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Ontrak Files for $6.3 Million IPO

Ontrak, Inc.

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Ontrak, Inc. (NASDAQ: OTRK), a leading AI-powered and telehealth-enabled healthcare company, has announced the pricing of a public offering and a concurrent private placement, along with the conversion of secured notes.

The public offering includes 4,592,068 shares of common stock and 9,184,136 warrants at a combined public offering price of $0.60 per share. Additionally, there are 5,907,932 pre-funded warrants to purchase common stock and 11,815,864 warrants at a combined public offering price of $0.5999 per pre-funded warrant.

Each share of common stock and pre-funded warrant is being sold together with two warrants to purchase one share of common stock. The accompanying warrants have an exercise price of $0.85 per share.

The offering is expected to close on November 14, 2023, subject to customary closing conditions. The gross proceeds to the company from the public offering are estimated to be approximately $6.3 million before deducting placement agent fees and other offering expenses. The net proceeds will be used for working capital and general corporate purposes.

Concurrently, Ontrak has priced a private placement to Acuitas of 18,333,333 pre-funded warrants and 36,666,666 warrants to purchase common stock at a combined offering price of $0.5999 per pre-funded warrant. The private placement is expected to result in the cancellation of $5.0 million of debt owed by the company to Acuitas and the reclassification of $6.0 million of restricted cash to unrestricted cash.

Furthermore, Acuitas will convert approximately $16.3 million of outstanding senior secured convertible notes before the closing of the public offering and private placement, leaving $2.0 million of senior secured convertible notes outstanding.

Roth Capital Partners is acting as the exclusive placement agent for the offering and private placement.

Ontrak, Inc. is a healthcare company focused on improving the health and well-being of individuals. The company utilizes AI and telehealth to engage and provide care pathways for vulnerable members of the behavioral health population, helping them receive treatment despite barriers in the healthcare system.

The integrated intervention platform combines AI, predictive analytics, and digital interfaces with care coach engagements to achieve improved member health, better healthcare system utilization, and cost savings for healthcare payors.

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