Ontrak Inc.
10/15/2024 | Press release | Distributed by Public on 10/15/2024 15:06
Material Event Form 8 K
Item 1.01 Entry into a Material Definitive Agreement.
In a public offering completed in November 2023, Ontrak, Inc. (the "Company," "we," "us" or "our"), issued certain warrants to purchase shares of its common stock (such warrants, the "Public Offering Warrants"). The Public Offering Warrants expire December 20, 2028. Under the terms of the Public Offering Warrants, in addition to customary adjustments to their exercise price and the number of shares of common stock issuable upon exercise in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock (a "Stock Combination Event"), if the Event Market Price (as defined below) is less than the exercise price then in effect (after giving effect to the customary adjustments thereto as a result of the event), then, on the 16thtrading day immediately following the Stock Combination Event, the exercise price will be reduced to the Event Market Price, and simultaneously with such adjustment, the number of shares of common stock issuable upon exercise is increased proportionally, such that the aggregate exercise price of the Public Offering Warrants, after taking into account the adjustment to the exercise price, will be equal to the aggregate exercise price before the adjustment to the exercise price. "Event Market Price" means, with respect to any Stock Combination Event, the quotient determined by dividing (x) the sum of the volume weighted average price of our common stock for each of the five lowest trading days during the 20 consecutive trading day period ending and including the trading day immediately preceding the 16th trading day after the date of such stock combination event, by (y) five.
As previously reported, we effected a reverse split of our common stock that was effective at 12:01 a.m. Eastern Time on September 23, 2024 (the "September 2024 SCE").
On October 8, 2024, we and certain holders of the Public Offering Warrants entered into warrant amendments (each, a "Warrant Amendment" and collectively, the "Warrant Amendments"), pursuant to which, solely with respect to the September 2024 SCE, the parties agreed to shorten the measuring period for determining the Event Market Price for the September 2024 SCE so that it ended on the 11thtrading day immediately following the September 2024 SCE. As a result of the foregoing, the exercise price of the Public Offering Warrants of the holders that entered into the Warrant Amendments was reduced to $2.25, which was the Event Market Price for the shortened period.