Ontrak, Inc. Announces Pricing of $6.3 Million Public Offering, $11 Million Concurrent Private Placement and $16.3 Million Conversion of Secured Notes

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.