# EDGAR Filing Document

**Accession Number:** 0001136174
**File Stem:** 0001628280-23-004548
**Filing Date:** 2023-2
**Character Count:** 43169
**Document Hash:** e8a3f711d0cae54c4aea208903c357dc
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-23-004548.hdr.sgml**: 20230222

**ACCESSION NUMBER**: 0001628280-23-004548

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230220

**ITEM INFORMATION**: Unregistered Sales of Equity Securities

**ITEM INFORMATION**: Changes in Control of Registrant

**ITEM INFORMATION**: Submission of Matters to a Vote of Security Holders

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230222

**DATE AS OF CHANGE**: 20230222

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Ontrak, Inc.
- **CENTRAL INDEX KEY:** 0001136174
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090]
- **IRS NUMBER:** 880464853
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-31932
- **FILM NUMBER:** 23653010

**BUSINESS ADDRESS:**
- **STREET 1:** 2200 PASEO VERDE PARKWAY
- **STREET 2:** SUITE 280
- **CITY:** HENDERSON
- **STATE:** NV
- **ZIP:** 89052
- **BUSINESS PHONE:** 310 444 4300

**MAIL ADDRESS:**
- **STREET 1:** 2200 PASEO VERDE PARKWAY
- **STREET 2:** SUITE 280
- **CITY:** HENDERSON
- **STATE:** NV
- **ZIP:** 89052

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CATASYS, INC.
- **DATE OF NAME CHANGE:** 20110316

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HYTHIAM, INC.
- **DATE OF NAME CHANGE:** 20101029

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HYTHIAM INC
- **DATE OF NAME CHANGE:** 20031003

?xml version="1.0" ? cats-20230220

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): February 20, 2023

**Ontrak, Inc.** 

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-31932** | **88-0464853** |
| (State or other jurisdiction<br>of incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |

---

**2200 Paseo Verde Parkway, Suite 280, Henderson, NV 89052**

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code **(310) 444-4300** 

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Title of each class | &nbsp;&nbsp;&nbsp;Trading Symbol(s) | &nbsp;&nbsp;&nbsp;Name of each exchange on which registered |
| &nbsp;&nbsp;&nbsp;Common Stock, $0.0001 par value | &nbsp;&nbsp;&nbsp;OTRK | &nbsp;&nbsp;&nbsp;The NASDAQ Global Market |
| &nbsp;&nbsp;&nbsp;9.50% Series A Cumulative Perpetual Preferred Stock, $0.0001 par value | &nbsp;&nbsp;&nbsp;OTRKP | &nbsp;&nbsp;&nbsp;The NASDAQ Global Market |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 3.02 Unregistered Sales of Equity Securities.**

As a result of the approval by the stockholders of Ontrak, Inc. ("our" or the "Company") of the proposal described under the heading "2. The Keep Well Proposal" in Item 5.07, below (the "Keep Well Proposal"), in accordance with the terms of the Master Note Purchase Agreement dated April 15, 2022, as amended, between the Company and Acuitas Capital LLC ("Acuitas Capital") (the "Keep Well Agreement"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Company will issue 2,038,133 shares of its common stock to Acuitas Capital (such shares, the "Additional Commitment Shares");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) warrants to purchase 1,775,148 shares of the Company's common stock previously issued by the Company to Acuitas Capital pursuant to the Keep Well Agreement will be exchanged for warrants to purchase 33,333,333 shares of the Company's common stock (the "Exchange Warrants");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) notes previously issued by the Company to Acuitas Capital evidencing the $15.0 million in principal amount borrowed by the Company from Acuitas Capital under the Keep Well Agreement will be exchanged for notes (the "Exchange Notes") that give Acuitas Capital, at its election, the right to convert (the "Conversion Right") the entire principal amount of such notes, plus all accrued and unpaid interest thereon, in whole or in part, into shares of the Company's common stock at a conversion price equal to the lesser of (i) $0.40 per share (subject to adjustment for stock splits and the like) and (ii) the greater of (a) the closing price of the Company's common stock on the trading day immediately prior to the applicable conversion date and (b) $0.15 (subject to adjustment for stock splits and the like); the Exchange Notes are immediately convertible into 37,500,000 shares of the Company's common stock (assuming a conversion price of $0.40); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if the Exchange Notes are so converted (and assuming all interest is paid in cash), the Company will issue warrants to purchase 37,500,000 shares of the Company's common stock to Acuitas Capital.

The Exchange Notes and notes issued in connection with future borrowings under the Keep Well Agreement, all of which will have the Conversion Right, are referred to as the "New Keep Well Notes."

In accordance with the Keep Well Agreement, the Company will borrow, and Acuitas will lend, subject to the conditions in the Keep Well Agreement, an additional $10.0 million, to be funded as follows: $4.0 million in each of March and June 2023, and $2.0 million in September 2023. In connection with each such borrowing, the Company will issue to Acuitas a New Keep Well Note.

In connection with each borrowing under the Keep Well Agreement, the Company will issue to Acuitas a warrant to purchase shares of the Company's common stock. As a result of the approval of the Keep Well Proposal by the Company's stockholders, in accordance with the Keep Well Agreement, the number of shares of the Company's common stock issuable upon exercise of each warrant will be equal to (x) 100% of the amount borrowed divided by (y) $0.45 (the "Warrant Coverage Denominator"), subject to future adjustment as described below, and each warrant will have an exercise price equal to $0.45 per share, subject to future adjustment as described below.

In connection with the conversion of the principal amount of any New Keep Well Note and/or accrued interest thereon into shares of the Company's common stock (as described above), the Company will issue to Acuitas a five-year warrant to purchase shares of the Company's common stock. The number of shares of the Company's common stock subject to each such warrant will be equal to (x) 100% of the amount converted divided by (y) the conversion price of the New Keep Well Note then in effect, and the exercise price of each such warrant will be equal to the conversion price of the New Keep Well Note then in effect, subject to adjustment as described below.

If the reverse stock split discussed under the heading the "1. The Reverse Stock Split Proposal" in Item 5.07, below (the "Reverse Stock Split Proposal"), is effected, then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the exercise price of each warrant issued pursuant to the Keep Well Agreement that is outstanding as of the effective time of the reverse stock split will be reduced to the lesser of (i) the volume-weighted average price of the Company's common stock over the five trading days beginning on the trading day that commences immediately after the effective time of the reverse stock split (the "Reverse Stock Split Price") and (ii) the exercise price after giving effect to the adjustment thereto as a result of the reverse stock split (the lesser of (i) and (ii), the "Post-Stock Split Price"), subject to further reduction as described in the paragraph immediately below; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Warrant Coverage Denominator will be reduced to the greater of $0.15 (adjusted for the reverse stock split) and the Post-Stock Split Price, subject to further reduction as described in the paragraph immediately below; and

Upon the occurrence of the final funding under the Keep Well Agreement (the date on when such final funding occurs, the "Final Funding Date"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the exercise price of each warrant issued pursuant to the Keep Well Agreement that is outstanding as of the Final Funding Date will be reduced to (i) if the Final Funding Date occurs at any time prior to the time the Reverse Stock Split Price is determined, the closing price of the Company's common stock on the trading day immediately preceding the Final Funding Date (the "Final Funding Date Price"), or (ii) if the Final Funding Date occurs at any time from and after the time the Reverse Stock Split Price is determined, the lesser of (x) the Post-Stock Split Price and (y) the Final Funding Date Price; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Warrant Coverage Denominator will be reduced to the lesser of (i) if the Final Funding Date occurs at any time prior to the time the Reverse Stock Split Price is determined, the greater of (a) $0.15 (subject to adjustment for stock splits and the like, including the reverse stock split) and (b) the Final Funding Date Price, or (ii) if the Final Funding Date occurs at any time from and after the time the Reverse Stock Split Price is determined, the greater of (a) $0.15 (subject to adjustment for stock splits and the like, including the reverse stock split) and (b) the lesser of (x) the Post-Stock Split Price and (y) the Final Funding Date Price.

The table below illustrates the additional shares of the Company's common stock that will be issuable upon (a) the conversion of the New Keep Well Notes to be issued in March, June and September 2023 (assuming a conversion price of $0.40 and all interest is paid in cash), (b) the exercise of the warrants to be issued in connection with the issuance of such New Keep Well Notes (assuming a Warrant Coverage Denominator of $0.45), and (c) the exercise of the warrants to be issued in connection with the conversion of such New Keep Well Notes:

---

| | | | |
|:---|:---|:---|:---|
| **Shares of Common Stock Issuable Upon** | **Shares of Common Stock Issuable Upon** | **Shares of Common Stock Issuable Upon** | **Shares of Common Stock Issuable Upon** |
| **Amount Borrowed under the Keep Well Agreement** | **Conversion of the Note (a)** | **Exercise of the Warrant Issued in Connection with the Borrowing (b)** | **Exercise of the Warrant Issued in Connection with the Conversion of the Note (c)** |
| $4.0 million in March 2023 | 10000000 | 8888889 | 10000000 |
| $4.0 million in June 2023 | 10000000 | 8888889 | 10000000 |
| $2.0 million in September 2023 | 5000000 | 4444444 | 5000000 |
| Total | 25000000 | 22222222 | 25000000 |

---

As discussed above, the conversion price of the New Keep Well Notes and the Warrant Coverage Denominator is subject to adjustment based on the price of the Company's common stock, subject to maximum downward adjustment to $0.15 (subject to adjustment for stock splits and the like, including the reverse stock split contemplated by the Reverse Stock Split Proposal, if effected). The table below illustrates the additional shares of the Company's common stock that would be issuable upon (a) the conversion of the New Keep Well Notes to be issued in March, June and September 2023 (assuming a conversion price of $0.15 and all interest is paid in cash), (b) the exercise of the warrants to be issued in connection with the issuance of such New Keep Well Notes (assuming a Warrant Coverage Denominator of $0.15), and (c) the exercise of the warrants to be issued in connection with the conversion of such New Keep Well Notes:

---

| | | | |
|:---|:---|:---|:---|
| **Shares of Common Stock Issuable Upon** | **Shares of Common Stock Issuable Upon** | **Shares of Common Stock Issuable Upon** | **Shares of Common Stock Issuable Upon** |
| **Amount Borrowed under the Keep Well Agreement** | **Conversion of the Note (a)** | **Exercise of the Warrant Issued in Connection with the Borrowing (b)** | **Exercise of the Warrant Issued in Connection with the Conversion of the Note (c)** |
| $4.0 million in March 2023 | 26666667 | 26666667 | 26666667 |
| $4.0 million in June 2023 | 26666667 | 26666667 | 26666667 |
| $2.0 million in September 2023 | 13333333 | 13333333 | 13333333 |
| Total | 66666667 | 66666667 | 66666667 |

---

None of the securities issuable under the Keep Well Agreement have been, or if and when issued to Acuitas Capital in the future will be, registered under the Securities Act of 1933, as amended (the "Securities Act"); all such securities have been and will be offered and sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

------

**Item 5.01 Changes in Control of Registrant.**

The information reported under Item 3.02, above, is incorporated by reference into this Item 5.01.

Immediately prior to the issuance of the Additional Commitment Shares, the Exchange Warrants, and the Exchange Notes, the Company had 27,281,404 shares of common stock outstanding. Immediately following the issuance of the Additional Commitment Shares, the Exchange Warrants, and the Exchange Notes, Acuitas Capital's beneficial ownership of the Company's capital stock was approximately 83%.

In accordance with the terms of the Keep Well Agreement, as a result of Acuitas Capital's beneficial ownership of the Company's capital stock being equal to at least a majority of the voting power of the Company's outstanding capital stock, Acuitas Capital and the Company entered into a stockholders agreement (the "Stockholders Agreement") pursuant to which, during any period that Acuitas Capital's and its affiliates' beneficial ownership of the Company's capital stock equals at least 50% of the Company's outstanding capital stock, Acuitas Capital agreed to vote the shares of the Company's common stock it beneficially owns (a) in favor of an amendment to the certificate of incorporation or bylaws of the Company that would require the Company's board of directors to include not fewer than three independent directors at all times, (b) in favor of the election or re-election of independent directors nominated for election by the Company's board of directors or by the nominating committee thereof unless the failure of a nominee to be elected or re-elected to the Company's board of directors would not result in the Company having fewer than three independent directors following such election, and (c) against any proposal or action that would result in the Company's board of directors having fewer than three independent directors at all times. In addition, under the Stockholders Agreement, the parties agreed that, during any period that such beneficial ownership of Acuitas Capital and its affiliates equals at least 50% of the Company's outstanding capital stock, the Company will not enter into any transaction between the Company or any of its affiliates, on the one hand, and Acuitas Capital or any of its affiliates (excluding the Company and its affiliates), on the other hand, unless it is approved by a majority of the independent directors then serving on the Company's board of directors.

The foregoing description of the Stockholders Agreement is qualified in its entirety by reference to the full text of the Stockholders Agreement, a copy of which is attached as an exhibit to this report and incorporated herein by reference.

**Item 5.07&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders.**

On February 20, 2023, the Company held a Special Meeting of Stockholders (the "Special Meeting"). At the Special Meeting, the Company's stockholders voted on three proposals and cast their votes as described below. The proposals are described in the Company's definitive proxy statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on January 20, 2023.

**1. The Reverse Stock Split Proposal** 

The Company's stockholders approved the proposal to give our board of directors the authority, at its discretion, to file a certificate of amendment to our amended and restated certificate of incorporation to effect a reverse split of our outstanding common stock at a ratio that is not less than 4:1 and not greater than 6:1, without reducing the authorized number of shares of our common stock, with the final ratio to be selected by our board of directors in its discretion, and to be effected, if at all, in the sole discretion of our board of directors at any time within one year of the date of the Special Meeting without further approval or authorization of our stockholders. The voting results were as follows:

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Votes For</u> | <u>Votes Against</u> | <u>Abstentions</u> | <u>Broker Non-Votes</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15891246 | 1237608 | 10811 | 0 |

---

**2. The Keep Well Proposal**

The Company's stockholders approved the issuance of shares of our common stock, convertible notes and the shares of our common stock issuable upon conversion thereof, and warrants to purchase shares of our common stock and the shares of our common stock issuable upon exercise thereof, in each case, pursuant to the Keep Well Agreement, for purposes of complying with Nasdaq Listing Rule 5635. The voting results were as follows:

------

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Votes For</u> | <u>Votes Against</u> | <u>Abstentions</u> | <u>Broker Non-Votes</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12084488 | 502636 | 12952 | 4539590 |

---

**3. The Adjournment Proposal**

The Company's stockholders approved the adjournment of the Special Meeting, if necessary or advisable, to solicit additional proxies in favor of the proposals described above if there were not sufficient votes to approve either of such proposals. The voting results were as follows:

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Votes For</u> | <u>Votes Against</u> | <u>Abstentions</u> | <u>Broker Non-Votes</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15184862 | 1263842 | 21864 | 669098 |

---

**Item 8.01 Other Events.**

On February 21, 2023, the Company filed with the Delaware Secretary of State a certificate of amendment to its amended and restated certificate of incorporation, as amended, to strike Article EIGHTH therefrom in its entirety (the "Charter Amendment"). The Charter Amendment, a copy of which is filed as an exhibit to this report, became effective upon filing. Article EIGHTH contained restrictions designed to protect certain tax loss carryovers and attributes of the Company. The Company's stockholders approved the Charter Amendment at the Company's annual meeting of stockholders held on August 29, 2022, and the proposal describing the Charter Amendment is in the Company's definitive proxy statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on July 25, 2022.

**Item 9.01. Financial Statements and Exhibits**

(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | <u>[Certificate of Amendment of Amended and Restated Certificate of Incorporation dated February 21, 2023](exhibit31-charteramendment.htm)</u> |
| 10.1 | <u>[Stockholders Agreement made and entered into as of February 21, 2023, by and between Ontrak, Inc., and Acuitas Capital LLC](exhibit101-stockholdersagr.htm)</u> |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | Ontrak, Inc. | Ontrak, Inc. |
| Date: February 22, 2023 | By: | /s/ James J. Park |
|  |  | James J. Park |
|  |  | Chief Financial Officer |

---

## Exhibit 3.1

**EXHIBIT 3.1**

**CERTIFICATE OF AMENDMENT**

**OF**

**AMENDED AND RESTATED**

**CERTIFICATE OF INCORPORATION**

**OF**

**ONTRAK, INC.**

(Pursuant to Section 242 of the

General Corporation Law of the State of Delaware)

Ontrak, Inc. (the "Corporation"), a corporation existing under the General Corporation Law of the State of Delaware (the "DGCL"), hereby certifies as follows:

1. This Certificate of Amendment (this "Certificate of Amendment") amends the provisions of the Corporation's Amended and Restated Certificate of Incorporation filed with the Secretary of State on October 28, 2019, as amended by the Certificate of Amendment thereto filed with the Secretary of State on July 6, 2020, the Certificate of Designations of Rights and Preferences filed with the Secretary of State on August 21, 2020 and Amendment No. 1 to Certificate of Designations of Rights and Preferences filed with the Secretary of State on October 15, 2020 (as amended to date, the "Certificate of Incorporation").

2. The Certificate of Incorporation is hereby amended by striking Article EIGHTH in its entirety.

3. This Certificate of Amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL.

4. All other provisions of the Certificate of Incorporation shall remain in full force and effect.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer on this 21st day of February, 2023.

Ontrak, Inc.

By: <u>/s/ Brandon LaVerne&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: Brandon LaVerne<br>Title: Chief Operating Officer

## Exhibit 10.1

**EXHIBIT 10.1**

**STOCKHOLDERS AGREEMENT**

**THIS STOCKHOLDERS AGREEMENT** (this "***Agreement***") is made and entered into as of February 21, 2023, by and between **ONTRAK, INC.**, a Delaware corporation (the "***Company***"), and **ACUITAS CAPITAL LLC**, a Delaware limited liability company (the "***Stockholder***"). Except as otherwise provided herein, capitalized terms used herein are defined in Section 4 hereof.

**Recitals**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.The Stockholder, together with its Affiliates, owns of record and beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "***Exchange Act***")) 83,765,266 shares ("***Existing Shares***") of common stock, par value $0.0001 per share of the Company ("***Common Stock***"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.Pursuant to the terms of that certain Master Note Purchase Agreement, dated as of April 15, 2022, by and among the Company, the Stockholder and the Collateral Agent (as defined therein) (as the same may be amended or modified from time to time in accordance with its terms, the "Purchase Agreement"), Acuitas Group Holdings, LLC, an Affiliate of the Stockholder, acquired and may in the future acquire from the Company (i) the Commitment Shares (as defined therein), (ii) one or more Warrants (as defined therein), and (iii) the Conversion Shares (as defined therein, and collectively with the Commitment Shares and the shares of Common Stock issuable upon exercise of the Warrants, the "New Securities").

**AGREEMENT**

The parties to this Agreement, intending to be legally bound, agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Voting Covenant.** At all times during any Effective Period, the Stockholder hereby agrees, at any meeting of the stockholders of the Company, however called, and in any action by written consent of the stockholders of the Company, to cause all the Outstanding Voting Securities beneficially owned by the Stockholder, and to cause each Affiliate of the Stockholder to cause all the Outstanding Voting Securities they respectively beneficially own, to be voted (a) in favor of an amendment to the certificate of incorporation or bylaws of the Company that would require the Board of Directors to include not fewer than three Independent Directors at all times, (b) in favor of the election or re-election of Independent Directors nominated for election by the Board of Directors or by the nominating committee of the Board of Directors unless the failure of a nominee to be elected or re-elected to the Board of Directors would not result in the Company having fewer than three Independent Directors following such election and (c) against any proposal or action that would result in the Board of Directors having fewer than three Independent Directors at all times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Interested Transactions**. Notwithstanding anything in the Company's Organizational Documents to the contrary, at all times during any Effective Period, the Company shall not enter into any transaction between the Company or any of its Affiliates, on the one hand, and Stockholder or any of its Affiliates (excluding the Company and its Affiliates), on the other hand, unless it is approved by a majority of the Independent Directors then serving on the Board of Directors, and any such transaction not so approved shall be deemed void *ab initio*. The Stockholder shall not, and shall cause its controlled Affiliates not to, take any action to cause the Company to act in contravention of the preceding sentence. Notwithstanding the provisions of Section 253 of General Corporation Law of the State of Delaware (as the same may be amended or modified from time to time, and any successor statute thereto, "Section 253"), the Stockholder shall not, and shall cause its controlled Affiliates not to, effect, or attempt or seek to effect, any transaction that could be effected under Section 253, unless such transaction is approved by a majority of the Independent Directors then serving on the Board of Directors, and any such transaction not so approved shall be deemed void *ab initio*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Representations and Warranties; Agreements.** The Stockholder represents and warrants as of the date hereof that (a) this Agreement has been duly authorized, executed and delivered by the Stockholder and, assuming the due authorization, execution and delivery of the Company, constitutes the valid and binding obligation of the Stockholder, enforceable in accordance with its terms, and (b) the

------

Stockholder has not granted and is not a party to any proxy, voting trust or other agreement which is inconsistent with, conflicts with or violates any provision of this Agreement. The Stockholder hereby agrees that it shall not, either directly or indirectly, grant any proxy or become party to any voting trust or other agreement which is inconsistent with, conflicts with or violates any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Definitions**

"***Affiliate***" of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where "***control***" means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise.

"***Board of Directors***" means the board of directors of the Company.

"***Change of Control***" means (a) any sale or transfer (in one transaction or in a series of transactions) of all or substantially all (as defined under Delaware law) of the assets of the Company on a consolidated basis, or (b) any direct or indirect sale or transfer (in one transaction or in a series of transactions) of a majority of the outstanding equity securities of the Company, as a result of which any Person or group (other than the Stockholder and/or any of its Affiliates) obtains direct or indirect possession of voting power (under ordinary circumstances) to elect a majority of the Board of Directors, including by means of a consolidation, merger or reorganization of the Company with or into any other entity or entities as a result of which any Person or group (other than the Stockholder and/or any of its Affiliates) obtains direct or indirect possession of voting power (under ordinary circumstances) to elect a majority of the surviving entity's governing body.

"***Effective Period***" means any of the following periods of time: (a) the period beginning at the Effective Time and ending at the Effective Time Initial Termination Time, and (b) the period beginning at any Effective Time Restart and ending at the Effective Time Restart Termination Time applicable to such Effective Time Restart. For the avoidance of doubt, the parties agree that there may be multiple Effective Periods during the term of this Agreement.

"***Effective Time***" means the time, if ever, that the Stockholder's and its Affiliates' beneficial ownership of the Company's capital stock equals at least 50% of the Outstanding Voting Securities following the issuance of any of the New Securities.

"***Effective Time Initial Termination Time***" means such time, if ever, as the Stockholder's and its Affiliates' beneficial ownership of the Company's capital stock equals less than 50% of the Outstanding Voting Securities following the Effective Time for at least 90 calendar days.

"***Effective Time Restart***" means the time, if ever, and from time to time, after the Effective Time Initial Termination Time, that the Stockholder's and its Affiliates' beneficial ownership of the Company's capital stock equals at least 50% of the Outstanding Voting Securities.

"***Effective Time Restart Termination Time***" means such time, if ever, as the Stockholder's and its Affiliates' beneficial ownership of the Company's capital stock equals less than 50% of the Outstanding Voting Securities following the immediately preceding Effective Time Restart for at least 90 calendar days.

"***Independent Director***" means a director who is not an executive officer or employee of the Company, who would satisfy the standards for being considered an independent director under the rules of The NASDAQ Global Market and who, in the opinion of a majority of the Independent Directors then serving on the Board of Directors, has no relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director; *provided*, that it is acknowledged and agreed that an Independent Director shall not include (a) Stockholder or Terren S. Peizer, (b) any Person who is an employee of Stockholder, Terren S. Peizer or any of their respective Affiliates (excluding the Company), (c) any Person who, directly or indirectly, has a material business relationship with Stockholder or Terren S. Peizer, or (d) any Person who, directly or indirectly, is otherwise an Affiliate of Stockholder or Terren S. Peizer; *provided, further, however*, that, notwithstanding the

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preceding proviso, a Person shall not be precluded from being determined to be an Independent Director solely because such Person serves on the Board of Directors of an entity with Terren S. Peizer.

"***Organizational Documents***" means, with respect to any Person (other than an individual), (a) the certificate or articles of association, incorporation or organization or limited partnership or limited liability company, and any joint venture, limited liability company, operating or partnership agreement and other similar documents adopted or filed in connection with the creation, formation or organization of such Person and (b) all bylaws, voting agreements, agreements among holders of equity interests and similar documents, instruments or agreements, in each case, relating to the organization or governance of such Person, in each case, as amended or supplemented.

"***Outstanding Voting Securities***" means, as of the date and time of determination, all shares of Common Stock then issued and outstanding.

"***Person***" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.Term.** This Agreement shall be effective as of the date hereof and shall continue in effect until and shall automatically terminate upon the consummation of a Change of Control of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.Amendments and Waivers**. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or the Stockholder unless such modification, amendment or waiver is approved in writing by the Company (including the prior approval of a majority of the Independent Directors then serving on the Board of Directors) and Stockholder. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.Severability**. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.Entire Agreement.** This Agreement contains the complete agreement between the parties hereto with respect to the subject matter hereof and supersedes any prior understandings, agreements and representations by or between the parties hereto (whether written or oral) which may have related to the subject matter hereof or thereof in any way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.Successors and Assigns**. Except as otherwise expressly provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Company and its successors and assigns and the Stockholder and his heirs and estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.Counterparts**. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which taken together shall constitute one and the same agreement. This Agreement may be executed and delivered by electronic signature; and, upon such delivery, the electronic signature will be deemed to have the same effect as if the original signature had been delivered to the other parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.Remedies**. The parties hereto shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that the Company, in addition to other rights and remedies existing in its favor, shall be entitled to specific

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performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce or prevent any violations of the provisions of this Agreement, in each case without the requirement of posting a bond or proving actual damages. All of the Company's rights under this Agreement may be enforced by a majority of the Independent Directors then serving on the Board of Directors. Any recovery in connection with an action, suit or proceeding to enforce this Agreement for the benefit of the Company shall be for the proportionate benefit of the stockholders other than the Stockholder and his Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.Notices.** Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, mailed first class mail (postage prepaid), sent by reputable overnight courier service (charges prepaid) or sent by email to the addresses set forth below or to such other address such party has specified by prior written notice to the other party. Notices shall be deemed to have been given hereunder when delivered personally, five (5) days after deposit in the U.S. mail, one day after deposit with a reputable overnight courier service (charges prepaid) or upon confirmation of transmission after being sent by email:

The Company:

Ontrak, Inc.

2200 Paseo Verde Parkway, Suite 280

Henderson, NV 89052

Attention: James Park

Email: jpark@ontrakhealth.com

with a copy to (*which shall not constitute notice to the Company*):

Sheppard, Mullin, Richter & Hampton LLP

12275 El Camino Real, Suite 100

San Diego, CA 92130-4092

Attention: John D. Tishler, Esq.

Email: jtishler@sheppardmullin.com

Stockholder:

Acuitas Capital, LLC<br>2120 Colorado Avenue, #230

Santa Monica, CA 90404

Attention: Terren S. Peizer<br>Email: <u>terren@AcuitasGH.com</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.Governing Law; Consent to Jurisdiction**. This Agreement will be governed and construed in accordance with the internal laws of the State of Delaware. Each party hereby (a) agrees to the exclusive jurisdiction of the Delaware Court of Chancery (or, if such court declines to accept jurisdiction, any other federal or state court located in Wilmington, Delaware) with respect to any claim or cause of action arising under or relating to this Agreement, (b) waives any objection based on *forum non conveniens* and waives any objection to venue of any such suit, action or proceeding, (c) waives personal service of any and process upon it, and (d) consents that all services of process be made by registered or certified mail (postage prepaid, return receipt requested) directed to it at its address stated in Section 12 and service so made will be complete when received. Nothing in this Section 13 will affect the rights of the parties to serve legal process in any other manner permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.Waiver of Trial by Jury.** EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.Descriptive Headings, etc**. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. The use of the term "including" herein shall mean "including without limitation."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.No Strict Construction**. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question or intent or interpretation arises, this Agreement shall be construed as it was drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement. The parties hereto intend that each covenant contained herein shall have independent significance. If any party has breached any covenant contained herein in any respect, the fact that there exists another covenant relating to the same or similar subject matter (regardless of the relative levels of specialty) which the party has not breached shall not detract from or mitigate the fact that the party is in breach of the first covenant.

[***Signature Page Follows***]

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**IN WITNESS WHEREOF**, the parties hereto have executed this Agreement on the day and year first above written.

***Company***:

**Ontrak, Inc.**

By: <u>/s/ James Park</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: James Park

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Chief Financial Officer

***Stockholder***:

**Acuitas Capital, LLC**

By: <u>/s/ Terren S. Peizer</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Terren S. Peizer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Chairman

[Signature Page to Stockholders Agreement]