Ontrak, Inc. (NASDAQ: OTRK) (“Ontrak” or the “Company”), a leading AI-powered and telehealth-enabled healthcare company, today announced the closing of its previously announced 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 was sold together with two warrants, each to purchase one share of common stock. The warrants accompanying the common stock and pre-funded warrants have an exercise price of $0.85 per share. The exercisability of the pre-funded warrants and accompanying warrants is subject to stockholder approval and, if such approval is obtained, will expire on the fifth anniversary of the date of such approval. 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 holds a majority of the Company’s outstanding common stock.

In addition, Ontrak today announced the closing of its previously announced 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 have an exercise price of $0.85 per share. The exercisability of such warrants is 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 converted 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 were 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 private placement resulted 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 acted as the exclusive placement agent for the offering.

The registration statement on Form S-1 (File No. 333-273029) relating to the securities being sold in the public offering 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. The offering was made only by means of a prospectus that forms a part of the registration statement. The final prospectus related to the offering is available on the SEC’s website at https://www.sec.gov/ and may be obtained by contacting Roth Capital Partners, LLC 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 these securities 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 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 factors described more fully in 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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