Item 1.01. Entry into a Material Definitive Agreement.
On August 2, 2022, Ontrak, Inc. (the “Company”) entered into a securities
purchase agreement with certain institutional investors for the purchase and
sale of 5,000,000 shares of its common stock at a purchase price of $0.80 per
share in a registered direct offering priced at-the-market under Nasdaq rules
(the “Offering”). The shares were sold through Roth Capital Partners, LLC, as
placement agent (the “Placement Agent”) pursuant to a placement agency agreement
entered into on August 2, 2022.
The shares of common stock issued in the Offering are being issued pursuant to a
“shelf” registration statement (the “Registration Statement”) on Form S-3 (File
No. 333-259329) previously filed with the U.S. Securities and Exchange
Commission (“SEC”) on September 3, 2021, and declared effective by the SEC on
September 16, 2021. A copy of the opinion of Sheppard Mullin Richter & Hampton
LLP relating to the legality of the issuance and sale of the securities in the
Offering is attached as Exhibit 5.1 hereto.
The closing of the Offering is expected to occur on August 4, 2022, subject to
the satisfaction of customary closing conditions. Gross proceeds are expected to
be $4,000,000, before deducting placement agent fees and related offering
expenses. The Company may use all or a portion of the net proceeds from the
Offering to pay off certain outstanding debt. Any remaining proceeds will be
used for general corporate purposes and working capital, including among other
things, capital expenditures and research and development expenses.
The securities purchase agreement contains customary representations,
warranties, agreements and indemnification rights and obligations of the
parties. The Placement Agent agreed to act on a reasonable best efforts basis in
connection with the Offering. The Company agreed to pay the Placement Agent a
cash fee of 7% of the gross proceeds raised in the Offering. The Company also
agreed to reimburse the Placement Agent for up to $25,000 of its expenses.
The foregoing descriptions of the securities purchase agreement and the
placement agency agreement are not complete and are qualified in their entirety
by reference to the form of such documents, copies of which are filed as
Exhibits 10.1 and 10.2 to this report, respectively, and are incorporated by
Item 7.01. Regulation FD Disclosure.
On August 2, 2022, the Company issued a press release announcing the Offering, a
copy of which is attached as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. Exhibit No. Description 5.1 Opinion of Sheppard Mullin Richter & Hampton LLP 10.1 Form of Securities Purchase Agreement 10.2 Form of Placement Agency Agreement 23.1 Consent of Sheppard Mullin Richter & Hampton LLP (included in Exhibit 5.1) 99.1 Press Release, dated August 2, 2022 104 Cover Page Interactive Data File (formatted as Inline XBRL) 1
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