Ontrak Form 4 / TERREN S PEIZER ownership change

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

PEIZER TERREN S

(Last)

(First)

(Middle)

200 DORADO BEACH DRIVE #3831

(Street)

DORADO

00646

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
Ontrak, Inc. [ OTRK ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
12/20/2023

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock⁽¹⁾	12/20/2023⁽²⁾⁽⁵⁾⁽⁶⁾		C		9,027,395⁽³⁾⁽⁵⁾⁽⁶⁾	A	$0.6⁽³⁾⁽⁵⁾⁽⁶⁾	27,082,186	I	By Humanitario
Common Stock⁽¹⁾								1,981,989	I	By Acuitas

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock Purchase Warrant⁽¹⁾	$0.9⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	12/20/2023⁽²⁾⁽⁵⁾⁽⁷⁾		H	V		18,054,791⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	11/14/2023⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	11/14/2028⁽⁴⁾⁽⁵⁾⁽⁷⁾	Common Stock	18,054,791⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	0	I	By Acuitas
Common Stock Purchase Warrant⁽¹⁾	$0.6⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	12/20/2023⁽²⁾⁽⁵⁾⁽⁷⁾		J	V	27,082,186⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾		12/20/2023⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	11/14/2028⁽⁴⁾⁽⁵⁾⁽⁷⁾	Common Stock	27,082,186⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	27,082,186⁽⁷⁾	I	By Acuitas
Pre-Funded Common Stock Purchase Warrant⁽¹⁾	$0.0001⁽⁸⁾⁽⁹⁾	12/20/2023⁽²⁾⁽⁸⁾⁽⁹⁾		P		18,333,333⁽⁸⁾⁽⁹⁾		12/20/2023⁽⁸⁾⁽⁹⁾	⁽⁹⁾	Common Stock	18,333,333⁽⁸⁾	⁽⁸⁾	18,333,333⁽⁸⁾	I	By Humanitario
Common Stock Purchase Warrant⁽¹⁾	$0.85⁽⁸⁾⁽⁹⁾	12/20/2023⁽²⁾⁽⁸⁾⁽⁹⁾		P		36,666,666⁽⁸⁾⁽⁹⁾		12/20/2023⁽⁸⁾⁽⁹⁾	12/20/2028⁽⁹⁾	Common Stock	36,666,666⁽⁸⁾	⁽⁸⁾	36,666,666⁽⁸⁾	I	By Humanitario
Senior Secured Convertible Note⁽¹⁾	$0.9⁽³⁾⁽⁸⁾⁽¹⁰⁾	12/20/2023⁽²⁾⁽⁸⁾⁽¹⁰⁾		H	V		$2,000,000⁽⁸⁾⁽¹⁰⁾	03/06/2023⁽³⁾⁽⁵⁾⁽⁸⁾⁽¹⁰⁾	05/14/2026⁽¹⁰⁾	Common Stock	⁽³⁾⁽⁶⁾⁽¹⁰⁾	⁽⁸⁾⁽¹⁰⁾	0	I	By Acuitas Capital
Senior Secured Convertible Note⁽¹⁾	$0.6⁽³⁾⁽⁸⁾⁽¹⁰⁾	12/20/2023⁽²⁾⁽⁸⁾⁽¹⁰⁾		J	V	$2,000,000⁽⁸⁾⁽¹⁰⁾		12/20/2023⁽³⁾⁽⁵⁾⁽⁸⁾⁽¹⁰⁾	05/14/2026⁽¹⁰⁾	Common Stock	⁽³⁾⁽⁶⁾⁽¹⁰⁾	⁽⁸⁾⁽¹⁰⁾	$2,000,000	I	By Acuitas Capital

1. Name and Address of Reporting Person^*

PEIZER TERREN S

(Last)

(First)

(Middle)

200 DORADO BEACH DRIVE #3831

(Street)

DORADO

00646

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

Acuitas Group Holdings, LLC

(Last)

(First)

(Middle)

200 DORADO BEACH DRIVE #3831

(Street)

DORADO

00646

(City)

(State)

(Zip)

Explanation of Responses:

1. This Form 4 is jointly filed by Terren S. Peizer ("Mr. Peizer") and Acuitas Group Holdings, LLC ("Acuitas") with respect to the issuer Ontrak, Inc. ("Ontrak"). Mr. Peizer is the Chairman and sole member of Acuitas and, in such capacity, exercises voting and investment power over any securities held for the accounts of Acuitas.

2. As previously disclosed, pursuant to the Fifth Amendment (as defined below) to the Master Note Purchase Agreement, dated April 15, 2022, by and among Acuitas Capital LLC, an entity wholly owned by Acuitas ("Acuitas Capital"), Ontrak and the other parties thereto, as last amended by the Fifth Amendment made on October 31, 2023 (the "Fifth Amendment"), and as modified on November 9, 2023 (as amended, the "Keep Well Agreement"), Ontrak was required to seek stockholder approval (the "Stockholder Approval") in accordance with Nasdaq rules with respect to the Conversion Shares Issuance, the Conversion Warrant Modifications and the Private Placement Securities (each, as defined below), among other things. The Stockholder Approval became effective on December 20, 2023.

3. As previously disclosed, under the Keep Well Agreement, Acuitas Capital, at its option, has the right to convert the entire principal amount of the outstanding senior secured convertible notes (the "Keep Well Notes") previously issued to Acuitas Capital by Ontrak under the Keep Well Agreement, plus all accrued and unpaid interest thereon, in whole or in part, into shares of Ontrak's common stock ("Shares"). Prior to the effectiveness of the Stockholder Approval, the conversion price was equal to the lesser of (a) $2.40 per share (as may be adjusted) and (b) the greater of (i) the closing price of Ontrak's common stock on the trading day immediately prior to conversion and (ii) $0.90 per share (as may be adjusted).

4. As previously disclosed, under the Keep Well Agreement, in connection with the conversion of any Keep Well Notes into Shares, Ontrak will issue to Acuitas Capital (or its designee) a five-year warrant (each a "Keep Well Warrant") to purchase up to a number of Shares equal to (x) the amount converted divided by (y) the conversion price of the Keep Well Note then in effect, which Keep Well Warrant will be exercisable for an exercise price equal to such conversion price (as may be adjusted).

5. As previously disclosed, on November 14, 2023, Ontrak completed its public offering of Shares and warrants to purchase Shares at a combined public offering price of $0.60 per Share and accompanying warrants (the "Offering Price"). As previously disclosed, in accordance with the Fifth Amendment, prior to the closing of such offering, Ontrak issued 18,054,791 Shares to Humanitario Capital LLC, an entity wholly owned by Mr. Peizer ("Humanitario"), upon the conversion of the aggregate principal amount of all then outstanding Keep Well Notes, plus all accrued and unpaid interest thereon, minus $7.0 million (the "Notes Conversion"), and, in connection with the Notes Conversion, issued to Acuitas a Keep Well Warrant (the "Conversion Warrant") initially exercisable for up to 18,054,791 Shares at an exercise price of $0.90 per Share.

6. Because the Offering Price was less than the conversion price at which the Keep Well Notes were initially converted in the Notes Conversion, on December 20, 2023, in connection with the Stockholder Approval, pursuant to the terms of the Fifth Amendment, Ontrak issued to Humanitario an additional 9,027,395 Shares, such that the total number of Shares issued in respect of the Notes Conversion (giving effect to such additional Shares) equals the number of Shares that would have been issued in respect thereof had the Keep Well Notes been converted therein at a conversion price equal to the Offering Price (the "Conversion Shares Issuance").

7. Because the Offering Price was less than the initial conversion price for the Notes Conversion (as described above), upon the effectiveness of the Stockholder Approval, pursuant to the terms of the Fifth Amendment, the exercise price of the Conversion Warrant was automatically reduced to $0.60 per Share, and the number of Shares subject to the Conversion Warrant was automatically increased by 9,027,395 Shares, such that the Conversion Warrant is now exercisable for 27,082,186 Shares (collectively, the "Conversion Warrant Modifications"). The Conversion Warrant Modifications are voluntarily reported in Table II above as the cancellation of the old Conversion Warrant in exchange for the issuance of a new Conversion Warrant reflecting the Conversion Warrant Modifications.

8. As previously disclosed, on November 14, 2023, in accordance with the Fifth Amendment, concurrently with the offering closing, Ontrak issued to Humanitario in a private placement an unregistered pre-funded warrant to purchase up to 18,333,333 Shares at an exercise price of $0.0001 per share (as may be adjusted) (the "Pre-Funded Warrant") and an unregistered warrant to purchase up to 36,666,666 Shares at an exercise price of $0.85 per share (as may be adjusted) (the "Private Placement Warrant"; collectively, the "Private Placement Securities"), for total consideration of $11.0 million, consisting of (a) the $6.0 million Acuitas Capital previously delivered to Ontrak in June 2023 and September 2023 in accordance with the Keep Well Agreement and (b) a reduction of the aggregate amounts then outstanding under the Keep Well Notes (after giving effect to the Notes Conversion) to $2.0 million (the Keep Well Note evidencing such $2.0 million, the "Surviving Note").

9. Upon the effectiveness of the Stockholder Approval, pursuant to their respective terms, the Private Placement Securities automatically became exercisable. As previously disclosed, the Pre-Funded Warrant may be exercised at any time until exercised in full and the Private Placement Warrant may be exercised through the fifth anniversary date of the effectiveness of the Stockholder Approval. The Private Placement Securities may be exercised on a cashless basis. The purchases of the Private Placement Securities on November 14, 2023 were previously reported on the Form 4 jointly filed by the reporting persons on November 15, 2023, and are reported in Table II above to reflect the exercisability of the Private Placement Securities upon the effectiveness of the Stockholder Approval.

10. As previously disclosed, under the terms of the Fifth Amendment, the Surviving Note will mature on May 14, 2026, unless earlier due and payable in full. Upon the effectiveness of the Stockholder Approval, pursuant to the terms of the Fifth Amendment, the conversion price of the Surviving Note automatically became the lesser of (i) $2.40 per share (as may be adjusted), and (ii) the greater of (a) the consolidated closing bid price of Ontrak's common stock on the trading day immediately prior to conversion and (b) $0.60 per share (as may be adjusted). Such modification is voluntarily reported in Table II above as the cancellation of the old note in exchange for the issuance of a new note reflecting the modified conversion price.

	Acuitas Group Holdings , LLC, Terren S. Peizer , Chairman /s/ Terren S. Peizer	12/22/2023
	/s/ Terren S. Peizer	12/22/2023
	** Signature of Reporting Person	Date
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Ontrak (OTRK) Form 4Ontrak / TERREN S PEIZER ownership change