MIAMI– Ontrak, Inc. (NASDAQ: OTRK) (“Ontrak” or the “Company”), a leading AI-powered and telehealth-enabled healthcare company, today announced the pricing of a public offering of:
- 4,592,068 shares of its common stock and 9,184,136 warrants to purchase up to 9,184,136 shares of its common stock at a combined public offering price of $0.60 per share of common stock and accompanying warrants, and
- 5,907,932 pre-funded warrants to purchase up to 5,907,932 shares of its common stock and 11,815,864 warrants to purchase up to 11,815,864 shares of its common stock at a combined public offering price of $0.5999 per pre-funded warrant and accompanying warrants, which represents the per share public offering price for the common stock and accompanying warrants less the $0.0001 per share exercise price for each pre-funded warrant.
Each share of common stock and pre-funded warrant is being sold together with two warrants, each to purchase one share of common stock. The warrants accompanying the common stock and pre-funded warrants will have an exercise price of $0.85 per share. The exercisability of the pre-funded warrants and accompanying warrants will be subject to stockholder approval and, if such approval is obtained, will expire on the fifth anniversary of the date of such approval. The offering is expected to close on November 14, 2023, subject to customary closing conditions. Pursuant to a support agreement from Acuitas Group Holdings, LLC and Acuitas Capital LLC (collectively, “Acuitas”), Acuitas agreed to vote for, or consent to, among other things, the exercisability of the warrants offered in the public offering and in the private placement described below. Acuitas will hold a majority of the outstanding common stock immediately before the closing of the offering.
In addition, Ontrak today announced the pricing of a concurrent private placement to Acuitas of 18,333,333 pre-funded warrants to purchase up to 18,333,333 shares of its common stock and 36,666,666 warrants to purchase up to 36,666,666 shares of its common stock at a combined offering price of $0.5999 per pre-funded warrant and accompanying warrants, which represents the per share public offering price for the common stock and accompanying warrants less the $0.0001 per share exercise price for each pre-funded warrant. The warrants accompanying the pre-funded warrants will have an exercise price of $0.85 per share. The exercisability of such warrants will be subject to stockholder approval and, if such approval is obtained, will expire on the fifth anniversary of the date of such approval. Prior to the closing of the public offering and private placement, Acuitas will convert approximately $16.3 million of outstanding senior secured convertible notes, leaving $2.0 million of senior secured convertible notes outstanding.
The gross proceeds to the Company from the public offering are expected to be approximately $6.3 million before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds of the offering for working capital and other general corporate purposes. In addition, the Company estimates that the private placement will result in the cancellation of $5.0 million of debt owed by the Company to Acuitas under outstanding senior secured convertible notes and the reclassification of $6.0 million of restricted cash held under the terms of the Master Note Purchase Agreement previously entered into with Acuitas to unrestricted cash.
Roth Capital Partners is acting as the exclusive placement agent for the offering and the private placement.
The public offering described above is being made pursuant to a registration statement on Form S-1 (File No. 333-273029), as amended, that was originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 29, 2023, and was declared effective on November 9, 2023. A final prospectus related to the offering will be filed and made available on the SEC’s website at https://www.sec.gov/. The public offering is being made only by means of a prospectus, which forms a part of the registration statement. Electronic copies of the final prospectus may be obtained, when available, by contacting Roth Capital Partners at 888 San Clemente Drive, Newport Beach CA 92660, or by phone at (800) 678-9147 or e-mail at [email protected].
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any of the securities described herein in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
