 LOCATIONS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: BUT YOUR TESTIMONY IS THAT YOU CAN'T REMEMBER TELLING RDV THAT THERANOS WOULD OPEN OR WAS ON THE PATH TO OPENING 900 WALGREENS STORES BY 2015?
ELIZABETH A. HOLMES: I DON'T THINK I WOULD HAVE BEEN THE PERSON SPEAKING TO THIS.
MR. LEACH: AND LAST WEEK WE TALKED A LITTLE BIT ABOUT EXHIBIT 5633, AN EMAIL THAT MR. BALWANI FORWARDED TO YOU IN AUGUST OF 2014 FROM NIMESH JHAVERI. DO YOU RECALL TESTIFYING ABOUT THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU RECALL MR. JHAVERI SAYING THERE WAS A NEED FOR A DETAILED PLAN ON HOW TO REDUCE THE NUMBER OF VENOUS DRAWS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND NONE OF THAT CAME UP IN THIS MEETING WITH MS. PETERSON IN OCTOBER OF 2014; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. ON THE PROJECTED STATEMENT OF INCOME, THERE'S -- DO YOU SEE WHERE IT PROJECTS 400 MILLION OF REVENUE FROM PHARMACEUTICAL SERVICES?
ELIZABETH A. HOLMES: I THINK IT SAYS 40.
MR. LEACH: CORRECT. THANK YOU. 40 MILLION?
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: AND YOU CAN'T IDENTIFY A SINGLE PHARMACEUTICAL CONTRACT ENTERED AS OF OCTOBER 2014 THAT WOULD GET ANYWHERE NEAR TO 40 MILLION; CORRECT?
MR. LEACH: OKAY. THERE'S ALSO A LINE FOR --
ELIZABETH A. HOLMES: TO BE CLEAR, I DON'T THINK THAT'S CORRECT.
MR. LEACH: YOU HAD NO REVENUE FROM PHARMACEUTICAL COMPANIES IN 2014; CORRECT?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: AND YOU HAD NO EXISTING CONTRACT IN 2014 THAT WOULD GET YOU TO $40 MILLION?
ELIZABETH A. HOLMES: I THINK WE DID.
MR. LEACH: NAME THE PHARMACEUTICAL COMPANY THAT YOU THINK YOU COULD HAVE DONE THAT WITH, MS. HOLMES.
ELIZABETH A. HOLMES: THE GSK BIOLOGICALS CONTRACT THAT WE HAD FROM BEFORE.
MR. LEACH: BACK IN 2010?
ELIZABETH A. HOLMES: I'M NOT SURE WHEN IT WAS SIGNED, BUT FROM A FEW YEARS BEFORE, A COUPLE YEARS BEFORE.
MR. LEACH: AND YOU WERE HERE WHEN MS. SPIVEY TESTIFIED THAT THERANOS DIDN'T RECOGNIZE A SINGLE DOLLAR FROM GSK; CORRECT?
MR. LEACH: NOT IN 2007; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: NOT IN 2008?
MR. LEACH: NOT IN 2009?
MR. LEACH: NOT IN 2010?
MR. LEACH: NOT IN 2011?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: NOT IN 2012?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND NOT IN 2013?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND THERE'S ALSO A LINE FOR LAB REVENUE SERVICES FROM HOSPITALS. DO YOU SEE THAT?
MR. LEACH: AND AM I RIGHT THAT THERANOS NEVER RECOGNIZED ANY REVENUE FROM HOSPITALS?
ELIZABETH A. HOLMES: I THINK WE HAD DEFERRED REVENUE THAT WAS ASSOCIATED WITH CONTRACTS THAT COULD COVER HOSPITAL SHIPMENTS.
MR. LEACH: AND MY QUESTION WAS NOT RELATED TO DEFERRED REVENUE, MS. HOLMES. MY QUESTION WAS, YOU NEVER RECOGNIZED ANY REVENUE FROM HOSPITAL SERVICES; CORRECT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: AND YOU NEVER PUT A MINILAB OR AN EDISON IN A HOSPITAL; CORRECT?
ELIZABETH A. HOLMES: NOT FOR CLINICAL CARE, NO.
MR. LEACH: AND NOT TO PERFORM THE SERVICES THAT THERANOS WAS ADVERTISING TO THE PUBLIC; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU NEVER PUT A MINILAB OR AN EDISON IN A PHYSICIAN OFFICE FOR CLINICAL CARE; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: OKAY. TO THE RIGHT COLUMN, THERE'S A TOTAL REVENUE NUMBER OF $990 MILLION. DO YOU SEE THAT?
MR. LEACH: AND WE CAN AGREE THAT THERANOS ACTUALLY NEVER ACHIEVED THAT LEVEL OF REVENUE; CORRECT?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: AND AM I RIGHT THAT TWO MONTHS AFTER PROVIDING THIS REVENUE PROJECTION OF 990 MILLION TO RDV, YOU PROVIDED SUBSTANTIALLY LOWER REVENUE PROJECTIONS TO ARANCA, YOUR STOCK OPTION VALUATION FIRM?
ELIZABETH A. HOLMES: PROBABLY.
MR. LEACH: YOU WERE HERE WHEN MS. SPIVEY TESTIFIED ABOUT THAT?
ELIZABETH A. HOLMES: I WAS. I WAS.
MR. LEACH: OKAY. LET'S LOOK AT WHAT IS IN EVIDENCE AS EXHIBIT 5190.
MR. LEACH: LET ME JUST MAKE SURE I HAVE THE RIGHT BINDER, MS. HOLMES. ONE MOMENT.
MR. LEACH: DO YOU RECALL MS. SPIVEY TESTIFYING ABOUT THIS EMAIL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND SHE WENT BY DANISE YAM AT THE TIME?
ELIZABETH A. HOLMES: SHE DID.
MR. LEACH: AND THE SUBJECT OF THIS IS 409A REPORT. DO YOU SEE THAT?
MR. LEACH: AND THE DATE IS DECEMBER 31ST, 2014. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS ROUGHLY TWO OR THREE MONTHS AFTER YOUR MEETING WITH MS. PETERSON IN CALIFORNIA ABOUT RDV?
MR. LEACH: LET ME DRAW YOUR ATTENTION TO PAGE 5. PAGE 2, MS. HOLLIMAN. AND THE HARD COPY IS IN VOLUME 2 IF YOU WANT TO SEE THAT.
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: AND DO YOU SEE WHERE IT SAYS, "AN ARANCA REPORT, THERANOS INC., MFV OF COMMON STOCK AS OF DECEMBER 15TH, 2014"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF I COULD FOCUS YOU ON PAGE 5. DO YOU SEE THE BULLET UNDER 1.2 WHERE ARANCA WROTE, "WE UNDERSTAND THIS REPORT AND ITS CONCLUSIONS WOULD BE USED BY THE COMPANY'S BOARD OF DIRECTORS (AND AUTHORIZED BOARD COMMITTEES) SOLELY IN CONNECTION WITH DETERMINING THE EXERCISE PRICE FOR GRANTING OPTIONS TO ITS EMPLOYEES TO COMPLY WITH," A PROVISION OF THE INTERNAL REVENUE CODE. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE IN THE SECOND BULLET THERE'S A DESCRIPTION OF THE PARTICULAR PROVISION OF THE INTERNAL REVENUE CODE THAT ARANCA IS TRYING TO ADDRESS WITH ITS REPORT? DO YOU SEE THAT BULLET?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND LET ME DRAW YOUR ATTENTION TO PAGE 31.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE THERE'S A TABLE FOR INCOME STATEMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IT SAYS, "BASED ON THE REVENUE AND EXPENSE PROJECTIONS BELOW IS THE ESTIMATED INCOME STATEMENT FOR THERANOS." DO YOU SEE THAT LANGUAGE?
MR. LEACH: AND DO YOU SEE FOR DECEMBER '14 -- YOU READ THAT TO BE 2014?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. IT HAS REVENUES OF $150,000?
MR. LEACH: AND DO YOU SEE TO THE RIGHT, FOR THE END OF 2015 IT'S PROJECTING $113 MILLION IN REVENUE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND, MS. HOLLIMAN, IF WE COULD DISPLAY AT THE SAME TIME EXHIBIT 1853 AGAINST THIS PAGE OF 5190. THANK YOU, MS. HOLLIMAN. SO, MS. HOLMES, AM I RIGHT THAT ON 1853, THE TOTAL PROJECTION IS $990 BILLION?
ELIZABETH A. HOLMES: MILLION.
MR. LEACH: THANK YOU. CLOSE TO 1 BILLION, 990 MILLION. I APPRECIATE YOUR ATTENTION TO THE ZEROS HERE.
MR. LEACH: AND FOR THE ARANCA PROJECTION IN DECEMBER, IT'S HUNDREDS OF MILLIONS OF DOLLARS LOWER AT 113 MILLION?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION, PLEASE, TO WHAT IS IN EVIDENCE AS EXHIBIT 2623. MS. HOLMES, DO YOU SEE THIS IS AN EMAIL FROM MS. YAM, OR MS. SPIVEY, TO YOU IN THE JULY 2015 TIME PERIOD RELATED TO THE 409A REPORTS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND, IN FACT, IF WE CAN LOOK AT PAGE 2, DO YOU SEE THE EMAIL FROM MS. YAM WITH THE SUBJECT "SUNIL DHAWAN" IN THE MIDDLE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTOOD AT THE TIME THAT SUNIL DHAWAN WAS COMING ON TO BE THE LAB DIRECTOR IN THE CLIA LAB?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. DID YOU KNOW HE WAS DOCTOR -- OR MR. BALWANI'S DERMATOLOGIST?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. AND YOU UNDERSTOOD THAT, AS PART OF HIS EMPLOYMENT AGREEMENT, THAT HE WAS GOING TO BE GRANTED OPTIONS?
ELIZABETH A. HOLMES: I THINK AT THAT POINT WE WERE GOING TO ISSUE RSU'S, NOT GRANT OPTIONS.
MR. LEACH: OKAY. WELL, DOESN'T IT SAY ON PAGE 3, "AS WE BRIEFLY TOUCHED BASE LAST NIGHT, ALL OPTION GRANTS WOULD BE PENDING ON THE 409A VALUATION." AM I READING THAT RIGHT?
ELIZABETH A. HOLMES: YOU ARE.
JUDGE DAVILA: MR. LEACH.
MR. LEACH: I'LL REPHRASE MY QUESTION.
MR. LEACH: AM I RIGHT THAT ON PAGE 3, MS. YAM IS WRITING, "AS WE BRIEFLY TOUCHED BASE LAST NIGHT, ALL OPTION GRANTS WOULD BE PENDING ON THE 409A VALUATION." DID I READ THAT LANGUAGE CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND IF WE COULD GO BACK TO PAGE 2, DO YOU SEE WHERE MS. YAM WRITES, "PLEASE SEE ATTACHED FOR THE FULL PROJECTION MODEL. THE QUICKEST TURN AROUND TIME IS TWO WEEKS, DEPENDING ON HOW MUCH CHANGES TO THE ASSUMPTIONS WE ARE MAKING. THE ASSUMPTIONS WE HAD BEEN USING SINCE SEPTEMBER 2014 WERE AS FOLLOWS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE IN THE TABLE SHE LISTS THAT THE ASSUMPTION THAT THERANOS HAD BEEN USING SINCE SEPTEMBER OF 2014 FOR 2015 REVENUE WAS $113 MILLION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND MS. YAM IS TELLING YOU THIS AT THE TIME TO GET GUIDANCE FROM YOU; CORRECT?
MR. LEACH: IF WE CAN GO TO PAGE 1, PLEASE, MS. HOLLIMAN, AND FOCUS ON THAT FIRST EMAIL. MS. HOLMES, DO YOU SEE WHERE MS. YAM WROTE, "REVISED THE REVENUE NUMBERS PER DISCUSSION AND UPDATED THE MODEL. I WILL SEND THIS TO ARANCA. "WE STILL NEED TO KNOW HOW MANY OPTIONS WILL BE GRANTED AT THE NEW VALUE (WHETHER AND HOW MANY TO INCLUDE FOR YOU AND SB)." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND THE SB THERE IS MR. BALWANI; CORRECT?
MR. LEACH: AND DOES IT APPEAR FROM THE TABLE THAT THE PROJECTED REVENUE FOR 2015 HAS NOW GONE DOWN IN THIS JULY 2015 TIME PERIOD FROM $113 MILLION DOWN TO $53 MILLION?
MR. LEACH: AND THAT IS FOLLOWING DISCUSSIONS THAT YOU HAD WITH MS. YAM?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: DO YOU SEE WHERE SHE WROTE, "HI ELIZABETH, "WE REVISED THE REVENUE NUMBERS PER DISCUSSION"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND SITTING HERE TODAY, YOU DON'T RECALL THE DISCUSSION?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU ALSO MET WITH SOMEONE NAMED BRIAN GROSSMAN; CORRECT?
MR. LEACH: AND YOU MET WITH HIM ONCE IN DECEMBER OF 2013?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU MET WITH HIM AGAIN IN JANUARY OF 2014?
MR. LEACH: AND AM I RIGHT THAT YOU AND MR. BALWANI TOLD HIM THAT THERANOS COULD DO OVER 1,000 CPT CODES WITH THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: I DON'T REMEMBER THE SPECIFICS OF THAT DISCUSSION, BUT THAT WAS A TOPIC OF DISCUSSION THAT WE WOULD FREQUENTLY HAVE.
MR. LEACH: YOU DON'T REMEMBER SAYING THAT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU AND MR. BALWANI TOLD MR. GROSSMAN THAT THERANOS WAITED TO LAUNCH ITS RETAIL PRODUCT BECAUSE IT WANTED TO MAKE SURE THAT THERANOS HAD COMPLETE COVERAGE, 100 PERCENT COVERAGE OF WHAT QUEST AND LABCORP COULD OFFER; CORRECT?
ELIZABETH A. HOLMES: AGAIN, I DON'T REMEMBER THE SPECIFICS OF THE DISCUSSION. I'M NOT SURE.
MR. LEACH: DO YOU DISPUTE THAT YOU TOLD -- YOU AND MR. BALWANI TOLD BRIAN GROSSMAN THAT -- DO YOU DISPUTE THAT YOU AND MR. BALWANI TOLD BRIAN GROSSMAN THAT THERANOS DID A LITTLE OVER 200 MILLION IN REVENUES, MOSTLY FROM DOD, THAT HAD SUSTAINED THERANOS PRIOR TO THE LAUNCH?
ELIZABETH A. HOLMES: I DON'T THINK WE SAID THAT.
MR. LEACH: AND ISN'T IT TRUE THAT YOU TOLD -- YOU AND MR. BALWANI TOLD MR. GROSSMAN THAT YOU AND THERANOS COULD SUPPORT THE ENTIRE COMMERCIAL ROLLOUT IN THE PHOENIX MARKET IN 200 SQUARE FEET BECAUSE YOUR SYSTEMS WERE SO MUCH SMALLER?
ELIZABETH A. HOLMES: AGAIN, I DON'T REMEMBER THE SPECIFICS OF THE CONVERSATION. THAT COULD BE RELATED TO MINILAB DEPLOYMENT IF WE DID TALK ABOUT SOMETHING LIKE THAT.
MR. LEACH: BUT YOU DON'T REMEMBER SAYING THAT BECAUSE YOU DON'T REMEMBER THE SPECIFICS OF THE CONVERSATION; CORRECT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU UNDERSTOOD IN THE JANUARY 2014 TIME PERIOD THAT BRIAN GROSSMAN WAS ASKING VERY SPECIFIC QUESTIONS ABOUT THE GROSS MARGIN FOR THE THERANOS ANALYZER; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK I HAD THAT CONVERSATION WITH HIM.
MR. LEACH: WELL, LET'S LOOK AT WHAT IS IN EVIDENCE AS EXHIBIT 1404. WOULD YOU LIKE A HARD COPY, MS. HOLMES, OR ARE YOU COMFORTABLE PROCEEDING ON THE SCREEN?
ELIZABETH A. HOLMES: SURE, IF YOU HAVE A HARD COPY, THAT'S GREAT.
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, LET ME DRAW YOUR ATTENTION, PLEASE, TO THE BOTTOM PORTION OF THIS EMAIL. DO YOU SEE WHERE BRIAN GROSSMAN IS EMAILING YOU AND SUNNY BALWANI WITH A COPY TO CHRIS JAMES WITH DUE DILIGENCE QUESTIONS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS AFTER YOUR INITIAL MEETING WITH MR. GROSSMAN IN DECEMBER OF 2013?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IF I REMEMBER YOUR TESTIMONY, YOU WERE THERE FOR SOME PORTION OF A MEETING WITH MR. GROSSMAN IN JANUARY OF 2014.
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND DO YOU SEE THE SUBJECT OF THIS IS "DUE DILIGENCE QUESTIONS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF I COULD FOCUS YOUR ATTENTION ON PAGE 4. DO YOU SEE IN BULLET 7, THERE ARE A NUMBER OF QUESTIONS RELATING TO FINANCIAL MODEL/PROJECTIONS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE WHERE IT SAYS, "WHAT IS THE CURRENT COST OF A WALGREENS'S ANALYZER?"
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE WHERE IT SAYS, "WHAT ARE GM ON THE ANALYZER, THE TESTS?"
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE WHERE IT SAYS, "WHAT ARE THE OTHER SIGNIFICANT OPERATING COSTS AND HOW THEY WILL CHANGE OVER TIME?"
MR. LEACH: AND YOU ACKNOWLEDGE THAT THERANOS NEVER TOLD PFM THAT THERANOS WAS USING THIRD PARTY MACHINES; CORRECT?
ELIZABETH A. HOLMES: NO, NOT IN THOSE WORDS.
MR. LEACH: I'M NOT SURE MY QUESTION WAS THE BEST QUESTION. YOU NEVER TOLD PFM THAT THERANOS WAS USING THIRD PARTY MACHINES?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AM I RIGHT THAT YOUR TESTIMONY IS THAT YOU DON'T THINK THE PFM SLIDE DECK DOES A VERY GOOD JOB OF DESCRIBING THE PHASE I, PHASE II DISTINCTION ON A STAND ALONE BASIS AS YOU TALKED ABOUT IN YOUR DIRECT TESTIMONY?
ELIZABETH A. HOLMES: THE SLIDE DECK DOES NOT. AND I SHOULD CLARIFY. I THINK WE DID TALK ABOUT COMMERCIAL ANALYZERS TO THE EXTENT THAT WE WERE TALKING ABOUT VENOUS TESTING.
MR. LEACH: OKAY. BUT YOU NEVER TOLD PFM THAT YOU WERE MODIFYING THIRD PARTY MACHINES TO DO TESTING?
ELIZABETH A. HOLMES: EXACTLY, YES.
MR. LEACH: I WANT TO MAKE SURE WE WERE NOT SPEAKING OVER EACH OTHER ON THE LAST QUESTION.
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: YOU'VE SEEN, AS A RESULT OF PRIOR PROCEEDINGS AND THE RESULT OF THE TRIAL HERE, THE POWERPOINT THAT WENT TO PFM; CORRECT?
ELIZABETH A. HOLMES: I HAVE.
MR. LEACH: AND AM I RIGHT, SITTING HERE TODAY, YOU DON'T THINK THAT SLIDE DECK DOES A GOOD JOB OF DESCRIBING THE PHASE I, PHASE II DISTINCTION?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: YOU WERE HERE FOR ROGER PARLOFF'S TESTIMONY; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU RECALL MEETING WITH HIM EITHER TELEPHONICALLY OR IN PERSON ON THE NUMEROUS OCCASIONS IN ADVANCE OF THE ARTICLE THAT HE PUBLISHED; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU READ THE PARLOFF ARTICLE AFTER IT WAS PUBLISHED; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. YOU DON'T HAVE A MEMORY OF FORWARDING THE PARLOFF ARTICLE TO INVESTORS OR POTENTIAL INVESTORS; CORRECT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: OKAY. LET'S SEE IF WE CAN REFRESH YOUR MEMORY. LET ME DRAW YOUR ATTENTION TO EXHIBIT 5727, WHICH SHOULD BE IN VOLUME 3.
ELIZABETH A. HOLMES: ONE SECOND. OKAY.
MR. LEACH: DO YOU SEE IN THE FROM LINE IT SAYS THERANOS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE DATE IS JUNE 12TH, 2014?
MR. LEACH: AND I THINK WE'VE REDACTED A NUMBER OF THE EMAIL ADDRESSES, BUT IN YOUR COPY, DO YOU RECOGNIZE THE EMAILS AS A NUMBER OF THERANOS INVESTORS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DOES THIS RELATE TO MR. PARLOFF'S ARTICLE IN JUNE OF 2014?
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5727.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5727 WAS RECEIVED IN EVIDENCE.)
(PAUSE IN PROCEEDINGS.)
MR. LEACH: YOUR HONOR, WE HAVEN'T MADE THE REDACTIONS TO 5727 IN THE EMAIL LINE, SO WE'RE GOING TO SHOW JUST THE BOTTOM PORTION OF PAGE 2.
MR. LEACH: MS. HOLMES, THIS IS AN EMAIL THAT THERANOS SENT ON JUNE 12TH, 2014?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IT'S WRITING, "TO OUR SHAREHOLDERS: "LAST SEPTEMBER, WE INTRODUCED OUR PRODUCTS TO THE CONSUMER AND CLINICAL MARKETS AFTER 10 YEARS OF INCREDIBLE WORK AND THE DEDICATION OF SO MANY PEOPLE. "WITH THIS EMAIL, WE'RE VERY PLEASED TO SHARE WITH YOU THIS MONTH'S 'FORTUNE' MAGAZINE COVER STORY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WERE SHARING THIS WITH YOUR INVESTORS SO THEY COULD UNDERSTAND THE CURRENT DEVELOPMENTS AT THERANOS?
MR. LEACH: AND YOU ALSO REFERRED TO THE PARLOFF ARTICLE IN POWERPOINTS THAT YOU PROVIDED TO POTENTIAL INVESTORS; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I'M SORRY. COULD YOU REPEAT THE QUESTION?
MR. LEACH: YOU ALSO REFERRED TO THE PARLOFF ARTICLE IN POWERPOINTS THAT YOU PROVIDED TO POTENTIAL INVESTORS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: NOW, AM I RIGHT THAT YOU DON'T THINK YOU EVER TOLD ROGER PARLOFF THAT YOU WERE MODIFYING COMMERCIALLY AVAILABLE MACHINES TO CONDUCT PATIENT TESTING?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND AT THE TIME, IF I UNDERSTAND YOUR TESTIMONY, YOU WERE NOT WORRIED THAT IF PARLOFF WROTE AN ARTICLE ONLY MENTIONING THERANOS'S MANUFACTURING DEVICES, THAT PEOPLE WOULD BE GIVEN AN INACCURATE IMPRESSION OF HOW THERANOS WAS CONDUCTING ITS PATIENT TESTING?
ELIZABETH A. HOLMES: I WAS NOT.
MR. LEACH: AND DO I UNDERSTAND YOUR TESTIMONY THAT TODAY YOU WISH YOU HAD HANDLED YOUR COMMUNICATIONS WITH MR. PARLOFF DIFFERENTLY?
ELIZABETH A. HOLMES: I DO. I THINK I COULD HAVE HANDLED THOSE COMMUNICATIONS DIFFERENTLY.
MR. LEACH: AND THAT'S WHAT YOU TOLD THE S.E.C.; CORRECT?
ELIZABETH A. HOLMES: I DON'T REMEMBER WHAT I SAID TO THE S.E.C., BUT PROBABLY.
MR. LEACH: YOU DON'T REMEMBER TELLING THEM THAT YOU WISHED YOU HAD HANDLED THE COMMUNICATION WITH PARLOFF DIFFERENTLY?
ELIZABETH A. HOLMES: I DON'T, BUT I'M NOT SURPRISED THAT I SAID THAT.
MR. LEACH: OKAY. AND YOU CERTAINLY DON'T DISAGREE WITH THAT HERE TODAY?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO CERTAIN STATEMENTS IN THE PARLOFF ARTICLE. IF WE CAN PLEASE GO TO WHAT IS IN EVIDENCE AS EXHIBIT 1776.
ELIZABETH A. HOLMES: IS THAT IN THE BINDERS OR IS IT JUST ON THE SCREEN?
MR. LEACH: IT SHOULD BE IN VOLUME 4.
ELIZABETH A. HOLMES: YES. I'VE GOT IT.
(PAUSE IN PROCEEDINGS.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, LET ME DRAW YOUR ATTENTION TO PAGE 9 OF EXHIBIT 1776.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: PAGE 9. IF WE CAN ZOOM OUT, MS. HOLLIMAN. I'D LIKE TO FOCUS ON THE PARAGRAPH BEGINNING "IMPORTANTLY." DO YOU SEE WHERE IT SAYS, "IMPORTANTLY, IT'S NOT JUST THE BLOOD DRAWS THAT ARE TINY. IT'S ALSO THE ANALYTICAL SYSTEMS THERANOS USES TO PERFORM THE TESTS. THEY TAKE UP A SMALL FRACTION OF THE FOOTPRINT REQUIRED BY A CONVENTIONAL LAB TODAY." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU AGREE WITH ME THAT THE STATEMENT -- THAT THAT STATEMENT AS OF JULY 2014 WAS NOT TRUE AS TO THE COMMERCIALLY AVAILABLE MACHINES THAT THERANOS WAS USING?
ELIZABETH A. HOLMES: IT WAS NOT.
MR. LEACH: AND IF I COULD DRAW YOUR ATTENTION, PLEASE, TO PAGE 11.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: IN THE THIRD PARAGRAPH THERE'S A LINE, "THERANOS, WHICH DOES NOT BUY ANALYZERS FROM THIRD PARTIES, IS THEREFORE IN A UNIQUE POSITION." THAT STATEMENT, "THERANOS DOES NOT BUY ANALYZERS FROM THIRD PARTIES," YOU AGREE WITH ME THAT WAS NOT TRUE AS OF JULY OF 2014?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: LET ME DRAW YOUR ATTENTION, PLEASE, TO PAGE 6 -- OR I'M SORRY, PAGE 5. AND I DRAW YOUR ATTENTION TO THE PARAGRAPH AT THE BOTTOM. DO YOU SEE WHERE IT SAYS, "THERANOS RUNS WHAT'S CALLED A HIGH-COMPLEXITY LABORATORY"?
MR. LEACH: AND THEN IN THAT SECOND SENTENCE IT SAYS, "IT CURRENTLY OFFERS MORE THAN 200 - AND IS RAMPING UP TO OFFER MORE THAN 1,000 - OF THE MOST COMMONLY ORDERED BLOOD DIAGNOSTIC TESTS, ALL WITHOUT THE NEED FOR A SYRINGE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU AGREE WITH ME THAT WAS NOT A CORRECT STATEMENT AS OF JULY 2014?
ELIZABETH A. HOLMES: I DON'T THINK IT IS NOW.
MR. LEACH: THERANOS OFFERED MANY TESTS WITH THE NEED FOR A SYRINGE; CORRECT?
ELIZABETH A. HOLMES: NO, WE DID NOT.
MR. LEACH: WELL, THERANOS OFFERED A NUMBER OF VENOUS DRAWS RUN ON COMMERCIALLY AVAILABLE MACHINES; CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: AND JUST TO BE CLEAR, YOU AGREE THAT THE STATEMENT IN THE PARLOFF ARTICLE WAS INCORRECT AT THE TIME?
ELIZABETH A. HOLMES: I BELIEVE THAT NOW.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO PAGE 10, AND IF WE CAN LOOK AT THE FIRST PARAGRAPH AT THE TOP. DO YOU SEE THERE'S A REFERENCE TO A STATEMENT BY DR. LARET AT UCSF, AND THEN A REFERENCE TO MILITARY EVACUATION HELICOPTERS, MS. HOLMES?
ELIZABETH A. HOLMES: YES, I'M JUST READING IT. I DO.
MR. LEACH: OKAY. AND IN PARENTHESIS IT SAYS, "THE ANALYZERS LOOK LIKE LARGE DESKTOP COMPUTER TOWERS. HOLMES DECLINES TO EXPLAIN HOW THEY WORK, OR EVEN ALLOW THEM TO BE PHOTOGRAPHED, CITING THE NEED TO PROTECT TRADE SECRETS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: WAS THAT TRUE, THAT YOU DECLINED TO HAVE THE DEVICES EVEN PHOTOGRAPHED TO PROTECT TRADE SECRETS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND THAT'S BECAUSE YOU KNEW THIS ARTICLE WOULD BE GOING OUT TO A LARGE AUDIENCE?
MR. LEACH: AND THAT'S TRUE BECAUSE YOU UNDERSTOOD THIS WOULD BE PUBLIC WITH PEOPLE WHO WEREN'T BOUND BY CONFIDENTIALITY AGREEMENTS?
MR. LEACH: LET ME ASK YOU SOME QUESTIONS ABOUT SAFEWAY. DO I UNDERSTAND YOUR TESTIMONY CORRECTLY, YOU DON'T THINK YOU EVER TOLD INVESTORS OR POTENTIAL INVESTORS IN 2014 THAT THE SAFEWAY CONTRACT WAS GOING WELL AND THAT THERANOS WOULD BE ROLLING OUT TO SAFEWAY STORES IN EARLY 2015?
ELIZABETH A. HOLMES: I DON'T REMEMBER SPECIFIC CONVERSATIONS NOW.
JUDGE DAVILA: MR. LEACH, BEFORE YOU ASK YOUR NEXT QUESTION, SHOULD WE TAKE OUR MORNING BREAK NOW?
MR. LEACH: YES.
JUDGE DAVILA: LET'S DO THAT. LET'S TAKE 30 MINUTES, LADIES AND GENTLEMEN, 30 MINUTES.
(RECESS FROM 11:05 A.M. UNTIL 11:45 A.M.)
JUDGE DAVILA: THANK YOU. WE'RE BACK ON THE RECORD. PLEASE BE SEATED. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT ONCE AGAIN. MR. LEACH, YOU'D LIKE TO CONTINUE?
MR. LEACH: YES, YOUR HONOR. THANK YOU.
MR. LEACH: GOOD MORNING AGAIN, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD MORNING.
MR. LEACH: BEFORE WE BROKE I WAS ASKING SOME QUESTIONS ABOUT SAFEWAY. DID YOU TELL INVESTORS OR POTENTIAL INVESTORS IN 2014 THAT THE SAFEWAY CONTRACT WAS GOING WELL AND THAT THERANOS WOULD BE ROLLING OUT TO SAFEWAY STORES IN EARLY 2015?
ELIZABETH A. HOLMES: I DON'T REMEMBER SAYING THAT SPECIFICALLY.
MR. LEACH: OKAY. AND DID YOU EVER HEAR MR. BALWANI SAY THAT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND WOULD THAT STATEMENT HAVE BEEN TRUE IN 2014?
ELIZABETH A. HOLMES: I THINK SO. THAT'S WHAT WE WERE PLANNING TO DO, YES.
MR. LEACH: WELL, LET ME ASK YOU TO LOOK IN YOUR RED BINDER, PLEASE.
MR. LEACH: AND IF YOU COULD PLEASE GO TO PAGE 5565.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I DRAW YOUR ATTENTION TO PAGE 841, BEGINNING AT LINE 22.
MR. LEACH: YOUR HONOR, I ASK PERMISSION TO READ FROM LINE 22 ON PAGE 841 TO LINE 7 ON PAGE 842.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, YOU WERE ASKED THE FOLLOWING QUESTIONS AND GAVE THE FOLLOWING ANSWERS: "DID YOU TELL INVESTORS OR POTENTIAL INVESTORS IN 2014 THAT THE SAFEWAY CONTRACT WAS GOING WELL AND THAT THERANOS WOULD BE ROLLING OUT TO SAFEWAY STORES IN EARLY 2015? "ANSWER: I DON'T THINK SO. "QUESTION: DID YOU EVER HEAR MR. BALWANI SAY THAT? "ANSWER: I DON'T THINK SO. "QUESTION: WOULD THAT STATEMENT HAVE BEEN TRUE IN 2014? "ANSWER: I DON'T KNOW ABOUT THE SECOND PART IN TERMS OF WHETHER WE THOUGHT WE WOULD BE ROLLING OUT, AND I DON'T THINK WE THOUGHT IT WAS GOING WELL." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YES, YOU DID.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO WHAT IS -- SO YOUR TESTIMONY BEFORE THE S.E.C. WAS THAT YOU DIDN'T THINK THE SAFEWAY RELATIONSHIP WAS GOING WELL IN 2014?
MR. LEACH: LET ME DISPLAY FOR YOU WHAT IS IN EVIDENCE AS EXHIBIT 2166.
ELIZABETH A. HOLMES: JUST TO CLARIFY, I THINK THIS SAY THE CONTRACT IS GOING WELL.
MR. LEACH: FAIR ENOUGH. MS. HOLMES, I'M DISPLAYING ON THE SCREEN WHAT HAS THE TITLE "RDV APPROVAL DOCUMENT." DO YOU RECALL MS. PETERSON TESTIFYING ABOUT THIS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. IF WE COULD GO TO PAGE 3. DO YOU SEE THE LINE IN THE GROWTH PLANS, IN THE SECOND LINE WHERE IT SAYS, "THERANOS IS ALSO UNDER CONTRACT WITH SAFEWAY FOR A NATIONAL ROLLOUT TO A SUBSTANTIAL NUMBER OF THEIR STORES WITH PLANS TO OPEN 300 SAFEWAY LOCATIONS DURING 2015." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN IF YOU LOOK DOWN AT THE BOTTOM RIGHT. IF YOU CAN ZOOM OUT, MS. HOLLIMAN. DO YOU SEE THE SECTION FOR FINANCIAL NOTES?
MR. LEACH: AND DO YOU SEE WHERE IT SAYS, "EVERYTHING IN THE 2015 FORECAST HAS CONTRACTS WITH PHARMACIES, PHYSICIANS, HOSPITALS, AND PAYORS TO SUPPORT THE PROJECTED REVENUES. "2015 ASSUMES THEY OPEN APPROXIMATELY 1200 LOCATIONS ACROSS WALGREENS (900) AND SAFEWAY (300) RETAIL NETWORKS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: I'D LIKE TO ASK YOU SOME ADDITIONAL QUESTIONS ABOUT JOHNS HOPKINS. DO YOU REMEMBER TALKING ABOUT JOHNS HOPKINS IN YOUR DIRECT EXAMINATION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THERANOS DID NOT HIRE JOHNS HOPKINS; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: WE CAN TAKE THIS DOWN. WALGREENS WAS THE ONE WHO HIRED JOHNS HOPKINS; AM I RIGHT?
MR. LEACH: AND YOU MET WITH JOHNS HOPKINS ON ONE OCCASION?
ELIZABETH A. HOLMES: WE MET WITH THEM SEVERAL TIMES.
MR. LEACH: OKAY. YOU MET WITH THEM IN APRIL OF 2010?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THAT APRIL 2010 MEETING IS THE BASIS FOR THE SUMMARY THAT YOU TALKED ABOUT IN YOUR EXAMINATION?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THAT ONE AND ONLY MEETING?
ELIZABETH A. HOLMES: YES, AND IN ADDITION TO I THINK SOME REVIEW OF MATERIALS THAT THEY HAD DONE PRIOR TO THE MEETING.
MR. LEACH: OKAY. YOU SENT SOME DATA IN ADVANCE OF THAT MEETING?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: BUT YOU MET WITH THEM ON THAT ONE DAY, AND THEN THEY PREPARED THEIR SUMMARY?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: OKAY. AND ALL OF THE DATA THAT YOU GAVE TO JOHNS HOPKINS WAS GENERATED BY THERANOS; CORRECT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: CAN WE PLEASE DISPLAY WHAT IS IN EVIDENCE AS EXHIBIT 7109. DO YOU RECALL TESTIFYING ON DIRECT EXAMINATION ABOUT THIS EMAIL FROM JUNE OF 2010?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IT WAS YOUR TESTIMONY THAT THIS POWERPOINT INCLUDES THE DATA THAT WAS PROVIDED TO HOPKINS?
MR. LEACH: OKAY. LET'S GO TO PAGE 4, PLEASE. DO YOU SEE DR. GIBBONS INCLUDED A CONFIDENTIAL INFORMATION NOTIFICATION IN THIS POWERPOINT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. IT SAYS, "PLEASE NOTE THAT THIS PRESENTATION IS STRICTLY CONFIDENTIAL AND DISCLOSES THERANOS INFORMATION NOT IN THE PUBLIC DOMAIN," IN ITALICS. DO YOU SEE THAT?
MR. LEACH: "THE TECHNOLOGY DESCRIBED IS THE SUBJECT OF PENDING U.S. AND INTERNATIONAL PATENTS, WHICH THERANOS WILL ACTIVELY ENFORCE." IS THAT A CORRECT STATEMENT?
MR. LEACH: OKAY. "THE INFORMATION CAN ONLY BE PROVIDED TO THOSE COVERED BY VALIDLY EXECUTED CONFIDENTIAL DISCLOSURE AGREEMENTS ON A NEED-TO-KNOW BASIS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU BROUGHT A DEVICE TO HOPKINS; CORRECT?
MR. LEACH: IT WAS NOT THE 4 SERIES YOU WERE MAKING. IT WAS A 3 SERIES; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU PROVIDED THEM SOME DATA FROM THE 4 SERIES; CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: IN THIS LENGTHY POWERPOINT THAT YOU SHARED WITH HOPKINS; RIGHT?
MR. LEACH: AND YOU WERE COMFORTABLE DOING THAT BECAUSE THEY HAD A CONFIDENTIALITY RELATIONSHIP WITH WALGREENS; CORRECT?
MR. LEACH: AND YOU ASKED THEM TO SIGN DOCUMENTS BEFORE YOU SHOWED THEM THE DEVICE AND DISPLAYED THIS POWERPOINT?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: WOULD IT SURPRISE YOU IF YOU DIDN'T?
ELIZABETH A. HOLMES: NOT NECESSARILY IF IT WAS COVERED BY THE WALGREENS RELATIONSHIP.
MR. LEACH: YOU WANTED TO BE CAREFUL TO PROTECT THE INFORMATION IN HERE BECAUSE IT INVOLVED TRADE SECRETS?
ELIZABETH A. HOLMES: OR PATENTS THAT WE WERE STILL WORKING ON.
MR. LEACH: CONFIDENTIAL INFORMATION RELATING TO THERANOS, AND YOU WANTED TO MAKE SURE IT DIDN'T GET OUT THERE?
ELIZABETH A. HOLMES: YEAH, EXACTLY.
MR. LEACH: OKAY. AND YOU WERE COMFORTABLE SHARING THAT WITH HOPKINS?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: OKAY. MR. DOWNEY ALSO SHOWED YOU THE SUMMARY THAT HOPKINS PROVIDED YOU; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND YOU ACTUALLY GOT THAT FROM WALGREENS; CORRECT?
MR. LEACH: AND THAT SUMMARY INCLUDES A DISCLAIMER DOWN AT THE BOTTOM OF THE TEXT, DOESN'T IT?
ELIZABETH A. HOLMES: I'M NOT SURE, BUT I'M SURE YOU'LL TELL ME.
MR. LEACH: DOESN'T IT HAVE A DISCLAIMER THAT THIS IS NOT AN ENDORSEMENT BY HOPKINS?
ELIZABETH A. HOLMES: I DON'T KNOW. I DON'T REMEMBER.
MR. LEACH: YOU DON'T REMEMBER?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: IT'S A TWO PAGE DOCUMENT THAT YOU DON'T REMEMBER HOPKINS SAYING "WE DON'T ENDORSE THIS"?
ELIZABETH A. HOLMES: I DON'T REMEMBER THE DISCLAIMER.
MR. LEACH: OKAY. WELL, IN ANY EVENT, YOU DID NOT THINK THAT THE JOHNS HOPKINS ASSESSMENT WAS VALIDATING THE DEVICE; CORRECT?
ELIZABETH A. HOLMES: I THOUGHT IT WAS VALIDATING THERANOS'S TECHNOLOGIES.
MR. LEACH: WELL, DO YOU HAVE THE RED BINDER, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU REMEMBER THIS IS YOUR TESTIMONY BEFORE THE SECURITIES AND EXCHANGE COMMISSION?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND YOU TOOK AN OATH THERE; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THIS WAS IN 2017 WHEN YOU TESTIFIED THERE?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION TO PAGE 839.
JUDGE DAVILA: IS THAT BATES 5564?
MR. LEACH: YES, YOUR HONOR. THANK YOU. I'D SEEK PERMISSION TO READ QUESTION -- OR LINES 15 THROUGH 23 ON PAGE 839.
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, WERE YOU ASKED THE FOLLOWING QUESTIONS AND DID YOU GIVE THE FOLLOWING ANSWERS: "QUESTION: DID YOU EVER TELL INVESTORS OR PROSPECTIVE INVESTORS THAT JOHNS HOPKINS HAD VALIDATED THERANOS'S DEVICES? "ANSWER: I DON'T REMEMBER USING THOSE WORDS, NO. "QUESTION: DID YOU EVER HEAR MR. BALWANI SAY THAT? "ANSWER: I DON'T THINK SO. "QUESTION: WOULD THAT HAVE BEEN TRUE IN 2013 AND 2014? "ANSWER: AS YOU KNOW, THEY'D DONE AN ASSESSMENT. I DON'T THINK WE THOUGHT OF IT AS VALIDATING THE DEVICE." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: OKAY. YOU KNEW THAT WALGREENS NEVER OPENED MORE THAN 41 WELLNESS CENTERS; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND LAST WEEK WE SAW AN EMAIL FROM MR. JHAVERI THAT WAS FORWARDED TO YOU IN AUGUST OF 2014 WHERE YOU WERE ADVISED THAT WALGREENS HAD TWO AREAS OF FOCUS THAT REQUIRED A DOCUMENTED DETAILED PLAN AS A PREREQUISITE EXPANSION. DO YOU RECALL LOOKING AT THAT DOCUMENT?
ELIZABETH A. HOLMES: I RECALL THE DOCUMENT. I UNDERSTOOD IT DIFFERENTLY.
MR. LEACH: OKAY. WELL, YOU SAW A REFERENCE IN THE DOCUMENT TO VENOUS PERCENTAGE NEEDS TO GET UNDER 10 PERCENT; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. AND LATER IN 2014, MR. BALWANI TOLD YOU THAT THERANOS COULD NOT SCALE WITH WALGREENS; CORRECT?
ELIZABETH A. HOLMES: I DON'T REMEMBER IT LIKE THAT.
MR. LEACH: OKAY. WELL, LET'S LOOK AT THE -- LET'S LOOK AT THE DOCUMENT. IF WE COULD PLEASE CALL UP EXHIBIT 5387D AND GO TO PAGE 24. ACTUALLY, ZOOM IN ON -- MS. HOLMES -- ACTUALLY, THAT WAS FINE, MS. HOLLIMAN. I'M SORRY. I MISSPOKE. MS. HOLMES, DO YOU SEE A SERIES OF TEXT MESSAGES BETWEEN YOU AND MR. BALWANI IN THE NOVEMBER 19TH, 2014 TIME PERIOD ON THE SCREEN?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND THE FIRST MESSAGE SAYS, "WE NEED CALL CENTER MANAGER, NEW CALL CENTER TEAM, GET RECURRENT CREW OUT OF DOCS FACING COMMUNICATIONS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN THE THIRD TEXT READS, "FUNDAMENTALLY WE NEED TO STOP FIGHTING FIRES BY NOT CREATING THEM." DO YOU SEE THAT?
MR. LEACH: AND FURTHER DOWN YOU WROTE SIMILAR WORDS, "FUNDAMENTALLY WE NEED TO STOP FIGHTING FIRES BY NOT CREATING THEM." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE, "NEED TO FIX ROOT CAUSE HERE." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN DOWN AT THE BOTTOM, DO YOU SEE WHERE MR. BALWANI WROTE, "WE CAN'T SCALE WITH WAG"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: W-A-G IS AN ABBREVIATION YOU WOULD USE FOR WALGREENS FROM TIME TO TIME; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND YOU WERE ALSO TOLD IN THIS LATE 2014 TIME PERIOD THAT WALGREENS DID NOT INTEND TO OPEN MORE PSC'S UNTIL JULY OF 2014 BECAUSE THERANOS MISSED THE INTEGRATION DEADLINE; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: WELL, LET'S LOOK FURTHER BELOW. IF WE CAN ZOOM OUT, MS. HOLLIMAN. SO AFTER THE TEXT, "WE CAN'T SCALE WITH WAG," MR. BALWANI WROTE, "THEY ARE TERRIBLE AND WE NEED SWY AND CVS." DO YOU SEE THAT?
MR. LEACH: S-W-Y WAS AN ACRONYM THAT YOU USED FROM TIME TO TIME FOR SAFEWAY; IS THAT CORRECT?
ELIZABETH A. HOLMES: I DON'T KNOW IF THAT'S WHAT I DID, BUT THAT'S WHAT IT MEANS HERE.
MR. LEACH: AND CVS IS AN ACRONYM FOR A WALGREENS COMPETITOR?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND YOU WROTE, "IT IS TIME. "LET'S GET SWY DONE THIS WEEK. "WE CAN DO IT." AND THEN THERE'S A TEXT FROM MR. BALWANI, "THEY TOLD OUR TEAM IN WAG MEETING THAT THEY DON'T INTEND TO OPEN MORE PSC'S UNTIL JULY BECAUSE WE MISSED THEIR I.T. INTEGRATION DEADLINE." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU RESPOND, AND THEN MR. BALWANI SAYS, "WHICH IS GOOD BECAUSE WE CAN FOCUS ON SWY AND CVS." DID I READ THAT LAST TEXT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THIS IS THE NOVEMBER OF 2014 TIME PERIOD; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND IN THIS LATE NOVEMBER, EARLY DECEMBER 2014 TIME PERIOD, YOU'RE STILL RAISING MONEY FROM INVESTORS; CORRECT?
MR. LEACH: AND THAT WOULD INCLUDE THE WALTON FAMILY?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. THAT WOULD INCLUDE RUPERT MURDOCH?
MR. LEACH: YOU TALKED IN YOUR DIRECT EXAMINATION ABOUT PHASE I AND PHASE II OF THE ROLLOUT. DO YOU RECALL THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE IDEA BEHIND PHASE I WAS YOU'RE GOING TO HAVE A CENTRAL LAB TO DO ALL OF THE TESTING, AND AT SOME POINT IN TIME AFTER THE FDA APPROVES THE DEVICE, YOU WILL PUT THE DEVICE IN ACTUAL WALGREENS STORES. HAVE I GOT THE THRUST OF THAT CORRECTLY?
MR. LEACH: OKAY. AND YOUR AMENDED CONTRACT WITH WALGREENS WAS IN JUNE OR JULY OF 2012?
ELIZABETH A. HOLMES: ONE OF THEM WAS.
MR. LEACH: OKAY. THE AMENDMENT THAT SPELLS OUT PHASE I AND PHASE II?
MR. LEACH: OKAY. SO BY JUNE OF 2012, YOU HAD THIS CONCEPT OF, WE'RE GOING TO HAVE A CENTRAL LAB IN PHASE I WHERE ALL OF THE TESTING IS DONE IN A CLIA LAB IN ONE SETTING, AND PHASE II IS GOING TO BE WHERE WE PUT THE DEVICES INTO ACTUAL WALGREENS STORES?
MR. LEACH: OKAY. AND I THINK YOU TESTIFIED THAT YOUR HOPE WAS THAT PHASE I WOULD BE SHORT?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: OKAY. BECAUSE YOU WANTED TO PUT MINILABS IN WALGREENS?
MR. LEACH: RIGHT? THAT WAS SOMETHING THAT YOU HAD WANTED TO DO SINCE 2010; CORRECT?
MR. LEACH: THAT'S BECAUSE YOU VIEWED THE MINILAB AS THE CORE OF THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: ONE OF THEM, YES.
MR. LEACH: WELL, IS IT FAIR TO SAY THAT THE MINILAB AND ALL OF THE CHEMISTRIES AND EVERYTHING THAT WORKS IN THERE WAS MORE IMPORTANT TO THERANOS'S FUTURE THAN ANYTHING BEING DONE IN PHASE I?
MR. LEACH: AND AM I RIGHT THAT THERANOS ACTUALLY GAVE MINILABS TO WALGREENS AT CERTAIN POINTS? CORRECT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: IN FACT, YOU GAVE TWO OF THEM TO WALGREENS?
ELIZABETH A. HOLMES: AT LEAST, YES.
MR. LEACH: OKAY. YOU SENT THE MINILAB TO CHICAGO, OR THE ILLINOIS AREA, FOR WALGREENS EXECUTIVES TO HAVE AND TO LOOK AT AND TO UNDERSTAND; CORRECT?
MR. LEACH: AND YOU DID THAT BECAUSE YOU HAD A CONFIDENTIALITY AGREEMENT WITH WALGREENS; CORRECT?
ELIZABETH A. HOLMES: AND OTHER REASONS, YES.
MR. LEACH: OKAY. THEY PROMISED TO KEEP YOUR SECRETS; RIGHT?
ELIZABETH A. HOLMES: THEY DID.
MR. LEACH: AND YOU HAD PROMISED TO KEEP WALGREENS'S SECRETS?
MR. LEACH: AND THAT'S BECAUSE YOU WERE PARTNERS IN THIS RELATIONSHIP?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU TRUSTED THEM TO HONOR THEIR AGREEMENTS?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: YOU TRUSTED THEM NOT TO REVERSE ENGINEER THE MINILAB?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU TRUSTED THEM NOT TO OPEN IT UP, LOOK AT THE SPECTROMETER, LOOK AT THE CENTRIFUGE, AND TRY TO COME AWAY WITH AN IDEA OF HOW TO REVERSE ENGINEER THAT; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND THAT WOULD VIOLATE YOUR CONFIDENTIALITY AGREEMENTS IF YOU DID THAT -- IF WALGREENS DID THAT; CORRECT?
ELIZABETH A. HOLMES: YES. AND JUST TO BE CLEAR, THE VERSIONS THAT WE SENT THEM WERE THE 3 SERIES VERSIONS.
MR. LEACH: OKAY. AND YOU WERE USING 3 SERIES VERSIONS IN THE CLIA LAB AT SOME POINT?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: OKAY. SO THIS WAS TECHNOLOGY THAT YOU WERE ACTUALLY USING?
MR. LEACH: OKAY. AND YOU KNEW THAT UNDER THE AGREEMENTS, WALGREENS COULDN'T TAKE APART THE DEVICE, COULDN'T STUDY IT, COULDN'T REVERSE ENGINEER IT. YOU TRUSTED THEM TO KEEP YOUR SECRETS?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: ON THIS VERY, VERY IMPORTANT PIECE OF THERANOS TECHNOLOGY?
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: JUST A SECOND. THANK YOU, MS. KRATZMANN. LET'S MAKE SURE THAT PEN IS WORKING.
MR. LEACH: THANK YOU, YOUR HONOR.
MR. LEACH: AND AM I RIGHT THAT WITHOUT THOSE ASSURANCES OF CONFIDENTIALITY FROM WALGREENS, YOU WOULD NOT HAVE BEEN COMFORTABLE GIVING THEM -- JUST HAVING A MINILAB THERE IN CHICAGO WHERE THEY COULD DO ANYTHING THEY WANTED WITH IT?
ELIZABETH A. HOLMES: PROBABLY NOT.
MR. LEACH: OKAY. LET ME ASK YOU ABOUT SOME OF YOUR INTERACTIONS WITH MS. SPIVEY. IF I UNDERSTOOD YOUR TESTIMONY, IT'S THAT MR. BALWANI PRIMARILY INTERFACED WITH MS. SPIVEY ON FINANCIAL OPERATIONS AND CASH MANAGEMENT.
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. NOW, YOU WERE HERE IN COURT WHEN MS. SPIVEY TESTIFIED THAT SHE REPORTED TO YOU FROM THE 2008, 2009 TIME PERIOD ALL OF THE WAY UP THROUGH 2016?
MR. LEACH: OKAY. AND YOU'RE NOT SAYING THAT YOU HAD NO INTERACTIONS WITH MS. SPIVEY ABOUT THERANOS'S FINANCIAL CONDITION; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU HAD REGULAR INTERACTIONS WITH HER; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. SHE WOULD PROVIDE YOU FINANCIAL STATEMENTS FROM TIME TO TIME?
ELIZABETH A. HOLMES: MY MEMORY IS THAT SHE WOULD SEND THE CASH BALANCE ON A REGULAR BASIS.
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: I'M PLACING BEFORE YOU, MS. HOLMES, WHAT WE'VE MARKED AS EXHIBITS 615 AND 792.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO 615. DO YOU SEE MS. YAM'S NAME AT THE TOP OF THIS EMAIL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE YOUR NAME IN THE TO LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE DATE OF THIS IS JUNE 4TH, 2012?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND DO YOU SEE THAT THERE'S AN ATTACHMENT "FINANCIAL STATEMENT ANALYSIS TEMPLATE-THERANOS" PDF?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOUR HONOR, I MOVE THE ADMISSION OF EXHIBIT 615.
COURT CLERK: THESE HAVE BEEN ADMITTED, YOUR HONOR. THEY ARE ADMITTED.
MR. LEACH: OH, I COULD HAVE SAVED A FEW SECONDS THERE. MY APOLOGIES, YOUR HONOR.
JUDGE DAVILA: THEY ARE IN EVIDENCE AND THEY CAN BE PUBLISHED.
MR. LEACH: OKAY. LET'S DISPLAY 615.
MR. LEACH: MS. HOLMES, THIS IS AN EMAIL BETWEEN JUST YOU AND MS. SPIVEY; CORRECT?
MR. LEACH: AND IN THE ATTACHMENT, IT SAYS FS 123111. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTOOD THAT TO BE A REFERENCE TO THERANOS'S 2011 FINANCIAL STATEMENTS?
MR. LEACH: AND IF WE COULD PLEASE LOOK AT PAGE 3, DO YOU SEE THAT THERE'S A BALANCE SHEET HERE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WERE FAMILIAR WITH BALANCE SHEETS DURING YOUR TIME AT THERANOS; CORRECT?
ELIZABETH A. HOLMES: GENERALLY, YES.
MR. LEACH: THERANOS WAS AUDITED FOR A SMALL PERIOD OF TIME; RIGHT?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: AND YOU HAD TO SIGN PAPERWORK IN CONNECTION WITH THAT AUDIT; CORRECT?
ELIZABETH A. HOLMES: PROBABLY, YES.
MR. LEACH: CERTIFYING THE FINANCIAL STATEMENTS AS TRUE AND CORRECT?
ELIZABETH A. HOLMES: I DON'T REMEMBER DOING THAT, BUT I DON'T DOUBT IT.
MR. LEACH: OKAY. AND ISN'T THIS AN EXAMPLE OF MS. SPIVEY FROM TIME TO TIME PROVIDING YOU NOT JUST CASH FORECASTS OR CASH BALANCES, BUT THE COMPANY'S ACTUAL FINANCIAL STATEMENTS?
MR. LEACH: IF I COULD ASK YOU TO PLEASE LOOK AT EXHIBIT 792. MS. KRATZMANN, IS 792 IN?
COURT CLERK: IT IS.
MR. LEACH: OKAY. AND IF WE CAN DISPLAY THIS, PLEASE.
MR. LEACH: IF I COULD DRAW YOUR ATTENTION TO THE BOTTOM, MS. HOLMES, DO YOU SEE YOU WROTE, "SOMETIME AGO WE MET WITH STANFORD AND SHARED SOME FINANCIAL INFORMATION IN A TEMPLATE THEY REQUESTED THAT YOU AND I REVIEWED TOGETHER. I AM MEETING AGAIN WITH THEM TOMORROW. CAN YOU UPDATE THAT TEMPLATE FOR WHERE WE ARE NOW/2013 AND SEND TO SUNNY AND ME AS WELL AS THE DOCUMENT WE SHARED WITH THEM LAST YEAR." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THIS ANOTHER EXAMPLE OF MS. SPIVEY PROVIDING TO YOU THE FINANCIAL STATEMENTS OF THERANOS?
MR. LEACH: AND YOU KNEW AT THE END OF THE DAY THAT YOU WERE ULTIMATELY RESPONSIBLE FOR THERANOS'S FINANCIAL CONDITION AS THE CEO?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: OKAY. AND YOUR TESTIMONY IS THAT THERE MAY HAVE BEEN INSTANCES IN WHICH YOU OPENED A COMPUTER FILE CONTAINING ONE OF MR. BALWANI'S FINANCIAL MODELS AND REVIEWED IT; CORRECT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO THE BINDER.
MR. LEACH: AND IF YOU COULD LOOK, PLEASE, AT -- IT'S PAGE 524 OF THE TESTIMONY. THE BATES NUMBER IS ENDING 5435.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I DRAW YOUR ATTENTION TO LINE 18 THROUGH 24.
MR. LEACH: PERMISSION TO READ THESE, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: MS. HOLMES, WERE YOU ASKED THE FOLLOWING QUESTIONS AND DID YOU GIVE THE FOLLOWING ANSWERS: "QUESTION: WERE THERE OTHER INSTANCES IN WHICH YOU MIGHT HAVE OPENED A FILE AND REVIEWED IT? "ANSWER: YES. "QUESTION: AND OTHER INSTANCES IN WHICH YOU MIGHT HAVE OPENED A FINANCIAL MODEL THAT SUNNY BALWANI WAS WORKING ON AND REVIEWED IT? "ANSWER: COULD HAVE BEEN." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THAT WAS YOUR TESTIMONY BACK THEN?
MR. LEACH: OKAY. AND THERE WERE ALSO INSTANCES WHEN YOU TOLD MR. BALWANI THAT YOU WOULD GET COMFORTABLE WITH THE FINANCIAL MODEL THAT WAS BEING PROVIDED TO AN INVESTOR?
ELIZABETH A. HOLMES: THERE WAS ONE INSTANCE I'M AWARE OF IT.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION, PLEASE, TO -- WELL, LET ME ASK THE QUESTION FIRST. YOU KNEW THAT WHEN POTENTIAL INVESTORS WERE CONSIDERING INVESTMENTS IN THERANOS, THAT THEY WOULD OFTEN BE PROVIDED A POWERPOINT DESCRIBING THERANOS'S BUSINESS; CORRECT?
MR. LEACH: OKAY. AND YOU ON OCCASION WOULD GO THROUGH THAT POWERPOINT WITH INVESTORS?
ELIZABETH A. HOLMES: WE WOULD LOOK AT A SLIDE OR SOME SLIDES FROM IT.
MR. LEACH: OKAY. BUT YOU HAD THE AUTHORITY TO EITHER SEND IT OUT OR NOT SEND IT OUT; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND DAN EDLIN WORKED CLOSELY WITH YOU ON THAT; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: HE WOULDN'T SEND SOMETHING OUT WITHOUT YOUR BLESSING; CORRECT?
ELIZABETH A. HOLMES: I THINK HE GENERALLY TRIED TO GET MY BLESSING.
MR. LEACH: OKAY. AND PEOPLE MAY HAVE CONTRIBUTED TO THE SLIDES, BUT AT THE END OF THE DAY, IT'S YOUR DECISION TO SEND THEM OUT; CORRECT, MS. HOLMES?
ELIZABETH A. HOLMES: ULTIMATELY.
MR. LEACH: IF YOU DISAGREED WITH ANYTHING IN THE SLIDES, YOU HAD THE ABILITY TO ORDER THEM CHANGED OR NOT SENT OUT AT ALL. IS THAT FAIR?
ELIZABETH A. HOLMES: OF COURSE.
MR. LEACH: OKAY. WE'VE LOOKED A COUPLE OF TIMES AT -- WELL, LET ME ASK IT THIS WAY: AM I RIGHT THAT YOU WERE AWARE IN 2014 AND 2015 THAT THE REPORTS RELATING TO PFIZER, SCHERING-PLOUGH, AND GSK WERE BEING INCLUDED IN INVESTOR MATERIALS?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND IF I COULD DRAW YOUR ATTENTION TO EXHIBIT 5728.
ELIZABETH A. HOLMES: WHICH BINDER? I THINK I FOUND IT.
ELIZABETH A. HOLMES: YEAH.
MR. LEACH: VOLUME 3. MY APOLOGIES.
ELIZABETH A. HOLMES: GOT IT.
BY MR. LEACH:
MR. LEACH: DO YOU SEE THE THERANOS LOGO AT THE TOP OF PAGE 1 OF 5728?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE IN THE BOTTOM A BATES NUMBER KRM_SEC?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND ON PAGE 3, DO YOU SEE A DOCUMENT WITH THE PFIZER LOGO AND THE THERANOS LOGO?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE GO TO PAGE 38, DO YOU ALSO SEE SOME REFERENCES TO ANOTHER PHARMACEUTICAL COMPANY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND THE BATES RANGE KRM, DO YOU HAVE ANY REASON TO DOUBT THAT THAT IS ASSOCIATED WITH RUPERT MURDOCH?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: YOU HAVE NO REASON TO DOUBT IT THOUGH?
ELIZABETH A. HOLMES: I DON'T, NO.
MR. LEACH: AND DOES THIS LOOK LIKE MATERIALS THAT WERE PROVIDED TO INVESTORS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5728.
MR. DOWNEY: YOUR HONOR, I HAVE TO OBJECT TO THE FOUNDATION ON THIS ONE.
JUDGE DAVILA: COULD YOU ASK A FEW MORE QUESTIONS REGARDING FOUNDATION?
BY MR. LEACH:
MR. LEACH: YOU RECOGNIZE THE THERANOS LOGO ON THE FIRST PAGE; RIGHT, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DO YOU SEE THE LINE "THERANOS CONFIDENTIAL" ON PAGE 1 KIND OF DIAGONAL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: YOU KNOW THAT THERANOS, FROM TIME TO TIME, WOULD APPLY THAT TO SOME OF ITS DOCUMENTS TO MAKE SURE THE READER WOULD KNOW THAT THIS WAS CONFIDENTIAL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU SEE THE HEADING IN THE MIDDLE OF THE FIRST PAGE OF PAGE 1? I DON'T WANT TO READ IT BECAUSE IT'S NOT IN EVIDENCE YET, BUT DO YOU SEE THAT?
ELIZABETH A. HOLMES: YEAH, I DO.
MR. LEACH: AND IS THAT CONSISTENT WITH THE FORMAT THAT YOU WOULD SEE BEING PROVIDED TO INVESTORS WHEN THEY WERE GIVEN BINDERS OF MATERIALS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5728.
JUDGE DAVILA: I'LL ADMIT IT OVER OBJECTION. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5728 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, JUST TO GO OVER SOME OF THE QUESTIONS THAT I HAD WITHOUT THE BENEFIT OF THIS ON THE SCREEN, DO YOU SEE WHERE IT SAYS "EXEMPLARY REPORTS FROM PHARMACEUTICAL PARTNERS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU KNOW SITTING HERE TODAY THAT THIS FORMAT WOULD BE USED FROM TIME TO TIME IN THE INVESTOR PACKAGE THAT WOULD GO OUT TO POTENTIAL INVESTORS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND IF WE CAN GO TO PAGE 2, PLEASE. AND IS THIS A COPY OF THE THERANOS ANGIOGENESIS STUDY REPORT WITH THE PFIZER LOGO AND THE THERANOS LOGO ON IT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. IF WE COULD PLEASE GO TO PAGE 38. IS THIS A COPY OF A REPORT RELATING TO SCHERING-PLOUGH WITH THE SCHERING-PLOUGH LOGO AND THE THERANOS LOGO?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. IF WE CAN ZOOM OUT, PLEASE, MS. HOLLIMAN. THERE'S A BATES NUMBER IN THE BOTTOM RIGHT-HAND CORNER KRM_SEC. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: BUT THAT PREFIX DOESN'T MEAN ANYTHING TO YOU SITTING HERE TODAY?
ELIZABETH A. HOLMES: IT DOESN'T.
MR. LEACH: YOU DO KNOW THAT YOU PROVIDED AN INVESTOR BINDER TO RUPERT MURDOCH; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU REVIEWED THAT BEFORE IT WENT OUT; CORRECT?
ELIZABETH A. HOLMES: I DON'T KNOW IF I PERSONALLY REVIEWED IT, BUT I WAS AWARE OF IT GOING OUT.
MR. LEACH: OKAY. WE TALKED A LITTLE BIT LAST WEEK ABOUT GSK. DO YOU RECALL TESTIFYING ABOUT GSK?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: WAS THE THERANOS DEVICE EVER USED IN A GSK CLINICAL TRIAL?
ELIZABETH A. HOLMES: JUST THE TIME WE SHIPPED THE DEVICES TO GSK FOR THE STUDY THAT WE RAN.
MR. LEACH: OKAY. THAT'S THE STUDY THAT WAS SUMMARIZED IN THE DOCUMENTS THAT WE WERE LOOKING AT DURING --
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: OKAY. BUT THAT WASN'T A CLINICAL TRIAL; RIGHT?
ELIZABETH A. HOLMES: I WASN'T SURE EXACTLY WHAT YOU MEANT BY THAT.
MR. LEACH: OKAY.
ELIZABETH A. HOLMES: BUT IT WAS A STUDY THAT WE RAN AT GSK.
MR. LEACH: WELL, YOU UNDERSTAND WHAT A CLINICAL TRIAL IS; CORRECT?
ELIZABETH A. HOLMES: I DO. I ASSUME YOU MEAN A DRUG TRIAL.
MR. LEACH: CORRECT.
ELIZABETH A. HOLMES: YES, IT WAS NOT USED IN A DRUG TRIAL.
MR. LEACH: OKAY. THANK YOU. PRIOR TO 2015, YOU UNDERSTOOD THAT THE FDA DID NOT APPROVE -- HAD NOT APPROVED THE MINILAB FOR ANY ASSAY IN ANY WAY, SHAPE, OR FASHION; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND IN 2015 YOU OBTAINED AN APPROVAL FOR THE SINGLE ASSAY, THAT WAS THE HERPES ASSAY; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND THAT WAS IN THE MIDDLE OF 2015, SO BEFORE THAT NO FDA APPROVAL OF THE MINILAB OR THE EDISON 3.5?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND THE FDA DID NOT REVIEW IN ANY WAY, SHAPE, OR FORM THE OTHER LDT'S THAT THERANOS WAS PERFORMING IN ITS LAB; CORRECT?
ELIZABETH A. HOLMES: CERTAINLY NOT A 510K REVIEW.
MR. LEACH: WELL, THEY DIDN'T COME INTO YOUR LAB AND LOOK AT THE TESTS, RIGHT, UNTIL SEPTEMBER OR AUGUST OF 2015?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: OKAY. I'M LOOKING AT THE PERIOD BEFORE THEN. THE FDA DIDN'T COME IN AND SAY, WE'VE SEEN ALL OF YOUR LDT'S, THIS IS GREAT, YOU HAVE OUR STAMP OF APPROVAL?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: OKAY. AND YOU ALSO KNEW WHEN YOU GOT YOUR CLIA CERTIFICATION IN 2011 THAT YOU WEREN'T PERFORMING ANY LDT'S AT THAT POINT IN TIME; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU WEREN'T PERFORMING ANY LDT'S IN 2012; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU TALKED ABOUT A NEW YORK INSPECTION IN EARLY -- YOU TALKED ABOUT A NEW YORK INSPECTION DURING YOUR DIRECT EXAMINATION. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND DO YOU KNOW THAT THAT INSPECTION WAS IN EARLY 2013?
ELIZABETH A. HOLMES: I ASSUME SO. I THINK THAT'S RIGHT.
MR. LEACH: OKAY. WELL, LET'S LOOK AT EXHIBIT 7282. IT SHOULD BE IN VOLUME 3. THIS IS IN EVIDENCE.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND IF WE CAN JUST FOCUS ON THE TOP PORTION, THE HEADER, MS. HOLLIMAN. DO YOU RECALL TESTIFYING ABOUT THIS IN DIRECT EXAMINATION?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IT'S MR. BALWANI GIVING CONGRATULATIONS FOR THE NEW YORK INSPECTION?
MR. LEACH: THE DATE IS APRIL 4TH, 2013; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: THAT'S BEFORE YOU'RE DOING ANY LDT TESTING IN THE CLIA LAB; RIGHT?
ELIZABETH A. HOLMES: EXACTLY, YES.
MR. LEACH: OKAY. SO THIS INSPECTION WOULD RELATE TO ORDINARY FDA MACHINES RUNNING ORDINARY FDA APPROVED TESTS; CORRECT?
ELIZABETH A. HOLMES: AND OUR QUALITY SYSTEMS.
MR. LEACH: BUT NO LDT'S?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU'RE NOT USING THE EDISON DEVICE?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU'RE NOT MODIFYING SIEMENS MACHINES AT THIS POINT IN TIME?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU ALSO TESTIFIED THAT THERE WAS AN INSPECTION IN DECEMBER OF 2013; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND YOU UNDERSTAND THAT WAS BY THE STATE OF CALIFORNIA; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. YOU WERE SAYING CMS IN YOUR DIRECT EXAMINATION, BUT I JUST WANT TO BE CLEAR, IT WAS THE STATE THAT CAME IN; CORRECT?
ELIZABETH A. HOLMES: GOT IT. SORRY, I USE THOSE INTERCHANGEABLY.
MR. LEACH: AND AT THAT POINT IN TIME, THERANOS WAS DOING A SMALL NUMBER OF LDT'S; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: I THINK, BASED ON WHAT WE WERE LOOKING AT EARLIER, IT'S SOMEWHERE IN THE NEIGHBORHOOD OF THREE TO FOUR?
ELIZABETH A. HOLMES: I THINK THAT'S RIGHT.
MR. LEACH: OKAY. AND SOME OF THOSE ARE ON THE EDISON 3.5, OTHERS MIGHT BE ON MODIFIED THIRD PARTY MACHINES?
MR. LEACH: AND I THINK YOU WERE SHOWN A DOCUMENT ON YOUR DIRECT EXAMINATION WHERE YOU GOT NOTES FROM DANIEL YOUNG REPORTING ON THE INSPECTION. DO YOU REMEMBER THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT REPORT SAID THAT THE INSPECTORS LOOKED AT A SINGLE VALIDATION REPORT FOR AN LDT; CORRECT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. LEACH: AND THAT WAS CREATININE?
ELIZABETH A. HOLMES: I DON'T REMEMBER, BUT I DON'T DOUBT YOU.
MR. LEACH: OKAY. WELL, WE'RE NOT GOING TO CALL UP THE DOCUMENT, BUT YOU REMEMBER ONE LDT?
ELIZABETH A. HOLMES: I REMEMBER THE REFERENCE TO AN LDT REPORT BEING REVIEWED BY THE INSPECTOR.
MR. LEACH: OKAY. AND THAT LDT WAS NOT AN EDISON ONE, IT WAS ONE ON THE MODIFIED SIEMENS MACHINE; CORRECT?
ELIZABETH A. HOLMES: EXACTLY, YES.
MR. LEACH: AND YOU HAVE NO REASON TO THINK THAT THE INSPECTOR ACTUALLY SAW AN EDISON DEVICE DURING THAT 2013 INSPECTION?
ELIZABETH A. HOLMES: I'M NOT SURE. I REMEMBER THE REFERENCE THERE TO DISCUSSING -- THE FACT THAT THE TEAM DISCUSSED THEM WITH THE INSPECTORS.
MR. LEACH: OKAY. THEY DISCUSSED THE FACT THAT THERE WERE LDT'S. YOU DON'T RECALL ANY REFERENCE IN THAT DOCUMENT FROM THE INSPECTOR ACTUALLY LOOKING AND INSPECTING THE EDISON 3.5?
ELIZABETH A. HOLMES: I DON'T REMEMBER.
MR. LEACH: OKAY. AND AT THIS POINT IN TIME, YOU'RE SCALING UP THE NUMBER OF LDT'S AND THERE'S NO FDA APPROVAL, CMS ISN'T GOING TO COME BACK FOR ANOTHER TWO YEARS, YOU'RE RAMPING UP ON LDT'S, BUT THE ONLY THING, FOR LACK OF A BETTER WORD, CHECKING THAT IS THERANOS; CORRECT?
ELIZABETH A. HOLMES: AND THE PROCESS THAT WE ENGAGED IN FOR PT AND AAP AND THE ONGOING QUALITY SYSTEMS OVERSIGHT.
MR. LEACH: OKAY. BUT NOBODY FROM CMS AND NOBODY FROM THE STATE AND NOBODY FROM THE FDA IS COMING IN AND LOOKING AT THE DEVICE AS A NEW LDT COMES ON BOARD AND SAYING, OKAY, YOU CAN GO AHEAD AND DO THAT; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: IT'S ALL THERANOS SAYING WE'VE GONE THROUGH THE PROCESS, WE'RE READY TO TAKE THIS LIVE?
ELIZABETH A. HOLMES: CORRECT, AND ENGAGING WITH FDA AND CMS IN D.C.
MR. LEACH: OKAY. BUT YOU TOLD CMS IN D.C. THAT YOU WERE DOING THIS. YOU DIDN'T PROVIDE THEM THE VALIDATION REPORTS OR THE DATA OR ANYTHING LIKE THAT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. AND YOUR TESTIMONY IS THAT YOU DON'T RECALL SUREKHA GANGADKHEDKAR COMING TO YOU IN SEPTEMBER OF 2013 SAYING THAT THERANOS ISN'T READY; CORRECT?
ELIZABETH A. HOLMES: I DO NOT.
MR. LEACH: AND DO YOU DENY THAT SHE TOLD YOU -- OR YOU TOLD HER THAT THERANOS DIDN'T HAVE MUCH OF A CHOICE, THAT YOU HAVE A PROMISE TO DELIVER TO THE CUSTOMER?
ELIZABETH A. HOLMES: I DON'T REMEMBER SAYING THAT, BUT THAT'S SOMETHING THAT I COULD HAVE SAID.
MR. LEACH: YOU JUST HAVE NO MEMORY OF IT?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU DON'T DISPUTE THAT ADAM ROSENDORFF TOLD YOU IN THE FALL OF 2013 THAT HE WAS BEING ASKED TO VOUCH FOR RESULTS THAT HE WAS NOT CONFIDENT IN?
ELIZABETH A. HOLMES: I REMEMBER AN EMAIL THAT -- I'M SORRY, IN NOVEMBER OF 2013?
MR. LEACH: I SAID THE FALL OF -- I MEANT TO SAY THE FALL OF 2014.
ELIZABETH A. HOLMES: THE FALL OF 2014. I REMEMBER THAT EMAIL.
MR. LEACH: YOU REMEMBER AN EMAIL FROM DR. ROSENDORFF WHERE HE SAID, I CAN'T VOUCH FOR THE TEST, OR I'M BEING ASKED TO VOUCH FOR RESULTS I'M NOT CONFIDENT IN?
ELIZABETH A. HOLMES: YES, I REMEMBER THAT.
MR. LEACH: OKAY. LET'S LOOK AT THAT. IT'S EXHIBIT 4330. I THINK I HAVE IT. IT'S IN EVIDENCE, BUT I HAVE A COPY. IF I MAY APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: LET'S LOOK AT PAGE 2, MS. HOLLIMAN. AND IF WE CAN ZOOM IN ON THE TOP EMAIL, PLEASE. MS. HOLMES, DO YOU SEE WHERE DR. ROSENDORFF WROTE, "I FEEL REALLY UNCOMFORTABLE WITH WHAT IS HAPPENING RIGHT NOW IN THIS COMPANY. IS THERE ANY WAY YOU CAN GET SPENCER BACK ON THE CLIA LICENSE AND TAKE ME OFF?" YOU UNDERSTOOD SPENCER TO BE A REFERENCE TO SPENCER HIRAKI?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: HE WAS THE LAB DIRECTOR FOR A BRIEF PERIOD OF TIME IN THE 2011 TO 2013 TIME PERIOD?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: "I AM FEELING PRESSURED TO VOUCH FOR RESULTS THAT I CANNOT BE CONFIDENT IN, AND ALSO IN A NUMBER OF CASES WHERE I GET QUESTIONS ABOUT ASSAYS, I DO NOT KNOW WHAT METHOD IS BEING USED IE VACUTAINERS ALIQUOTTED INTO CTN'S, ET CETERA." THIS WAS THE TESTIMONY THAT YOU TALKED ABOUT ON YOUR DIRECT EXAMINATION; CORRECT?
ELIZABETH A. HOLMES: IT IS THE ONE I'M TALKING ABOUT RIGHT NOW, YES.
MR. LEACH: AND IF WE CAN START WHERE THIS DIALOGUE BEGINS ON PAGE 3, THE SUBJECT MATTER OF THIS EMAIL IS EBOLA. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DR. ROSENDORFF WROTE, "SUNNY/ELIZABETH, "I AM HEARING THAT THERANOS INTENDS TEST SAMPLES TO RULE OUT OR DIAGNOSE EBOLA AT 7373 GATEWAY. "CAN YOU PLEASE CONFIRM THAT THIS IS CORRECT. IF SO, I'M WONDERING WHY AS LAB DIRECTOR I WAS NOT INVOLVED IN THE DECISION AND PLANNING?" DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE GO TO PAGE 2, YOU WROTE, "THAT IS NOT CORRECT. WHO SAID THIS?" DO YOU SEE THAT?
MR. LEACH: AND DR. ROSENDORFF REPLIES, "PERHAPS A COMPANY WIDE EMAIL IS AN ORDER TO QUASH THIS RUMOR?" DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WROTE BACK, "NO ONE AT ANY OF OUR OTHER SITES IS UNDER THIS IMPRESSION FYI. THERE ARE MANY DIFFERENT ORGANIZATIONS IN OUR COMPANY OUTSIDE OF CLIA LAB -- SUNNY WILL FOLLOW UP WITH GODFRED." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THERANOS WAS DOING A LOT OF WORK TO DEPLOY AN EBOLA ASSAY; ISN'T THAT RIGHT, MS. HOLMES?
ELIZABETH A. HOLMES: WE WERE.
MR. LEACH: LET ME DRAW YOUR ATTENTION TO EXHIBIT 5733. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: DO YOU SEE YOUR NAME AT THE TOP OF THIS EMAIL, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS APPEARS TO BE TO SOMEONE NAMED GARY ROUGHHEAD. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND ADMIRAL ROUGHHEAD WAS ON YOUR PARDON?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: AND DOES THIS RELATION TO THERANOS'S EFFORTS TO OPERATIONALIZE EBOLA?
ELIZABETH A. HOLMES: I'M JUST LOOKING AT IT. YES.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5733.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5733 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: MS. KRATZMANN, CAN I USE THE ELMO?
MR. LEACH: DO YOU SEE THE DATE OF THIS IS SEPTEMBER 29TH, 2014, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S ROUGHLY TWO OR THREE MONTHS BEFORE THE EMAIL WHERE DR. ROSENDORFF IS RAISING QUESTIONS ABOUT EBOLA?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND YOU'RE WRITING AT THE TOP HERE, "WE ARE WORKING ON GETTING HIM TO PALO ALTO. HE WAS TIED UP THROUGH OCTOBER." I THINK THAT'S A REFERENCE TO SOMEONE DOWN ON THE BOTTOM. "FYI -- GATES, CDC, AND ANDY WEBER'S TEAM FROM DOD ARE ALL COMING OUT TO THERANOS ON WEDNESDAY TO MEET ON OPERATIONALIZING EBOLA." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION TO 5731. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: MS. HOLMES, DO YOU SEE YOUR NAME AT THE TOP OF THIS EMAIL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE BILL FOEGE'S NAME IN THE TO LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DR. FOEGE HAD SOME INVOLVEMENT WITH THERANOS AND ITS BOARD AT THE TIME?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND THIS ALSO RELATES TO THERANOS'S EFFORTS WITH RESPECT TO EBOLA?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5731.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5731 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: MS. HOLMES, I WANT TO DRAW YOUR ATTENTION TO THE FIRST EMAIL. FIRST OF ALL, DO YOU SEE THE DATE OF OCTOBER 7TH, 2014?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND SO THIS IS A WEEK OR SO AFTER THE EMAIL THAT WE JUST SAW, AND A COUPLE OF MONTHS BEFORE DR. ROSENDORFF COMES TO YOU WITH HIS CONCERNS?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND YOU WROTE TO DR. FOEGE, "WONDERFUL CONNECT FRIDAY. WE HAVE ALL OF OUR ASSAY DEVELOPMENT TEAMS ON DECK FOR BRINGING UP THE BEST COMBINATION OF TESTS FOR AN EBOLA SOLUTION." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: DR. FOEGE WRITES BACK, "SORRY. MISSED THIS. IF A CBC CAN BE EASILY DONE, THERE ARE TIMES WHEN IT WOULD BE USEFUL SO I WOULD INCLUDE IT. YOU AVOID THE CLINICIAN WANTING IT AFTER SEEING THE INITIAL RESULTS AND HAVING TO REPEAT THE FINGERSTICK. THANKS, BILL." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND YOU WROTE BACK, "WE AGREE. WE THINK IT COULD ALSO BE USEFUL IN THE INFECTION TRIAGE AND MANAGEMENT. WE WILL PLAN ON INCLUDING IT IN THE STAGED DEPLOYMENTS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS YOU AND DR. FOEGE TALKING ABOUT STAGED DEPLOYMENTS OF AN EBOLA SOLUTION; CORRECT?
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: IS THIS ANOTHER EMAIL EXCHANGE BETWEEN YOU AND DR. FOEGE RELATING TO EBOLA, MS. HOLMES?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IS THIS IN THE OCTOBER 2013 TIME PERIOD?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5730.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5730 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: SO LET ME START WITH THE INITIAL EMAIL, MS. HOLMES. IT LOOKS LIKE THIS IS FROM SOMEONE NAMED GERRIT VAN ROEKEL ABOUT THERANOS NOT GETTING WORK TO PURSUE A COLLABORATION WITH EBOLA. AM I READING THAT CORRECTLY?
ELIZABETH A. HOLMES: NOT GETTING THE GATES FOUNDATION GRANT.
MR. LEACH: OKAY. YOU HAD BEEN SEEKING A GRANT TO GET MONEY TO CONDUCT EBOLA TESTING, BUT YOU WERE UNSUCCESSFUL?
ELIZABETH A. HOLMES: WE DIDN'T SEEK A GRANT. THEY CAME TO SEE WHETHER WE SHOULD APPLY FOR IT, AND WE DID NOT.
MR. LEACH: AND DR. FOEGE WRITES BACK, "ELIZABETH, I AM SORRY THIS FIRST VENTURE DID NOT WORK OUT. I WOULD ENCOURAGE YOU TO CONTINUE ENGAGEMENT WITH THEM AND RESPOND TO THEIR INVITATION. THERE IS NOTHING LOST IN SEEING WHAT THEY ARE DOING AND IT MAY LEAD TO A DIFFERENT KIND OF ENGAGEMENT IN THE FUTURE. IT WILL CERTAINLY LEAD TO OTHER CONTACTS." HE THEN WRITES, "CONCERNING CDC, I RECOGNIZE THAT IT IS EASIER FOR YOU TO HAVE THE SPECIMENS IN PALO ALTO." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS IN RELATION TO POTENTIAL WORK ON EBOLA; CORRECT?
MR. LEACH: LAST WEEK I ASKED YOU SOME QUESTIONS ABOUT WHETHER YOU AND MR. BALWANI DISCUSSED WHAT WOULD HAVE HAPPENED -- WHAT WOULD HAPPEN IF JOHN CARREYROU, "THE WALL STREET JOURNAL" REPORTER, WENT TO PHOENIX WELLNESS CENTER TO HAVE HIS BLOOD DRAWN. DO YOU RECALL THAT TOPIC COMING UP AND GOING THROUGH SOME MESSAGES ON THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND WE LOOKED AT SOME TEXTS WHERE YOU DISCUSSED THE CONCEPT OF IT BEING BETTER TO HAVE A PERFECT VENIPUNCTURE THAN A BAD FINGERSTICK. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT WAS IN THE APRIL 25TH, 2015 TIME PERIOD, OR IN THE EARLY 2015 TIME PERIOD?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: AND PRIOR TO THAT, YOU TOOK STEPS TO CONCEAL FROM POTENTIAL INVESTORS THERANOS'S RELIANCE ON VENOUS DRAWS; ISN'T THAT CORRECT?
MR. LEACH: LET'S LOOK AT EXHIBIT 2065, WHICH IS IN YOUR BINDER. IT SHOULD BE VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE CHRISTIAN HOLMES'S NAME IN THE FROM LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE YOUR AND MR. BALWANI'S NAME IN THE TO LINE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE SUBJECT IS "BDT VISITORS TO WAG SATURDAY"?
MR. LEACH: AND YOU WERE PURSUING -- YOU WERE HAVING DISCUSSIONS WITH BDT ABOUT A POTENTIAL INVESTMENT IN THIS TIMEFRAME?
MR. LEACH: AND BDT WAS A FUND RUN BY SOMEONE NAMED BYRON TROTT?
ELIZABETH A. HOLMES: BYRON TROTT, YES.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 2065.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 2065 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: SO THIS APPEARS TO BE AN EMAIL FROM YOUR BROTHER, CHRISTIAN HOLMES?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: HE WAS A PROJECT MANAGER?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: DID HE REPORT TO YOU?
ELIZABETH A. HOLMES: HE DID NOT. HE REPORTED TO SUNNY AT THIS TIME.
MR. LEACH: AND AT ANY POINT DID HE REPORT TO YOU?
MR. LEACH: THE SUBJECT IS "BDT VISITORS TO WAG SATURDAY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IN THE FIRST PARAGRAPH IT SAYS -- WELL, LET'S WORK OUR WAY UP FROM THE TOP. IF WE CAN GO TO PAGE 2. DO YOU SEE THE INITIAL EMAIL, MS. HOLMES, WHERE CHRISTIAN IS WRITING, "WHERE CAN I FIND THE LIST OF NAMES YOU MENTIONED FROM BDT WHO WOULD COME INTO WAG ON SATURDAY?" DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: "WE WILL SEND OVER THE DIFFERENT WORK FLOWS FOR HOW WE WILL ACCOMMODATE FINGERSTICK REGARDLESS OF WHAT'S ON THE ORDER, AND POSSIBLE ISSUES ASSOCIATED, AS REQUESTED." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: OKAY. AND THEN THERE'S A RESPONSE FROM MR. BALWANI. AND THEN IF WE CAN GO BACK TO CHRISTIAN HOLMES'S RESPONSE ON PAGE 1. DO YOU SEE WHERE IT SAYS, "ALSO WANTED TO SEND ALONG OUR THOUGHTS FOR HOW TO ACCOMPLISH THE FS IN THE SCENARIO THEIR ORDERS PROMPT VENOUS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND FS IS AN ACRONYM FOR FINGERSTICK?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: "ASSUMPTIONS HERE FROM EAH ARE THAT WE MUST NOT DO VENOUS DRAW, AND WE CANNOT TELL THEM THAT THEIR ORDER PROMPTS VENOUS IF IT DOES." DID I READ THAT SENTENCE CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND EAH IS AN ACRONYM FOR YOU; CORRECT?
ELIZABETH A. HOLMES: IT'S MY INITIALS.
MR. LEACH: THOSE ARE YOUR INITIALS?
MR. LEACH: AND PEOPLE WOULD REFER TO YOU AS EAH FROM TIME TO TIME?
ELIZABETH A. HOLMES: THEY DID.
MR. LEACH: OKAY. AND AFTER MR. HOLMES WRITES, "WE CANNOT TELL THEM THAT THEIR ORDER PROMPTS VENOUS IF IT DOES," HE SAYS, "THE FOLLOWING IS THE ACTION PLANNING TO ACCOMPLISH THIS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE GO FURTHER BELOW, THERE ARE SOME PREP ACTIONS. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IT LISTS "ANAM/ROBIN HAVE A LIST OF NAMES WHICH INCLUDES POSSIBLE PATIENTS FROM BDT." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND ANAM AND ROBIN WERE THE FOLKS IN THE WELLNESS CENTER WHO WOULD BE GREETING THE BDT INDIVIDUALS?
ELIZABETH A. HOLMES: I THINK THEY'RE PEOPLE IN THE CALL CENTER.
MR. LEACH: OKAY. "NISHIT IS BRIEFED TO BE ABLE TO HANDLE ANY MANUAL ACTIONS NECESSARY IN THE LAB WHEN SAMPLES ARRIVE." NISHIT IS NISHIT DOSHI?
MR. LEACH: HE WORKS IN THE CLINICAL LAB?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. AND THEN "CIARA WILL BE BRIEFED WITH BDT NAMES, TOLD TO EXPECT A CALL FROM US SHOULD THERE NEED TO BE ANY WORKFLOW CHANGES, WHICH COULD INCLUDE DRAWING EXTRA FINGERSTICKS, OTHERWISE INSTRUCTION IS TO COLLECT THE CTN'S REQUESTED IN THE APP BY AS FEW FINGERSTICKS AS POSSIBLE." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND CTN IS A REFERENCE TO THE COLLECTION DEVICE?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THEN IF WE CAN GO DOWN, DO YOU SEE THAT THERE ARE TWO SCENARIOS LAID OUT ON HOW TO DEAL WITH THIS BDT VIP VISIT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND FOR "SCENARIO 1: SCANNED ORDER FROM BDT VIP CONTAINS TESTS THAT PROMPT FOR VENOUS DRAW." DO YOU SEE THAT SCENARIO LISTED?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THAT THERE ARE TWO CASES FOR THIS SCENARIO, A CASE A AND A CASE B?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND CASE A IS "WHAT TO DO IF VENOUS IS PROMPTED DUE TO SOME TESTS NOT BEING ON FS, BUT WOULD OTHERWISE PROMPT FS." DO YOU SEE THAT BULLET?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN SOME NEGATIVES FOR THIS CASE ARE LISTED. "NEED TO EITHER TELL THE PATIENT AT THE STORE THAT WE WILL NOT RUN A FEW TESTS, OR TELL THEM ON THE BACK END THAT WE COULD NOT RUN CERTAIN TESTS." IS THAT WHAT IS REFLECTED IN THE FIRST BULLET UNDER "NEGATIVE"?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND DOES USE CASE B INVOLVE WHAT WOULD HAPPEN IF A VENOUS IS PROMPTED DUE TO THE VOLUME OF TESTS, BUT TESTS INDIVIDUALLY WOULD PROMPT A FINGERSTICK?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: IN THAT SCENARIO, DANIEL OR MAX WILL DETERMINE WHAT COMBINATION OF CTN'S WERE NEEDED IN ORDER TO FULFILL THE ORDER; CORRECT?
ELIZABETH A. HOLMES: EXACTLY.
MR. LEACH: AND IN THAT SCENARIO, CIARA WOULD COLLECT THE NUMBER OF CTN'S WITH AS FEW STICKS AS POSSIBLE; CORRECT?
MR. LEACH: AND THEN IT LAYS OUT SOME NEGATIVES FOR THIS SCENARIO IF THAT'S WHAT HAPPENS FROM THE BDT ORDER; CORRECT?
MR. LEACH: AND SOME OF THE NEGATIVES ARE BDT VIP -- AND THAT'S VERY IMPORTANT PERSON?
ELIZABETH A. HOLMES: I THINK SO, YES.
MR. LEACH: -- IS A SELF-PAY PATIENT, THEN THE RECEIPT PRINTED BY THE APP WILL ONLY SHOW THE TESTS TRANSCRIBED, WHICH WILL NOT INCLUDE ALL OF THE TESTS FOR THE ORDER. WAS THAT ONE OF THE NEGATIVES LISTED FOR THIS CASE B?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IF THEY NOTICE MISSING TESTS ON THE RECEIPT, THEY MAY ASK THE WAG TECH ABOUT IT. WAS THAT ALSO A NEGATIVE LISTED FOR THIS SCENARIO?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THEN THERE'S DISCUSSION OF A WORST CASE, THEY WOULD MAKE A CALL TO CS. IS THAT CUSTOMER SUPPORT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. CUSTOMER SUPPORT IN PALO ALTO?
ELIZABETH A. HOLMES: I GUESS, YES.
MR. LEACH: OKAY. AND ANAM WOULD TELL THEM EVERYTHING IS FINE. CIARA WILL ALSO BE ABLE TO COME OUT WITH THE DRAW ROOM ONCE CHECK-IN IS COMPLETE AND WELCOME THEM INTO THE ROOM AND DISTRACT FROM LOOKING AT THE RECEIPT. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THEN THOSE ARE THE CASE A AND B IF THE BDT VIP ASKS FOR TESTS THAT PROMPTED VENOUS DRAW; CORRECT?
ELIZABETH A. HOLMES: A VENOUS DRAW. BUT IF YOU COULD COLLECT MORE CTN'S, IT WOULD BE FINGERSTICK.
MR. LEACH: OKAY. AND MR. HOLMES AT THE TOP IS SAYING THAT SOME OF THE ASSUMPTIONS FOR HOW TO DEAL WITH BDT ARE YOU MUST NOT DO A VENOUS DRAW, AND YOU CAN'T TELL THEM IF THEIR ORDER PROMPTS VENOUS IF IT DOES. DID I READ THAT LANGUAGE CORRECT?
MR. LEACH: YOU WANTED BDT TO HAVE A GOOD EXPERIENCE IN THE WELLNESS CENTER?
MR. LEACH: YOU WANTED TO PUT YOUR BEST FOOT FORWARD WITH THEM; CORRECT?
MR. LEACH: DID BDT END UP INVESTING?
MR. LEACH: YOU TESTIFIED -- I'D LIKE TO GO BACK TO THIS IDEA OF PHASE I AND PHASE II. PHASE I IS IN THE JUNE OR JULY 2012 WALGREENS AMENDMENTS? THAT'S WHEN THIS IDEA OF PHASE I GETS MEMORIALIZED?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND YOUR HOPE WAS THAT PHASE I WOULD BE SHORT?
ELIZABETH A. HOLMES: IT WAS.
MR. LEACH: OKAY. BECAUSE YOU WANTED TO PUT THE MINILAB IN WALGREENS STORES AFTER THE FDA APPROVED IT?
ELIZABETH A. HOLMES: WE DID.
MR. LEACH: OKAY. AND PHASE I STARTS IN JUNE OF 2012, JUNE OR JULY OF 2012; CORRECT?
ELIZABETH A. HOLMES: THAT'S WHEN THE IDEA CAME, YES.
MR. LEACH: OKAY. BUT THE IDEA TO MODIFY THE SIEMENS MACHINES, THE ADVIA'S, THAT DOESN'T COME UP UNTIL JULY OF 2013; CORRECT?
MR. LEACH: OKAY. SO TWO MONTHS BEFORE THE WALGREENS LAUNCH IS THE FIRST TIME YOU'RE PURSUING THIS IDEA OF MODIFYING THE SIEMENS MACHINES?
MR. LEACH: AND ONE OF THE REASONS THAT YOU'RE PURSUING MODIFYING THE SIEMENS MACHINES IS BECAUSE THE MINILAB ISN'T READY?
ELIZABETH A. HOLMES: YES, IT WASN'T VALIDATED.
MR. LEACH: IN FACT, IT NEVER GOT VALIDATED; RIGHT?
ELIZABETH A. HOLMES: IN THE CLIA LAB.
MR. LEACH: AND YOU WERE STILL HAVING DEMONSTRATIONS WITH WALGREENS IN THE JULY 2013 TIME PERIOD WITH THE MINILAB AND THE EDISON 3.5 AND OTHER THERANOS MANUFACTURED ANALYZERS; CORRECT?
ELIZABETH A. HOLMES: WHAT DO YOU MEAN BY THAT?
MR. LEACH: YOU WERE HAVING DEMONSTRATIONS WITH THE FOLKS FROM WALGREENS IN JULY AND AUGUST OF 2013 WITH THE MINILAB AND THE EDISON 3.5; CORRECT?
ELIZABETH A. HOLMES: WE SHOWED THEM THOSE DEVICES.
MR. LEACH: OKAY. AND YOU DIDN'T SHOW THEM ANY MODIFIED SIEMENS MACHINES?
MR. LEACH: OKAY. AND AM I RIGHT IN JULY OF 2013, WALGREENS WAS PUSHING YOU REALLY HARD TO GO LIVE AS SOON AS POSSIBLE?
ELIZABETH A. HOLMES: THEY WERE.
MR. LEACH: AM I RIGHT THAT YOU TOLD SAFEWAY IN OR AROUND JUNE OF 2013 THAT THE MINILAB OR THE DEVICE WAS WHAT WAS GOING TO BE USED IN THE CLIA LAB?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: WELL, LET ME SHOW YOU WHAT HAS BEEN MARKED AS EXHIBIT 5536. IT SHOULD BE IN VOLUME 2.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: IS --
MR. DOWNEY: MR. LEACH, I'M SORRY TO INTERRUPT YOU. I DON'T THINK I HAVE THIS ONE.
MR. LEACH: 5536.
COURT CLERK: VOLUME 3.
MR. LEACH: IN VOLUME 3.
MR. LEACH: DOES THIS APPEAR TO BE AN EMAIL FROM MR. BALWANI TO YOU DATED JUNE 28TH, 2013?
MR. LEACH: AND IS THE SUBJECT "SAFEWAY/THERANOS - MEETING"?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IS HE FORWARDING YOU MINUTES OF A MEETING THAT YOU HAD WITH BOB GORDON AND ROBERT EDWARDS AT SAFEWAY?
ELIZABETH A. HOLMES: I THINK IT'S NOTES FROM BOB GORDON.
MR. LEACH: OKAY. AND YOU'RE BEING ASKED TO COMMENT ON THESE NOTES?
MR. LEACH: OKAY. YOUR HONOR, I OFFER EXHIBIT 5536.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5536 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: LET'S LOOK AT THE BOTTOM EMAIL FIRST. BOB GORDON WAS THE GENERAL COUNSEL OF SAFEWAY, MS. HOLMES?
ELIZABETH A. HOLMES: HE WAS.
MR. LEACH: AND HE'S WRITING TO YOU AND MR. BALWANI, "ELIZABETH AND SUNNY, "AS WE DISCUSSED, I AM ATTACHING MY NOTES FROM THE MEETING ON WEDNESDAY. PLEASE MAKE ANY SUGGESTED REVISIONS THAT ARE NECESSARY TO MAKE THIS AN ACCURATE SUMMARY OF OUR DISCUSSIONS." DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF I COULD DRAW YOUR ATTENTION, PLEASE, TO PAGE 2 OF THE DOCUMENT, IT'S THE FIRST PAGE OF THE NOTES. IF WE COULD CAPTURE THE FIRST THREE PARAGRAPHS, MS. HOLLIMAN. PERFECT. DO YOU SEE THE DATE OF JUNE 26TH, 2013, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THERE'S A HEADING HERE "CENTRAL LAB MODEL. "CONTRARY TO IMPRESSIONS THAT SOME SAFEWAY PEOPLE HAD, THERE IS NO TECHNOLOGICAL PROBLEM WITH THE DEVICES AND NO PLAN TO GO WITHOUT THE DEVICES IN THE STORES. THERANOS HAS DETERMINED THAT THE USE OF THE CENTRAL LAB MODEL PROVIDES THE QUICKEST AND EASIEST WAY TO EXPAND GEOGRAPHICALLY." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THAT'S WHAT MR. GORDON IS ASKING YOU IN THIS LATE JUNE 2013 TIME PERIOD TO COMMENT ON?
MR. LEACH: "THE CENTRAL LAB CONTAINS THE DEVICE; IN FACT, THE DEVICE IS THE ONLY WAY OF OBTAINING RESULTS FROM THE NANOTAINERS. THE LONG-TERM PLAN IS THAT THE DEVICES WILL BE MIGRATED INTO STORES AS DEMAND, DEMOGRAPHICS, AND MARKETING FULFILLMENT REQUIRE." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND AM I UNDERSTANDING THAT AT SOME POINT IN JULY OF 2013 YOU MAKE THE DECISION TO ATTEMPT TO MODIFY ADVIA MACHINES TO SUPPORT SOME OF THE TESTING IN THE CLIA LAB?
MR. LEACH: LET ME DRAW YOUR ATTENTION TO EXHIBIT 5611. AND IF I COULD DRAW YOUR ATTENTION TO THE FIRST PAGE -- OR THE SECOND PAGE OF 5611, MS. HOLMES.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE WHAT APPEARS TO BE AN EMAIL FROM YOU TO WILLIAM WESTRICK?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND DOES THE REMAINDER OF THE DOCUMENT INCLUDE DIALOGUE INVOLVING MR. WESTRICK AND YOU, MR. BALWANI, AND THEN DANIEL YOUNG?
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5611.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5611 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: IF YOU COULD PLEASE GO TO PAGE 2, MS. HOLLIMAN.
MR. LEACH: THERE'S AN EMAIL HERE FROM YOU, MS. HOLMES, TO MR. WESTRICK WITH NO SUBJECT THAT SAYS, "WILLIAM: "WE WANT TO PUT YOU ON POINT ON A CRITICAL PATH PROJECT. DANIEL WILL BE CONNECTING WITH YOU (IF HE HASN'T ALREADY) ON THE SELECTION AND PROCUREMENT OF ADDITIONAL LIQUID HANDLING SYSTEMS FOR THIS PROJECT. PLEASE FOCUS ON GETTING THIS DONE ASAP. IT IS A TOP PRIORITY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THIS AN EMAIL IN CONNECTION WITH YOUR DECISION TO MODIFY THE ADVIA MACHINES?
MR. LEACH: WELL, LET'S LOOK AT -- DID YOU EVER DESCRIBE HERE THE ADVIA SOLUTION DESCRIBED AS A STOPGAP SOLUTION?
ELIZABETH A. HOLMES: I'M SORRY, WHERE IS IT?
MR. LEACH: IT'S NOT IN THIS EMAIL. IT'S JUST A QUESTION.
ELIZABETH A. HOLMES: OH. OH.
MR. LEACH: DID MR. WESTRICK END UP DOING WORK ON ADVIA'S IN CONNECTION WITH MAKING MODIFICATIONS TO THE DEVICES?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: OKAY. DID YOU EVER HEAR THE MODIFICATIONS TO THE ADVIA'S BEING CALLED A STOPGAP SOLUTION?
ELIZABETH A. HOLMES: IT COULD HAVE.
MR. LEACH: OKAY. STOPGAP MEANING TO GET US TO PHASE II?
MR. LEACH: LET ME DRAW YOUR ATTENTION TO EXHIBIT 5090. THIS SHOULD BE IN VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: MS. HOLLIMAN -- OR, MS. KRATZMANN, I BELIEVE EXHIBIT 5090 IS IN EVIDENCE.
COURT CLERK: NO, IT IS NOT, COUNSEL.
MR. LEACH: OKAY. MY APOLOGIES.
MR. LEACH: DO YOU SEE YOUR NAME IN THE TO LINE, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS FROM DANIEL YOUNG?
MR. LEACH: OKAY. AND DOES THIS RELATE TO A DEMONSTRATION IN THE JULY 2013 TIME PERIOD?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5090.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5090 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: DO YOU SEE THE DATE AS JULY 11TH, 2013, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS A DATE OF A DEMONSTRATION FOR WALGREENS, ISN'T IT?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: OKAY. YOU GAVE A PRESENTATION TO WALGREENS IN PALO ALTO ON JUNE 11TH, 2013; CORRECT?
ELIZABETH A. HOLMES: JULY 11TH?
MR. LEACH: JULY 11TH, EXCUSE ME.
ELIZABETH A. HOLMES: I DON'T KNOW. I KNOW WE WERE MEETING WITH THEM THAT SUMMER.
MR. LEACH: OKAY. AND WHEN YOU WERE MEETING WITH THEM, YOU WERE SHOWING THEM MINILABS, 3.5'S, BUT NOT THE MODIFIED SIEMENS MACHINES?
MR. LEACH: OKAY. AND THIS IS DANIEL YOUNG WRITING HERE, "4S IS READY FOR CBC, USE CARTRIDGE ON TOP OF DEVICE." DID I READ THAT CORRECTLY?
MR. LEACH: 4S IS THE SERIES OF THE MINILAB THAT YOU WERE CREATING FOR THE MILITARY?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: "MINILAB WITH CARTRIDGE ON TOP WILL RUN NULL PROTOCOL." DO YOU SEE THAT?
MR. LEACH: AND YOU HEARD MR. EDLIN TESTIFYING ABOUT THE NULL PROTOCOL?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND I THINK YOU TESTIFIED ON YOUR DIRECT EXAMINATION THAT, SITTING HERE TODAY, YOU'RE FAMILIAR WITH THE NULL PROTOCOL?
ELIZABETH A. HOLMES: I AM.
MR. LEACH: "SECOND MINILAB SHOULD NOT BE USED. "IF WE HAVE ANOTHER 30 MINUTES, WE CAN MOVE THE THIRD MINILAB IN AND RUN VIT D ON IT." IS THAT VITAMIN D?
MR. LEACH: "LET ME KNOW." AND IF I COULD NOW DRAW YOUR ATTENTION TO EXHIBIT 905, WHICH IS IN VOLUME 4.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: I BELIEVE THIS IS IN EVIDENCE.
COURT CLERK: YES.
MR. LEACH: WE CAN DISPLAY THIS, MS. HOLLIMAN.
ELIZABETH A. HOLMES: OKAY.
BY MR. LEACH:
MR. LEACH: DO YOU SEE THAT THERE ARE SOME DEMO -- THIS EMAIL RELATES TO DEMO RESULTS FOR 7/11?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THAT'S THE DATE OF THE EMAIL THAT WE JUST LOOKED AT?
MR. LEACH: OKAY. AND IF I COULD DRAW YOUR ATTENTION TO PAGE 5, DO YOU SEE THE EMAIL FROM DANIEL EDLIN TO YOU AND DANIEL YOUNG?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND HE'S WRITING ABOUT THE RESULTS FROM THESE DEMOS, INCLUDING THE FACT THAT VITAMIN D HAS BEEN REMOVED, TT4 AND TT3 HAVE BEEN REMOVED FROM ALL THYROID PANELS, AND FT4 HAS BEEN REMOVED FROM A THYROID PANEL IN ONE PATIENT; CORRECT?
MR. LEACH: AND DAN YOUNG IS PROVIDING INPUT ON WHAT TO INCLUDE ON THE REPORTS THAT ARE EVENTUALLY GOING TO GO OUT TO THE PEOPLE RECEIVING THE DEMOS; CORRECT?
MR. LEACH: OKAY. AND IF WE GO TO PAGE -- THE TOP OF PAGE 5, DO YOU SEE WHERE DANIEL YOUNG IS WRITING, "I AM CONCERNED ABOUT THE TSH VALUES F2, MF, AND M6 WHICH WERE ALL DONE ON THE THYROID PANEL. I DO THINK THESE ARE ALL RUNNING LOW. TO BE CONSERVATIVE, I WOULD REMOVE ALL OF THESE THREE RESULTS." YOU CAN'T TELL FROM THIS EMAIL THAT THIS RELATES TO WALGREENS; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. WE'LL GET TO WHETHER YOU'RE MEETING WITH WALGREENS ON THIS DATE OR NOT. BUT AM I RIGHT THAT YOU NEVER TOLD WALGREENS ABOUT ISSUES THAT THERANOS WAS HAVING WITH ITS VITAMIN D ASSAY?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND YOU DIDN'T TELL WALGREENS FOLLOWING THIS DEMO THAT THERANOS WAS HAVING ISSUES WITH THE TT4 ASSAY?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND YOU DIDN'T TELL WALGREENS THAT THERANOS WAS HAVING ISSUES WITH THE TT3 ASSAY?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND YOU DIDN'T TELL WALGREENS THAT THERANOS WAS HAVING ISSUES WITH THE FT4 ASSAY?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: THERE'S ALSO REFERENCES TO CHLORIDE AND ALKALINE PHOSPHATE IN THIS. YOU DIDN'T TELL WALGREENS THAT YOU WERE HAVING ISSUES WITH THOSE ASSAYS, DID YOU?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. AND RATHER THAN TELL WALGREENS ABOUT THOSE ISSUES, YOU ELECTED SIMPLY TO REMOVE THOSE RESULTS FROM THE REPORT; CORRECT?
ELIZABETH A. HOLMES: I HAVEN'T READ ALL OF THIS, BUT WE WOULD HAVE FOLLOWED DR. YOUNG'S GUIDANCE.
MR. LEACH: AND RATHER THAN HAVING A FRANK DISCUSSION WITH THEM ABOUT ISSUES THAT YOU WERE HAVING WITH ASSAYS, YOU JUST TOOK THEM OUT?
ELIZABETH A. HOLMES: NO. I THINK IF DR. YOUNG WAS SAYING THERE WAS A CONCERN ABOUT A RESULT, WE WOULD NOT REPORT THE RESULT, AND THEN THE TEAM WOULD DO WHATEVER INVESTIGATION WAS NECESSARY TO UNDERSTAND IF THERE WAS AN ISSUE.
MR. LEACH: OKAY. BUT YOU NEVER TOLD WALGREENS, FOLLOWING THIS JULY DEMO, THAT THERANOS WAS HAVING ISSUES WITH THESE ASSAYS; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: OKAY. LET'S LOOK AT EXHIBIT 5623.
ELIZABETH A. HOLMES: THE THIRD BINDER?
MR. LEACH: THIS IS IN VOLUME 3. DOES THIS APPEAR TO BE AN EMAIL FROM CHRISTIAN HOLMES TO YOU AND SUNNY BALWANI DATED JULY 11TH, 2013?
MR. LEACH: AND THE SUBJECT MATTER IS "DECK FOR BOOTS MEETING TOMORROW"?
MR. LEACH: AND BOOTS IS ANOTHER NAME FOR WALGREENS? OR BOOTS IS AFFILIATED WITH WALGREENS?
MR. LEACH: OKAY. YOUR HONOR, I OFFER EXHIBIT 5623.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5623 WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: AND DO YOU SEE THE DATE JULY 11TH, 2013, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THIS ROUGHLY THE TIME PERIOD OF THE DEMONSTRATIONS THAT WE JUST LOOKED AT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND DOES THIS REFRESH YOUR MEMORY THAT IN THIS TIME PERIOD WALGREENS EXECUTIVES WERE COMING THROUGH FOR DEMONSTRATIONS?
ELIZABETH A. HOLMES: AGAIN, NOT SPECIFICALLY AS TO THE DATE, BUT I KNOW THAT WE WERE MEETING WITH THEM THAT SUMMER.
MR. LEACH: OKAY. YOUR HONOR, WE'VE MARKED THE POWERPOINT TO THIS AS A SEPARATE EXHIBIT, EXHIBIT 5609. IF I COULD ASK MS. HOLMES TO LOOK AT IT.
ELIZABETH A. HOLMES: YES. OKAY.
MR. LEACH: DO YOU SEE THE DATE JULY 11TH, 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THE NAMES THERANOS, ALLIANCE, BOOTS, AND WALGREENS ON THIS POWER POINT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU WOULD HAVE BEEN PRESENTING TO WALGREENS IN THIS TIME PERIOD ABOUT THE THERANOS RELATIONSHIP?
ELIZABETH A. HOLMES: WE WOULD HAVE BEEN MEETING WITH THEM ON OUR PARTNERSHIP.
MR. LEACH: YOUR HONOR, I OFFER EXHIBIT 5609.
MR. DOWNEY: YOUR HONOR, NO OBJECTION FROM ME, BUT MINE IS ACTUALLY NOT READABLE.
MR. LEACH: IF WE CAN USE THE NATIVE ON THE SCREEN.
MR. DOWNEY: MAYBE IT IS A NATIVE EXHIBIT.
MR. LEACH: I THINK THE PRINTOUT CAME OUT IN A WAY THAT IS NOT READABLE, YOUR HONOR. BUT WE HAVE A NATIVE COPY THAT I THINK WILL BE DISPLAYABLE.
JUDGE DAVILA: SOME OF THESE PAGES DO HAVE SOME --
MR. LEACH: YEAH, I CAN'T EXPLAIN IT. BUT I'VE PERSONALLY REVIEWED THE NATIVE AND I THINK MR. DOWNEY'S CONCERN WILL BE ALLAYED.
JUDGE DAVILA: ALL RIGHT. THANK YOU. AND YOU'RE GOING TO DISPLAY THE NATIVE?
MR. LEACH: YES.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5609 WAS RECEIVED IN EVIDENCE.)
MR. LEACH: MAY I HAVE ONE MOMENT, YOUR HONOR?
(DISCUSSION OFF THE RECORD.)
MR. LEACH: WHILE MS. HOLLIMAN IS WORKING ON THAT, IF I COULD USE THE ELMO?
MR. LEACH: MS. HOLMES, I'M DISPLAYING THE FINAL PAGE OF EXHIBIT 5609, THE TITLE IS "OVERVIEW: THERANOS SYSTEMS." DO YOU SEE THAT ON THE SCREEN?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND TO THE LEFT THERE'S THERANOS SYSTEMS AND IMAGES OF TWO THINGS DESCRIBED AS THERANOS ANALYZERS. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THAT THE 3.5 TO THE LEFT?
MR. LEACH: AND WHAT IS THE ONE TO THE RIGHT?
ELIZABETH A. HOLMES: ONE OF THE MINILABS.
MR. LEACH: AND THIS IS FROM JULY OF 2013, THE TIME PERIOD WHEN YOU'RE MODIFYING THE SIEMENS ADVIA MACHINES; CORRECT?
MR. LEACH: AND AT NO POINT IN TIME DID YOU TELL WALGREENS THAT YOU WERE MODIFYING SIEMENS MACHINES TO GO FORWARD WITH THE LAUNCH?
ELIZABETH A. HOLMES: WE DID NOT.
MR. LEACH: AND YOU DIDN'T PROVIDE THEM THE IMAGE LIKE WE HAVE HERE OF A THERANOS ANALYZER CONSISTING OF A THIRD PARTY MODIFIED DEVICE; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU ALSO HELD OUT TO WALGREENS THE FACT THAT YOU HAD A CLIA LICENSE; CORRECT?
ELIZABETH A. HOLMES: WE DISCUSSED THAT WITH THEM.
MR. LEACH: AND THAT'S IN THE CONTRACT, THERANOS NEEDS TO GET -- BE LICENSED BY CLIA IN ORDER TO DO THE TESTING?
ELIZABETH A. HOLMES: IT SOUNDS RIGHT.
MR. LEACH: AND AT THIS POINT IN TIME, JULY OF 2013, YOU HAD NOT VALIDATED A SINGLE ASSAY FOR USE IN THE CLIA LAB USING ANY DEVICE; CORRECT?
ELIZABETH A. HOLMES: CORRECT, YES.
MR. LEACH: AND THAT WAS ALL WORK THAT WAS STILL TO COME?
MR. LEACH: OKAY. AT SOME POINT AT OR AFTER SEPTEMBER OF 2013?
ELIZABETH A. HOLMES: AT SOME POINT AT OR AFTER JULY OF 2013.
MR. LEACH: OKAY. YOU MENTIONED -- YOU MENTIONED SOME NAMES IN YOUR DIRECT EXAMINATION THAT I WANTED TO ASK SOME FOLLOW-UP QUESTIONS ABOUT. ONE OF THEM WAS IAN GIBBONS. DO YOU RECALL BEING ASKED SOME QUESTIONS ABOUT IAN GIBBONS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND BEFORE I GET TO IAN GIBBONS, I THINK WE'VE SUCCESSFULLY PUT THE NATIVE OF THE POWERPOINT ON THE SLIDE. IF I CAN WALK THROUGH SOME OF THOSE PAGES WITH YOU. DO YOU SEE THE DATE OF JULY 11TH, 2013?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IF WE COULD PLEASE GO TO PAGE 7. DO YOU SEE THERE'S A SLIDE TALKING ABOUT BACKGROUND ON THERANOS, TRANSFORMING THE CLINICAL LABORATORY, CONSUMER MARKETING?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS WAS -- YOU DON'T HAVE A MEMORY OF GIVING THIS PRESENTATION TO WALGREENS?
ELIZABETH A. HOLMES: I DO NOT.
MR. LEACH: BUT YOU DON'T HAVE ANY REASON TO DOUBT THAT YOU DID?
ELIZABETH A. HOLMES: I THINK WE PROBABLY SPOKE TO SOME OF THE SLIDES. WE DIDN'T GENERALLY GO THROUGH A DECK.
MR. LEACH: OKAY. LET'S LOOK AT PAGE 8. DO YOU SEE WHERE IT SAYS, "TRANSFORMING THE CLINICAL LAB"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND TO THE RIGHT IT SAYS, "THE 5 PERCENT CV YIELDED IN THERANOS'S ANALYSIS RESULTS FROM ELIMINATION OF PRE-ANALYTIC ERRORS, AND PROVIDES FOR PRECISE AND ACTIONABLE INFORMATION THAT WAS PREVIOUSLY INACCESSIBLE." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND AT THIS TIME YOU'RE STILL WORKING ON VALIDATING YOUR ASSAYS FOR USE ON THE EDISON OR THE MODIFIED THIRD PARTY MACHINES IN THE CLIA LAB?
ELIZABETH A. HOLMES: YES. AS OF JULY 11TH, I'M NOT SURE THAT THE MODIFIED WORK HAD STARTED YET. BUT THE LDT VALIDATION HAD NOT HAPPENED YET.
MR. LEACH: OKAY. AND IF WE COULD GO TO THE NEXT SLIDE, PLEASE. DO YOU SEE WHERE IT SAYS, "NEW POSSIBILITIES IN LAB"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: "ALL 2000 PLUS CURRENTLY RUN TESTS/CPT CODES ARE AVAILABLE THROUGH THERANOS." DID I READ THAT CORRECTLY ON THE LEFT?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: "THERANOS RUNS ANY TEST AVAILABLE IN CENTRAL LABORATORIES." THAT'S WHAT IS ON THIS SLIDE FOR WALGREENS IN THE JULY 2013 TIME PERIOD?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND IF WE COULD GO TO PAGE 12. DO YOU SEE WHERE IT SAYS, "VALIDATION OF THERANOS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THIS IS A SLIDE RELATING TO PHARMACEUTICAL COMPANIES THAT YOU WOULD OFTEN PROVIDE AT INVESTOR PRESENTATIONS; CORRECT?
ELIZABETH A. HOLMES: IT'S THE SAME DECK THAT WE WOULD GENERALLY SHARE WITH PEOPLE.
MR. LEACH: OKAY. YOU CAN PUT THAT EXHIBIT TO THE SIDE, MS. HOLMES.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND I'D LIKE TO GO BACK TO IAN GIBBONS.
MR. LEACH: IAN GIBBONS WAS ONE OF THE FIRST EMPLOYEES AT THERANOS?
ELIZABETH A. HOLMES: VERY EARLY.
MR. LEACH: DO YOU REMEMBER WHAT EMPLOYEE NUMBER HE WAS?
ELIZABETH A. HOLMES: OH, GOSH. NO, BUT IT WAS 2005, I THINK.
MR. LEACH: OKAY. AND HE LEFT THERANOS IN 2010?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: DID HE -- HE DIDN'T LEAVE AT ANY POINT BETWEEN 2010 AND 2013?
MR. LEACH: OKAY. HE PASSED AWAY IN 2013; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. AND YOU TESTIFIED THAT EXHIBIT 7098 WAS A POWERPOINT THAT YOU RECEIVED FROM DR. GIBBONS ABOUT THE CAPABILITIES OF THERANOS TECHNOLOGY. DO YOU RECALL THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. LET'S LOOK AT EXHIBIT 7098.
ELIZABETH A. HOLMES: IS THAT ONE UP HERE?
MR. LEACH: IT'S IN VOLUME 4.
ELIZABETH A. HOLMES: OKAY. OKAY.
MR. LEACH: AND YOU TESTIFIED THAT AS A RESULT OF -- AND THIS IS IN EVIDENCE, MS. HOLLIMAN, SO WE CAN DISPLAY THIS. YOU TESTIFIED ON DIRECT EXAMINATION THAT AS A RESULT OF THE PRESENTATION THAT YOU RECEIVED IN FEBRUARY OF 2010, YOU UNDERSTOOD THAT THE 4 SERIES COULD DO ANY BLOOD TEST. DO I HAVE THAT RIGHT?
MR. LEACH: OKAY. NOW, YOU DIDN'T HAVE A WORKING 4.0 SYSTEM AT THIS POINT; CORRECT?
ELIZABETH A. HOLMES: ONLY PROTOTYPES.
MR. LEACH: ONLY PROTOTYPES. SO LET'S LOOK AT PAGE 2. OR EXCUSE ME, IT'S PAGE 3. DR. GIBBONS WROTE HERE, "SYSTEM 4.0 WILL BE CAPABLE OF PERFORMING ANY MEASUREMENT REQUIRED IN A DISTRIBUTED TEST SETTING." HE'S USING THE FUTURE TENSE THERE; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: AND HE WROTE, "IT IS ENVISAGED THAT SEVERAL DISTINCT MEASUREMENT TECHNOLOGIES WILL BE INCORPORATED." THAT'S SOMETHING THAT IS GOING TO HAPPEN IN THE FUTURE; RIGHT?
MR. LEACH: IT'S A VISION OF WHAT IS GOING TO HAPPEN IN THE FUTURE?
ELIZABETH A. HOLMES: IT'S WHAT WE WERE DOING IN THE LAB, BUT YES.
MR. LEACH: OKAY. "THE SYSTEM WILL BE BROADLY BASED ON THE EXISTING CARTRIDGE AND READER CONCEPTS." THAT, AGAIN, IS THE FUTURE TENSE THAT DR. GIBBONS IS USING THERE; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THEN IT SAYS, "THE NUMBER OF TOTAL MEASUREMENTS PER SAMPLE WILL BE INCREASED BY 2 TO 3-FOLD (TARGET: 15 ASSAYS?)." AGAIN, HE'S SAYING WILL BE INCREASED, SO THAT'S THE FUTURE TENSE; CORRECT?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. IF WE CAN LOOK AT THE NEXT PAGE, PLEASE. DO YOU SEE THE SLIDE TITLED "ASSAY MENU"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE WHERE IT SAYS, "IN THE FIELD OF IMMUNOASSAY WE HAVE GOOD INFORMATION AND EXPERIENCE. "IN OTHER FIELDS, WE HAVE LESS SECURE INFORMATION." DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: AND THE OTHER FIELDS INCLUDE TYPES OF TESTING LIKE GENERAL CHEMISTRY AND NUCLEIC ACID AMPLIFICATION, AREAS OUTSIDE OF IMMUNOASSAYS THAT YOU HAD SOME EXPERIENCE IN?
ELIZABETH A. HOLMES: HE'S SAYING WE HAVE LESS EXPERIENCE IN THOSE AREAS AND OTHER AREAS.
MR. LEACH: OKAY. LESS SECURE INFORMATION?
MR. LEACH: OKAY. AND IF WE LOOK AT PAGE 5, DO YOU SEE WHERE DR. GIBBONS IS USING THE HEADING "CANDIDATE TECHNOLOGIES"?
MR. LEACH: AND THESE ARE CANDIDATES; RIGHT?
MR. LEACH: AND I BELIEVE YOU TESTIFIED THAT DR. GIBBONS WAS SUGGESTING THAT WE REVIEW THESE AS POSSIBLE METHODS TO RUN ON THE SYSTEM?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: OKAY. LET'S LOOK AT PAGE 6. DO YOU SEE THAT THERE'S A LISTING OF GENERAL SYSTEM REQUIREMENTS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND SOME OF THE THINGS LIKE SIZE AND ASSAY TIMES AND OTHER CAPABILITIES WERE TBD?
MR. LEACH: TBD MEANS TO BE DETERMINED?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: OKAY. AND THROUGHOUT THESE FIRST COUPLE OF SLIDES, DR. GIBBONS IS USING THE FUTURE TENSE AND REFERENCING CANDIDATES AND TALKING ABOUT THINGS THAT ARE YET TO BE DETERMINED; CORRECT?
MR. LEACH: OKAY. BUT YOU UNDERSTOOD FROM THIS THAT THERANOS COULD RUN ANY BLOOD TEST?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT THIS WAS THE BEGINNING OF AFFIRMING WE WERE CAPABLE OF DOING THAT, YES.
MR. LEACH: OKAY. SO WHEN YOU TESTIFIED THAT AFTER REVIEWING THIS YOU UNDERSTOOD THAT THE 4 SERIES COULD DO ANY BLOOD TESTS, WHAT YOU MEANT IS THAT THIS WAS THE BEGINNING OF SOMETHING THAT MIGHT BE ABLE TO DO THAT?
ELIZABETH A. HOLMES: WHEN I TESTIFIED THAT I BELIEVED THIS MEANT THAT WE COULD DO IT, I WAS CORRECT, I BELIEVE IT MEANT THAT WE COULD DO IT.
MR. LEACH: OKAY. YOU UNDERSTOOD THAT THIS WAS SOMETHING THAT YOU MIGHT BE ABLE TO DO IN THE FUTURE? IS THAT WHAT YOU'RE SAYING?
ELIZABETH A. HOLMES: I UNDERSTOOD FROM THE WORK THAT THIS TEAM OF SCIENTISTS AND ENGINEERS AND DR. GIBBONS DID THAT WE COULD DO ANY METHOD ON THE MINILAB THE WAY THAT WE WERE PROPOSING TO BUILD IT AND TAKE IT FORWARD.
MR. LEACH: WASN'T THIS A PROOF OF CONCEPT?
ELIZABETH A. HOLMES: AT THIS STAGE, THE PROTOTYPES FOR SURE.
MR. LEACH: OKAY. SO YOU HAVE A PROTOTYPE, YOU HAVE A PROOF OF CONCEPT, YOU HAVE WILL BE'S, YOU HAVE TBD'S, YOU HAVE CANDIDATES. BUT IT REMAINS TO BE SEEN WHETHER YOU'RE GOING TO MAKE IT ALL COME TOGETHER. IS THAT A FAIR WAY OF LOOKING AT THIS?
ELIZABETH A. HOLMES: THERE WAS STILL WORK TO BE DONE.
MR. LEACH: WELL, LET'S LOOK AT SLIDE 7. DO YOU SEE THE HEADING "PROPOSAL FOR THE BASIS OF SYSTEM 4.0"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. THIS WAS A PROPOSAL; RIGHT?
MR. LEACH: AND THERE'S -- THE FIRST BULLET SAYS, "REVIEW AVAILABLE TECHNOLOGIES: DONE." "DEFINE REQUIREMENTS? "FIRST PASS PROPOSAL." AND THEN THERE'S SOMETHING CALLED AN "ENGINEERING REVIEW" WHICH THERANOS HAS TO UNDERTAKE. IS THAT WHAT THIS SLIDE IS CONVEYING?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: LET'S LOOK AT PAGE 9. DO YOU SEE THE BOX "COMPARISON OF PHYSICAL TECHNOLOGIES USED FOR ASSAYS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THERE'S A ROW FOR SOMETHING CALLED NON-SEPARATION, IT'S THE FOURTH ROW DOWN. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND TO THE RIGHT IT SAYS, IN THE COLUMN, I.T./LICENSING REQUIRED. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU UNDERSTOOD THAT TO MEAN THAT THERE WAS STILL SOME INTELLECTUAL PROPERTY THAT NEEDED TO BE SECURED BY THERANOS IN ORDER TO TURN THIS PROTOTYPE INTO SOMETHING MORE WORKABLE?
MR. LEACH: WELL, LET'S LOOK AT PAGE 10. IS THIS A DESCRIPTION OF "SEPARATION OF RED CELLS AND WASHING"?
ELIZABETH A. HOLMES: I'M JUST READING IT. YES.
MR. LEACH: AND IS DR. GIBBONS IDENTIFYING CERTAIN SOLUTIONS TO THIS PROBLEM IN THE THIRD BULLET?
ELIZABETH A. HOLMES: I'M JUST LOOKING AT IT. YES.
MR. LEACH: AND THERE'S THREE POSSIBLE SOLUTIONS. THE THIRD ONE SAYS, "SEPARATE PLASMA AND USE A VERY LOW VOLUME MEASUREMENT TECHNOLOGY (I.E. NANODROP). "WILL REQUIRE REVERSE ENGINEERING AND/OR A LICENSE?" DID I READ THAT CORRECTLY?
ELIZABETH A. HOLMES: YOU DID.
MR. LEACH: DO YOU SEE ON THIS SLIDE FOR THE "SPECIAL PROBLEM FOR BLOOD SAMPLES," THERE ARE A COUPLE OF ELLIPSES IN THE POWERPOINT THAT ARE NOT ANSWERED OR THAT AREN'T CLEAR WHAT THEY'RE GETTING AT HERE?
ELIZABETH A. HOLMES: I SEE THEM.
MR. LEACH: OKAY. HOW ABOUT PAGE 12? DO YOU SEE HERE THERE'S A DISCUSSION OF "SEPARATION VERSUS NON-SEPARATION TECHNOLOGIES," AND THERE ARE THREE TECHNOLOGIES THAT ARE VERY SENSITIVE AND GENERAL, INCLUDING ONES BY SIEMENS, DISCOVERRX, AND PACKARD?
MR. LEACH: SO DR. GIBBONS IS TALKING ABOUT THE NEED FOR LICENSING A REVERSE ENGINEERING. THERE'S UNCLEAR ELLIPSES IN THIS. THERE'S A DISCUSSION OF TRADEOFFS AND LIMITS. BUT YOUR TESTIMONY IS, FROM THIS, THAT YOU THOUGHT THERANOS COULD DO ANY BLOOD TESTS?
ELIZABETH A. HOLMES: HE'S TALKING HERE ABOUT THE FACT THAT THERE'S OTHER WAYS TO DO IMMUNOASSAYS THAN WHAT WE'VE DONE BEFORE AND DESCRIBING SOME OF THE OTHER IMMUNOASSAY TECHNOLOGIES THAT EXIST.
MR. LEACH: OKAY. BUT, AGAIN, YOU VIEWED THIS AS A PROTOTYPE; CORRECT?
MR. LEACH: OKAY. YOU DIDN'T THINK YOU COULD GO OUT AND -- WELL, YOU DIDN'T HAVE -- YOU DIDN'T THINK THAT YOU COULD GO OUT AND SELL YOUR PROTOTYPE IN FEBRUARY OF 2010; CORRECT?
ELIZABETH A. HOLMES: WE WEREN'T READY TO LAUNCH IT IN FEBRUARY OF 2010.
MR. LEACH: OKAY. BUT BY MARCH OF 2010, YOU'RE READY TO TALK TO WALGREENS AND YOU'RE READY TO TALK TO SAFEWAY?
MR. LEACH: OKAY. DR. GIBBONS PASSED AWAY IN 2013?
ELIZABETH A. HOLMES: HE DID.
MR. LEACH: DID YOU HAVE ANY REASON TO THINK THAT HIS VIEWS OF THERANOS'S TECHNOLOGY HAD CHANGED BY THAT POINT IN TIME?
ELIZABETH A. HOLMES: I DID NOT.
MR. LEACH: OKAY. YOU DIDN'T BEGIN TO SUSPECT THAT ROCHELLE GIBBONS WAS ONE OF THE SOURCES FOR MR. CARREYROU?
ELIZABETH A. HOLMES: I DON'T THINK MR. CARREYROU CAME INTO OUR LIFE UNTIL TWO YEARS LATER.
MR. LEACH: OKAY. BUT WHEN HE DOES, YOU STARTED TO SUSPECT THAT ROCHELLE GIBBONS WAS ONE OF THE SOURCES FOR THE CARREYROU ARTICLE?
ELIZABETH A. HOLMES: I LEARNED THAT AT SOME POINT.
MR. LEACH: OKAY. DID THERE COME A POINT IN TIME WHEN YOU STARTED TO SUSPECT THAT ROCHELLE GIBBONS WAS ONE OF THE SOURCES?
ELIZABETH A. HOLMES: I DON'T KNOW IF I SUSPECTED IT. I KNOW THAT I LEARNED THAT SHE WAS AT SOME POINT.
MR. LEACH: OKAY. YOU DID TELL MR. CARREYROU THAT BY 2013, DR. GIBBONS'S WORK WAS NOT LIVING UP TO WHAT IT HAD BEEN IN THE PAST. IS THAT FAIR?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: I'LL COME BACK TO THAT ONE, MS. HOLMES. BEFORE I GET TO THAT, LET ME ASK YOU -- DID I HEAR YOU SAY YOU LEARNED ROCHELLE GIBBONS WAS A SOURCE FOR MR. CARREYROU IN THE 2015 TIME PERIOD?
ELIZABETH A. HOLMES: THAT'S WHAT I REMEMBER.
MR. LEACH: LET ME -- YOU TALKED IN YOUR DIRECT EXAMINATION ABOUT PATENTS, AND I THINK YOU TALKED A LITTLE BIT ABOUT ONE OF YOUR FIRST PATENTS, WHICH HAD SOMETHING TO DO WITH AN INGESTIBLE PILL AND A PATCH, OR SOMETHING THAT WOULD GO ON THE ARM TO MEASURE BLOOD.
MR. LEACH: OKAY. AND YOU WERE AWARDED A PATENT FOR THAT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: CORRECT? AND WE SAW THAT AT EXHIBIT 9501?
ELIZABETH A. HOLMES: I DON'T KNOW THE EXHIBIT, BUT PROBABLY.
MR. LEACH: WELL, WE CAN DISPLAY IT, AND I'LL BRING YOU A COPY.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: DO YOU SEE THE DATE OF NOVEMBER 6TH, 2007 ON THIS PATENT, MS. HOLMES?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF WE COULD GO TO PAGE 2, THERE'S AN ABSTRACT IN THE FAR -- IN THE RIGHT COLUMN.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE THE HEADING "ABSTRACT"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE WHERE IT SAYS, "THE INVENTION RELATES TO AN INGESTIBLE, IMPLANTABLE, OR WEARABLE MEDICAL DEVICE COMPRISING A MICRO ARRAY WHICH COMPRISES," AND THEN IT CONTINUES. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU GOT A PATENT FOR THIS IDEA?
MR. LEACH: OKAY. I WANT TO TALK ABOUT THE PROCESS FOR THAT. SO TO GET THE PATENT, YOU SENT IN SOME PAPERWORK TO THE U.S. PATENT AND TRADEMARK OFFICE?
MR. LEACH: THEY DIDN'T COME TO THERANOS'S OFFICE; RIGHT?
ELIZABETH A. HOLMES: NOT FOR THIS ONE.
MR. LEACH: THEY DIDN'T REVIEW THE INGESTIBLE, IMPLANTABLE, OR WEARABLE DEVICE IN THERANOS'S OFFICES; CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO.
MR. LEACH: AND THEY DIDN'T TURN ON ANY DEVICE AND SEE IF IT COULD RUN SAMPLES OR WORK THE WAY THAT IS CLAIMED IN THE PIECE OF PAPER; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND WHAT THEY DID DO WAS COMPARE YOUR SUBMISSION, YOUR FILING, AGAINST SOMETHING CALLED PRIOR ART; CORRECT?
MR. LEACH: THEY WERE TRYING TO SEE IF THIS WAS A NEW IDEA OR AN OLD IDEA?
MR. LEACH: OKAY. AND HOLDING A PATENT DOES NOT NECESSARILY MEAN THE INVENTION DESCRIBED IN THE PATENT WORKS; CORRECT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: FOR EXAMPLE, YOU DON'T HAVE AN INGESTIBLE PILL THAT ENABLES YOU TO, TO MEASURE LIPIDS IN THE BLOOD; CORRECT?
ELIZABETH A. HOLMES: NOT YET.
MR. LEACH: NOT YET. AND YOU KNEW THAT AT THE TIME? THIS WAS AN IDEA, YOU HAVE A PATENT, BUT THAT DOESN'T MEAN IT WORKS?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: AND YOU DON'T HAVE AN IMPLANTABLE PATCH THAT, YET, CAN MEASURE BLOOD; RIGHT?
ELIZABETH A. HOLMES: CORRECT.
MR. LEACH: YOU HAVE A PATENT FOR THAT?
MR. LEACH: BUT IT DOESN'T QUITE WORK YET?
MR. LEACH: OKAY. YOUR HONOR, I'M ABOUT TO MOVE INTO A DIFFERENT TOPIC AREA. I THINK IT MIGHT BE A GOOD TIME.
JUDGE DAVILA: LET'S TAKE A BREAK NOW. LET'S TAKE 30 MINUTES, LADIES AND GENTLEMEN. WE'LL TAKE OUR AFTERNOON BREAK OF 30 MINUTES.
COURT CLERK: COURT IS IN RECESS.
(RECESS FROM 1:27 P.M. UNTIL 2:04 P.M.)
JUDGE DAVILA: WE'RE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT ONCE AGAIN. MR. LEACH, YOU'D LIKE TO CONTINUE?
MR. LEACH: YES, YOUR HONOR. THANK YOU.
MR. LEACH: GOOD AFTERNOON, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD AFTERNOON.
MR. LEACH: BEFORE THE BREAK WE WERE TALKING ABOUT IAN GIBBONS. I WANTED TO SEE IF I COULD REFRESH YOUR MEMORY ON SOME ITEMS RELATING TO HIM. IF YOU COULD PLEASE TURN TO EXHIBIT 5720, WHICH SHOULD BE IN VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE YOUR NAME IN THE TO LINE UP AT THE TOP?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE THE DATE OF THIS DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. I WANT TO DRAW YOUR ATTENTION TO THE BOTTOM PORTION OF -- ARE YOU ABLE TO UNDERSTAND THE CONTEXT OF THIS FROM THE TOP PORTION OF THE DOCUMENT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. I WANTED TO DRAW YOUR ATTENTION TO THE BOTTOM PORTION. THERE'S A BOLD HEADING DOWN TOWARDS THE BOTTOM, AND THEN THREE ADDITIONAL LINES. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IF YOU COULD PLEASE TURN TO THE NEXT PAGE AND READ TO YOURSELF THE FIRST TWO COMPLETE PARAGRAPHS ON THE TOP OF PAGE 2.
ELIZABETH A. HOLMES: OKAY.
(PAUSE IN PROCEEDINGS.)
ELIZABETH A. HOLMES: OKAY.
BY MR. LEACH:
MR. LEACH: DOES THIS REFRESH YOUR RECOLLECTION THAT DR. GIBBONS WAS FREQUENTLY ABSENT FROM WORK IN THE LAST FEW YEARS OF HIS LIFE?
ELIZABETH A. HOLMES: IT DOESN'T REFRESH MY RECOLLECTION.
MR. LEACH: DOES IT REFRESH YOUR RECOLLECTION THAT THERANOS TOLD "THE WALL STREET JOURNAL" THAT IN OR AROUND OCTOBER OF 2015?
MR. LEACH: DOES THIS REFRESH YOUR RECOLLECTION THAT DR. GIBBONS WAS FREQUENTLY ABSENT FROM SCIENTIFIC MEETINGS WITH HIS OWN TEAM?
MR. LEACH: DOES THIS REFRESH YOUR RECOLLECTION THAT THERANOS TOLD "THE WALL STREET JOURNAL" THAT IN OCTOBER OF 2015?
ELIZABETH A. HOLMES: IT DOES NOT.
MR. LEACH: OKAY. DOES THIS REFRESH YOUR RECOLLECTION THAT THERANOS TOLD "THE WALL STREET JOURNAL," DR. GIBBONS IS NOT A CREDIBLE SOURCE FOR INFORMATION ABOUT THERANOS'S TECHNOLOGY, BUSINESS PLANS, AND ANY OTHER INFORMATION?
ELIZABETH A. HOLMES: I DON'T THINK THAT'S WHAT THIS SAYS.
MR. LEACH: OKAY. THIS DOESN'T REFRESH YOUR MEMORY THAT THERANOS TOLD "THE WALL STREET JOURNAL" IN OCTOBER OF 2015 NEITHER DR. GIBBONS NOR ROCHELLE IS A CREDIBLE SOURCE OF INFORMATION ABOUT THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: IT DOES NOT.
MR. LEACH: OKAY. YOU CAN PUT THAT TO THE SIDE. YOU WERE ASKED SOME QUESTIONS ABOUT EXHIBIT 7623, WHICH SHOULD BE IN VOLUME 4.
ELIZABETH A. HOLMES: OKAY.
COURT CLERK: THAT EXHIBIT NUMBER AGAIN, PLEASE, COUNSEL.
MR. LEACH: 7623.
MR. LEACH: THIS IS AN OCTOBER -- WELL, DOES THIS INCLUDE AN OCTOBER 7TH, 2015 EMAIL ABOUT A PATIENT'S EXPERIENCE AT A WALGREENS RELATING TO THYROID RESULTS?
ELIZABETH A. HOLMES: IT DOES.
MR. LEACH: AND YOU RECALL -- YOU TESTIFIED THAT YOU RECEIVED SOME POSITIVE FEEDBACK ABOUT THIS PATIENT EXPERIENCE IN OR AROUND OCTOBER OF 2015.
MR. LEACH: OKAY. AT THIS POINT IN TIME, OCTOBER OF 2015, THIS WAS AFTER THE FDA INSPECTION OF THERANOS IN AUGUST?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND AT THIS POINT IN TIME, THERANOS WAS NOT PERFORMING ANY TESTS IN ITS CALIFORNIA CLIA LAB FROM ITS FINGERSTICK TECHNOLOGY; CORRECT?
ELIZABETH A. HOLMES: WE WERE NOT USING THE NANOTAINER.
MR. LEACH: OKAY. AND SO YOU WEREN'T USING THE NANOTAINER TO TEST FOR THYROID?
ELIZABETH A. HOLMES: I DON'T THINK SO, NO.
MR. LEACH: OKAY. SO THIS WOULD HAVE BEEN RUN ON AN ORDINARY FDA MACHINE?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. THIS WOULD NOT HAVE HAD ANYTHING TO DO WITH THE EDISON?
ELIZABETH A. HOLMES: I DON'T -- YES, CORRECT.
MR. LEACH: AND IT WOULD NOT HAVE HAD ANYTHING TO DO WITH YOUR SMALL SAMPLE TESTING?
ELIZABETH A. HOLMES: I BELIEVE THAT'S CORRECT.
MR. LEACH: AND YOU BELIEVE THAT TO BE CORRECT BASED ON THE TIMING OF THE DATE OF THE VISIT?
MR. LEACH: OKAY. I ALSO WANTED TO DRAW YOUR ATTENTION TO 7718.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU RECALL TESTING ABOUT -- TESTING. DO YOU RECALL TESTIFYING ABOUT THIS ARTICLE IN "THE JOURNAL OF VIROLOGICAL METHODS"?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND I WANTED TO DRAW YOUR ATTENTION DOWN TO THE BOTTOM PORTION. DO YOU SEE THAT THERE ARE RECEIVED AND REVISED AND ACCEPTED DATES DOWN IN THE VERY BOTTOM OF THIS DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND THE RECEIVED DATE OF EXHIBIT 7718 IS JULY 17TH, 2017; CORRECT?
MR. LEACH: SO 2017, THAT'S AFTER THE FDA INSPECTION IN AUGUST OF 2015?
MR. LEACH: AND THAT'S AFTER THE CMS INSPECTION THAT STARTS IN SEPTEMBER AND CONCLUDES AT SOME POINT IN NOVEMBER OF 2015?
MR. LEACH: AND THAT'S AFTER YOU RECEIVED THE CMS REPORT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THAT'S AFTER ALL OF THE NEGATIVE PUBLICITY FROM "THE WALL STREET JOURNAL" ARTICLE?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS IS AFTER INVESTORS STARTED ASKING YOU QUESTIONS ABOUT WHAT WAS HAPPENING AND WHAT WAS GOING ON WITH THE TECHNOLOGY; CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND THE ACCEPTED DATE OF THIS ARTICLE IS OCTOBER 25TH, 2017. AM I RIGHT ABOUT THAT?
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION TO 719, OR 7719.
ELIZABETH A. HOLMES: OKAY.
JUDGE DAVILA: DID YOU WANT THESE PUBLISHED? THESE ARE IN EVIDENCE.
MR. LEACH: THESE ARE IN EVIDENCE. I DON'T NEED TO PUBLISH THEM. I JUST WANT TO GO THROUGH THE DATES, YOUR HONOR.
MR. LEACH: IS THIS ANOTHER JOURNAL ARTICLE THAT YOU TESTIFIED TO ON YOUR DIRECT EXAMINATION?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND ARE THERE DATES AT THE TOP OF 7719?
MR. LEACH: AND IS THE RECEIVED DATE FOR 7719 SEPTEMBER 28TH, 2017?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THAT'S ROUGHLY TWO YEARS AFTER "THE WALL STREET JOURNAL" ARTICLE RAISING QUESTIONS ABOUT THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: OKAY. AND THAT'S ROUGHLY TWO YEARS AFTER SOME OF YOUR INVESTORS STARTED ASKING SOME QUESTIONS ABOUT WHAT WAS GOING ON WITH THE TECHNOLOGY?
MR. LEACH: OKAY. LET'S ALSO PLEASE LOOK AT 7695.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: IS THIS ANOTHER JOURNAL ARTICLE THAT YOU TESTIFIED TO ON YOUR DIRECT EXAMINATION?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND DO YOU SEE THE DATES OF THIS JOURNAL ARTICLE DOWN IN THE BOTTOM LEFT CORNER?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS THE RECEIVED DATE NOVEMBER 18TH, 2017?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THE PUBLISHED DATE IS DECEMBER 19TH, 2017; CORRECT?
MR. LEACH: SO, AGAIN, THIS IS WELL AFTER "THE WALL STREET JOURNAL" ARTICLE THAT RAISED SOME CRITICISMS ABOUT THERANOS?
ELIZABETH A. HOLMES: IT IS.
MR. LEACH: AND THIS IS ROUGHLY TWO YEARS AFTER SOME OF YOUR INVESTORS STARTED ASKING QUESTIONS ABOUT YOUR TECHNOLOGY?
MR. LEACH: FINALLY, 7717. I BELIEVE YOU TESTIFIED THIS WAS SOMETHING THAT WAS NOT ACTUALLY PUBLISHED; IS THAT CORRECT?
MR. LEACH: OKAY. AND THE DATE THAT THIS WAS SUBMITTED, IF YOU LOOK AT PAGE 2, IS DECEMBER 20TH, 2017?
MR. LEACH: AND AGAIN, THAT'S ROUGHLY TWO YEARS AFTER INVESTORS STARTED ASKING QUESTIONS ABOUT SOME OF THE CLAIMS THERANOS HAD BEEN MAKING?
ELIZABETH A. HOLMES: I DON'T REMEMBER IT AS ASKING QUESTIONS ABOUT THE CLAIMS, BUT, YES, IT'S TWO YEARS AFTER THE NEGATIVE REPORTING ABOUT THERANOS.
MR. LEACH: OKAY. I BELIEVE YOU TESTIFIED ON DIRECT EXAMINATION THAT YOU CAME TO THE CONCLUSION AFTER RECEIVING THE CMS REPORT THAT MR. BALWANI WAS NOT THE BUSINESSMAN YOU THOUGHT HE WAS AND THAT YOU MADE THE DECISION TO PUSH HIM OUT FROM THERANOS AND END YOUR PERSONAL RELATIONSHIP WITH HIM. IS THAT A FAIR SUMMARY?
ELIZABETH A. HOLMES: OVERALL, YES.
MR. LEACH: OKAY. BUT IT'S TRUE, ISN'T IT, MS. HOLMES, THAT YOU WERE TOLD IN SEPTEMBER OF 2015 WHILE THE CMS INSPECTION WAS GOING ON THAT IT WAS GOING BADLY; CORRECT?
ELIZABETH A. HOLMES: I WAS TOLD AROUND THEN, YES.
MR. LEACH: OKAY. YOU WERE TOLD IN SEPTEMBER OF 2015 THAT THE CMS INSPECTORS WERE VERY HOSTILE SO FAR, THEY HAVE COMPLAINTS; CORRECT?
MR. LEACH: AND YOU WERE TOLD, OUR VALIDATION REPORTS ARE TERRIBLE, REALLY PAINFUL GOING THROUGH THIS PROCESS, SAME ISSUES FDA POINTED OUT. CORRECT?
MR. LEACH: YOU WERE TOLD THAT IN SEPTEMBER OF 2015?
ELIZABETH A. HOLMES: I DON'T REMEMBER EXACTLY, BUT THAT SOUNDS RIGHT.
MR. LEACH: AS THE INSPECTION IS GOING ON?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND YOU WERE TOLD DANIEL HAS NOTHING READY, TOLD ME EVERYTHING IS IN BINDERS, NOT THERE. YOU WERE TOLD THAT DURING THE INSPECTION; CORRECT?
ELIZABETH A. HOLMES: I DON'T REMEMBER THAT, BUT THAT SOUNDS LIKE A TEXT FROM SUNNY, SO I'M ASSUMING.
MR. LEACH: OKAY. SO NO REASON TO DOUBT THAT YOU WERE TOLD THAT IN SEPTEMBER OF 2015 AS THE INSPECTION WAS GOING ON?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: AND YOU WERE TOLD -- YOU KNOW THE INSPECTORS CAME BACK IN NOVEMBER OF 2015; CORRECT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: THEY WERE THERE FOR TWO DAYS AROUND NOVEMBER 17TH AND 18TH OF 2015?
MR. LEACH: AND YOU WERE THERE FOR ONE OF THE DAYS; CORRECT?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. THE FIRST DAY YOU ACTUALLY TRAVELLED BY CORPORATE JET TO FLORIDA TO PICK UP SOME AWARD; CORRECT?
ELIZABETH A. HOLMES: I DON'T KNOW.
MR. LEACH: OKAY. WELL, LET'S LOOK AT 5635.
ELIZABETH A. HOLMES: WHICH BINDER?
MR. LEACH: IT SHOULD BE IN VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DO YOU SEE THE DATE AT THE TOP OF THIS EMAIL?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU RECOGNIZE THIS AS AN EMAIL FROM YOUR ASSISTANT TO YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IF YOU LOOK AT NUMBER 5, DO YOU SEE A DISCUSSION OF SOME FLIGHT OPTIONS TO FLORIDA?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. AND IF YOU LOOK AT PAGE 6, DO YOU SEE AN AGENDA FOR A MEETING IN FLORIDA ON NOVEMBER 17TH?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: OKAY. DOES THIS REFRESH YOUR MEMORY THAT YOU TRAVELLED TO FLORIDA ON OR AROUND NOVEMBER 17TH BY CORPORATE JET TO ACCEPT AN AWARD BY SOMETHING CALLED CME GROUP?
ELIZABETH A. HOLMES: IT DOESN'T. I GENERALLY REMEMBER GOING TO FLORIDA FOR THAT, BUT I DIDN'T REMEMBER THE DATES.
MR. LEACH: OKAY. WELL, YOUR HONOR, I OFFER PAGE 1 OF 5635, AND PAGES 6 AND 7 OF 5635.
(PAUSE IN PROCEEDINGS.)
MR. DOWNEY: YOUR HONOR, I DON'T OBJECT TO IT BEING REDACTED SO THAT THE TWO ENTRIES THAT HE'S REFERRING TO CAN BE INTRODUCED INTO EVIDENCE. THERE'S A LOT OF OTHER DISCUSSION OF OTHER ISSUES THAT RAISE 403 AND 801, 802 ISSUES, ET CETERA. BUT I DON'T -- IF HE CAN REDACT IT DOWN OR JUST DISPLAY THE PART THAT HE'S REFERRED TO, THOSE PARTS, I HAVE NO OBJECTION TO THEM COMING IN.
JUDGE DAVILA: MR. LEACH?
MR. LEACH: I'M NOT 100 PERCENT CLEAR ON WHAT I COULD DISPLAY, YOUR HONOR, BUT I'M TALKING ABOUT THE ENTIRETY OF PAGE 6 AND PAGE 7, AND I CAN WORK WITH MR. DOWNEY TO REDACT APPROPRIATE PORTIONS OF PAGE 1.
MR. DOWNEY: WELL, I THOUGHT THAT HE HAD REFERRED TO NUMBER 5 ON PAGE 1 AND TO THE BOTTOM HALF WITH A FLIGHT AGENDA ON PAGE 6.
JUDGE DAVILA: WHY DON'T YOU -- CAN YOU GO TO -- WHY DON'T YOU SHOW MR. DOWNEY WHAT IT IS THAT YOU'RE TALKING ABOUT FOR A MOMENT.
MR. LEACH: THANK YOU, YOUR HONOR.
(DISCUSSION AMONGST COUNSEL OFF THE RECORD.)
MR. DOWNEY: YOUR HONOR, I SEE WHAT MR. LEACH IS ATTEMPTING TO DO. I WOULD SAY I OBJECT TO THE MATERIAL UNDER THE RECEIVED LINE UNDER THE COURT'S PRIOR RULING AT 798, BUT I HAVE NO OBJECTION TO THE BODY OF THAT EMAIL AND THE TOP OF PAGE 6 BEING ADMITTED.
JUDGE DAVILA: AND PAGE 1 THERE'S NO OBJECTION?
MR. DOWNEY: I DON'T THINK HE THINKS HE NEEDS PAGE 1.
JUDGE DAVILA: I THOUGHT HE DID. SORRY.
MR. LEACH: I WOULD LIKE PAGE 1, YOUR HONOR, BUT IT'S ONLY BULLETS NUMBER 3 AND 5, BUT I DON'T THINK I CAN REDACT THAT ON THE FLY IN A MEANINGFUL WAY.
MR. DOWNEY: WELL, YOUR HONOR, THAT'S THE 798 AND 403.
JUDGE DAVILA: SO WITHOUT FOUNDATION -- YOU'RE FAMILIAR WITH THE COURT'S ORDER ON 798 ON THIS?
MR. LEACH: YES.
JUDGE DAVILA: AND IF THERE'S INFORMATION, IF THERE'S INFORMATION REGARDING THE LIFESTYLE OF CEO'S I THINK IS HOW IT'S PHRASED IN 798, THAT'S THE FOUNDATION THAT NEEDS TO BE LAID, WHETHER OR NOT THIS WAS NORMAL IN THE INDUSTRY. LET ME PUT IT THAT WAY.
MR. LEACH: OKAY. I'LL TRY TO LAY A FOUNDATION FOR 6 AND 7.
MR. LEACH: MS. HOLMES, ON PAGE 6, DO YOU SEE AN EMAIL FROM LISA DURKIN TO YOU?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND IS SHE LAYING OUT YOUR TRAVEL ARRANGEMENTS FOR A TRIP TO FLORIDA TO ACCEPT SOMETHING CALLED THE CME GROUP AWARD?
ELIZABETH A. HOLMES: SHE'S MAKING SUGGESTIONS.
MR. LEACH: OKAY. AND SHE WOULD MAKE SUGGESTIONS TO YOU FROM TIME TO TIME ABOUT TRAVEL LOGISTICS AND HOW TO GET FROM A TO B, HOW TO GET TO AN INVESTOR MEETING, THINGS LIKE THAT?
ELIZABETH A. HOLMES: SHE DID.
MR. LEACH: OKAY. AND IS THIS ANYTHING OUT OF THE ORDINARY OF HOW YOU WOULD CONDUCT BUSINESS WITH MS. DURKIN?
MR. LEACH: AND IS THIS EXEMPLATIVE OF HOW YOU ON OCCASIONS WOULD MAKE ARRANGEMENTS WITH MS. DURKIN TO FULFILL YOUR RESPONSIBILITIES AS CEO OF THERANOS?
ELIZABETH A. HOLMES: SOMETIMES.
MR. LEACH: OKAY. AND YOU -- WELL, YOUR HONOR, I OFFER PAGES 6 AND 7.
JUDGE DAVILA: I THINK --
MR. DOWNEY: I DON'T THINK THAT CURES THE 798 ISSUE, BUT THAT'S MY REMAINING OBJECTION, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'M GOING TO ADMIT IT. I DO THINK THE SPIRIT OF 798 HAS BEEN SATISFIED. IT WAS WHETHER OR NOT ANYTHING IS EXTRAORDINARY FROM CEO'S, AND THE TESTIMONY LAYS THE FOUNDATION FOR THAT. SO IT'S ADMITTED, NOTING THE OBJECTION.
MR. LEACH: THANK YOU, YOUR HONOR.
(GOVERNMENT'S EXHIBIT 5635, PAGES 6 AND 7, WAS RECEIVED IN EVIDENCE.)
BY MR. LEACH:
MR. LEACH: SO, MS. HOLMES, IF WE CAN ZOOM IN ON THE TOP PORTION OF THIS EMAIL. DO YOU SEE THE REFERENCE TO -- OR THIS IS FROM LISA DURKIN. SHE WAS YOUR ASSISTANT AT THE TIME?
MR. LEACH: AND THERE'S SOMEBODY NAMED PAIGE WILLIAMS COPIED ON THIS. WHO IS THAT?
ELIZABETH A. HOLMES: SHE ALSO WORKED FOR ME.
MR. LEACH: AND THERE'S A DISCUSSION OF DIFFERENT FLIGHT OPTIONS IN THE ATTACHMENTS. DO YOU SEE THOSE REFERENCES THERE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND FROM TIME TO TIME, SHE WOULD COME TO YOU WITH SUGGESTIONS ABOUT HOW TO TRAVEL AND GIVE YOU THE CHOICE OF ULTIMATELY WHAT TO DO?
MR. LEACH: OKAY. AND THERE'S AN AGENDA HERE FOR NOVEMBER 17TH OF 2015. DO YOU SEE THAT?
MR. LEACH: AND YOU UNDERSTOOD THAT WAS THE FIRST DAY OF THE CMS INSPECTION WHEN THE INSPECTORS CAME BACK?
ELIZABETH A. HOLMES: AGAIN, I DON'T REMEMBER THE DATES.
MR. LEACH: OKAY. WELL, CAN YOU LOOK AT EXHIBIT 5387D, SPECIFICALLY PAGE 118.
ELIZABETH A. HOLMES: I HAVE 5387.
MR. LEACH: 5387D, PAGE 118.
ELIZABETH A. HOLMES: I DON'T KNOW IF I HAVE THAT.
MR. LEACH: THIS IS IN BINDER 4. 5387D, PAGE 118.
ELIZABETH A. HOLMES: I'VE GOT IT.
MR. LEACH: 5387D, PAGE 118. DO YOU SEE THE DATE OF NOVEMBER 19TH, 2015?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE SOME REFERENCES TO GOING NOT WELL, THESE GUYS DIDN'T KEEP MOST CALIBRATION INFORMATION, EVEN A MACHINE FROM THREE WEEKS AGO, GOING OKAY. DO YOU SEE THAT LANGUAGE?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND DO YOU SEE SOME REFERENCE TO WHO IS THE BEST PERSON TO ANSWER 1800 QUESTIONS?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: AND YOU BELIEVE THAT TO BE A REFERENCE TO THE ADVIA?
MR. LEACH: AND THESE ARE TEXT EXCHANGES RELATING TO THE CMS INSPECTION; CORRECT?
ELIZABETH A. HOLMES: I THINK SO. I'M NOT COMPLETELY SURE.
MR. LEACH: OKAY. BUT YOU THINK SO?
ELIZABETH A. HOLMES: I THINK SO.
MR. LEACH: OKAY. AND DOES THIS REFRESH YOUR MEMORY THAT YOU WERE ONLY THERE FOR THE SECOND DAY OF THE CMS INSPECTION?
ELIZABETH A. HOLMES: IT DOESN'T.
MR. LEACH: OKAY. THERE WAS -- BUT YOU WERE TOLD DURING THE CMS INSPECTION THAT DAY TWO, OR THE SECOND PORTION, WAS NOT GOING WELL; CORRECT?
ELIZABETH A. HOLMES: I'M SORRY, I DON'T COMPLETELY FOLLOW.
MR. LEACH: WHETHER YOU WERE THERE OR YOU WEREN'T, OR WHETHER YOU WERE THERE FOR ONE DAY OR TWO DAYS, YOU REMEMBER BEING TOLD THAT THE CMS INSPECTION WASN'T GOING WELL IN NOVEMBER OF 2015?
ELIZABETH A. HOLMES: I REMEMBER BEING TOLD AT SOME POINT, WHICH IS WHY I SAT IN ON THE INSPECTION IN NOVEMBER.
MR. LEACH: OKAY. AND AT THE CONCLUSION OF THE INSPECTION IN NOVEMBER OF 2015, THERE WAS AN EXIT INTERVIEW WITH SOME OF THE CMS INSPECTORS; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: THERE WAS.
MR. LEACH: AND YOU ATTENDED THAT EXIT INTERVIEW; CORRECT?
ELIZABETH A. HOLMES: I DID.
MR. LEACH: AND THAT WAS WITH SARAH BENNETT?
MR. LEACH: AND GARY YAMAMOTO?
MR. LEACH: AND THEY TOLD YOU IN THIS EXIT INTERVIEW THAT THEY WERE CONTEMPLATING FINDING IMMEDIATE JEOPARDY AT THERANOS'S LAB; CORRECT?
ELIZABETH A. HOLMES: I'M NOT SURE.
MR. LEACH: WELL, LET'S SEE IF WE CAN REFRESH YOUR MEMORY. WOULD YOU PLEASE LOOK AT EXHIBIT 5717.
MR. LEACH: DO YOU HAVE 5717 IN FRONT OF YOU?
ELIZABETH A. HOLMES: ALMOST.
MR. LEACH: OKAY. I JUST WANT YOU TO REVIEW TO YOURSELF THE FIRST FOUR LINES IN THE BODY UP AT THE TOP.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: AND IF I COULD DRAW YOUR ATTENTION TO THE SECOND PAGE.
MR. LEACH: TAKE A MOMENT TO READ THE SECOND TO THE LAST PARAGRAPH STARTING WITH THE SIXTH LINE FROM THE BOTTOM. IF YOU COULD JUST READ THAT CAREFULLY TO YOURSELF, AND THEN I WILL ASK MY QUESTION.
ELIZABETH A. HOLMES: OKAY.
(PAUSE IN PROCEEDINGS.)
ELIZABETH A. HOLMES: OKAY.
BY MR. LEACH:
MR. LEACH: DOES THIS REFRESH YOUR MEMORY THAT AT THE END OF THE INSPECTION IN NOVEMBER OF 2015, CMS TOLD YOU THAT THEY WERE CONSIDERING IMMEDIATE JEOPARDY?
ELIZABETH A. HOLMES: IT DOESN'T. I REMEMBER DISCUSSION OF POSSIBLE CITATIONS AT THAT TIME.
MR. LEACH: OKAY. AND YOU REMEMBER A DISCUSSION OF POSSIBLE STANDARD LEVEL CITATIONS AND CERTAIN CONDITION LEVEL CITATIONS; CORRECT?
ELIZABETH A. HOLMES: I DON'T REMEMBER THE DESIGNATIONS.
MR. LEACH: YOU WERE URGING THEM TO FIND A LOWER CATEGORY OF CITATIONS; ISN'T THAT CORRECT?
ELIZABETH A. HOLMES: I DON'T THINK SO. I THINK WE WERE TALKING TO THEM ABOUT WHAT WE BELIEVED WE'D DONE PROPERLY IN THE LAB.
MR. LEACH: OKAY. AND YOU DON'T REMEMBER THE CMS INSPECTOR TELLING YOU AT THAT POINT IN TIME THAT THEY WERE CONSIDERING AN IMMEDIATE JEOPARDY FINDING?
ELIZABETH A. HOLMES: I DON'T.
MR. LEACH: YOU KNEW, BY VIRTUE OF YOUR WORK IN THE INDUSTRY, WHAT THE CONSEQUENCES OF AN IMMEDIATE JEOPARDY FINDING WERE; CORRECT?
ELIZABETH A. HOLMES: I LEARNED THAT AT SOME POINT.
MR. LEACH: OKAY. AND THE CMS REPORT COMES OUT IN JANUARY OF 2016?
ELIZABETH A. HOLMES: IT DID.
MR. LEACH: OKAY. AND BY THE END OF APRIL OF 2016, YOU HAD MADE THE DECISION TO -- THAT MR. BALWANI SHOULD LEAVE THE COMPANY; CORRECT?
MR. LEACH: AND ISN'T IT RIGHT THAT EVEN AFTER DOING THAT, YOU CONTINUED TO MINIMIZE THE CMS FINDINGS TO LISA PETERSON?
ELIZABETH A. HOLMES: I DON'T THINK I DID.
MR. LEACH: WELL, LET ME SEE IF I CAN REFRESH YOUR MEMORY. COULD YOU LOOK AT EXHIBIT 31 -- OR 3165. MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. LEACH:
MR. LEACH: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. LEACH: YOU WERE HERE WHEN MS. PETERSON TESTIFIED; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: AND YOU WERE HERE WHEN SHE DESCRIBED HER MEETING WITH YOU AT THE END OF APRIL OF 2016; CORRECT?
MR. LEACH: AND IF I COULD DRAW YOUR ATTENTION TO THE TOP PARAGRAPH OF PAGE 4 OF 3165.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: TAKE A MOMENT TO READ PARAGRAPH 1 TO YOURSELF.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: DOES THIS REFRESH YOUR MEMORY THAT YOU TOLD LISA PETERSON THAT CARREYROU'S PRIMARY SOURCES WERE TWO DISGRUNTLED LOW LEVEL EMPLOYEES?
ELIZABETH A. HOLMES: NO. I BELIEVE OUR COUNSEL WAS DOING A LOT OF THE TALKING AT THIS MEETING.
MR. LEACH: WELL, DOES THIS REFRESH YOUR MEMORY THAT YOUR COUNSEL SAID THAT?
ELIZABETH A. HOLMES: I DON'T REMEMBER HER SAYING THAT.
MR. LEACH: YOU WERE IN THE ROOM AT THE TIME?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: SO IT WAS YOU, MS. PETERSON, HEATHER KING, YOUR GENERAL COUNSEL?
MR. LEACH: DAN EDLIN WAS THERE?
MR. LEACH: JERRY TUBERGEN WAS THERE?
ELIZABETH A. HOLMES: I SEE THAT HERE.
MR. LEACH: OKAY. AND YOU DON'T HAVE A MEMORY OF YOU OR YOUR GENERAL COUNSEL SAYING CARREYROU'S PRIMARY SOURCES WERE TWO DISGRUNTLED LOWER LEVEL FORMER EMPLOYEES?
ELIZABETH A. HOLMES: I REMEMBER HEATHER TALKING ABOUT THIS TOPIC.
MR. LEACH: OKAY. LET ME DRAW YOUR ATTENTION TO PARAGRAPH 2.
ELIZABETH A. HOLMES: OKAY.
MR. LEACH: WELL, BEFORE I DRAW YOUR ATTENTION TO PARAGRAPH 2, LET ME DRAW YOUR ATTENTION TO 3A. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. LEACH: DO YOU RECALL THAT BY THIS POINT IN TIME, APRIL 28TH, 2016, SUNNY BALWANI HAD BEEN ASKED TO LEAVE THE COMPANY?
MR. LEACH: AND IF I DRAW YOUR ATTENTION TO PARAGRAPH 2E, IF YOU COULD TAKE A MOMENT TO READ THAT TO YOURSELF?
MR. LEACH: DOES THIS REFRESH YOUR MEMORY THAT THERANOS TOLD LISA PETERSON AT THIS MEETING, "THERANOS CAN'T TRIVIALIZE THE CMS ISSUES IN THE PRESS, BUT IN REALITY THEY DON'T FEEL THE ISSUES ARE MAJOR, AND THEY WOULD BE SHOCKED IF SANCTIONS WERE IMPOSED"?
ELIZABETH A. HOLMES: IT DOES NOT.
MR. LEACH: YOU WERE HERE WHEN MS. PETERSON TESTIFIED ABOUT THIS MEETING; CORRECT?
ELIZABETH A. HOLMES: I WAS.
MR. LEACH: OKAY. AND YOU DON'T HAVE A MEMORY OF TRIVIALIZING THE CMS INSPECTION TO HER; IS THAT WHAT YOU'RE SAYING?
ELIZABETH A. HOLMES: I DON'T THINK I DID THAT.
MR. LEACH: YOUR HONOR, MAY I HAVE A MOMENT?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST GOVERNMENT COUNSEL OFF THE RECORD.)
MR. LEACH: THANK YOU, YOUR HONOR. I HAVE NO FURTHER QUESTIONS. THANK YOU, MS. HOLMES.
JUDGE DAVILA: LET ME ASK YOU ABOUT, I THINK IT'S 5365. I WANT TO CLARIFY WHAT WAS ADMITTED THERE, WHAT YOU HAD REDACTED.
MR. LEACH: I THINK IT'S PAGES 6 AND 7 AND NOTHING MORE, YOUR HONOR.
JUDGE DAVILA: I'M SORRY, THE ENTIRETY OF PAGES 6 AND 7?
MR. LEACH: YES, WHICH I BELIEVE WERE ADMITTED OVER THE DEFENSE OBJECTION.
JUDGE DAVILA: THAT'S RIGHT. AND THEN PAGE 1?
MR. LEACH: I'LL WITHDRAW PAGE 1, YOUR HONOR. IT'S NOT --
JUDGE DAVILA: ALL RIGHT. PAGE 1 IS WITHDRAWN. THE ENTIRETY OF 6 AND 7 WERE ADMITTED OVER OBJECTION. THESE WERE NOT PUBLISHED YET. DID YOU WANT TO PUBLISH THESE?
MR. LEACH: NO. I THINK THAT'S FINE.
JUDGE DAVILA: OKAY. AND PAGES 6 AND 7 WERE ADMITTED OVER DEFENSE OBJECTION. ALL RIGHT. THANK YOU. MR. DOWNEY?
MR. DOWNEY: YOUR HONOR, MAY I JUST HAVE A MOMENT TO TRANSITION HERE?
JUDGE DAVILA: YES. FOLKS, FEEL FREE TO STRETCH AND STAND IF YOU WOULD LIKE.
(STRETCHING.)
JUDGE DAVILA: MS. KRATZMANN HAS CALLED OUR MAINTENANCE. I THINK THE HEAT IS UP HERE A LITTLE BIT, SO WE'RE GOING TO TRY TO GET SOME AIR CONDITIONING IN HERE.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: MR. DOWNEY?
REDIRECT EXAMINATION BY MR. DOWNEY:
MR. DOWNEY: GOOD AFTERNOON, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD AFTERNOON.
MR. DOWNEY: YOUR HONOR, MAY I APPROACH THE WITNESS?
JUDGE DAVILA: YES.
BY MR. DOWNEY:
MR. DOWNEY: (HANDING.)
ELIZABETH A. HOLMES: THANK YOU.
MR. DOWNEY: MS. HOLMES, WERE YOU TOLD HOW MANY SMALL SAMPLE TESTS THERANOS WOULD HAVE TO DEVELOP IN ITS CLIA MINILAB TO COVER 93 PERCENT OF TESTS?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: WHAT WERE YOU TOLD?
ELIZABETH A. HOLMES: I REMEMBER JUST OVER 40 TESTS WAS ABOUT 90 PERCENT OF THE TESTS.
MR. DOWNEY: HOW MANY TESTS WAS THERANOS OFFERING IN ITS CLINICAL LAB THAT USED A SMALL SAMPLE FINGERSTICK BETWEEN 2013 AND 2015?
ELIZABETH A. HOLMES: I THINK ABOUT 70.
MR. DOWNEY: TO THE PATIENT WHO GETS A BLOOD TEST, DOES IT MATTER IN THEIR EXPERIENCE WHAT DEVICE THEIR BLOOD IS BEING ANALYZED ON?
MR. LEACH: OBJECTION, YOUR HONOR. FOUNDATION.
BY MR. DOWNEY:
MR. DOWNEY: WELL, DO THEY EVEN SEE --
JUDGE DAVILA: DO YOU WANT TO WITHDRAW THAT?
MR. DOWNEY: I'LL WITHDRAW IT, YEAH.
MR. DOWNEY: DO THEY SEE THE ANALYZER THAT THEIR BLOOD TEST IS BEING PERFORMED ON IN THE CENTRAL LAB?
ELIZABETH A. HOLMES: THEY DO NOT.
MR. DOWNEY: NOW, WHO AT THERANOS WAS RESPONSIBLE FOR VALIDATING TESTS BEFORE THEY WERE OFFERED IN THE CLINICAL LAB?
ELIZABETH A. HOLMES: THE LABORATORY DIRECTOR.
MR. DOWNEY: AND DID ALL LDT'S HAVE TO BE VALIDATED BEFORE THEY WERE OFFERED TO PATIENTS?
MR. DOWNEY: ARE YOU AWARE OF ANY TEST BEING OFFERED IN THE CLIA LAB AT THERANOS THAT WAS NOT VALIDATED?
ELIZABETH A. HOLMES: I AM NOT.
MR. DOWNEY: WAS THERE ANY INSTANCE WHERE YOU SOUGHT TO OVERRULE THE LAB DIRECTOR OR ANY LAB PERSONNEL AS TO WHAT COULD AND COULDN'T BE OFFERED?
MR. DOWNEY: AND YOU TESTIFIED JUST A FEW MOMENTS AGO ABOUT THE CMS INSPECTION IN NOVEMBER OF 2015. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND ABOUT THE PERFORMANCE OF THERANOS'S CLINICAL LAB PRIOR TO THE FALL OF 2015?
ELIZABETH A. HOLMES: THAT IT WAS EXCELLENT.
MR. DOWNEY: WHAT DID MR. BALWANI TELL YOU ABOUT THE PERFORMANCE OF THAT LAB PRIOR TO THE FALL OF 2015?
ELIZABETH A. HOLMES: THAT IT WAS ONE OF THE BEST LABS IN THE WORLD.
MR. DOWNEY: NOW, DID YOU UNDERSTAND IN THE PERIOD BETWEEN 2013 AND 2015 THAT ISSUES MIGHT COME UP WITH PARTICULAR TESTS?
ELIZABETH A. HOLMES: OF COURSE.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND ABOUT HOW THOSE ISSUES WERE HANDLED IN THE CLINICAL LAB AT THERANOS WHEN THEY CAME UP?
ELIZABETH A. HOLMES: I UNDERSTOOD THERE WAS A TEAM OF GENERAL SUPERVISORS, TECHNICAL SUPERVISORS, OTHER EXPERTS IN THE CLINICAL LAB WHO WOULD WORK TO IDENTIFY ISSUES, ELEVATE THEM, DO SOME TYPE OF ROOT CAUSE ANALYSIS TO UNDERSTAND WHAT THEY WERE, FIX THEM, AND TAKE REMEDIAL ACTION SO THAT THE SAME ISSUE WOULD NOT HAPPEN AGAIN.
MR. DOWNEY: AS BETWEEN YOU AND MR. BALWANI, WHO WAS RESPONSIBLE FOR THE OPERATIONAL MANAGEMENT OF THE LAB?
ELIZABETH A. HOLMES: MR. BALWANI.
MR. DOWNEY: NOW, DO YOU RECALL DR. DAS TESTIFYING IN THIS MATTER?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DR. DAS BEGAN HIS WORK AT THERANOS IN THE TIME PERIOD SHORTLY AFTER THE CMS INSPECTION THAT YOU JUST TESTIFIED ABOUT?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: DO YOU RECALL HIM PRESENTING YOU WITH THE FACT THAT HE THOUGHT THAT ALL OF THE TESTS THAT HAD BEEN RUN ON THERANOS'S EDISON DEVICE IN THE CLINICAL LAB SHOULD BE VOIDED?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DID YOU ACCEPT THAT DECISION?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: PRIOR TO THE POINT AT WHICH MR. DAS TOLD YOU THAT, DR. DAS TOLD YOU THAT, DID YOU EVER HAVE ANY ISSUE OR ANY SUGGESTION THAT THERE WAS SOME TYPE OF SYSTEMIC OR REPEATED PROBLEM WITH THERANOS'S EDISON DEVICE?
MR. DOWNEY: I WANT TO TALK FOR A MOMENT ABOUT SOME OF THE DIFFERENT FUNCTIONS AT THERANOS IN RESPONSE TO SOME OF WHAT MR. LEACH COVERED WITH YOU. DO YOU RECALL MR. LEACH SHOWING YOU SOME DOCUMENTS THAT RELATED TO DR. ROSENDORFF'S QUESTIONS ABOUT EBOLA?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, WHAT WAS DR. ROSENDORFF'S ROLE AT THERANOS WHEN HE WAS THERE?
ELIZABETH A. HOLMES: HE WAS THE CLINICAL LAB DIRECTOR.
MR. DOWNEY: DID HE PLAY ANY ROLE WITH REGARD TO THE RESEARCH AND DEVELOPMENT EFFORTS AT THERANOS?
ELIZABETH A. HOLMES: HE DID NOT.
MR. DOWNEY: WHERE WAS THE CLINICAL LAB OF THERANOS LOCATED WHEN YOU RECEIVED THAT EMAIL FROM DR. ROSENDORFF IN 2014?
ELIZABETH A. HOLMES: ON GATEWAY BOULEVARD IN NEWARK, CALIFORNIA.
MR. DOWNEY: LET ME ASK THAT EXHIBIT 4330, WHICH WAS INTRODUCED INTO EVIDENCE, BE BROUGHT UP. AND I'D LIKE TO GO TO THE LAST PAGE, PAGE 3 OF THIS EMAIL. IF I COULD JUST HIGHLIGHT THE FIRST SENTENCE OF THE EMAIL FROM DR. ROSENDORFF TO YOU. DO YOU RECALL DISCUSSING THIS SENTENCE WITH MR. LEACH?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IS 7373 GATEWAY THE NEWARK FACILITY?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: WAS DR. ROSENDORFF ASKING YOU WHETHER THE EBOLA SAMPLES WERE BEING TESTED AT THE NEWARK FACILITY?
ELIZABETH A. HOLMES: HE IS.
MR. DOWNEY: AND THEN DO YOU RECALL THAT MR. LEACH THEN SHOWED YOU SOME DOCUMENTS ABOUT EBOLA SAMPLES?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT THE REFERENCE IN THOSE DOCUMENTS WAS THAT THE EBOLA SAMPLES WOULD BE STORED IN PALO ALTO?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: WHAT DID YOU UNDERSTAND THAT TO BE A REFERENCE TO?
ELIZABETH A. HOLMES: THE R&D LABORATORY IN PALO ALTO.
MR. DOWNEY: WAS YOUR REPRESENTATION TO DR. ROSENDORFF IN NOVEMBER OF 2014 ABOUT THE EBOLA SAMPLES CORRECT?
MR. DOWNEY: I WANT TO TALK FOR A MOMENT ABOUT THE MODIFIED DEVICES THAT YOU DISCUSSED WITH MR. LEACH ON YOUR CROSS-EXAMINATION. I THINK IT'S FAIR TO SAY THAT HE ASKED YOU REPEATEDLY ABOUT WHETHER SEVERAL DIFFERENT PEOPLE WERE MADE AWARE OF THERANOS'S USE OF THOSE MODIFIED DEVICES. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND, AND HAD THERANOS MODIFIED THOSE DEVICES SO THAT IT COULD RUN FINGERSTICK SAMPLES IN HIGH VOLUME?
MR. DOWNEY: WHY HAD THERANOS DONE THAT AS OPPOSED TO USING ITS THERANOS ANALYZER IN THE CLINICAL LAB?
ELIZABETH A. HOLMES: MULTIPLE REASONS, THE FIRST BEING THAT WE NEEDED A WAY TO HANDLE POTENTIALLY TENS OF THOUSANDS OF SAMPLES COMING IN AT THE SAME TIME, AND WE DID NOT HAVE A SCALEABLE WAY TO DO THAT AT THAT TIME. THE 4 SERIES ON THE ONE HAND WAS NOT VALIDATED YET FOR THE CLINICAL LAB; AND ON THE OTHER HAND WE REALIZED THAT ALL OF THE LOGISTICAL ISSUES WITH TRYING TO PUT DEVICES THAT WERE DESIGNED TO HANDLE ONE SAMPLE AT A TIME IN A CLINICAL LAB DIDN'T MAKE SENSE.
MR. DOWNEY: NOW, DID YOU, IN FACT, SHARE THE FACT THAT THERANOS WAS USING THOSE DEVICES WITH ANYONE?
ELIZABETH A. HOLMES: THE MODIFIED SYSTEMS?
MR. DOWNEY: YES.
MR. DOWNEY: DID YOU SHARE IT WITH THE BOARD OF DIRECTORS OF THERANOS?
ELIZABETH A. HOLMES: OH, SORRY. YES, WE DID.
MR. DOWNEY: DID YOU SHARE IT WITH THE FDA?
MR. DOWNEY: AS PART OF THEIR REGULATION OF THERANOS?
ELIZABETH A. HOLMES: YES, YES.
MR. DOWNEY: DID YOU SHARE IT WITH CMS DURING THEIR INSPECTION IN THE FALL OF 2013?
MR. DOWNEY: DO YOU RECALL THAT MR. LEACH SAID TO YOU THAT THE INSPECTION THAT WAS CONDUCTED IN THE FALL OF 2013 WAS CONDUCTED BY THE STATE OF CALIFORNIA?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DO YOU UNDERSTAND THAT CMS SOMETIMES CONTRACTS WITH THE STATES TO PERFORM INSPECTIONS ON ITS BEHALF?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: WAS THE INSPECTION IN THE FALL OF 2013 THAT WAS CONDUCTED OF THERANOS'S CLIA LABORATORY ON BEHALF OF CMS?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: OKAY. LET ME ASK YOU NEXT ABOUT THE CASH POSITION OF THERANOS AT VARIOUS POINTS IN TIME. DO YOU RECALL THAT MR. LEACH SHOWED YOU A SPREADSHEET FROM THE SECOND HALF OF 2013?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT HE SHOWED YOU THAT THE CASH POSITION WAS SUCH THAT THE AMOUNT OF CASH IN THE COMPANY WAS DECREASING AND THEN THERE WAS AN INVESTMENT FROM PEER VENTURES AND LVG?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THOSE INVESTORS ARE A VENTURE FIRM THAT INVESTED AND AN ENTITY AFFILIATED WITH DON LUCAS?
MR. DOWNEY: NOW, DON LUCAS HAD BEEN THE CHAIRMAN OF THE BOARD; CORRECT?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: OKAY. NOW, PRIOR TO THAT TIME, DID THERANOS KNOW THAT IT WAS ABOUT TO ENTER INTO AN AGREEMENT UNDER WHICH IT WOULD RECEIVE A SUBSTANTIAL PAYMENT FROM WALGREENS?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND WAS A CONTRACT ASSOCIATED WITH THAT ENTERED INTO IN CONNECTION WITH THE LAUNCH OF THERANOS SERVICE CENTERS IN WALGREENS STORES?
MR. DOWNEY: AND HOW MUCH WAS THERANOS TO RECEIVE UNDER THAT CONTRACT?
ELIZABETH A. HOLMES: $75 MILLION.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 1083, WHICH IS IN EVIDENCE, BUT IT SHOULD BE IN YOUR NOTEBOOK IN HARD COPY AS WELL. DO YOU SEE THAT THIS IS AN EMAIL FROM MR. MIQUELON TO YOU IN SEPTEMBER OF 2013?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN IF YOU GO FORWARD, DO YOU SEE THAT HE ATTACHES TO THIS A FRAMEWORK OR TERM SHEET, PROPOSED TERM SHEET?
MR. DOWNEY: AND DO YOU SEE -- IF YOU GO TO PAGE 3 OF THIS TERM SHEET, DO YOU SEE PARAGRAPH 2 THERE?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DOES THAT SET FORTH THE ANTICIPATED PAYMENTS FROM WALGREENS AS OF SEPTEMBER 5TH, 2013?
ELIZABETH A. HOLMES: IT DOES.
MR. DOWNEY: SO AT THE TIME THAT -- IN THE PERIOD WHERE MR. LEACH WAS SHOWING YOU THE SPREADSHEET AND THE CASH POSITION, WERE YOU EXPECTING AT THAT TIME TO BEGIN TO RECEIVE PAYMENTS IN CONNECTION WITH THE THERANOS LAUNCH?
MR. DOWNEY: LET ME ASK YOU ABOUT THE QUESTIONS THAT MR. LEACH ASKED YOU ABOUT, THE FINANCIAL MODEL. DO YOU RECALL THOSE?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND YOU TESTIFIED THAT THE FINANCIAL MODEL WAS SOMETHING THAT MR. BALWANI DEVELOPED; IS THAT RIGHT?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND DID HE MODIFY IT OVER TIME?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: DID YOU EVER MADE MODIFICATION TO IT?
MR. DOWNEY: WHEN YOU HAD TO MAKE A -- WHEN YOU HAD TO PREPARE MATERIALS FOR BOARD MEETINGS, WOULD THEY TYPICALLY INCLUDE FINANCIAL PROJECTIONS TO BE SHARED WITH DIRECTORS?
MR. DOWNEY: WHERE WOULD YOU GET THOSE FINANCIAL PROJECTIONS?
ELIZABETH A. HOLMES: FROM MR. BALWANI.
MR. DOWNEY: AND WOULD YOU SOMETIMES INCLUDE IN PRESENTATIONS SENT TO OUTSIDERS, INCLUDING INVESTORS, INCLUDE FINANCIAL DATA?
MR. DOWNEY: AND WHERE WOULD YOU GET THAT DATA?
ELIZABETH A. HOLMES: FROM MR. BALWANI.
MR. DOWNEY: DID YOU UNDERSTAND SOME ASPECTS OF HOW THAT MODEL WORKED?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID YOU HAVE ENOUGH FAMILIARITY WITH IT TO MODIFY IT IF YOU WANTED TO MODIFY IT?
ELIZABETH A. HOLMES: GENERALLY I HAD SOME FAMILIARITY WITH IT.
MR. DOWNEY: AND DO YOU RECALL SEEING THE TEXT IN WHICH MR. BALWANI SAID TO YOU -- WAS HAVING AN EXCHANGE WITH YOU AND YOU WERE TALKING BETWEEN THE TWO OF YOU ABOUT YOU GETTING COMFORTABLE WITH THE MODEL?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: CAN YOU EXPLAIN WHAT WAS GOING ON THERE?
ELIZABETH A. HOLMES: YES. THERE WAS A MEETING THAT I WAS GOING TO DO WHEN SUNNY WAS TRAVELLED INTERNATIONALLY, AND SUNNY NORMALLY WOULD BE THE PERSON WHO SHARED THE MODEL THAT HE HAD, AND HE WAS SUGGESTING THAT THE TIME OF THE MEETING WAS NOT IDEAL FOR HIS SCHEDULE. AND I WAS TRYING TO SAY, WELL, I COULD GET MYSELF COMFORTABLE WITH IT IF YOU DON'T WANT TO DO THIS. I'M NOT SURE THAT THAT ACTUALLY HAPPENED.
MR. DOWNEY: GENERALLY IN CONNECTION WITH THE INVESTOR PRESENTATIONS, DO YOU RECALL MR. LEACH ASKING YOU IF YOU COULD DECIDE WHETHER A PRESENTATION WAS SENT OR NOT SENT TO INVESTORS?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IT'S TRUE THAT YOU COULD DECIDE THAT; RIGHT?
MR. DOWNEY: BUT MUCH OF THE CONTENT OF THOSE PRESENTATIONS WAS PREPARED BY OTHERS; IS THAT FAIR TO SAY?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: FOR EXAMPLE, IF THERE WAS SCIENTIFIC CONTENT IN THE REPORTS, WHO WOULD PREPARE THAT?
ELIZABETH A. HOLMES: IT WAS PREPARED BY OUR SCIENTISTS AND ENGINEERS.
MR. DOWNEY: IF THERE WERE ASSERTIONS ABOUT THE CAPABILITIES OF TECHNOLOGY OR CERTAIN TESTS, WOULD YOU ASK THOSE SCIENTISTS OR ENGINEERS TO REVIEW IT?
MR. DOWNEY: OKAY. AND WITH RESPECT TO ANY FINANCIAL REPORTS, WERE THEY ALWAYS PREPARED BY MR. BALWANI?
MR. DOWNEY: DO YOU RECALL THAT MR. LEACH REVIEWED WITH YOU A SERIES -- A DOCUMENT THAT RELATED TO A GROUP CALLED ARANCA?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT HE SHOWED YOU IN CONNECTION WITH ARANCA'S WORK THEY HAD BEEN PROVIDED WITH A REVENUE NUMBER THAT WAS DIFFERENT THAN THE PROJECTED REVENUE NUMBER PROVIDED TO THE INVESTOR RDV. DO YOU RECALL THAT?
MR. DOWNEY: AND CAN YOU TELL US WHETHER THE REVENUE NUMBERS THAT WERE SHARED WITH RDV WERE PROVIDED TO -- THE PROJECTED REVENUE NUMBERS THAT WERE PROVIDED TO RDV WERE PROVIDED TO THERANOS'S BOARD OF DIRECTORS?
ELIZABETH A. HOLMES: THEY WERE.
MR. DOWNEY: AND AT THE SAME TIME, WERE THE ARANCA PROJECTIONS OF REVENUE FOR THE FOLLOWING YEAR PROVIDED TO THE BOARD OF DIRECTORS?
ELIZABETH A. HOLMES: THEY WERE.
MR. DOWNEY: DID YOU UNDERSTAND THAT THE ANALYSES THAT WERE BEING PERFORMED WERE DIFFERENT BETWEEN THOSE TWO EXERCISES?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: I WANT TO ASK YOU NOW ABOUT THE REPORTS THAT WENT TO WALGREENS THAT CONTAINED A DISCUSSION ABOUT THE LOGOS THROUGHOUT THE TRIAL. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND MR. LEACH WENT THROUGH SEVERAL EMAILS THAT YOU EXCHANGED WITH PFIZER AND ASKED YOU ABOUT THOSE. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: I'D LIKE TO PUT BACK UP A DOCUMENT THAT IS IN EVIDENCE, EXHIBIT 15048. DO YOU SEE AT THE TOP OF THIS EMAIL, THIS IS AN EMAIL SENT BY CHRISTIAN HOLMES TO SOME PEOPLE FROM PFIZER AND YOU'RE COPIED?
MR. DOWNEY: AND DO YOU SEE THAT DR. SAKUL IS ONE OF THE RECIPIENTS?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HOW LONG HAD HE BEEN INVOLVED IN THE THERANOS/PFIZER RELATIONSHIP?
ELIZABETH A. HOLMES: I THINK BACK TO AS EARLY AS 2005.
MR. DOWNEY: AND THIS DOCUMENT WAS BEING SENT IN JANUARY OF 2014?
MR. DOWNEY: OKAY. LET'S GO TO THE NEXT PAGE OF 15048, AND LET'S GO TO THE ATTACHMENT. DO YOU SEE THAT THIS IS A COPY OF THE REPORT THAT HAS BEEN THE SUBJECT OF DISCUSSION THROUGHOUT THIS TRIAL?
MR. DOWNEY: AND DO YOU SEE THAT THIS CONTAINS BOTH THE PFIZER LOGO AND THE THERANOS LOGO?
ELIZABETH A. HOLMES: IT DOES.
MR. DOWNEY: TAKE A MOMENT TO REVIEW THAT ATTACHMENT. IS THAT THE SAME DOCUMENT THAT YOU SENT TO WALGREENS IN 2010?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: DID ANYONE FROM PFIZER HAVE ANY REACTION TO THIS, TO YOUR KNOWLEDGE, THE FACT THAT YOU HAD ATTACHED THEIR LOGO TO THIS DOCUMENT?
ELIZABETH A. HOLMES: NO. I REMEMBER IT AS BEING POSITIVE, THAT THEY WERE LOOKING AT THE PROGRAM THAT WE DID WITH THEM.
MR. DOWNEY: LET ME ASK YOU NEXT ABOUT -- AND BY THE WAY, AM I RIGHT THAT THE WORK SUMMARIZED IN THIS DOCUMENT IS WORK THAT THERANOS HAS ACTUALLY DONE?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND CAN YOU REMIND US WHAT THAT WORK WAS?
ELIZABETH A. HOLMES: YES. WE RAN A STUDY OVER A COURSE OF I THINK IT WAS MULTIPLE YEARS IN WHICH WE DEPLOYED OUR SYSTEMS TO PATIENTS' HOMES IN RURAL AREAS, IN TENNESSEE, KENTUCKY, AND I THINK PENNSYLVANIA, AND WERE ABLE TO DO TESTING IN THE HOME AND IN A CLINIC AND HAVE DATA COLLECTED OVER TIME THAT COULD HELP SHOW TRENDS IN PEOPLE'S BLOOD MARKERS THAT WE THOUGHT COULD BE USEFUL FOR SEEING THE PROGRESSION OF DISEASE BETTER.
MR. DOWNEY: OKAY. NEXT LET'S TALK ABOUT GLAXOSMITHKLINE. IT'S REFERRED TO AS GSK ON YOUR CROSS-EXAMINATION.
MR. DOWNEY: AND THAT'S A PHARMACEUTICAL COMPANY WITH WHICH THERANOS HAD A PARTNERSHIP?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND AT ONE POINT THERANOS -- AM I RIGHT THAT THERANOS ASKED GSK TO EXAMINE ITS TECHNOLOGY FOR PURPOSES OF DETERMINING WHETHER IT COULD BE VALIDATED?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND DID GSK UNDERTAKE THAT?
ELIZABETH A. HOLMES: THEY DID.
MR. DOWNEY: WHAT WERE THE CONCLUSIONS OF THAT?
ELIZABETH A. HOLMES: I REMEMBER THE CONCLUSION WAS THAT THE SCIENTISTS THERE THOUGHT THAT OUR MINILAB ELIMINATED THE NEED FOR A LAB.
MR. DOWNEY: WELL, LET ME ASK YOU TO LOOK AT EXHIBIT 112. GO TO THE ATTACHED SUMMARY. DID YOU SEE ON THE FIRST PAGE, THIS IS A DESCRIPTION OF HOW THEY -- THE METHODOLOGY?
MR. DOWNEY: IF WE GO TO THE NEXT PAGE, DO YOU SEE IN THE OVERALL CONCLUSIONS, IS IT CORRECT THAT THEY REPORTED THAT THEY HAD A FAVORABLE IMPRESSION OF THE TECHNOLOGY AND SYSTEM?
MR. DOWNEY: AND THAT IT PROVIDED QUALITY DATA?
MR. DOWNEY: NOW, MR. LEACH ASKED YOU IF -- WELL, DO YOU RECALL THAT YOU TRANSMITTED A COPY OF THIS REPORT WHICH ALSO HAD THE GSK LOGO ON IT AND THE THERANOS LOGO? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IF YOU LOOK BACK AT THE FIRST PAGE, WHICH WE WERE LOOKING AT A MOMENT AGO, GO TO THE NEXT PAGE. DO YOU SEE THAT THERE'S NO HEADER OF ANY ORGANIZATION ON THIS DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: BUT WHO PREPARED THIS DOCUMENT, GSK OR THERANOS?
MR. DOWNEY: ALL RIGHT. NOW, LET ME ASK YOU TO LOOK NEXT AT EXHIBIT 291. THIS IS ALREADY IN EVIDENCE. DO YOU SEE THAT THIS IS AN EMAIL FROM YOU TRANSMITTING THE DOCUMENTS TO REPRESENTATIVES OF WALGREENS?
MR. DOWNEY: AND THEN LET'S GO TO PAGE 2. AND DO YOU SEE THAT THIS DOCUMENT IS A COPY OF THE SAME DOCUMENT WITH THE GSK AND THERANOS LOGOS AT THE TOP?
MR. DOWNEY: AND I BELIEVE YOU TESTIFIED ON YOUR DIRECT EXAMINATION THAT YOU DON'T KNOW WHEN THAT WAS DONE OR WHEN THOSE LOGOS WERE ADDED.
ELIZABETH A. HOLMES: I DON'T.
MR. DOWNEY: LET ME ASK YOU IF YOU HAD DEALINGS WHEN YOU WERE AT THERANOS WITH A REPRESENTATIVE OF GSK NAMED AIDEN FLYNN?
MR. DOWNEY: AND WHO WAS AIDEN FLYNN?
ELIZABETH A. HOLMES: HE WAS A MEMBER OF GSK -- I THINK HE MAY HAVE WORKED WITH GSK BIOLOGICALS. I'M NOT SURE. HE WAS ANOTHER MEMBER OF THE SCIENTIFIC TEAM FROM GSK.
MR. DOWNEY: AND IS GSK -- WERE YOU CONTINUING, AFTER THIS REPORT WAS PREPARED, TO SEEK WORK FROM GSK?
MR. DOWNEY: AND DID YOU CONTINUE TO -- DID YOU HAVE CONTACT WITH DR. FLYNN ABOUT THAT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID THERE COME A TIME WHEN YOU ASKED YOUR -- WELL, LET ME ASK YOU TO JUST LOOK AT EXHIBIT 15066.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND LET ME ASK YOU, DID THERE COME A TIME WHEN YOU ASKED YOUR ASSISTANT TO -- I'M SORRY. DID THERE COME A TIME WHEN YOU ASKED SOMEONE ELSE AT THERANOS TO TRANSMIT THE REPORT THAT GSK HAD PREPARED FOR THERANOS BACK TO GSK?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID YOU ASK MS. BALKENHOL TO DO THAT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS SHE AN EMPLOYEE AT THERANOS WHO WORKED WITH PHARMACEUTICAL COMPANIES?
MR. DOWNEY: AND IS EXHIBIT 15066 A TRANSMISSION AS YOU UNDERSTAND IT IN RESPONSE TO THAT QUESTION?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 15066.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED WITHOUT OBJECTION.
(DEFENDANT'S EXHIBIT 15066 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: ALL RIGHT. DO YOU SEE IN THE COVER EMAIL, THIS IS AN EMAIL FROM MS. BALKENHOL TO DR. FLYNN?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN IF YOU LOOK AT THE THIRD LINE, THE SECOND LINE, YOU SEE MS. BALKENHOL WRITES, "ELIZABETH ASKED ME TO FORWARD YOU THIS GSK REPORT, AS WELL, FOR YOUR REVIEW." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, LET'S GO TO THE NEXT PAGE OF 15066. AND JUST TAKE A MOMENT TO REVIEW THAT. IS THIS THE SAME DOCUMENT THAT YOU TRANSMITTED TO WALGREENS IN APRIL OF 2010?
MR. DOWNEY: AND IF YOU GO BACK TO THE -- DO YOU SEE IT HAS THE GSK LOGO AND THE THERANOS LOGO ON TOP?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IF YOU GO BACK TO THE EMAIL ON PAGE 1, DO YOU SEE THAT THIS IS DATED MARCH OF 2009?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THAT'S ABOUT A YEAR BEFORE YOU TRANSMITTED THIS TO WALGREENS?
MR. DOWNEY: DID DR. FLYNN OR ANYONE ELSE AT GSK CONVEY TO YOU THAT THEY THOUGHT IT WAS INAPPROPRIATE THAT YOU HAD ATTACHED THEIR LOGO TO THIS REPORT?
ELIZABETH A. HOLMES: NOT AT ALL.
MR. DOWNEY: AND THE WORK THAT WAS DONE IN CONNECTION WITH THE REPORT WAS ACTUALLY WORK THAT THEY HAD DONE; IS THAT CORRECT?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND DID THEY HAVE ANY OBJECTION TO YOU PUTTING YOUR LOGO UP THERE NEXT TO GSK?
ELIZABETH A. HOLMES: THEY DID NOT.
MR. DOWNEY: LET ME ASK YOU TO LOOK NEXT AT EXHIBIT 15058.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: OTHER THAN DR. FLYNN, DID YOU HAVE CONTACTS WITH OTHER SCIENTISTS AT GSK WHO PARTICIPATED IN CLINICAL TRIALS AND OTHER WORK THAT THERANOS WANTED TO BE A PART OF?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: CAN YOU TELL US WHO THOMAS BREUER WAS?
ELIZABETH A. HOLMES: HE IS THE PHYSICIAN OR SCIENTIST THAT WAS PART OF GSK BIO. I THINK DR. FLYNN MAY HAVE BEEN PART OF A DIFFERENT GROUP WITHIN GSK.
MR. DOWNEY: AND DO YOU RECOGNIZE EXHIBIT 15058?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IS THAT AN EMAIL THAT IS TRANSMITTING A POWERPOINT FOR A PRESENTATION?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 15058.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15058 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND DO YOU SEE THIS? THIS IS SENT FROM YOU TO DR. BREUER IN DECEMBER OF 2009. DO YOU SEE THAT?
MR. DOWNEY: AND THEN IT LISTS A VARIETY OF ATTACHMENTS, AND I'M INTERESTED FOR PRESENT PURPOSES IN LOOKING AT PAGE 6 AT BATES LABEL 779. AND ON PAGE 6, DO YOU SEE THAT IT'S LABELLED THERANOS AND GSK?
MR. DOWNEY: AND DO YOU SEE THAT THE FIRST BULLET POINT SAYS, "GSK COMPLETED A COMPREHENSIVE VALIDATION OF THERANOS SYSTEMS IN 2008"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IS THAT PART OF A POWERPOINT THAT YOU AUTHORIZED TO BE SENT TO GSK?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND YOU DESCRIBED THAT VALIDATION IN THIS REPORT AS A COMPREHENSIVE VALIDATION?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID ANYONE FROM GSK REFLECT ANY DISAGREEMENT OR ISSUE WITH THAT STATEMENT?
MR. DOWNEY: AND AM I RIGHT THAT YOU CONTINUED TO HAVE A RELATIONSHIP WITH GSK FOR A FEW MORE YEARS AFTER THIS?
MR. DOWNEY: I WANT TO TALK IN A LITTLE BIT ABOUT GSK BIOLOGICS --
MR. DOWNEY: -- BUT WE'LL DO THAT IN CONNECTION WITH ANOTHER SUBJECT. I WANT TO TALK NOW ABOUT THE QUESTIONS THAT MR. LEACH ASKED YOU THE OTHER DAY ABOUT SOME OF YOUR REACTION TO THE QUESTIONS THAT WERE BEING RAISED IN CONNECTION WITH PREPARATION OF A "WALL STREET JOURNAL" ARTICLE. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IN RESPONSE TO SEVERAL OF HIS QUESTIONS, YOU SAID THAT ONE OF THE THINGS THAT YOU WERE CONCERNED ABOUT WAS THAT THERANOS HAD TRADE SECRETS WHICH YOU THOUGHT YOU HAD TO PROTECT?
MR. DOWNEY: AND I WANT TO ASK YOU A FEW QUESTIONS ABOUT WHAT YOU MEANT BY THAT. DID THERE COME A TIME IN 2011 OR 2012 WHERE THERANOS BEGAN TO BECOME HIGHLY CONCERNED ABOUT PROTECTING ITS TRADE SECRETS?
MR. DOWNEY: AND WHY WAS THAT?
ELIZABETH A. HOLMES: BECAUSE WE HAD A HUGE AMOUNT OF INVENTION THAT WAS HAPPENING IN OUR LABORATORIES. WE HAD TEAMS OF SCIENTISTS AND ENGINEERS THAT WERE WORKING REALLY HARD ON COMING UP WITH NEW IDEAS FOR PATENTS AND TRADE SECRETS, AND WE NEEDED TO FIGURE OUT HOW TO PROTECT THEM.
MR. DOWNEY: AND DID YOU INTERNALLY ASK FOR GUIDANCE FROM YOUR HUMAN RESOURCES PERSONNEL AND OTHERS ABOUT HOW TO PROTECT TRADE SECRETS OF THE COMPANY?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 15054.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND DO YOU RECOGNIZE THIS AS AN EMAIL TO ANOTHER THERANOS EMPLOYEE ASKING THEM TO REFLECT THE TRADE SECRET POLICY IN WRITING?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 15054.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15054 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: ALL RIGHT. DO YOU SEE THIS BOTTOM EMAIL, YOU SENT IT TO A DAVID DOYLE IN APRIL OF 2012?
MR. DOWNEY: AND WHO WAS DAVID DOYLE?
ELIZABETH A. HOLMES: HE WAS A COUNSEL AT THERANOS.
MR. DOWNEY: AND IF YOU LOOK IN THE SECOND SENTENCE, YOU WRITE -- I'M HAVING A LITTLE TROUBLE WITH MY MONITOR, BUT I THINK IT SAYS, "IN ESSENCE, THIS DOCUMENT SHOULD HIGHLIGHT THE EXTRA CONFIDENTIALITY PROCEDURES (EVEN INSIDE A GIVEN TEAM) THAT NEED TO BE IN PLACE AROUND METHODOLOGIES THAT WE WON'T PATENT THAT SOLVE COMPLEX CHALLENGES. PLEASE TAKE A PASS AT THIS AND SEND IT OVER." DO YOU SEE THAT?
MR. DOWNEY: AND WERE THERE PARTICULAR METHODOLOGIES THAT THERANOS DID NOT PLAN TO FILE A PATENT APPLICATION FOR?
MR. DOWNEY: BUT DID IT OTHERWISE HOPE TO PROTECT THOSE INVENTIONS FROM BEING COPIED BY OTHERS?
ELIZABETH A. HOLMES: VERY MUCH SO.
MR. DOWNEY: HOW DID YOU UNDERSTAND YOU WOULD BE ABLE TO DO THAT?
ELIZABETH A. HOLMES: BY PROTECTING THEM AS A TRADE SECRET, WHICH REQUIRED US TO TAKE A NUMBER OF STEPS TO ENSURE THAT THERE WAS NEVER A PUBLIC DISCLOSURE OF THOSE INVENTIONS.
MR. DOWNEY: LET ME ASK YOU TO LOOK NEXT AT EXHIBIT 15055.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO YOU RECOGNIZE EXHIBIT 15055 AS A RESPONSE FROM MR. DOYLE TO YOU IN RESPONSE TO THE EMAIL THAT YOU HAD SENT HIM THAT WE JUST LOOKED AT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: I MOVE THE ADMISSION OF 15055.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15055 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU'D LOOK, THIS IS AN EMAIL FROM MR. DOYLE TO YOU IN MAY OF 2012?
MR. DOWNEY: AND IN THE FIRST SENTENCE HE NOTES THAT HE'S SENDING YOU A DRAFT. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: I'D LIKE TO DRAW YOUR ATTENTION TO THE PARAGRAPHS BELOW IN THE DRAFT. AND DO YOU SEE THAT HE BEGINS THIS -- AND THIS WAS DESIGNED TO GO TO ALL EMPLOYEES? IS THAT THE GIST OF IT?
MR. DOWNEY: AND DO YOU SEE THAT HE SAYS THAT THE COMPANY VIGOROUSLY PURSUES AND ENFORCES ITS PATENT PROTECTION FOR IP, WHENEVER IT MAKES SENSE TO DO SO?
MR. DOWNEY: BUT THEN HE GOES ON TO SAY THAT EVEN WHEN PATENTS WERE PENDING, AND EVEN WHERE THEY MAY ULTIMATELY BE UNAVAILABLE, TRADE SECRET LAWS PROVIDE ANOTHER CRITICAL LAYER FOR OUR IP?
MR. DOWNEY: AND THEN HE GOES ON TO SAY THIS REMINDS ALL EMPLOYEES HOW IT WORKS. DO YOU SEE THAT?
ELIZABETH A. HOLMES: YES, I DO.
MR. DOWNEY: AND THEN IF WE GO TO THE NEXT PARAGRAPH, DO YOU SEE THAT HE DEFINES WHAT A TRADE SECRET IS? HE SAYS A TRADE SECRET IS ANY INFORMATION AN OWNER MAKES REASONABLE EFFORTS TO KEEP SECRET?
MR. DOWNEY: AND HE SAYS IT HAS ECONOMIC VALUE BECAUSE IT'S NOT GENERALLY KNOWN TO THE PUBLIC OR A COMPETITOR. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: ALL RIGHT. AND THEN IF YOU GO DOWN TO THE NEXT PARAGRAPH, DO YOU SEE THAT HE CONTINUES HIS DISCUSSION OF HOW TO PROTECT TRADE SECRETS?
MR. DOWNEY: AND DO YOU SEE THE SECOND SENTENCE THERE THAT BEGINS, "THE DEFINING CHARACTERISTIC"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THAT IT READS, "THE DEFINING CHARACTERISTIC OF A TRADE SECRET, IN FACT, IS THAT IT IS NEVER," NEVER UNDERLINED, "NEVER DISCLOSED PUBLICLY. THAT DISTINGUISHES THESE RIGHTS FROM PATENTS AND TRADEMARKS, WHICH MUST BE PUBLICLY DISCLOSED TO SECURE PROTECTION." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN IF YOU GO DOWN TO THE BULLET POINT SECTION, DO YOU SEE THAT HE THEN LISTS A NUMBER OF THINGS THAT HAVE TO BE DONE TO ENSURE TRADE SECRETS AREN'T DISCLOSED?
MR. DOWNEY: AND THEN IN THE FIRST PARAGRAPH, HE TALKS ABOUT PROTECTING THE PHYSICAL SECURITY OF THERANOS FACILITIES?
MR. DOWNEY: AND THEN IN THE SECOND HE TALKS ABOUT ALL OF THE STEPS THAT HAVE TO BE TAKEN TO PROTECT THERANOS'S RECORDS AND DATABASES AND SO FORTH. DO YOU SEE THAT?
MR. DOWNEY: AND THEN DO YOU SEE IN THE THIRD PARAGRAPH HE SAYS, IT'S REQUIRED THAT ALL VISITORS TO THERANOS SIGN A CONFIDENTIALITY AGREEMENT ON THEIR OWN BEHALF, A CDA. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE NEXT HE SAYS THAT ALL VENDORS AND PARTNERS HAVE TO SIGN A CDA?
MR. DOWNEY: AND THEN HE GOES ON TO SAY THAT EMPLOYEES HAVE TO SIGN A CDA. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, WHEN YOU ANSWERED MR. LEACH BY REFERRING TO TRADE SECRETS AS ONE OF THE CONCERNS THAT YOU HAD WHEN YOU WERE GETTING QUESTIONS ABOUT THERANOS'S CLIA LAB IN 2015, CAN YOU EXPLAIN TO US WHAT YOUR CONCERN WAS?
ELIZABETH A. HOLMES: MY CONCERN WAS THAT IF THERE WAS A PUBLIC DISCLOSURE OF THIS INFORMATION, WE WOULD LOSE THE TRADE SECRET PROTECTION THAT WE HAD WORKED SO HARD TO SECURE AND PROTECT FOR YEARS PRIOR TO THAT POINT.
MR. DOWNEY: AND WAS IT THE CASE THAT MR. LEACH ASKED YOU ABOUT THERANOS'S PARTNERSHIP WITH WALGREENS? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND HE ASKED YOU ABOUT THE, THE 3.0 DEVICE BEING SENT TO WALGREENS; IS THAT RIGHT?
MR. DOWNEY: NOW, THAT HAD BEEN DONE IN 2010, HADN'T IT?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: BUT THE INVENTION TO MODIFY THE DEVICES DIDN'T TAKE PLACE UNTIL 2013; IS THAT RIGHT?
ELIZABETH A. HOLMES: CORRECT.
MR. DOWNEY: AND THAT WAS AFTER THE DATE OF THE ADVICE THAT WAS RENDERED IN THIS MEMORANDUM FROM MR. DOYLE TO YOU; IS THAT RIGHT?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: AND EVEN THOUGH WALGREENS HAD A NONDISCLOSURE AGREEMENT WITH THERANOS, DID ALL OF THEIR INDIVIDUAL EMPLOYEES SIGN NONDISCLOSURE AGREEMENTS WITH THERANOS?
MR. DOWNEY: NOW, DID YOU KEEP SECRET FROM THE FACT THAT -- FROM INVESTORS THE FACT THAT THERE WERE ASPECTS OF THERANOS'S BUSINESS THAT YOU COULDN'T DISCLOSE TO THEM BECAUSE OF A CONCERN ABOUT TRADE SECRETS?
MR. DOWNEY: AND DO YOU RECALL BEING ASKED ABOUT MS. PETERSON ON YOUR CROSS-EXAMINATION?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND MS. PETERSON WORKED FOR THE RDV ENTITY; CORRECT?
MR. DOWNEY: AND THAT'S AN INVESTMENT VEHICLE FOR THE DEVOS FAMILY?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND DO YOU -- DID YOU UNDERSTAND THAT MR. MOSLEY -- DO YOU RECALL HIM TESTIFYING?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID HE ALSO HAVE A ROLE WITH REGARD TO THE DEVOS FAMILY?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: I WANT TO ASK YOU WHAT HIS ROLE WAS.
ELIZABETH A. HOLMES: I UNDERSTOOD THAT HE WAS THEIR LAWYER AND HE WAS ADVISING THEM ON THE INVESTMENT.
MR. DOWNEY: OKAY. I'D LIKE TO ASK YOU TO LOOK AT EXHIBIT 14186.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND IS THIS AN EMAIL BETWEEN MR. MOSLEY AND YOURSELF DISCUSSING NEED FOR CONFIDENTIALITY FOR TECHNOLOGY AT THERANOS?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND WAS THIS DURING THE PERIOD WHEN MR. MOSLEY WAS AN INVESTOR AT THERANOS?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 14186.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 14186 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: DO YOU SEE THIS EMAIL FROM MR. MOSLEY IN DECEMBER OF 2014? AND I'M INTERESTED HERE IN THE SECOND PARAGRAPH, AND HE REFERS IN THE FIRST SENTENCE TO A "NEW YORKER" ARTICLE. DO YOU SEE THAT?
MR. DOWNEY: AND WAS THAT A PUBLICATION ABOUT THERANOS?
MR. DOWNEY: AND THEN HE GOES ON -- IN THE SECOND SENTENCE, HE SAYS HE SAW THE AUTHOR ON T.V. THAT MORNING. DO YOU SEE THAT?
MR. DOWNEY: AND THEN HE SAYS IT WAS POSITIVE, BUT THEY SPENT TOO MUCH TIME SPECULATING AS TO WHY YOUR TECHNOLOGY -- YOUR PROCESS AND TECHNOLOGY IS BEING KEPT CONFIDENTIAL, WHICH SHOULD BE OBVIOUS TO ANYONE. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND MR. MOSLEY TO BE COMMUNICATING IN CONNECTION WITH THIS EMAIL?
ELIZABETH A. HOLMES: THAT OUR DECISION TO PROTECT OUR TRADE SECRET PROCESSES BY NOT COMMUNICATING THEM AND THE DECISION TO KEEP CERTAIN ASPECTS OF OUR TECHNOLOGY CONFIDENTIAL SHOULD BE OBVIOUS BECAUSE OF HOW IMPORTANT IT WAS TO THE SURVIVAL AND ABILITY TO MAINTAIN A COMPETITIVE ADVANTAGE FOR THE BUSINESS.
MR. DOWNEY: NOW, WERE YOU -- AS THE CEO AND FOUNDER OF THERANOS, WERE YOU ALSO SUBJECT TO THE REQUIREMENT THAT THERANOS NOT DISCLOSE TRADE SECRETS?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: DID YOU ACTUALLY SIGN A CONTRACT WITH THE COMPANY THAT SAID THAT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS THAT A CONTRACT THAT YOU REPRESENTED TO INVESTORS THAT YOU HAD SIGNED?
MR. DOWNEY: MR. LEACH WENT THROUGH ON HIS CROSS-EXAMINATION EARLIER TODAY A LIST OF PARTIES TO WHOM YOU ACKNOWLEDGED YOU DID NOT DISCLOSE THE FACT THAT THERANOS HAD MODIFIED ITS COMMERCIAL DEVICES TO PERFORM FINGERSTICK ASSAYS. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IT INCLUDED MR. PARLOFF, FOR EXAMPLE?
MR. DOWNEY: DO YOU RECALL THAT? AND MR. GROSSMAN, FOR EXAMPLE?
MR. DOWNEY: IS THERE A REASON THAT YOU DID NOT DISCLOSE THAT TO THOSE INDIVIDUALS?
ELIZABETH A. HOLMES: IT WOULD HAVE BEEN A VIOLATION OF OUR OWN TRADE SECRET POLICY AND MY OWN AGREEMENT TO PROTECT OUR TRADE SECRETS.
MR. DOWNEY: NOW, MR. LEACH ASKED YOU ON DIRECT EXAMINATION WHETHER YOU WERE AGGRESSIVE IN PROTECTING THE COMPANY'S INTELLECTUAL PROPERTY AND YOU SAID YES. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHEN YOU SAID YOU WERE AGGRESSIVE IN PROTECTING THE COMPANY'S INTELLECTUAL PROPERTY, WHAT DID YOU MEAN?
ELIZABETH A. HOLMES: I MEANT THAT WE TRIED TO TAKE EVERY STEP POSSIBLE TO PROTECT THE INTELLECTUAL PROPERTY, AND THAT INCLUDED POLICIES LIKE THE ONE THAT WE JUST LOOKED AT; IT INCLUDED MAKING SURE THAT WE HAD THE RIGHT AGREEMENTS WITH EMPLOYEES; AND IT INCLUDED TAKING THE ACTIONS THAT I UNDERSTOOD WE WERE OBLIGATED TO TAKE TO MAINTAIN TRADE SECRET PROTECTION IF WE BECAME AWARE THAT THERE HAD BEEN SOME BREACH OF THOSE AGREEMENTS.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT DOING THAT WAS NECESSARY TO PROTECT VALUE, THE VALUE OF THE COMPANY?
ELIZABETH A. HOLMES: I DID. I UNDERSTOOD THAT IF WE DIDN'T DO IT, WE WOULD LOSE TRADE SECRET PROTECTION AND THAT WOULD BE DEVASTATING TO THE COMPANY.
MR. DOWNEY: I WANT TO TURN FROM THAT SUBJECT TO TALKING ABOUT THE SUBJECT OF VENOUS DRAWS OF BLOOD.
MR. DOWNEY: YOU RECALL DISCUSSING WITH MR. LEACH, ON YOUR CROSS-EXAMINATION, DISCUSSIONS BETWEEN WALGREENS AND THERANOS ABOUT THE PERCENTAGE OF VENOUS BLOOD?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: I WANT TO TALK, FIRST OF ALL, JUST ABOUT THE DRAWING OF VENOUS BLOOD AT THERANOS SERVICE CENTERS. HOW WOULD -- HOW WAS VENOUS BLOOD TYPICALLY DRAWN AT A THERANOS SERVICE CENTER IN A WALGREENS STORE?
ELIZABETH A. HOLMES: IT WAS DRAWN THROUGH WHAT WE CALLED A MICRO SAMPLE, WHICH WAS TAKEN BY A BUTTERFLY NEEDLE INTO A SMALLER TUBE THAN WHAT WOULD TRADITIONALLY BE USED.
MR. DOWNEY: AND WHY DID YOU USE THAT METHOD OF DRAWING BLOOD RATHER THAN A TRADITIONAL VENIPUNCTURE?
ELIZABETH A. HOLMES: BECAUSE IT WAS LESS PAINFUL AND MORE HUMANE.
MR. DOWNEY: WERE ALL OF THE TESTS RUN ON THE MODIFIED DEVICES, FINGERSTICK TESTS?
ELIZABETH A. HOLMES: FOR THE MOST PART.
MR. DOWNEY: AND WERE THE TESTS RUN ON THE EDISON DEVICE FINGERSTICK TESTS?
ELIZABETH A. HOLMES: ALSO FOR THE MOST PART.
MR. DOWNEY: DID YOU TAKE STEPS AT ANY TIME TO HIDE THE FACT THAT THERE WERE SOME VENOUS DRAWS BEING RUN AT WALGREENS SERVICE CENTER, AT THERANOS SERVICE CENTERS AT WALGREENS STORES?
MR. DOWNEY: DID THERANOS, IN FACT, DISCLOSE ON ITS WEBSITE THAT THERE WERE VENOUS DRAWS AT ITS SERVICE CENTERS IN WALGREENS STORES?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND WAS THAT SOMETHING THAT WAS ACKNOWLEDGED PUBLICLY IN OTHER PLACES AS WELL?
MR. DOWNEY: MR. LEACH SHOWED YOU SOME EMAILS ABOUT A DEMONSTRATION WHERE THERE WAS A DISCUSSION OF POTENTIAL VENOUS TESTS. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND AT THE TIME THAT THAT DEMONSTRATION WAS TAKING PLACE, IS IT ACCURATE THAT THERE WERE DISCLOSURES ABOUT VENOUS TESTING AT THERANOS THAT EXISTED IN THE PUBLIC DOMAIN?
MR. DOWNEY: IS IT THE CASE THAT SOMETIMES WHEN POTENTIAL PARTNERS OF THERANOS CAME TO THE COMPANY OR WENT TO A WALGREENS STORE THEY WANTED TO GET A FINGERSTICK EXPERIENCE?
MR. DOWNEY: AND WOULD THE COMPANY TAKE STEPS TO TRY TO ACCOMMODATE THEIR REQUEST THAT THEY HAVE THE FINGERSTICK EXPERIENCE IN THE STORE?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND AM I RIGHT THAT ANYONE COULD WALK INTO A WALGREENS SERVICE CENTER -- A THERANOS SERVICE CENTER AT WALGREENS AND GET THEIR BLOOD TESTED WITHOUT THERANOS'S HELP?
ELIZABETH A. HOLMES: OF COURSE.
MR. DOWNEY: AND THAT HAPPENED ON OCCASIONS, DIDN'T IT?
MR. DOWNEY: SOMEONE HAD AN INTEREST IN THERANOS, WOULD SHOW UP, AND JUST GET A TEST; IS THAT RIGHT?
MR. DOWNEY: ALL RIGHT. I WANT TO NEXT ASK ABOUT THE EMAILS THAT MR. LEACH SHOWED YOU RELATED TO TYLER SHULTZ. DO YOU RECALL THAT DISCUSSION WITH MR. LEACH?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, MR. SHULTZ, YOU HAVE NOT SEEN HIM TESTIFYING HERE; IS THAT RIGHT?
ELIZABETH A. HOLMES: I HAVE NOT.
MR. DOWNEY: BUT YOU RECALL SOME DOCUMENTS BEING INTRODUCED THAT WERE EMAILS FROM HIM?
MR. DOWNEY: AND DO YOU RECALL THAT ONE OF THE QUESTIONS THAT MR. LEACH ASKED YOU ON LAST TUESDAY WAS ABOUT VALIDATION OF THERANOS'S SYPHILIS ASSAY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT HE ALSO ASKED YOU QUESTIONS ABOUT MR. SHULTZ RAISING CONCERNS ABOUT MEDIA STATEMENTS THAT THERANOS HAD MADE?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU ALSO RECALL THAT HE HAD ASKED YOU QUESTIONS LAST TUESDAY ABOUT A COEFFICIENT OF VARIATION FOR A PARTICULAR ASSAY? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IS IT FAIR TO SAY THAT IN ALL THREE OF THOSE CATEGORIES, MR. SHULTZ WAS RAISING SOME CONCERN ABOUT THERANOS'S WORK?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: NOW, YOU TESTIFIED DURING YOUR DIRECT EXAMINATION THAT MR. SHULTZ HAD FIRST RAISED THOSE QUESTIONS IN FEBRUARY OF 2014. DO YOU REMEMBER THAT?
MR. DOWNEY: AND I THINK WE LOOKED AT A SERIES OF EMAILS WHERE DR. YOUNG PROVIDED ANSWERS TO MR. SHULTZ'S CONCERNS; IS THAT RIGHT?
MR. DOWNEY: AND THEN THE ISSUE DIED FOR A WHILE. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN IN APRIL, MR. SHULTZ AGAIN RAISED AN ISSUE DIRECTLY WITH YOU. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WE LOOKED AT YOU ASKING DR. YOUNG TO GET INVOLVED AND TRY TO UNDERSTAND THE CONCERNS THAT MR. SHULTZ WAS RAISING. DO YOU RECALL THAT?
MR. DOWNEY: AND DO YOU RECALL THAT DR. YOUNG DID PROVIDE EMAIL COMMUNICATIONS TO YOU AND TO MR. BALWANI THAT ADDRESSED THE CONCERNS THAT MR. SHULTZ WAS RAISING?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: ALL RIGHT. I WANT TO LOOK AT LOOK AT SOME OF THOSE EMAIL COMMUNICATIONS IN LIGHT OF THE QUESTIONS THAT MR. LEACH ASKED YOU. LET'S LOOK AT EXHIBIT 1667, WHICH IS IN EVIDENCE.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: SO I'M INTERESTED IN THE THIRD EMAIL HERE FROM MS. HOLMES AT 4:35 ON APRIL 11TH. IF WE CAN JUST BLOW THAT UP. AND DO YOU SEE THAT THIS IS YOU, IN RESPONSE TO MR. SHULTZ'S EMAIL RAISING CONCERNS, ASKING DR. YOUNG TO TAKE A LOOK AT IT?
MR. DOWNEY: AND HE SAYS DID YOU -- YOU RAISE A QUESTION WITH HIM, DID HE TALK TO -- HAD DR. YOUNG TALKED TO MR. SHULTZ TO SAY THAT WHAT THE MEDIA REFERENCES TO THERANOS'S ACCURACY WERE, WERE ABOUT THERANOS'S INFRASTRUCTURE AND ITS LONGITUDINAL POWER IN THE CONTEXT OF LAB TO LAB VARIABILITY. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, MR. SHULTZ WAS RAISING A CONCERN THAT THERANOS WAS PUBLICLY SAYING THAT ITS TESTS WERE ACCURATE AND RELIABLE, AND IN SOME CASES MORE ACCURATE AND RELIABLE; IS THAT RIGHT?
MR. DOWNEY: AND YOU WERE COMMENTING TO DR. YOUNG ABOUT THE QUESTIONS THAT MR. SHULTZ RAISED ON THAT; IS THAT RIGHT?
ELIZABETH A. HOLMES: I AM.
MR. DOWNEY: AND YOU SAY, WELL, THOSE ARE REFERENCES TO OUR PRACTICE'S LONGITUDINAL POWER IN THE CONTEXT OF LAB TO LAB VARIABILITY. IS THAT WHAT IS HAPPENING HERE?
MR. DOWNEY: AND WHEN YOU SAID THAT THOSE COMMENTS ABOUT ACCURACY AND RELIABILITY ARE ABOUT LONGITUDINAL POWER IN THE CONTEXT OF LAB TO LAB VARIABILITY, WHAT DID THAT MEAN?
ELIZABETH A. HOLMES: IT MEANT THAT WE WERE BUILDING A LAB AND MINILAB THAT WERE DESIGNED TO BE STANDARDIZED AND THAT PEOPLE WOULD BE ABLE TO GET TESTS ACROSS LOCATIONS AND SEE TRENDS IN THEIR DATA THAT SHOULD HELP TO SHOW THEM THE ONSET AND PROGRESSION OF DISEASE IN WAYS THAT YOU COULD NOT SEE IF YOU DIDN'T HAVE STANDARDIZED TECHNOLOGY OR STANDARDIZED LABS LIKE WE WERE WORKING TO BUILD.
MR. DOWNEY: AND WHY WAS -- WHY WOULD THAT BE TRUE WITH RESPECT TO THERANOS TECHNOLOGY IN PARTICULAR?
ELIZABETH A. HOLMES: WITH RESPECT TO MINILAB, BECAUSE WE WERE FACTORY CALIBRATING THE DEVICES; AND WITH RESPECT TO THE LABORATORY, BECAUSE WE WERE STANDARDIZING THE EQUIPMENT IN THE AUTOMATION AMONGST ALL OF THE OTHER LABS WE INTENDED TO BUILD.
MR. DOWNEY: AND WHEN YOU OR THE COMPANY MADE STATEMENTS PUBLICLY ABOUT ACCURACY AND RELIABILITY, IS THAT SOMETHING THAT YOU WERE REFERRING TO?
MR. DOWNEY: LET'S LOOK ABOVE THIS EMAIL IN THE SAME EMAIL CHAIN JUST TO THIS APRIL 11TH EMAIL FROM DR. YOUNG, AND HE SAYS THAT HE HAS RESPONDED AND INTERLACED HIS COMMENTS IN RESPONSE TO MR. SHULTZ. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN IF WE GO DOWN INTO THE BODY OF THE EMAIL, IF WE GO TO THE TOP OF PAGE 2, WE SEE A LITTLE BIT OF THE DIALOGUE BETWEEN MR. YOUNG -- DR. YOUNG AND MR. SHULTZ. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IF YOU LOOK AT THE PARAGRAPH THAT IS AT THE TOP OF THE SCREEN NOW BEGINNING, "CALCULATING THE MEDIAN DOES NOT IGNORE ANY DATA." DO YOU SEE THAT PARAGRAPH?
MR. DOWNEY: AND DO YOU SEE THAT IN THE THIRD LINE IT BEGINS, "TYLER STILL JUST DOES NOT GRASP THE MEANING OF THE CV"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IS THIS DR. YOUNG'S RESPONSE TO THE CONCERNS THAT MR. SHULTZ HAD RAISED ABOUT THERANOS'S CALCULATION ABOUT THE COEFFICIENT OF VARIATION?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND DR. YOUNG TO BE SAYING ABOUT MR. SHULTZ'S CONCERNS AND THEIR VALIDITY?
ELIZABETH A. HOLMES: THAT HE WAS NOT ABLE TO GET MR. SHULTZ TO UNDERSTAND THE CONCEPT OF COEFFICIENT OF VARIATION AND THE MATH BEHIND HOW IT WAS CALCULATED, AND THAT MR. SHULTZ WAS CONFUSED ABOUT THAT.
MR. DOWNEY: AND IF YOU GO THEN TO THE MIDDLE OF PAGE 2, WHICH YOU TALKED ABOUT, WHICH IS THE NEXT EMAIL WHICH BEGINS, "DANIEL ALSO TOLD ME." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND AGAIN, THAT THE -- THIS IS RAISING ANOTHER CONCERN ABOUT THE CV AND ABOUT SPECIFICALLY WITH REGARD TO SENSITIVITY TESTING DONE IN CONNECTION WITH THE SYPHILIS ASSAY. DO YOU SEE THAT?
MR. DOWNEY: AND THEN DO YOU SEE IN THE SECOND PARAGRAPH IN THE LATER TEXT, IS THAT DR. YOUNG'S RESPONSE?
MR. DOWNEY: AND DR. YOUNG RESPONDS, "HE MAKES IT SOUND LIKE SOMETHING INAPPROPRIATE IS BEING DONE, WHICH IT IS NOT. EQUIVOCAL ZONES ARE COMMONLY USED, AND EXPECTED IN SUCH QUALITATIVE ASSAYS. THE APPROACH BEING USED FOR SETTING OURS WAS BASED ON COMMON TECHNIQUES." DO YOU SEE THAT?
MR. DOWNEY: AND THEN IN THE SECOND PARAGRAPH, DO YOU SEE THAT HE SAYS -- HE COMMENTS FURTHER AND SAYS THAT, "I DON'T KNOW THAT ANY STUDY WAS SIMPLY REPEATED WITH THE ORIGINAL DATA BEING IGNORED." IS THAT A RESPONSE TO A CONCERN THAT MR. SHULTZ HAD RAISED?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: OKAY. NOW, I WANT TO NEXT GO TO THE BOTTOM OF PAGE 2. AND I WANT TO FOCUS FIRST ON THE CONCERN THAT MR. SHULTZ RAISES IN THE DARKER TEXT IN THE PARAGRAPH THAT BEGINS, "I THEN ASKED." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE SAID, "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 I SHOULD FORWARD THEM TO HIM." AND THEN MR. -- AND HE GOES ON AND INDICATES THAT HE HAS DONE THAT, AND HE COMMENTS ON THERANOS NEVER DIRECTLY MAKING THOSE CLAIMS. DO YOU SEE THEN THAT DR. YOUNG RESPONDS TO THAT BY SAYING, "I DID NOTE TO TYLER THAT THERANOS WILL HAVE A SUPERIOR PRODUCT BY CONTROLLING/MONITORING/REDUCING VARIANCE ACROSS OUR COUNTRY-WIDE INFRASTRUCTURE. THIS WILL ENABLE US TO TRACK/TREND TEST RESULTS FOR PATIENTS IN A MUCH MORE ROBUST MANNER COMPARED TO WHAT IS AVAILABLE NOW TO PATIENTS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND, AGAIN, IS THAT THIS IDEA THAT THERE'S CALIBRATION BETWEEN INSTRUMENTS THAT ARE THERANOS INSTRUMENTS NO MATTER WHERE THE DEVICE WAS LOCATED?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND THEN IF YOU GO TO THE NEXT PARAGRAPH, DO YOU SEE MR. SHULTZ IS RAISING AN ISSUE ABOUT THE PREVIOUS DISCUSSION RELATED TO THE CV CLAIM OF LESS THAN 10 PERCENT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE SAYS THAT THAT'S NOT ACCURATE UNDER THE MEDIAN. DO YOU SEE THAT?
MR. DOWNEY: AND DR. YOUNG RESPONDS AND SAYS MEDIAN IS NOT USED HERE, AVERAGES ARE. DO YOU SEE THAT?
MR. DOWNEY: AND THEN MR. LEACH SHOWED YOU LAST TUESDAY A DRAFT RESPONSE TO MR. SHULTZ THAT WAS PREPARED IN COMMUNICATIONS BETWEEN YOU AND DR. YOUNG AND MR. BALWANI. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THERE WAS A DRAFT WHERE YOU HAD PROVIDED SOME COMMENTS?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 15070.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND IS EXHIBIT 15070 A -- RELATE TO THE COMMENTS THAT WERE BEING EXCHANGED BETWEEN YOURSELF AND DR. YOUNG AND MR. BALWANI RESPONDING TO MR. SHULTZ?
ELIZABETH A. HOLMES: IT DOES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 15070.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15070 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF YOU LOOK AT PAGE 2, THIS IS -- IF YOU LOOK AT THE FIRST PAGE, THIS IS AN EMAIL WHERE MR. BALWANI SAYS HE'S PROVIDING A DOCUMENT THAT -- WHERE HE HAS ADDED A RESPONSE THAT HE'S GOING TO GIVE TO MR. SHULTZ. DO YOU SEE THAT?
MR. DOWNEY: AND THEN IF YOU LOOK AT THE ATTACHMENT, DO YOU SEE THE COMMENT ON THE RIGHT-HAND SIDE, AND THIS IS THE COMMENT THAT MR. LEACH HAD DRAWN YOUR ATTENTION TO WHERE IT SEEMS TO SPIN OUT FROM THE FIRST SENTENCE, AND YOU SAY, "STRONGER - EMPHASIZE WHAT HE DID FIRST ESPECIALLY IN LIGHT OF MY COMMENT ON ACCURACY BELOW." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, YOU REFERRED THERE TO A COMMENT ON ACCURACY BELOW, AND I WANT TO SEE IF WE CAN TAKE A LOOK AT THAT COMMENT BY LOOKING AT EXHIBIT 7349.
ELIZABETH A. HOLMES: 7439?
MR. DOWNEY: 7439.
ELIZABETH A. HOLMES: GOT IT. OKAY.
MR. DOWNEY: AND IS THIS ANOTHER VERSION WITH A LITTLE BIT OF A DIFFERENT FORMULATION OF THESE EMAIL COMMUNICATIONS BETWEEN YOURSELF AND DR. YOUNG AND MR. BALWANI?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND IF YOU LOOK THROUGH THAT DOCUMENT -- WELL, YOUR HONOR, I MOVE TO ADMIT EXHIBIT 7439 SO WE CAN PUT IT UP.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7439 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: OKAY. DO YOU SEE THAT THE FIRST PAGE IS MR. BALWANI FORWARDING EDITS AND MR. YOUNG SAYING THAT THOSE EDITS LOOK VERY GOOD?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND ATTACHED ARE EDITS?
MR. DOWNEY: BUT WHAT I WANT TO FOCUS YOU ON IS THE COMMENT THAT YOU HAD MADE WHICH YOU WERE REFERRING TO IN THE PRIOR EXHIBIT, WHICH IS ON PAGE 5 OF THE EXHIBIT. AND IF YOU COULD BLOW UP THE COMMENT ON THE RIGHT-HAND SIDE. DO YOU SEE THAT THIS IS A COMMENT THAT YOU ENTERED ON A SENTENCE IN THE RESPONSE TO MR. SHULTZ?
MR. DOWNEY: AND DO YOU SEE THAT IT'S COMMENTING ABOUT THAT A LARGE NUMBER OF OTHER ASSAYS -- DOES THAT MEAN OTHER ASSAYS FROM OTHER COMPANIES?
ELIZABETH A. HOLMES: WHERE ARE YOU IN THE --
MR. DOWNEY: SORRY. THE SENTENCE THAT BEGINS, "THE SAME APPLIES FOR AN OVERWHELMINGLY LARGE NUMBER OF ASSAYS?
ELIZABETH A. HOLMES: YES, GOT IT.
MR. DOWNEY: "THE CV'S FOR THESE IS USUALLY MUCH HIGHER WHEN YOU MEASURE IT ACROSS MULTIPLE DEVICES, DIFFERENT REAGENT LOTS AND DIFFERENT DAYS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: TELL US WHAT THAT IS A REFERENCE TO.
ELIZABETH A. HOLMES: IT'S TALKING ABOUT OTHER ASSAYS OR TESTS AND THE COEFFICIENT OF VARIATION BEING MUCH HIGHER THAN WHAT'S OFTEN REPORTED WHEN IT'S MEASURED ACROSS DIFFERENT LABS OR DIFFERENT ANALYZERS, DIFFERENT LOTS OF REAGENTS AND DIFFERENT DAYS, THAT YOU DON'T SEE THAT LOWER CV IN ACTUAL PERFORMANCE.
MR. DOWNEY: OKAY. AND LET'S LOOK AT THE COMMENT THAT YOU MAKE IN THE RIGHT-HAND COLUMN. DO YOU SEE THAT YOU WRITE, "ADD PRE-ANALYTICAL ERROR AND VARIANCE POINT - THIS IS WHAT THE" "WALL STREET JOURNAL," "WSJ," "WALL STREET JOURNAL," "AND EVERYONE ELSE IS TALKING ABOUT BY THE WORD 'ACCURACY.'" DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IS THAT A REFERENCE TO THE ARTICLE THAT HAD RUN IN SEPTEMBER OF 2013 ABOUT THERANOS, WRITTEN BY JOE RAGO?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND IN THIS SENTENCE YOU SAY THAT "THE WALL STREET JOURNAL" IS TALKING ABOUT PRE-ANALYTICAL ERROR. FIRST, WHAT DOES THAT MEAN?
ELIZABETH A. HOLMES: IT MEANS ALL OF THE ERRORS THAT CAN GO INTO A TEST FROM SAMPLE COLLECTION, TRANSPORTING THE SAMPLE, ACCESSIONING THE SAMPLE IN THE LAB BEFORE IT'S EVEN RUN ON A MACHINE.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT THERANOS'S 4.0 SYSTEM, WHEN IMPLEMENTED, WOULD ELIMINATE THOSE ERRORS?
MR. DOWNEY: AND YOU THEN GO ON TO SAY, AFTER PRE-ANALYTICAL ERROR, AND VARIANCE POINT. WHAT WERE YOU REFERRING TO THERE?
ELIZABETH A. HOLMES: AGAIN, THE SAME POINT, THAT IF YOU COULD LOOK AT LAB DATA OVER TIME, THERE WAS AN OPPORTUNITY TO SEE THE ONSET OF DISEASE. BUT TO DO THAT, YOU NEEDED TO STANDARDIZE THE DEVICES OR THE PLATFORMS ON WHICH YOU WERE MEASURING, AND THAT WAS SOMETHING THAT THERANOS HAD CREATED IN ITS TECHNOLOGIES, AND WE THOUGHT WE COULD CHANGE IN THE WAY THAT PEOPLE COULD USE LAB DATA.
MR. DOWNEY: AND THEN IF YOU GO TO -- YOU SAY THAT, "READ THE ARTICLES, THEY EXPOUND ON EXACTLY THIS, THIS IS OUR WHOLE POINT AND MISSION ON ACTIONABLE INFORMATION AND WHAT WE ALWAYS TALK ABOUT WHEN TALKING ABOUT ACCURACY AS YOU CAN SEE FROM THE CONTEXT AROUND ANY PERFORMANCE CLAIM, INCLUDING ON OUR WEBSITE AND IN ARTICLES." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: WERE YOU, IN THIS COMMENT THAT YOU MADE IN APRIL OF 2014, REFERRING TO COMMENTS ON THE THERANOS WEBSITE AS THEY THEN EXISTED?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: AND WERE THOSE COMMENTS TO THE EFFECT THAT THERANOS'S TECHNOLOGY WAS MORE ACCURATE AND RELIABLE THAN THOSE OF THE TECHNOLOGY OF COMPETITORS?
MR. DOWNEY: AND WHEN YOU SAID IN THIS DOCUMENT IN YOUR FIRST COMMENT THAT MR. BALWANI SHOULD BE STRONGER AND SHOULD EMPHASIZE, WERE YOU REFERRING TO THIS COMMENT ABOUT ACCURACY AND RELIABILITY IN YOUR INTENTION IN SAYING IT?
ELIZABETH A. HOLMES: I WAS. AND JUST LOOKING AT IT, THAT PART OF THE SENTENCE REFERS TO WHAT IS WRITTEN THERE, WHICH IS GIVING HIM THE BENEFIT OF THE DOUBT THAT HIS INTENTIONS ARE IN THE RIGHT PLACE.
MR. DOWNEY: LET ME ASK YOU TO JUST TAKE A LOOK QUICK AT THE NEXT PAGE OF THIS EXHIBIT. AND REALLY I'M INTERESTED IN THE LAST PARAGRAPH HERE BEGINNING, "I THEN THOUGHT." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THE FIRST PARAGRAPH HERE BEGINNING, "I THEN THOUGHT BACK TO OUR PREVIOUS DISCUSSION," IS THAT A REFERENCE FROM A PARAGRAPH PREPARED BY MR. SHULTZ?
MR. DOWNEY: AND HE SAYS, WE CHECKED THE THERANOS WEBSITE AND FOUND THAT WE ONLY MAKE THIS CLAIM FOR VITAMIN D, BUT THEN HE GOES ON TO SAY, BUT THE CV LEVELS WERE HIGHER THAN 10 PERCENT, AND HE LISTS A VARIETY OF NUMBERS, WHEN CALCULATED ON THE MEDIAN OF EACH PRECISION RUN AND HIGHER THAN 10 AGAIN WHEN CALCULATED BASED ON THE ENTIRE DATA SET. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THAT DR. YOUNG RESPONDED TO THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THAT HIS RESPONSE IS THAT THE DATA APPEARS TO BE FROM THE 2-TIP PRECISION DATA, INCLUDING EACH TIP VALUE. WHY WAS THAT RELEVANT AS PART OF HIS RESPONSE?
ELIZABETH A. HOLMES: BECAUSE THAT'S AN INCORRECT WAY TO CALCULATE COEFFICIENT OF VARIATION.
MR. DOWNEY: AND THEN HE SAYS, "AS NOTED SEVERAL TIMES, THE CV METRIC ACROSS THAT DATA IS NOT HOW WE QUANTIFY OUR ASSAY SYSTEM CV. WE HAVE REFERENCED OUR 6-TIP VITAMIN D PRECISION BELOW IN REFERENCE TO THE TABLE SUMMARIES." DO YOU SEE THAT?
MR. DOWNEY: HE GOES ON TO SAY, "YOU WERE WRONG HERE, MEDIAN WAS NOT USED HERE - AVERAGES ARE. THIS IS WHY YOU ARE GENERATING WRONG NUMBERS." AND DID YOU UNDERSTAND THAT THIS WAS DR. YOUNG'S RESPONSE TO MR. SHULTZ'S CONCERNS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS THIS THE THIRD OR FOURTH TIME THAT DR. YOUNG AND MR. SHULTZ HAD HAD CONVERSATIONS ON THESE SAME SUBJECTS?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: LET ME TURN FROM TALKING ABOUT MR. SHULTZ TO TALKING FOR A MOMENT ABOUT MS. CHEUNG. DO YOU RECALL THAT MS. CHEUNG TESTIFIED VERY CLOSE TO THE BEGINNING OF THE TRIAL? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND AM I RIGHT THAT YOU DID NOT KNOW MS. CHEUNG WHEN SHE WORKED AT THERANOS?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: AND YOU DID NOT KNOW THAT SHE RAISED ANY CONCERNS ABOUT THE QUALITY OF THERANOS TESTING WHILE SHE WAS AT THERANOS; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: AND IS IT RIGHT THAT YOU DID NOT LEARN THAT UNTIL A CONSIDERABLE AMOUNT OF TIME LATER?
MR. DOWNEY: AND YOU WERE ASKED ON CROSS-EXAMINATION ABOUT THERANOS'S RESPONSE, DO YOU RECALL THAT, TO LEARNING THAT MS. CHEUNG WAS TALKING TO A REPORTER FROM "THE WALL STREET JOURNAL"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT MR. LEACH ASKED IF YOU HAD A LAWYER SEND A LETTER TO MS. CHEUNG. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, I WANT TO ASK YOU, IN REGARD TO MS. CHEUNG'S TIME AT THERANOS, IS IT ACCURATE THAT SHE SIGNED A NONDISCLOSURE AGREEMENT AGREEING TO KEEP INFORMATION ABOUT THERANOS CONFIDENTIAL?
ELIZABETH A. HOLMES: SHE DID.
MR. DOWNEY: AND WAS THAT REQUIRED OF EVERY EMPLOYEE?
MR. DOWNEY: WHEN YOU LEARNED THAT MS. CHEUNG WAS HAVING CONVERSATIONS ABOUT THERANOS AND WHAT YOU BELIEVED TO BE CONFIDENTIAL INFORMATION, WAS YOUR -- WAS THE FIRST REACTION YOU HAD TO HAVE A LAWYER SEND HER A LETTER?
MR. DOWNEY: DID YOU ASK THAT THERANOS'S HUMAN RESOURCES DEPARTMENT REACH OUT TO HER?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT THEY DID THAT?
MR. DOWNEY: HOW MANY TIMES, IN YOUR UNDERSTANDING, DID THE HEAD OF PERSONNEL AT THERANOS REACH OUT TO MS. CHEUNG?
ELIZABETH A. HOLMES: MULTIPLE TIMES.
MR. DOWNEY: AND DID MS. CHEUNG RESPOND TO ANY OF THOSE CALLS?
MR. DOWNEY: LET ME SWITCH FROM THE SUBJECT OF THE RESPONSE TO "THE WALL STREET JOURNAL" ARTICLE IN CONNECTION WITH EMPLOYEES TO TALK ABOUT THE BOARD OF DIRECTORS. DO YOU RECALL THAT?
MR. DOWNEY: AND MR. LEACH ASKED YOU ABOUT A JULY 2015 BOARD MEETING. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT WHEN GENERAL MATTIS TESTIFIED, HE GAVE SOME TESTIMONY ABOUT THAT SAME BOARD MEETING? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT GENERAL MATTIS TESTIFIED THAT HE WAS A LITTLE BIT OFFENDED THAT THERE WAS A SLIDE AS PART OF A PRESENTATION AT THAT MEETING THAT REFERRED TO THE DUTY OF LOYALTY. DO YOU REMEMBER THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT HE FELT THAT HE WAS SOMEONE WHO HAD SERVED THE COUNTRY FOR A LONG TIME AND HE DIDN'T NEED TO BE TOLD ABOUT A DUTY OF LOYALTY? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO. HE HAS.
MR. DOWNEY: AND DO YOU RECALL THAT HE WAS SHOWN THAT REFERENCE TO A DUTY OF LOYALTY IN REDACTED FASHION?
ELIZABETH A. HOLMES: IN HIS TESTIMONY?
MR. DOWNEY: YES.
MR. DOWNEY: I'D LIKE TO ASK YOU TO LOOK AT EXHIBIT 15062.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS 15062 A DECK THAT WAS PROVIDED TO DIRECTORS OF THERANOS IN CONNECTION WITH ITS JULY 2015 MEETING?
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 15062.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15062 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF YOU LOOK AT THE SECOND PAGE HERE, DO YOU SEE THERE'S AN AGENDA FOR THE BOARD OF DIRECTORS THAT IS SET FORTH FOR A MEETING?
MR. DOWNEY: I'D LIKE TO ASK YOU TO FLIP FORWARD IN THIS DOCUMENT TO PAGE 12 OF THE DOCUMENTS.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND DO YOU SEE THAT THIS IS LABELLED "CHARTERING THE BOARD OF COUNSELORS"?
MR. DOWNEY: AND CAN YOU EXPLAIN WHAT WAS GOING ON HERE?
ELIZABETH A. HOLMES: WE WERE FORMALIZING AN ADVISORY BOARD TO THE COMPANY, WHICH WE WERE CALLING THE BOARD OF COUNSELORS, AND WE WERE TALKING ABOUT THE CORE ASPECTS OF THE BOARD OF COUNSELORS AND THEIR AGREEMENT WITH THE COMPANY.
MR. DOWNEY: OKAY. AND THE FIRST ITEM IS DUTY OF LOYALTY. DO YOU SEE THAT?
MR. DOWNEY: AND THEN IF YOU GO TO THE NEXT SLIDE, DO YOU SEE THAT THE FULL DISCUSSION HERE REFLECTS DISCUSSION ABOUT THE LEGAL REQUIREMENTS THAT ARE IMPOSED ON DIRECTORS OF A COMPANY?
MR. DOWNEY: AND DID YOU UNDERSTAND THAT THIS WAS INFORMATION THAT YOU WERE TO SHARE WITH THE BOARD OF DIRECTORS TO MAKE SURE THAT ALL OF THE LEGAL RESPONSIBILITIES THAT THEY HAD WERE UNDERSTOOD?
MR. DOWNEY: NOW, MR. LEACH ALSO ASKED YOU ABOUT GENERAL MATTIS'S RESIGNATION FROM THERANOS IN 2016. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID YOU HAVE AN UNDERSTANDING IN 2016 WHY GENERAL MATTIS HAD RESIGNED?
MR. DOWNEY: DID YOU CONTINUE TO SPEAK WITH GENERAL MATTIS AFTER HE LEFT THE BOARD IN 2016?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 15061.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND IS EXHIBIT 15061 A SERIES OF EMAILS ABOUT THE DEPARTURE OF GENERAL MATTIS AS A DIRECTOR?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 15061.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15061 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: WE'LL BRING THAT UP, YOUR HONOR.
MR. DOWNEY: DO YOU SEE THIS IS AN EMAIL FROM GENERAL MATTIS AND YOU'RE COPIED ON THE EMAIL FROM DECEMBER 2016?
MR. DOWNEY: DO YOU SEE THAT?
ELIZABETH A. HOLMES: YES, YES.
MR. DOWNEY: AND WAS THIS AROUND THE TIME THAT GENERAL MATTIS WAS NOMINATED TO SERVE AS SECRETARY OF DEFENSE?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND DO YOU SEE THAT IN GENERAL MATTIS'S EMAIL, HE SAYS, "DUE TO MY STATUS OF PENDING NOMINATION AND POSSIBLY GOING INTO A CONFIRMATION PROCESS, I NEED TO RECUSE MYSELF FROM THE BOARD MEETING. SORRY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND AFTER THE TIME OF HIS NOMINATION, DID HE CEASE PARTICIPATING IN BOARD AFFAIRS OF THERANOS?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: NOW, YOU ALSO RECALL THAT GENERAL MATTIS TESTIFIED THAT HE HOPED THAT THERANOS WOULD PURSUE HAVING SOME EFFORTS TO HAVE PEER REVIEW OF WORK DONE IN CONNECTION WITH ITS TECHNOLOGY. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WAS THAT ADVICE THAT THE COMPANY TOOK TO HEART IN 2016?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND WERE THE STUDIES THAT MR. LEACH SHOWED YOU ON YOUR CROSS-EXAMINATION, WERE THEY IN PART AN EFFORT TO RESPOND TO THE ADVICE THAT YOU GOT FROM GENERAL MATTIS AND OTHERS?
MR. DOWNEY: LET ME MOVE TO TALKING A LITTLE BIT ABOUT THE WEBSITE OF THERANOS IN SOME OF THE EMAILS THAT YOU WERE SHOWN DURING YOUR CROSS-EXAMINATION. DO YOU RECALL THAT MR. LEACH SHOWED YOU EMAILS WHERE LAWYERS WERE COMMENTING ON DRAFTS OF THE WEBSITE?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND YOU RECALL THAT YOU HAD ASKED LAWYERS TO REVIEW THE CONTENT OF THE WEBSITE BEFORE IT WENT LIVE?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS THAT LAWYERS FROM ONE LAW FIRM OR MORE THAN ONE LAW FIRM?
ELIZABETH A. HOLMES: MULTIPLE LAW FIRMS.
MR. DOWNEY: AND WHY DID YOU WANT LAWYERS TO REVIEW THE CONTENT OF THE WEBSITE?
ELIZABETH A. HOLMES: BECAUSE I WANTED TO MAKE SURE THAT WHAT WE WERE PUTTING UP WAS RIGHT.
MR. DOWNEY: WERE THERE NONLAWYERS ALSO INVOLVED IN THE PROCESS OF REVIEWING THERANOS'S WEBSITE?
ELIZABETH A. HOLMES: YES. THERE WERE MULTIPLE TEAMS OF PEOPLE INVOLVED.
MR. DOWNEY: AND WERE THE TWO EMAILS THAT YOU WERE SHOWN BY MR. LEACH, WERE THEY THE ONLY ADVICE THAT YOU RECEIVED IN CONNECTION WITH THE CONTENT OF THE WEBSITE?
MR. DOWNEY: NOW, YOU RECALL THAT CERTAIN CHANGES WERE SUGGESTED IN THAT EMAIL?
MR. DOWNEY: DID YOU TRACK ALL OF THOSE AND GO INTO THE WEBSITE AND MAKE THOSE CHANGES YOURSELF?
MR. DOWNEY: WHO WAS RESPONSIBLE FOR DOING THAT?
ELIZABETH A. HOLMES: THERE WAS A TEAM OF PROJECT MANAGERS AND OTHER PEOPLE WITHIN THE COMPANY WHO DID THAT.
MR. DOWNEY: AND DID YOU RECALL THAT THE DOCUMENT REFERRED TO HAVING CLAIMS SUBSTANTIATED ON THE WEBSITE?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IN OTHER WORDS, DO YOU RECALL THAT THE LAWYERS WERE SAYING, BEFORE WE SIGN OFF ON THIS BEING RUN, WE WOULD LIKE TO SEE SOME SUBSTANTIATION?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WAS THAT A COMMON PROCESS THAT YOU OBSERVED AT THERANOS?
MR. DOWNEY: AND DO YOU KNOW WHETHER SPECIFICALLY IN CONNECTION WITH THE CONCERNS THAT WERE RAISED IN THAT EMAIL SUBSTANTIATION WAS PROVIDED TO THE LAWYERS?
ELIZABETH A. HOLMES: I DO. I KNOW THERE WAS MUCH ONGOING DISCUSSION AFTER THAT.
MR. DOWNEY: AND WHO WAS IN CHARGE OF COORDINATING THE PROCESS OF ENTRY OF CHANGES INTO THE WEBSITE BEFORE IT WENT LIVE?
ELIZABETH A. HOLMES: ONE OF OUR PROJECT MANAGERS OR A FEW OF OUR PROJECT MANAGERS IN COMMUNICATION WITH OUR TECHNICAL TEAM, THE REGULATORY TEAM, THE LEGAL TEAM, AND THE MARKETING TEAM.
MR. DOWNEY: ALL RIGHT. NOW I WANT TO ASK YOU ABOUT SOME OF THE TEXTS THAT MR. LEACH REVIEWED WITH YOU BETWEEN YOURSELF AND MR. BALWANI. DO YOU RECALL DISCUSSING THAT DURING THE COURSE OF YOUR --
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: -- EXAMINATION? ONE SERIES OF TEXTS --
JUDGE DAVILA: EXCUSE ME, MR. DOWNEY. I'M SORRY. SHOULD WE BREAK FOR THE AFTERNOON? IS THIS GOING TO BE --
MR. DOWNEY: OH, IT'S LATER THAN I REALIZED IT WAS, YOUR HONOR.
JUDGE DAVILA: NO, IT'S QUITE ALL RIGHT. IT SOUNDS LIKE THIS WILL BE A BIT OF A LENGTH.
MR. DOWNEY: PROBABLY TOO LONG TO KEEP THE JURY, YEAH.
JUDGE DAVILA: LET'S TAKE OUR EVENING RECESS, LADIES AND GENTLEMEN. LET'S RESUME OUR REDIRECT EXAMINATION TOMORROW MORNING AT 9:00 A.M. I'M GOING TO ASK YOU TO CONTINUE TO BE SUCCESSFUL IN YOUR EFFORTS NOT TO DISCUSS, LEARN, DO ANY RESEARCH ABOUT THIS CASE, NOR FORM ANY OPINION ABOUT IT OVERNIGHT. I'LL ASK YOU TOMORROW MORNING AGAIN WHETHER OR NOT ANY OF THOSE THINGS HAVE HAPPENED. WE'LL BE IN RECESS. TOMORROW IS A 4:00 P.M. DAY, I BELIEVE. I BELIEVE WE'RE GOING UNTIL 4:00 P.M. TOMORROW. I'LL HAVE AN UPDATE. I'M GOING TO TALK WITH THE LAWYERS TONIGHT WHEN YOU LEAVE AND A LITTLE TOMORROW MORNING AND GIVE YOU AN UPDATE ON SCHEDULING. I KNOW THAT MAY BE ON YOUR MIND. SO HAVE A GOOD EVENING AND WE'LL SEE YOU TOMORROW MORNING. HAVE A GOOD NIGHT. YOU MAY STAND DOWN, MS. HOLMES.
(JURY OUT AT 4:01 P.M.)
JUDGE DAVILA: PLEASE BE SEATED. THANK YOU. THE RECORD SHOULD REFLECT THAT OUR JURY HAS LEFT FOR THE EVENING. SO COUNSEL, LET ME JUST CHECK IN. FIRST OF ALL, ON SCHEDULE, WHAT CAN I TELL -- WHAT DO YOU THINK I COULD TELL THE JURY NOW? IS IT PREMATURE TO GIVE THEM AN UPDATE ON OUR SCHEDULE? I KNOW THAT'S A REALLY TROUBLESOME QUESTION, ISN'T IT? IT REQUIRES SOME THOUGHT.
MR. DOWNEY: WELL, WITH MS. HOLMES I ONLY HAVE ABOUT HALF AN HOUR, I WOULD SAY, AND I DON'T KNOW HOW LONG MR. LEACH PLANS TO TAKE.
JUDGE DAVILA: OKAY.
MR. DOWNEY: I IMAGINE NOT LONG ON HIS RECROSS.
JUDGE DAVILA: THANK YOU.
MR. LEACH: LIMITED, YOUR HONOR.
JUDGE DAVILA: OKAY. AND THEN YOU MIGHT HAVE ANOTHER WITNESS TO CALL?
MR. DOWNEY: WE'LL SEE WHERE WE ARE AT THE END OF THE DEFENDANT'S TESTIMONY, BUT I WANT TO LOOK AT THE TRANSCRIPT TONIGHT AND SEE WHERE WE ARE AS TO OTHER WITNESSES.
JUDGE DAVILA: OKAY. OKAY.
MR. DOWNEY: SO I MIGHT HAVE AN UPDATE ON THAT AS SOON AS WHEN MS. HOLMES FINISHES.
JUDGE DAVILA: OKAY. AND THEN WE STILL HAVE SOME CONVERSATION REGARDING INSTRUCTIONS. WE STILL NEED TO DO THAT.
MR. DOWNEY: YES.
JUDGE DAVILA: LET'S NOT SCHEDULE SOMETHING NOW. I JUST WANT TO PUT IT ON YOUR RADAR. WE NEED TO BE LOOKING AT A SCHEDULE WHEN WE CAN COMPLETE OUR DISCUSSIONS. MY SENSE IS THAT YOU'VE BEEN SUCCESSFULLY MEETING AND CONFERRING REGARDING OUR LAST CONVERSATION ON FRIDAY.
MR. LEACH: I THINK THAT'S GENERALLY FAIR, YOUR HONOR.
MR. DOWNEY: I THINK WE FEEL THAT WAY BECAUSE WE'RE NOT DIRECTLY PARTICIPATING IN IT, BUT WE FEEL IT'S GOING VERY WELL, YES.
(LAUGHTER.)
MR. LEACH: SHARING WITH MY COLLEAGUES, YOUR HONOR, WE SENT A FORMAT OF A DRAFT ON FRIDAY AFTER OUR HEARING. WE RECEIVED SOME RESPONSES ON SUNDAY, WHICH WE'RE STILL REVIEWING.
JUDGE DAVILA: SURE.
MR. LEACH: AND A FEW OTHER FILINGS WITHIN THE LAST COUPLE OF DAYS WHICH HAVE CAUGHT OUR ATTENTION, TOO. BUT WE ARE -- I WOULD -- I'M NOT SURE IF I WOULD USE THE WORD "PRODUCTIVE," BUT WE'RE EXCHANGING DRAFTS AND WE'LL HAVE SOMETHING TO PRESENT TO THE COURT IN THE NEAR FUTURE.
JUDGE DAVILA: THANK YOU. I'M ASKING TO KEEP US GOING. I KNOW SCHEDULES ARE IMPORTANT THIS TIME OF YEAR. I KNOW WE'RE UNAVAILABLE NEXT TUESDAY AND WEDNESDAY. SO, OKAY, ANYTHING FURTHER BEFORE WE BREAK?
MR. DOWNEY: YOUR HONOR, JUST ONE ISSUE I MIGHT TALK TO YOU AND MR. SCHENK ABOUT THAT RELATES TO SCHEDULING.
JUDGE DAVILA: A SCHEDULING ISSUE? SURE, OKAY. OKAY. THANK YOU. WE'LL SEE YOU TOMORROW.
COURT CLERK: COURT IS ADJOURNED.
(COURT ADJOURNED AT 4:04 P.M.)