Ontrak, Inc. (NASDAQ:OTRK), a healthcare services provider, has entered into amendments with certain warrant holders following a reverse stock split last month, according to its latest SEC filing on Tuesday. The company, which has previously operated under names such as Catasys (NASDAQ:OTRK), Inc. and Hythiam, Inc., adjusted the exercise price of the Public Offering Warrants to $2.25, reflecting the new Event Market Price after shortening the measurement period for determining the price following the reverse split.
The reverse stock split, effective September 23, 2024, aimed at meeting the Nasdaq's minimum bid price requirement. Ontrak successfully regained compliance with the Nasdaq's Minimum Bid Price Rule by October 7, 2024, with the closing bid price for its common stock hitting $1.00 or more for at least 10 consecutive trading sessions. Ontrak will be monitored by Nasdaq for one year to ensure ongoing compliance.
Additionally, Ontrak disclosed that from October 8 to October 11, 2024, warrant holders exercised their amended Public Offering Warrants, resulting in the issuance of approximately 675,000 shares for cash and approximately 143,000 shares on a cashless basis. This exercise brought in gross proceeds of around $1.5 million for the company.
In another financial move, Ontrak reported that it has received $3.5 million from the purchase of Committed Demand Notes under an agreement with Acuitas Capital LLC. This funding was part of a $5.0 million agreement to purchase senior secured convertible notes, which was initially established on April 15, 2022.
In other recent news, Ontrak Inc. announced a 1-for-15 reverse stock split, aimed at increasing the company's common stock bid price to comply with the Nasdaq Capital Market's minimum bid price requirement. Concurrently, Ontrak reported a decline in year-over-year revenue for Q2 2024, but projects a return to growth in Q4. This optimism is supported by a new contract with a Northeast regional health plan, potentially doubling its outreach.
Ontrak shareholders approved the Amended and Restated 2017 Stock Incentive Plan and ratified the appointment of EisnerAmper LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024. The company has also entered into a strategic partnership with MosaicVoice, an AI-powered voice technology firm, to enhance patient care.
These are among the recent developments at Ontrak, which ended Q2 with $7.3 million in cash, after drawing $4.5 million from its Keep Well Agreement, and carries a debt of $6.5 million. Revenue projections for Q3 2024 range between $2.4 million and $2.8 million, excluding the new customer's impact in Q4. As the company navigates its financial challenges, it continues active discussions to secure additional capital.
InvestingPro Insights
Recent financial data from InvestingPro sheds additional light on Ontrak's current situation. The company's market capitalization stands at a modest $7.62 million, reflecting its recent challenges. Ontrak's revenue for the last twelve months as of Q2 2024 was $12.38 million, with a revenue growth of 14.23% over the same period. However, the company is facing profitability issues, with an adjusted operating income of -$17.31 million for the last twelve months.
Two key InvestingPro Tips are particularly relevant to Ontrak's recent activities. First, the company is "quickly burning through cash," which aligns with its recent efforts to raise capital through warrant exercises and note sales. Second, Ontrak's "liquid assets exceed short term obligations," suggesting that despite its financial challenges, the company maintains some financial flexibility.
These insights provide context to Ontrak's recent financial maneuvers, including the warrant amendments and capital raising activities described in the article. Investors seeking a more comprehensive analysis can find 12 additional InvestingPro Tips for Ontrak, offering a deeper understanding of the company's financial health and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.