Although the 382 Restrictions were intended to reduce the likelihood of an Ownership Change, they significantly reduced the flexibility of our company to issue equity securities, as any such issuance needs to be evaluated in light of the possibility of an Ownership Change implicating the 382 Restrictions and voiding the issuance of such securities. As a result, and in light of our current financial situation and forecasts of our ability to utilize our NOLs and NCLs, at this time the Board of Directors believes that the potential benefits of the 382 Restrictions may be greatly outweighed by the severe restrictions they impose on our ability to pursue equity financings and, should the requisite holders of our outstanding Senior Secured Notes due 2024 approve such amendment, the Board of Directors should be given discretion to amend the Amended and Restated Certificate of Incorporation to remove the 382 Restrictions. The removal of the 382 Restrictions could result in an Ownership Change which could have the effect of limiting otherwise available NOLs, NCLs and certain other tax attributes to reduce our future taxable income. Our Board currently believes that the flexibility from the removal of the 382 Restrictions substantially outweighs the loss of such tax attributes. However, even if approved by stockholders at the Special Meeting, prior to filing an amendment to the Amended and Restated Certificate of Incorporation to remove the 382 Restrictions, the Board of Directors may determine, in its sole discretion, not to effect the removal of the 382 Restrictions and not to file any amendment to our Amended and Restated Certificate of Incorporation.


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PROPOSAL NO. 2

~~ADJOURNMENT OF SPECIAL MEETING~~

The Board has approved the submission to the stockholders of a proposal to approve one or more adjournments of the Special Meeting in the event that there is not a sufficient number of votes at the Special Meeting to approve Proposal 1. In order to permit proxies that have been timely received to be voted for such adjournments, we are submitting this proposal as a separate matter for your consideration. If it is necessary to adjourn the Special Meeting, the adjournment is for a period of less than 30 days and the record date remains unchanged, no notice of the time and place of the reconvened meeting will be given to stockholders, other than an announcement made at the special meeting.THE KEEP WELL PROPOSAL

~~Required Vote~~Background

~~Approval of this Proposal requires~~On April 15, 2022, the ~~affirmative “FOR” vote~~Company entered into a Master Note Purchase Agreement (the “Original Keep Well Agreement”) with Acuitas Capital LLC (“Acuitas Capital”), an entity indirectly wholly owned and controlled by Terren S. Peizer, the Company’s Chief Executive Officer and Chairman and largest stockholder. On August 12, 2022, the Company and Acuitas Capital entered into an amendment to the Original Keep Well Agreement in connection with the appointment of a ~~majority~~collateral agent under the Original Keep Well Agreement (the “First Amendment”). On November 19, 2022, the Company and Acuitas Capital entered into a further amendment to the Original Keep Well Agreement, as amended by the First Amendment (the “Second Amendment”), and on December 30, 2022, the Company and Acuitas Capital entered into a further amendment to the Original Keep Well Agreement, as amended by the First Amendment and the Second Amendment (the “Third Amendment”). The Company refers to the Original Keep Well Agreement, as amended by the First Amendment, the Second Amendment and the Third Amendment, as the “Keep Well Agreement” and to Acuitas Capital, together with any of its transferees or affiliates under the Keep Well Agreement, as “Acuitas.”

As further discussed below, in this proposal the Company’s stockholders are being asked to approve the issuance of (1) common stock, (2) convertible notes and the common stock issuable upon conversion thereof, and (3) warrants to purchase shares of common stock and the common stock issuable upon exercise thereof, in each case, pursuant to the Keep Well Agreement for purposes of complying with Nasdaq Listing Rule 5635.

The Original Keep Well Agreement

Under the terms of the ~~votes cast live via~~Original Keep Well Agreement, subject to the ~~internet or represented~~satisfaction of certain conditions precedent (some of which are described below), the Company could borrow from Acuitas up to $25.0 million, and in connection with each such borrowing, the Company agreed to issue to Acuitas a senior secured note (each, a “Keep Well Note”) with a principal amount equal to the amount borrowed. Subject to obtaining approval of the Company’s stockholders as required by ~~proxy~~applicable Nasdaq listing rules, which approval was obtained at the ~~Special~~Company’s annual meeting of stockholders held on August 29, 2022 (the “2022 Annual Meeting of Stockholders”), in connection with each Keep Well Note issued by the Company, the Company agreed to issue to Acuitas a warrant to purchase shares of the Company’s common stock (each, a “Keep Well Warrant”). The number of shares of the Company’s common stock underlying each Keep Well Warrant would be equal to (y) the product of the principal amount of the applicable Keep Well Note and ~~entitled~~20% divided by (z) the exercise price of the applicable Keep Well Warrant, which was $1.69 per share, the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Company’s common stock immediately preceding the time the parties entered into the Original Keep Well Agreement. The maturity date of the Keep Well Notes was September 1, 2023.

The conditions precedent to ~~vote~~the Company’s ability to borrow, and Acuitas’ obligation to lend, under the Original Keep Well Agreement included that (x) the Company have used best efforts to obtain sufficient financing from a third party for the Company to pay and discharge, when due and payable, its obligations, (y) the Company be unable despite its best efforts to obtain such financing from a third party on reasonably acceptable terms, and (z) (1) absent obtaining the ~~proposal. You may vote “FOR,” “AGAINST,”~~funds requested by the Company to borrow under the Original Keep Well Agreement, the Company would not have sufficient unrestricted cash to pay and discharge all of its obligations then due or ~~“ABSTAIN” on this proposal. Abstentions~~scheduled to become due within the 30 days following the date of the borrowing request, and ~~broker non-votes will not affect~~(2) there be no conditions or events that, when considered in the ~~outcome~~aggregate, raise substantial doubt about the Company’s ability to continue as a going concern through August 15, 2023 (the “Funding Condition”).

In connection with entering into the Original Keep Well Agreement, subject to obtaining approval of ~~voting on this proposal.~~the Company’s stockholders as required by applicable Nasdaq listing rules, which approval was obtained at the 2022 Annual Meeting of Stockholders, the Company agreed to issue 739,645 shares of its common stock to Acuitas (or an entity affiliated with Acuitas, as designated by Acuitas) (the “Original Commitment Shares”). The Original Commitment Shares were issued to Acuitas in September 2022.

~~THE BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF THE ADJOURNMENT OF SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES IN THE EVENT THERE ARE INSUFFICIENT VOTES TO APPROVE PROPOSAL 1.~~


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The Second Amendment and the Third Amendment

Below is a summary of certain amendments to the terms of the Original Keep Well Agreement effected by the Second Amendment and the Third Amendment.

Keep Well Notes

The Company and Acuitas agreed to the following changes to the terms and conditions of the Keep Well Notes set forth in the Original Keep Well Agreement:

•the maturity date of the Keep Well Notes was extended from September 1, 2023 to June 30, 2024;

•the remaining amount available to be borrowed was increased from $10.7 million to $14.0 million and the provision that previously reduced the amount available to be borrowed by the net proceeds the Company received from equity financings was eliminated;

•the funding structure was changed from borrowings as needed from time to time at the election of the Company, to the Company agreeing to borrow, and Acuitas agreeing to lend, subject to the conditions in the Keep Well Agreement (which conditions were also amended as described below), the entire remaining amount of $14.0 million, to be funded as follows: $4.0 million in each of January (which was borrowed on January 5, 2023), March and June 2023, and $2.0 million in September 2023;

•many of the conditions precedent to the Company’s ability to borrow, and Acuitas’ obligation to lend, were eliminated, including the Funding Condition;

•the Company’s obligation to pay accrued interest on a monthly basis was eliminated, and instead accrued interest will be added to the principal amount of the applicable Keep Well Note; and

•the financial covenant that the Company’s consolidated recurring revenue be at least $15.0 million was reduced to $11.0 million, however, the satisfaction of such covenant as a condition to funding was eliminated, and certain other affirmative and negative covenants of the Company, the satisfaction of which were conditions to funding, were also eliminated as conditions to funding.

Conversion of Keep Well Notes

The Company and Acuitas agreed that, subject to the approval of the Company’s stockholders, Acuitas, at its option, will have 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 the Company’s common stock at a conversion price equal to the lesser of (i) $0.40 per share and (ii) the greater of (a) the closing price of the Company’s common stock on the trading day immediately prior to the applicable conversion date and (b) $0.15 (the “Conversion Right”). The $0.40 and $0.15 referenced in the preceding sentence are subject to adjustment for stock splits and the like, including the reverse stock split contemplated by the Reverse Stock Split Proposal.

If this proposal is approved by the Company’s stockholders, each Keep Well Note outstanding as of the date of such approval will be deemed to be amended to contain the Conversion Right. The Company refers to the such Keep Well Notes, as so amended, and to the Keep Well Notes issued in connection with future borrowings under the Keep Well Agreement, as the “New Keep Well Notes.”

In addition, subject to the approval of the Company’s stockholders, in connection with the conversion of the principal amount of any New Keep Well Note and/or accrued interest thereon into shares of the Company’s common stock (as described above), the Company will issue to Acuitas a five-year warrant to purchase shares of the Company’s common stock, and the number of shares of the Company’s common stock subject to each such warrant will be equal to (x) 100% of the amount converted divided by (y) the conversion price of the New Keep Well Note then in effect, and the exercise price of each such warrant will be equal to the conversion price of the New Keep Well Note then in effect, subject to adjustment as described below.


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Increase in Warrant Coverage

Subject to the approval of the Company’s stockholders, the Company and Acuitas agreed to reduce the exercise price of Keep Well Warrants issued under the Keep Well Agreement (both Keep Well Warrants outstanding as of the date of the Second Amendment and those issued thereafter) and to increase the warrant coverage on all previous and future borrowings under the Keep Well Agreement as follows:

•the exercise price of currently outstanding Keep Well Warrants will be reduced to $0.45 per share, which was the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Company’s common stock immediately preceding the time the parties entered into the Second Amendment, and which will be subject to future adjustment as described below;

•the number of shares of the Company’s common stock subject to currently outstanding Keep Well Warrants (i.e., 1,775,148 shares) will be increased to the number of shares that would have been subject to such Keep Well Warrants if the warrant coverage was equal to 100% of the amount borrowed under the Keep Well Agreement in respect of which the applicable Keep Well Warrant was issued (instead of 20%) divided by $0.45 (i.e., 33,333,333 shares, or an additional 31,558,185 shares);

•the warrant coverage on borrowings under the Keep Well Agreement after the date of the Second Amendment will be increased to a number of shares of the Company’s common stock equal to (x) 100% of the amount borrowed (instead of 20% of such amount) divided by (y) $0.45 (the “Warrant Coverage Denominator”), subject to future adjustment as described below, and each Keep Well Warrant issued after the date of the Second Amendment will have an exercise price equal to $0.45 per share, subject to future adjustment as described below;

•if the reverse stock split discussed in the Reverse Stock Split Proposal is effected, then:

◦the exercise price of each warrant issued pursuant to the Keep Well Agreement that is outstanding as of the effective time of the reverse stock split will be reduced to the lesser of (i) the volume-weighted average price of the Company’s common stock over the five trading days beginning on the trading day that commences immediately after the effective time of the reverse stock split (the “Reverse Stock Split Price”) and (ii) the exercise price after giving effect to the adjustment thereto as a result of the reverse stock split (the lesser of (i) and (ii), the “Post-Stock Split Price”), subject to further reduction as described in the bullet immediately below; and

◦the Warrant Coverage Denominator will be reduced to the greater of $0.15 (adjusted for the reverse stock split) and the Post-Stock Split Price, subject to further reduction as described in the bullet immediately below; and

•upon the occurrence of the final funding under the Keep Well Agreement (the date on when such final funding occurs, the “Final Funding Date”):

◦the exercise price of each warrant issued pursuant to the Keep Well Agreement that is outstanding as of the Final Funding Date will be reduced to (i) if the Final Funding Date occurs at any time prior to the time the Reverse Stock Split Price is determined, the closing price of the Company’s common stock on the trading day immediately preceding the Final Funding Date (the “Final Funding Date Price”), or (ii) if the Final Funding Date occurs at any time from and after the time the Reverse Stock Split Price is determined, the lesser of (x) the Post-Stock Split Price and (y) the Final Funding Date Price; and

◦the Warrant Coverage Denominator will be reduced to the lesser of (i) if the Final Funding Date occurs at any time prior to the time the Reverse Stock Split Price is determined, the greater of (a) $0.15 (subject to adjustment for stock splits and the like, including the reverse stock split) and (b) the Final Funding Date Price, or (ii) if the Final Funding Date occurs at any time from and after the time the Reverse Stock Split Price is determined, the greater of (a) $0.15 (subject to adjustment for stock splits and the like, including the reverse stock split) and (b) the lesser of (x) the Post-Stock Split Price and (y) the Final Funding Date Price.

If this proposal is approved by the Company’s stockholders, the Company agreed to issue to the holder of each Keep Well Warrant outstanding as of the date of such approval, in exchange for such Keep Well Warrant, a new warrant to purchase shares of the Company’s common stock that reflect the amendments to the Keep Well Warrants described above, including the increase in the warrant coverage and the decrease in the exercise price. The Company refers to the new warrants issued in exchange for outstanding Keep Well Warrants and to any warrants issued in


			-15-

connection with future borrowings under the Keep Well Agreement or in connection with the conversion of the principal amount of any New Keep Well Note and/or accrued interest thereon into shares of the Company’s common stock (as described above) as the “New Keep Well Warrants.”

Additional Commitment Shares

Subject to the approval of the Company’s stockholders, the Company agreed to issue to Acuitas 2,038,133 additional shares of the Company’s common stock (the “Additional Commitment Shares”).

Issuance Cap

The Company and Acuitas agreed that (i) under no circumstances will the Company issue any shares upon exercise of any warrant issued under the Keep Well Agreement or upon conversion of any Keep Well Note to the extent that, after giving effect to the issuance of any such shares, Acuitas (together with its affiliates) would beneficially own shares of the Company’s common stock representing more than 90% of the total number of shares of the Company’s common stock outstanding as of the time of such issuance (the “Issuance Cap”); and (ii) in the event of a Fundamental Transaction (as defined in the Second Amendment), regardless of the actual number of securities of the Company beneficially owned by Acuitas and its affiliates at the effective time thereof, Acuitas shall not be entitled to receive any consideration pursuant to such Fundamental Transaction in respect of any shares underlying any of the warrants issued under the Keep Well Agreement or any shares issuable upon conversion of any Keep Well Note that would represent shares in excess of the Issuance Cap if beneficially owned by Acuitas and/or its affiliates immediately prior to such effective time, and all warrants and Keep Well Notes owned or beneficially owned by Acuitas and/or its affiliates at the effective time of such Fundamental Transaction, solely to the extent that, if exercised or converted, such warrants and Keep Well Notes would result in the issuance of such excess shares, will be cancelled and forfeited without consideration therefor, effective as of such effective time; provided, however, that the foregoing shall not affect the Company’s obligation to pay all amounts owed under such Keep Well Notes in connection with such Fundamental Transaction.

Other Information

As of January 9, 2023, Keep Well Notes in the aggregate principal amount of $15.0 million and Keep Well Warrants to purchase 1,775,148 shares of the Company’s common stock were outstanding.

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on April 15, 2022 (the “2021 10-K”), the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2022 filed with the SEC on November 21, 2022 (the “3Q 10Q”), and the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2023 (the “Third Amendment 8-K”), includes a summary of the terms of the Original Keep Well Agreement, the Second Amendment and the Third Amendment, respectively, and the terms of New Keep Well Note and New Keep Well Warrant, which is qualified in its entirety by reference to copies of the foregoing documents that were filed as exhibits to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2022 filed with the SEC on May 11, 2022, the 3Q 10Q and the Third Amendment 8-K. Please see the 2021 10-K, the 3Q 10Q, the Third Amendment 8-K and copies of the Original Keep Well Agreement, the Second Amendment, the Third Amendment, the New Keep Well Note and the New Keep Well Warrant for additional information regarding the terms of such documents.

None of the securities issuable under the Keep Well Agreement have been, or if and when issued to Acuitas in the future will be, registered under the Securities Act of 1933, as amended (the “Securities Act”); all such securities have been and will be offered and sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

All shares of the Company’s common stock issued under the Keep Well Agreement will be the same class of common stock that the Company has listed on The Nasdaq Global Market under the trading symbol “OTRK.”

Reasons for Seeking Stockholder Approval

Nasdaq Listing Rules


			-16-

The Company’s common stock is listed on the Nasdaq Global Market and the Company is subject to the Nasdaq Listing Rules.

Nasdaq Listing Rule 5635(b) requires stockholder approval prior to the issuance of securities when the issuance or potential issuance will result in a “change of control” of the company. This rule does not define when a change in control of a company may be deemed to occur; however, Nasdaq suggests in its guidance that a change of control would occur, subject to certain limited exceptions, if after a transaction a person or entity will hold 20% or more of the outstanding shares of common stock or voting power of an issuer and such ownership or voting power of an issuer would represent the largest ownership position in the issuer. We are seeking stockholder approval of this proposal in order to satisfy the requirements of Nasdaq Listing Rule 5635(b) with respect to the issuance of the (a) the Additional Commitment Shares, (b) the New Keep Well Warrants, (c) the New Keep Well Notes, (d) the shares of the Company’s common stock issuable upon exercise of the New Keep Well Warrants (the “New Keep Well Warrant Shares”) and (e) the shares of the Company’s common stock issuable upon conversion of the New Keep Well Notes (the “Conversion Shares” and, together with the Additional Commitment Shares and the New Keep Well Warrant Shares, the “New Keep Well Shares”), in the event the issuance thereof could be considered a “change of control” under that rule. A “change of control” for purposes of Nasdaq Listing Rule 5635(b) applies only with respect to the application of such rule and does not constitute a “change of control” for purposes of Delaware law, our organizational documents, U.S. income tax laws or any other purpose.

Nasdaq Listing Rule 5635(c), among other things, requires stockholder approval prior to the issuance of securities when an equity compensation arrangement is made pursuant to which stock may be acquired by officers, directors, employees, or consultants. Nasdaq guidance provides that the issuance of common stock (or equivalents) or securities convertible into or exercisable for common stock to officers, directors, employees, or consultants at a price less than the market value of the stock is considered a form of “equity compensation” and requires stockholder approval unless the issuance is part of a public offering. The issuance of the New Keep Well Shares, the New Keep Well Warrants and the New Keep Well Notes (collectively, the “New Keep Well Securities”) may be considered “equity compensation” under Nasdaq Listing Rule 5635(c) because Acuitas is an entity indirectly wholly owned and controlled by Mr. Peizer, who serves as the Company’s Chief Executive Officer and Chairman.

Nasdaq Listing Rule 5635(c) also requires stockholder approval prior to a 20% Issuance (as defined in such rule) at a price that is less than the Minimum Price (as defined in such rule). For purposes of this rule, (1) "20% Issuance" means a transaction, other than a public offering, involving the sale, issuance or potential issuance by the company of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or substantial shareholders of the company, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance, and (2) “Minimum Price” means a price that is the lower of: (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. The issuance of the New Keep Well Securities may result in a 20% Issuance at a price that is less than the Minimum Price.

Accordingly, in order to ensure compliance with Nasdaq Listing Rules 5635(b), (c) and (d), the Company is seeking stockholder approval of the issuance of the New Keep Well Securities.

Event of Default

Under the terms of the Second Amendment, the Company agreed to seek stockholder approval of the terms of the Second Amendment and the Third Amendment that are subject to approval by the Company’s stockholders as described above (collectively, the “Amended Keep Well Terms Subject to Stockholder Approval”) by February 20, 2023, and the failure to obtain such approval by such date is an event of default under the Keep Well Agreement. In other words, if this proposal is not approved by the Company’s stockholders, the Company would be in default under the Keep Well Agreement, and Acuitas and the collateral agent under the Keep Well Agreement would have the rights that a secured creditor with a first priority lien on a company’s assets would have, including, the right to collect, enforce or satisfy any secured obligations then owing, including by foreclosing on the collateral securing the Company’s obligations under the Keep Well Agreement (which generally comprise all of the Company’s assets), restrictions on the operation of the Company’s business would spring into effect, and Acuitas would have no obligation to fund any future borrowings under the Keep Well Agreement. A default under the Keep Well


			-17-

Agreement would have serious consequences to the Company’s financial condition, operating results, and business, and could cause the Company to become insolvent or enter bankruptcy proceedings, and the Company’s stockholders may lose all or a portion of their investment because of the priority of the claims of Acuitas, in its capacity as a secured creditor, on the Company’s assets.

Effectiveness of the Second Amendment and Third Amendment

The Company is not seeking stockholder approval of its entry into either the Second Amendment or the Third Amendment or, other than the Amended Keep Well Terms Subject to Stockholder Approval, the terms thereof or the transactions contemplated thereby. If stockholder approval of this proposal is not obtained, none of the Amended Keep Well Terms Subject to Stockholder Approval will become effective, but it would constitute an event of default under the Keep Well Agreement as discussed above.

Effect of Issuance of Securities on Current Stockholders

If this proposal is approved, it will result in the immediate issuance of the 2,038,133 Additional Commitment Shares. As of the record date for the Special Meeting, there were [●] shares of the Company’s common stock outstanding. Therefore, the 2,038,133 Additional Commitment Shares represents [●]% of such outstanding common stock, and the issuance thereof would dilute the percentage interest of the Company’s stockholders, other than Acuitas, in the voting power, liquidation value and aggregate book value of the Company.

In addition, if this proposal is approved:

•the Keep Well Warrants to purchase 1,775,148 shares of the Company’s common stock currently outstanding will be immediately exchanged for New Keep Well Warrants to purchase 33,333,333 shares of the Company’s common stock;

•the $15.0 million in principal amount of Keep Well Notes currently outstanding will be exchanged for New Keep Well Notes which will be immediately convertible into 37,500,000 shares of the Company’s common stock (assuming a conversion price of $0.40); and

•if such Keep Well Notes are so converted (and assuming all interest is paid in cash), New Keep Well Warrants to purchase 37,500,000 shares of the Company’s common stock would be issued.

The table below illustrates the additional shares of the Company’s common stock that would be issuable upon (a) the conversion of the New Keep Well Notes to be issued in 2023 (assuming a conversion price of $0.40 and all interest is paid in cash), (b) the exercise of the New Keep Well Warrants to be issued in connection with the issuance of such New Keep Well Notes (assuming a Warrant Coverage Denominator of $0.45), and (c) the exercise of the New Keep Well Warrants to be issued in connection with the conversion of such New Keep Well Notes:


Shares of Common Stock Issuable Upon
Amount Borrowed under the Keep Well Agreement	Conversion of the Note (a)	Exercise of the Warrant Issued in Connection with the Borrowing (b)	Exercise of the Warrant Issued in Connection with the Conversion of the Note (c)
$4.0 million in March 2023	10,000,000	8,888,889	10,000,000
$4.0 million in June 2023	10,000,000	8,888,889	10,000,000
$2.0 million in September 2023	5,000,000	4,444,444	5,000,000
Total	25,000,000	22,222,222	25,000,000

Accordingly, if this proposal is approved, based on the assumptions described above regarding the dollar amount of the conversion price and the Warrant Coverage Denominator and assuming all interest on the New Keep Well Notes is paid in cash, if all the New Keep Well Notes are converted and all New Keep Well Warrants are exercised, the Company would, subject to the Issuance Cap in the Keep Well Agreement, issue an aggregate of approximately 180.8 million shares of its common stock (including the Additional Commitment Shares), increasing the dilution of the Company’s stockholders, other than Acuitas.


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As discussed above, the conversion price of the New Keep Well Notes and the Warrant Coverage Denominator for New Keep Well Warrants is subject to adjustment based on the price of our common stock, subject to maximum downward adjustment to $0.15 (subject to adjustment for stock splits and the like, including the reverse stock split contemplated by the Reverse Stock Split Proposal, if effected). The table below illustrates the additional shares of the Company’s common stock that would be issuable upon (a) the conversion of the New Keep Well Notes to be issued in 2023 (assuming a conversion price of $0.15 and all interest is paid in cash), (b) the exercise of the New Keep Well Warrants to be issued in connection with the issuance of such New Keep Well Notes (assuming a Warrant Coverage Denominator of $0.15), and (c) the exercise of the New Keep Well Warrants to be issued in connection with the conversion of such New Keep Well Notes:


Shares of Common Stock Issuable Upon
Amount Borrowed under the Keep Well Agreement	Conversion of the Note (a)	Exercise of the Warrant Issued in Connection with the Borrowing (b	Exercise of the Warrant Issued in Connection with the Conversion of the Note (c)
$4.0 million in March 2023	26,666,667	26,666,667	26,666,667
$4.0 million in June 2023	26,666,667	26,666,667	26,666,667
$2.0 million in September 2023	13,333,333	13,333,333	13,333,333
Total	66,666,667	66,666,667	66,666,667

Accordingly, if this proposal is approved, based on the assumptions described above regarding the dollar amount of the conversion price and the Warrant Coverage Denominator and assuming all interest on the New Keep Well Notes is paid in cash, if all the New Keep Well Notes are converted and all New Keep Well Warrants are exercised, the Company would issue an aggregate of approximately 433.6 million shares of its common stock (including the Additional Commitment Shares), increasing the dilution of the Company’s stockholders, other than Acuitas. However, the issuance of shares upon the conversion of the New Keep Well Notes and/or the exercise of the New Keep Well Warrants are subject to the Issuance Cap in the Keep Well Agreement, as described above.

Interests of Directors and Executive Officers

Other than Mr. Peizer, none of the Company’s directors or executive officers have any substantial interest, directly or indirectly, in the matters set forth in this proposal except to the extent of their ownership of shares of the Company’s common stock. None of the Company’s officers or directors have a beneficial interest in any of the Keep Well Securities, other than Mr. Peizer through his ownership and control of Acuitas.

As of the record date for the Special Meeting, Acuitas and its affiliates beneficially owned [●] shares of the Company’s common stock, or [●]% shares of the Company’s common stock outstanding as of the record date. Acuitas and its affiliates may vote all such shares of the Company’s common stock on this proposal.

No Appraisal Rights

Stockholders are not entitled to rights of appraisal with respect to this proposal.

Vote Required

If a quorum is present at the special meeting, approval of this proposal requires the affirmative vote of the majority of shares present in person or represented by proxy at the special meeting and entitled to vote on the subject matter (meaning that of the shares represented at the special meeting and entitled to vote, a majority of them must be voted “FOR” this proposal for it to be approved). Stockholders may vote “FOR,” “AGAINST” or “ABSTAIN” from voting on this proposal. Abstentions will have the same effect as a vote “AGAINST” this proposal, and broker non-votes will have no effect on the outcome of this proposal.

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL


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PROPOSAL NO. 3

THE ADJOURNMENT PROPOSAL

General

In this proposal, we are asking our stockholders to authorize us to adjourn the special meeting to another time and place, if necessary or advisable, to solicit additional proxies in the event there are not sufficient votes to approve either or both of the Reverse Stock Split Proposal and the Keep Well Proposal at the special meeting. If our stockholders approve this proposal, we could adjourn the special meeting without a vote on either the Reverse Stock Split Proposal or the Keep Well Proposal to solicit additional proxies and/or to seek to convince stockholders to change their votes in favor of such proposals.

If the special meeting is adjourned, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the special meeting or displayed, during the time scheduled for the special meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication. However, if the adjournment is for more than 30 days, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting. In addition, if after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, notice of the adjourned meeting will be given to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting. At the adjourned meeting, we may transact any business which might have been transacted at the original meeting.

Interests of Directors and Executive Officers

None of the Company’s directors or executive officers have any substantial interest, directly or indirectly, in this proposal except to the extent of their ownership of shares of the Company’s common stock.

Vote Required

If a quorum is present at the special meeting, approval of this proposal requires the affirmative vote of the majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on this proposal (meaning that of the shares present in person or represented by proxy at the special meeting and entitled to vote, a majority of them must be voted “FOR” this proposal for it to be approved). Stockholders may vote “FOR,” “AGAINST” or “ABSTAIN” from voting on this proposal. Abstentions will have the same effect as a vote “AGAINST” this proposal. This proposal is a routine matter and brokers and other nominees may generally vote in their discretion on routine matters, and therefore broker non-votes are not expected on this proposal.

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THIS PROPOSAL.


			-20-

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ~~AND RELATED STOCKHOLDER MATTERS~~

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of January ~~25, 2022~~5, 2023 for (a) each stockholder known by us to own beneficially more than 5% of our common stock (b) our named executive officers, ~~listed in the 2020 Summary Compensation Table in our Annual Report on Form 10-K/A,~~ (c) each of our directors, and (d) all of our current directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of January 25, 2022 pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based o~~n 20,691,129 shares of common stock outstanding on January 25, 2022.~~

Total
Shares common
Common beneficially stock Percent
stock owned beneficially of
Name of beneficial owner (1) owned (2) (3) owned class (3)
Directors and Named Executive Officers:
Terren S. Peizer (4) 9,114,155 — 9,114,155 44.0 %
Richard A. Berman (5) — 171,008 171,008 *
Michael Sherman (6) 15,550 120,474 136,024 *
Brandon H. LaVerne (7) 1,146 100,000 101,146 *
Edward Zecchini (8) — 85,551 85,551 *
Diane Seloff (9) — 85,551 85,551 *
Robert Rebak (10) 8,200 71,293 79,493 *
Robert I. Newton (11) — 47,223 47,223 *
Gustavo Giraldo (12) — 18,567 18,567 *
Katherine Quinn (13) — 6,593 6,593 *
Jonathan Mayhew (14) — — — *
All current directors, director nominee and executive officers as a group (15 persons) 9,142,523 787,760 9,911,283 46.2 %


Name of beneficial owner (1)	Common Stock Owned	Shares Beneficially Owned (2)	Total Common Stock Beneficially Owned	Percent of Class (3)
Directors and Named Executive Officers:
Terren S. Peizer (4)	9,853,800	2,815,148	12,668,948	42.1	%
Richard A. Berman	—	—	—	*
Michael Sherman	15,550	—	15,550	*
James Messina (5)	—	16,360	16,360	*
Jonathan E. Mayhew (6)	—	—	—	*
Brandon H. LaVerne (7)	44,140	145,834	189,974	*
Mary Louise Osborne (8)	32,335	37,500	69,835	*
All current directors and executive officers as a group (9 persons)	10,018,706	3,317,959	13,156,665	43.3	%

___________


*			Less than 1%
(1)			Except as set forth below, the mailing address of all individuals listed is c/o Ontrak, Inc., ~~2120 Colorado Ave.,~~2200 Paseo Verde Parkway, Suite ~~230, Santa Monica, CA 90404.~~280, Henderson, NV 89052.
(2)			The number of shares beneficially owned includes shares of common stock in which a person has sole or shared voting power and/or sole or shared investment ~~power.~~power and shares of common stock acquirable within 60 days of January 5, 2023 upon exercise of options or warrants. Except as noted ~~below,~~in other footnotes to this table, each person named ~~reportedly~~ has sole voting and investment powers with respect to the common stock beneficially owned by that person, subject to applicable community property and similar laws.
(3)			~~On January 25, 2022, there were 20,691,129 shares~~ Shares of common stock ~~outstanding. Common stock not outstanding but which underlies options and rights (including warrants) vested as of~~ that may be acquired by an individual or ~~vesting~~group within 60 days ~~after~~of January ~~25, 2022, is~~5, 2023 are deemed to be outstanding for the purpose of computing the percentage ownership of ~~the common stock beneficially owned by each named person (and the directors and executive officers as a group),~~such individual or group, but isare not deemed to be outstanding for the purpose of computing the percentage ownership of any other ~~purpose.~~person. Percentage of ownership is based on 27,280,862 shares of common stock outstanding on January 5, 2023.
(4)			~~Consists~~Total common stock beneficially owned consists of ~~9,114,155~~9,853,800 shares of common stock, warrants to purchase 1,775,148 shares of common stock and options to purchase 1,040,000 shares of common stock. ~~9,114,155~~The 9,853,800 shares of common stock are held of record by Acuitas Group Holdings, LLC, a limited liability company 100% owned by Terren S. Peizer, and as such, Mr. Peizer may be deemed to beneficially own or control. ~~Mr. Peizer disclaims beneficial ownership of any such securities.~~
(5)			~~Includes~~Total common stock beneficially owned consists of options to purchase ~~171,008~~16,360 shares of common stock.
(6)			On June 24, 2022, Mr. Mayhew gave notice of his resignation, effective August 12, 2022.
(7)			Total common stock beneficially owned consists of 20,000 shares of common stock, ~~which are exercisable within the next 60 days.~~
~~(6)~~			~~Consists of 15,550 shares of common stock and options to purchase 120,474 shares of common stock, which are exercisable within the next 60 days.~~
~~(7)~~			~~Consists of 1,146~~24,140 shares of common stock held under the Company’s 401(k) plan, and options to purchase ~~100,000~~145,834 shares of common stock.
(8)			Total common stock beneficially owned consists of 20,000 shares of common stock, ~~which are exercisable within the next 60 days.~~
~~(8)~~			~~Includes options to purchase 85,551~~12,335 shares of common stock ~~which are exercisable within~~held under the ~~next 60 days.~~
~~(9)~~			~~Includes options to purchase 85,551 shares of common stock, which are exercisable within the next 60 days.~~
~~(10)~~			~~Consists of 8,200 shares of common stock~~Company’s 401(k) plan, and options to purchase ~~71,293~~37,500 shares of common ~~stock, which are exercisable within the next 60 days.~~
~~(11)~~			~~Includes options to purchase 47,223 shares of common stock, which are exercisable within the next 60 days.~~
~~(12)~~			~~Includes options to purchase 18,567 shares of common stock, which are exercisable within the next 60 days.~~
~~(13)~~			Ms. Quinn was appointed to serve as a member of the Board in August 2020, and resigned effective as of January 11, 2022. Includes options to purchase 6,593 shares of common stock, which are exercisable within the next 60 days
~~(14)~~			~~Mr. Mayhew was appointed to serve as Chief Executive Officer on April 12, 2021.~~stock.


			-21-

STOCKHOLDER PROPOSALS OR NOMINATIONS TO BE PRESENTED
AT NEXT ANNUAL MEETING

Stockholders may submit proposals on matters appropriate for stockholder action at our 2023 annual meeting of stockholders consistent with Rule 14a-8 promulgated under the Exchange Act. To be considered for inclusion in proxy materials for our 2023 annual meeting of stockholders, a stockholder proposal must be submitted in writing no later than March 30, 2023 (which is 120 days before the anniversary of the date we released our proxy statement to stockholders in connection with our 2022 annual meeting of stockholders), to our Corporate Secretary, c/o Ontrak, Inc., 2200 Paseo Verde Parkway, Suite 280, Henderson, NV 89052. However, if the date of our 2023 annual meeting of stockholders is convened more than 30 days before, or delayed by more than 30 days after, August 29, 2023, to be considered for inclusion in proxy materials for our 2023 annual meeting of stockholders, a stockholder proposal must be submitted in writing to our Corporate Secretary, c/o Ontrak, Inc., 2200 Paseo Verde Parkway, Suite 280, Henderson, NV 89052 in a reasonable time before we begin to print and send our proxy materials for the 2023 Annual Meeting of Stockholders. The persons authorized by the form of proxy to be sent in connection with the solicitation of proxies on behalf of the Company’s board of directors for our 2023 annual meeting of stockholders will vote in their discretion as to any matter of which the Company has not received notice by June 13, 2023.

The deadline for providing notice to the company under Rule 14a-19, the SEC’s universal proxy rule, of a stockholder’s intent to solicit proxies in support of director nominees for our 2023 annual meeting of stockholders is June 30, 2023.

HOUSEHOLDING OF PROXY MATERIALS

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.

A number of brokers with account holders who are Ontrak stockholders will be “householding” our proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, or, if you share an address with another Company stockholder and are receiving multiple copies of annual reports and proxy statements but only wish to receive a single copy of such materials, you may:

•if you are a stockholder of record, direct your written request to our transfer agent, American Stock Transfer and Trust Company, LLC, Attn: Proxy Dept., 6201 15th Avenue, Third Floor, Brooklyn, NY 11219, U.S.A.; or call: in the United States, 1-800-PROXIES (1-800-776-9437) and outside the United States, 1-718-921-8500); or

•if you are not a stockholder of record, notify your broker.

Ontrak will promptly deliver, upon written or oral request, a separate copy of the proxy materials to a stockholder at a shared address to which a single copy was delivered by using the contact information provided above.

WHERE YOU CAN FIND MORE INFORMATION

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, and proxy statements and other information we file or furnish pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge on our website at www.ontrakhealth.com under the Investors tab as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the SEC.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including our company.


			-22-

OTHER MATTERS

~~The Board~~Our board of ~~Directors~~directors knows of no other matters that will be presented for consideration at the ~~Special Meeting.~~special meeting. If any other matters are properly presented at the ~~Special Meeting,~~special meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment, pursuant to the discretionary authority granted by the proxy.

~~By order of the Board of Directors,~~

~~/s/ Brandon H. LaVerne~~

~~Brandon H. LaVerne~~

~~Chief Financial Officer~~

~~Santa Monica, California~~

~~January 28, 2022~~


			-23-

Appendix A

~~Form of~~
Proposed Amendment to Amended and Restated Certificate of Incorporation

CERTIFICATE OF AMENDMENT

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION

ONTRAK, INC.

(Pursuant to Section 242 of the

General Corporation Law of the State of Delaware)

~~I, Brandon LaVerne, being the Chief Financial Officer of~~ Ontrak, Inc. (the “Corporation”), a corporation existing under the ~~laws~~General Corporation Law of the State of Delaware (the ~~“Corporation”~~“DGCL”), do hereby ~~certify~~certifies as follows:

~~FIRST. The name~~FIRST: This Certificate of Amendment (this “Certificate of Amendment”) amends the provisions of the ~~Corporation is: Ontrak, Inc.~~

~~SECOND. The original~~Corporation’s Amended and Restated Certificate of Incorporation ~~of the Corporation was~~ filed with the Secretary of State ofon October 4, 2019, as amended by the ~~State of Delaware (the “Secretary”) on September 29, 2003 (the “~~Certificate of ~~Incorporation~~”Amendment thereto filed with the Secretary of State on July 6, 2020, the Certificate of Designations of Rights and Preferences filed with the Secretary of State on August 21, 2020 and Amendment No. 1 to Certificate of Designations of Rights and Preferences filed with the Secretary of State on October 15, 2020 (as amended to date, the “Certificate of Incorporation”).

THIRD. That the Board of Directors of the Corporation duly adopted resolutions proposing to amend the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and in the best interests of the Corporation and its stockholders, and authorizing the appropriate officers of the Corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment as follows:

SECOND: The Certificate of Incorporation is hereby amended by ~~striking~~revising Article ~~EIGHTH in its entirety.~~FOURTH to include a new paragraph 3 as follows:

~~FOURTH. That~~3. Effective at 6:00 p.m. Eastern Time (the “Effective Time”) on the ~~foregoing~~effective date of the certificate of amendment ~~was approved~~adding this paragraph to Article FOURTH of the certificate of incorporation of the Corporation (the “Effective Date”), every [•] ([•]) shares of Common Stock issued and outstanding or held by the ~~holders~~Corporation in treasury stock immediately prior to the Effective Time shall automatically be combined and reclassified into one (1) validly issued, fully paid and non-assessable share of Common Stock without any further action by the ~~requisite~~Corporation or the holder thereof (the “Reverse Split”); provided, however, that if the Reverse Split would result in the record account of any holder of Common Stock having a number of shares of Common Stock that is, in the ~~Corporation~~aggregate, less than one (1) share (a “Fractional Share”), such holder shall be entitled to receive a whole share of Common Stock in lieu of a Fractional Share.

THIRD: This Certificate of Amendment was duly adopted in accordance with the provisions of Section 242 of the ~~Delaware General Corporation Law.~~

~~FIFTH. This Certificate of Amendment of Certificate of Incorporation shall become effective on [____], 2022 at __:00 pm EDT.~~DGCL.

IN WITNESS WHEREOF, the ~~undersigned affirms that~~Corporation has caused this Certificate of Amendment to be duly adopted and executed in its corporate name and on its behalf by its duly authorized officer as of the ~~statements made herein are true under the penalties of perjury, this __th~~___ day of ~~[___], 202_.~~___________, 202__.

Ontrak, Inc.

By:
Name:
Title:

~~Name: Brandon LaVerne~~

~~Title: Chief Financial Officer~~


Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:
☐☒ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒☐ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under ~~§240.14a-12~~§240.14A-12


Proposal	~~Vote~~Votes Required	Impact of “Abstain” Votes	Broker Discretionary Voting Allowed? Impact of Broker Non-Votes
Reverse Stock Split Proposal	The affirmative vote of a majority of our outstanding shares of common stock as of the record date for the special meeting.	Abstentions will have the same effect as a vote against this proposal	Yes No broker non-votes are expected on this proposal. If there are any, they will have the same effect as a vote against this proposal.
~~Proposal No. 1 – Charter Amendment~~Keep Well Proposal	~~Majority~~The affirmative vote of ~~outstanding~~the majority of shares present in person or represented by proxy at the special meeting and entitled to vote on this proposal.	Abstentions will have the same effect as a vote against this proposal	No Broker non-votes will not have any effect on the outcome of this proposal.
~~Proposal No. 2 –~~ Adjournment Proposal	~~Majority~~The affirmative vote of ~~votes cast~~the majority of shares present in person or represented by proxy at the special meeting and entitled to vote on this proposal.	Abstentions will have the same effect as a vote against this proposal	Yes No


~~ONTRAK, INC.~~
~~(Name of Registrant as Specified In Its Charter)~~

~~(Name of Person(s) Filing Proxy Statement, if other than the Registrant)~~


2200 Paseo Verde Parkway, Suite 280 Henderson, NV 89052 (310) 444-4300


1.			To authorize the Board of Directors, in its discretion, to approve and adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation to remove certain protective transfer restrictions originally designed to preserve our ability to utilize our net operating (“NOLs”) and net capital (“NCLs”) loss carryovers (the “Charter Amendment Proposal”).
2.			~~To authorize one or more adjournments of the Special Meeting to solicit additional proxies in the event there are insufficient votes to approve Proposal 1 above (the “Adjournment Proposal”).~~
3.			~~To transact any other business that may properly come before the Special Meeting or any adjournments or postponements of the Special Meeting.~~


Henderson, Nevada			By order of the Board of Directors,
[•], 2023


•			To vote online at the virtual Special Meeting on March 1, 2022, follow the instructions above under “How do I participate in the Special Meeting?” click on “I have a login,” enter the control number found on your proxy card you previously received, and enter the password “ontrak2022” (the password is case sensitive).
•			To vote using the proxy card, please complete, sign and date the proxy card and return it in the prepaid envelope. If you return your signed proxy card to us before the Special Meeting, we will vote your shares as you direct. If you do not have the prepaid envelope, please mail your completed proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, U.S.A.
•			To vote via the telephone, you can vote by calling the telephone number on your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been properly recorded.
•			To vote via the Internet, please go to www.voteproxy.com and follow the instructions. Please have your proxy card handy when you go to the website. As with telephone voting, you can confirm that your instructions have been properly recorded.


•			~~giving written notice that you are revoking your proxy to the Secretary, Ontrak, Inc., 2120 Colorado Ave., Suite 230, Santa Monica, CA 90404;~~
•			delivering a properly completed proxy card with a later date, or vote by telephone or on the Internet at a later date (we will vote your shares as directed in the last instructions properly received from you prior to the Special Meeting); or
•			~~attending and voting online at the virtual Special Meeting (note, simply attending the Special Meeting will not, by itself, revoke your proxy).~~


•			~~FOR the Charter Amendment Proposal; and~~
•			~~FOR the Adjournment Proposal.~~


					Total
			Shares		common
	Common		beneficially		stock		Percent
	stock		owned		beneficially		of
Name of beneficial owner (1)	owned (2)		(3)		owned		class (3)
Directors and Named Executive Officers:
Terren S. Peizer (4)		9,114,155		—		9,114,155		44.0	%
Richard A. Berman (5)		—		171,008		171,008		*
Michael Sherman (6)		15,550		120,474		136,024		*
Brandon H. LaVerne (7)		1,146		100,000		101,146		*
Edward Zecchini (8)		—		85,551		85,551		*
Diane Seloff (9)		—		85,551		85,551		*
Robert Rebak (10)		8,200		71,293		79,493		*
Robert I. Newton (11)		—		47,223		47,223		*
Gustavo Giraldo (12)		—		18,567		18,567		*
Katherine Quinn (13)		—		6,593		6,593		*
Jonathan Mayhew (14)		—		—		—		*

All current directors, director nominee and executive officers as a group (15 persons)		9,142,523		787,760		9,911,283		46.2	%


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