Thread by @doratki

It’s just past 7 a.m. and I'm outside the San Jose federal courthouse for day 2 of testimony in US v Elizabeth Holmes. The line is small this morning w/ no Holmes look-alikes. Balwani’s counsel is here, along with the small group of press who will be covering this trial daily.

A woman in line behind me said this is the 4th time she’s showed up trying to get a seat in the courtroom. The last three times she was turned away, she says. The guy in front of me tells her she should get a seat today, b/c “there’s an Apple event,” and everyone’s covering it.

“Oh good,” she replies. She owns Apple stock - we are in San Jose after all - and she hope it goes up today. Now the guy in from of me is explaining Judge GR’s Epic v Apple decision. (Good lord, let me inside this courthouse.)

The lady behind me in line was raised on a chicken farm in New Jersey and is a fan, but not a “fan fan” of Bruce Springsteen. “Last time I was here I tried to get to the front of the line and they literally kicked my butt,” she says. (I now remember her and there was no kicking.)

A guy in front of me in line says he was the last person to get a seat in court last week, and once everyone behind him realized that, a big argument broke out b/w people accusing others of jumping the line.

Apparently one woman accused a guy in front of her of skipping the line, and in the words of one reporter, she was “going 51/50” when she realized she wouldn’t make it inside, which I find hilarious. (Look it up.)

Elizabeth Holmes has arrived and the woman behind me is clapping for her as she approaches security. “Congratulations on your little boy, you’re a good mom,” the woman tells Holmes. “Putting everything on one person is ridiculous. Ridiculous.

The woman behind me who grew up in NJ is a spectator. “Don’t forget the Me Too Movement,” she shouts as jurors wait to go through security. A man in a suit behind her tells her to be quiet, bc she could cause a mistrial. This may be her only day attending court, she replies.

Judge Davila is on the bench. He says juror No 9 received two negative COVID-19 tests. "We’re happy for that juror and that’s why we’re in session today," he says.

Judge says he's going to excuse Juror No 7 b/c she told the court over the weekend she couldn't shift her work schedule. The juror is 19 and works part time in customer service to help her mom pay bills. She said in voir dire, her dad died 4 yr ago and he could get violent.

In light of excusing Juror No 7, the judge is moving up juror alternate No 1, and now the 12-member jury panel is 8 men, 4 women.

Oh boy. Judge Davila just read my prior tweet aloud to the attorneys and everyone in the courtroom about the NJ woman who shouted about the Me Too movement to the jurors. The judge reminds everyone that interfering with jurors could face investigation and not to do it.

S/o to the CAND pr guy who's reading my tweets this morning. ✌️😬✌️

Moving on. Judge Davila brings in Juror No 12, who disclosed she once worked at KPMG as an admin assistant after an ex-Theranos employee who testified last week mentioned hiring KPMG. After some q's, it doesn't appear there are any conflicts.

With that, the judge called in the rest of the jury. Former Theranos Controller Danise Yam is back on the stand. Prosecutors are up, asking her about Theranos' financial statements from 2010 and 2011. (Buckle up, testimony is about to get boring.)

Yam says in 2010 Theranos made $1.4 million in revenues and lost $16.2 million, and in 2011, it made $518k an lost $27.66 million. She says at the end of 2011, Theranos' accumulated deficit (ie. its total losses since the co was founded in 2003) was $104 million.

Yam says in 2012, Theranos lost $57 million and had no revenue. It's accumulated deficit at the end of 2012 was $161 million, she says.

Yam says in 2013, Theranos lost $92 million and had no revenue. Yam hasn't said what Theranos' accumulated deficit was at the end of 2013, but doing the math on that I'm guessing it was $283 million.

Yam says Theranos issued stock in 6 rounds, with the first round costing 17 cents per share, and the last round $17 per share in 2014-2015. A document shows investors invested a total of $944.6 million in Theranos representing 533 million shares.

Yam says in 2015(?) Theranos revenues were $14k. Prosecutor asks if Yam thinks things got better for Theranos that year. "Um, no," she replies. By the end of 2014, Theranos' accumulated deficit was $376 million, she says.

A prosecutor walked through Theranos' contracts w/ pharmaceutical cos, including Pfizer, Astrazeneca, Navartis and Schering-Plough. The contracts range from $25k to Theranos' $900k with Pfizer. Most are under $300k. Yam says Theranos had no revenue generating contacts w/ the DOD.

Yam says from 2010 to 2014, Elizabeth Holmes' annual salary at Theranos was $200k, and in 2015 it was $400k.

Yam says she approved invoices for the private jet that Elizabeth Holmes used to travel for work, but she says she doesn't know where Holmes' went when she flew on the jet, and she doesn't recall how much in total Theranos spent on Holmes' air travel.

Yam says in Sept 2013, Holmes provided her and financial advisor Aranca with revenue projections that estimated Theranos' revenues would be $50 million at the end of 2013, $90M end of 2014 and $112M end of 2015.

A prosecutor points to a 2014 email that shows Elizabeth Holmes estimated Theranos' revenue projections for 2015 would be $100 million. Yam says they provided Aranca with that estimate as the firm was assessing Theranos' value.

Prosecutor Robert Leach shows Yam more revenue estimates provided to Arcana. One document shows at one point Theranos' rev estimates for 2014 were $140 million and $990 million for 2015. Yam says she doesn't know where those numbers came from.

Leach wraps Yam's direct pointing to Theranos' 2015 tax return, which shows the company made $429k in revenues that year and had an accumulated deficit of $585 million, which represents its total losses from 2003 through* 2015.

Holmes' defense counsel, Lance Wade, begins cross getting Yam to acknowledge that cash and revenue aren’t the same, and that there was a U.S. financial crisis occurring in 2008-09 when Theranos was struggling. She also concedes that Theranos always made its payroll.

Holmes' attorney has pulled up a document showing Celgene made more than $1 million in payments to Theranos, and the American Burn Association paid Theranos ~$290k for a U.S. Army burn study.

Holmes' attorney tries to get Yam to acknowledged that she solicited advice from KPMG about Theranos' stock value. Yam says she doesn't remember if KPMG "raised the issue," or if Theranos did.

Holmes attorney asks Yam if she recalls that KPMG concluded Theranos' share pricing was "properly valued and presented." She says she doesn't recall KPMG's conclusion. Before moving on to another topic, we're taking a trial break. brb

We're back, Wade asks Yam if she reported to Balwani when he joined Theranos in 2009. She says she reported to Elizabeth Holmes, but she shared Theranos' financial information with Balwani.

Wade brings up the document showing Theranos expected to generate $140 million in 2014 and $990 million in 2015. Yam says she doesn't know who prepared the doc, for what purpose, when it was prepared, who saw it or how the estimates were created. (Surprised the thing is admitted)

Yam acknowledges that in July 2014, she provided Balwani with Theranos' annual deferred revenue estimate of $169 million.