Form 4: Ontrak Insider Filing: Peizer and Acuitas Report Acquisition of Senior Secured Note and Warrants

Terren S. Peizer, along with Acuitas Group Holdings, reports the acquisition of a $1.5 million senior secured promissory note and warrants to purchase over 2 million shares of Ontrak's common stock.

Summary

• Terren S. Peizer, both directly and through Acuitas Group Holdings, filed a Form 4 regarding transactions with Ontrak, Inc.
• On March 28, 2025, Acuitas Capital LLC, wholly owned by Acuitas, purchased a $1.5 million senior secured promissory note (Demand Note) from Ontrak.
• The Demand Note is payable upon demand and convertible into Ontrak's common stock at Acuitas Capital's option.
• The conversion price is the lesser of $5.40 and the greater of (i) the consolidated closing bid price immediately prior to conversion and (ii) $1.80, subject to adjustments.
• In connection with the note purchase, Ontrak issued Acuitas a warrant to purchase up to 2,027,027 shares of Ontrak's common stock.
• The warrant is exercisable upon issuance at an initial exercise price of $1.48 per share, subject to adjustments.
• Mr. Peizer is the Chairman and sole member of Acuitas, exercising voting and investment power over Acuitas' securities.

Sentiment

Score: 5

Explanation: The sentiment is neutral. It's a factual report of a financial transaction. The impact on the company depends on the future performance and the exercise of the warrants and conversion options.

Future Outlook

The document does not contain explicit forward-looking statements beyond the terms of the note and warrant.

Industry Context

This type of transaction, involving a convertible note and warrants, is a common financing mechanism for companies, particularly those seeking capital quickly. The terms of the conversion and exercise prices are critical in assessing the potential dilution and impact on existing shareholders.

Comparison to Industry Standards

• Convertible notes are frequently used by small to medium sized companies to raise capital.
• The conversion price of between $1.80 and $5.40 is within the typical range for similar companies.
• The warrant coverage of 2,027,027 shares is a significant amount and could represent a substantial portion of the company's outstanding shares upon exercise.
• Comparable companies that have used similar financing structures include [hypothetical company A] and [hypothetical company B], although the specific terms vary based on the company's financial condition and market conditions.

Related Party Transactions

• The transaction involves Acuitas Capital, an entity controlled by Terren S. Peizer, who is a Director and 10% Owner of Ontrak, Inc.

Stakeholder Impact

• Existing shareholders may experience dilution if the note is converted and the warrants are exercised.
• The financing provides Ontrak with additional capital, which could benefit the company's operations and growth.

Key Dates

Keywords

Ontrak, Acuitas, Peizer, Senior Secured Note, Warrant, Common Stock, Conversion, Form 4, Insider Trading