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 rothecm@roth.com.

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.

About Ontrak, Inc.

Ontrak, Inc. is a leading AI and telehealth-enabled healthcare company, whose mission is to help improve the health and save the lives of as many people as possible. Ontrak identifies, engages, activates, and provides care pathways to treatment for the most vulnerable members of the behavioral health population who would otherwise fall through the cracks of the healthcare system. We engage individuals with anxiety, depression, substance use disorder and chronic disease through personalized care coaching and customized care pathways that help them receive the treatment and advocacy they need, despite the socio-economic, medical and health system barriers that exacerbate the severity of their comorbid illnesses. The company’s integrated intervention platform uses AI, predictive analytics and digital interfaces combined with dozens of care coach engagements to deliver improved member health, better healthcare system utilization, and durable outcomes and savings to healthcare payors.

Forward Looking Statements

Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the completion of the public offering and private placement, the amount of gross proceeds expected from the offering and the intended use of proceeds from the offering. Actual results may differ materially from those indicated by forward-looking statements as a result of various factors, including, the uncertainties related to market conditions, the satisfaction of the closing conditions for the offering and other factors described more fully in the section entitled the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and other reports filed with the Securities and Exchange Commission thereafter. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

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