The embattled blood-testing company Theranos plans to offer additional shares to investors who promise not to sue the company or founder and CEO Elizabeth Holmes, according to The Wall Street Journal.
Investors who participated in the company's latest funding rounds, which ended in 2015 and brought in more than $600 million, could get about two extra shares for each one they bought. Investors initially paid $15 to $17 a share, but that value likely dropped after the company's operational hardships. The extra shares will lower investors' cost to about $5 a share.
"This is an affirmative development for the company, providing a path forward in partnership with employees, investors and other stakeholders," Theranos director Daniel Warmenhoven told the Journal. "Elizabeth elected to contribute her own equity to protect any dilution of shares held by other parties."
Theranos reached a separate agreement with Rupert Murdoch, the executive chairman of News Corp and 21st Century Fox, to buy back the shares he purchased in 2015 for about $125 million. The media mogul sold his shares to the company for $1, according to a personal familiar with the matter. That means he could get back millions on taxes owed on other income by writing off Theranos as an investment loss.
The news comes after a series of struggles for Theranos. Holmes created the company in 2003 with the hope to revolutionize the blood-testing industry by performing multiple tests with just a few drops of blood. However, investigations into lab practices found that Theranos repeatedly violated its own policies and procedures. The company closed two of its labs last year.