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Refer to: WDSC-GKY

IMPORTANT NOTICE – PLEASE READ CAREFULLY

March 18, 2016

Dear Dr. Dhawan, Ms. Holmes, and Mr. Balwani:

'''This letter provides notice of sanctions the Centers for Medicare & Medicaid Services (CMS) is proposing to impose against the laboratory's Clinical Laboratory Improvement Amendments of 1988 (CLIA) certificate and of the laboratory's opportunity to submit in writing any evidence or information as to why the proposed sanctions should not be imposed. If the sanctions are imposed, we will provide the laboratory with a separate notice setting forth hearing rights and explaining the administrative appeals process.'''

CMS conducted a CLIA recertification and complaint survey at Theranos, Inc. ("Theranos" or "laboratory"). The onsite portion of the survey was completed on November 20, 2015; however, the survey concluded with the receipt of critical information received from the laboratory on December 23, 2015. Based on this survey, Theranos was found to be out of compliance with the following five CLIA Condition-level requirements:

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