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On Monday, Ontrak, Inc. (NASDAQ:OTRK) disclosed that a significant prospect decided not to pursue a partnership with the company. The prospect, which had previously paused its review to evaluate Ontrak’s financial stability and capacity to deliver its program as a Medicaid provider, communicated its decision on July 2. The company stated that the prospect based its choice on a variety of factors, without providing further details.
According to Ontrak’s statement, this prospect represented up to 9,000 potential members for its Wholehealth+ program and up to 20,000 for its Engage program. As a result, these potential member opportunities are no longer part of the company’s near-term sales outlook.
Ontrak also reported that it currently has four prospects in the later stages of the sales process. These remaining prospects represent a combined estimated outreach pool of up to 13,000 members for Wholehealth+ and up to 20,000 for Engage.
The company noted that its newest health plan customers have expressed interest in expanding Ontrak’s solutions to additional populations, contingent upon achieving certain clinical and financial outcomes.
In addition to the four late-stage prospects, Ontrak reported having 20 additional active prospects in earlier phases of the sales process as of July 2. These prospects collectively represent approximately 15 million plan lives.
All information in this article is based on a press release statement included in Ontrak’s recent SEC filing.
In other recent news, Ontrak Inc. reported a 25% decline in revenue for Q1 2025, bringing in $2 million compared to the same period last year. The company’s gross margin also fell significantly to 37% from 61% in the previous quarter. In a bid to strengthen its financial position, Ontrak has priced a public offering expected to generate around $4 million in gross proceeds. The offering includes 6,666,667 shares of common stock and 26,666,668 warrants, priced at $0.60 each, with Roth Capital Partners (WA:CPAP) as the exclusive placement agent.
Additionally, Ontrak has amended its agreement with Acuitas Capital LLC for the sale of up to $8.45 million in convertible notes. This amendment allows for the issuance of senior secured convertible promissory notes, with Acuitas committed to purchasing up to the full amount. Ontrak is also required to seek stockholder approval for these financial arrangements, which it plans to obtain through Acuitas, the majority stockholder. The company is focused on innovative solutions and strategic partnerships to address its financial challenges, with forward-looking guidance suggesting potential growth in Q2 2025.
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