SCHEDULE 13D/A: Ontrak Secures Additional $250,000 in Financing from Acuitas Capital, Increasing Insider Ownership to Over 96%

Ontrak, Inc. has received an additional $250,000 in financing from Acuitas Capital LLC through a new Demand Note and associated warrants, further consolidating beneficial ownership by Terren S. Peizer and affiliated entities.

Summary

• Acuitas Capital LLC purchased an additional Demand Note from Ontrak, Inc. on June 18, 2025, with a principal amount of $250,000.
• In connection with this Demand Note, Acuitas received a Demand Warrant to purchase up to 359,712 Shares at an initial exercise price of $1.39 per share.
• The source of funds for this transaction was working capital.
• Terren S. Peizer, through his affiliated entities (Acuitas Group Holdings, LLC, Acuitas Capital LLC, and Humanitario Capital LLC), is deemed to beneficially own 68,013,532 Shares, representing approximately 96.8% of Ontrak's total outstanding shares.
• Acuitas Group Holdings, LLC beneficially owns 44,899,793 Shares, representing approximately 91.6% of the class.
• Acuitas Capital LLC beneficially owns 15,055,568 Shares, representing approximately 78.1% of the class.
• Humanitario Capital LLC beneficially owns 23,173,739 Shares, representing approximately 90.6% of the class.
• The beneficial ownership calculations include shares currently outstanding (4,217,848 as of May 31, 2025) and shares issuable upon conversion of various notes and exercise of warrants, including New Keep Well Warrants, Surviving Note, Demand Notes, Demand Warrants, and Conversion Warrants.
• A May 2025 Warrant Adjustment lowered the exercise prices of certain warrants (New Keep Well Warrants, Private Placement Warrant, Demand Warrants) to $1.553 per share.

Sentiment

Score: 4

Explanation: The document reports a necessary financing event, which is positive for liquidity, but the terms (dilutive warrants, low conversion prices, and high insider ownership) suggest ongoing financial challenges and potential future dilution for public shareholders, leading to a slightly negative overall sentiment.

Positives

• Ontrak, Inc. successfully secured additional financing of $250,000, providing continued working capital.

Negatives

• The ongoing reliance on financing from a single group of investors (Terren S. Peizer and affiliates) may indicate limited alternative funding sources.
• The issuance of new warrants and notes convertible into shares at prices as low as $1.39 or $1.80 per share, and the downward adjustment of existing warrant exercise prices to $1.553, suggest potential significant dilution for existing shareholders.

Risks

• Significant potential for shareholder dilution due to the conversion of various notes and exercise of warrants held by the reporting persons.
• Concentrated ownership by Terren S. Peizer and his affiliated entities (96.8% beneficial ownership) could limit liquidity and influence corporate governance decisions.
• Continued reliance on specific financing arrangements with Acuitas Capital may pose a risk if future funding needs arise and terms become less favorable.

Future Outlook

The document does not provide explicit forward-looking statements or guidance beyond the details of the financing transaction and its impact on beneficial ownership. It indicates a continuation of the existing financing relationship between Ontrak and the Acuitas entities.

Industry Context

This filing reflects a specific financing event for Ontrak, Inc., a company operating in the healthcare technology or wellness sector. The continued reliance on a single major investor group for funding, as evidenced by the 32nd amendment to the Schedule 13D, suggests that the company may be facing challenges in securing broader market financing or is strategically aligning with this investor group for long-term support. This pattern is common for companies undergoing significant restructuring or in niche markets with limited access to traditional capital markets.

Comparison to Industry Standards

• The high concentration of beneficial ownership (96.8% by Terren S. Peizer) is significantly above typical industry standards for publicly traded companies, where diversified institutional and retail ownership is common. This level of control is more akin to a private company or a company undergoing a significant recapitalization.
• The repeated amendments to the Master Note Purchase Agreement (32 amendments) indicate an ongoing, flexible, and potentially critical financing relationship, which is less common for mature public companies and more typical for early-stage or distressed entities requiring continuous capital injections from a dedicated backer.
• The issuance of convertible notes and warrants with exercise price adjustments (e.g., $1.39, $1.553, $1.80) is a common financing mechanism, but the frequency and the downward adjustments suggest a need to incentivize conversion or provide favorable terms to the lender, potentially reflecting a lower valuation or higher risk profile compared to companies securing equity financing at higher valuations.

Related Party Transactions

• The purchase of the Demand Note and issuance of the Demand Warrant by Ontrak, Inc. to Acuitas Capital LLC and Acuitas Group Holdings, LLC, respectively, constitutes a related party transaction given the significant beneficial ownership and control by Terren S. Peizer, who is associated with all reporting entities.

Stakeholder Impact

• Shareholders: Potential for significant dilution due to the conversion of notes and exercise of warrants at relatively low prices, which could impact share value.
• Creditors: The additional financing may improve the company's short-term liquidity, potentially reducing immediate credit risk.
• Management: Continued reliance on a single major investor group for financing may influence strategic decisions and operational autonomy.

Next Steps

• The company will continue to operate under the terms of the amended Master Note Purchase Agreement with Acuitas Capital.
• Potential future conversions of notes and exercises of warrants by the reporting persons will continue to impact the company's share structure and beneficial ownership percentages.

Key Dates

Keywords

Ontrak Inc., Acuitas Group Holdings, Acuitas Capital, Humanitario Capital, Terren S. Peizer, Schedule 13D, Beneficial Ownership, Demand Note, Demand Warrant, Keep Well Agreement, Share Dilution, SEC Filing, Corporate Finance, Warrants, Notes Convertible