0001136174FALSE00011361742024-10-082024-10-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 8, 2024

Ontrak, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3193288-0464853
(State or other jurisdiction
of incorporation)		(Commission File Number)(IRS Employer
Identification No.)

333 S. E. 2nd Avenue, Suite 2000, Miami, FL 33131
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code   (310) 444-4300


(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueOTRK
The NASDAQ Capital Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐




Item 1.01 Entry into a Material Definitive Agreement.

In a public offering completed in November 2023, Ontrak, Inc. (the “Company,” “we,” “us” or “our”), issued certain warrants to purchase shares of its common stock (such warrants, the “Public Offering Warrants”). The Public Offering Warrants expire December 20, 2028. Under the terms of the Public Offering Warrants, in addition to customary adjustments to their exercise price and the number of shares of common stock issuable upon exercise in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock (a “Stock Combination Event”), if the Event Market Price (as defined below) is less than the exercise price then in effect (after giving effect to the customary adjustments thereto as a result of the event), then, on the 16th trading day immediately following the Stock Combination Event, the exercise price will be reduced to the Event Market Price, and simultaneously with such adjustment, the number of shares of common stock issuable upon exercise is increased proportionally, such that the aggregate exercise price of the Public Offering Warrants, after taking into account the adjustment to the exercise price, will be equal to the aggregate exercise price before the adjustment to the exercise price. “Event Market Price” means, with respect to any Stock Combination Event, the quotient determined by dividing (x) the sum of the volume weighted average price of our common stock for each of the five lowest trading days during the 20 consecutive trading day period ending and including the trading day immediately preceding the 16th trading day after the date of such stock combination event, by (y) five.

As previously reported, we effected a reverse split of our common stock that was effective at 12:01 a.m. Eastern Time on September 23, 2024 (the “September 2024 SCE”).

On October 8, 2024, we and certain holders of the Public Offering Warrants entered into warrant amendments (each, a “Warrant Amendment” and collectively, the “Warrant Amendments”), pursuant to which, solely with respect to the September 2024 SCE, the parties agreed to shorten the measuring period for determining the Event Market Price for the September 2024 SCE so that it ended on the 11th trading day immediately following the September 2024 SCE. As a result of the foregoing, the exercise price of the Public Offering Warrants of the holders that entered into the Warrant Amendments was reduced to $2.25, which was the Event Market Price for the shortened period.

Item 3.02 Unregistered Sales of Equity Securities.

The information reported in Item 1.01 of this report is incorporated by reference into this Item 3.02.

From October 8, 2024 through and including October 11, 2024, in the aggregate, holders of the Public Offering Warrants that entered into the Warrant Amendments purchased shares of common stock through exercise of their Public Offering Warrants for (1) approximately 675,000 shares, paying the exercise price therefor in cash, and (2) approximately 312,000 shares on a cashless basis, for which we issued approximately 143,000 shares. We received gross proceeds of approximately $1.5 million from the sale of common stock upon the exercise of such Public Offering Warrants.

The shares of common stock issued upon the cashless exercise of the Public Offering Warrants were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. The shares of common stock issued for cash were issued pursuant to the Company’s effective registration statements on Form S-1.

Item 8.01 Other Events.

Keep Well Agreement Funding

As previously reported, on August 13, 2024, we entered into an agreement with Acuitas Capital LLC (“Acuitas”) pursuant to which Acuitas agreed to purchase $5.0 million of senior secured convertible notes (the “Committed Demand Notes”) under the Master Note Purchase Agreement we entered into with Acuitas on April 15, 2022, as amended. On October 3, 2024, Acuitas purchased $1.0 million of the Committed Demand Notes. Through the date on the signature page of this report, we have received $3.5 million from the purchase of Committed Demand Notes pursuant to such agreement.








1

Nasdaq Matters

As previously reported: (i) in October 2023, we received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we no longer met the minimum bid price requirement in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”); (ii) in April 2024, we received a letter from the Staff notifying us that we had not regained compliance with the Minimum Bid Price Rule by April 10, 2024 and that our common stock would be scheduled for delisting unless we timely requested a hearing before Nasdaq’s Hearings Panel (the “Panel”) to appeal the Staff’s delisting determination; (iii) we submitted a timely request for a hearing before the Panel, which stayed the suspension and delisting of our common stock pending the decision of the Panel and the expiration of any additional time granted by the Panel; and (iv) in May 2024, the Panel granted us a temporary exception until October 7, 2024 to regain compliance with the Minimum Bid Price Rule.

On October 7, 2024, we received a letter from the Nasdaq Office of General Counsel confirming that we regained compliance with the Minimum Bid Price Rule by October 7, 2024 because the closing bid price for our common stock was $1.00 or more for a minimum of 10 consecutive trading sessions. That letter also informed us that, pursuant to Nasdaq Listing Rule 5815(d)(4)(A), we will be subject to a Discretionary Panel Monitor for a period of one year from October 7, 2024, and that if, within that one-year monitoring period, we fail to maintain compliance with any continued listing requirement, the Staff will issue a Delist Determination Letter and promptly schedule a new hearing with the Panel. Notwithstanding Nasdaq Listing Rule 5810(c)(2), we will not be permitted to provide a plan of compliance to the Staff with respect to any deficiency that arises during the one-year monitoring period, and the Staff will not be permitted to grant additional time for us to regain compliance with respect to any such deficiency.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.
Description
10.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Ontrak, Inc.
Date: October 15, 2024By:/s/ James J. Park
James J. Park
Chief Financial Officer



2

EXHIBIT 10.1

WARRANT AMENDMENT
THIS WARRANT AMENDMENT (this “Amendment”) is dated as of October 8, 2024, by the party set forth on the signature page hereto (“Purchaser”) and Ontrak, Inc., a Delaware corporation (“Company”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Public Offering Warrants (as defined below).
R E C I T A L S
A.    Pursuant to the Securities Purchase Agreement dated November 10, 2023, by and between the Company and each purchaser signatory thereto, the Company issued an aggregate of (a) 4,592,068 shares of Common Stock and one or more warrants to purchase up to 9,184,136 shares of Common Stock (such warrants, the “Accompanying Warrants”), and (b) one or more pre-funded warrants to purchase up to 5,907,932 shares of Common Stock and additional warrants to purchase up to 11,815,864 shares of Common Stock (such additional warrants, together with the Accompanying Warrants, in each case as heretofore amended, the “Public Offering Warrants”).
B.    A Stock Combination Event was effected on September 23, 2024 (the “September 2024 SCE”).
C.    Pursuant to Section 5(l) of the Public Offering Warrants, the Public Offering Warrants may be modified or amended or the provisions thereof waived with the written consent of the Company, on the one hand, and holder, on the other hand.
D.    Purchaser is the holder of one or more Public Offering Warrants.
E.    The Company and Purchaser desire to amend the terms of all of Purchaser’s Public Offering Warrants (“Purchaser’s Warrants”) as set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Purchaser agree as follows:
1.    Amendment to Section 3(b)(vii). Solely with respect to the September 2024 SCE, the Company and Purchaser hereby agree to amend Section 3(b)(vii) of Purchaser’s Warrants to read in its entirety as follows (deletions reflected with stricken text and additions reflected with double underlined text):
“If at any time and from time to time on or after the Issuance Date an event referred to in Section 3(a) occurs (each, a “Stock Combination Event”, and the date on which such event occurs, the “Stock Combination Event Date”) and the Event Market Price is less than the Exercise Price then in effect (after giving effect to the adjustment to the Exercise Price in accordance with Section 3(a)), then on the sixteenth (16th) eleventh (11th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect on such sixteenth (16th) eleventh (11th) Trading Day (after giving effect to the adjustment in accordance with Section 3(a)) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made.”
For the avoidance of doubt, in the event any other Stock Combination Event occurs, the amendment to Section 3(b)(vii) of Purchaser’s Warrants set forth in this Section 1 shall not apply to such Stock Combination Event.
2.    Agreement and Acknowledgement. The Company and Purchaser hereby agree and acknowledge that, after giving effect to the amendment to Section 3(b)(vii) of Purchaser’s Warrants set forth in Section 1 above, the Event Market Price related to the September 2024 SCE, and the Exercise Price of Purchaser’s Warrants as of the date hereof, is $2.25. The Company and Purchaser also hereby agree and acknowledge that Section 3(b)(x) of Purchaser’s Warrants applies to the adjustment to the Exercise Price of Purchaser’s Warrants as so adjusted pursuant to Section 3(b)(vii) of Purchaser’s Warrants as amended herein (without regard to any limitations on exercise contained in Purchaser’s Warrants).


-1-


3.    Waiver. Purchaser hereby agrees and acknowledges that (a) to the extent that any holder of any warrant that includes a provision similar to Section 3(b)(vii) of Purchaser’s Warrants that calls for an adjustment of the exercise price and/or the number of shares purchasable on exercise based on market trading prices through the sixteenth (16th) Trading Day following the September 2024 SCE (any such other warrant, a “Similar Warrant”) does not agree to amend such provision in a manner described in Section 1 above, the Event Market Price related to to the September 2024 SCE (and therefore the Exercise Price) for such Similar Warrant may be less than $2.25, and (b) notwithstanding anything to the contrary in Purchaser’s Warrants or any other agreement or understanding between Purchaser and the Company, the Exercise Price of Purchaser’s Warrants shall not be further adjusted for any reason as a result of or related to the September 2024 SCE including, without limitation, because the exercise price of any Similar Warrant is reduced below $2.25 as a result of the operation of any provision similar to Section 3(b)(vii) of Purchaser’s Warrants, and Purchaser irrevocably waives any claim that the Exercise Price of Purchaser’s Warrant shall be reduced below $2.25 as a result of or related to the September 2024 SCE or the operation of any provision similar to Section 3(b)(vii) of Purchaser’s Warrants.
4.    Miscellaneous.
(a)    Entire Agreement. This Amendment constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior understandings, agreements or representations by or between the Company and Purchaser, written or oral, to the extent they relate in any way to the subject matter hereof.
(b)    Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery by facsimile or electronic transmission of a portable document file (also known as a .pdf file) of an executed counterpart signature page shall be effective as a manually executed counterpart signature hereof.
(c)    Governing Law. This Waiver shall be governed by, and construed, interpreted and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of laws thereunder which would specify the application of the law of another jurisdiction.

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.
    PURCHASER:

____________________________



By:    ____________________________
Name:
Title:


ONTRAK, INC.
By: ____________________________
Name:
Title:
-3-

v3.24.3
Cover
Oct. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 08, 2024
Entity Registrant Name Ontrak, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-31932
Entity Tax Identification Number 88-0464853
Entity Address, Address Line One 333 S. E. 2nd Avenue
Entity Address, Address Line Two Suite 2000
Entity Address, City or Town Miami
Entity Address, State or Province FL
Entity Address, Postal Zip Code 33131
City Area Code 310
Local Phone Number 444-4300
Title of 12(b) Security Common Stock, $0.0001 par value
Trading Symbol OTRK
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0001136174
Amendment Flag false
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