Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-31932 | |
Entity Registrant Name | Ontrak, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 88-0464853 | |
Entity Address, Address Line One | 333 S. E. 2nd Avenue | |
Entity Address, Address Line Two | Suite 2000 | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33131 | |
City Area Code | 310 | |
Local Phone Number | 444-4300 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | OTRK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 47,967,363 | |
Entity Central Index Key | 0001136174 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 6,400 | $ 9,701 |
Receivables, net | 241 | 0 |
Unbilled receivables | 232 | 207 |
Deferred costs | 119 | 128 |
Prepaid expenses and other current assets | 2,439 | 2,743 |
Total current assets | 9,431 | 12,779 |
Long-term assets: | ||
Property and equipment, net | 757 | 913 |
Goodwill | 5,713 | 5,713 |
Intangible assets, net | 50 | 99 |
Other assets | 10,589 | 147 |
Operating lease right-of-use assets | 183 | 195 |
Total assets | 26,723 | 19,846 |
Current liabilities: | ||
Accounts payable | 667 | 563 |
Accrued compensation and benefits | 756 | 442 |
Deferred revenue | 244 | 97 |
Current portion of operating lease liabilities | 59 | 56 |
Other accrued liabilities | 1,982 | 2,784 |
Total current liabilities | 3,708 | 3,942 |
Long-term liabilities: | ||
Long-term debt, net | 1,617 | 1,467 |
Long-term operating lease liabilities | 151 | 166 |
Total liabilities | 5,476 | 5,575 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 3,770,265 shares issued and outstanding at each of March 31, 2024 and December 31, 2023 | 0 | 0 |
Common stock, $0.0001 par value; 500,000,000 shares authorized; 43,950,678 and 38,466,979 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 7 | 6 |
Additional paid-in capital | 496,359 | 484,926 |
Accumulated deficit | (475,119) | (470,661) |
Total stockholders' equity | 21,247 | 14,271 |
Total liabilities and stockholders' equity | $ 26,723 | $ 19,846 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 3,770,265 | 3,770,265 |
Preferred stock, shares outstanding (in shares) | 3,770,265 | 3,770,265 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 43,950,678 | 38,466,979 |
Common stock, shares outstanding (in shares) | 43,950,678 | 38,466,979 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 2,680 | $ 2,529 |
Cost of revenue | 975 | 847 |
Gross profit | 1,705 | 1,682 |
Operating expenses: | ||
Research and development | 1,078 | 1,644 |
Sales and marketing | 532 | 990 |
General and administrative | 4,078 | 5,818 |
Restructuring, severance and related charges | 290 | 457 |
Total operating expenses | 5,978 | 8,909 |
Operating loss | (4,273) | (7,227) |
Other (expense) income , net | (2) | 291 |
Interest expense, net | (183) | (1,394) |
Loss before income taxes | (4,458) | (8,330) |
Income tax expense | 0 | (20) |
Net loss | (4,458) | (8,350) |
Dividends on preferred stock - undeclared | (2,239) | (2,239) |
Net loss attributable to common stockholders, basic | (6,697) | (10,589) |
Net loss attributable to common stockholders, diluted | $ (6,697) | $ (10,589) |
Net loss per common share, basic (in dollars per share) | $ (0.11) | $ (2.26) |
Net loss per common share, diluted (in dollars per share) | $ (0.11) | $ (2.26) |
Weighted-average common shares outstanding, basic (in shares) | 60,882 | 4,686 |
Weighted-average common shares outstanding, diluted (in shares) | 60,882 | 4,686 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Public Offering Warrants | Pre-Funded Warrants | Preferred Stock | Common Stock | Common Stock Public Offering Warrants | Common Stock Pre-Funded Warrants | Additional Paid-In Capital | Additional Paid-In Capital Public Offering Warrants | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2022 | 3,770,265 | 4,527,914 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 5,677 | $ 0 | $ 3 | $ 448,415 | $ (442,741) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock issued for financing (in shares) | 339,689 | |||||||||
Warrants issued in connection with Keep Well Notes | 10,797 | 10,797 | ||||||||
Loss on extinguishment of debt with related party | (2,153) | (2,153) | ||||||||
Restricted stock units vested, net (in shares) | 208 | |||||||||
Restricted stock units vested, net | (2) | (2) | ||||||||
401(k) employer match (in shares) | 18,897 | |||||||||
Stock-based compensation expense | 651 | 651 | ||||||||
Net loss | (8,350) | (8,350) | ||||||||
Ending balance (in shares) at Mar. 31, 2023 | 3,770,265 | 4,886,708 | ||||||||
Ending balance at Mar. 31, 2023 | 6,620 | $ 0 | $ 3 | 457,708 | (451,091) | |||||
Beginning balance (in shares) at Dec. 31, 2023 | 3,770,265 | 38,466,979 | ||||||||
Beginning balance at Dec. 31, 2023 | 14,271 | $ 0 | $ 6 | 484,926 | (470,661) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Debt issuance costs | 10,495 | 10,495 | ||||||||
Common stock issued relating to settlement of contingent consideration (in shares) | 1,238 | |||||||||
Common stock issued relating to settlement of contingent consideration | 64 | 64 | ||||||||
Warrants exercised (in shares) | 1,450,000 | 4,032,398 | ||||||||
Warrants exercised | $ 522 | $ 1 | $ 1 | $ 522 | ||||||
Restricted stock units vested, net (in shares) | 63 | |||||||||
Stock-based compensation expense | 352 | 352 | ||||||||
Net loss | (4,458) | (4,458) | ||||||||
Ending balance (in shares) at Mar. 31, 2024 | 3,770,265 | 43,950,678 | ||||||||
Ending balance at Mar. 31, 2024 | $ 21,247 | $ 0 | $ 7 | $ 496,359 | $ (475,119) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (4,458) | $ (8,350) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 352 | 651 |
Paid-in-kind interest expense | 112 | 848 |
Gain on termination of operating lease | 0 | (471) |
Depreciation expense | 198 | 295 |
Amortization expense | 100 | 912 |
Change in fair value of warrant liability | 2 | 19 |
Changes in operating assets and liabilities: | ||
Receivables | (241) | 278 |
Unbilled receivables | (25) | 217 |
Prepaid expenses and other current assets | 365 | 836 |
Accounts payable | 104 | (258) |
Deferred revenue | 146 | (18) |
Leases liabilities | (13) | (118) |
Other accrued liabilities | 99 | 206 |
Net cash used in operating activities | (3,259) | (4,953) |
Cash flows from investing activities | ||
Purchase of property and equipment | (37) | (25) |
Net cash used in investing activities | (37) | (25) |
Cash flows from financing activities | ||
Proceeds from Keep Well Notes | 0 | 8,000 |
Proceeds from warrants exercised | 523 | 0 |
Finance lease obligations | 0 | (50) |
Financed insurance premium payments | (528) | (611) |
Net cash (used in) provided by financing activities | (5) | 7,339 |
Net change in cash and restricted cash | (3,301) | 2,361 |
Cash and restricted cash at beginning of period | 9,701 | 9,713 |
Cash and restricted cash at end of period | 6,400 | 12,074 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 30 | 27 |
Non-cash financing and investing activities: | ||
Warrants issued in connection with Keep Well Notes | 0 | 10,797 |
Debt issuance costs | 10,495 | 0 |
Loss on extinguishment of debt with related party | 0 | 2,153 |
Finance lease and accrued purchases of property and equipment | 4 | 44 |
Common stock issued to settle contingent consideration | $ 64 | $ 0 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Company Overview Ontrak, Inc. (“Ontrak,” “Company,” “we,” “us” or “our”) is an AI-powered and technology-enabled behavioral healthcare company, whose mission is to help improve the health and save the lives of as many people as possible. The Company's technology-enabled platform utilizes claim-based analytics and predictive modeling to provide analytic insights throughout the delivery of our personalized care program. The Company's program predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages and guides them to and through the care and treatment they need. By combining predictive analytics with human engagement, we deliver improved member health and validated outcomes and savings to healthcare payors. The Company's integrated, technology-enabled solutions are designed to provide healthcare solutions to members with behavioral conditions that cause or exacerbate chronic medical conditions such as diabetes, hypertension, coronary artery disease, chronic obstructive pulmonary disease, and congestive heart failure, which result in high medical costs. Ontrak has a unique ability to engage these members, who may not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance. Ontrak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaches who address the social and environmental determinants of health. The Ontrak programs seek to improve member health and deliver validated cost savings to healthcare payors. Basis of Presentation The accompanying condensed consolidated financial statements include Ontrak, Inc., its wholly-owned subsidiaries and its variable interest entities. The accompanying condensed consolidated financial statements for Ontrak, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and instructions to Form 10-Q and Article 8 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed financial statements includes all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the entire fiscal year. The accompanying unaudited financial information should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year-ended December 31, 2023 (the “2023 10-K”), filed with the Securities and Exchange Commission (“SEC”), from which the consolidated balance sheet as of December 31, 2023 has been derived. The Company operates as one segment. The Company generates revenues from fees charged for the services it provides to commercial (employer funded), managed Medicare Advantage, managed Medicaid and duel eligible (Medicare and Medicaid) populations. The Company also generates revenues from the fees charged for mental health and wellbeing support services it provides to members of employer customers under the Company's LifeDojo wellbeing solution. The Company aims to increase the number of members that are eligible for its solutions by signing new contracts and identifying more eligible members within customers with whom the Company has existing contracts. We have incurred significant net losses and negative operating cash flows since our inception, and we expect to continue to incur net losses and negative operating cash flow, in part due to the negative impact on our operations by customer terminations. As of March 31, 2024, our cash was $6.4 million and we had working capital of approximately $5.7 million. For the three months ended March 31, 2024, our average monthly cash burn rate from operations was $1.1 million. On March 28, 2024, the Company and Acuitas Capital LLC (together with its affiliates, “Acuitas”) entered into a sixth amendment ( the “Sixth Amendment”) to Master Note Purchase Agreement dated as of April 15, 2022 (as amended to date, the “Keep Well Agreement”). Under the Sixth Amendment, the Company may issue up to a total of $15.0 million of senior secured convertible promissory notes (each a “Demand Note”) (see Note 10 below for more information), with the initial note in the principal amount of $1.5 million (the “Initial Demand Note”) issued on April 5, 2024 and another note in the principal amount of $1.5 million issued on May 8, 2024 (see Note 14 below). Acuitas, in its sole discretion, may purchase from the Company, and the Company will issue and sell to Acuitas, up to an additional $12.0 million in principal amount of Demand Notes. As of March 31, 2024, $2.2 million of secured debt, including accrued paid-in-kind interest, issued under the Keep Well Agreement was outstanding. As of the filing date of this report, approximately $5.3 million of secured debt, including accrued paid-in-kind interest, issued under the Keep Well Agreement was outstanding, $3.0 million of which is payable upon demand of the holder, and the balance of which matures on May 14, 2026, unless it becomes due and payable in full earlier, whether by acceleration or otherwise. In March 2023 and in February 2024, as part of the Company's continued cost saving measures to reduce its operating costs and to better align with its previously stated strategic initiatives, the Company implemented reductions in workforce and vendor cost optimization plans. The Company began realizing the full effect of these cost saving measures in 2023 and in 2024, including a decrease in the Company's operating costs and an improvement in the Company's average monthly cash flow from operations. These cost optimization plans were necessary to right size the Company's business commensurate with its then current customer base. From April 1, 2024 through the filing date of this report, the Company received a total of $1.4 million of cash proceeds from the exercise of warrants by certain holders thereof and the Company issued a total of 4,016,664 shares of its common stock (see Note 14 below). Management plans to continue executing its strategy to increase liquidity by continuing to (i) explore other sources of capital for future liquidity needs; (ii) manage operating costs by strategically pursuing cost optimization initiatives; and (iii) pursue executing our growth strategy by: (a) expanding sales and marketing resources to acquire new and diverse customers across major health plans, value based provider groups and self-insurance employers; (b) executing on our better market penetration strategy by providing full scale customized behavioral health solutions, addressing customer needs across all member acuity levels while mitigating vendor fatigue by becoming a principal customer partner; (c) leveraging our AI technology and new predictive algorithms to improve identification and outreach, create more efficiencies, enhance coaching solutions and create more proof points; and (d) opportunistically pursuing partnerships that we believe will accelerate growth. We will need additional capital to successfully execute our growth strategy. In addition to revenue from business operations, since April 2022, the Company's primary source of working capital has been borrowings under the Keep Well Agreement and raising capital in equity offerings. We may seek to raise additional capital through equity or debt financings, however, when we can affect such financings and how much capital we can raise depends on a variety of factors, including, among others, market conditions, the trading price of our common stock and our determination as to the appropriate sources of funding for our operations. There can be no assurance that other capital will be available when needed or that, if available, it will be obtained on terms favorable to us and our stockholders, that we will be successful in implementing cost optimization initiatives, or that we will be successful in executing our growth strategy. In addition, the Keep Well Agreement contains various financial and other covenants, and any non-compliance with those covenants could result in an acceleration of the repayment of the amounts outstanding thereunder. Furthermore, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders, and debt financings may subject us to restrictive covenants, operational restrictions and security interests in our assets. Regardless of our success in raising additional capital, we expect our cash on hand as of March 31, 2024, together with the $3.0 million we received in exchange for Demand Notes issued on April 5, 2024 and May 8, 2024, the $1.4 million of cash proceeds we received from the exercise of warrants since April 1, 2024 through the filing date of this report and the amount potentially available for borrowing under the Keep Well Agreement, will be sufficient to meet our obligations for at least the next 12 months from the date the financial statements in this report are released. Reverse Stock Split At the special meeting of the Company's stockholders held in February 2023 (the “2023 Special Meeting”), the Company’s stockholders approved a proposal to give the Company’s Board of Directors the authority, at its discretion, to file a certificate of amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of our outstanding common stock at a ratio that is not less than 1:4 and not greater than 1:6, without reducing the authorized number of shares of the Company’s common stock, with the final ratio to be selected by the Company’s Board of Directors in its discretion, and to be effected, if at all, in the sole discretion of the Company’s Board of Directors at any time within one year of the date of the 2023 Special Meeting without further approval or authorization of the Company’s stockholders. On July 27, 2023, the Company filed a certificate of amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Delaware implementing a 1-for-6 reverse stock split. Fractional shares of the Company’s common stock resulting from the reverse split were automatically rounded up to the nearest whole share. The Company’s common stock began trading on the NASDAQ Capital Market on a post-split basis at the open of trading on July 28, 2023. The Company’s common stock continues to trade under the symbol “OTRK,” but was assigned a new CUSIP number (683373302). All restricted stock units, stock options and warrants to purchase shares of the Company’s common stock and securities convertible or exchangeable for shares of the Company’s common stock (including the Series A Preferred Stock) outstanding immediately prior to the reverse stock split, and the shares of the Company’s common stock reserved for issuance under the Company’s equity incentive plans immediately prior to the reverse stock split, was adjusted by dividing the applicable number of shares of common stock by six and, as applicable, multiplying the exercise price or conversion price by six or dividing the exchange rate by six. In addition, as discussed in Note 10 below, the exercise price of the Keep Well Warrants (as defined in Note 10 below)and the conversion price of the Keep Well Notes (as defined in Note 10 below) were subject to other adjustment mechanisms. For additional information regarding the effect of the reverse stock split on the Keep Well Warrants and the Keep Well Notes, see the Company’s definitive proxy statement for the 2023 Special Meeting, a copy of which was filed with the SEC on January 20, 2023. All common share and common stock per share amounts presented herein for the prior year period has been retroactively adjusted to reflect the impact of the 1-for-6 reverse stock split. Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements Since the date on which the Company filed the 2023 10-K, there were no recently adopted account standards or new accounting standards issued, but not yet adopted by the Company, which are expected to materially affect the Company's condensed consolidated financial statements. |
Restricted Cash
Restricted Cash | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash total as presented in the condensed consolidated statement of cash flows for the periods presented (in thousands): March 31, 2024 2023 Cash $ 6,400 $ 7,393 Restricted cash - current: Dividend payments on preferred stock (1) — 4,477 Letter of credit (2) — 204 Subtotal - Restricted cash - current — 4,681 Cash and restricted cash $ 6,400 $ 12,074 ____________ (1) Amount represents the cash balance that was remaining in an account funded with a portion of the proceeds from the sale of the Series A Preferred Stock for the payment of dividends thereon through August 2022. The use of such funds for the payment of such dividends was subject to compliance with applicable laws. In April 2023, the Company’s board of directors determined that the use of such funds for other corporate purposes was in the best interests of the Company and its common stockholders after considering its fiduciary duties to the Company’s common stockholders. Therefore, the amount was classified as unrestricted cash in April 2023. (2) A letter of credit ("LOC") was required under the terms of the lease for our Santa Monica, California office. In accordance with the lease termination agreement entered into on February 16, 2023 (as discussed in Note 9 below), the LOC was cancelled on June 16, 2023. |
Receivables and Revenue Concent
Receivables and Revenue Concentration | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Receivables and Revenue Concentration | Receivables and Revenue Concentration The following table is a summary of concentration of credit risk by customer revenues as a percentage of our total revenue: Three Months Ended Percentage of Revenue 2024 2023 Customer A 62.1 % 52.0 % Customer B 20.5 35.8 Customer C 9.9 1.7 Remaining customers 7.5 10.5 Total 100.0 % 100.0 % The following table is a summary of concentration of credit risk by customer accounts receivables as a percentage of our total accounts receivable: Percentage of Accounts Receivable March 31, 2024 December 31, 2023 Customer D 74.6 % — % Customer C 25.4 — Total 100.0 % — % The Company applies the specific identification method for assessing provision for credit losses. There was no bad debt expense during the three months ended March 31, 2024 or 2023. Customer Notification On October 10, 2023, the Company was notified by a health plan customer of its intent not to continue using the Company’s services after February 2024. The customer advised us to cease enrollment of any new members from that customer immediately. The customer also informed us that its decision was related to the customer’s change in strategy and not reflective of the performance or value of the Company’s services. For the three months ended March 31, 2024, the Company billed this customer approximately $0.5 million, representing billings for services rendered through February 2024. Other receivable - Insurance Recoveries |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following (in thousands): March 31, December 31, 2024 2023 Software $ 4,653 $ 4,575 Computers and equipment 416 416 ROU assets - finance lease 300 300 Software development in progress 23 59 Subtotal 5,392 5,350 Less: Accumulated depreciation and amortization (4,635) (4,437) Property and equipment, net $ 757 $ 913 Total depreciation and amortization expense relating to property and equipment presented above was $0.2 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively. Capitalized Internal Use Software Costs |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The carrying amount of indefinite-lived goodwill was $5.7 million as of March 31, 2024 and December 31, 2023. Intangible Assets The following table sets forth amounts recorded for intangible assets subject to amortization (in thousands): At March 31, 2024 At December 31, 2023 Weighted Average Estimated Useful Life (years) Gross Value Accumulated Amortization Net Carrying Value Gross Value Accumulated Amortization Net Carrying Value Acquired software technology 3 $ 3,500 $ (3,500) $ — $ 3,500 $ (3,500) $ — Customer relationships 5 270 (220) 50 270 (171) 99 Total $ 3,770 $ (3,720) $ 50 $ 3,770 $ (3,671) $ 99 Amortization expense for intangible assets presented above was $0.05 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, estimated amortization expense for intangible assets for each year thereafter was as follows (in thousands): Remainder of 2024 $ 50 Total $ 50 |
Restructuring, Severance and Re
Restructuring, Severance and Related Costs | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Severance and Related Costs | Restructuring, Severance and Related Costs Over the last two years, the Company's management has approved multiple restructuring plans as part of management's continued cost saving measures in order to reduce its operating costs, optimize its business model and help align with its previously stated strategic initiatives. In February 2024, approximately 21% of the Company's employee positions were eliminated and the Company incurred a total of approximately $0.3 million of one-time termination related costs, including severance payments and benefits payable to the impacted employees, which have been recorded as part of "Restructuring, severance and related costs" on the Company's condensed consolidated statement of operations for the three months ended March 31, 2024. The headcount reductions were completed during March and April 2024. In March 2023, approximately 19% of the Company's employee positions were eliminated and the Company incurred a total of approximately $0.5 million of one-time termination related costs, including severance payments and benefits payable to the impacted employees, which have been recorded as part of "Restructuring, severance and related costs" on the Company's condensed consolidated statement of operations for the three months ended March 31, 2023. The headcount reductions were completed by May 2023. |
Common Stock and Preferred Stoc
Common Stock and Preferred Stock | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Common Stock and Preferred Stock | Common Stock and Preferred Stock Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by giving effect to all shares of common stock potentially issuable upon exchange or exercise of outstanding shares of preferred stock and outstanding stock options and warrants, in each case, to the extent dilutive. Basic and diluted net loss per common share were the same for each period presented below as the inclusion of any such shares of common stock potentially issuable would have been anti-dilutive. Basic and diluted net loss per common share were as follows (in thousands, except per share amounts): Three Months Ended 2024 2023 Net loss $ (4,458) $ (8,350) Dividends on preferred stock - declared and undeclared (2,239) (2,239) Net loss attributable to common stockholders $ (6,697) $ (10,589) Weighted-average shares of common stock outstanding 60,882 4,686 Net loss per common share - basic and diluted $ (0.11) $ (2.26) Included in the weighted-average shares of common stock outstanding for the three months ended March 31, 2024 is a total of 18,333,333 common shares issuable upon the exercise of Private Placement Pre-funded Warrants (as defined and described in Note 10 below), which are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders. The following common equivalent shares as of March 31, 2024 and 2023, issuable upon exercise of stock options and warrants, have been excluded from the diluted earnings per share calculation as their effect was anti-dilutive: March 31, 2024 2023 Warrants to purchase common stock 168,925,136 7,082,788 Options to purchase common stock 1,821,604 931,019 Total 170,746,740 8,013,807 Equity Offerings Common Stock In February 2023, pursuant to the terms of the Keep Well Agreement, as a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to Acuitas 2,038,133 shares of the Company's common stock (which, after giving effect to the reverse stock split discussed in Note 1 above, was adjusted to 339,689 shares of the Company's common stock). Preferred Stock In 2020, the Company completed the issuance of a total of 3,770,265 shares of 9.50% Series A Cumulative Perpetual Preferred Stock (the "Series A Preferred Stock"). The Company, generally, may not redeem the Series A Preferred Stock until August 25, 2025, except upon the occurrence of a Delisting Event or Change of Control (as defined in the Certificate of Designations establishing the Series A Preferred Stock), and on and after August 25, 2025, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends. The Series A Preferred Stock has no maturity date and will remain outstanding indefinitely unless redeemed by the Company or exchanged for shares of common stock in connection with a Delisting Event or Change of Control. Holders of Series A Preferred Stock generally have no voting rights, but have limited voting rights if the Company fails to pay dividends in respect of the Series A Preferred Stock for six or more quarters, whether or not declared or consecutive and in certain other events, including the right, voting separately as a single class, to elect two individuals to the Company's Board of Directors. Such director election right commenced on August 31, 2023 since the Company did not pay the dividend payable on that date or in respect of the five prior quarters (see discussion below). Holders of Series A Preferred Stock of record at the close of business of each respective record date for quarterly dividends (February 15, May 15, August 15 and November 15 of each year) are entitled to receive, when, as and if declared by our Board of Directors, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 9.50% per annum of the $25.00 per share liquidation preference (equivalent to $2.375 per annum per share or $0.593750 per quarter per share). Dividends, if and when declared by our Board of Directors, are payable quarterly in arrears, every February 28, May 30, August 31, and November 30, as applicable. At March 31, 2024, we had total undeclared dividends of $18.7 million. On October 11, 2023, the Company received a letter from Nasdaq informing the Company that it is not eligible for a second 180-day compliance period within which to regain compliance with the minimum bid price rule for the Series A Preferred Stock and that Nasdaq determined that the Series A Preferred Stock would be delisted from The Nasdaq Capital Market and would be suspended at the opening of business on October 20, 2023. On November 20, 2023, The Nasdaq Stock Market filed a Form 25-NSE with the SEC to remove the Series A Preferred Stock from listing and registration on The Nasdaq Stock Market. The Series A Preferred Stock currently trades in the over-the-counter OTC Markets system. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company's 2017 Stock Incentive Plan (the “2017 Plan”) and 2010 Stock Incentive Plan (the “2010 Plan” and together with the 2017 Plan, the "Plans") provide for the issuance of 2,849,746 shares of the Company's common stock. The Company has granted stock options to executive officers, employees, members of the Company's board of directors, and certain outside consultants and restricted stock units ("RSUs") to employees and members of the Company's board of directors. The terms and conditions upon which options vest vary among grants; however, options expire no later than ten years from the date of grant and awards granted to employees and members of the Company's board of directors generally vest over one three Stock-based compensation expense was $0.4 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively. The assumptions used in the Black-Scholes option-pricing model were as follows: Three Months Ended Volatility 96.0% Risk-free interest rate 3.81% Expected life (in years) 4.09 Dividend yield 0 % The expected volatility assumptions have been based on the historical and expected volatility of our stock and stock of comparable companies, measured over a period generally commensurate with the expected term or acceptable period to determine reasonable volatility. The weighted average expected option term for the three months ended March 31, 2024 reflects the application of the simplified method prescribed in SEC Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches. Stock Options - Employees and Directors A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2023 1,162,109 $ 6.63 Granted 770,039 0.39 Forfeited (110,544) 15.19 Outstanding as of March 31, 2024 1,821,604 3.48 Options vested and exercisable as of March 31, 2024 615,633 $ 7.14 As of March 31, 2024, there was $2.3 million of unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees and directors under the Plans. These costs are expected to be recognized over a weighted-average period of approximately 2.82 years. Restricted Stock Units - Employees The Company estimates the fair value of RSUs based on the closing price of its common stock on the date of grant. The following table summarizes our RSU award activity issued under the 2017 Plan: Restricted Stock Units Weighted Non-vested at December 31, 2023 120,637 $ 13.06 Vested and settled (104) 325.80 Forfeited (3,514) 196.49 Non-vested at March 31, 2024 117,019 7.27 As of March 31, 2024, there was $0.6 million of unrecognized compensation costs related to unvested outstanding RSUs. These costs are expected to be recognized over a weighted-average period of approximately 1.42 years. Warrants - Non-employees The Company has issued warrants to purchase shares of the Company's common stock that have been approved by our Board of Directors. A summary of warrants activity was as follows: Number of Warrants Weighted Average Outstanding as of December 31, 2023 114,243,865 $ 0.63 Granted 136,163,668 0.36 Exercised (5,482,398) 0.10 Cancelled (57,666,666) 0.85 Outstanding as of March 31, 2024 187,258,469 0.38 Warrants exercisable as of March 31, 2024 187,258,469 0.38 The number of shares of the Company's common stock subject to warrants granted and cancelled as presented in the table above give effect to the adjustment to the exercise price of Public Offering Warrants and Private Placement Warrants (as such terms are defined in Note 10 below) pursuant to the waivers entered into by each holder of such warrants (discussed in Note 10 below). In accordance with the terms of such waivers, on March 28, 2024, the exercise price per share of all outstanding Public Offering Warrants and Private Placement Warrants was reduced to $0.36 and simultaneously, the number of shares of common stock issuable upon exercise was increased proportionally, such that the aggregate exercise price of the warrants, after taking into account the adjustment in the exercise price, was equal to the aggregate exercise price before the adjustment in the exercise price. The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: Three Months Ended March 31, 2024 Volatility 98% Risk-free interest rate 4.21% Expected life (in years) 4.73 Dividend yield 0 % |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on the Company's balance sheet and classifies the leases as either operating or finance leases. The Company leases office space in Henderson, Nevada, which previously served as the Company's headquarters and currently serves as the administrative office for certain of the Company's back-office functions, and in Rosemont, Illinois, which are accounted for as operating leases. The Rosemont, Illinois lease expired in June 2023. In September 2023, the Company entered into a month-to-month lease for a virtual office space in Miami, Florida, which serves as the Company's headquarters. The Company leases various computer equipment used in the operation of its business, which are accounted for as finance leases. The operating lease agreement for the Henderson, Nevada office is for a total of 2,721 square feet of office space for lease term of 58 months. The Company's finance leases are generally for 36 month terms. The Company had no finance leases during the three months ended and as of March 31, 2024 and December 31, 2023. In April 2022, the Company entered into a sublease agreement with a subtenant for 100% of the office space the Company leased in Santa Monica, California. The sublease agreement commenced in June 2022 and provided for an expiration date of July 17, 2024, unless sooner terminated. On February 16, 2023, the Company, the landlord and the subtenant entered into a lease and sublease termination agreement for the office space, with a termination date of February 28, 2023. The Company agreed to pay to the landlord a $0.1 million early termination fee and monthly fixed rent for March and April 2023, and the subtenant agreed to pay to the Company monthly fixed sublease payments for March and April 2023. As a result of the lease termination, the Company wrote-off $0.3 million of operating lease right-of-use assets, and $0.6 million and $0.2 million of current and long-term operating lease liabilities, respectively, resulting in a non-cash gain of $0.5 million included in "Other income, net" on the condensed consolidated statement of operations for the three months ended March 31, 2023. The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. Quantitative information for our leases is as follows (in thousands): Condensed Consolidated Balance Sheets Balance Sheet Classification March 31, 2024 December 31, 2023 Assets Operating lease assets "Operating lease right-of-use-assets" $ 183 $ 195 Total lease assets $ 183 $ 195 Liabilities Current Operating lease liabilities "Current portion of operating lease liabilities" $ 59 $ 56 Non-current Operating lease liabilities "Long-term operating lease liabilities" 151 166 Total lease liabilities $ 210 $ 222 Three Months Ended Condensed Consolidated Statements of Operations 2024 2023 Operating lease expense $ 20 $ 87 Short-term lease rent expense 1 1 Variable lease expense — 15 Operating sublease income — (65) Total rent expense $ 21 $ 38 Finance lease expense Amortization of leased assets $ — $ 25 Interest on lease liabilities — 2 Total $ — $ 27 Three Months Ended Condensed Consolidated Statements of Cash Flows 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21 $ 145 Financing cash flows from finance leases — 50 Other Cash received for operating sublease — 97 Other Information March 31, 2024 December 31, 2023 Weighted-average remaining lease term (years) Operating leases 2.9 3.2 Weighted-average discount rate (%) Operating leases 16.25 % 16.25 % Finance leases — 15.15 % The following table sets forth maturities of our lease liabilities (in thousands): Operating Leases At March 31, 2024 Remainder of 2024 $ 66 2025 90 2026 93 2027 16 Total lease payments 265 Less: imputed interest (55) Present value of lease liabilities 210 Less: current portion (59) Lease liabilities, non-current $ 151 |
Leases | Leases The Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on the Company's balance sheet and classifies the leases as either operating or finance leases. The Company leases office space in Henderson, Nevada, which previously served as the Company's headquarters and currently serves as the administrative office for certain of the Company's back-office functions, and in Rosemont, Illinois, which are accounted for as operating leases. The Rosemont, Illinois lease expired in June 2023. In September 2023, the Company entered into a month-to-month lease for a virtual office space in Miami, Florida, which serves as the Company's headquarters. The Company leases various computer equipment used in the operation of its business, which are accounted for as finance leases. The operating lease agreement for the Henderson, Nevada office is for a total of 2,721 square feet of office space for lease term of 58 months. The Company's finance leases are generally for 36 month terms. The Company had no finance leases during the three months ended and as of March 31, 2024 and December 31, 2023. In April 2022, the Company entered into a sublease agreement with a subtenant for 100% of the office space the Company leased in Santa Monica, California. The sublease agreement commenced in June 2022 and provided for an expiration date of July 17, 2024, unless sooner terminated. On February 16, 2023, the Company, the landlord and the subtenant entered into a lease and sublease termination agreement for the office space, with a termination date of February 28, 2023. The Company agreed to pay to the landlord a $0.1 million early termination fee and monthly fixed rent for March and April 2023, and the subtenant agreed to pay to the Company monthly fixed sublease payments for March and April 2023. As a result of the lease termination, the Company wrote-off $0.3 million of operating lease right-of-use assets, and $0.6 million and $0.2 million of current and long-term operating lease liabilities, respectively, resulting in a non-cash gain of $0.5 million included in "Other income, net" on the condensed consolidated statement of operations for the three months ended March 31, 2023. The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. Quantitative information for our leases is as follows (in thousands): Condensed Consolidated Balance Sheets Balance Sheet Classification March 31, 2024 December 31, 2023 Assets Operating lease assets "Operating lease right-of-use-assets" $ 183 $ 195 Total lease assets $ 183 $ 195 Liabilities Current Operating lease liabilities "Current portion of operating lease liabilities" $ 59 $ 56 Non-current Operating lease liabilities "Long-term operating lease liabilities" 151 166 Total lease liabilities $ 210 $ 222 Three Months Ended Condensed Consolidated Statements of Operations 2024 2023 Operating lease expense $ 20 $ 87 Short-term lease rent expense 1 1 Variable lease expense — 15 Operating sublease income — (65) Total rent expense $ 21 $ 38 Finance lease expense Amortization of leased assets $ — $ 25 Interest on lease liabilities — 2 Total $ — $ 27 Three Months Ended Condensed Consolidated Statements of Cash Flows 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21 $ 145 Financing cash flows from finance leases — 50 Other Cash received for operating sublease — 97 Other Information March 31, 2024 December 31, 2023 Weighted-average remaining lease term (years) Operating leases 2.9 3.2 Weighted-average discount rate (%) Operating leases 16.25 % 16.25 % Finance leases — 15.15 % The following table sets forth maturities of our lease liabilities (in thousands): Operating Leases At March 31, 2024 Remainder of 2024 $ 66 2025 90 2026 93 2027 16 Total lease payments 265 Less: imputed interest (55) Present value of lease liabilities 210 Less: current portion (59) Lease liabilities, non-current $ 151 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Keep Well Agreement On April 15, 2022, the 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 former Chief Executive Officer and Chairman. The Original Keep Well Agreement was amended on each of August 12, 2022 (the “First Amendment”), November 19, 2022 (the “Second Amendment”), December 30, 2022 (the “Third Amendment”), June 23, 2023 (the “Fourth Amendment”), October 31, 2023 (the “Fifth Amendment”) and March 28, 2024 (the “Sixth Amendment”). The Company refers to the Original Keep Well Agreement as amended to date as the “Keep Well Agreement” and to Acuitas Capital, together with its affiliates and any of its transferees under the Keep Well Agreement, as “Acuitas.” The Keep Well Agreement contains customary covenants that must be complied with by the Company, including, among other covenants, restrictions on the Company’s ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into certain asset sale transactions, and covenants that require the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good repair, maintain insurance and comply with applicable laws. The Keep Well Agreement also includes the following financial covenants: a requirement that annualized consolidated recurring revenue for the preceding twelve months be at least $11.0 million tested monthly, and a requirement that consolidated liquidity must be greater than $5.0 million at all times. The Company was in compliance with such financial covenants as of March 31, 2024. The Original Keep Well Agreement Under the terms of the Original Keep Well Agreement, subject to the 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, an “Original Keep Well Note”) with a principal amount equal to the amount borrowed. Subject to obtaining approval of the Company’s stockholders as required by applicable Nasdaq listing rules, which approval was obtained at the Company’s annual meeting of stockholders held on August 29, 2022 (the “2022 Annual Meeting of Stockholders”), in connection with each Original 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, an “Original Keep Well Warrant”). The number of shares of the Company’s common stock underlying each Original Keep Well Warrant was to be equal to (y) the product of the principal amount of the applicable Keep Well Note and 20% divided by (z) the exercise price of the applicable Original 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 Original Keep Well Notes was September 1, 2023. The Second Amendment, the Third Amendment and Fourth Amendment to the Keep Well Agreement Under the Second Amendment and the Third Amendment, many of the conditions precedent to the Company’s ability to borrow, and Acuitas’ obligation to lend, were eliminated, 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 secured note issued under the Keep Well Agreement, the financial covenant that the Company’s consolidated recurring revenue be at least $15.0 million was reduced to $11.0 million, and (a) the minimum conversion price of the Keep Well Notes (as defined below) and (b) the minimum dollar amount to which the denominator will be reduced for purposes of calculating the warrant coverage on future borrowings under the Keep Well Agreement (as discussed below), was revised to be $0.15 (subject to adjustment for stock splits or other recapitalizations that affect all common stockholders proportionately). The $0.15 referenced in the preceding sentence was adjusted to $0.90 after giving effect to the reverse stock split discussed in Note 1 above. Below is a summary of certain other amendments effected by the Second Amendment, the Third Amendment and the Fourth Amendment: • the maturity date of the Original Keep Well Notes (and of any other secured notes issued under the Keep Well Agreement) was extended from September 1, 2023 to June 30, 2024 in the Second Amendment, and further extended from June 30, 2024 to September 30, 2024 in the Fourth Amendment, subject to acceleration for certain customary events of default, including for failure to make payments when due, breaches by the Company of certain covenants and representations in the Keep Well Agreement, defaults by the Company under other agreements related to indebtedness, the Company’s bankruptcy or dissolution, and a change of control of the Company; • per the Second Amendment, the remaining amount available to be borrowed under the Keep Well Agreement 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; • per the Second Amendment, 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 above), the entire then-remaining amount of $14.0 million as follows: $4.0 million in each of January (which was borrowed on January 5, 2023), March (which was borrowed on March 6, 2023) and June 2023, and $2.0 million in September 2023; the funding structure was further amended in the Fourth Amendment with respect to the $6.0 million remaining available amount to be funded, as described below; • per the Fourth Amendment, in lieu of the $6.0 million remaining available amount to be funded as described above (and in full satisfaction of Acuitas’ obligation to purchase Keep Well Notes from the Company), Acuitas agreed to deliver to the Company for deposit and to be held by the Company in a segregated account established by the Company until such time of qualified withdrawal and issuance of a Keep Well Note, as described below (the proceeds so deposited, the “Escrowed Funds” and the account into which the proceeds are so deposited, the “Escrow Account”): (i) $4.0 million on June 23, 2023 (which was received by the Company on June 26, 2023); and (ii) $2.0 million on September 1, 2023 (which was received by the Company on September 7, 2023); • per the Fourth Amendment, any time, and from time to time, that the Company has less than $1.0 million of Qualified Cash (as defined in Fourth Amendment), the Company may withdraw $1.0 million of Escrowed Funds (or any lesser remaining amount of Escrowed Funds) from the Escrow Account; each such withdrawal will be treated as a sale by the Company to Acuitas of a Keep Well Note with a principal amount equal to the amount withdrawn by the Company and in connection with each such withdrawal, the Company will also issue a Keep Well Warrant to Acuitas; and • per the Fourth Amendment, if the Company does not complete a Qualified Financing (as defined below) on or prior to October 31, 2023, then, on October 31, 2023, the Company must withdraw all of the Escrowed Funds (other than any accrued interest thereon, all of which will belong to the Company) then on deposit in the Escrow Account, and such withdrawal will be treated as a sale by the Company to Acuitas of a Keep Well Note, and in connection with such withdrawal, the Company will also issue a Keep Well Warrant to Acuitas. In the event the Company completes a Qualified Financing, all of the Escrowed Funds (other than any accrued interest thereon, all of which will belong to the Company) then on deposit in the Escrow Account will be invested in the Qualified Financing on behalf of Acuitas on the same terms as all other investors in the Qualified Financing, and the Company’s obligation to sell to Acuitas, and Acuitas’ obligation to purchase from the Company, any further Keep Well Notes will thereupon be deemed discharged with respect to the amount so invested. A “Qualified Financing” generally means any financing in which the Company issues or sells any of its equity securities for cash to one or more third party investors resulting in gross proceeds to the Company of at least $10.0 million exclusive of any amount invested by Acuitas in such financing. For a discussion regarding an amendment to the definition of Qualified Financing as well as investment of Escrowed Funds and conversion of Keep Well Notes, as described below, see " Fifth Amendment to Keep Well Agreement" below. Conversion of Keep Well Notes Following approval of the Company’s stockholders obtained at the 2023 Special Meeting, Acuitas, at its option, has the right to convert the entire principal amount of the secured notes issued under the Keep Well Agreement, 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 similar corporate actions, and were adjusted to $2.39 and $0.90, respectively, after giving effect to the reverse stock split discussed in Note 1 above. Each Original Keep Well Note outstanding as of the date of stockholder approval was deemed to be amended to contain the Conversion Right. The Company refers to such Original Keep Well Notes, as so amended, and to all other secured notes issued under the Keep Well Agreement, as the “Keep Well Notes.” In addition, in connection with the conversion of the principal amount of any 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 Keep Well Note then in effect, and the exercise price of each such warrant will be equal to the conversion price of the Keep Well Note then in effect, subject to adjustment as described below. See Note 14 below for information regarding conversion of Keep Well Notes. Increase in Warrant Coverage and Other Adjustments Following approval of the Company’s stockholders obtained at the 2023 Special Meeting, (a) the exercise price of the warrants issued under the Keep Well Agreement (both the Original Keep Well Warrants outstanding as of the date of the Second Amendment and those issued thereafter) was reduced to $0.45 per share ($2.70 per share as adjusted for the reverse stock split discussed in Note 1 above), 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 is subject to future adjustment as described below; (b) the number of shares of the Company’s common stock subject to the warrants outstanding at the time of the 2023 Special Meeting (i.e., 1,775,148 shares, before the reverse stock split discussed in Note 1 above) was increased to the number of shares that would have been subject to such 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; 5,555,557 shares , or an additional 5,259,696 shares, as adjusted for the reverse stock split discussed in Note 1 above); and (c) the warrant coverage on borrowings under the Keep Well Agreement after the date of the Second Amendment was 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) the greater of (i) the per share warrant exercise price (as adjusted as of the date of issuance of the applicable warrant) and (ii) $0.15 ($0.90 as adjusted for the reverse stock split discussed in Note 1 above) (the “Warrant Coverage Denominator”), subject to future adjustment as described below, and each warrant issued after the date of the Second Amendment has an exercise price equal to $0.45 per share ($2.70 per share as adjusted for the reverse stock split discussed in Note 1 above), subject to future adjustment as described below. As a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to the holder of each warrant issued under the Keep Well Agreement outstanding as of the date of such approval, in exchange for such warrant, a new warrant to purchase shares of the Company’s common stock that reflect the amendments to the warrants described above and below, 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 warrants and to any warrants issued in connection with future borrowings under the Keep Well Agreement or in connection with the conversion of the principal amount of any Keep Well Note and/or accrued interest thereon into shares of the Company’s common stock as the “Keep Well Warrants.” Under the terms of the Second Amendment, if the reverse stock split approved at the 2023 Special Meeting is effected, then: (1) 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 would be reduced to the lesser of (i) the volume-weighted average price of the Company’s common stock over the five (2) the Warrant Coverage Denominator would be reduced to the greater of $0.15 ($0.90 as adjusted for the reverse stock split discussed in Note 1 above) and the Post-Stock Split Price, subject to further reduction as described below. As discussed in Note 1 above, the reverse stock split approved at the 2023 Special Meeting was effected on July 27, 2023. After giving effect to such reverse stock split, and in accordance with the above, the Post-Stock Split Price was determined to be $2.44 on August 3, 2023. In addition, after giving effect to such reverse stock split, the number of shares of the Company’s common stock underlying the Keep Well Warrants outstanding at the effective time of the reverse stock split were proportionally adjusted such that the aggregate exercise price payable upon exercise of the Keep Well Warrants remains unchanged. Also under the terms of the Second Amendment: (i) the exercise price of each Keep Well Warrant outstanding as of September 1, 2023 was to be reduced to the closing price of the Company’s common stock on August 31, 2023, if such closing price is less than the Post-Stock Split Price; and (ii) the Warrant Coverage Denominator was to be reduced to the greater of (a) $0.15 (or $0.90 as adjusted after giving effect to the reverse stock split discussed in Note 1 above) and (b) the lesser of (x) the Post-Stock Split Price and (y) the closing price of the Company’s common stock on August 31, 2023. As such, on September 1, 2023, the exercise price of each Keep Well Warrant and the Warrant Coverage Denominator (applicable to warrant issuances, if any, thereafter) was determined to be $0.92. Additional Commitment Shares As a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to Acuitas 2,038,133 additional shares of the Company’s common stock (which, after giving effect to the reverse stock split discussed in Note 1 above, was adjusted to 339,689 shares of the Company's common stock). Fifth Amendment to Keep Well Agreement Changes to Qualified Financing . Under the Fifth Amendment, the minimum amount to be raised in an equity financing for such financing to constitute a “Qualified Financing” was reduced from $10.0 million to $8.0 million, and the deadline by when a Qualified Financing must be completed before the Company is required to withdraw the Escrowed Funds was extended from October 31, 2023 to January 31, 2024. Under a letter agreement entered into on November 9, 2023, the minimum amount to be raised in an equity financing for such financing to constitute a “Qualified Financing” was further reduced to $6.0 million. Conversion of Keep Well Notes . Under the Fifth Amendment, if the Company completed a Qualified Financing, Acuitas agreed to convert into shares of the Company’s common stock the aggregate principal amount of the Keep Well Notes plus all accrued and unpaid interest thereon, minus (a) $7.0 million, minus (b) the principal amount of any Keep Well Notes purchased with funds from the Escrow Account prior to the closing of the Qualified Financing, if any, in accordance with the terms (including the conversion price) of the Keep Well Agreement and the Keep Well Notes (the “Notes Conversion”); provided that if the offering price per share at which the shares of common stock and accompanying warrants are sold to the public in the Qualified Financing (the “Offering Price”) is less than the conversion price at which Keep Well Notes are converted, upon the effectiveness of the Fifth Amendment Stockholder Approval Matters (as defined below): (1) the Company would issue to Acuitas such additional shares of common stock such that the total number of shares of common stock issued in respect of the Notes Conversion plus such additional shares of common stock would equal the number of shares that would have been issued in respect of the Notes Conversion if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Offering Price; and (2) the exercise price of the warrants issued to Acuitas in connection with the Notes Conversion (the “Conversion Warrants”) would be reduced to the Offering Price and the number of shares of common stock subject to the Conversion Warrants would be increased to the number of shares of common stock that would have been subject to the Conversion Warrants if the Keep Well Notes were converted at a conversion price equal to the Offering Price. Private Placement . In lieu of the provisions set forth in the Fourth Amendment concerning the investment of Escrowed Funds in the offering that constitutes a Qualified Financing, the Fifth Amendment provided that if an offering constituted a Qualified Financing, the Company and Acuitas will immediately prior to, or simultaneously with the closing of such offering, consummate a private placement (the “Private Placement”) of $11.0 million of an unregistered pre-funded warrant to purchase shares of the Company’s common stock (the “Private Placement Pre-Funded Warrant”) and an unregistered warrant to purchase shares of the Company’s common stock (the “Private Placement Warrant,” and together with the Private Placement Pre-Funded Warrant, the “Private Placement Securities”). The consideration for the Private Placement Securities purchased by Acuitas would consist of (a) the Escrowed Funds then held in the Escrow Account, and (b) a reduction of the aggregate amounts outstanding under the Keep Well Notes (after giving effect to the Notes Conversion) to $2.0 million (the senior secured convertible promissory note evidencing such $2.0 million, the “Surviving Note”). Each Private Placement Pre-Funded Warrant would be sold together with two Private Placement Warrants with each Private Placement Warrant exercisable for one share of our common stock. Surviving Note . Under the Fifth Amendment, the maturity date of the Surviving Note was extended from September 30, 2024 to May 14, 2026, which date is two years and six months after the closing date of the offering that constituted a Qualified Financing, unless the Surviving Note becomes due and payable in full earlier, whether by acceleration or otherwise. In addition, if the Offering Price is lower than $0.90, then, subject to the effectiveness of the Fifth Amendment Stockholder Approval Matters, the $0.90 floor on the conversion price of the Surviving Note would be replaced with the Offering Price. On December 20, 2023, upon the effectiveness of the Fifth Amendment Stockholder Approval Matters, the $0.90 conversion price of the Surviving Note was replaced with $0.60, the Public Offering Price, discussed below. Stockholder Approval . Under the Fifth Amendment, among other things, the Company was required to seek stockholder approval in accordance with the Nasdaq listing rules of (A) the issuance of the shares of the Company’s common stock issuable upon exercise of (x) the warrants and the pre-funded warrants sold in the offering that constitutes a Qualified Financing and (y) the Private Placement Securities that, in the aggregate for clauses (x) and (y) above, are in excess of the maximum number of shares of the Company’s common stock permitted to be issued without such approval under Nasdaq’s listing rules (which amount is equal to 19.99% of the total number of shares of the Company’s common stock outstanding immediately following the Notes Conversion and immediately prior to the closing of the offering that constitutes a Qualified Financing and/or the Private Placement), (B) the amendment to the conversion price of the Surviving Note described above, and (C) any other terms of the offering that constitutes a Qualified Financing, the Private Placement and/or the Fifth Amendment that require approval of the Company’s stockholders under Nasdaq’s listing rules (collectively, the “Fifth Amendment Stockholder Approval Matters”). Support Agreement . In connection with entering into the Fifth Amendment, on October 31, 2023, the Company and Acuitas entered into a support agreement pursuant to which Acuitas has agreed to vote the shares of the Company's common stock it beneficially owns in favor of the Fifth Amendment Stockholder Approval Matters. Public Offering, Private Placement and Notes Conversion On November 14, 2023, the Company completed a public offering (the “Public Offering”). In the Public Offering, the Company issued (a) 4,592,068 shares of its common stock and 9,184,136 warrants to purchase up to 9,184,136 shares of its common stock at a combined public offering price of $0.60 per share of common stock and accompanying warrants (the “Public Offering Price”), and (b) 5,907,932 pre-funded warrants to purchase up to 5,907,932 shares of its common stock (the “Public Offering Pre-Funded Warrants”) and 11,815,864 warrants to purchase up to 11,815,864 shares of its common stock at a combined public offering price of $0.5999 per Public Offering Pre-Funded Warrant and accompanying warrants, which represents the per share public offering price for the common stock and accompanying warrants less the $0.0001 per share exercise price for each Public Offering Pre-Funded Warrant. The Company refers to the warrants sold in the Public Offering accompanying the shares of common stock and the warrants accompanying the Public Offering Pre-Funded Warrants as the “Public Offering Warrants.” The Company received gross proceeds of $6.3 million from the Public Offering, and therefore the Public Offering constituted a Qualified Financing. Total net proceeds was approximately $5.3 million (net of approximately $1.0 million of offering related fees and expenses, not including the placement fee payable relating to the Private Placement discussed below). The Public Offering Warrants had an initial exercise price of $0.85 per share, subject to adjustment. The exercisability of the Public Offering Warrants was subject to the effectiveness of the Fifth Amendment Stockholder Approval Matters, and expire five years from the effectiveness thereof. In accordance with the Fifth Amendment, concurrent with the closing of the Public Offering, the Company issued to Humanitario Capital LLC, an affiliate of Acuitas Capital, a Private Placement Pre-Funded Warrant to purchase up to 18,333,333 shares of the Company's common stock, at an exercise price of $0.0001 per share, and a Private Placement Warrant to purchase up to 36,666,666 shares of the Company's common stock, at an exercise price of $0.85 per share, subject to adjustment, for total consideration of $11.0 million. The consideration for the Private Placement Securities consisted of (a) the $6.0 million in the Escrow Account that Acuitas previously delivered to the Company in June 2023 and September 2023 in accordance with the Keep Well Agreement (which $6.0 million was reclassified from restricted cash to unrestricted cash) and (b) $5.0 million of debt owed under the Keep Well Notes, which was cancelled. The Company wrote-off $1.5 million of debt discount in connection with $5.0 million Keep Well Notes cancelled. The Company paid placement fees of approximately $0.4 million in connection with the Private Placement. The Company assessed and determined that the warrants issued in the Public Offering and Private Placement as described above qualified for equity classification and applied the relative fair value method to allocate proceeds from each Public Offering and Private Placement transactions to the respective warrants. In accordance with the Fifth Amendment, on November 14, 2023 and before the closing of the Public Offering and Private Placement, the Notes Conversion was effected. In connection with the Notes Conversion, $16.2 million of Keep Well Notes were converted into 18,054,791 shares of the Company’s common stock and the Company issued to Acuitas a Conversion Warrant to purchase up to 18,054,791 shares of the Company’s common stock with an exercise price of $0.90 per share, which was the conversion price of the Keep Well Notes converted in the Notes Conversion. The Company wrote-off $3.7 million of debt discount in connection with the conversion of $16.2 million of Keep Well Notes. On November 15, 2023, Acuitas, who owned a majority of the outstanding shares of the Company’s common stock as of that date, executed and delivered to the Company a written consent approving the Fifth Amendment Stockholder Approval Matters. The Company filed an information statement regarding the Fifth Amendment Stockholder Approval Matters with the SEC on November 30, 2023 and mailed such information statement to the holders of its common stock. The actions approved by such consent became effective on December 20, 2023. Because the Public Offering Price was less than the conversion price at which Keep Well Notes were converted in the Notes Conversion, (1) the Company issued to Acuitas 9,027,395 additional shares of common stock, which when added with the shares of common stock issued in respect of the Notes Conversion, equaled the total number of shares of common stock that the Company would have issued in respect of the Notes Conversion if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Public Offering Price; and (2) the exercise price of the Conversion Warrant was reduced to the Public Offering Price and the number of shares of common stock subject to the Conversion Warrant was increased by an additional 9,027,395 shares to equal the number of shares of common stock that would have been subject to the Conversion Warrant if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Public Offering Price. Sixth Amendment to Keep Well Agreement Issuance of Demand Notes and Warrants . Under the Sixth Amendment, and in connection with the execution of the Sixth Amendment, on April 1, 2024, the Company shall issue and sell to Acuitas, and Acuitas shall purchase from the Company, a senior secured convertible promissory note (a “Demand Note”), with a principal amount of $1.5 million (the “Initial Demand Note”) (see discussion in Note 14 below). Also, under the Sixth Amendment, in Acuitas’ sole discretion, Acuitas may purchase from the Company, and the Company will issue and sell to Acuitas, up to an additional $13.5 million in principal amount of Demand Notes, at such time and in such principal amounts as specified in the Sixth Amendment (see Note 14 below). The terms of the Demand Notes are substantially similar to the Surviving Note, except the amounts due under the Demand Notes are payable upon demand of the holder. Unless and until the effective date of the Sixth Amendment Stockholder Approval (as defined below) occurs (such effective date, the “Sixth Amendment Stockholder Approval Effective Date”), the Company will not issue any shares of its common stock in connection with the conversion of any Demand Note. In connection with each Demand Note purchased by Acuitas from the Company (including the Initial Demand Note), and subject to the Sixth Amendment Stockholder Approval Effective Date occurring, the Company will issue to Acuitas (or an entity affiliated with Acuitas, as designated by Acuitas) a warrant (“Demand Warrant”) to purchase such number of shares of the Company’s common stock that results in 200% warrant coverage. Each Demand Warrant will have a term of five years. The initial exercise price of each Demand Warrant will be (a) in the case of the Demand Warrant issued in connection with the Initial Demand Note and in respect of the next $3.0 million of principal amount of Demand Notes purchased by Acuitas, the lesser of (i) $0.3442 (after giving effect to the reduction of the exercise price of the Public Offering Warrants and Private Placement Warrant (collectively, the “November 2023 Warrants”) that occurred on April 5, 2024 described below) and (ii) the greater of (1) the consolidated closing bid price of the Company’s common stock as reported on The Nasdaq Stock Market or such other exchange on which the Company’s common stock is listed (the “Exchange”) immediately preceding the time the applicable Demand Note is deemed issued by the Company and (2) $0.12, and (b) in the case of the Demand Warrants issued in connection with any subsequent Demand Notes, the consolidated closing bid price of the Company’s common stock as reported on the Exchange immediately preceding the time the applicable Demand Note is deemed issued by the Company, which initial exercise price will, in each case of clauses (a) and (b) above, be subject to further adjustment in accordance with the terms of the Demand Warrant and the Sixth Amendment. The terms of the Demand Warrants will be substantially similar to the terms of the November 2023 Warrants. See “Warrant Adjustment Provisions,” below. The Company will not issue any Demand Warrant unless and until the Sixth Amendment Stockholder Approval Effective Date occurs, and promptly as practicable following such date, the Company will issue each Demand Warrant that would have been issued through and including such date. Replacement of Keep Well Warrants . Following the Sixth Amendment Stockholder Approval Effective Date, the Company will issue to each holder of each warrant to purchase shares of the Company’s common stock issued under the Existing Keep Well Agreement outstanding as of the Sixth Amendment Stockholder Approval Effective Date (any such warrant, a “Replaced Keep Well Warrant”), in exchange therefor, a warrant to purchase shares of the Company’s common stock (a “New Keep Well Warrant”) substantially in the form of the Demand Warrant, and each Replaced Keep Well Warrant will be deemed automatically cancelled. Each New Keep Well Warrant will (a) have the same issuance date as the Replaced Keep Well Warrant in respect of which it was issued, (b) a term of five years from the original issuance date of the Replaced Keep Well Warrant in respect of which it was issued, and (c) an initial exercise price equal to $0.3442 (after giving effect to the reduction of the exercise price of the November 2023 Warrants that occurred on April 5, 2024 described below), which will be subject to further adjustment in accordance with its terms and the terms of the Sixth Amen |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input Input Definition Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis as of the periods presented (in thousands): Balance as of March 31, 2024 Level I Level II Level III Total Warrant liabilities (1) $ — $ — $ 10 $ 10 Total liabilities $ — $ — $ 10 $ 10 Balance as of December 31, 2023 Level I Level II Level III Total Contingent consideration (2) $ — $ — $ 64 $ 64 Warrant liabilities (1) — — 8 8 Total liabilities $ — $ — $ 72 $ 72 ___________________ (1) Relates to warrants issued in connection with the Eight Amendment to the Note Purchase Agreement with Goldman Sachs Specialty Lending Group, L.P., executed on March 8, 2022, and included in "Other accrued liabilities" on our condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023. (2) Included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023. Financial instruments classified as Level III in the fair value hierarchy as of March 31, 2024 and December 31, 2023 represent liabilities measured at market value on a recurring basis and include warrant liabilities relating to warrants issued in connection with an amendment to our Note Purchase Agreement dated September 24, 2019, and contingent consideration relating to a stock price guarantee provided in an acquisition (see further discussion below regarding this contingent consideration). In accordance with current accounting rules, the warrant liabilities and contingent consideration liability are marked-to-market each quarter-end until they are completely settled or expire. The fair value of the warrant liabilities was valued using the Black-Scholes pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. The fair value of the contingent consideration liability was valued using the Monte Carlo simulation model, using both observable and unobservable inputs and assumptions. The carrying value of the Keep Well Notes is estimated to approximate their respective fair values as the variable interest rate of the notes approximates the market rate for debt with similar terms and risk characteristics. The fair value measurements using significant Level III inputs, and changes therein, was as follows (in thousands): Level III Balance as of December 31, 2023 $ 64 Settlement of contingent consideration (64) Balance as of March 31, 2024 $ — The $0.1 million of contingent consideration liability, relating to a stock price guarantee in our acquisition of LifeDojo Inc. completed in October 2020, was included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023. In January 2024, the Company issued 1,238 shares of common stock, representing full settlement of the contingent consideration liability. Warrant Liabilities Level III Balance as of December 31, 2023 $ 8 Loss on change in fair value of warrant liabilities 2 Balance as of March 31, 2024 $ 10 The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: March 31, 2024 Volatility 100.0 % Risk-free interest rate 4.40 % Weighted average expected life (in years) 2.52 Dividend yield 0 % |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. As discussed under the heading Management Services Agreements (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSAs, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSAs. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH, including its decision making and approvals are conducted for its benefit, as evidenced by the fact that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee by TIH and CIH is subordinate to payments of the other obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans, the Company has determined that TIH and CIH are VIEs. The Company, as the primary beneficiary, is required to consolidate the VIE entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreements In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSAs, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks, and provides all required day-to-day business management services, including, but not limited to: • general administrative support services; • information systems; • recordkeeping; • billing and collection; and • obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five-year period), (b) 10%-15% of the foregoing costs, and (c) any performance bonus amount, as determined by TIH at its sole discretion. CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five-year period), and (b) any performance bonus amount, as determined by CIH at its sole discretion. The Company's condensed consolidated balance sheets include the following assets and liabilities from its TIH and CIH VIEs (in thousands): March 31, December 31, Cash $ 1,562 $ 1,433 Unbilled receivables 83 85 Prepaid and other current assets 31 45 Total assets $ 1,676 $ 1,563 Accrued liabilities $ 31 $ 52 Deferred revenue 62 64 Payables to Ontrak 2,186 2,281 Total liabilities $ 2,279 $ 2,397 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, we are subject to various legal proceedings that arise in the normal course of our business activities. As of the date of this report, we are not party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our results of operations or financial position, except the following: Loss Contingencies On March 3, 2021, a purported securities class action was filed in the United States District Court for the Central District of California, entitled Farhar v. Ontrak, Inc ., Case No. 2:21-cv-01987. On March 19, 2021, another similar lawsuit was filed in the same court, entitled Yildrim v. Ontrak, Inc ., Case No. 2:21-cv-02460. On July 14, 2021, the Court consolidated the two actions under the Farhar case (“Consolidated Class Action”), appointed Ibinabo Dick as lead plaintiff, and the Rosen Law Firm as lead counsel. On August 13, 2021, lead plaintiff filed a consolidated amended complaint. In the Consolidated Amended Complaint, lead plaintiff, purportedly on behalf of a putative class of purchasers of Ontrak securities from August 5, 2020 through February 26, 2021, alleges that the Company and Terren S. Peizer, Brandon H. LaVerne and Curtis Medeiros, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder, by intentionally or recklessly making false and misleading statements and omissions in various press releases, SEC filings and conference calls with investors on August 5, 2020 and November 5, 2020. Specifically, the Consolidated Amended Complaint alleges that the Company was inappropriately billing its largest customer, Aetna, causing Aetna to, in May 2020, shut off its data feed to Ontrak, and, in July 2020, require Ontrak to complete a Corrective Action Plan (“CAP”). Lead plaintiff alleges that defendants: (1) misrepresented to investors that the data feed was shut off in July 2020, and that it was part of Aetna’s standard compliance review of all of its vendors; (2) failed to disclose to investors that Aetna had issued the CAP; and (3) failed to disclose to investors that Ontrak was engaging in inappropriate billing practices. Lead plaintiff seeks certification of a class and monetary damages in an indeterminate amount. On September 13, 2021, defendants filed a motion to dismiss the Consolidated Amended Complaint for failure to state a claim under Federal Rules of Civil Procedure 12(b)(6) and 9(b) and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. §§ 78u-4, et seq. The motion was taken under submission, with no oral argument. Prior to any ruling being issued on the motion to dismiss, on March 29, 2023, lead plaintiff filed a Second Amended Complaint. The Second Amended Complaint (1) adds Jonathan Mayhew as a defendant; (2) expands the purported class period to August 5, 2020 through August 19, 2021; and (3) now includes allegations that the defendants additionally intentionally or recklessly made false and misleading statements and omissions regarding the Company’s relationship with its then-second largest customer, Cigna, in various press releases, SEC filings and conference calls with investors on May 6, 2021 and August 5, 2021. On May 15, 2023, the Company filed its motion to dismiss the Second Amended Complaint. On February 2, 2024, the Court issued an order granting the Company’s motion to dismiss in its entirety and providing lead plaintiff leave to amend. On March 5, 2024, lead plaintiff filed its Third Amended Complaint, which asserts the same claims, against the same defendants for the same purported class period. On March 19, 2024, the Company filed its motion to dismiss the Third Amended Complaint. That motion is now fully briefed and has been taken under submission by the Court. The Company believes that the allegations lack merit and intends to defend against the action vigorously. On August 6, 2021, a purported stockholder derivative complaint was filed in the United States District Court for the Central District of California, entitled Aptor v. Peizer , Case No. 2:21-cv-06371, alleging breach of fiduciary duty on behalf of the Company against Terren S. Peizer, Brandon H. LaVerne, Richard A. Berman, Michael Sherman, Diane Seloff, Robert Rebak, Gustavo Giraldo and Katherine Quinn, and contribution against Terren S. Peizer and Brandon H. LaVerne. On October 6, 2021, a similar shareholder derivative action was filed in the same Court, entitled Anderson v. Peizer , Case No. 2:21-cv-07998, for breach of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement and waste of corporate assets against Terren S. Peizer, Brandon H. LaVerne, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, and Katherine Quinn, and contribution against Terren S. Peizer, Brandon H. LaVerne and Curtis Medeiros. On December 1, 2021, a similar shareholder derivative action was filed in the United States District Court for the District of Delaware, entitled Vega v. Peizer , Case No. 1:21-cv-01701, for violation of Section 20(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment and waste of corporate assets against Terren S. Peizer, Brandon H. LaVerne, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, and Katherine Quinn. In these actions, plaintiffs allege that the defendants breached their fiduciary duties by allowing or causing the Company to violate the federal securities laws as alleged in the Consolidated Class Action discussed above. The plaintiffs seek damages (and contribution from the officers) in an indeterminate amount. On December 7, 2021, the Court in the Central District of California consolidated the two Central District of California actions under the Aptor case caption and number (the "Consolidated Derivative Action"), stayed the action pending a ruling on the Motion to Dismiss in the Consolidated Class Action and ordered plaintiffs to file a consolidated amended complaint within fourteen (14) days of a ruling on the Motion to Dismiss in the Consolidated Class Action. On February 7, 2022, the Court in the District of Delaware extended the deadline for defendants to respond to the complaint in the Vega action to April 8, 2022. On March 21, 2022, the Court in the District of Delaware granted plaintiff’s unopposed motion to transfer the case to the United States District Court for Central District of California in the interest of judicial efficiency due to the Consolidated Class Action and Consolidated Derivative Action already pending in that district, and that same day the case was transferred into the United States District Court for Central District of California and given the new Case No. 2:22-cv-01873-CAS-AS. On April 11, 2022, the Court stayed the action pending a ruling on the Motion to Dismiss in the Consolidated Class Action and ordered plaintiffs to inform defendants regarding their intention to amend their initial complaint within thirty (30) days of said ruling. On February 14, 2024, the parties in Consolidated Derivative Action stipulated to an extension of the stay pending a ruling on Ontrak’s anticipated motion to dismiss the forthcoming amended complaint filed by lead plaintiff in the Consolidated Class Action. On April 8, 2024, the parties in the Vega action did the same. On January 25, 2024, another purported stockholder derivative complaint was filed in the Court of Chancery of the State of Delaware, entitled Dutkiewicz v. Acuitas Group Holdings LLC (“Acuitas”), Case No. 2024-0068, alleging breach of fiduciary duty under Brophy and unjust enrichment against Acuitas and Terren S. Peizer and breach of fiduciary duties generally against Acuitas, Terren S. Peizer, Brandon H. LaVerne, Jonathan Mayhew, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, Katherine Quinn and Robert Newton. Ontrak’s response date to this new derivative complaint is not yet set. Although all of the claims asserted in these actions purport to seek recovery on behalf of the Company, the Company will incur certain expenses due to indemnification and advancement obligations with respect to the defendants. The Company understands that defendants believe these actions are without merit and intend to defend themselves vigorously. On February 28, 2022, a purported securities class action was filed in the Superior Court of California for Los Angeles County, entitled Braun v. Ontrak, Inc., et al ., Case No. 22STCV07174. The plaintiff filed this action purportedly on behalf of a putative class of all purchasers of the Series A Preferred Stock pursuant to Registration Statements and Prospectuses issued in connection with Ontrak’s August 21, 2020 initial public stock offering, its September 2020 through December 2020 “at market” offering, and its December 16, 2020 follow-on stock offering (collectively, the “Preferred Stock Offerings”). The plaintiff brings this action against the Company; its officers: Terren S. Peizer, Brandon H. LaVerne, and Christopher Shirley; its board members: Richard A. Berman, Sharon Gabrielson, Gustavo Giraldo, Katherine B. Quinn, Robert Rebak, Diane Seloff, Michael Sherman, and Edward Zecchini; and the investment banking firms that acted as underwriters for the Preferred Stock Offerings: B. Riley Securities, Inc., Ladenburg Thalmann & Co., Inc., William Blair & Company, LLC, Aegis Capital Corp., Insperex LLC (f/k/a Incapital LLC), The Benchmark Company, LLC, Boenning & Scatteredgood, Inc., Colliers Securities, LLC, Kingswood Capital Markets, and ThinkEquity (the "Underwriters"). The plaintiff asserts three causes of action alleging that Ontrak violated § 11, § 12(a)(2), and § 15 of the Securities Act of 1933, respectively, (1) by failing to disclose facts required to be disclosed under SEC Regulation S-K items 105 and 303 – that Aetna had turned off the data feed of customer records to Ontrak citing dissatisfaction with the Company’s value proposition and billing practices and thereafter submitted a CAP to which Ontrak’s senior executives were unable to effectively respond; and (2) by issuing allegedly false or misleading statements in its Registration Statements and Prospectuses: (a) regarding Ontrak’s growing customer base; (b) regarding its ability to scale its operations; (c) that revenue from a limited number of its customers would continue; (d) that its services are provided to customers continuously; (e) that revenue increases were attributable to continued expansion of the Ontrak program; and (f) regarding the healthcare experience of its executives. The plaintiff seeks damages in an indeterminate amount. On July 7, 2022, the defendants filed demurrers to the complaint. On October 4, 2022, the Court issued its ruling, allowing the case to proceed but with a narrowed scope. Specifically, of the six alleged misleading statements, only two remain (that Ontrak had a growing “growing customer base” and that Ontrak’s revenue growth was attributed to “[t]he continued expansion of [its] Ontrak program with [its] existing health plan customers”). The Court sustained the Company’s demurrer to the second cause of action, for violation of Section 12 of the Securities Act of 1933; while the Court granted leave to amend the plaintiff determined not to amend to pursue that claim. The Company believes that the remaining allegations lack merit and intends to defend against the action vigorously. On November 18, 2022, plaintiff filed his Motion for Class Certification. On February 17, 2023, the Company filed its opposition and joined in the opposition of the Underwriters. On October 12, 2023, the Court issued its ruling granting plaintiff's Motion and certifying the class as to the Section 11 and Section 15 claims only. The parties were engaged in discovery until November 3, 2023, when the United States Attorneys' Office filed an application for leave to intervene and stay discovery pending resolution of a federal criminal case. On November 8, 2023, the Court set the Government's motion for hearing on December 14, 2023 and issued an order temporarily staying all discovery in the action pending resolution of the motion. On December 14, 2023, the Court granted the application for leave to intervene and stay discovery, staying discovery until June 25, 2024, or until criminal case reaches its conclusion at the trial level. The Court also vacated the previously set trial and related dates. Securities Investigation On November 15, 2022, the Company received a notification from the SEC, Division of Enforcement, that it is conducting an investigation captioned “In the Matter of Trading in the Securities of Ontrak, Inc. (HO-14340)” and issued a preservation letter as well as a subpoena for documents relating to the investigation. The notification indicates the investigation is a fact-finding inquiry for compliance with federal securities laws and should not be construed as an indication by the SEC that any violation of law has occurred, nor as a reflection upon any person, entity or security. The Company cooperated with the terms of the subpoena. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Issuance of Demand Notes Under the Sixth Amendment, on April 5, 2024, the Company issued and sold to Acuitas, and Acuitas purchased from the Company, the Initial Demand Note with a principal amount of $1.5 million. On May 8, 2024, the Company issued and sold to Acuitas, and Acuitas purchased from the Company, another Demand Note with a principal amount of $1.5 million. As of the filing date of this report, under the Sixth Amendment, in Acuitas’ sole discretion, Acuitas may purchase from the Company, and the Company will issue and sell to Acuitas, up to an additional $12.0 million in principal amount of Demand Notes, at such time and in such principal amounts as specified in the Sixth Amendment. Sixth Amendment Stockholder Approval On April 22, 2024, the Company obtained the Sixth Amendment Stockholder Approval (discussed in Note 10 above) by written consent or consents signed by the holders of outstanding shares of the Company’s common stock having not less than the minimum number of votes that would be necessary to authorize or take the applicable actions at a meeting at which all shares entitled to vote thereon were present and voted. Following receipt of the Sixth Amendment Stockholder Approval, on May 1, 2024, the Company filed with the SEC a preliminary information statement related to the Sixth Amendment Stockholder Approval, and on May 13, 2024, the Company mailed a definitive information statement to the Company’s stockholders in accordance with SEC rules. Under SEC rules, in the case of corporate actions taken by the consent of stockholders, the definitive information statement must be sent or given at least 20 calendar days prior to the earliest date on which the corporate actions approved by the consent of stockholders may be taken. Accordingly, the effectiveness of the stockholder approval of the corporate actions approved by the Sixth Amendment Stockholder Approval will be 20 calendar days after the date on which definitive information statement was first sent or given to the Company’s stockholders, or June 2, 2024. Exercise of Public Offering Warrants |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (4,458) | $ (8,350) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization (Policies)
Organization (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements Since the date on which the Company filed the 2023 10-K, there were no recently adopted account standards or new accounting standards issued, but not yet adopted by the Company, which are expected to materially affect the Company's condensed consolidated financial statements. |
Fair Value Measurements | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input Input Definition Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Financial instruments classified as Level III in the fair value hierarchy as of March 31, 2024 and |
Variable Interest Entities | Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. As discussed under the heading Management Services Agreements (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSAs, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSAs. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH, including its decision making and approvals are conducted for its benefit, as evidenced by the fact that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee by TIH and CIH is subordinate to payments of the other obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans, the Company has determined that TIH and CIH are VIEs. The Company, as the primary beneficiary, is required to consolidate the VIE entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreements In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSAs, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks, and provides all required day-to-day business management services, including, but not limited to: • general administrative support services; • information systems; • recordkeeping; • billing and collection; and • obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five-year period), (b) 10%-15% of the foregoing costs, and (c) any performance bonus amount, as determined by TIH at its sole discretion. CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five-year period), and (b) any performance bonus amount, as determined by CIH at its sole discretion. |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Summary of restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash total as presented in the condensed consolidated statement of cash flows for the periods presented (in thousands): March 31, 2024 2023 Cash $ 6,400 $ 7,393 Restricted cash - current: Dividend payments on preferred stock (1) — 4,477 Letter of credit (2) — 204 Subtotal - Restricted cash - current — 4,681 Cash and restricted cash $ 6,400 $ 12,074 ____________ (1) Amount represents the cash balance that was remaining in an account funded with a portion of the proceeds from the sale of the Series A Preferred Stock for the payment of dividends thereon through August 2022. The use of such funds for the payment of such dividends was subject to compliance with applicable laws. In April 2023, the Company’s board of directors determined that the use of such funds for other corporate purposes was in the best interests of the Company and its common stockholders after considering its fiduciary duties to the Company’s common stockholders. Therefore, the amount was classified as unrestricted cash in April 2023. (2) A letter of credit ("LOC") was required under the terms of the lease for our Santa Monica, California office. In accordance with the lease termination agreement entered into on February 16, 2023 (as discussed in Note 9 below), the LOC was cancelled on June 16, 2023. |
Receivables and Revenue Conce_2
Receivables and Revenue Concentration (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Schedule of concentration of risk | The following table is a summary of concentration of credit risk by customer revenues as a percentage of our total revenue: Three Months Ended Percentage of Revenue 2024 2023 Customer A 62.1 % 52.0 % Customer B 20.5 35.8 Customer C 9.9 1.7 Remaining customers 7.5 10.5 Total 100.0 % 100.0 % The following table is a summary of concentration of credit risk by customer accounts receivables as a percentage of our total accounts receivable: Percentage of Accounts Receivable March 31, 2024 December 31, 2023 Customer D 74.6 % — % Customer C 25.4 — Total 100.0 % — % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): March 31, December 31, 2024 2023 Software $ 4,653 $ 4,575 Computers and equipment 416 416 ROU assets - finance lease 300 300 Software development in progress 23 59 Subtotal 5,392 5,350 Less: Accumulated depreciation and amortization (4,635) (4,437) Property and equipment, net $ 757 $ 913 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the useful life of internal use software | The following table sets forth amounts recorded for intangible assets subject to amortization (in thousands): At March 31, 2024 At December 31, 2023 Weighted Average Estimated Useful Life (years) Gross Value Accumulated Amortization Net Carrying Value Gross Value Accumulated Amortization Net Carrying Value Acquired software technology 3 $ 3,500 $ (3,500) $ — $ 3,500 $ (3,500) $ — Customer relationships 5 270 (220) 50 270 (171) 99 Total $ 3,770 $ (3,720) $ 50 $ 3,770 $ (3,671) $ 99 |
Schedule of intangible assets' estimated future amortization expense | At March 31, 2024, estimated amortization expense for intangible assets for each year thereafter was as follows (in thousands): Remainder of 2024 $ 50 Total $ 50 |
Common Stock and Preferred St_2
Common Stock and Preferred Stock (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per common share were as follows (in thousands, except per share amounts): Three Months Ended 2024 2023 Net loss $ (4,458) $ (8,350) Dividends on preferred stock - declared and undeclared (2,239) (2,239) Net loss attributable to common stockholders $ (6,697) $ (10,589) Weighted-average shares of common stock outstanding 60,882 4,686 Net loss per common share - basic and diluted $ (0.11) $ (2.26) |
Schedule of shares excluded from net loss per share | The following common equivalent shares as of March 31, 2024 and 2023, issuable upon exercise of stock options and warrants, have been excluded from the diluted earnings per share calculation as their effect was anti-dilutive: March 31, 2024 2023 Warrants to purchase common stock 168,925,136 7,082,788 Options to purchase common stock 1,821,604 931,019 Total 170,746,740 8,013,807 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of assumptions used in the Black-Scholes option-pricing model | The assumptions used in the Black-Scholes option-pricing model were as follows: Three Months Ended Volatility 96.0% Risk-free interest rate 3.81% Expected life (in years) 4.09 Dividend yield 0 % |
Summary of stock option activity for employees and directors | A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2023 1,162,109 $ 6.63 Granted 770,039 0.39 Forfeited (110,544) 15.19 Outstanding as of March 31, 2024 1,821,604 3.48 Options vested and exercisable as of March 31, 2024 615,633 $ 7.14 |
Schedule of restricted stock units activity | The following table summarizes our RSU award activity issued under the 2017 Plan: Restricted Stock Units Weighted Non-vested at December 31, 2023 120,637 $ 13.06 Vested and settled (104) 325.80 Forfeited (3,514) 196.49 Non-vested at March 31, 2024 117,019 7.27 |
Summary of warrant activity for non-employees | A summary of warrants activity was as follows: Number of Warrants Weighted Average Outstanding as of December 31, 2023 114,243,865 $ 0.63 Granted 136,163,668 0.36 Exercised (5,482,398) 0.10 Cancelled (57,666,666) 0.85 Outstanding as of March 31, 2024 187,258,469 0.38 Warrants exercisable as of March 31, 2024 187,258,469 0.38 |
Schedule of valuation assumptions | The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: Three Months Ended March 31, 2024 Volatility 98% Risk-free interest rate 4.21% Expected life (in years) 4.73 Dividend yield 0 % The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: March 31, 2024 Volatility 100.0 % Risk-free interest rate 4.40 % Weighted average expected life (in years) 2.52 Dividend yield 0 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of quantitative information for operating leases | Quantitative information for our leases is as follows (in thousands): Condensed Consolidated Balance Sheets Balance Sheet Classification March 31, 2024 December 31, 2023 Assets Operating lease assets "Operating lease right-of-use-assets" $ 183 $ 195 Total lease assets $ 183 $ 195 Liabilities Current Operating lease liabilities "Current portion of operating lease liabilities" $ 59 $ 56 Non-current Operating lease liabilities "Long-term operating lease liabilities" 151 166 Total lease liabilities $ 210 $ 222 Three Months Ended Condensed Consolidated Statements of Operations 2024 2023 Operating lease expense $ 20 $ 87 Short-term lease rent expense 1 1 Variable lease expense — 15 Operating sublease income — (65) Total rent expense $ 21 $ 38 Finance lease expense Amortization of leased assets $ — $ 25 Interest on lease liabilities — 2 Total $ — $ 27 Three Months Ended Condensed Consolidated Statements of Cash Flows 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21 $ 145 Financing cash flows from finance leases — 50 Other Cash received for operating sublease — 97 Other Information March 31, 2024 December 31, 2023 Weighted-average remaining lease term (years) Operating leases 2.9 3.2 Weighted-average discount rate (%) Operating leases 16.25 % 16.25 % Finance leases — 15.15 % |
Schedule of maturities of operating lease liabilities | The following table sets forth maturities of our lease liabilities (in thousands): Operating Leases At March 31, 2024 Remainder of 2024 $ 66 2025 90 2026 93 2027 16 Total lease payments 265 Less: imputed interest (55) Present value of lease liabilities 210 Less: current portion (59) Lease liabilities, non-current $ 151 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of carrying amounts of debt | The net carrying amounts of the liability components consists of the following (in thousands): March 31, 2024 December 31, 2023 Principal $ 2,168 $ 2,057 Less: debt discount (551) (590) Net carrying amount $ 1,617 $ 1,467 |
Schedule of interest expense recognized | The following table presents the interest expense recognized related to the Company's borrowings under the Keep Well Agreement (in thousands): Three Months Ended 2024 2023 Contractual interest expense $ 112 $ 848 Accretion of debt discount 39 521 Total interest expense $ 151 $ 1,369 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements by level | The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis as of the periods presented (in thousands): Balance as of March 31, 2024 Level I Level II Level III Total Warrant liabilities (1) $ — $ — $ 10 $ 10 Total liabilities $ — $ — $ 10 $ 10 Balance as of December 31, 2023 Level I Level II Level III Total Contingent consideration (2) $ — $ — $ 64 $ 64 Warrant liabilities (1) — — 8 8 Total liabilities $ — $ — $ 72 $ 72 ___________________ (1) Relates to warrants issued in connection with the Eight Amendment to the Note Purchase Agreement with Goldman Sachs Specialty Lending Group, L.P., executed on March 8, 2022, and included in "Other accrued liabilities" on our condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023. (2) Included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023. |
Schedule of fair value measurements using significant Level III inputs | The fair value measurements using significant Level III inputs, and changes therein, was as follows (in thousands): Level III Balance as of December 31, 2023 $ 64 Settlement of contingent consideration (64) Balance as of March 31, 2024 $ — Level III Balance as of December 31, 2023 $ 8 Loss on change in fair value of warrant liabilities 2 Balance as of March 31, 2024 $ 10 |
Schedule of valuation assumptions | The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: Three Months Ended March 31, 2024 Volatility 98% Risk-free interest rate 4.21% Expected life (in years) 4.73 Dividend yield 0 % The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: March 31, 2024 Volatility 100.0 % Risk-free interest rate 4.40 % Weighted average expected life (in years) 2.52 Dividend yield 0 % |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The Company's condensed consolidated balance sheets include the following assets and liabilities from its TIH and CIH VIEs (in thousands): March 31, December 31, Cash $ 1,562 $ 1,433 Unbilled receivables 83 85 Prepaid and other current assets 31 45 Total assets $ 1,676 $ 1,563 Accrued liabilities $ 31 $ 52 Deferred revenue 62 64 Payables to Ontrak 2,186 2,281 Total liabilities $ 2,279 $ 2,397 |
Organization (Details)
Organization (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||||||
Jul. 27, 2023 | May 15, 2024 USD ($) shares | May 08, 2024 USD ($) | Feb. 28, 2023 | Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | Apr. 05, 2024 USD ($) | Mar. 28, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Number of segments | segment | 1 | ||||||||
Cash | $ 6,400 | $ 7,393 | $ 9,701 | ||||||
Working capital | 5,700 | ||||||||
Average monthly cash burn rate | 1,100 | ||||||||
Proceeds from warrants exercised | 523 | $ 0 | |||||||
Reverse stock split ratio | 0.17 | ||||||||
Subsequent event | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from warrants exercised | $ 1,400 | ||||||||
Warrants exercised (in shares) | shares | 4,016,664 | ||||||||
Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Reverse stock split ratio | 0.17 | ||||||||
Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Reverse stock split ratio | 0.25 | ||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt outstanding | $ 2,200 | ||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Subsequent event | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt outstanding | $ 5,300 | ||||||||
Short-term debt outstanding | $ 3,000 | ||||||||
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Convertible Debt | Subsequent event | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of notes | $ 1,500 | $ 1,500 | |||||||
Maximum additional principal amount of notes to be issued | 12,000 | $ 13,500 | |||||||
Proceeds from short-term debt | $ 3,000 | ||||||||
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Convertible Debt | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of notes | $ 15,000 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash | $ 6,400 | $ 9,701 | $ 7,393 | |
Restricted cash - current | 0 | 4,681 | ||
Cash and restricted cash | 6,400 | $ 9,701 | 12,074 | $ 9,713 |
Dividend payments on preferred stock | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash - current | 0 | 4,477 | ||
Letter of credit | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash - current | $ 0 | $ 204 |
Receivables and Revenue Conce_3
Receivables and Revenue Concentration (Details) - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk | 100% | 100% |
Revenue | Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk | 62.10% | 52% |
Revenue | Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk | 20.50% | 35.80% |
Revenue | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk | 9.90% | 1.70% |
Revenue | Remaining customers | ||
Concentration Risk [Line Items] | ||
Concentration risk | 7.50% | 10.50% |
Accounts receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk | 100% | |
Accounts receivable | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk | 25.40% | |
Accounts receivable | Customer D | ||
Concentration Risk [Line Items] | ||
Concentration risk | 74.60% |
Receivables and Revenue Conce_4
Receivables and Revenue Concentration - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Concentration Risk [Line Items] | ||
Bad debt expense | $ 0 | $ 0 |
Revenue | 2,680,000 | 2,529,000 |
Amount of insurance claims filed | 3,600,000 | |
Decrease in other receivable due to payment to insurer payment to third parties | 365,000 | 836,000 |
Decrease in other accrued liabilities due to payment to insurer payment to third parties | (99,000) | $ (206,000) |
Insurance claim receivable | 300,000 | |
Accrued insurance | 300,000 | |
Insurance Settlement | ||
Concentration Risk [Line Items] | ||
Decrease in other receivable due to payment to insurer payment to third parties | 3,300,000 | |
Decrease in other accrued liabilities due to payment to insurer payment to third parties | 3,300,000 | |
Health Plan Customer, Cancelled Services | Revenue | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Revenue | $ 500,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,392 | $ 5,350 |
Less: Accumulated depreciation and amortization | (4,635) | (4,437) |
Property and equipment, net | 757 | 913 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,653 | 4,575 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 416 | 416 |
ROU assets - finance lease | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 300 | 300 |
Software development in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 23 | $ 59 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 200 | $ 300 |
Capitalized internal use software costs, additions | 40 | 100 |
Capitalized internal use software costs, amortization | $ 200 | $ 300 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 5,713 | $ 5,713 | |
Amortization of intangible assets | $ 50 | $ 300 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Value | $ 3,770 | $ 3,770 |
Accumulated Amortization | (3,720) | (3,671) |
Net Carrying Value | $ 50 | 99 |
Acquired software technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Estimated Useful Life (years) | 3 years | |
Gross Value | $ 3,500 | 3,500 |
Accumulated Amortization | (3,500) | (3,500) |
Net Carrying Value | $ 0 | 0 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Estimated Useful Life (years) | 5 years | |
Gross Value | $ 270 | 270 |
Accumulated Amortization | (220) | (171) |
Net Carrying Value | $ 50 | $ 99 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets' Estimated Future Amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2024 | $ 50 | |
Net Carrying Value | $ 50 | $ 99 |
Restructuring, Severance and _2
Restructuring, Severance and Related Costs (Details) - One-time termination benefits - USD ($) $ in Millions | 1 Months Ended | |
Feb. 29, 2024 | Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Positions eliminated | 21% | 19% |
Restructuring costs | $ 0.3 | $ 0.5 |
Common Stock and Preferred St_3
Common Stock and Preferred Stock - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (4,458) | $ (8,350) |
Dividends on preferred stock - undeclared | (2,239) | (2,239) |
Net loss attributable to common stockholders, basic | (6,697) | (10,589) |
Net loss attributable to common stockholders, diluted | $ (6,697) | $ (10,589) |
Weighted-average common shares outstanding, basic (in shares) | 60,882 | 4,686 |
Weighted-average common shares outstanding, diluted (in shares) | 60,882 | 4,686 |
Net loss per common share, basic (in dollars per share) | $ (0.11) | $ (2.26) |
Net loss per common share, diluted (in dollars per share) | $ (0.11) | $ (2.26) |
Common Stock and Preferred St_4
Common Stock and Preferred Stock - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Feb. 28, 2023 shares | Mar. 31, 2024 USD ($) $ / shares shares | Dec. 31, 2020 director $ / shares shares | |
Class of Stock [Line Items] | |||
Shares issuable upon exercise of warrants included in common stock outstanding (in shares) | shares | 18,333,333 | ||
Preferred stock, voting rights, number of directors able to elect | director | 2 | ||
Series A Cumulative Perpetual Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock issued (in shares) | shares | 3,770,265 | ||
Preferred stock, dividend rate | 9.50% | 9.50% | |
Preferred stock, redemption price (in dollars per share) | $ / shares | $ 25 | ||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | ||
Preferred stock, liquidation preference, per annum (in dollars per share) | $ / shares | 2.375 | ||
Preferred stock, dividend rate (in dollars per share) | $ / shares | $ 0.593750 | ||
Preferred stock, undeclared dividends | $ | $ 18.7 | ||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | |||
Class of Stock [Line Items] | |||
Sale of stock, shares issued (in shares) | shares | 2,038,133 | ||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Effect of reverse stock split | |||
Class of Stock [Line Items] | |||
Sale of stock, shares issued (in shares) | shares | 339,689 |
Common Stock and Preferred St_5
Common Stock and Preferred Stock - Antidilutive Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 170,746,740 | 8,013,807 |
Warrants to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 168,925,136 | 7,082,788 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,821,604 | 931,019 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 28, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized (in shares) | 2,849,746 | ||
Expiration period (in years) | 10 years | ||
Shares reserved for future award (in shares) | 557,901 | ||
Share-based compensation expense | $ 0.4 | $ 0.7 | |
Public Offering Warrants and Private Placement Warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price of warrants (in dollars per share) | $ 0.36 | ||
Employees and directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs | $ 2.3 | ||
Unrecognized compensation costs, recognition period (in years) | 2 years 9 months 25 days | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
Stock options and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options and RSUs outstanding (in shares) | 1,938,623 | ||
Restricted Stock Units (RSUs) | Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs | $ 0.6 | ||
Unrecognized compensation costs, recognition period (in years) | 1 year 5 months 1 day | ||
Restricted Stock Units (RSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used in the Black-Scholes Option-pricing Model (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Volatility | 96% |
Risk-free interest rate | 3.81% |
Expected life (in years) | 4 years 1 month 2 days |
Dividend yield | 0% |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee and Director Stock Option Activity (Details) - Employees and directors | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 1,162,109 |
Granted (in shares) | shares | 770,039 |
Forfeited (in shares) | shares | (110,544) |
Ending balance (in shares) | shares | 1,821,604 |
Options vested and exercisable (in shares) | shares | 615,633 |
Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 6.63 |
Granted (in dollars per share) | $ / shares | 0.39 |
Forfeited (in dollars per share) | $ / shares | 15.19 |
Ending balance (in dollars per share) | $ / shares | 3.48 |
Options vested and exercisable (in dollars per share) | $ / shares | $ 7.14 |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - Employee | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted Stock Units | |
Non-vested beginning balance (in shares) | shares | 120,637 |
Vested and settled (in shares) | shares | (104) |
Forfeited (in shares) | shares | (3,514) |
Non-vested ending balance (in shares) | shares | 117,019 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 13.06 |
Vested and settled (in dollars per share) | $ / shares | 325.80 |
Forfeited (in dollars per share) | $ / shares | 196.49 |
Ending balance (in dollars per share) | $ / shares | $ 7.27 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Warrant Activity (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Warrants | |
Cancelled (in shares) | shares | (57,666,666) |
Weighted Average Exercise Price | |
Cancelled (in dollars per share) | $ / shares | $ 0.85 |
Nonemployee | |
Number of Warrants | |
Beginning balance (in shares) | shares | 114,243,865 |
Granted (in shares) | shares | 136,163,668 |
Exercised (in shares) | shares | (5,482,398) |
Ending balance (in shares) | shares | 187,258,469 |
Exercisable (in shares) | shares | 187,258,469 |
Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 0.63 |
Granted (in dollars per share) | $ / shares | 0.36 |
Exercised (in dollars per share) | $ / shares | 0.10 |
Ending balance (in dollars per share) | $ / shares | 0.38 |
Exercisable (in dollars per share) | $ / shares | $ 0.38 |
Stock-Based Compensation - As_2
Stock-Based Compensation - Assumptions used in the Black-Scholes warrant-pricing model (Details) | Mar. 31, 2024 year |
Volatility | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 1 |
Volatility | Nonemployee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 0.98 |
Risk-free interest rate | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 0.0440 |
Risk-free interest rate | Nonemployee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 0.0421 |
Expected life (in years) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 2.52 |
Expected life (in years) | Nonemployee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 4.73 |
Dividend yield | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 0 |
Dividend yield | Nonemployee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrant liability assumptions | 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Feb. 28, 2023 USD ($) | Mar. 31, 2024 USD ($) ft² | Mar. 31, 2023 USD ($) | |
Leases [Abstract] | |||
Area of real estate property (in sq. ft) | ft² | 2,721 | ||
Operating lease, term (in months) | 58 months | ||
Finance lease, term | 36 months | ||
Lease, early termination fee | $ 100 | ||
Operating lease right-of-use assets, written off | 300 | ||
Current operating lease liabilities, written off | 600 | ||
Long-term operating lease liabilities, written off | $ 200 | ||
Gain on termination of operating lease | $ 0 | $ 471 |
Leases - Condensed Consolidated
Leases - Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Operating lease assets | $ 183 | $ 195 |
Total lease assets | 183 | 195 |
Current | ||
Operating lease liabilities | 59 | 56 |
Non-current | ||
Operating lease liabilities | 151 | 166 |
Total lease liabilities | $ 210 | $ 222 |
Leases - Condensed Consolidat_2
Leases - Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating lease expense | $ 20 | $ 87 |
Short-term lease rent expense | 1 | 1 |
Variable lease expense | 0 | 15 |
Operating sublease income | 0 | (65) |
Total rent expense | 21 | 38 |
Amortization of leased assets | 0 | 25 |
Interest on lease liabilities | 0 | 2 |
Total | $ 0 | $ 27 |
Leases - Condensed Consolidat_3
Leases - Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 21 | $ 145 |
Financing cash flows from finance leases | 0 | 50 |
Cash received for operating sublease | $ 0 | $ 97 |
Leases - Other Information (Det
Leases - Other Information (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Weighted-average remaining lease term (years) | ||
Operating leases | 2 years 10 months 24 days | 3 years 2 months 12 days |
Weighted-average discount rate (%) | ||
Operating leases | 16.25% | 16.25% |
Finance leases | 0% | 15.15% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Remainder of 2024 | $ 66 | |
2025 | 90 | |
2026 | 93 | |
2027 | 16 | |
Total lease payments | 265 | |
Less: imputed interest | (55) | |
Present value of lease liabilities | 210 | |
Less: current portion | (59) | $ (56) |
Lease liabilities, non-current | $ 151 | $ 166 |
Debt - Keep Well Agreement (Det
Debt - Keep Well Agreement (Details) - Acuitas Capital, LLC - Keep Well Agreement - Affiliated Entity - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 23, 2023 | Apr. 15, 2022 | Mar. 31, 2024 | |
Debt Instrument [Line Items] | |||
Covenant, recurring revenue minimum | $ 11 | $ 15 | $ 11 |
Covenant, liquidity minimum | $ 5 |
Debt - Keep Well Agreement, The
Debt - Keep Well Agreement, The Original, Second, Third and Fourth Amendments (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | |||||||||||||
Sep. 07, 2023 | Jun. 26, 2023 | Jun. 23, 2023 | Mar. 06, 2023 | Jan. 05, 2023 | Apr. 15, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Feb. 28, 2023 | Sep. 07, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Sep. 01, 2023 | Aug. 03, 2023 | Nov. 19, 2022 | Aug. 12, 2022 | |
Debt Instrument [Line Items] | ||||||||||||||||
Proceeds from Keep Well Notes | $ 0 | $ 8,000 | ||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Related party debt, available amount | $ 25,000 | |||||||||||||||
Warrant coverage, covenant, percentage of amount borrowed | 20% | 20% | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ 0.45 | $ 0.92 | ||||||||||||||
Covenant, recurring revenue minimum | $ 11,000 | $ 15,000 | $ 11,000 | |||||||||||||
Conversion right (in dollars per share) | $ 0.15 | $ 0.15 | ||||||||||||||
Available borrowing capacity | $ 10,700 | |||||||||||||||
Term of warrants | 5 years | |||||||||||||||
Shares issued for warrants, amount converted, multiplier | 100% | |||||||||||||||
Stock that can be purchased with warrants (in shares) | 1,775,148 | |||||||||||||||
Potential warrants (in shares) | 33,333,333 | |||||||||||||||
Additional warrants (in shares) | 31,558,185 | |||||||||||||||
Warrant exercise price, volume-weighted average price threshold, trading days | 5 days | |||||||||||||||
Sale of stock, shares issued (in shares) | 2,038,133 | |||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Keep Well Notes, Second Amendment | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Available borrowing capacity | $ 6,000 | $ 14,000 | ||||||||||||||
Proceeds from Keep Well Notes | $ 4,000 | $ 4,000 | ||||||||||||||
Proceeds from Keep Well Agreement held in escrow | $ 2,000 | $ 4,000 | ||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Keep Well Notes, Fourth Amendment | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Available borrowing capacity | 6,000 | |||||||||||||||
Proceeds from Keep Well Agreement held in escrow | $ 2,000 | $ 4,000 | $ 6,000 | |||||||||||||
Qualified cash threshold (less than) | 1,000 | |||||||||||||||
Qualified cash, withdrawal amount | 1,000 | |||||||||||||||
Qualified financing threshold (at least) | $ 10,000 | |||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Effect of reverse stock split | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 2.70 | |||||||||||||||
Conversion right (in dollars per share) | $ 0.90 | $ 0.90 | ||||||||||||||
Potential warrants (in shares) | 5,555,557 | |||||||||||||||
Additional warrants (in shares) | 5,259,696 | |||||||||||||||
Sale of stock, shares issued (in shares) | 339,689 | |||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 1.69 | |||||||||||||||
Conversion price (in dollars per share) | $ 0.40 | |||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum | Effect of reverse stock split | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Conversion price (in dollars per share) | $ 2.39 | $ 2.44 |
Debt - Keep Well Agreement, Fif
Debt - Keep Well Agreement, Fifth Amendment (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | |||||||||||||
Dec. 20, 2023 $ / shares shares | Nov. 14, 2023 USD ($) $ / shares shares | Oct. 31, 2023 USD ($) warrant $ / shares shares | Sep. 07, 2023 USD ($) | Jun. 26, 2023 USD ($) | Feb. 28, 2023 $ / shares shares | Sep. 07, 2023 USD ($) | Mar. 31, 2024 USD ($) | Mar. 28, 2024 $ / shares | Dec. 31, 2023 USD ($) | Nov. 09, 2023 USD ($) | Sep. 01, 2023 $ / shares | Jun. 23, 2023 USD ($) | Mar. 31, 2023 USD ($) | Apr. 15, 2022 $ / shares | |
Debt Instrument [Line Items] | |||||||||||||||
Unrestricted cash | $ 6,400 | $ 9,701 | $ 7,393 | ||||||||||||
Restricted cash | $ 0 | $ 4,681 | |||||||||||||
Public Offering Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.85 | $ 0.36 | |||||||||||||
Term of warrants | 5 years | ||||||||||||||
Public Offering | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Sale of stock, shares issued (in shares) | shares | 4,592,068 | ||||||||||||||
Sale of stock, price (in dollars per share) | $ / shares | $ 0.60 | ||||||||||||||
Proceeds from offering | $ 6,300 | ||||||||||||||
Sale of stock, net proceeds | 5,300 | ||||||||||||||
Stock issuance, fees and expenses | $ 1,000 | ||||||||||||||
Public Offering | Public Offering Accompanying Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants outstanding (in shares) | shares | 9,184,136 | ||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 9,184,136 | ||||||||||||||
Public Offering | Public Offering Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants outstanding (in shares) | shares | 5,907,932 | ||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 5,907,932 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||
Public Offering | Public Offering Pre-Funded Accompanying Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants outstanding (in shares) | shares | 11,815,864 | ||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 11,815,864 | ||||||||||||||
Public Offering | Public Offering Pre-Funded Warrants and Accompanying Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrant, offering price (in dollars per share) | $ / shares | $ 0.5999 | ||||||||||||||
Private Placement | Private Placement Pre-Funded Warrants and Private Placement Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issuance, fees and expenses | $ 400 | ||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Consideration to be received for private placement of warrants | $ 11,000 | ||||||||||||||
Amount of Surviving Note after completion of private placement | $ 2,000 | ||||||||||||||
Number of private placement warrants to be sold with each private placement pre-funded warrants (in warrants) | warrant | 2 | ||||||||||||||
Number of shares of common stock exercisable for each warrant (in shares) | shares | 1 | ||||||||||||||
Sale of stock, shares issued (in shares) | shares | 2,038,133 | ||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 1,775,148 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.45 | $ 0.92 | |||||||||||||
Term of warrants | 5 years | ||||||||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.40 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.69 | ||||||||||||||
Acuitas Capital, LLC | Keep Well Notes, Fourth Amendment | Keep Well Agreement | Affiliated Entity | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Qualified financing threshold (at least) | $ 10,000 | ||||||||||||||
Proceeds from Keep Well Agreement held in escrow | $ 2,000 | $ 4,000 | $ 6,000 | ||||||||||||
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Qualified financing threshold (at least) | $ 8,000 | ||||||||||||||
Reduction to conversion amount | $ 7,000 | ||||||||||||||
Remaining term of debt from closing date of offering that constitutes a Qualified Financing | 2 years 6 months | ||||||||||||||
Maximum common stock permitted to be issued without approval as a percent of total common stock outstanding | 19.99% | ||||||||||||||
Sale of stock, shares issued (in shares) | shares | 9,027,395 | ||||||||||||||
Debt cancelled | 5,000 | ||||||||||||||
Notes conversion amount | $ 16,200 | ||||||||||||||
Stock issued upon note conversion (in shares) | shares | 18,054,791 | ||||||||||||||
Write-off of debt issuance costs related to conversion of Keep Well Notes | $ 3,700 | ||||||||||||||
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Reclassification | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Unrestricted cash | 6,000 | ||||||||||||||
Restricted cash | $ (6,000) | ||||||||||||||
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Conversion Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.90 | ||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 9,027,395 | 18,054,791 | |||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.90 | ||||||||||||||
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.60 | $ 0.90 | |||||||||||||
Acuitas Capital, LLC | Keep Well Notes, November 2023 Letter Agreement | Keep Well Agreement | Affiliated Entity | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Qualified financing threshold (at least) | $ 6,000 | ||||||||||||||
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Write-off of debt issuance costs related to cancelled Keep Well Notes in Private Placement | $ 1,500 | ||||||||||||||
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Private Placement | Private Placement Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 18,333,333 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Private Placement | Private Placement Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock that can be purchased with warrants (in shares) | shares | 36,666,666 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.85 | ||||||||||||||
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Private Placement | Private Placement Pre-Funded Warrants and Private Placement Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Sale of stock, net proceeds | $ 11,000 |
Debt - Keep Well Agreement, Six
Debt - Keep Well Agreement, Sixth Amendment (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |||||||||
May 14, 2026 | Apr. 04, 2024 | Mar. 28, 2024 | Feb. 28, 2023 | May 08, 2024 | Apr. 05, 2024 | Mar. 31, 2024 | Nov. 14, 2023 | Sep. 01, 2023 | Apr. 15, 2022 | |
Public Offering Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term of warrants | 5 years | |||||||||
Exercise price of warrants (in dollars per share) | $ 0.36 | $ 0.85 | ||||||||
Warrant exercise price, volume-weighted average price threshold, trading days | 5 days | |||||||||
Public Offering Warrants and Private Placement Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.36 | |||||||||
Warrants fair value increase recorded in deferred costs | $ 10.5 | |||||||||
November 2023 Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price adjustment, trading days following stock combination event | 16 days | |||||||||
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, trading days | 5 days | |||||||||
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, consecutive trading days | 20 days | |||||||||
Warrant exercise price adjustment, stock combination event, denominator | 5 | |||||||||
Warrant exercise price adjustment, volume-weighted average price threshold, trading days following restricted transaction | 5 days | |||||||||
Warrant, percent of common stock outstanding, threshold | 50% | |||||||||
Warrant, percent of voting power represented by common stock outstanding, threshold | 50% | |||||||||
November 2023 Warrants | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price, volume-weighted average price threshold, trading days | 5 days | |||||||||
November 2023 Warrants | Maximum | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.1584 | |||||||||
Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
VWAP, minimum (in dollars per share) | $ 0.3442 | |||||||||
Subsequent event | November 2023 Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.3442 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term of warrants | 5 years | |||||||||
Exercise price of warrants (in dollars per share) | $ 0.45 | $ 0.92 | ||||||||
Warrant exercise price, volume-weighted average price threshold, trading days | 5 days | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 1.69 | |||||||||
Conversion price (in dollars per share) | $ 0.40 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant coverage percentage | 200% | |||||||||
Term of warrants | 5 years | |||||||||
Threshold of subsequent issuances for exercise price calculation | $ 3 | |||||||||
Warrant exercise price adjustment, trading days following stock combination event | 16 days | |||||||||
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, trading days | 5 days | |||||||||
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, consecutive trading days | 20 days | |||||||||
Warrant exercise price adjustment, stock combination event, denominator | 5 | |||||||||
Warrant exercise price adjustment, volume-weighted average price threshold, trading days following restricted transaction | 5 days | |||||||||
Warrant, percent of common stock outstanding, threshold | 50% | |||||||||
Warrant, percent of voting power represented by common stock outstanding, threshold | 50% | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price, volume-weighted average price threshold, trading days | 5 days | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.3442 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Maximum | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.1584 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.12 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | New Keep Well Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term of warrants | 5 years | |||||||||
Exercise price of warrants (in dollars per share) | $ 0.3442 | |||||||||
Warrant exercise price adjustment, trading days following stock combination event | 16 days | |||||||||
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, trading days | 5 days | |||||||||
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, consecutive trading days | 20 days | |||||||||
Warrant exercise price adjustment, stock combination event, denominator | 5 | |||||||||
Warrant exercise price adjustment, volume-weighted average price threshold, trading days following restricted transaction | 5 days | |||||||||
Warrant, percent of common stock outstanding, threshold | 50% | |||||||||
Warrant, percent of voting power represented by common stock outstanding, threshold | 50% | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | New Keep Well Warrants | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price, volume-weighted average price threshold, trading days | 5 days | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | New Keep Well Warrants | Maximum | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.1584 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Subsequent event | Demand Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | 0.3442 | |||||||||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Subsequent event | New Keep Well Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.3442 | |||||||||
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 0.36 | |||||||||
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 0.12 | |||||||||
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Convertible Debt | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount of notes | $ 15 | |||||||||
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Convertible Debt | Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount of notes | $ 1.5 | $ 1.5 | ||||||||
Maximum additional principal amount of notes to be issued | $ 12 | $ 13.5 |
Debt - Keep Well Agreement, Bor
Debt - Keep Well Agreement, Borrowings (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt with related party | $ 0 | $ 2,153 | ||
Principal | 2,168 | $ 2,057 | ||
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt with related party | $ 2,200 | |||
Debt issuance costs | $ 300 | |||
Principal | 2,200 | |||
Accrued paid-in-kind interest | $ 200 | |||
Effective weighted average interest rate | 21.08% |
Debt - Net Carrying Amounts (De
Debt - Net Carrying Amounts (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Principal | $ 2,168 | $ 2,057 |
Less: debt discount | (551) | (590) |
Net carrying amount | $ 1,617 | $ 1,467 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Disclosure [Abstract] | ||
Contractual interest expense | $ 112 | $ 848 |
Accretion of debt discount | 39 | 521 |
Total interest expense | $ 151 | $ 1,369 |
Debt - Stockholders Agreement (
Debt - Stockholders Agreement (Details) - Acuitas Capital, LLC - Keep Well Agreement - Affiliated Entity | Feb. 21, 2023 director |
Debt Instrument [Line Items] | |
Percent of capital stock, threshold | 50% |
Minimum number of independent directors | 3 |
Debt - Other (Details)
Debt - Other (Details) - Insurance Premium Financing $ in Millions | 4 Months Ended | ||
Nov. 30, 2023 USD ($) installment | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Short-Term Debt [Line Items] | |||
Principal amount of notes | $ 2.1 | ||
Weighted average interest rate (in percentage) | 8.70% | ||
Repayments of debt | $ 0.4 | ||
Short-term debt outstanding | $ 0.9 | $ 1.4 | |
Minimum | |||
Short-Term Debt [Line Items] | |||
Repayment of debt, number of installments | installment | 9 | ||
Maximum | |||
Short-Term Debt [Line Items] | |||
Repayment of debt, number of installments | installment | 11 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 64 | |
Warrant liabilities | $ 10 | 8 |
Total liabilities | 10 | 72 |
Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | |
Warrant liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | |
Warrant liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 64 | |
Warrant liabilities | 10 | 8 |
Total liabilities | $ 10 | $ 72 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value Measurements Using Significant Level III Inputs (Details) - Level III $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Contingent consideration | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 64 |
Settlement of contingent consideration | (64) |
Ending balance | 0 |
Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 8 |
Loss on change in fair value of warrant liabilities | 2 |
Ending balance | $ 10 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - LifeDojo Inc. - USD ($) $ in Millions | 1 Months Ended | |
Jan. 31, 2024 | Dec. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 0.1 | |
Common stock issued relating to settlement of contingent consideration (in shares) | 1,238 |
Fair Value Measurements - Fai_3
Fair Value Measurements - Fair Value Assumptions, Warrant Liabilities (Details) | Mar. 31, 2024 year |
Volatility | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability assumptions | 1 |
Risk-free interest rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability assumptions | 0.0440 |
Expected life (in years) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability assumptions | 2.52 |
Dividend yield | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability assumptions | 0 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 | |
TIH | |
Variable Interest Entity [Line Items] | |
Capitalized cost, amortization period | 5 years |
TIH | Minimum | |
Variable Interest Entity [Line Items] | |
Foregoing costs, percent | 10% |
TIH | Maximum | |
Variable Interest Entity [Line Items] | |
Foregoing costs, percent | 15% |
CIH | |
Variable Interest Entity [Line Items] | |
Capitalized cost, amortization period | 5 years |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Amounts and Classification of Assets and Liabilities of VIE (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Variable Interest Entity [Line Items] | |||
Cash | $ 6,400 | $ 9,701 | $ 7,393 |
Prepaid and other current assets | 2,439 | 2,743 | |
Total assets | 26,723 | 19,846 | |
Deferred revenue | 244 | 97 | |
Total liabilities | 5,476 | 5,575 | |
VIE, Primary beneficiary | |||
Variable Interest Entity [Line Items] | |||
Cash | 1,562 | 1,433 | |
Unbilled receivables | 83 | 85 | |
Prepaid and other current assets | 31 | 45 | |
Total assets | 1,676 | 1,563 | |
Accrued liabilities | 31 | 52 | |
Deferred revenue | 62 | 64 | |
Payables to Ontrak | 2,186 | 2,281 | |
Total liabilities | $ 2,279 | $ 2,397 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
May 15, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | May 08, 2024 | Apr. 05, 2024 | |
Subsequent Event [Line Items] | |||||
Proceeds from warrants exercised | $ 523 | $ 0 | |||
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from warrants exercised | $ 1,400 | ||||
Warrants exercised (in shares) | 4,016,664 | ||||
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Convertible Debt | |||||
Subsequent Event [Line Items] | |||||
Principal amount of notes | $ 1,500 | $ 1,500 | |||
Maximum additional principal amount of notes to be issued | $ 12,000 | $ 13,500 |