SCHEDULE 13D/A: Major Shareholder Terren S. Peizer and Affiliates Increase Stake in Ontrak, Now Beneficially Owning Over 95% of Shares

Terren S. Peizer and affiliated entities, Acuitas Group Holdings, Acuitas Capital, and Humanitario Capital, have significantly increased their beneficial ownership in Ontrak, Inc. to over 95% through recent debt and warrant transactions, including a new $1.5 million Demand Note.

Summary

• Terren S. Peizer and his affiliated entities (Acuitas Group Holdings, Acuitas Capital, and Humanitario Capital) have increased their beneficial ownership in Ontrak, Inc.
• Mr. Peizer's beneficial ownership now stands at 51,652,463 Shares, representing approximately 95.8% of the total shares deemed outstanding.
• Acuitas Group Holdings beneficially owns 33,563,434 Shares (89.2% of its relevant class).
• Humanitario Capital beneficially owns 18,089,029 Shares (88.2% of its relevant class).
• Acuitas Capital beneficially owns 12,777,788 Shares (75.2% of its relevant class).
• On March 28, 2025, Acuitas Capital purchased an additional Demand Note from Ontrak for $1.5 million.
• In connection with this Demand Note, Ontrak issued a Demand Warrant to Acuitas, exercisable for up to 2,027,027 Shares at an initial exercise price of $1.48 per share.
• In October 2024, the exercise prices of the Private Placement Warrant, existing Demand Warrants, and New Keep Well Warrants were reduced to $2.08 per Share.
• This adjustment increased the number of shares issuable upon exercise: Private Placement Warrant to 14,983,974 Shares, Demand Warrants to 7,692,308 Shares, and New Keep Well Warrants to 10,934,178 Shares.
• The calculation of beneficial ownership includes 4,217,846 Shares issued and outstanding as of November 7, 2024, as disclosed in the Company's Most Recent Report.

Sentiment

Score: 5

Explanation: The filing is neutral in tone, primarily providing factual updates on beneficial ownership and financing arrangements. While the capital infusion is positive, the significant concentration of ownership and potential for dilution could be viewed negatively by some investors.

Positives

• The capital infusion of $1.5 million from Acuitas Capital provides additional working capital to Ontrak, which can support its operations.
• The continued investment by a major shareholder group demonstrates their ongoing commitment and belief in the company's future.

Negatives

• The significant increase in beneficial ownership by a single group (Terren S. Peizer and affiliates) to over 95% could lead to reduced public float and liquidity for other shareholders.
• The reduction in warrant exercise prices to $2.08 per share suggests a lower valuation expectation for the company's stock compared to previous terms, potentially indicating dilution for existing shareholders if these warrants are exercised.
• The issuance of new debt (Demand Note) adds to the company's liabilities.

Risks

• Dilution Risk: The issuance and potential exercise of a large number of warrants (over 30 million shares combined from various warrants) at a low exercise price ($2.08 or $1.80 conversion price for notes) could significantly dilute the ownership percentage of existing public shareholders.
• Concentrated Ownership Risk: With Mr. Peizer and his affiliates beneficially owning over 95% of the company, control is highly concentrated, which may limit the influence of minority shareholders on corporate decisions.
• Liquidity Risk: High concentration of ownership can reduce the number of shares available for trading in the public market, potentially leading to lower trading volume and reduced liquidity for investors.
• Debt Burden: The company continues to issue Demand Notes, adding to its debt obligations, which could strain its financial health if not managed effectively.

Future Outlook

The filing primarily details past and current beneficial ownership and related transactions. It does not provide explicit forward-looking statements or guidance regarding the company's operational or financial performance, beyond the implications of the ongoing financing arrangements with Acuitas entities.

Industry Context

This filing is a disclosure of significant beneficial ownership changes and related party financing, which is specific to Ontrak, Inc. and its relationship with its major investor group. It does not provide information to analyze broader industry trends or competitive landscape.

Related Party Transactions

• Acuitas Capital, a wholly-owned subsidiary of Acuitas Group Holdings, purchased a $1.5 million Demand Note from Ontrak, Inc. on March 28, 2025.
• Acuitas Group Holdings received a Demand Warrant for 2,027,027 shares in connection with this Demand Note.
• Terren S. Peizer is the Chairman of Acuitas Group Holdings, LLC and the sole member of Humanitario Capital LLC, and is deemed to have beneficial ownership over the shares held by these entities and Acuitas Capital LLC, indicating a clear related-party relationship in these transactions.

Stakeholder Impact

• Shareholders: Existing public shareholders face potential dilution from the exercise of a large number of warrants and conversion of notes at relatively low prices. The highly concentrated ownership by Mr. Peizer and his affiliates (over 95%) may reduce the influence of minority shareholders and impact stock liquidity.
• Company (Ontrak, Inc.): Benefits from continued access to capital through debt and warrant issuances from its major investor, providing working capital for operations.

Key Dates

Recommendation

Keywords

Ontrak Inc., ONTR, Schedule 13D, Beneficial Ownership, Terren S. Peizer, Acuitas Group Holdings, Acuitas Capital, Humanitario Capital, Warrants, Demand Notes, Capital Raise, Share Dilution, Corporate Control, SEC Filing