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On Monday, Ontrak, Inc. (NASDAQ:OTRK), a company currently trading near its 52-week low of $0.48 and showing weak financial health according to InvestingPro analysis, announced it has entered into a seventh amendment to its Master Note Purchase Agreement with Acuitas Capital LLC, allowing for the sale of up to $8.45 million in senior secured convertible promissory notes. The amendment, effective as of Friday, June 27, 2025, also terminates all rights and obligations under a previous agreement dated May 2025.
According to the company’s press release statement filed with the SEC, Acuitas has committed to purchase up to $8.45 million in principal amount of these notes, which are payable on demand. Ontrak may request up to $1.5 million per note, subject to certain conditions, including the company’s cash needs and absence of material adverse changes. Once the committed amount is reached, Acuitas may, but is not obligated to, purchase additional notes in increments of up to $1.5 million each.
The conversion price for the new notes will be the lesser of $0.9726 and the greater of either the closing price of Ontrak’s common stock immediately prior to conversion or $0.3242, subject to customary adjustments. Acuitas has agreed not to demand repayment of any amounts under these notes until the earlier of September 1, 2026, or 30 days after purchasing the full $8.45 million in notes.
In connection with each note purchased, Acuitas will receive a warrant to buy shares of Ontrak common stock, providing 200% warrant coverage. Each warrant will have a term of five years and an exercise price equal to the closing price of the company’s stock on the funding date, subject to adjustment.
The company is required to seek stockholder approval for the issuance of these notes, warrants, and related shares, in accordance with Nasdaq listing rules. Ontrak intends to obtain this approval through written consent from Acuitas, which owned a majority of the company’s outstanding common stock as of the amendment date.
Additionally, on June 20, 2025, Humanitario Capital, an affiliate of Acuitas, exercised 500,000 pre-funded warrants, resulting in Acuitas holding 52% of Ontrak’s common stock and beneficially owning 98%.
This article is based on a press release statement filed with the SEC.
In other recent news, Ontrak Inc. reported a significant revenue decline of 25% year-over-year for Q1 2025, bringing in $2 million. The company’s gross margin also dropped sharply to 37% from 61% in the previous quarter. Despite these challenges, Ontrak is optimistic about potential revenue growth, projecting Q2 2025 revenue between $2.2 million and $2.6 million. In a strategic move to bolster its financial position, Ontrak announced a $4 million public offering of common stock and warrants. The offering, which is expected to close soon, is intended to generate gross proceeds before expenses and will be managed by Roth Capital Partners (WA:CPAP). Additionally, Ontrak has entered into the Seventh Amendment to the Keep Well Agreement, with further details to be disclosed. The company has also launched new AI-driven solutions to enhance its market reach and is awaiting feedback on several health plan proposals that could significantly boost future revenues.
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