0001104659-23-118825.txt : 20231115
0001104659-23-118825.hdr.sgml : 20231115
20231115181748
ACCESSION NUMBER: 0001104659-23-118825
CONFORMED SUBMISSION TYPE: 4
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20231114
FILED AS OF DATE: 20231115
DATE AS OF CHANGE: 20231115
REPORTING-OWNER:
OWNER DATA:
COMPANY CONFORMED NAME: PEIZER TERREN S
CENTRAL INDEX KEY: 0000904534
FILING VALUES:
FORM TYPE: 4
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-31932
FILM NUMBER: 231411872
MAIL ADDRESS:
STREET 1: 11111 SANTA MONICABLVD STE.500
CITY: LOS ANGELES
STATE: CA
ZIP: 90025
REPORTING-OWNER:
OWNER DATA:
COMPANY CONFORMED NAME: Acuitas Group Holdings, LLC
CENTRAL INDEX KEY: 0001797168
STATE OF INCORPORATION: CA
FILING VALUES:
FORM TYPE: 4
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-31932
FILM NUMBER: 231411871
BUSINESS ADDRESS:
STREET 1: 2120 COLORADO AVENUE, #230
CITY: SANTA MONICA
STATE: CA
ZIP: 90404
BUSINESS PHONE: 310-444-4321
MAIL ADDRESS:
STREET 1: 2120 COLORADO AVENUE, #230
CITY: SANTA MONICA
STATE: CA
ZIP: 90404
ISSUER:
COMPANY DATA:
COMPANY CONFORMED NAME: Ontrak, Inc.
CENTRAL INDEX KEY: 0001136174
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090]
IRS NUMBER: 880464853
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
BUSINESS ADDRESS:
STREET 1: 333 S. E. 2ND AVENUE
STREET 2: SUITE 2000
CITY: MIAMI
STATE: FL
ZIP: 33131
BUSINESS PHONE: 310 444 4300
MAIL ADDRESS:
STREET 1: 333 S. E. 2ND AVENUE
STREET 2: SUITE 2000
CITY: MIAMI
STATE: FL
ZIP: 33131
FORMER COMPANY:
FORMER CONFORMED NAME: CATASYS, INC.
DATE OF NAME CHANGE: 20110316
FORMER COMPANY:
FORMER CONFORMED NAME: HYTHIAM, INC.
DATE OF NAME CHANGE: 20101029
FORMER COMPANY:
FORMER CONFORMED NAME: HYTHIAM INC
DATE OF NAME CHANGE: 20031003
4
1
tm2330803-1_4seq1.xml
OWNERSHIP DOCUMENT
X0508
4
2023-11-14
0
0001136174
Ontrak, Inc.
OTRK
0000904534
PEIZER TERREN S
200 DORADO BEACH DRIVE #3831
DORADO
PR
00646
PUERTO RICO
0
0
1
0
0001797168
Acuitas Group Holdings, LLC
200 DORADO BEACH DRIVE #3831
DORADO
PR
00646
PUERTO RICO
0
0
1
0
0
Common Stock
2023-11-14
4
C
0
18054791
0.90
A
18054791
I
By Humanitario Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
4
C
0
5000000
D
2022-07-15
2024-09-30
Common Stock
6990805
0
I
By Acuitas Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
4
C
0
6000000
D
2022-09-07
2024-09-30
Common Stock
8388967
0
I
By Acuitas Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
4
C
0
1000000
D
2023-01-05
2024-09-30
Common Stock
1979916
3000000
I
By Acuitas Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
4
C
0
0
D
2023-03-06
2024-09-30
Common Stock
695103
4000000
I
By Acuitas Capital LLC
Common Stock Purchase Warrant
0.90
2023-11-14
4
P
0
18054791
A
2023-11-14
2028-11-14
Common Stock
18054791
18054791
I
By Acuitas
Senior Secured Convertible Note
0.90
2023-11-14
5
S
0
E
3000000
D
2023-01-05
2024-09-30
Common Stock
0
I
By Acuitas Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
5
S
0
E
3000000
D
2023-03-06
2024-09-30
Common Stock
2000000
I
By Acuitas Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
4
S
0
2000000
D
2023-03-06
2024-09-30
Common Stock
0
I
By Acuitas Capital LLC
Senior Secured Convertible Note
0.90
2023-11-14
4
P
0
2000000
A
2023-03-06
2026-05-14
Common Stock
2000000
I
By Acuitas Capital LLC
Pre-Funded Common Stock Purchase Warrant
0.0001
2023-11-14
5
P
0
E
18333333
A
Common Stock
18333333
18333333
I
By Humanitario Capital LLC
Common Stock Purchase Warrant
0.85
2023-11-14
5
P
0
E
36666666
A
Common Stock
36666666
36666666
I
By Humanitario Capital LLC
This Form 4 is jointly filed by Terren S. Peizer ("Mr. Peizer") and Acuitas Group Holdings, LLC ("Acuitas") with respect to the issuer Ontrak, Inc. ("Ontrak"). Mr. Peizer is the Chairman and sole member of Acuitas and, in such capacity, exercises voting and investment power over any securities held for the accounts of Acuitas.
As previously disclosed, Ontrak previously issued to Acuitas Capital LLC, an entity wholly owned by Acuitas ("Acuitas Capital"), senior secured convertible notes (the "Keep Well Notes") in the principal amounts of $5 million, $6 million, $4 million and $4 million on July 15, 2022, September 7, 2022, January 5, 2023 and March 6, 2023, respectively, pursuant to the Master Note Purchase Agreement, dated as of April 15, 2022, by and among Ontrak, Acuitas Capital and the other parties thereto, as last amended by the Fifth Amendment thereto made as of October 31, 2023 (the "Fifth Amendment"), and as modified by the letter agreement made as of November 9, 2023 (as amended, the "Keep Well Agreement").
Under the terms of the Keep Well Agreement, prior to the Notes Conversion (as defined below), the Keep Well Notes had a maturity date of September 30, 2024. Acuitas Capital, at its option, has the right to convert the entire principal amount of the Keep Well Notes outstanding, plus all accrued and unpaid interest thereon, in whole or in part, into shares of Ontrak's common stock ("Shares") at a conversion price equal to the lesser of (a) $2.40 per share (as may be adjusted) and (b) the greater of (i) the closing price of Ontrak's common stock on the trading day immediately prior to the conversion and (ii) $0.90 per share (as may be adjusted).
Under the terms of the Keep Well Agreement, in connection with the conversion of any Keep Well Note into Shares, Ontrak will issue to Acuitas Capital a five-year warrant (each, a "Keep Well Warrant") to purchase up to a number of Shares equal to (x) the amount converted divided by (y) the conversion price of the Keep Well Note then in effect, which Keep Well Warrant will be exercisable for an exercise price equal to such conversion price (as may be adjusted).
On November 14, 2023, Ontrak completed its previously announced public offering (the "Offering") of Shares and warrants to purchase Shares at a combined public offering price of $0.60 per Share and accompanying warrants (the "Offering Price"), as disclosed in the Form 8-K filed by Ontrak with the SEC on November 15, 2023. In accordance with the Fifth Amendment, prior to the closing of the Offering, Ontrak issued 18,054,791 Shares to Humanitario Capital LLC, an entity wholly owned by Acuitas ("Humanitario"), upon conversion of the aggregate principal amount of all outstanding Keep Well Notes previously issued to Acuitas Capital under the Keep Well Agreement, plus all accrued and unpaid interest thereon, minus $7.0 million (the "Notes Conversion"), in accordance with the terms (including the conversion price) of the Keep Well Agreement and the Keep Well Notes.
On November 14, 2023, in connection with the Notes Conversion, Ontrak issued to Acuitas a Keep Well Warrant to purchase up to 18,054,791 Shares with an exercise price of $0.90 per share (the "Conversion Warrant").
On November 14, 2023, in accordance with the Fifth Amendment, and concurrent with the closing of the Offering, Ontrak issued to Humanitario in a private placement an unregistered pre-funded warrant to purchase up to 18,333,333 Shares (the "Pre-Funded Warrant") and an unregistered warrant to purchase up to 36,666,666 Shares (the "Private Placement Warrant"; together with the Pre-Funded Warrant, the "Private Placement Securities"), for total consideration of $11.0 million, consisting of (a) the $6.0 million Acuitas Capital previously delivered to Ontrak in June 2023 and September 2023 in accordance with the Keep Well Agreement and (b) a reduction of the aggregate amounts outstanding under the Keep Well Notes (after giving effect to the Notes Conversion) to $2.0 million (the Keep Well Note evidencing such $2.0 million, the "Surviving Note").
The exercisability of the Private Placement Securities is subject to Stockholder Approval (as defined below). Upon effectiveness of the Stockholder Approval, the Pre-Funded Warrant may be exercised at any time until exercised in full and the Private Placement Warrant may be exercised through the fifth anniversary date of the effectiveness of the Stockholder Approval. The Private Placement Securities may be exercised on a cashless basis. The exercise prices of the Pre-Funded Warrant and the Private Placement Warrant are $0.0001 per share and $0.85 per share, respectively, in each case, subject to customary adjustment for stock dividends, stock splits, reorganizations or similar events. The exercise price of the Private Placement Warrant and the number of Shares issuable upon exercise thereof are also subject to adjustment upon the occurrence of certain events described therein (collectively, the "Warrant Adjustment Provisions").
The Fifth Amendment requires Ontrak to seek stockholder approval (the "Stockholder Approval") under Nasdaq rules for (a) the issuance of the Shares issuable upon exercise of the Private Placement Securities that, together with the Shares issuable upon exercise of the warrants sold by Ontrak in the Offering, exceed the maximum number of Shares permitted to be issued without such approval under Nasdaq rules, (b) the Notes Conversion Modification (defined below), (c) the elimination of the 90% beneficial ownership limitation under the Keep Well Agreement that prohibited the issuance of Shares to Acuitas Capital and its affiliates upon conversion of any Keep Well Note or exercise of any Keep Well Warrant, and (d) any other terms of the Offering, the Private Placement Securities and/or the Fifth Amendment requiring stockholder approval under Nasdaq rules, including the Warrant Adjustment Provisions.
The Offering Price was less than the conversion price at which the Keep Well Notes were converted in the Notes Conversion. Pursuant to the Fifth Amendment, upon effectiveness of the Stockholder Approval, Ontrak will issue additional Shares to Acuitas Capital such that the total number of Shares issued in respect of the Notes Conversion plus such additional Shares will equal the number of Shares that would have been issued in respect of the Notes Conversion had the Keep Well Notes been converted therein at a conversion price equal to the Offering Price, the exercise price of the Conversion Warrant will be reduced to the Offering Price, and the number of Shares subject to the Conversion Warrant will be increased to the number of Shares that would have been subject thereto had the Keep Well Notes been converted in the Notes Conversion at a conversion price equal to the Offering Price (collectively, the "Notes Conversion Modifications").
Pursuant to the Fifth Amendment, the maturity date of the Surviving Note has been extended from September 30, 2024 to May 14, 2026, unless earlier due and payable in full. Subject to the effectiveness of the Stockholder Approval, the conversion price of the Surviving Note will be the lesser of (a) $2.40 per share (as may be adjusted) and (b) the greater of (i) the consolidated closing bid price of Ontrak's common stock on the trading day immediately prior to the conversion and (b) $0.60 per share (as may be adjusted).
/s/ Terren S. Peizer
2023-11-15
/s/ Terren S. Peizer
2023-11-15