Item 2.02 Results of Operations and Financial Condition.
On March 15, 2023, Ontrak, Inc. (the "Company") issued a press release
announcing its financial results for the quarter and year ended December 31
2022. The full text of the Company's press release is furnished herewith as
Exhibit 99.1.
The information set forth under this "Item 2.02. Results of Operations and
Financial Condition," including the exhibit attached hereto, shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, nor shall it be deemed incorporated by reference into any filing under
the Securities Act of 1933, as amended, except as shall be expressly set forth
by specific reference in such filing.
Item 2.05 Costs Associated with Exit or Disposal Activities.
As part of the Company's continued cost saving measures and to reduce its
operating costs and to help align with its previously stated strategic
initiatives, on March 9, 2023, the Company implemented additional headcount
reductions wherein approximately 19% of the Company's employee positions were
eliminated. These headcount reductions are expected to result in a reduction of
approximately $2.7 million of the Company's annual compensation costs. The
Company estimates one-time costs of approximately $0.3 million of termination
benefits to the impacted employees, including severance payments and benefits.
The headcount reductions were completed by March 10, 2023.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
As previously reported, on September 14, 2022, the Company received a letter
from The Nasdaq Stock Market LLC ("Nasdaq") indicating that the Company no
longer meets the minimum bid price requirement set forth in Nasdaq Listing Rule
5450(a)(1) (the "Minimum Bid Price Requirement") because the closing bid price
for the Company's common stock was less than $1.00 for the previous 30
consecutive business days. Under Nasdaq Listing Rule 5810(c)(3)(A), the Company
had a 180-calendar day grace period, or until March 13, 2023, to regain
compliance with the Minimum Bid Price Requirement. On March 7, 2023, the Company
applied to transfer the listing of its common stock from The Nasdaq Global
Market to The Nasdaq Capital Market. On March 14, 2023, the Company received
notice from Nasdaq that the Company's application was approved and that the
Company is eligible for an additional 180-calendar day period, or until
September 11, 2023, to regain compliance with the Minimum Bid Price Requirement.
Both the Company's common stock and 9.50% Series A Cumulative Perpetual
Preferred Stock will be transferred to The Nasdaq Capital Market at the opening
of business on March 16, 2023. If at any time during the 180-calendar day
period, the closing bid price of the Company's common stock is at least $1.00
per share for a minimum of 10 consecutive business days, Nasdaq will provide
written confirmation of compliance, and the matter will be closed, unless Nasdaq
exercises its discretion to require the Company to maintain a closing bid price
for its common stock of at least $1.00 per share for more than 10 consecutive
business days. In connection with the Company's application to transfer to The
Nasdaq Capital Market, the Company notified Nasdaq of the Company's intention to
cure the non-compliance with the Minimum Bid Price Requirement during the
additional compliance period, such as by effecting a reverse stock split, if
necessary. If the Company does not regain compliance with the Minimum Bid Price
Requirement by September 11, 2023, Nasdaq will provide written notification that
the Company's securities will be delisted. At that time, the Company expects to
be afforded seven days to request that a Nasdaq hearings panel review the
delisting determination. If the Company makes such request, the Company expects
that its appeal will be heard by a Nasdaq hearing panel within 45 days of its
request for a hearing. A timely request for a hearing will ordinarily stay the
suspension and delisting action pending the issuance of a written panel
decision. The Company is monitoring the closing bid price of its common stock
and will consider options to regain compliance with the Minimum Bid Price
Requirement. However, there can be no assurance that the Company will be able to
regain compliance with the Minimum Bid Price Requirement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release, da ted March 15, 202 3 .
104 Cover Page Interactive Data File (formatted as Inline XBRL).
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