It says most of the company's remaining two dozen employees finished work last Friday and that Fortress, the United States private equity firm, is set to take control of the company's patents - leaving just $5m to be distributed among unsecured creditors.
Theranos and Ms Holmes, its founder, claimed that Edison, their invention, a portable blood analyser, could conduct comprehensive tests using tiny amounts of blood taken from a pinprick on the finger, rather than vials filled with blood taken from veins. The news was first reported by The Wall Street Journal, which published the letter.
Theranos, founded in 2003 by a then 19-year-old, wide-eyed Elizabeth Holmes, the Stanford drop-out who everyone believed could change the world.
Holmes and Balwani both pleaded not guilty at their arraignment.
The company plans to formally dissolve itself and pay unsecured creditors its remaining cash in coming months, the newspaper reported, citing an email sent to shareholders. He said it owes at least $60 million.
Holmes said she was inspired to start the company in response to her fear of needles.
But as the Journal revealed in a series of articles beginning in October 2015, Theranos's blood-testing device was unreliable and the company used it for just a fraction of the more than 240 tests it offered to consumers. Founder and former CEO Elizabeth Holmes is facing criminal charges.
"We are now out of time", Taylor said.
The SEC also alleged that claims the company would generate more than $100 million in revenue in 2014 were false, as it generated a little more than $100,000. At one time, Theranos was worth more than $10 billion and Holmes the youngest self-made female billionaire. Walgreens ended its relationship with Theranos in 2016.
The downfall of Holmes, who settled with the Securities and Exchange Commission in March over fraud charges it announced against her, has hastened the collapse of her company.