Testimony of Professor Channing Robertson for Theranos

CROSS-EXAM

BY

MR.

FUisz-----------------------------------------,

CROSS-EXAMINATION BY MR. J. FUISZ

MR. J. FUISZ:

Q.

GOOD MORNING.

I'M JOE FUISZ, WE'VE NEVER MET BEFORE, HAVE

WE, SIR?

A.

NOT OFFICIALLY.

Q.

THE FIRST QUESTION I WANT TO ASK YOU AND I APOLOGIZE FOR

ASKING PERSONAL FINANCIAL INFORMATION BUT I FEEL I NEED TO.

YOU TESTIFIED YOU

ARE

NOT BEING COMPENSATED FOR THIS

10

REPORT; IS THAT CORRECT?

11

A.

NO, SIR.

12

Q.

OKAY.

13

A.

I AM.

14

Q.

AND YOU YOUR CURRENT COMPENSATION LEVEL IS?

15

A.

RECEIVING APPROXIMATELY $500,000 A YEAR ANNUALLY.

16

Q.

OKAY.

17

INTO THAT AGREEMENT IN JULY OF 2013?

18

A.

THAT 'S CORRECT.

19

Q.

AND YOU FIRST LEARNED YOU WOULD BE A WITNESS OR EXPERT IN

20

THIS CASE IN THE PRECEDING MONTH I BELIEVE YOU TESTIFIED,

21

JUNE 2013; IS THAT CORRECT?

22

A.

YES.

23

Q.

OKAY.

24

YOU HAD, I HAVE TO CONFESS THE RECORD WASN'T ENTIRELY CLEAR TO

25

ME, 700,000 STOCK OPTIONS OR-- I DIDN'T KNOW IF IT WAS SHARES

NOT DIRECTLY.

BUT YOU ARE A FULL TIME CONSULTANT TO THERANOS?

AND THAT-- YOUR DEPOSITION YOU SAID YOU ENTERED

YOU TESTIFIED AT YOUR DEPOSITION IN SEPTEMBER THAT

Testimony of Professor Channing Robertson for Theranos

CROSS-EXAM

BY

MR.

FUisz-------------------------------------------,

ACTUALLY GRANTED.

I'M WONDERING IF YOU CAN CLARIFY THAT.

LET'S START WITH

THE 700,000 IS THAT THE RIGHT NUMBER.

A.

YES.

Q.

NOW THOSE

A.

I REFER TO THEM AS OPTIONS, I BELIEVE.

EXERCISED THOSE OPTIONS.

Q.

WAY I WOULD UNDERSTAND AN OPTION TYPICALLY YOU HAVE A STRIKE

ARE

OPTIONS OR GRANTED SHARES?

AND I EARLY

OKAY. SO I GUESS WHAT I'M TRYING TO ASK YOU SIR, IS THE

10

PRICE THEN YOU WOULD BE ENTITLED TO THE DIFFERENCE BETWEEN THE

11

STRIKE PRICE AND THE ULTIMATE MARKET PRICE, BUT FROM WHAT I'M

12

HEARING IS SOUNDS LIKE YOU ARE ENTITLED TO THE ENTIRE VALUE OF

13

EACH OF THOSE SHARES BECAUSE YOU'VE ALREADY EXERCISED THEM; IS

14

THAT CORRECT?

15

A.

WHATEVER THE VALUE MIGHT BE AT SOME POINT IN TIME.

16

Q.

OKAY.

17

ENTIRE 700,000 SHARES?

18

A.

IF THEY END UP HAVING A VALUE, YES.

19

Q.

OKAY.

20

ANY ESTIMATE OF THE VALUE OF THOSE SHARES AT THE CURRENT TIME?

21

A.

NO.

22

Q.

AND WHY IS THAT, SIR?

23

A.

I DON 'T KNOW WHAT THEY

24

Q.

OKAY.

25

CONCLUDED A FINANCING ROUND?

SO YOU WILL BE ENTITLED TO THE FULL VALUE OF THOSE

ARE

YOU ABLE FOR THE BENEFIT OF THE JURY, TO IMPUTE

ARE

WORTH.

IS IT NOT THE CASE THAT THE COMPANY HAS RECENTLY

Testimony of Professor Channing Robertson for Theranos

CROSS-EXAM

BY

MR.

FUisz-------------------------------------------,

A.

I 'M AWARE OF IT BUT I DON'T KNOW THE DETAILS.

Q.

YOU HAVE NO IDEA WHAT THE VALUATION OF THE COMPANY WAS TO

IMPLY VALUATION FOR YOUR SHARES?

A.

SHARE.

Q.

WE WERE TO SAY THAT THE MARKET VALUE OF THE COMPANY WOULD BE

$15 A SHARE THEN COULD WE SAY THAT 700,000 TIMES 15 WOULD BE AN

APPROXIMATE NUMBER, A POSSIBILITY?

I KNOW THAT THE VALLATE, THE INTERNAL EVALUATION WAS $15 A

OKAY.

IF WE WERE TO, AND ADMITTEDLY IT'S AN ASSUMPTION, IF

10

A.

THAT WOULD BE THE INTERNAL EVALUATION BUT THAT'S NO OPEN

11

MARKET FOR THOSE SHARES.

12

Q.

13

BUT IF SOMEBODY BOUGHT THE ENTIRE COMPANY AT THE SAME VALUE

14

THAT THE INVESTORS RECENTLY BOUGHT SHARES FOR, YOU WOULD

15

RECEIVE AND MY MATH IS NOT VERY GOOD, IT SOUNDS LIKE

16

$13 MILLION MORE OR LESS?

17

A.

IF THAT'S THE CONVERSION RATE, WE CAN DO THE MATH, YES.

18

Q.

THAT SEEMS LIKE A REASONABLE ASSUMPTION FOR TODAY?

UNDERSTOOD.

19

THE COMPANY COULD BE BOUGHT FOR MORE OR LESS.

MR. BOIES:

YOUR HONOR, I THINK THAT'S A LITTLE OFF.

20

WE CAN STIPULATE TO IT.

21

MR. J. FUISZ:

22

THE COURT:

23
24
25

PLEASE.

I DON'T HAVE A CALCULATOR.

I WILL OVERRULE THE OBJECTION.

BUT I THINK THE POINT HAS BEEN MADE.

WHY DON'T YOU

CONTINUE.
MR. J. FUISZ:

OKAY.

THANK YOU, YOUR HONOR.