OTRKP Ontrak Inc (PK)

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Company Overview

Ontrak, Inc. (“Ontrak,” “Company,” “we,” “us” or “our”) is an AI-powered and technology-enabled behavioral healthcare company, whose mission is to help improve the health and save the lives of as many people as possible. The Company's technology-enabled platform utilizes claim-based analytics and predictive modeling to provide analytic insights throughout the delivery of its personalized care program. The Company's program predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages and guides them to and through the care and treatment they need. By combining predictive analytics with human engagement, we deliver improved member health and validated outcomes and savings to healthcare payors.

The Company's integrated, technology-enabled solutions are designed to provide healthcare solutions to members with behavioral conditions that cause or exacerbate chronic medical conditions such as diabetes, hypertension, coronary artery disease, chronic obstructive pulmonary disease, and congestive heart failure, which result in high medical costs. Ontrak has a unique ability to engage these members, who may not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance. Ontrak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaches who address the social and environmental determinants of health. The Ontrak programs seek to improve member health and deliver validated cost savings to healthcare payors.

The Company generates revenues from the services it provides to populations insured by private health insurance programs, including employer funded programs (which the Company refers to as commercial revenue) and by government-funded health insurance programs, such as managed Medicare Advantage, managed Medicaid and dual eligible (Medicare and Medicaid) populations. Under our LifeDojo wellbeing solution, the Company also generates revenues from the mental health and wellbeing support services it provides to members of employer customers. The Company aims to increase the number of members that are eligible for our solutions by signing new contracts and identifying more eligible members within customers with whom the Company has existing contracts.

Basis of Presentation

The accompanying condensed consolidated financial statements include Ontrak, Inc., its wholly-owned subsidiaries and its variable interest entities. The accompanying condensed consolidated financial statements for Ontrak, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and instructions to Form 10-Q and Article 8 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed financial statements includes all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the entire fiscal year. The accompanying unaudited financial information should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year-ended December 31, 2023 (the “2023 10-K”), filed with the Securities and Exchange Commission (“SEC”), from which the consolidated balance sheet as of December 31, 2023 has been derived. The Company operates as one segment.

We have incurred significant net losses and negative operating cash flows since our inception, and we expect to continue to incur net losses and negative operating cash flow, in part due to the negative impact on our operations by customer terminations. As of June 30, 2024, our cash was $7.3 million and we had working capital of approximately $8.1 million. For the six months ended June 30, 2024, our average monthly cash burn rate from operations was $1.3 million.

As of June 30, 2024, $6.9 million of secured debt, including accrued paid-in-kind interest, issued under the Keep Well Agreement was outstanding. As of the filing date of this report, approximately $7.1 million of secured debt, including accrued paid-in-kind interest, issued under the Keep Well Agreement was outstanding, $4.8 million of which is payable at any time after August 30, 2025 upon demand of the holder (see Note 14 below for more information), and the balance of which matures on May 14, 2026, unless it becomes due and payable in full earlier, whether by acceleration or otherwise.

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On August 13, 2024, the Company entered into an agreement with Acuitas pursuant to which Acuitas agreed to purchase $5.0 million of Demand Notes (as defined in Note 10 below) in accordance with a schedule specified therein, subject to a limited offset right, and not to exercise its right to require that any amounts due under any Demand Note be paid until after August 30, 2025, subject to a limited exception. See Note 14 below for more information regarding this agreement. After taking into account the $5.0 million of Demand Notes that Acuitas agreed to purchase, Acuitas, in its sole discretion, may purchase from the Company, and the Company would issue to Acuitas, up to an additional $5.5 million of Demand Notes. There can be no assurance that Acuitas will elect to purchase such $5.5 million of Demand Notes.

In March 2023 and in February 2024, as part of the Company's continued cost saving measures to reduce its operating costs and to better align with its previously stated strategic initiatives, the Company implemented reductions in workforce and vendor cost optimization plans. The Company began realizing the full effect of these cost saving measures in 2023 and in 2024, including a decrease in the Company's operating costs and an improvement in the Company's average monthly cash flow from operations. These cost optimization plans were necessary to right size the Company's business commensurate with its then current customer base.

Management plans to continue executing its strategy to increase liquidity by continuing to (i) explore other sources of capital for future liquidity needs; (ii) manage operating costs by strategically pursuing cost optimization initiatives; and (iii) pursue executing our growth strategy by: (a) expanding sales and marketing resources to acquire new and diverse customers across major health plans, value based provider groups and self-insurance employers; (b) executing on our better market penetration strategy by providing full scale customized behavioral health solutions, addressing customer needs across all member acuity levels while mitigating vendor fatigue by becoming a principal customer partner; (c) leveraging our AI technology and new predictive algorithms to improve identification and outreach, create more efficiencies, enhance coaching solutions and create more proof points; and (d) opportunistically pursuing partnerships that we believe will accelerate growth.

We will need additional capital to successfully execute our growth strategy. In addition to revenue from business operations, since April 2022, the Company's primary source of working capital has been borrowings under the Keep Well Agreement and raising capital in equity offerings. We may seek to raise additional capital through equity or debt financings, however, when we can affect such financings and how much capital we can raise depends on a variety of factors, including, among others, market conditions, the trading price of our common stock and our determination as to the appropriate sources of funding for our operations. There can be no assurance that other capital will be available when needed or that, if available, it will be obtained on terms favorable to us and our stockholders, that we will be successful in implementing cost optimization initiatives, or that we will be successful in executing our growth strategy. In addition, the Keep Well Agreement contains various financial and other covenants, and any non-compliance with those covenants could result in an acceleration of the repayment of the amounts outstanding thereunder. Furthermore, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders, and debt financings may subject us to restrictive covenants, operational restrictions and security interests in our assets.

Regardless of our success in raising additional capital, we expect our cash on hand and the $5.0 million of Demand Notes Acuitas agreed to purchase under the August 13, 2024 agreement discussed above (discussed in Note 14 below) will be sufficient to meet our obligations for at least the next 12 months from the date the financial statements in this report are released.

Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements

Since the date on which the Company filed the 2023 10-K, there were no recently adopted account standards or new accounting standards issued, but not yet adopted by the Company, which are expected to materially affect the Company's condensed consolidated financial statements.

The following table provides a reconciliation of total cash and restricted cash as presented in the Company's condensed consolidated statement of cash flows for the periods presented (in thousands):

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			June 30,
			2024						2023
Cash			$	7,292					$	6,094
Restricted cash - current:
Cash in escrow (1)			—						4,000
Subtotal - Restricted cash - current			—						4,000
Cash and restricted cash			$	7,292					$	10,094

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(1) Represents cash received under the Keep Well Agreement in June 2023 and held in a separate account pursuant to the terms of the Keep Well Agreement. See Note 10 below for more information. The amount was included in "Other accrued liabilities" on the Company's condensed consolidated balance sheet as of June 30, 2023.

The following table is a summary of concentration of credit risk by customer revenues as a percentage of our total revenue:

						Three Months Ended June 30,												Six Months Ended June 30,
Percentage of Revenue						2024						2023						2024						2023
Customer A						61.3		%				55.4		%				61.7		%				53.8		%
Customer B						30.9						3.2						20.0						2.5
Customer C						—						33.5						10.7						34.6
Remaining customers						7.8						7.9						7.6						9.1
Total						100.0		%				100.0		%				100.0		%				100.0		%

The following table is a summary of concentration of credit risk by customer accounts receivables as a percentage of our total accounts receivable:

Percentage of Accounts Receivable			June 30, 2024						December 31, 2023
Customer B			53.1		%				—		%
Customer A			46.9						—
Total			100.0		%				—		%

The Company applies the specific identification method for assessing provision for credit losses. There was no bad debt expense during either of the three or six months ended June 30, 2024 or 2023.

Customer Notification

On October 10, 2023, the Company was notified by a health plan customer of its intent not to continue using the Company’s services after February 2024. The customer advised us to cease enrollment of any new members from that customer immediately. The customer also informed us that its decision was related to the customer’s change in strategy and not reflective of the performance or value of the Company’s services. The Company billed this customer approximately $0.5 million for services rendered from January 2024 through February 2024, and received full payment of such invoiced amount in March 2024.

Other Receivable - Insurance Recoveries

The Company is involved in various securities class actions and purported stockholder derivative complaints, and the Company has incurred legal costs related to the SEC/Department of Justice (the "DOJ") investigation of the Company's former Chief Executive Officer and Chairman of the Board of Directors, as described in Note 13 below. The Company maintains a corporate

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Property and equipment consisted of the following (in thousands):

			June 30,						December 31,
			2024						2023
Software			$	4,713					$	4,575
Computers and equipment			416						416
ROU assets - finance lease			300						300
Software development in progress			—						59
Subtotal			5,429						5,350
Less: Accumulated depreciation and amortization			(4,846)						(4,437)
Property and equipment, net			$	583					$	913

Total depreciation and amortization expense relating to property and equipment presented above was $0.2 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and $0.4 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively.

Capitalized Internal Use Software Costs

During the three months ended June 30, 2024 and 2023, the Company capitalized $0.04 million and $0.1 million, respectively, of costs relating to development of internal use software, and recorded $0.2 million and $0.3 million, respectively, of amortization expense relating to capitalized internal use software, which was included in total depreciation and amortization expense as described above.

Goodwill

The carrying amount of indefinite-lived goodwill was $5.7 million as of June 30, 2024 and December 31, 2023.

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Intangible Assets

The following table sets forth amounts recorded for intangible assets subject to amortization (in thousands):

																		At December 31, 2023
						Weighted Average Estimated Useful Life (years)																								Gross Value						Accumulated Amortization						Net Carrying Value
Acquired software technology						3																								$	3,500					$	(3,500)					$	—
Customer relationships						5																								270						(171)						99
Total																														$	3,770					$	(3,671)					$	99

As of June 30, 2024, the Company's acquired software technology and customer relationships presented in the table above were fully amortized.

Amortization expense for intangible assets presented above was $0.05 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and $0.1 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively.

In each of 2023 and 2024, the Company implemented restructuring plans as part of management's continued cost saving measures in order to reduce its operating costs, optimize its business model and help align with its previously stated strategic initiatives.

In February 2024, approximately 21% of the Company's employee positions were eliminated and the Company incurred a total of approximately $0.3 million of one-time termination related costs, including severance payments and benefits payable to the impacted employees, which have been recorded as part of "Restructuring, severance and related costs" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2024. The headcount reductions were completed by May 2024.

In March 2023, approximately 19% of the Company's employee positions were eliminated and the Company incurred a total of approximately $0.5 million of one-time termination related costs, including severance payments and benefits payable to the impacted employees, which have been recorded as part of "Restructuring, severance and related costs" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2023. The headcount reductions were completed by May 2023.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by giving effect to all shares of common stock potentially issuable upon exchange or exercise of outstanding shares of preferred stock and outstanding stock options and warrants, in each case, to the extent dilutive. Basic and diluted net loss per common share were the same for each period presented below as the inclusion of any such shares of common stock potentially issuable would have been anti-dilutive.

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Basic and diluted net loss per common share were as follows (in thousands, except per share amounts):

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Net loss			$	(10,289)					$	(6,756)					$	(14,747)					$	(15,106)
Dividends on preferred stock - undeclared			(2,238)						(2,238)						(4,477)						(4,477)
Net loss attributable to common stockholders			$	(12,527)					$	(8,994)					$	(19,224)					$	(19,583)
Weighted-average shares of common stock outstanding			66,141						4,887						63,512						4,787
Net loss per common share - basic and diluted			$	(0.19)					$	(1.84)					$	(0.30)					$	(4.09)

Included in the weighted-average shares of common stock outstanding for the three and six months ended June 30, 2024 are a total of 18,333,333 common shares issuable upon the exercise of Private Placement Pre-funded Warrants (as defined and described in Note 10 below), which are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders.

The following number of shares issuable upon exercise of stock options and warrants outstanding as of June 30, 2024 and 2023 have been excluded from the diluted earnings per share calculation as their effect would be anti-dilutive:

			June 30,
			2024						2023
Warrants to purchase common stock			234,416,187						7,082,788
Options to purchase common stock			60,971,977						1,202,676
Total			295,388,164						8,285,464

Equity Offerings

Common Stock

In February 2023, pursuant to the terms of the Keep Well Agreement, the Company issued to Acuitas 339,689 shares of the Company's common stock after giving effect to the 1-for-6 reverse stock split, approved at the special meeting of the Company's stockholders held in February 2024, effected by the Company on July 27, 2023 (the “2023 Reverse Stock Split”).

Preferred Stock

In 2020, the Company completed the issuance of a total of 3,770,265 shares of 9.50% Series A Cumulative Perpetual Preferred Stock (the "Series A Preferred Stock"). The Company, generally, may not redeem the Series A Preferred Stock until August 25, 2025, except upon the occurrence of a Delisting Event or Change of Control (as defined in the Certificate of Designations establishing the Series A Preferred Stock), and on and after August 25, 2025, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends. The Series A Preferred Stock has no maturity date and will remain outstanding indefinitely unless redeemed by the Company or exchanged for shares of common stock in connection with a Delisting Event or Change of Control. Holders of Series A Preferred Stock generally have no voting rights, but have limited voting rights if the Company fails to pay dividends in respect of the Series A Preferred Stock for six or more quarters, whether or not declared or consecutive and in certain other events, including the right, voting separately as a single class, to elect two individuals to the Company's Board of Directors. Such director election right commenced on August 31, 2023 since the Company did not pay the dividend payable on that date or in respect of the five prior quarters (see discussion below).

Holders of Series A Preferred Stock of record at the close of business of each respective record date for quarterly dividends (February 15, May 15, August 15 and November 15 of each year) are entitled to receive, when, as and if declared by our Board of Directors, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 9.50% per annum

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of the $25.00 per share liquidation preference (equivalent to $2.375 per annum per share or $0.593750 per quarter per share). Dividends, if and when declared by our Board of Directors, are payable quarterly in arrears, every February 28, May 30, August 31, and November 30, as applicable. At June 30, 2024, we had total undeclared dividends of $20.9 million.

On October 11, 2023, the Company received a letter from Nasdaq informing the Company that it is not eligible for a second 180-day compliance period within which to regain compliance with the minimum bid price rule for the Series A Preferred Stock and that Nasdaq determined that the Series A Preferred Stock would be delisted from The Nasdaq Capital Market and would be suspended at the opening of business on October 20, 2023. On November 20, 2023, The Nasdaq Stock Market filed a Form 25-NSE with the SEC to remove the Series A Preferred Stock from listing and registration on The Nasdaq Stock Market. The Series A Preferred Stock currently trades in the over-the-counter OTC Markets system.

The Company's 2017 Stock Incentive Plan (the “2017 Plan”) and 2010 Stock Incentive Plan (the “2010 Plan” and together with the 2017 Plan, the "Plans") provide for the issuance of 2,849,746 shares of the Company's common stock. The Company has granted stock options to employees, members of the Company's board of directors, and certain outside consultants, and restricted stock units ("RSUs") to employees and members of the Company's board of directors. The terms and conditions upon which options vest vary among grants; however, options expire no later than ten years from the date of grant and awards granted to employees and members of the Company's board of directors generally vest over one to four years on a straight-line basis. The terms and conditions upon which RSUs vest vary among grants; however, RSUs generally vest over three to five years on a straight-line basis. As of June 30, 2024, the Company had 61,088,379 shares of common stock in the aggregate subject to outstanding stock options (see discussion below regarding options to purchase 59.2 million shares of the Company's common stock granted in June 2024) and RSUs and outstanding and 579,751 shares available for issuance under the 2017 Plan (assuming that all awards outstanding as of such date are ultimately settled for their full number of shares and are not forfeited or modified).

Stock-based compensation expense was $0.4 million and $0.9 million for the three months ended June 30, 2024 and 2023, respectively, and $0.8 million and $1.5 million for the six months ended June 30, 2024 and 2023, respectively.

The assumptions used in the Black-Scholes option-pricing model were as follows:

			Six Months Ended June 30, 2024
Volatility			96.0%
Risk-free interest rate			4.09% - 4.52%
Expected life (in years)			3.52 - 4.45
Dividend yield			0		%

The expected volatility assumptions have been based on the historical and expected volatility of our stock and the stock of comparable companies, measured over a period generally commensurate with the expected term or acceptable period to determine reasonable volatility. The weighted average expected life of options for the six months ended June 30, 2024 reflects the application of the simplified method prescribed in SEC Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the expected life of options as the average of the contractual term of the options and the weighted average vesting period for all option tranches.

Stock Options - Employees and Directors

A summary of stock option activity is as follows:

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			Number of Shares						Weighted Average Exercise Price
Outstanding as of December 31, 2023			1,162,109						$	6.63
Granted			59,942,262						0.23
Forfeited			(132,394)						13.11
Outstanding as of June 30, 2024			60,971,977						0.32
Options vested and exercisable as of June 30, 2024			928,003						$	5.18

The stock options granted, as presented in the table above, includes options to purchase 59.2 million shares of the Company's common stock granted in June 2024 to the Company's employees and members of the Company's board of directors, all of which are subject to stockholder approval of the Company’s Amended and Restated 2017 Stock Incentive Plan, and if such approval is not obtained, they will be cancelled for no consideration.

As of June 30, 2024, there was $11.3 million of unrecognized compensation cost related to non-vested share-based compensation arrangements granted to the Company's employees and members of the Company's board of directors under the Plans. These costs are expected to be recognized over a weighted-average period of approximately 3.73 years.

Restricted Stock Units - Employees

The Company estimates the fair value of RSUs based on the closing price of its common stock on the date of grant. The following table summarizes our RSU award activity issued under the 2017 Plan:

			Restricted Stock Units						Weighted Average Grant Date Fair Value
Non-vested at December 31, 2023			120,637						$	13.06
Vested and settled			(721)						236.79
Forfeited			(3,514)						196.49
Non-vested at June 30, 2024			116,402						6.14

As of June 30, 2024, there was $0.5 million of unrecognized compensation costs related to unvested outstanding RSUs. These costs are expected to be recognized over a weighted-average period of approximately 1.16 years.

Warrants - Non-employees

The Company has issued warrants to purchase shares of the Company's common stock that have been approved by our Board of Directors. A summary of warrants activity was as follows:

			Number of Warrants						Weighted Average Exercise Price
Outstanding as of December 31, 2023			114,243,865						$	0.63
Granted			370,781,350						0.34
Exercised			(9,499,062)						0.21
Cancelled			(222,776,633)						0.53
Outstanding as of June 30, 2024			252,749,520						0.31
Warrants exercisable as of June 30, 2024			252,749,520						0.31

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The number of shares of the Company's common stock subject to warrants granted and warrants cancelled as presented in the table above each include and give effect to the adjustment to the exercise price of Public Offering Warrants and Private Placement Warrants (as such terms are defined in Note 10 below) pursuant to the waivers entered into by each holder of such warrants (discussed in Note 10 below). In accordance with the terms of such waivers, the exercise price per share of all outstanding Public Offering Warrants and Private Placement Warrants was reduced to $0.36 on March 28, 2024 and further reduced to $0.3442 on April 5, 2024, and simultaneously with each exercise price reduction, the number of shares of common stock issuable upon exercise was increased proportionally, such that the aggregate exercise price of the warrants, after taking into account the adjustment in the exercise price, was equal to the aggregate exercise price before the adjustment in the exercise price. The exercise price reduction has been reflected as a cancellation of the previously issued warrants and grant of new warrants.

Also included in the number of shares of the Company's common stock subject to warrants granted as presented in the table above are Demand Warrants (as such term is defined in Note 10 below) granted during the three months ended June 30, 2024 by the Company to Acuitas to purchase a total of 31.5 million shares of the Company's common stock with exercise prices ranging from $0.26 to $0.3442. See Note 10 below for more information.

The assumptions used in the Black-Scholes warrant-pricing model were determined as follows:

			Six Months Ended June 30, 2024
Volatility			93% - 98%
Risk-free interest rate			4.31% - 4.50%
Expected life (in years)			3.33 - 5.00
Dividend yield			0		%

The Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on the Company's balance sheet and classifies the leases as either operating or finance leases. The Company leases office space in Henderson, Nevada, which previously served as the Company's headquarters and currently serves as the administrative office for certain of the Company's back-office functions, and in Rosemont, Illinois, which are accounted for as operating leases. The Rosemont, Illinois lease expired in June 2023. In September 2023, the Company entered into a month-to-month lease for a virtual office space in Miami, Florida, which serves as the Company's headquarters. The Company leases various computer equipment used in the operation of its business, which are accounted for as finance leases. The operating lease agreement for the Henderson, Nevada office is for a total of 2,721 square feet of office space for lease term of 58 months. The Company's finance leases are generally for 36 month terms. The Company had no finance leases during either of the three or six months ended June 30, 2024, or as of June 30, 2024 and December 31, 2023.

In April 2022, the Company entered into a sublease agreement with a subtenant for 100% of the office space the Company leased in Santa Monica, California. The sublease agreement commenced in June 2022 and provided for an expiration date of July 17, 2024, unless sooner terminated. On February 16, 2023, the Company, the landlord and the subtenant entered into a lease and sublease termination agreement for the office space, with a termination date of February 28, 2023. The Company agreed to pay to the landlord a $0.1 million early termination fee and monthly fixed rent for March and April 2023, and the subtenant agreed to pay to the Company monthly fixed sublease payments for March and April 2023. As a result of the lease termination, the Company wrote-off $0.3 million of operating lease right-of-use assets, and $0.6 million and $0.2 million of current and long-term operating lease liabilities, respectively, resulting in a non-cash gain of $0.5 million included in "Other income, net" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2023.

The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

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Quantitative information for our leases is as follows (in thousands):

Condensed Consolidated Balance Sheets			Balance Sheet Classification			June 30, 2024						December 31, 2023
Assets
Operating lease assets			"Operating lease right-of-use-assets"			$	171					$	195
Total lease assets						$	171					$	195
Liabilities
Current
Operating lease liabilities			"Current portion of operating lease liabilities"			$	62					$	56
Non-current
Operating lease liabilities			"Long-term operating lease liabilities"			134						166
Total lease liabilities						$	196					$	222

			Three Months Ended June 30,												Six Months Ended June 30,
Condensed Consolidated Statements of Operations			2024						2023						2024						2023
Operating lease expense			$	21					$	32					$	41					$	119
Short-term lease rent expense			1						—						2						1
Variable lease expense			—						8						—						23
Operating sublease income			—						—						—						(65)
Total rent expense			$	22					$	40					$	43					$	78
Finance lease expense
Amortization of leased assets			$	—					$	25					$	—					$	50
Interest on lease liabilities			—						1						—						3
Total			$	—					$	26					$	—					$	53

			Six Months Ended June 30,
Condensed Consolidated Statements of Cash Flows			2024						2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	43					$	179
Financing cash flows from finance leases			—						100
Other
Cash received for operating sublease			—						97

Other Information			June 30, 2024						December 31, 2023
Weighted-average remaining lease term (years):
Operating leases			2.7						3.2
Weighted-average discount rate (%):
Operating leases			16.25		%				16.25		%
Finance leases			—						15.15		%

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The following table sets forth maturities of our lease liabilities (in thousands):

Operating Leases			At June 30, 2024
Remainder of 2024			$	44
2025			90
2026			93
2027			16
Total lease payments			243
Less: imputed interest			(47)
Present value of lease liabilities			196
Less: current portion			(62)
Lease liabilities, non-current			$	134

Keep Well Agreement

On April 15, 2022, the Company entered into a Master Note Purchase Agreement (the “Original Keep Well Agreement”) with Acuitas Capital LLC (“Acuitas Capital”), an entity indirectly wholly owned and controlled by Terren S. Peizer, the Company’s former Chief Executive Officer and Chairman. The Original Keep Well Agreement was amended on each of August 12, 2022 (the “First Amendment”), November 19, 2022 (the “Second Amendment”), December 30, 2022 (the “Third Amendment”), June 23, 2023 (the “Fourth Amendment”), October 31, 2023 (the “Fifth Amendment”) and March 28, 2024 (the “Sixth Amendment”). The Company refers to the Original Keep Well Agreement as amended to date as the “Keep Well Agreement” and, in this Note 10, to Acuitas Capital, together with its affiliates and any of its transferees under the Keep Well Agreement, as “Acuitas.”

The Keep Well Agreement contains customary covenants that must be complied with by the Company, including, among other covenants, restrictions on the Company’s ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into certain asset sale transactions, and covenants that require the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good repair, maintain insurance and comply with applicable laws.

The Keep Well Agreement also includes the following financial covenants: a requirement that annualized consolidated recurring revenue for the preceding twelve months be at least $11.0 million tested monthly, and a requirement that consolidated liquidity must be greater than $5.0 million at all times. The Company was in compliance with such financial covenants as of June 30, 2024.

The Original Keep Well Agreement

Under the terms of the Original Keep Well Agreement, subject to the satisfaction of certain conditions precedent (some of which are described below), the Company could borrow from Acuitas up to $25.0 million, and in connection with each such borrowing, the Company agreed to issue to Acuitas a senior secured note (each, an “Original Keep Well Note”) with a principal amount equal to the amount borrowed. Subject to obtaining approval of the Company’s stockholders as required by applicable Nasdaq listing rules, which approval was obtained at the Company’s annual meeting of stockholders held on August 29, 2022 (the “2022 Annual Meeting of Stockholders”), in connection with each Original Keep Well Note issued by the Company, the Company agreed to issue to Acuitas a warrant to purchase shares of the Company’s common stock (each, an “Original Keep Well Warrant”). The number of shares of the Company’s common stock underlying each Original Keep Well Warrant was to be equal to (y) the product of the principal amount of the applicable Keep Well Note and 20% divided by (z) the exercise price of the applicable Original Keep Well Warrant, which was $1.69 per share, the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Company’s common stock immediately preceding the time the parties entered into the Original Keep Well Agreement. The maturity date of the Original Keep Well Notes was September 1, 2023.

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The Second Amendment, the Third Amendment and Fourth Amendment to the Keep Well Agreement

Under the Second Amendment and the Third Amendment, many of the conditions precedent to the Company’s ability to borrow, and Acuitas’ obligation to lend, were eliminated, the Company’s obligation to pay accrued interest on a monthly basis was eliminated, and instead accrued interest will be added to the principal amount of the applicable secured note issued under the Keep Well Agreement, the financial covenant that the Company’s consolidated recurring revenue be at least $15.0 million was reduced to $11.0 million, and (a) the minimum conversion price of the Keep Well Notes (as defined below) and (b) the minimum dollar amount to which the denominator will be reduced for purposes of calculating the warrant coverage on future borrowings under the Keep Well Agreement (as discussed below), was revised to be $0.15 (subject to adjustment for stock splits or other recapitalizations that affect all common stockholders proportionately). The $0.15 referenced in the preceding sentence was adjusted to $0.90 after giving effect to the 2023 Reverse Stock Split.

Below is a summary of certain other amendments effected by the Second Amendment, the Third Amendment and the Fourth Amendment:

•the maturity date of the Original Keep Well Notes (and of any other secured notes issued under the Keep Well Agreement) was extended from September 1, 2023 to June 30, 2024 in the Second Amendment, and further extended from June 30, 2024 to September 30, 2024 in the Fourth Amendment, subject to acceleration for certain customary events of default, including for failure to make payments when due, breaches by the Company of certain covenants and representations in the Keep Well Agreement, defaults by the Company under other agreements related to indebtedness, the Company’s bankruptcy or dissolution, and a change of control of the Company;

•per the Second Amendment, the remaining amount available to be borrowed under the Keep Well Agreement was increased from $10.7 million to $14.0 million and the provision that previously reduced the amount available to be borrowed by the net proceeds the Company received from equity financings was eliminated;

•per the Second Amendment, the funding structure was changed from borrowings as needed from time to time at the election of the Company, to the Company agreeing to borrow, and Acuitas agreeing to lend, subject to the conditions in the Keep Well Agreement (which conditions were also amended as described above), the entire then-remaining amount of $14.0 million as follows: $4.0 million in each of January (which was borrowed on January 5, 2023), March (which was borrowed on March 6, 2023) and June 2023, and $2.0 million in September 2023; the funding structure was further amended in the Fourth Amendment with respect to the $6.0 million remaining available amount to be funded, as described below;

•per the Fourth Amendment, in lieu of the $6.0 million remaining available amount to be funded as described above (and in full satisfaction of Acuitas’ obligation to purchase Keep Well Notes from the Company), Acuitas agreed to deliver to the Company for deposit and to be held by the Company in a segregated account established by the Company until such time of qualified withdrawal and issuance of a Keep Well Note, as described below (the proceeds so deposited, the “Escrowed Funds” and the account into which the proceeds are so deposited, the “Escrow Account”): (i) $4.0 million on June 23, 2023 (which was received by the Company on June 26, 2023); and (ii) $2.0 million on September 1, 2023 (which was received by the Company on September 7, 2023);

•per the Fourth Amendment, any time, and from time to time, that the Company has less than $1.0 million of Qualified Cash (as defined in Fourth Amendment), the Company may withdraw $1.0 million of Escrowed Funds (or any lesser remaining amount of Escrowed Funds) from the Escrow Account; each such withdrawal will be treated as a sale by the Company to Acuitas of a Keep Well Note with a principal amount equal to the amount withdrawn by the Company and in connection with each such withdrawal, the Company will also issue a Keep Well Warrant to Acuitas; and

•per the Fourth Amendment, if the Company does not complete a Qualified Financing (as defined below) on or prior to October 31, 2023, then, on October 31, 2023, the Company must withdraw all of the Escrowed Funds (other than any accrued interest thereon, all of which will belong to the Company) then on deposit in the Escrow Account, and such withdrawal will be treated as a sale by the Company to Acuitas of a Keep Well Note, and in connection with such withdrawal, the Company will also issue a Keep Well Warrant to Acuitas.

In the event the Company completes a Qualified Financing, all of the Escrowed Funds (other than any accrued interest thereon, all of which will belong to the Company) then on deposit in the Escrow Account will be invested in the Qualified Financing on behalf of Acuitas on the same terms as all other investors in the Qualified Financing, and the Company’s obligation to sell to Acuitas, and Acuitas’ obligation to purchase from the Company, any further Keep Well Notes will thereupon be deemed discharged with respect to the amount so invested.

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A “Qualified Financing” generally means any financing in which the Company issues or sells any of its equity securities for cash to one or more third party investors resulting in gross proceeds to the Company of at least $10.0 million exclusive of any amount invested by Acuitas in such financing. For a discussion regarding an amendment to the definition of Qualified Financing as well as investment of Escrowed Funds and conversion of Keep Well Notes, as described below, see "Fifth Amendment to Keep Well Agreement" below.

Conversion of Keep Well Notes

Following approval of the Company’s stockholders obtained at a special meeting of stockholders held in February 2023 (the “2023 Special Meeting”), Acuitas, at its option, has the right to convert the entire principal amount of the secured notes issued under the Keep Well Agreement, 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 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 (the “Conversion Right”). The $0.40 and $0.15 referenced in the preceding sentence are subject to adjustment for stock splits and similar corporate actions, and were adjusted to $2.39 and $0.90, respectively, after giving effect to the 2023 Reverse Stock Split.

Each Original Keep Well Note outstanding as of the date of stockholder approval was deemed to be amended to contain the Conversion Right. The Company refers to such Original Keep Well Notes, as so amended, and to all other secured notes issued under the Keep Well Agreement, as the “Keep Well Notes.”

In addition, in connection with the conversion of the principal amount of any 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, and 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 Keep Well Note then in effect, and the exercise price of each such warrant will be equal to the conversion price of the Keep Well Note then in effect, subject to adjustment as described below. See Note 14 below for information regarding conversion of Keep Well Notes.

Increase in Warrant Coverage and Other Adjustments

Following approval of the Company’s stockholders obtained at the 2023 Special Meeting, (a) the exercise price of the warrants issued under the Keep Well Agreement (both the Original Keep Well Warrants outstanding as of the date of the Second Amendment and those issued thereafter) was reduced to $0.45 per share ($2.70 per share as adjusted for the 2023 Reverse Stock Split), which was the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Company’s common stock immediately preceding the time the parties entered into the Second Amendment, and which is subject to future adjustment as described below; (b) the number of shares of the Company’s common stock subject to the warrants outstanding at the time of the 2023 Special Meeting (i.e., 1,775,148 shares, before the 2023 Reverse Stock Split) was increased to the number of shares that would have been subject to such warrants if the warrant coverage was equal to 100% of the amount borrowed under the Keep Well Agreement in respect of which the applicable Keep Well Warrant was issued (instead of 20%) divided by $0.45 (i.e., 33,333,333 shares, or an additional 31,558,185 shares; 5,555,557 shares , or an additional 5,259,696 shares, as adjusted for the 2023 Reverse Stock Split); and (c) the warrant coverage on borrowings under the Keep Well Agreement after the date of the Second Amendment was increased to a number of shares of the Company’s common stock equal to (x) 100% of the amount borrowed (instead of 20% of such amount) divided by (y) the greater of (i) the per share warrant exercise price (as adjusted as of the date of issuance of the applicable warrant) and (ii) $0.15 ($0.90 as adjusted for the 2023 Reverse Stock Split) (the “Warrant Coverage Denominator”), subject to future adjustment as described below, and each warrant issued after the date of the Second Amendment has an exercise price equal to $0.45 per share ($2.70 per share as adjusted for the 2023 Reverse Stock Split), subject to future adjustment as described below.

As a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to the holder of each warrant issued under the Keep Well Agreement outstanding as of the date of such approval, in exchange for such warrant, a new warrant to purchase shares of the Company’s common stock that reflect the amendments to the warrants described above and below, including the increase in the warrant coverage and the decrease in the exercise price. The Company refers to the new warrants issued in exchange for outstanding warrants and to any warrants issued in connection with future borrowings under the Keep Well Agreement or in connection with the conversion of the principal amount of any Keep Well Note and/or accrued interest thereon into shares of the Company’s common stock as the “Keep Well Warrants.”

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Under the terms of the Second Amendment, if the reverse stock split approved at the 2023 Special Meeting is effected, then:

(1) 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 would 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 below; and

(2) the Warrant Coverage Denominator would be reduced to the greater of $0.15 ($0.90 as adjusted for the reverse stock split discussed in Note 1 above) and the Post-Stock Split Price, subject to further reduction as described below.

As discussed in Note 7 above, the reverse stock split approved at the 2023 Special Meeting was effected on July 27, 2023. After giving effect to such reverse stock split, and in accordance with the above, the Post-Stock Split Price was determined to be $2.44 on August 3, 2023. In addition, after giving effect to such reverse stock split, the number of shares of the Company’s common stock underlying the Keep Well Warrants outstanding at the effective time of the reverse stock split were proportionally adjusted such that the aggregate exercise price payable upon exercise of the Keep Well Warrants remains unchanged.

Also under the terms of the Second Amendment: (i) the exercise price of each Keep Well Warrant outstanding as of September 1, 2023 was to be reduced to the closing price of the Company’s common stock on August 31, 2023, if such closing price is less than the Post-Stock Split Price; and (ii) the Warrant Coverage Denominator was to be reduced to the greater of (a) $0.15 (or $0.90 as adjusted after giving effect to the 2023 Reverse Stock Split) and (b) the lesser of (x) the Post-Stock Split Price and (y) the closing price of the Company’s common stock on August 31, 2023. As such, on September 1, 2023, the exercise price of each Keep Well Warrant and the Warrant Coverage Denominator (applicable to warrant issuances, if any, thereafter) was determined to be $0.92.

In February 2023, as a result of approvals obtained at the 2023 Special Meeting relating to the terms provided for in the Second Amendment, as described above, the Company determined that terms of the Keep Well Agreement as amended by the Second Amendment is substantially different from the terms in the Original Keep Well Agreement and that extinguishment of the senior secured notes issued under the Original Keep Well Agreement and recognition of a new debt instrument for the senior secured notes under the Original Keep Well Agreement as amended by the Second Amendment was appropriate. As such, in February 2023, the Company recorded the extinguishment of the senior secured notes under the Original Keep Well Agreement, resulting in a loss on extinguishment of debt of $2.2 million, which was recorded as part of additional paid in capital since the debt transaction is with Acuitas, a significant shareholder. The new debt instrument includes an embedded conversion feature, as described above, which was accounted for in accordance with ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity," which the Company adopted on January 1, 2022, and accordingly the Company did not separately present such embedded conversion feature in equity but rather accounted for the convertible debt wholly as debt. The Company also assessed and determined that the Keep Well Warrants qualified for equity classification and applied the relative fair value method to allocate proceeds from the debt issuance to the Keep Well Warrants. The Company incurred $0.3 million of debt issuance costs related to the Second Amendment. The fair value of the Keep Well Warrants and new debt issuance costs relating to the Second Amendment were recorded as part of debt discount and accreted using the effective interest method over the contractual term of the debt.

Additional Commitment Shares

As a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to Acuitas 339,689 shares of the Company's common stock (after giving effect to the 2023 Reverse Stock Split).

Fifth Amendment to Keep Well Agreement

Changes to Qualified Financing. Under the Fifth Amendment, the minimum amount to be raised in an equity financing for such financing to constitute a “Qualified Financing” was reduced from $10.0 million to $8.0 million, and the deadline by when a Qualified Financing must be completed before the Company is required to withdraw the Escrowed Funds was extended from October 31, 2023 to January 31, 2024. Under a letter agreement entered into on November 9, 2023, the minimum amount to be raised in an equity financing for such financing to constitute a “Qualified Financing” was further reduced to $6.0 million.

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Conversion of Keep Well Notes. Under the Fifth Amendment, if the Company completed a Qualified Financing, Acuitas agreed to convert into shares of the Company’s common stock the aggregate principal amount of the Keep Well Notes plus all accrued and unpaid interest thereon, minus (a) $7.0 million, minus (b) the principal amount of any Keep Well Notes purchased with funds from the Escrow Account prior to the closing of the Qualified Financing, if any, in accordance with the terms (including the conversion price) of the Keep Well Agreement and the Keep Well Notes (the “Notes Conversion”); provided that if the offering price per share at which the shares of common stock and accompanying warrants are sold to the public in the Qualified Financing (the “Offering Price”) is less than the conversion price at which Keep Well Notes are converted, upon the effectiveness of the Fifth Amendment Stockholder Approval Matters (as defined below): (1) the Company would issue to Acuitas such additional shares of common stock such that the total number of shares of common stock issued in respect of the Notes Conversion plus such additional shares of common stock would equal the number of shares that would have been issued in respect of the Notes Conversion if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Offering Price; and (2) the exercise price of the warrants issued to Acuitas in connection with the Notes Conversion (the “Conversion Warrants”) would be reduced to the Offering Price and the number of shares of common stock subject to the Conversion Warrants would be increased to the number of shares of common stock that would have been subject to the Conversion Warrants if the Keep Well Notes were converted at a conversion price equal to the Offering Price.

Private Placement. In lieu of the provisions set forth in the Fourth Amendment concerning the investment of Escrowed Funds in the offering that constitutes a Qualified Financing, the Fifth Amendment provided that if an offering constituted a Qualified Financing, the Company and Acuitas will immediately prior to, or simultaneously with the closing of such offering, consummate a private placement (the “Private Placement”) of $11.0 million of an unregistered pre-funded warrant to purchase shares of the Company’s common stock (the “Private Placement Pre-Funded Warrant”) and an unregistered warrant to purchase shares of the Company’s common stock (the “Private Placement Warrant,” and together with the Private Placement Pre-Funded Warrant, the “Private Placement Securities”). The consideration for the Private Placement Securities purchased by Acuitas would consist of (a) the Escrowed Funds then held in the Escrow Account, and (b) a reduction of the aggregate amounts outstanding under the Keep Well Notes (after giving effect to the Notes Conversion) to $2.0 million (the senior secured convertible promissory note evidencing such $2.0 million, the “Surviving Note”). Each Private Placement Pre-Funded Warrant would be sold together with two Private Placement Warrants with each Private Placement Warrant exercisable for one share of our common stock.

Surviving Note. Under the Fifth Amendment, the maturity date of the Surviving Note was extended from September 30, 2024 to May 14, 2026, which date is two years and six months after the closing date of the offering that constituted a Qualified Financing, unless the Surviving Note becomes due and payable in full earlier, whether by acceleration or otherwise. In addition, if the Offering Price is lower than $0.90, then, subject to the effectiveness of the Fifth Amendment Stockholder Approval Matters, the $0.90 floor on the conversion price of the Surviving Note would be replaced with the Offering Price. On December 20, 2023, upon the effectiveness of the Fifth Amendment Stockholder Approval Matters, the $0.90 conversion price of the Surviving Note was replaced with $0.60, the Public Offering Price, discussed below.

Stockholder Approval. Under the Fifth Amendment, among other things, the Company was required to seek stockholder approval in accordance with the Nasdaq listing rules of (A) the issuance of the shares of the Company’s common stock issuable upon exercise of (x) the warrants and the pre-funded warrants sold in the offering that constitutes a Qualified Financing and (y) the Private Placement Securities that, in the aggregate for clauses (x) and (y) above, are in excess of the maximum number of shares of the Company’s common stock permitted to be issued without such approval under Nasdaq’s listing rules (which amount is equal to 19.99% of the total number of shares of the Company’s common stock outstanding immediately following the Notes Conversion and immediately prior to the closing of the offering that constitutes a Qualified Financing and/or the Private Placement), (B) the amendment to the conversion price of the Surviving Note described above, and (C) any other terms of the offering that constitutes a Qualified Financing, the Private Placement and/or the Fifth Amendment that require approval of the Company’s stockholders under Nasdaq’s listing rules (collectively, the “Fifth Amendment Stockholder Approval Matters”).

Support Agreement. In connection with entering into the Fifth Amendment, on October 31, 2023, the Company and Acuitas entered into a support agreement pursuant to which Acuitas has agreed to vote the shares of the Company's common stock it beneficially owns in favor of the Fifth Amendment Stockholder Approval Matters.

Public Offering, Private Placement and Notes Conversion

On November 14, 2023, the Company completed a public offering (the “Public Offering”). In the Public Offering, the Company issued (a) 4,592,068 shares of its common stock and 9,184,136 warrants to purchase up to 9,184,136 shares of its common stock at a combined public offering price of $0.60 per share of common stock and accompanying warrants (the “Public

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Offering Price”), and (b) 5,907,932 pre-funded warrants to purchase up to 5,907,932 shares of its common stock (the “Public Offering Pre-Funded Warrants”) and 11,815,864 warrants to purchase up to 11,815,864 shares of its common stock at a combined public offering price of $0.5999 per Public Offering Pre-Funded Warrant and accompanying warrants, which represents the per share public offering price for the common stock and accompanying warrants less the $0.0001 per share exercise price for each Public Offering Pre-Funded Warrant. The Company refers to the warrants sold in the Public Offering accompanying the shares of common stock and the warrants accompanying the Public Offering Pre-Funded Warrants as the “Public Offering Warrants.” The Company received gross proceeds of $6.3 million from the Public Offering, and therefore the Public Offering constituted a Qualified Financing. Total net proceeds was approximately $5.3 million (net of approximately $1.0 million of offering related fees and expenses, not including the placement fee payable relating to the Private Placement discussed below). The Public Offering Warrants had an initial exercise price of $0.85 per share, subject to adjustment. The exercisability of the Public Offering Warrants was subject to the effectiveness of the Fifth Amendment Stockholder Approval Matters, and expire five years from the effectiveness thereof.

In accordance with the Fifth Amendment, concurrent with the closing of the Public Offering, the Company issued to Humanitario Capital LLC, an affiliate of Acuitas Capital, a Private Placement Pre-Funded Warrant to purchase up to 18,333,333 shares of the Company's common stock, at an exercise price of $0.0001 per share, and a Private Placement Warrant to purchase up to 36,666,666 shares of the Company's common stock, at an exercise price of $0.85 per share, subject to adjustment, for total consideration of $11.0 million. The consideration for the Private Placement Securities consisted of (a) the $6.0 million in the Escrow Account that Acuitas previously delivered to the Company in June 2023 and September 2023 in accordance with the Keep Well Agreement (which $6.0 million was reclassified from restricted cash to unrestricted cash) and (b) $5.0 million of debt owed under the Keep Well Notes, which was cancelled. The Company wrote-off $1.5 million of debt discount in connection with $5.0 million Keep Well Notes cancelled. The Company paid placement fees of approximately $0.4 million in connection with the Private Placement.

The Company assessed and determined that the warrants issued in the Public Offering and Private Placement as described above qualified for equity classification and applied the relative fair value method to allocate proceeds from each Public Offering and Private Placement transactions to the respective warrants.

In accordance with the Fifth Amendment, on November 14, 2023 and before the closing of the Public Offering and Private Placement, the Notes Conversion was effected. In connection with the Notes Conversion, $16.2 million of Keep Well Notes were converted into 18,054,791 shares of the Company’s common stock and the Company issued to Acuitas a Conversion Warrant to purchase up to 18,054,791 shares of the Company’s common stock with an exercise price of $0.90 per share, which was the conversion price of the Keep Well Notes converted in the Notes Conversion. The Company wrote-off $3.7 million of debt discount in connection with the conversion of $16.2 million of Keep Well Notes.

On November 15, 2023, Acuitas, who owned a majority of the outstanding shares of the Company’s common stock as of that date, executed and delivered to the Company a written consent approving the Fifth Amendment Stockholder Approval Matters. The Company filed an information statement regarding the Fifth Amendment Stockholder Approval Matters with the SEC on November 30, 2023 and mailed such information statement to the holders of its common stock. The actions approved by such consent became effective on December 20, 2023.

Because the Public Offering Price was less than the conversion price at which Keep Well Notes were converted in the Notes Conversion, (1) the Company issued to Acuitas 9,027,395 additional shares of common stock, which when added with the shares of common stock issued in respect of the Notes Conversion, equaled the total number of shares of common stock that the Company would have issued in respect of the Notes Conversion if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Public Offering Price; and (2) the exercise price of the Conversion Warrant was reduced to the Public Offering Price and the number of shares of common stock subject to the Conversion Warrant was increased by an additional 9,027,395 shares to equal the number of shares of common stock that would have been subject to the Conversion Warrant if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Public Offering Price.

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Sixth Amendment to Keep Well Agreement

Issuance of Demand Notes and Warrants. Under the Sixth Amendment, the Company agreed to issue and sell to Acuitas, in Acuitas’ sole discretion, up to $15 million of senior secured convertible promissory notes (each a “Demand Note”). The Company issued and sold Demand Notes to Acuitas in the original principal amount of $1.5 million on each of April 5, 2024, May 8, 2024 and June 5, 2024. At June 30, 2024, in Acuitas’ sole discretion, Acuitas may purchase from the Company, and the Company would issue and sell to Acuitas, up to an additional $10.5 million in principal amount of Demand Notes. The terms of the Demand Notes are substantially similar to the Surviving Note, except the amounts due under the Demand Notes were payable upon demand of the holder. On August 13, 2024, the Company entered into an agreement with Acuitas pursuant to which Acuitas agreed to purchase $5.0 million of Demand Notes in accordance with the specified schedule therein, subject to a limited offset right, and also agreed not to exercise its right to require that any amounts due under any Demand Note be paid until after August 30, 2025, subject to a limited exception. As a result of the foregoing, the Company has classified the $4.6 million, including accrued payment-in-kind interest, outstanding under Demand Notes as of June 30, 2024 as part of long-term debt on the Company's condensed consolidated balance sheet.

In connection with each Demand Note purchased by Acuitas from the Company, the Company agreed to issue to Acuitas (or an entity affiliated with Acuitas, as designated by Acuitas) a warrant (“Demand Warrant”) to purchase such number of shares of the Company’s common stock that results in 200% warrant coverage.

The initial exercise price of each Demand Warrant issued with respect to: (a) the first $4.5 million of principal amount of Demand Notes purchased by Acuitas, was the lesser of (i) $0.3442 (after giving effect to the reduction of the exercise price of the Public Offering Warrants and Private Placement Warrant (collectively, the “November 2023 Warrants”) that occurred on April 5, 2024 as described below) and (ii) the greater of (1) the consolidated closing bid price of the Company’s common stock as reported on The Nasdaq Stock Market or such other exchange on which the Company’s common stock is listed (the “Exchange”) immediately preceding the time the applicable Demand Note is deemed issued by the Company and (2) $0.12; and (b) any subsequent Demand Notes, will be the consolidated closing bid price of the Company’s common stock as reported on the Exchange immediately preceding the time the applicable Demand Note is deemed issued by the Company.

Following the occurrence of the Sixth Amendment Stockholder Approval Effective Date (as defined below), the Company issued Demand Warrants to Acuitas in respect of the Demand Notes issued to Acuitas in the original principal amount of $1.5 million on each of April 5, 2024, May 8, 2024 and June 5, 2024. In the aggregate, such Demand Warrants allow the holder thereof to purchase a total of 31.5 million shares of the Company's common stock at per share exercise prices ranging from $0.26 to $0.3442. The Company determined the relative fair value of such Demand Warrants issued and recorded a total of $2.7 million of expense included in "Debt issuance costs" in its condensed consolidated statement of operation for the three and six months ended June 30, 2024.

The exercise price of each Demand Warrant is subject to further adjustment in accordance with the terms of the Demand Warrant and the Sixth Amendment. Each Demand Warrant has a term of five years and the other terms of the Demand Warrants are substantially similar to the terms of the November 2023 Warrants. See “Warrant Adjustment Provisions,” below.

Sixth Amendment Stockholder Approval. The Company was required to seek stockholder approval (the “Sixth Amendment Stockholder Approval”) in accordance with the Nasdaq listing rules of (a) the issuance of the (x) Demand Warrants, (y) the New Keep Well Warrants and (z) the Demand Notes, (b) the issuance of the shares of the Company’s common stock upon exercise or conversion, as applicable, of the Demand Warrants, the New Keep Well Warrants, and the Demand Notes, and (c) any other terms of the Sixth Amendment that require approval of the Company’s stockholders under the Nasdaq listing rules.

On April 22, 2024, the Company obtained the Sixth Amendment Stockholder Approval by written consent or consents signed by the holders of outstanding shares of the Company’s common stock having not less than the minimum number of votes that would be necessary to authorize or take the applicable actions at a meeting at which all shares entitled to vote thereon were present and voted. Following receipt of the Sixth Amendment Stockholder Approval, on May 1, 2024, the Company filed with the SEC a preliminary information statement related to the Sixth Amendment Stockholder Approval, and on May 13, 2024, the Company mailed a definitive information statement to the Company’s stockholders in accordance with SEC rules. Under SEC rules, in the case of corporate actions taken by the consent of stockholders, the definitive information statement must be sent or given at least 20 calendar days prior to the earliest date on which the corporate actions approved by the consent of stockholders may be taken. Accordingly, the effective date of the stockholder approval of the corporate actions approved by the Sixth Amendment Stockholder Approval was June 2, 2024 (the “Sixth Amendment Stockholder Approval Effective Date”).

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Replacement of Keep Well Warrants. Following the occurrence of the Sixth Amendment Stockholder Approval Effective Date, the Company issued to each holder of each warrant to purchase shares of the Company’s common stock issued under the Existing Keep Well Agreement outstanding as of the Sixth Amendment Stockholder Approval Effective Date (any such warrant, a “Replaced Keep Well Warrant”), in exchange therefor, a warrant to purchase shares of the Company’s common stock (a “New Keep Well Warrant”) substantially in the form of the Demand Warrant, and each Replaced Keep Well Warrant was deemed automatically cancelled. Each New Keep Well Warrant has (a) the same issuance date as the Replaced Keep Well Warrant in respect of which it was issued, (b) a term of five years from the original issuance date of the Replaced Keep Well Warrant in respect of which it was issued, and (c) an initial exercise price equal to $0.3442 (after giving effect to the reduction of the exercise price of the November 2023 Warrants that occurred on April 5, 2024 described below), which will be subject to further adjustment in accordance with its terms and the terms of the Sixth Amendment.

Surviving Note. Effective as of the Sixth Amendment Stockholder Approval Effective Date, the conversion price of the Surviving Note was reduced from $0.60 to the lesser of (i) $0.36, and (ii) the greater of (a) the consolidated closing bid price of the Company’s common stock as reported on the Exchange on the trading day that is immediately prior to the applicable conversion date of such note and (b) $0.12, subject to further adjustment in accordance with its terms. The Company concluded that this modification of the conversion price of the Surviving Note is a substantially different term as provided in the Sixth Amendment, and therefore extinguishment of original debt and recognition of new debt is appropriate. As such, the Company recorded a $0.5 million loss on extinguishment of debt, which was recorded as part of additional paid in capital since the debt transaction is with Acuitas, a significant shareholder.

Waivers by Holders of Outstanding Warrants

On March 28, 2024, the Company and each holder of a Public Offering Warrant entered into a waiver and consent agreement (collectively, the “Public Offering Investor Waivers”), pursuant to which such holder agreed to waive, with respect to the transactions contemplated by the Sixth Amendment, certain limitations and prohibitions in the securities purchase agreement pursuant to which the Public Offering Warrants were issued that otherwise would have prohibited the Company from entering into Sixth Amendment and consummating the transactions contemplated thereby.

In addition, pursuant to the Public Offering Investor Waivers, the holders of the Public Offering Warrants agreed to the following adjustments to the exercise price of the Public Offering Warrants then in effect (in lieu of the adjustments that would otherwise be made in accordance with the terms of the Public Offering Warrants) in connection with the Sixth Amendment and the transactions contemplated thereby: (i) the exercise price was reduced to $0.36 per share at the time the Company entered into the Sixth Amendment; (ii) if $0.36 was greater than the lowest volume weighted average price (“VWAP”) of the Company’s common stock on any trading day during the five trading day period immediately following the public announcement of the Company entering into the Sixth Amendment (the “Restricted Transaction Measuring Period”), then the exercise price per share would be further reduced to the lowest VWAP on any trading day during the Restricted Transaction Measuring Period; and (iii) if any senior secured promissory note issued under the Keep Well Agreement is converted into shares of the Company’s common stock at a conversion price per share less than the exercise price per share of the Public Offering Warrants then in effect, after giving effect to the preceding clauses (i) and (ii) and any adjustments pursuant to the terms of the Public Offering Warrant (other than Section 3(b) thereof), then the exercise price will be further reduced to such conversion price at such time of such conversion.

Also on March 28, 2024, the Company and Humanitario entered into a waiver and agreement (together with the Public Offering Investors Waivers, the “Investor Waivers”) pursuant to which, among other things, Humanitario agreed to the adjustments to the exercise price of the Private Placement Warrant then in effect as described above for the Public Offering Warrants (in lieu of the adjustments that would otherwise be made in accordance with the terms of such warrant) in connection with the Sixth Amendment and the transactions contemplated thereby.

The lowest VWAP on any trading day during the Restricted Transaction Measuring Period (the five trading day ended on April 5, 2024) was $0.3442 . Accordingly, the exercise price of the Public Offering Warrants and the Private Placement Warrant (collectively, the “November 2023 Warrants”) was reduced to, and currently is, $0.3442 per share, which is subject to further adjustment in accordance with the terms of the Investor Waivers and the November 2023 Warrants.

In order to enter into the Sixth Amendment, as described above, the Company and the holders of the Public Offering Warrants and Private Placement Warrants agreed to adjust the exercise price and simultaneously increase the number of shares of the Company's common stock issuable upon exercise of the Public Offering Warrants and Private Placement Warrants, as described

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above. The Company deemed these modifications of warrants to be debt issuance costs, which was recorded at their relative fair value of $10.7 million. A cumulative total of $10.9 million of debt issuance costs (the foregoing $10.7 million plus $0.2 million of legal cost) was recorded as an other long-term asset included in "Other assets" on the Company's condensed consolidated balance sheet. As of June 30, 2024, $3.3 million of such debt issuance costs, representing a proportionate amount relative to the $4.5 million of Demand Notes that have been issued, has been expensed, and included in "Debt issuance costs" in the Company's condensed consolidated statement of operation for the three and six months ended June 30, 2024.

Warrant Adjustment Provisions

In addition to customary adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock, the exercise price of the November 2023 Warrants, the Demand Warrants and New Keep Well Warrants, and the number of shares of common stock issuable upon exercise thereof are subject to adjustment upon the occurrence of the events described below (collectively, the “Warrant Adjustment Provisions”).

•Adjustment in May 2026. On May 14, 2026, the exercise price of the warrants will be reduced to the greater of (i) $0.1584 per share and (ii) the lesser of (x) the then exercise price and (y) the lowest volume weighted average price of our common stock on any trading day during the five trading day period immediately before May 14, 2026.

•Alternative Exercise Price Following Certain Issuances. If we issue or sell, or enter into any agreement to issue or sell, any common stock, common stock equivalents, or rights, warrants or options to purchase shares of our capital stock or common stock equivalents that are issuable or convertible into or exchangeable or exercisable for shares of our common stock at a price which varies or may vary with the market price of our common stock (excluding customary adjustments in the event of stock dividends, stock splits, reorganizations or similar events), the holder will have the right, in its sole discretion, to substitute the variable price for the exercise price of its warrants.

•Adjustment for Stock Combination Events. 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 of the warrants then in effect (after giving effect to customary adjustments thereto as a result of the event), then on the 16th trading day immediately following the Stock Combination Event, the exercise price of the warrants will be reduced to the Event Market 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.

•Adjustment Upon Restricted Investor Subsequent Placement. If at any time prior to June 20, 2027, we (1) grant, issue or sell (or enter into any agreement to grant, issue or sell) any shares of common stock, non-convertible indebtedness and/or common stock equivalents to Acuitas that results in a reduction of the exercise price in accordance with the terms of the warrants, or (2) consummate (or enter into any agreement with respect to) any other financing with Acuitas (any transaction described in clause (1) or (2), other than certain exempt issuances, a “Restricted Transaction”) and the exercise price of the warrants is greater than the lowest volume weighted average price of our common stock on any trading day during the five trading day period immediately following the public announcement of such Restricted Transaction, then the exercise price of the warrants will be reduced to the lowest volume weighted average price on any trading day during such five trading day period.

•Adjustment for Dilutive Issuances. If we issue (or enter into any agreement to issue) any shares of our common stock or common stock equivalents, excluding certain exempt issuances, for a consideration per share less than the exercise price of the warrants in effect immediately prior to such issuance or deemed issuance, then the exercise price of the warrants will be reduced to an amount equal to the consideration per share at which the common stock or common stock equivalents were issued or deemed issued.

•Adjustment to Number of Shares Issuable Upon Exercise. Simultaneously with any adjustment to the exercise price on or prior to June 20, 2027, the number of shares of common stock issuable upon exercise will be increased or decreased proportionally, such that the aggregate exercise price of the warrants, after taking into account the adjustment in the exercise price, will be equal to the aggregate exercise price before the adjustment in the exercise price.

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In the event of a fundamental transaction, as described in the November 2023 Warrants, the Demand Warrants and New Keep Well Warrants and which generally includes any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, a holder of any of the November 2023 Warrants, the Demand Warrants or New Keep Well Warrants will be entitled to receive upon exercise thereof the kind and amount of securities, cash or other property that the holder would have received had it exercised the holder’s applicable warrant immediately prior to such fundamental transaction. Additionally, as more fully described in the November 2023 Warrants, the Demand Warrants and New Keep Well Warrants, in the event of certain fundamental transactions, the holder will be entitled to receive consideration in an amount equal to the Black Scholes Value (as defined in the warrants) of the warrants on the date of consummation of such transaction.

Borrowings Under the Keep Well Agreement

At June 30, 2024, a total of $6.9 million, which includes $0.4 million of accrued paid-in-kind interest, was outstanding under the Keep Well Agreement. The amount outstanding under the Keep Well Agreement, which are evidenced by Keep Well Notes, accrues interest based on the adjusted term SOFR for each interest period. At June 30, 2024, the effective weighted average interest rate for the Keep Well Notes was 21.29%.

The net carrying amounts of the liability components consists of the following (in thousands):

			June 30, 2024						December 31, 2023
Long-term debt:
Principal			$	6,933					$	2,057
Less: debt discount			(261)						(590)
Net carrying amount			$	6,672					$	1,467

The following table presents the interest expense recognized related to the Company's borrowings under the Keep Well Agreement (in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Contractual interest expense			$	265					$	1,088					$	377					$	1,936
Accretion of debt discount			46						1,119						85						1,640
Total interest expense			$	311					$	2,207					$	462					$	3,576

Stockholders Agreement

Under the terms of the Keep Well Agreement, if Acuitas' beneficial ownership of the Company’s capital stock equals at least a majority of the voting power of the Company’s outstanding capital stock, Acuitas Capital and the Company agreed to enter into a stockholders agreement (the “Stockholders Agreement”) pursuant to which, during any period that Acuitas’ beneficial ownership of the Company’s capital stock equals at least 50% of the Company’s outstanding capital stock, Acuitas 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 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 or any of its affiliates

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(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 Stockholders Agreement was entered into on February 21, 2023.

Other

During August and November 2023, the Company financed a total of $2.1 million of its insurance premiums at annual weighted average effective rate of 8.7%, payable in 9 to 11 equal monthly installments and down payments totaling $0.4 million. At June 30, 2024 and December 31, 2023, there was $0.3 million and $1.4 million, respectively, relating to such financed insurance premium outstanding, which were included as part of "Other accrued liabilities" on our condensed consolidated balance sheet as of each respective period.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below:

Level Input						Input Definition
Level I						Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II						Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III						Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis as of the periods presented (in thousands):

			Balance as of June 30, 2024
			Level I						Level II						Level III						Total
Warrant liabilities (1)			$	—					$	—					$	4					$	4
Total liabilities			$	—					$	—					$	4					$	4

			Balance as of December 31, 2023
			Level I						Level II						Level III						Total
Contingent consideration (2)			$	—					$	—					$	64					$	64
Warrant liabilities (1)			—						—						8						8
Total liabilities			$	—					$	—					$	72					$	72

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(1) Relates to warrants issued in connection with the Eight Amendment to the Note Purchase Agreement with Goldman Sachs Specialty Lending Group, L.P., executed on March 8, 2022, and included in "Other accrued liabilities" on our condensed consolidated balance sheet as of June 30, 2024 and December 31, 2023.

(2) Included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023.

Financial instruments classified as Level III in the fair value hierarchy as of June 30, 2024 and December 31, 2023 represent liabilities measured at market value on a recurring basis and include warrant liabilities relating to warrants issued in connection with an amendment to our Note Purchase Agreement dated September 24, 2019, and contingent consideration relating to a stock

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price guarantee provided in an acquisition (see further discussion below regarding this contingent consideration). In accordance with current accounting rules, the warrant liabilities and contingent consideration liability are marked-to-market each quarter-end until they are completely settled or expire. The fair value of the warrant liabilities was valued using the Black-Scholes pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. The fair value of the contingent consideration liability was valued using the Monte Carlo simulation model, using both observable and unobservable inputs and assumptions.

The carrying value of the Keep Well Notes is estimated to approximate their respective fair values as the variable interest rate of the notes approximates the market rate for debt with similar terms and risk characteristics.

The fair value measurements using significant Level III inputs, and changes therein, was as follows (in thousands):

			Level III Contingent Consideration
Balance as of December 31, 2023			$	64
Settlement of contingent consideration			(64)
Balance as of June 30, 2024			$	—

The $0.1 million of contingent consideration liability, relating to a stock price guarantee in our acquisition of LifeDojo Inc. completed in October 2020, was included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023. In January 2024, the Company issued 1,238 shares of common stock, representing full settlement of the contingent consideration liability.

Warrant Liabilities

			Level III Warrant Liabilities
Balance as of December 31, 2023			$	8
Gain on change in fair value of warrant liabilities			(4)
Balance as of June 30, 2024			$	4

The assumptions used in the Black-Scholes warrant-pricing model were determined as follows:

						June 30, 2024
Volatility						100.0		%
Risk-free interest rate						4.52		%
Weighted average expected life (in years)						2.27
Dividend yield						0		%

Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis.

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As discussed under the heading Management Services Agreements (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSAs, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSAs. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH, including its decision making and approvals are conducted for its benefit, as evidenced by the fact that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee by TIH and CIH is subordinate to payments of the other obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit.

Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans, the Company has determined that TIH and CIH are VIEs. The Company, as the primary beneficiary, is required to consolidate the VIE entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers.

Management Services Agreements

In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSAs, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks, and provides all required day-to-day business management services, including, but not limited to:

•general administrative support services;

•information systems;

•recordkeeping;

•billing and collection; and

•obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits.

All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company.

TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five-year period), (b) 10%-15% of the foregoing costs, and (c) any performance bonus amount, as determined by TIH at its sole discretion.

CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five-year period), and (b) any performance bonus amount, as determined by CIH at its sole discretion.

The Company's condensed consolidated balance sheets include the following assets and liabilities from its TIH and CIH VIEs (in thousands):

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			June 30, 2024						December 31, 2023
Cash			$	459					$	1,433
Accounts receivable			443						—
Unbilled receivables			76						85
Prepaid and other current assets			16						45
Total assets			$	994					$	1,563
Accrued liabilities			$	9					$	52
Deferred revenue			50						64
Payables to Ontrak			1,608						2,281
Total liabilities			$	1,667					$	2,397

From time to time, we are subject to various legal proceedings that arise in the normal course of our business activities. As of the date of this report, we are not party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our results of operations or financial position, except the following:

Loss Contingencies

On March 3, 2021, a purported securities class action was filed in the United States District Court for the Central District of California, entitled Farhar v. Ontrak, Inc., Case No. 2:21-cv-01987. On March 19, 2021, another similar lawsuit was filed in the same court, entitled Yildrim v. Ontrak, Inc., Case No. 2:21-cv-02460. On July 14, 2021, the Court consolidated the two actions under the Farhar case (“Consolidated Class Action”), appointed Ibinabo Dick as lead plaintiff, and the Rosen Law Firm as lead counsel. On August 13, 2021, lead plaintiff filed a consolidated amended complaint. In the Consolidated Amended Complaint, lead plaintiff, purportedly on behalf of a putative class of purchasers of Ontrak securities from August 5, 2020 through February 26, 2021, alleges that the Company and Terren S. Peizer, Brandon H. LaVerne and Curtis Medeiros, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder, by intentionally or recklessly making false and misleading statements and omissions in various press releases, SEC filings and conference calls with investors on August 5, 2020 and November 5, 2020. Specifically, the Consolidated Amended Complaint alleges that the Company was inappropriately billing its largest customer, Aetna, causing Aetna to, in May 2020, shut off its data feed to Ontrak, and, in July 2020, require Ontrak to complete a Corrective Action Plan (“CAP”). Lead plaintiff alleges that defendants: (1) misrepresented to investors that the data feed was shut off in July 2020, and that it was part of Aetna’s standard compliance review of all of its vendors; (2) failed to disclose to investors that Aetna had issued the CAP; and (3) failed to disclose to investors that Ontrak was engaging in inappropriate billing practices. Lead plaintiff seeks certification of a class and monetary damages in an indeterminate amount. On September 13, 2021, defendants filed a motion to dismiss the Consolidated Amended Complaint for failure to state a claim under Federal Rules of Civil Procedure 12(b)(6) and 9(b) and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. §§ 78u-4, et seq. The motion was taken under submission, with no oral argument. Prior to any ruling being issued on the motion to dismiss, on March 29, 2023, lead plaintiff filed a Second Amended Complaint. The Second Amended Complaint (1) adds Jonathan Mayhew as a defendant; (2) expands the purported class period to August 5, 2020 through August 19, 2021; and (3) now includes allegations that the defendants additionally intentionally or recklessly made false and misleading statements and omissions regarding the Company’s relationship with its then-second largest customer, Cigna, in various press releases, SEC filings and conference calls with investors on May 6, 2021 and August 5, 2021. On May 15, 2023, the Company filed its motion to dismiss the Second Amended Complaint. On February 2, 2024, the Court issued an order granting the Company’s motion to dismiss in its entirety and providing lead plaintiff leave to amend. On March 5, 2024, lead plaintiff filed its Third Amended Complaint, which asserts the same claims, against the same defendants for the same purported class period. On March 19, 2024, the Company filed its motion to dismiss the Third Amended Complaint. That motion is now fully briefed and has been taken under submission by the Court. The Company believes that the allegations lack merit and intends to defend against the action vigorously.

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On August 6, 2021, a purported stockholder derivative complaint was filed in the United States District Court for the Central District of California, entitled Aptor v. Peizer, Case No. 2:21-cv-06371, alleging breach of fiduciary duty on behalf of the Company against Terren S. Peizer, Brandon H. LaVerne, Richard A. Berman, Michael Sherman, Diane Seloff, Robert Rebak, Gustavo Giraldo and Katherine Quinn, and contribution against Terren S. Peizer and Brandon H. LaVerne. On October 6, 2021, a similar shareholder derivative action was filed in the same Court, entitled Anderson v. Peizer, Case No. 2:21-cv-07998, for breach of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement and waste of corporate assets against Terren S. Peizer, Brandon H. LaVerne, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, and Katherine Quinn, and contribution against Terren S. Peizer, Brandon H. LaVerne and Curtis Medeiros. On December 1, 2021, a similar shareholder derivative action was filed in the United States District Court for the District of Delaware, entitled Vega v. Peizer, Case No. 1:21-cv-01701, for violation of Section 20(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment and waste of corporate assets against Terren S. Peizer, Brandon H. LaVerne, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, and Katherine Quinn. In these actions, plaintiffs allege that the defendants breached their fiduciary duties by allowing or causing the Company to violate the federal securities laws as alleged in the Consolidated Class Action discussed above. The plaintiffs seek damages (and contribution from the officers) in an indeterminate amount. On December 7, 2021, the Court in the Central District of California consolidated the two Central District of California actions under the Aptor case caption and number (the "Consolidated Derivative Action"), stayed the action pending a ruling on the Motion to Dismiss in the Consolidated Class Action and ordered plaintiffs to file a consolidated amended complaint within fourteen (14) days of a ruling on the Motion to Dismiss in the Consolidated Class Action. On February 7, 2022, the Court in the District of Delaware extended the deadline for defendants to respond to the complaint in the Vega action to April 8, 2022. On March 21, 2022, the Court in the District of Delaware granted plaintiff’s unopposed motion to transfer the case to the United States District Court for Central District of California in the interest of judicial efficiency due to the Consolidated Class Action and Consolidated Derivative Action already pending in that district, and that same day the case was transferred into the United States District Court for Central District of California and given the new Case No. 2:22-cv-01873-CAS-AS. On April 11, 2022, the Court stayed the action pending a ruling on the Motion to Dismiss in the Consolidated Class Action and ordered plaintiffs to inform defendants regarding their intention to amend their initial complaint within thirty (30) days of said ruling. On February 14, 2024, the parties in Consolidated Derivative Action stipulated to an extension of the stay pending a ruling on Ontrak’s anticipated motion to dismiss the forthcoming amended complaint filed by lead plaintiff in the Consolidated Class Action. On April 8, 2024, the parties in the Vega action did the same. On January 25, 2024, another purported stockholder derivative complaint was filed in the Court of Chancery of the State of Delaware, entitled Dutkiewicz v. Acuitas Group Holdings LLC (“Acuitas”), Case No. 2024-0068, alleging breach of fiduciary duty under Brophy and unjust enrichment against Acuitas and Terren S. Peizer and breach of fiduciary duties generally against Acuitas, Terren S. Peizer, Brandon H. LaVerne, Jonathan Mayhew, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, Katherine Quinn and Robert Newton. On July 11, 2024, the parties also stipulated to stay the matter pending a ruling on Ontrak’s motion to dismiss in the Consolidated Class Action. Although all of the claims asserted in these actions purport to seek recovery on behalf of the Company, the Company will incur certain expenses due to indemnification and advancement obligations with respect to the defendants. The Company understands that defendants believe these actions are without merit and intend to defend themselves vigorously.

On February 28, 2022, a purported securities class action was filed in the Superior Court of California for Los Angeles County, entitled Braun v. Ontrak, Inc., et al., Case No. 22STCV07174. The plaintiff filed this action purportedly on behalf of a putative class of all purchasers of the Series A Preferred Stock pursuant to Registration Statements and Prospectuses issued in connection with Ontrak’s August 21, 2020 initial public stock offering, its September 2020 through December 2020 “at market” offering, and its December 16, 2020 follow-on stock offering (collectively, the “Preferred Stock Offerings”). The plaintiff brings this action against the Company; its officers: Terren S. Peizer, Brandon H. LaVerne, and Christopher Shirley; its board members: Richard A. Berman, Sharon Gabrielson, Gustavo Giraldo, Katherine B. Quinn, Robert Rebak, Diane Seloff, Michael Sherman, and Edward Zecchini; and the investment banking firms that acted as underwriters for the Preferred Stock Offerings: B. Riley Securities, Inc., Ladenburg Thalmann & Co., Inc., William Blair & Company, LLC, Aegis Capital Corp., Insperex LLC (f/k/a Incapital LLC), The Benchmark Company, LLC, Boenning & Scatteredgood, Inc., Colliers Securities, LLC, Kingswood Capital Markets, and ThinkEquity (the "Underwriters"). The plaintiff asserts three causes of action alleging that Ontrak violated § 11, § 12(a)(2), and § 15 of the Securities Act of 1933, respectively, (1) by failing to disclose facts required to be disclosed under SEC Regulation S-K items 105 and 303 – that Aetna had turned off the data feed of customer records to Ontrak citing dissatisfaction with the Company’s value proposition and billing practices and thereafter submitted a CAP to which Ontrak’s senior executives were unable to effectively respond; and (2) by issuing allegedly false or misleading statements in its Registration Statements and Prospectuses: (a) regarding Ontrak’s growing customer base; (b) regarding its ability to scale its operations; (c) that revenue from a limited number of its customers would continue; (d) that its services are provided to customers continuously; (e) that revenue increases were attributable to continued expansion of the Ontrak program; and (f) regarding the healthcare experience of its

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executives. The plaintiff seeks damages in an indeterminate amount. On July 7, 2022, the defendants filed demurrers to the complaint. On October 4, 2022, the Court issued its ruling, allowing the case to proceed but with a narrowed scope. Specifically, of the six alleged misleading statements, only two remain (that Ontrak had a growing “growing customer base” and that Ontrak’s revenue growth was attributed to “[t]he continued expansion of [its] Ontrak program with [its] existing health plan customers”). The Court sustained the Company’s demurrer to the second cause of action, for violation of Section 12 of the Securities Act of 1933; while the Court granted leave to amend the plaintiff determined not to amend to pursue that claim. The Company believes that the remaining allegations lack merit and intends to defend against the action vigorously.

On November 18, 2022, plaintiff filed his Motion for Class Certification. On February 17, 2023, the Company filed its opposition and joined in the opposition of the Underwriters. On October 12, 2023, the Court issued its ruling granting plaintiff's Motion and certifying the class as to the Section 11 and Section 15 claims only.

The parties were engaged in discovery until November 3, 2023, when the United States Attorneys' Office filed an application for leave to intervene and stay discovery pending resolution of a federal criminal case. On November 8, 2023, the Court set the Government's motion for hearing on December 14, 2023 and issued an order temporarily staying all discovery in the action pending resolution of the motion. On December 14, 2023, the Court granted the application for leave to intervene and stay discovery, staying discovery until June 25, 2024, or until criminal case reaches its conclusion at the trial level. The Court also vacated the previously set trial and related dates. On June 25, 2024, the Court lifted the stay on discovery and ordered (a) a further status conference to be held August 29, 2024, at 9:00 a.m., (b) the parties to meet and confer in advance of that status conference regarding a new case schedule and (c) the parties to submit a joint status report in advance thereof.

Securities Investigation

On November 15, 2022, the Company received a notification from the SEC, Division of Enforcement, that it is conducting an investigation captioned “In the Matter of Trading in the Securities of Ontrak, Inc. (HO-14340)” and issued a preservation letter as well as a subpoena for documents relating to the investigation. The notification indicates the investigation is a fact-finding inquiry for compliance with federal securities laws and should not be construed as an indication by the SEC that any violation of law has occurred, nor as a reflection upon any person, entity or security. The Company cooperated with the terms of the subpoena.

On March 1, 2023, the DOJ announced charges and the SEC filed a civil complaint against Terren S. Peizer, Ontrak's former Chief Executive Officer and Chairman of our Board of Directors, alleging unlawful insider trading in our stock. Neither the Company nor any other current or former director or employee of the Company were charged by the DOJ or sued by the SEC. On June 21, 2024, a federal jury convicted Mr. Peizer of one count of securities fraud and two counts of insider trading. He is scheduled to be sentenced on October 21, 2024. The Company cannot predict whether any other governmental authorities will initiate separate investigations or litigation. Investigations and any related legal and administrative proceedings could include a wide variety of outcomes, including the institution of administrative, civil injunctive or criminal proceedings involving the Company and/or its current or former executives and/or directors, the imposition of fines and other penalties, remedies and/or sanctions.

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v3.24.2.u1

Cover Page - shares	6 Months Ended
	Jun. 30, 2024	Aug. 09, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-31932
Entity Registrant Name	Ontrak, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	88-0464853
Entity Address, Address Line One	333 S. E. 2nd Avenue
Entity Address, Address Line Two	Suite 2000
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33131
City Area Code	310
Local Phone Number	444-4300
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	OTRK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,967,746
Entity Central Index Key	0001136174
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false
Current Fiscal Year End Date	--12-31

v3.24.2.u1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash	$ 7,292	$ 9,701
Receivables, net	946	0
Unbilled receivables	385	207
Deferred costs	138	128
Prepaid expenses and other current assets	2,358	2,743
Total current assets	11,119	12,779
Long-term assets:
Property and equipment, net	583	913
Goodwill	5,713	5,713
Intangible assets, net	0	99
Other assets	7,689	147
Operating lease right-of-use assets	171	195
Total assets	25,275	19,846
Current liabilities:
Accounts payable	224	563
Accrued compensation and benefits	415	442
Deferred revenue	58	97
Current portion of operating lease liabilities	62	56
Other accrued liabilities	2,297	2,784
Total current liabilities	3,056	3,942
Long-term liabilities:
Long-term debt, net	6,672	1,467
Long-term operating lease liabilities	134	166
Total liabilities	9,862	5,575
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 3,770,265 shares issued and outstanding at each of June 30, 2024 and December 31, 2023	0	0
Common stock, $0.0001 par value; 500,000,000 shares authorized; 47,967,725 and 38,466,979 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	7	6
Additional paid-in capital	500,814	484,926
Accumulated deficit	(485,408)	(470,661)
Total stockholders' equity	15,413	14,271
Total liabilities and stockholders' equity	$ 25,275	$ 19,846

v3.24.2.u1

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	3,770,265	3,770,265
Preferred stock, shares outstanding (in shares)	3,770,265	3,770,265
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	47,967,725	38,466,979
Common stock, shares outstanding (in shares)	47,967,725	38,466,979

v3.24.2.u1

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenue	$ 2,451	$ 2,960	$ 5,131	$ 5,489
Cost of revenue	844	804	1,819	1,651
Gross profit	1,607	2,156	3,312	3,838
Operating expenses:
Research and development	1,026	1,537	2,104	3,181
Sales and marketing	691	837	1,223	1,827
General and administrative	3,937	4,410	8,015	10,228
Restructuring, severance and related costs	0	0	290	457
Total operating expenses	5,654	6,784	11,632	15,693
Operating loss	(4,047)	(4,628)	(8,320)	(11,855)
Other income (expense), net	5	(5)	3	286
Debt issuance costs (Note 10)	(5,921)	0	(5,921)	0
Interest expense, net	(326)	(2,223)	(509)	(3,617)
Loss before income taxes	(10,289)	(6,856)	(14,747)	(15,186)
Income tax benefit, net	0	100	0	80
Net loss	(10,289)	(6,756)	(14,747)	(15,106)
Dividends on preferred stock - undeclared	(2,238)	(2,238)	(4,477)	(4,477)
Net loss attributable to common stockholders, basic	(12,527)	(8,994)	(19,224)	(19,583)
Net loss attributable to common stockholders, diluted	$ (12,527)	$ (8,994)	$ (19,224)	$ (19,583)
Net loss per common share, basic (in dollars per share)	$ (0.19)	$ (1.84)	$ (0.30)	$ (4.09)
Net loss per common share, diluted (in dollars per share)	$ (0.19)	$ (1.84)	$ (0.30)	$ (4.09)
Weighted-average common shares outstanding, basic (in shares)	66,141	4,887	63,512	4,787
Weighted-average common shares outstanding, diluted (in shares)	66,141	4,887	63,512	4,787

v3.24.2.u1

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Pre-Funded Warrants	Public Offering Warrants	Demand Warrants	Debt Financing Warrants	Preferred Stock	Common Stock	Common Stock Pre-Funded Warrants	Common Stock Public Offering Warrants	Additional Paid-In Capital	Additional Paid-In Capital Public Offering Warrants	Additional Paid-In Capital Demand Warrants	Additional Paid-In Capital Debt Financing Warrants	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022						3,770,265	4,527,914
Beginning balance at Dec. 31, 2022	$ 5,677					$ 0	$ 3			$ 448,415				$ (442,741)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued for financing (in shares)							339,689
Warrants issued	10,797									10,797
Loss on extinguishment of debt with related party	(2,153)									(2,153)
Restricted stock units vested, net (in shares)							1,374
Restricted stock units vested, net	(2)									(2)
401(k) employer match (in shares)							18,897
Stock-based compensation expense	1,543									1,543
Net loss	(15,106)													(15,106)
Ending balance (in shares) at Jun. 30, 2023						3,770,265	4,887,874
Ending balance at Jun. 30, 2023	756					$ 0	$ 3			458,600				(457,847)
Beginning balance (in shares) at Mar. 31, 2023						3,770,265	4,886,708
Beginning balance at Mar. 31, 2023	6,620					$ 0	$ 3			457,708				(451,091)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock units vested, net (in shares)							1,166
Stock-based compensation expense	892									892
Net loss	(6,756)													(6,756)
Ending balance (in shares) at Jun. 30, 2023						3,770,265	4,887,874
Ending balance at Jun. 30, 2023	756					$ 0	$ 3			458,600				(457,847)
Beginning balance (in shares) at Dec. 31, 2023						3,770,265	38,466,979
Beginning balance at Dec. 31, 2023	14,271					$ 0	$ 6			484,926				(470,661)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued relating to settlement of contingent consideration (in shares)							1,238
Common stock issued relating to settlement of contingent consideration	64									64
Warrants exercised (in shares)								4,032,398	5,466,664
Warrants exercised		$ 1	$ 1,963					$ 1			$ 1,963
Warrants issued				$ 2,659	$ 278							$ 2,659	$ 278
Loss on extinguishment of debt with related party	(521)									(521)
Debt issuance costs	10,651									10,651
Restricted stock units vested, net (in shares)							446
Stock-based compensation expense	794									794
Net loss	(14,747)													(14,747)
Ending balance (in shares) at Jun. 30, 2024						3,770,265	47,967,725
Ending balance at Jun. 30, 2024	15,413					$ 0	$ 7			500,814				(485,408)
Beginning balance (in shares) at Mar. 31, 2024						3,770,265	43,950,678
Beginning balance at Mar. 31, 2024	21,247					$ 0	$ 7			496,359				(475,119)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Warrants exercised (in shares)							4,016,664
Warrants exercised	1,441									1,441
Warrants issued				$ 2,659	$ 278							$ 2,659	$ 278
Loss on extinguishment of debt with related party	(521)									(521)
Debt issuance costs	156									156
Restricted stock units vested, net (in shares)							383
Stock-based compensation expense	442									442
Net loss	(10,289)													(10,289)
Ending balance (in shares) at Jun. 30, 2024						3,770,265	47,967,725
Ending balance at Jun. 30, 2024	$ 15,413					$ 0	$ 7			$ 500,814				$ (485,408)

v3.24.2.u1

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities
Net loss	$ (14,747)	$ (15,106)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	794	1,543
Paid-in-kind interest expense	377	1,936
Gain on termination of operating lease	0	(471)
Depreciation expense	409	590
Amortization expense	208	2,382
Change in fair value of warrant liability	(4)	12
Debt Issuance Cost Expense	5,921	0
Changes in operating assets and liabilities:
Receivables	(946)	691
Unbilled receivables	(178)	89
Prepaid expenses and other assets	221	326
Accounts payable	(339)	(371)
Deferred revenue	(39)	(18)
Leases liabilities	(26)	(142)
Other accrued liabilities	620	(1,529)
Net cash used in operating activities	(7,729)	(10,068)
Cash flows from investing activities
Purchase of property and equipment	(74)	(123)
Net cash used in investing activities	(74)	(123)
Cash flows from financing activities
Proceeds from Demand Notes	4,500	0
Proceeds from Keep Well Notes	0	8,000
Proceeds from warrants exercised	1,963	0
Proceeds from Keep Well Agreement held in escrow	0	4,000
Debt issuance costs	0	(98)
Finance lease obligations	0	(100)
Financed insurance premium payments	(1,069)	(1,228)
Payment of taxes related to net-settled stock awards	0	(2)
Net cash provided by financing activities	5,394	10,572
Net change in cash and restricted cash	(2,409)	381
Cash and restricted cash at beginning of period	9,701	9,713
Cash and restricted cash at end of period	7,292	10,094
Supplemental disclosure of cash flow information:
Interest paid	48	45
Income taxes paid	5	3
Non-cash financing and investing activities:
Debt issuance costs	10,651	85
Loss on extinguishment of debt with related party	521	2,153
Finance lease and accrued purchases of property and equipment	4	28
Common stock issued to settle contingent consideration	64	0
Demand Warrants
Adjustments to reconcile net loss to net cash used in operating activities:
Debt Issuance Cost Expense	2,659	0
Non-cash financing and investing activities:
Warrants Issued	2,659	0
Keep Well Warrant
Non-cash financing and investing activities:
Warrants Issued	0	10,797
Public Offering Warrants and Private Placement Warrants
Adjustments to reconcile net loss to net cash used in operating activities:
Debt Issuance Cost Expense	3,262	$ 0
Non-cash financing and investing activities:
Debt issuance costs	$ 10,700

v3.24.2.u1

Organization	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Company Overview Ontrak, Inc. (“Ontrak,” “Company,” “we,” “us” or “our”) is an AI-powered and technology-enabled behavioral healthcare company, whose mission is to help improve the health and save the lives of as many people as possible. The Company's technology-enabled platform utilizes claim-based analytics and predictive modeling to provide analytic insights throughout the delivery of its personalized care program. The Company's program predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages and guides them to and through the care and treatment they need. By combining predictive analytics with human engagement, we deliver improved member health and validated outcomes and savings to healthcare payors. The Company's integrated, technology-enabled solutions are designed to provide healthcare solutions to members with behavioral conditions that cause or exacerbate chronic medical conditions such as diabetes, hypertension, coronary artery disease, chronic obstructive pulmonary disease, and congestive heart failure, which result in high medical costs. Ontrak has a unique ability to engage these members, who may not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance. Ontrak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaches who address the social and environmental determinants of health. The Ontrak programs seek to improve member health and deliver validated cost savings to healthcare payors. The Company generates revenues from the services it provides to populations insured by private health insurance programs, including employer funded programs (which the Company refers to as commercial revenue) and by government-funded health insurance programs, such as managed Medicare Advantage, managed Medicaid and dual eligible (Medicare and Medicaid) populations. Under our LifeDojo wellbeing solution, the Company also generates revenues from the mental health and wellbeing support services it provides to members of employer customers. The Company aims to increase the number of members that are eligible for our solutions by signing new contracts and identifying more eligible members within customers with whom the Company has existing contracts. Basis of Presentation The accompanying condensed consolidated financial statements include Ontrak, Inc., its wholly-owned subsidiaries and its variable interest entities. The accompanying condensed consolidated financial statements for Ontrak, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and instructions to Form 10-Q and Article 8 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed financial statements includes all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the entire fiscal year. The accompanying unaudited financial information should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year-ended December 31, 2023 (the “2023 10-K”), filed with the Securities and Exchange Commission (“SEC”), from which the consolidated balance sheet as of December 31, 2023 has been derived. The Company operates as one segment. We have incurred significant net losses and negative operating cash flows since our inception, and we expect to continue to incur net losses and negative operating cash flow, in part due to the negative impact on our operations by customer terminations. As of June 30, 2024, our cash was $7.3 million and we had working capital of approximately $8.1 million. For the six months ended June 30, 2024, our average monthly cash burn rate from operations was $1.3 million. As of June 30, 2024, $6.9 million of secured debt, including accrued paid-in-kind interest, issued under the Keep Well Agreement was outstanding. As of the filing date of this report, approximately $7.1 million of secured debt, including accrued paid-in-kind interest, issued under the Keep Well Agreement was outstanding, $4.8 million of which is payable at any time after August 30, 2025 upon demand of the holder (see Note 14 below for more information), and the balance of which matures on May 14, 2026, unless it becomes due and payable in full earlier, whether by acceleration or otherwise. On August 13, 2024, the Company entered into an agreement with Acuitas pursuant to which Acuitas agreed to purchase $5.0 million of Demand Notes (as defined in Note 10 below) in accordance with a schedule specified therein, subject to a limited offset right, and not to exercise its right to require that any amounts due under any Demand Note be paid until after August 30, 2025, subject to a limited exception. See Note 14 below for more information regarding this agreement. After taking into account the $5.0 million of Demand Notes that Acuitas agreed to purchase, Acuitas, in its sole discretion, may purchase from the Company, and the Company would issue to Acuitas, up to an additional $5.5 million of Demand Notes. There can be no assurance that Acuitas will elect to purchase such $5.5 million of Demand Notes. In March 2023 and in February 2024, as part of the Company's continued cost saving measures to reduce its operating costs and to better align with its previously stated strategic initiatives, the Company implemented reductions in workforce and vendor cost optimization plans. The Company began realizing the full effect of these cost saving measures in 2023 and in 2024, including a decrease in the Company's operating costs and an improvement in the Company's average monthly cash flow from operations. These cost optimization plans were necessary to right size the Company's business commensurate with its then current customer base. Management plans to continue executing its strategy to increase liquidity by continuing to (i) explore other sources of capital for future liquidity needs; (ii) manage operating costs by strategically pursuing cost optimization initiatives; and (iii) pursue executing our growth strategy by: (a) expanding sales and marketing resources to acquire new and diverse customers across major health plans, value based provider groups and self-insurance employers; (b) executing on our better market penetration strategy by providing full scale customized behavioral health solutions, addressing customer needs across all member acuity levels while mitigating vendor fatigue by becoming a principal customer partner; (c) leveraging our AI technology and new predictive algorithms to improve identification and outreach, create more efficiencies, enhance coaching solutions and create more proof points; and (d) opportunistically pursuing partnerships that we believe will accelerate growth. We will need additional capital to successfully execute our growth strategy. In addition to revenue from business operations, since April 2022, the Company's primary source of working capital has been borrowings under the Keep Well Agreement and raising capital in equity offerings. We may seek to raise additional capital through equity or debt financings, however, when we can affect such financings and how much capital we can raise depends on a variety of factors, including, among others, market conditions, the trading price of our common stock and our determination as to the appropriate sources of funding for our operations. There can be no assurance that other capital will be available when needed or that, if available, it will be obtained on terms favorable to us and our stockholders, that we will be successful in implementing cost optimization initiatives, or that we will be successful in executing our growth strategy. In addition, the Keep Well Agreement contains various financial and other covenants, and any non-compliance with those covenants could result in an acceleration of the repayment of the amounts outstanding thereunder. Furthermore, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders, and debt financings may subject us to restrictive covenants, operational restrictions and security interests in our assets. Regardless of our success in raising additional capital, we expect our cash on hand and the $5.0 million of Demand Notes Acuitas agreed to purchase under the August 13, 2024 agreement discussed above (discussed in Note 14 below) will be sufficient to meet our obligations for at least the next 12 months from the date the financial statements in this report are released. Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements Since the date on which the Company filed the 2023 10-K, there were no recently adopted account standards or new accounting standards issued, but not yet adopted by the Company, which are expected to materially affect the Company's condensed consolidated financial statements.

v3.24.2.u1

Restricted Cash	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Restricted Cash	Restricted Cash The following table provides a reconciliation of total cash and restricted cash as presented in the Company's condensed consolidated statement of cash flows for the periods presented (in thousands): June 30, 2024 2023 Cash $ 7,292  $ 6,094  Restricted cash - current: Cash in escrow (1) —  4,000         Subtotal - Restricted cash - current —  4,000  Cash and restricted cash $ 7,292  $ 10,094  ____________ (1) Represents cash received under the Keep Well Agreement in June 2023 and held in a separate account pursuant to the terms of the Keep Well Agreement. See Note 10 below for more information. The amount was included in "Other accrued liabilities" on the Company's condensed consolidated balance sheet as of June 30, 2023.

v3.24.2.u1

Receivables and Revenue Concentration	6 Months Ended
	Jun. 30, 2024
Receivables [Abstract]
Receivables and Revenue Concentration	Receivables and Revenue Concentration The following table is a summary of concentration of credit risk by customer revenues as a percentage of our total revenue: Three Months Ended June 30, Six Months Ended June 30, Percentage of Revenue 2024 2023 2024 2023 Customer A 61.3  % 55.4  % 61.7  % 53.8  % Customer B 30.9  3.2  20.0  2.5  Customer C —  33.5  10.7  34.6  Remaining customers 7.8  7.9  7.6  9.1     Total 100.0  % 100.0  % 100.0  % 100.0  % The following table is a summary of concentration of credit risk by customer accounts receivables as a percentage of our total accounts receivable: Percentage of Accounts Receivable June 30, 2024 December 31, 2023 Customer B 53.1  % —  % Customer A 46.9  —     Total 100.0  % —  % The Company applies the specific identification method for assessing provision for credit losses. There was no bad debt expense during either of the three or six months ended June 30, 2024 or 2023. Customer Notification On October 10, 2023, the Company was notified by a health plan customer of its intent not to continue using the Company’s services after February 2024. The customer advised us to cease enrollment of any new members from that customer immediately. The customer also informed us that its decision was related to the customer’s change in strategy and not reflective of the performance or value of the Company’s services. The Company billed this customer approximately $0.5 million for services rendered from January 2024 through February 2024, and received full payment of such invoiced amount in March 2024. Other Receivable - Insurance Recoveries The Company is involved in various securities class actions and purported stockholder derivative complaints, and the Company has incurred legal costs related to the SEC/Department of Justice (the "DOJ") investigation of the Company's former Chief Executive Officer and Chairman of the Board of Directors, as described in Note 13 below. The Company maintains a corporate liability insurance policy which provides coverage for legal defense costs. The terms of this insurance policy provide that the insurer will pay the third party directly on behalf of the Company for such legal defense costs. Based on the Company's analysis, the Company's obligation as the primary obligor of the invoices for legal defense costs has not been transferred to the insurer and as such, the Company records these costs as an other receivable with a corresponding liability on its consolidated balance sheet. As of June 30, 2024, the Company submitted cumulative claims for legal defense costs totaling approximately $4.4 million, of which $3.6 million has been paid by the insurer to the third parties. The Company has $0.8 million of claims for legal defense costs recorded as other receivable included in "Prepaid expenses and other current assets" and $0.8 million as part of "Other accrued liabilities" on its condensed consolidated balance sheet as of June 30, 2024.

v3.24.2.u1

Property and Equipment	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment Property and equipment consisted of the following (in thousands): June 30, December 31, 2024 2023 Software $ 4,713  $ 4,575  Computers and equipment 416  416  ROU assets - finance lease 300  300  Software development in progress —  59     Subtotal 5,429  5,350  Less: Accumulated depreciation and amortization (4,846) (4,437)     Property and equipment, net $ 583  $ 913  Total depreciation and amortization expense relating to property and equipment presented above was $0.2 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and $0.4 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively. Capitalized Internal Use Software Costs During the three months ended June 30, 2024 and 2023, the Company capitalized $0.04 million and $0.1 million, respectively, of costs relating to development of internal use software, and recorded $0.2 million and $0.3 million, respectively, of amortization expense relating to capitalized internal use software, which was included in total depreciation and amortization expense as described above. During the six months ended June 30, 2024 and 2023, the Company capitalized $0.1 million and $0.2 million, respectively, of costs relating to development of internal use software, and recorded $0.4 million and $0.5 million, respectively, of amortization expense relating to capitalized internal use software, which was included in total depreciation and amortization expense as described above.

v3.24.2.u1

Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill The carrying amount of indefinite-lived goodwill was $5.7 million as of June 30, 2024 and December 31, 2023. Intangible Assets The following table sets forth amounts recorded for intangible assets subject to amortization (in thousands): At December 31, 2023 Weighted Average Estimated Useful Life (years) Gross Value Accumulated Amortization Net Carrying Value Acquired software technology 3 $ 3,500  $ (3,500) $ —  Customer relationships 5 270 (171) 99      Total $ 3,770  $ (3,671) $ 99  As of June 30, 2024, the Company's acquired software technology and customer relationships presented in the table above were fully amortized. Amortization expense for intangible assets presented above was $0.05 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and $0.1 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively.

v3.24.2.u1

Restructuring, Severance and Related Costs	6 Months Ended
	Jun. 30, 2024
Restructuring and Related Activities [Abstract]
Restructuring, Severance and Related Costs	Restructuring, Severance and Related Costs In each of 2023 and 2024, the Company implemented restructuring plans as part of management's continued cost saving measures in order to reduce its operating costs, optimize its business model and help align with its previously stated strategic initiatives. In February 2024, approximately 21% of the Company's employee positions were eliminated and the Company incurred a total of approximately $0.3 million of one-time termination related costs, including severance payments and benefits payable to the impacted employees, which have been recorded as part of "Restructuring, severance and related costs" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2024. The headcount reductions were completed by May 2024. In March 2023, approximately 19% of the Company's employee positions were eliminated and the Company incurred a total of approximately $0.5 million of one-time termination related costs, including severance payments and benefits payable to the impacted employees, which have been recorded as part of "Restructuring, severance and related costs" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2023. The headcount reductions were completed by May 2023.

v3.24.2.u1

Common Stock and Preferred Stock	6 Months Ended
	Jun. 30, 2024
Earnings Per Share [Abstract]
Common Stock and Preferred Stock	Common Stock and Preferred Stock Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by giving effect to all shares of common stock potentially issuable upon exchange or exercise of outstanding shares of preferred stock and outstanding stock options and warrants, in each case, to the extent dilutive. Basic and diluted net loss per common share were the same for each period presented below as the inclusion of any such shares of common stock potentially issuable would have been anti-dilutive. Basic and diluted net loss per common share were as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net loss $ (10,289) $ (6,756) $ (14,747) $ (15,106) Dividends on preferred stock - undeclared (2,238) (2,238) (4,477) (4,477) Net loss attributable to common stockholders $ (12,527) $ (8,994) $ (19,224) $ (19,583) Weighted-average shares of common stock outstanding 66,141  4,887  63,512  4,787  Net loss per common share - basic and diluted $ (0.19) $ (1.84) $ (0.30) $ (4.09) Included in the weighted-average shares of common stock outstanding for the three and six months ended June 30, 2024 are a total of 18,333,333 common shares issuable upon the exercise of Private Placement Pre-funded Warrants (as defined and described in Note 10 below), which are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders. The following number of shares issuable upon exercise of stock options and warrants outstanding as of June 30, 2024 and 2023 have been excluded from the diluted earnings per share calculation as their effect would be anti-dilutive: June 30, 2024 2023 Warrants to purchase common stock 234,416,187  7,082,788  Options to purchase common stock 60,971,977  1,202,676  Total 295,388,164  8,285,464  Equity Offerings Common Stock In February 2023, pursuant to the terms of the Keep Well Agreement, the Company issued to Acuitas 339,689 shares of the Company's common stock after giving effect to the 1-for-6 reverse stock split, approved at the special meeting of the Company's stockholders held in February 2024, effected by the Company on July 27, 2023 (the “2023 Reverse Stock Split”). Preferred Stock In 2020, the Company completed the issuance of a total of 3,770,265 shares of 9.50% Series A Cumulative Perpetual Preferred Stock (the "Series A Preferred Stock"). The Company, generally, may not redeem the Series A Preferred Stock until August 25, 2025, except upon the occurrence of a Delisting Event or Change of Control (as defined in the Certificate of Designations establishing the Series A Preferred Stock), and on and after August 25, 2025, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends. The Series A Preferred Stock has no maturity date and will remain outstanding indefinitely unless redeemed by the Company or exchanged for shares of common stock in connection with a Delisting Event or Change of Control. Holders of Series A Preferred Stock generally have no voting rights, but have limited voting rights if the Company fails to pay dividends in respect of the Series A Preferred Stock for six or more quarters, whether or not declared or consecutive and in certain other events, including the right, voting separately as a single class, to elect two individuals to the Company's Board of Directors. Such director election right commenced on August 31, 2023 since the Company did not pay the dividend payable on that date or in respect of the five prior quarters (see discussion below). Holders of Series A Preferred Stock of record at the close of business of each respective record date for quarterly dividends (February 15, May 15, August 15 and November 15 of each year) are entitled to receive, when, as and if declared by our Board of Directors, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 9.50% per annum of the $25.00 per share liquidation preference (equivalent to $2.375 per annum per share or $0.593750 per quarter per share). Dividends, if and when declared by our Board of Directors, are payable quarterly in arrears, every February 28, May 30, August 31, and November 30, as applicable. At June 30, 2024, we had total undeclared dividends of $20.9 million. On October 11, 2023, the Company received a letter from Nasdaq informing the Company that it is not eligible for a second 180-day compliance period within which to regain compliance with the minimum bid price rule for the Series A Preferred Stock and that Nasdaq determined that the Series A Preferred Stock would be delisted from The Nasdaq Capital Market and would be suspended at the opening of business on October 20, 2023. On November 20, 2023, The Nasdaq Stock Market filed a Form 25-NSE with the SEC to remove the Series A Preferred Stock from listing and registration on The Nasdaq Stock Market. The Series A Preferred Stock currently trades in the over-the-counter OTC Markets system.

v3.24.2.u1

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company's 2017 Stock Incentive Plan (the “2017 Plan”) and 2010 Stock Incentive Plan (the “2010 Plan” and together with the 2017 Plan, the "Plans") provide for the issuance of 2,849,746 shares of the Company's common stock. The Company has granted stock options to employees, members of the Company's board of directors, and certain outside consultants, and restricted stock units ("RSUs") to employees and members of the Company's board of directors. The terms and conditions upon which options vest vary among grants; however, options expire no later than ten years from the date of grant and awards granted to employees and members of the Company's board of directors generally vest over one to four years on a straight-line basis. The terms and conditions upon which RSUs vest vary among grants; however, RSUs generally vest over three to five years on a straight-line basis. As of June 30, 2024, the Company had 61,088,379 shares of common stock in the aggregate subject to outstanding stock options (see discussion below regarding options to purchase 59.2 million shares of the Company's common stock granted in June 2024) and RSUs and outstanding and 579,751 shares available for issuance under the 2017 Plan (assuming that all awards outstanding as of such date are ultimately settled for their full number of shares and are not forfeited or modified). Stock-based compensation expense was $0.4 million and $0.9 million for the three months ended June 30, 2024 and 2023, respectively, and $0.8 million and $1.5 million for the six months ended June 30, 2024 and 2023, respectively. The assumptions used in the Black-Scholes option-pricing model were as follows: Six Months Ended June 30, 2024 Volatility      96.0% Risk-free interest rate 4.09% - 4.52% Expected life (in years)   3.52 - 4.45 Dividend yield 0  % The expected volatility assumptions have been based on the historical and expected volatility of our stock and the stock of comparable companies, measured over a period generally commensurate with the expected term or acceptable period to determine reasonable volatility. The weighted average expected life of options for the six months ended June 30, 2024 reflects the application of the simplified method prescribed in SEC Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the expected life of options as the average of the contractual term of the options and the weighted average vesting period for all option tranches. Stock Options - Employees and Directors A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2023 1,162,109  $ 6.63  Granted 59,942,262  0.23  Forfeited (132,394) 13.11  Outstanding as of June 30, 2024 60,971,977  0.32  Options vested and exercisable as of June 30, 2024 928,003  $ 5.18  The stock options granted, as presented in the table above, includes options to purchase 59.2 million shares of the Company's common stock granted in June 2024 to the Company's employees and members of the Company's board of directors, all of which are subject to stockholder approval of the Company’s Amended and Restated 2017 Stock Incentive Plan, and if such approval is not obtained, they will be cancelled for no consideration. As of June 30, 2024, there was $11.3 million of unrecognized compensation cost related to non-vested share-based compensation arrangements granted to the Company's employees and members of the Company's board of directors under the Plans. These costs are expected to be recognized over a weighted-average period of approximately 3.73 years. Restricted Stock Units - Employees The Company estimates the fair value of RSUs based on the closing price of its common stock on the date of grant. The following table summarizes our RSU award activity issued under the 2017 Plan: Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2023 120,637  $ 13.06  Vested and settled (721) 236.79  Forfeited (3,514) 196.49  Non-vested at June 30, 2024 116,402  6.14  As of June 30, 2024, there was $0.5 million of unrecognized compensation costs related to unvested outstanding RSUs. These costs are expected to be recognized over a weighted-average period of approximately 1.16 years. Warrants - Non-employees The Company has issued warrants to purchase shares of the Company's common stock that have been approved by our Board of Directors. A summary of warrants activity was as follows: Number of Warrants Weighted Average Exercise Price Outstanding as of December 31, 2023 114,243,865  $ 0.63  Granted 370,781,350  0.34  Exercised (9,499,062) 0.21  Cancelled (222,776,633) 0.53  Outstanding as of June 30, 2024 252,749,520  0.31  Warrants exercisable as of June 30, 2024 252,749,520  0.31  The number of shares of the Company's common stock subject to warrants granted and warrants cancelled as presented in the table above each include and give effect to the adjustment to the exercise price of Public Offering Warrants and Private Placement Warrants (as such terms are defined in Note 10 below) pursuant to the waivers entered into by each holder of such warrants (discussed in Note 10 below). In accordance with the terms of such waivers, the exercise price per share of all outstanding Public Offering Warrants and Private Placement Warrants was reduced to $0.36 on March 28, 2024 and further reduced to $0.3442 on April 5, 2024, and simultaneously with each exercise price reduction, the number of shares of common stock issuable upon exercise was increased proportionally, such that the aggregate exercise price of the warrants, after taking into account the adjustment in the exercise price, was equal to the aggregate exercise price before the adjustment in the exercise price. The exercise price reduction has been reflected as a cancellation of the previously issued warrants and grant of new warrants. Also included in the number of shares of the Company's common stock subject to warrants granted as presented in the table above are Demand Warrants (as such term is defined in Note 10 below) granted during the three months ended June 30, 2024 by the Company to Acuitas to purchase a total of 31.5 million shares of the Company's common stock with exercise prices ranging from $0.26 to $0.3442. See Note 10 below for more information. The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: Six Months Ended June 30, 2024 Volatility 93% - 98% Risk-free interest rate 4.31% - 4.50% Expected life (in years)  3.33 - 5.00 Dividend yield 0  %

v3.24.2.u1

Leases	6 Months Ended
	Jun. 30, 2024
Leases [Abstract]
Leases	Leases The Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on the Company's balance sheet and classifies the leases as either operating or finance leases. The Company leases office space in Henderson, Nevada, which previously served as the Company's headquarters and currently serves as the administrative office for certain of the Company's back-office functions, and in Rosemont, Illinois, which are accounted for as operating leases. The Rosemont, Illinois lease expired in June 2023. In September 2023, the Company entered into a month-to-month lease for a virtual office space in Miami, Florida, which serves as the Company's headquarters. The Company leases various computer equipment used in the operation of its business, which are accounted for as finance leases. The operating lease agreement for the Henderson, Nevada office is for a total of 2,721 square feet of office space for lease term of 58 months. The Company's finance leases are generally for 36 month terms. The Company had no finance leases during either of the three or six months ended June 30, 2024, or as of June 30, 2024 and December 31, 2023. In April 2022, the Company entered into a sublease agreement with a subtenant for 100% of the office space the Company leased in Santa Monica, California. The sublease agreement commenced in June 2022 and provided for an expiration date of July 17, 2024, unless sooner terminated. On February 16, 2023, the Company, the landlord and the subtenant entered into a lease and sublease termination agreement for the office space, with a termination date of February 28, 2023. The Company agreed to pay to the landlord a $0.1 million early termination fee and monthly fixed rent for March and April 2023, and the subtenant agreed to pay to the Company monthly fixed sublease payments for March and April 2023. As a result of the lease termination, the Company wrote-off $0.3 million of operating lease right-of-use assets, and $0.6 million and $0.2 million of current and long-term operating lease liabilities, respectively, resulting in a non-cash gain of $0.5 million included in "Other income, net" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2023. The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. Quantitative information for our leases is as follows (in thousands): Condensed Consolidated Balance Sheets Balance Sheet Classification June 30, 2024 December 31, 2023 Assets Operating lease assets "Operating lease right-of-use-assets" $ 171  $ 195  Total lease assets $ 171  $ 195  Liabilities Current      Operating lease liabilities "Current portion of operating lease liabilities" $ 62  $ 56  Non-current      Operating lease liabilities "Long-term operating lease liabilities" 134 166 Total lease liabilities $ 196  $ 222  Three Months Ended June 30, Six Months Ended June 30, Condensed Consolidated Statements of Operations 2024 2023 2024 2023 Operating lease expense $ 21  $ 32  $ 41  $ 119  Short-term lease rent expense 1  —  2  1  Variable lease expense —  8  —  23  Operating sublease income —  —  —  (65) Total rent expense $ 22  $ 40  $ 43  $ 78  Finance lease expense   Amortization of leased assets $ —  $ 25  $ —  $ 50    Interest on lease liabilities —  1  —  3  Total $ —  $ 26  $ —  $ 53  Six Months Ended June 30, Condensed Consolidated Statements of Cash Flows 2024 2023 Cash paid for amounts included in the measurement of lease liabilities:    Operating cash flows from operating leases $ 43  $ 179     Financing cash flows from finance leases —  100  Other Cash received for operating sublease —  97  Other Information June 30, 2024 December 31, 2023 Weighted-average remaining lease term (years):    Operating leases 2.7 3.2 Weighted-average discount rate (%):    Operating leases 16.25  % 16.25  %    Finance leases —  15.15  % The following table sets forth maturities of our lease liabilities (in thousands): Operating Leases At June 30, 2024 Remainder of 2024 $ 44  2025 90 2026 93 2027 16 Total lease payments 243     Less: imputed interest (47) Present value of lease liabilities 196     Less: current portion (62) Lease liabilities, non-current $ 134
Leases	Leases The Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on the Company's balance sheet and classifies the leases as either operating or finance leases. The Company leases office space in Henderson, Nevada, which previously served as the Company's headquarters and currently serves as the administrative office for certain of the Company's back-office functions, and in Rosemont, Illinois, which are accounted for as operating leases. The Rosemont, Illinois lease expired in June 2023. In September 2023, the Company entered into a month-to-month lease for a virtual office space in Miami, Florida, which serves as the Company's headquarters. The Company leases various computer equipment used in the operation of its business, which are accounted for as finance leases. The operating lease agreement for the Henderson, Nevada office is for a total of 2,721 square feet of office space for lease term of 58 months. The Company's finance leases are generally for 36 month terms. The Company had no finance leases during either of the three or six months ended June 30, 2024, or as of June 30, 2024 and December 31, 2023. In April 2022, the Company entered into a sublease agreement with a subtenant for 100% of the office space the Company leased in Santa Monica, California. The sublease agreement commenced in June 2022 and provided for an expiration date of July 17, 2024, unless sooner terminated. On February 16, 2023, the Company, the landlord and the subtenant entered into a lease and sublease termination agreement for the office space, with a termination date of February 28, 2023. The Company agreed to pay to the landlord a $0.1 million early termination fee and monthly fixed rent for March and April 2023, and the subtenant agreed to pay to the Company monthly fixed sublease payments for March and April 2023. As a result of the lease termination, the Company wrote-off $0.3 million of operating lease right-of-use assets, and $0.6 million and $0.2 million of current and long-term operating lease liabilities, respectively, resulting in a non-cash gain of $0.5 million included in "Other income, net" on the Company's condensed consolidated statement of operations for the six months ended June 30, 2023. The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. Quantitative information for our leases is as follows (in thousands): Condensed Consolidated Balance Sheets Balance Sheet Classification June 30, 2024 December 31, 2023 Assets Operating lease assets "Operating lease right-of-use-assets" $ 171  $ 195  Total lease assets $ 171  $ 195  Liabilities Current      Operating lease liabilities "Current portion of operating lease liabilities" $ 62  $ 56  Non-current      Operating lease liabilities "Long-term operating lease liabilities" 134 166 Total lease liabilities $ 196  $ 222  Three Months Ended June 30, Six Months Ended June 30, Condensed Consolidated Statements of Operations 2024 2023 2024 2023 Operating lease expense $ 21  $ 32  $ 41  $ 119  Short-term lease rent expense 1  —  2  1  Variable lease expense —  8  —  23  Operating sublease income —  —  —  (65) Total rent expense $ 22  $ 40  $ 43  $ 78  Finance lease expense   Amortization of leased assets $ —  $ 25  $ —  $ 50    Interest on lease liabilities —  1  —  3  Total $ —  $ 26  $ —  $ 53  Six Months Ended June 30, Condensed Consolidated Statements of Cash Flows 2024 2023 Cash paid for amounts included in the measurement of lease liabilities:    Operating cash flows from operating leases $ 43  $ 179     Financing cash flows from finance leases —  100  Other Cash received for operating sublease —  97  Other Information June 30, 2024 December 31, 2023 Weighted-average remaining lease term (years):    Operating leases 2.7 3.2 Weighted-average discount rate (%):    Operating leases 16.25  % 16.25  %    Finance leases —  15.15  % The following table sets forth maturities of our lease liabilities (in thousands): Operating Leases At June 30, 2024 Remainder of 2024 $ 44  2025 90 2026 93 2027 16 Total lease payments 243     Less: imputed interest (47) Present value of lease liabilities 196     Less: current portion (62) Lease liabilities, non-current $ 134

v3.24.2.u1

Debt	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
Debt	Debt Keep Well Agreement On April 15, 2022, the Company entered into a Master Note Purchase Agreement (the “Original Keep Well Agreement”) with Acuitas Capital LLC (“Acuitas Capital”), an entity indirectly wholly owned and controlled by Terren S. Peizer, the Company’s former Chief Executive Officer and Chairman. The Original Keep Well Agreement was amended on each of August 12, 2022 (the “First Amendment”), November 19, 2022 (the “Second Amendment”), December 30, 2022 (the “Third Amendment”), June 23, 2023 (the “Fourth Amendment”), October 31, 2023 (the “Fifth Amendment”) and March 28, 2024 (the “Sixth Amendment”). The Company refers to the Original Keep Well Agreement as amended to date as the “Keep Well Agreement” and, in this Note 10, to Acuitas Capital, together with its affiliates and any of its transferees under the Keep Well Agreement, as “Acuitas.” The Keep Well Agreement contains customary covenants that must be complied with by the Company, including, among other covenants, restrictions on the Company’s ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into certain asset sale transactions, and covenants that require the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good repair, maintain insurance and comply with applicable laws. The Keep Well Agreement also includes the following financial covenants: a requirement that annualized consolidated recurring revenue for the preceding twelve months be at least $11.0 million tested monthly, and a requirement that consolidated liquidity must be greater than $5.0 million at all times. The Company was in compliance with such financial covenants as of June 30, 2024. The Original Keep Well Agreement Under the terms of the Original Keep Well Agreement, subject to the satisfaction of certain conditions precedent (some of which are described below), the Company could borrow from Acuitas up to $25.0 million, and in connection with each such borrowing, the Company agreed to issue to Acuitas a senior secured note (each, an “Original Keep Well Note”) with a principal amount equal to the amount borrowed. Subject to obtaining approval of the Company’s stockholders as required by applicable Nasdaq listing rules, which approval was obtained at the Company’s annual meeting of stockholders held on August 29, 2022 (the “2022 Annual Meeting of Stockholders”), in connection with each Original Keep Well Note issued by the Company, the Company agreed to issue to Acuitas a warrant to purchase shares of the Company’s common stock (each, an “Original Keep Well Warrant”). The number of shares of the Company’s common stock underlying each Original Keep Well Warrant was to be equal to (y) the product of the principal amount of the applicable Keep Well Note and 20% divided by (z) the exercise price of the applicable Original Keep Well Warrant, which was $1.69 per share, the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Company’s common stock immediately preceding the time the parties entered into the Original Keep Well Agreement. The maturity date of the Original Keep Well Notes was September 1, 2023. The Second Amendment, the Third Amendment and Fourth Amendment to the Keep Well Agreement Under the Second Amendment and the Third Amendment, many of the conditions precedent to the Company’s ability to borrow, and Acuitas’ obligation to lend, were eliminated, the Company’s obligation to pay accrued interest on a monthly basis was eliminated, and instead accrued interest will be added to the principal amount of the applicable secured note issued under the Keep Well Agreement, the financial covenant that the Company’s consolidated recurring revenue be at least $15.0 million was reduced to $11.0 million, and (a) the minimum conversion price of the Keep Well Notes (as defined below) and (b) the minimum dollar amount to which the denominator will be reduced for purposes of calculating the warrant coverage on future borrowings under the Keep Well Agreement (as discussed below), was revised to be $0.15 (subject to adjustment for stock splits or other recapitalizations that affect all common stockholders proportionately). The $0.15 referenced in the preceding sentence was adjusted to $0.90 after giving effect to the 2023 Reverse Stock Split. Below is a summary of certain other amendments effected by the Second Amendment, the Third Amendment and the Fourth Amendment: •the maturity date of the Original Keep Well Notes (and of any other secured notes issued under the Keep Well Agreement) was extended from September 1, 2023 to June 30, 2024 in the Second Amendment, and further extended from June 30, 2024 to September 30, 2024 in the Fourth Amendment, subject to acceleration for certain customary events of default, including for failure to make payments when due, breaches by the Company of certain covenants and representations in the Keep Well Agreement, defaults by the Company under other agreements related to indebtedness, the Company’s bankruptcy or dissolution, and a change of control of the Company; •per the Second Amendment, the remaining amount available to be borrowed under the Keep Well Agreement was increased from $10.7 million to $14.0 million and the provision that previously reduced the amount available to be borrowed by the net proceeds the Company received from equity financings was eliminated; •per the Second Amendment, the funding structure was changed from borrowings as needed from time to time at the election of the Company, to the Company agreeing to borrow, and Acuitas agreeing to lend, subject to the conditions in the Keep Well Agreement (which conditions were also amended as described above), the entire then-remaining amount of $14.0 million as follows: $4.0 million in each of January (which was borrowed on January 5, 2023), March (which was borrowed on March 6, 2023) and June 2023, and $2.0 million in September 2023; the funding structure was further amended in the Fourth Amendment with respect to the $6.0 million remaining available amount to be funded, as described below; •per the Fourth Amendment, in lieu of the $6.0 million remaining available amount to be funded as described above (and in full satisfaction of Acuitas’ obligation to purchase Keep Well Notes from the Company), Acuitas agreed to deliver to the Company for deposit and to be held by the Company in a segregated account established by the Company until such time of qualified withdrawal and issuance of a Keep Well Note, as described below (the proceeds so deposited, the “Escrowed Funds” and the account into which the proceeds are so deposited, the “Escrow Account”): (i) $4.0 million on June 23, 2023 (which was received by the Company on June 26, 2023); and (ii) $2.0 million on September 1, 2023 (which was received by the Company on September 7, 2023); •per the Fourth Amendment, any time, and from time to time, that the Company has less than $1.0 million of Qualified Cash (as defined in Fourth Amendment), the Company may withdraw $1.0 million of Escrowed Funds (or any lesser remaining amount of Escrowed Funds) from the Escrow Account; each such withdrawal will be treated as a sale by the Company to Acuitas of a Keep Well Note with a principal amount equal to the amount withdrawn by the Company and in connection with each such withdrawal, the Company will also issue a Keep Well Warrant to Acuitas; and •per the Fourth Amendment, if the Company does not complete a Qualified Financing (as defined below) on or prior to October 31, 2023, then, on October 31, 2023, the Company must withdraw all of the Escrowed Funds (other than any accrued interest thereon, all of which will belong to the Company) then on deposit in the Escrow Account, and such withdrawal will be treated as a sale by the Company to Acuitas of a Keep Well Note, and in connection with such withdrawal, the Company will also issue a Keep Well Warrant to Acuitas. In the event the Company completes a Qualified Financing, all of the Escrowed Funds (other than any accrued interest thereon, all of which will belong to the Company) then on deposit in the Escrow Account will be invested in the Qualified Financing on behalf of Acuitas on the same terms as all other investors in the Qualified Financing, and the Company’s obligation to sell to Acuitas, and Acuitas’ obligation to purchase from the Company, any further Keep Well Notes will thereupon be deemed discharged with respect to the amount so invested. A “Qualified Financing” generally means any financing in which the Company issues or sells any of its equity securities for cash to one or more third party investors resulting in gross proceeds to the Company of at least $10.0 million exclusive of any amount invested by Acuitas in such financing. For a discussion regarding an amendment to the definition of Qualified Financing as well as investment of Escrowed Funds and conversion of Keep Well Notes, as described below, see "Fifth Amendment to Keep Well Agreement" below. Conversion of Keep Well Notes Following approval of the Company’s stockholders obtained at a special meeting of stockholders held in February 2023 (the “2023 Special Meeting”), Acuitas, at its option, has the right to convert the entire principal amount of the secured notes issued under the Keep Well Agreement, 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 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 (the “Conversion Right”). The $0.40 and $0.15 referenced in the preceding sentence are subject to adjustment for stock splits and similar corporate actions, and were adjusted to $2.39 and $0.90, respectively, after giving effect to the 2023 Reverse Stock Split. Each Original Keep Well Note outstanding as of the date of stockholder approval was deemed to be amended to contain the Conversion Right. The Company refers to such Original Keep Well Notes, as so amended, and to all other secured notes issued under the Keep Well Agreement, as the “Keep Well Notes.” In addition, in connection with the conversion of the principal amount of any 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, and 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 Keep Well Note then in effect, and the exercise price of each such warrant will be equal to the conversion price of the Keep Well Note then in effect, subject to adjustment as described below. See Note 14 below for information regarding conversion of Keep Well Notes. Increase in Warrant Coverage and Other Adjustments Following approval of the Company’s stockholders obtained at the 2023 Special Meeting, (a) the exercise price of the warrants issued under the Keep Well Agreement (both the Original Keep Well Warrants outstanding as of the date of the Second Amendment and those issued thereafter) was reduced to $0.45 per share ($2.70 per share as adjusted for the 2023 Reverse Stock Split), which was the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Company’s common stock immediately preceding the time the parties entered into the Second Amendment, and which is subject to future adjustment as described below; (b) the number of shares of the Company’s common stock subject to the warrants outstanding at the time of the 2023 Special Meeting (i.e., 1,775,148 shares, before the 2023 Reverse Stock Split) was increased to the number of shares that would have been subject to such warrants if the warrant coverage was equal to 100% of the amount borrowed under the Keep Well Agreement in respect of which the applicable Keep Well Warrant was issued (instead of 20%) divided by $0.45 (i.e., 33,333,333 shares, or an additional 31,558,185 shares; 5,555,557 shares , or an additional 5,259,696 shares, as adjusted for the 2023 Reverse Stock Split); and (c) the warrant coverage on borrowings under the Keep Well Agreement after the date of the Second Amendment was increased to a number of shares of the Company’s common stock equal to (x) 100% of the amount borrowed (instead of 20% of such amount) divided by (y) the greater of (i) the per share warrant exercise price (as adjusted as of the date of issuance of the applicable warrant) and (ii) $0.15 ($0.90 as adjusted for the 2023 Reverse Stock Split) (the “Warrant Coverage Denominator”), subject to future adjustment as described below, and each warrant issued after the date of the Second Amendment has an exercise price equal to $0.45 per share ($2.70 per share as adjusted for the 2023 Reverse Stock Split), subject to future adjustment as described below. As a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to the holder of each warrant issued under the Keep Well Agreement outstanding as of the date of such approval, in exchange for such warrant, a new warrant to purchase shares of the Company’s common stock that reflect the amendments to the warrants described above and below, including the increase in the warrant coverage and the decrease in the exercise price. The Company refers to the new warrants issued in exchange for outstanding warrants and to any warrants issued in connection with future borrowings under the Keep Well Agreement or in connection with the conversion of the principal amount of any Keep Well Note and/or accrued interest thereon into shares of the Company’s common stock as the “Keep Well Warrants.” Under the terms of the Second Amendment, if the reverse stock split approved at the 2023 Special Meeting is effected, then: (1) 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 would 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 below; and (2) the Warrant Coverage Denominator would be reduced to the greater of $0.15 ($0.90 as adjusted for the reverse stock split discussed in Note 1 above) and the Post-Stock Split Price, subject to further reduction as described below. As discussed in Note 7 above, the reverse stock split approved at the 2023 Special Meeting was effected on July 27, 2023. After giving effect to such reverse stock split, and in accordance with the above, the Post-Stock Split Price was determined to be $2.44 on August 3, 2023. In addition, after giving effect to such reverse stock split, the number of shares of the Company’s common stock underlying the Keep Well Warrants outstanding at the effective time of the reverse stock split were proportionally adjusted such that the aggregate exercise price payable upon exercise of the Keep Well Warrants remains unchanged. Also under the terms of the Second Amendment: (i) the exercise price of each Keep Well Warrant outstanding as of September 1, 2023 was to be reduced to the closing price of the Company’s common stock on August 31, 2023, if such closing price is less than the Post-Stock Split Price; and (ii) the Warrant Coverage Denominator was to be reduced to the greater of (a) $0.15 (or $0.90 as adjusted after giving effect to the 2023 Reverse Stock Split) and (b) the lesser of (x) the Post-Stock Split Price and (y) the closing price of the Company’s common stock on August 31, 2023. As such, on September 1, 2023, the exercise price of each Keep Well Warrant and the Warrant Coverage Denominator (applicable to warrant issuances, if any, thereafter) was determined to be $0.92. In February 2023, as a result of approvals obtained at the 2023 Special Meeting relating to the terms provided for in the Second Amendment, as described above, the Company determined that terms of the Keep Well Agreement as amended by the Second Amendment is substantially different from the terms in the Original Keep Well Agreement and that extinguishment of the senior secured notes issued under the Original Keep Well Agreement and recognition of a new debt instrument for the senior secured notes under the Original Keep Well Agreement as amended by the Second Amendment was appropriate. As such, in February 2023, the Company recorded the extinguishment of the senior secured notes under the Original Keep Well Agreement, resulting in a loss on extinguishment of debt of $2.2 million, which was recorded as part of additional paid in capital since the debt transaction is with Acuitas, a significant shareholder. The new debt instrument includes an embedded conversion feature, as described above, which was accounted for in accordance with ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity," which the Company adopted on January 1, 2022, and accordingly the Company did not separately present such embedded conversion feature in equity but rather accounted for the convertible debt wholly as debt. The Company also assessed and determined that the Keep Well Warrants qualified for equity classification and applied the relative fair value method to allocate proceeds from the debt issuance to the Keep Well Warrants. The Company incurred $0.3 million of debt issuance costs related to the Second Amendment. The fair value of the Keep Well Warrants and new debt issuance costs relating to the Second Amendment were recorded as part of debt discount and accreted using the effective interest method over the contractual term of the debt. Additional Commitment Shares As a result of stockholder approvals obtained at the 2023 Special Meeting, the Company issued to Acuitas 339,689 shares of the Company's common stock (after giving effect to the 2023 Reverse Stock Split). Fifth Amendment to Keep Well Agreement Changes to Qualified Financing. Under the Fifth Amendment, the minimum amount to be raised in an equity financing for such financing to constitute a “Qualified Financing” was reduced from $10.0 million to $8.0 million, and the deadline by when a Qualified Financing must be completed before the Company is required to withdraw the Escrowed Funds was extended from October 31, 2023 to January 31, 2024. Under a letter agreement entered into on November 9, 2023, the minimum amount to be raised in an equity financing for such financing to constitute a “Qualified Financing” was further reduced to $6.0 million. Conversion of Keep Well Notes. Under the Fifth Amendment, if the Company completed a Qualified Financing, Acuitas agreed to convert into shares of the Company’s common stock the aggregate principal amount of the Keep Well Notes plus all accrued and unpaid interest thereon, minus (a) $7.0 million, minus (b) the principal amount of any Keep Well Notes purchased with funds from the Escrow Account prior to the closing of the Qualified Financing, if any, in accordance with the terms (including the conversion price) of the Keep Well Agreement and the Keep Well Notes (the “Notes Conversion”); provided that if the offering price per share at which the shares of common stock and accompanying warrants are sold to the public in the Qualified Financing (the “Offering Price”) is less than the conversion price at which Keep Well Notes are converted, upon the effectiveness of the Fifth Amendment Stockholder Approval Matters (as defined below): (1) the Company would issue to Acuitas such additional shares of common stock such that the total number of shares of common stock issued in respect of the Notes Conversion plus such additional shares of common stock would equal the number of shares that would have been issued in respect of the Notes Conversion if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Offering Price; and (2) the exercise price of the warrants issued to Acuitas in connection with the Notes Conversion (the “Conversion Warrants”) would be reduced to the Offering Price and the number of shares of common stock subject to the Conversion Warrants would be increased to the number of shares of common stock that would have been subject to the Conversion Warrants if the Keep Well Notes were converted at a conversion price equal to the Offering Price. Private Placement. In lieu of the provisions set forth in the Fourth Amendment concerning the investment of Escrowed Funds in the offering that constitutes a Qualified Financing, the Fifth Amendment provided that if an offering constituted a Qualified Financing, the Company and Acuitas will immediately prior to, or simultaneously with the closing of such offering, consummate a private placement (the “Private Placement”) of $11.0 million of an unregistered pre-funded warrant to purchase shares of the Company’s common stock (the “Private Placement Pre-Funded Warrant”) and an unregistered warrant to purchase shares of the Company’s common stock (the “Private Placement Warrant,” and together with the Private Placement Pre-Funded Warrant, the “Private Placement Securities”). The consideration for the Private Placement Securities purchased by Acuitas would consist of (a) the Escrowed Funds then held in the Escrow Account, and (b) a reduction of the aggregate amounts outstanding under the Keep Well Notes (after giving effect to the Notes Conversion) to $2.0 million (the senior secured convertible promissory note evidencing such $2.0 million, the “Surviving Note”). Each Private Placement Pre-Funded Warrant would be sold together with two Private Placement Warrants with each Private Placement Warrant exercisable for one share of our common stock. Surviving Note. Under the Fifth Amendment, the maturity date of the Surviving Note was extended from September 30, 2024 to May 14, 2026, which date is two years and six months after the closing date of the offering that constituted a Qualified Financing, unless the Surviving Note becomes due and payable in full earlier, whether by acceleration or otherwise. In addition, if the Offering Price is lower than $0.90, then, subject to the effectiveness of the Fifth Amendment Stockholder Approval Matters, the $0.90 floor on the conversion price of the Surviving Note would be replaced with the Offering Price. On December 20, 2023, upon the effectiveness of the Fifth Amendment Stockholder Approval Matters, the $0.90 conversion price of the Surviving Note was replaced with $0.60, the Public Offering Price, discussed below. Stockholder Approval. Under the Fifth Amendment, among other things, the Company was required to seek stockholder approval in accordance with the Nasdaq listing rules of (A) the issuance of the shares of the Company’s common stock issuable upon exercise of (x) the warrants and the pre-funded warrants sold in the offering that constitutes a Qualified Financing and (y) the Private Placement Securities that, in the aggregate for clauses (x) and (y) above, are in excess of the maximum number of shares of the Company’s common stock permitted to be issued without such approval under Nasdaq’s listing rules (which amount is equal to 19.99% of the total number of shares of the Company’s common stock outstanding immediately following the Notes Conversion and immediately prior to the closing of the offering that constitutes a Qualified Financing and/or the Private Placement), (B) the amendment to the conversion price of the Surviving Note described above, and (C) any other terms of the offering that constitutes a Qualified Financing, the Private Placement and/or the Fifth Amendment that require approval of the Company’s stockholders under Nasdaq’s listing rules (collectively, the “Fifth Amendment Stockholder Approval Matters”). Support Agreement. In connection with entering into the Fifth Amendment, on October 31, 2023, the Company and Acuitas entered into a support agreement pursuant to which Acuitas has agreed to vote the shares of the Company's common stock it beneficially owns in favor of the Fifth Amendment Stockholder Approval Matters. Public Offering, Private Placement and Notes Conversion On November 14, 2023, the Company completed a public offering (the “Public Offering”). In the Public Offering, the Company issued (a) 4,592,068 shares of its common stock and 9,184,136 warrants to purchase up to 9,184,136 shares of its common stock at a combined public offering price of $0.60 per share of common stock and accompanying warrants (the “Public Offering Price”), and (b) 5,907,932 pre-funded warrants to purchase up to 5,907,932 shares of its common stock (the “Public Offering Pre-Funded Warrants”) and 11,815,864 warrants to purchase up to 11,815,864 shares of its common stock at a combined public offering price of $0.5999 per Public Offering Pre-Funded Warrant and accompanying warrants, which represents the per share public offering price for the common stock and accompanying warrants less the $0.0001 per share exercise price for each Public Offering Pre-Funded Warrant. The Company refers to the warrants sold in the Public Offering accompanying the shares of common stock and the warrants accompanying the Public Offering Pre-Funded Warrants as the “Public Offering Warrants.” The Company received gross proceeds of $6.3 million from the Public Offering, and therefore the Public Offering constituted a Qualified Financing. Total net proceeds was approximately $5.3 million (net of approximately $1.0 million of offering related fees and expenses, not including the placement fee payable relating to the Private Placement discussed below). The Public Offering Warrants had an initial exercise price of $0.85 per share, subject to adjustment. The exercisability of the Public Offering Warrants was subject to the effectiveness of the Fifth Amendment Stockholder Approval Matters, and expire five years from the effectiveness thereof. In accordance with the Fifth Amendment, concurrent with the closing of the Public Offering, the Company issued to Humanitario Capital LLC, an affiliate of Acuitas Capital, a Private Placement Pre-Funded Warrant to purchase up to 18,333,333 shares of the Company's common stock, at an exercise price of $0.0001 per share, and a Private Placement Warrant to purchase up to 36,666,666 shares of the Company's common stock, at an exercise price of $0.85 per share, subject to adjustment, for total consideration of $11.0 million. The consideration for the Private Placement Securities consisted of (a) the $6.0 million in the Escrow Account that Acuitas previously delivered to the Company in June 2023 and September 2023 in accordance with the Keep Well Agreement (which $6.0 million was reclassified from restricted cash to unrestricted cash) and (b) $5.0 million of debt owed under the Keep Well Notes, which was cancelled. The Company wrote-off $1.5 million of debt discount in connection with $5.0 million Keep Well Notes cancelled. The Company paid placement fees of approximately $0.4 million in connection with the Private Placement. The Company assessed and determined that the warrants issued in the Public Offering and Private Placement as described above qualified for equity classification and applied the relative fair value method to allocate proceeds from each Public Offering and Private Placement transactions to the respective warrants. In accordance with the Fifth Amendment, on November 14, 2023 and before the closing of the Public Offering and Private Placement, the Notes Conversion was effected. In connection with the Notes Conversion, $16.2 million of Keep Well Notes were converted into 18,054,791 shares of the Company’s common stock and the Company issued to Acuitas a Conversion Warrant to purchase up to 18,054,791 shares of the Company’s common stock with an exercise price of $0.90 per share, which was the conversion price of the Keep Well Notes converted in the Notes Conversion. The Company wrote-off $3.7 million of debt discount in connection with the conversion of $16.2 million of Keep Well Notes. On November 15, 2023, Acuitas, who owned a majority of the outstanding shares of the Company’s common stock as of that date, executed and delivered to the Company a written consent approving the Fifth Amendment Stockholder Approval Matters. The Company filed an information statement regarding the Fifth Amendment Stockholder Approval Matters with the SEC on November 30, 2023 and mailed such information statement to the holders of its common stock. The actions approved by such consent became effective on December 20, 2023. Because the Public Offering Price was less than the conversion price at which Keep Well Notes were converted in the Notes Conversion, (1) the Company issued to Acuitas 9,027,395 additional shares of common stock, which when added with the shares of common stock issued in respect of the Notes Conversion, equaled the total number of shares of common stock that the Company would have issued in respect of the Notes Conversion if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Public Offering Price; and (2) the exercise price of the Conversion Warrant was reduced to the Public Offering Price and the number of shares of common stock subject to the Conversion Warrant was increased by an additional 9,027,395 shares to equal the number of shares of common stock that would have been subject to the Conversion Warrant if the Keep Well Notes converted in the Notes Conversion were converted at a conversion price equal to the Public Offering Price. Sixth Amendment to Keep Well Agreement Issuance of Demand Notes and Warrants. Under the Sixth Amendment, the Company agreed to issue and sell to Acuitas, in Acuitas’ sole discretion, up to $15 million of senior secured convertible promissory notes (each a “Demand Note”). The Company issued and sold Demand Notes to Acuitas in the original principal amount of $1.5 million on each of April 5, 2024, May 8, 2024 and June 5, 2024. At June 30, 2024, in Acuitas’ sole discretion, Acuitas may purchase from the Company, and the Company would issue and sell to Acuitas, up to an additional $10.5 million in principal amount of Demand Notes. The terms of the Demand Notes are substantially similar to the Surviving Note, except the amounts due under the Demand Notes were payable upon demand of the holder. On August 13, 2024, the Company entered into an agreement with Acuitas pursuant to which Acuitas agreed to purchase $5.0 million of Demand Notes in accordance with the specified schedule therein, subject to a limited offset right, and also agreed not to exercise its right to require that any amounts due under any Demand Note be paid until after August 30, 2025, subject to a limited exception. As a result of the foregoing, the Company has classified the $4.6 million, including accrued payment-in-kind interest, outstanding under Demand Notes as of June 30, 2024 as part of long-term debt on the Company's condensed consolidated balance sheet. In connection with each Demand Note purchased by Acuitas from the Company, the Company agreed to issue to Acuitas (or an entity affiliated with Acuitas, as designated by Acuitas) a warrant (“Demand Warrant”) to purchase such number of shares of the Company’s common stock that results in 200% warrant coverage. The initial exercise price of each Demand Warrant issued with respect to: (a) the first $4.5 million of principal amount of Demand Notes purchased by Acuitas, was the lesser of (i) $0.3442 (after giving effect to the reduction of the exercise price of the Public Offering Warrants and Private Placement Warrant (collectively, the “November 2023 Warrants”) that occurred on April 5, 2024 as described below) and (ii) the greater of (1) the consolidated closing bid price of the Company’s common stock as reported on The Nasdaq Stock Market or such other exchange on which the Company’s common stock is listed (the “Exchange”) immediately preceding the time the applicable Demand Note is deemed issued by the Company and (2) $0.12; and (b) any subsequent Demand Notes, will be the consolidated closing bid price of the Company’s common stock as reported on the Exchange immediately preceding the time the applicable Demand Note is deemed issued by the Company. Following the occurrence of the Sixth Amendment Stockholder Approval Effective Date (as defined below), the Company issued Demand Warrants to Acuitas in respect of the Demand Notes issued to Acuitas in the original principal amount of $1.5 million on each of April 5, 2024, May 8, 2024 and June 5, 2024. In the aggregate, such Demand Warrants allow the holder thereof to purchase a total of 31.5 million shares of the Company's common stock at per share exercise prices ranging from $0.26 to $0.3442. The Company determined the relative fair value of such Demand Warrants issued and recorded a total of $2.7 million of expense included in "Debt issuance costs" in its condensed consolidated statement of operation for the three and six months ended June 30, 2024. The exercise price of each Demand Warrant is subject to further adjustment in accordance with the terms of the Demand Warrant and the Sixth Amendment. Each Demand Warrant has a term of five years and the other terms of the Demand Warrants are substantially similar to the terms of the November 2023 Warrants. See “Warrant Adjustment Provisions,” below. Sixth Amendment Stockholder Approval. The Company was required to seek stockholder approval (the “Sixth Amendment Stockholder Approval”) in accordance with the Nasdaq listing rules of (a) the issuance of the (x) Demand Warrants, (y) the New Keep Well Warrants and (z) the Demand Notes, (b) the issuance of the shares of the Company’s common stock upon exercise or conversion, as applicable, of the Demand Warrants, the New Keep Well Warrants, and the Demand Notes, and (c) any other terms of the Sixth Amendment that require approval of the Company’s stockholders under the Nasdaq listing rules. On April 22, 2024, the Company obtained the Sixth Amendment Stockholder Approval by written consent or consents signed by the holders of outstanding shares of the Company’s common stock having not less than the minimum number of votes that would be necessary to authorize or take the applicable actions at a meeting at which all shares entitled to vote thereon were present and voted. Following receipt of the Sixth Amendment Stockholder Approval, on May 1, 2024, the Company filed with the SEC a preliminary information statement related to the Sixth Amendment Stockholder Approval, and on May 13, 2024, the Company mailed a definitive information statement to the Company’s stockholders in accordance with SEC rules. Under SEC rules, in the case of corporate actions taken by the consent of stockholders, the definitive information statement must be sent or given at least 20 calendar days prior to the earliest date on which the corporate actions approved by the consent of stockholders may be taken. Accordingly, the effective date of the stockholder approval of the corporate actions approved by the Sixth Amendment Stockholder Approval was June 2, 2024 (the “Sixth Amendment Stockholder Approval Effective Date”). Replacement of Keep Well Warrants. Following the occurrence of the Sixth Amendment Stockholder Approval Effective Date, the Company issued to each holder of each warrant to purchase shares of the Company’s common stock issued under the Existing Keep Well Agreement outstanding as of the Sixth Amendment Stockholder Approval Effective Date (any such warrant, a “Replaced Keep Well Warrant”), in exchange therefor, a warrant to purchase shares of the Company’s common stock (a “New Keep Well Warrant”) substantially in the form of the Demand Warrant, and each Replaced Keep Well Warrant was deemed automatically cancelled. Each New Keep Well Warrant has (a) the same issuance date as the Replaced Keep Well Warrant in respect of which it was issued, (b) a term of five years from the original issuance date of the Replaced Keep Well Warrant in respect of which it was issued, and (c) an initial exercise price equal to $0.3442 (after giving effect to the reduction of the exercise price of the November 2023 Warrants that occurred on April 5, 2024 described below), which will be subject to further adjustment in accordance with its terms and the terms of the Sixth Amendment. Surviving Note. Effective as of the Sixth Amendment Stockholder Approval Effective Date, the conversion price of the Surviving Note was reduced from $0.60 to the lesser of (i) $0.36, and (ii) the greater of (a) the consolidated closing bid price of the Company’s common stock as reported on the Exchange on the trading day that is immediately prior to the applicable conversion date of such note and (b) $0.12, subject to further adjustment in accordance with its terms. The Company concluded that this modification of the conversion price of the Surviving Note is a substantially different term as provided in the Sixth Amendment, and therefore extinguishment of original debt and recognition of new debt is appropriate. As such, the Company recorded a $0.5 million loss on extinguishment of debt, which was recorded as part of additional paid in capital since the debt transaction is with Acuitas, a significant shareholder. Waivers by Holders of Outstanding Warrants On March 28, 2024, the Company and each holder of a Public Offering Warrant entered into a waiver and consent agreement (collectively, the “Public Offering Investor Waivers”), pursuant to which such holder agreed to waive, with respect to the transactions contemplated by the Sixth Amendment, certain limitations and prohibitions in the securities purchase agreement pursuant to which the Public Offering Warrants were issued that otherwise would have prohibited the Company from entering into Sixth Amendment and consummating the transactions contemplated thereby. In addition, pursuant to the Public Offering Investor Waivers, the holders of the Public Offering Warrants agreed to the following adjustments to the exercise price of the Public Offering Warrants then in effect (in lieu of the adjustments that would otherwise be made in accordance with the terms of the Public Offering Warrants) in connection with the Sixth Amendment and the transactions contemplated thereby: (i) the exercise price was reduced to $0.36 per share at the time the Company entered into the Sixth Amendment; (ii) if $0.36 was greater than the lowest volume weighted average price (“VWAP”) of the Company’s common stock on any trading day during the five trading day period immediately following the public announcement of the Company entering into the Sixth Amendment (the “Restricted Transaction Measuring Period”), then the exercise price per share would be further reduced to the lowest VWAP on any trading day during the Restricted Transaction Measuring Period; and (iii) if any senior secured promissory note issued under the Keep Well Agreement is converted into shares of the Company’s common stock at a conversion price per share less than the exercise price per share of the Public Offering Warrants then in effect, after giving effect to the preceding clauses (i) and (ii) and any adjustments pursuant to the terms of the Public Offering Warrant (other than Section 3(b) thereof), then the exercise price will be further reduced to such conversion price at such time of such conversion. Also on March 28, 2024, the Company and Humanitario entered into a waiver and agreement (together with the Public Offering Investors Waivers, the “Investor Waivers”) pursuant to which, among other things, Humanitario agreed to the adjustments to the exercise price of the Private Placement Warrant then in effect as described above for the Public Offering Warrants (in lieu of the adjustments that would otherwise be made in accordance with the terms of such warrant) in connection with the Sixth Amendment and the transactions contemplated thereby. The lowest VWAP on any trading day during the Restricted Transaction Measuring Period (the five trading day ended on April 5, 2024) was $0.3442 . Accordingly, the exercise price of the Public Offering Warrants and the Private Placement Warrant (collectively, the “November 2023 Warrants”) was reduced to, and currently is, $0.3442 per share, which is subject to further adjustment in accordance with the terms of the Investor Waivers and the November 2023 Warrants. In order to enter into the Sixth Amendment, as described above, the Company and the holders of the Public Offering Warrants and Private Placement Warrants agreed to adjust the exercise price and simultaneously increase the number of shares of the Company's common stock issuable upon exercise of the Public Offering Warrants and Private Placement Warrants, as described above. The Company deemed these modifications of warrants to be debt issuance costs, which was recorded at their relative fair value of $10.7 million. A cumulative total of $10.9 million of debt issuance costs (the foregoing $10.7 million plus $0.2 million of legal cost) was recorded as an other long-term asset included in "Other assets" on the Company's condensed consolidated balance sheet. As of June 30, 2024, $3.3 million of such debt issuance costs, representing a proportionate amount relative to the $4.5 million of Demand Notes that have been issued, has been expensed, and included in "Debt issuance costs" in the Company's condensed consolidated statement of operation for the three and six months ended June 30, 2024. Warrant Adjustment Provisions In addition to customary adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock, the exercise price of the November 2023 Warrants, the Demand Warrants and New Keep Well Warrants, and the number of shares of common stock issuable upon exercise thereof are subject to adjustment upon the occurrence of the events described below (collectively, the “Warrant Adjustment Provisions”). •Adjustment in May 2026. On May 14, 2026, the exercise price of the warrants will be reduced to the greater of (i) $0.1584 per share and (ii) the lesser of (x) the then exercise price and (y) the lowest volume weighted average price of our common stock on any trading day during the five trading day period immediately before May 14, 2026. •Alternative Exercise Price Following Certain Issuances. If we issue or sell, or enter into any agreement to issue or sell, any common stock, common stock equivalents, or rights, warrants or options to purchase shares of our capital stock or common stock equivalents that are issuable or convertible into or exchangeable or exercisable for shares of our common stock at a price which varies or may vary with the market price of our common stock (excluding customary adjustments in the event of stock dividends, stock splits, reorganizations or similar events), the holder will have the right, in its sole discretion, to substitute the variable price for the exercise price of its warrants. •Adjustment for Stock Combination Events. 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 of the warrants then in effect (after giving effect to customary adjustments thereto as a result of the event), then on the 16th trading day immediately following the Stock Combination Event, the exercise price of the warrants will be reduced to the Event Market 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. •Adjustment Upon Restricted Investor Subsequent Placement. If at any time prior to June 20, 2027, we (1) grant, issue or sell (or enter into any agreement to grant, issue or sell) any shares of common stock, non-convertible indebtedness and/or common stock equivalents to Acuitas that results in a reduction of the exercise price in accordance with the terms of the warrants, or (2) consummate (or enter into any agreement with respect to) any other financing with Acuitas (any transaction described in clause (1) or (2), other than certain exempt issuances, a “Restricted Transaction”) and the exercise price of the warrants is greater than the lowest volume weighted average price of our common stock on any trading day during the five trading day period immediately following the public announcement of such Restricted Transaction, then the exercise price of the warrants will be reduced to the lowest volume weighted average price on any trading day during such five trading day period. •Adjustment for Dilutive Issuances. If we issue (or enter into any agreement to issue) any shares of our common stock or common stock equivalents, excluding certain exempt issuances, for a consideration per share less than the exercise price of the warrants in effect immediately prior to such issuance or deemed issuance, then the exercise price of the warrants will be reduced to an amount equal to the consideration per share at which the common stock or common stock equivalents were issued or deemed issued. •Adjustment to Number of Shares Issuable Upon Exercise. Simultaneously with any adjustment to the exercise price on or prior to June 20, 2027, the number of shares of common stock issuable upon exercise will be increased or decreased proportionally, such that the aggregate exercise price of the warrants, after taking into account the adjustment in the exercise price, will be equal to the aggregate exercise price before the adjustment in the exercise price. In the event of a fundamental transaction, as described in the November 2023 Warrants, the Demand Warrants and New Keep Well Warrants and which generally includes any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, a holder of any of the November 2023 Warrants, the Demand Warrants or New Keep Well Warrants will be entitled to receive upon exercise thereof the kind and amount of securities, cash or other property that the holder would have received had it exercised the holder’s applicable warrant immediately prior to such fundamental transaction. Additionally, as more fully described in the November 2023 Warrants, the Demand Warrants and New Keep Well Warrants, in the event of certain fundamental transactions, the holder will be entitled to receive consideration in an amount equal to the Black Scholes Value (as defined in the warrants) of the warrants on the date of consummation of such transaction. Borrowings Under the Keep Well Agreement At June 30, 2024, a total of $6.9 million, which includes $0.4 million of accrued paid-in-kind interest, was outstanding under the Keep Well Agreement. The amount outstanding under the Keep Well Agreement, which are evidenced by Keep Well Notes, accrues interest based on the adjusted term SOFR for each interest period. At June 30, 2024, the effective weighted average interest rate for the Keep Well Notes was 21.29%. The net carrying amounts of the liability components consists of the following (in thousands): June 30, 2024 December 31, 2023 Long-term debt:     Principal $ 6,933  $ 2,057      Less: debt discount (261) (590)     Net carrying amount $ 6,672  $ 1,467  The following table presents the interest expense recognized related to the Company's borrowings under the Keep Well Agreement (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Contractual interest expense $ 265  $ 1,088  $ 377  $ 1,936  Accretion of debt discount 46  1,119  85  1,640  Total interest expense $ 311  $ 2,207  $ 462  $ 3,576  Stockholders Agreement Under the terms of the Keep Well Agreement, if Acuitas' beneficial ownership of the Company’s capital stock equals at least a majority of the voting power of the Company’s outstanding capital stock, Acuitas Capital and the Company agreed to enter into a stockholders agreement (the “Stockholders Agreement”) pursuant to which, during any period that Acuitas’ beneficial ownership of the Company’s capital stock equals at least 50% of the Company’s outstanding capital stock, Acuitas 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 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 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 Stockholders Agreement was entered into on February 21, 2023. Other During August and November 2023, the Company financed a total of $2.1 million of its insurance premiums at annual weighted average effective rate of 8.7%, payable in 9 to 11 equal monthly installments and down payments totaling $0.4 million. At June 30, 2024 and December 31, 2023, there was $0.3 million and $1.4 million, respectively, relating to such financed insurance premium outstanding, which were included as part of "Other accrued liabilities" on our condensed consolidated balance sheet as of each respective period.

v3.24.2.u1

Fair Value Measurements	6 Months Ended
	Jun. 30, 2024
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input Input Definition Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis as of the periods presented (in thousands): Balance as of June 30, 2024 Level I Level II Level III Total Warrant liabilities (1) $ —  $ —  $ 4  $ 4  Total liabilities $ —  $ —  $ 4  $ 4  Balance as of December 31, 2023 Level I Level II Level III Total Contingent consideration (2) $ —  $ —  $ 64  $ 64  Warrant liabilities (1) —  —  8  8  Total liabilities $ —  $ —  $ 72  $ 72  ___________________ (1) Relates to warrants issued in connection with the Eight Amendment to the Note Purchase Agreement with Goldman Sachs Specialty Lending Group, L.P., executed on March 8, 2022, and included in "Other accrued liabilities" on our condensed consolidated balance sheet as of June 30, 2024 and December 31, 2023. (2) Included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023. Financial instruments classified as Level III in the fair value hierarchy as of June 30, 2024 and December 31, 2023 represent liabilities measured at market value on a recurring basis and include warrant liabilities relating to warrants issued in connection with an amendment to our Note Purchase Agreement dated September 24, 2019, and contingent consideration relating to a stock price guarantee provided in an acquisition (see further discussion below regarding this contingent consideration). In accordance with current accounting rules, the warrant liabilities and contingent consideration liability are marked-to-market each quarter-end until they are completely settled or expire. The fair value of the warrant liabilities was valued using the Black-Scholes pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. The fair value of the contingent consideration liability was valued using the Monte Carlo simulation model, using both observable and unobservable inputs and assumptions. The carrying value of the Keep Well Notes is estimated to approximate their respective fair values as the variable interest rate of the notes approximates the market rate for debt with similar terms and risk characteristics. The fair value measurements using significant Level III inputs, and changes therein, was as follows (in thousands): Level III Contingent Consideration Balance as of December 31, 2023 $ 64      Settlement of contingent consideration (64) Balance as of June 30, 2024 $ —  The $0.1 million of contingent consideration liability, relating to a stock price guarantee in our acquisition of LifeDojo Inc. completed in October 2020, was included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023. In January 2024, the Company issued 1,238 shares of common stock, representing full settlement of the contingent consideration liability. Warrant Liabilities Level III Warrant Liabilities Balance as of December 31, 2023 $ 8  Gain on change in fair value of warrant liabilities (4) Balance as of June 30, 2024 $ 4  The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: June 30, 2024 Volatility 100.0  % Risk-free interest rate 4.52  % Weighted average expected life (in years) 2.27 Dividend yield 0  %

v3.24.2.u1

Variable Interest Entities	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities	Variable Interest Entities Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. As discussed under the heading Management Services Agreements (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSAs, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSAs. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH, including its decision making and approvals are conducted for its benefit, as evidenced by the fact that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee by TIH and CIH is subordinate to payments of the other obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans, the Company has determined that TIH and CIH are VIEs. The Company, as the primary beneficiary, is required to consolidate the VIE entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreements In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSAs, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks, and provides all required day-to-day business management services, including, but not limited to: •general administrative support services; •information systems; •recordkeeping; •billing and collection; and •obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five-year period), (b) 10%-15% of the foregoing costs, and (c) any performance bonus amount, as determined by TIH at its sole discretion. CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five-year period), and (b) any performance bonus amount, as determined by CIH at its sole discretion. The Company's condensed consolidated balance sheets include the following assets and liabilities from its TIH and CIH VIEs (in thousands): June 30, 2024 December 31, 2023 Cash $ 459  $ 1,433  Accounts receivable 443  —  Unbilled receivables 76  85  Prepaid and other current assets 16  45  Total assets $ 994  $ 1,563  Accrued liabilities $ 9  $ 52  Deferred revenue 50  64  Payables to Ontrak 1,608  2,281  Total liabilities $ 1,667  $ 2,397

v3.24.2.u1

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies From time to time, we are subject to various legal proceedings that arise in the normal course of our business activities. As of the date of this report, we are not party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our results of operations or financial position, except the following: Loss Contingencies On March 3, 2021, a purported securities class action was filed in the United States District Court for the Central District of California, entitled Farhar v. Ontrak, Inc., Case No. 2:21-cv-01987. On March 19, 2021, another similar lawsuit was filed in the same court, entitled Yildrim v. Ontrak, Inc., Case No. 2:21-cv-02460. On July 14, 2021, the Court consolidated the two actions under the Farhar case (“Consolidated Class Action”), appointed Ibinabo Dick as lead plaintiff, and the Rosen Law Firm as lead counsel. On August 13, 2021, lead plaintiff filed a consolidated amended complaint. In the Consolidated Amended Complaint, lead plaintiff, purportedly on behalf of a putative class of purchasers of Ontrak securities from August 5, 2020 through February 26, 2021, alleges that the Company and Terren S. Peizer, Brandon H. LaVerne and Curtis Medeiros, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder, by intentionally or recklessly making false and misleading statements and omissions in various press releases, SEC filings and conference calls with investors on August 5, 2020 and November 5, 2020. Specifically, the Consolidated Amended Complaint alleges that the Company was inappropriately billing its largest customer, Aetna, causing Aetna to, in May 2020, shut off its data feed to Ontrak, and, in July 2020, require Ontrak to complete a Corrective Action Plan (“CAP”). Lead plaintiff alleges that defendants: (1) misrepresented to investors that the data feed was shut off in July 2020, and that it was part of Aetna’s standard compliance review of all of its vendors; (2) failed to disclose to investors that Aetna had issued the CAP; and (3) failed to disclose to investors that Ontrak was engaging in inappropriate billing practices. Lead plaintiff seeks certification of a class and monetary damages in an indeterminate amount. On September 13, 2021, defendants filed a motion to dismiss the Consolidated Amended Complaint for failure to state a claim under Federal Rules of Civil Procedure 12(b)(6) and 9(b) and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. §§ 78u-4, et seq. The motion was taken under submission, with no oral argument. Prior to any ruling being issued on the motion to dismiss, on March 29, 2023, lead plaintiff filed a Second Amended Complaint. The Second Amended Complaint (1) adds Jonathan Mayhew as a defendant; (2) expands the purported class period to August 5, 2020 through August 19, 2021; and (3) now includes allegations that the defendants additionally intentionally or recklessly made false and misleading statements and omissions regarding the Company’s relationship with its then-second largest customer, Cigna, in various press releases, SEC filings and conference calls with investors on May 6, 2021 and August 5, 2021. On May 15, 2023, the Company filed its motion to dismiss the Second Amended Complaint. On February 2, 2024, the Court issued an order granting the Company’s motion to dismiss in its entirety and providing lead plaintiff leave to amend. On March 5, 2024, lead plaintiff filed its Third Amended Complaint, which asserts the same claims, against the same defendants for the same purported class period. On March 19, 2024, the Company filed its motion to dismiss the Third Amended Complaint. That motion is now fully briefed and has been taken under submission by the Court. The Company believes that the allegations lack merit and intends to defend against the action vigorously. On August 6, 2021, a purported stockholder derivative complaint was filed in the United States District Court for the Central District of California, entitled Aptor v. Peizer, Case No. 2:21-cv-06371, alleging breach of fiduciary duty on behalf of the Company against Terren S. Peizer, Brandon H. LaVerne, Richard A. Berman, Michael Sherman, Diane Seloff, Robert Rebak, Gustavo Giraldo and Katherine Quinn, and contribution against Terren S. Peizer and Brandon H. LaVerne. On October 6, 2021, a similar shareholder derivative action was filed in the same Court, entitled Anderson v. Peizer, Case No. 2:21-cv-07998, for breach of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement and waste of corporate assets against Terren S. Peizer, Brandon H. LaVerne, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, and Katherine Quinn, and contribution against Terren S. Peizer, Brandon H. LaVerne and Curtis Medeiros. On December 1, 2021, a similar shareholder derivative action was filed in the United States District Court for the District of Delaware, entitled Vega v. Peizer, Case No. 1:21-cv-01701, for violation of Section 20(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment and waste of corporate assets against Terren S. Peizer, Brandon H. LaVerne, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, and Katherine Quinn. In these actions, plaintiffs allege that the defendants breached their fiduciary duties by allowing or causing the Company to violate the federal securities laws as alleged in the Consolidated Class Action discussed above. The plaintiffs seek damages (and contribution from the officers) in an indeterminate amount. On December 7, 2021, the Court in the Central District of California consolidated the two Central District of California actions under the Aptor case caption and number (the "Consolidated Derivative Action"), stayed the action pending a ruling on the Motion to Dismiss in the Consolidated Class Action and ordered plaintiffs to file a consolidated amended complaint within fourteen (14) days of a ruling on the Motion to Dismiss in the Consolidated Class Action. On February 7, 2022, the Court in the District of Delaware extended the deadline for defendants to respond to the complaint in the Vega action to April 8, 2022. On March 21, 2022, the Court in the District of Delaware granted plaintiff’s unopposed motion to transfer the case to the United States District Court for Central District of California in the interest of judicial efficiency due to the Consolidated Class Action and Consolidated Derivative Action already pending in that district, and that same day the case was transferred into the United States District Court for Central District of California and given the new Case No. 2:22-cv-01873-CAS-AS. On April 11, 2022, the Court stayed the action pending a ruling on the Motion to Dismiss in the Consolidated Class Action and ordered plaintiffs to inform defendants regarding their intention to amend their initial complaint within thirty (30) days of said ruling. On February 14, 2024, the parties in Consolidated Derivative Action stipulated to an extension of the stay pending a ruling on Ontrak’s anticipated motion to dismiss the forthcoming amended complaint filed by lead plaintiff in the Consolidated Class Action. On April 8, 2024, the parties in the Vega action did the same. On January 25, 2024, another purported stockholder derivative complaint was filed in the Court of Chancery of the State of Delaware, entitled Dutkiewicz v. Acuitas Group Holdings LLC (“Acuitas”), Case No. 2024-0068, alleging breach of fiduciary duty under Brophy and unjust enrichment against Acuitas and Terren S. Peizer and breach of fiduciary duties generally against Acuitas, Terren S. Peizer, Brandon H. LaVerne, Jonathan Mayhew, Curtis Medeiros, Richard A. Berman, Michael Sherman, Edward Zecchini, Diane Seloff, Robert Rebak, Gustavo Giraldo, Katherine Quinn and Robert Newton. On July 11, 2024, the parties also stipulated to stay the matter pending a ruling on Ontrak’s motion to dismiss in the Consolidated Class Action. Although all of the claims asserted in these actions purport to seek recovery on behalf of the Company, the Company will incur certain expenses due to indemnification and advancement obligations with respect to the defendants. The Company understands that defendants believe these actions are without merit and intend to defend themselves vigorously. On February 28, 2022, a purported securities class action was filed in the Superior Court of California for Los Angeles County, entitled Braun v. Ontrak, Inc., et al., Case No. 22STCV07174. The plaintiff filed this action purportedly on behalf of a putative class of all purchasers of the Series A Preferred Stock pursuant to Registration Statements and Prospectuses issued in connection with Ontrak’s August 21, 2020 initial public stock offering, its September 2020 through December 2020 “at market” offering, and its December 16, 2020 follow-on stock offering (collectively, the “Preferred Stock Offerings”). The plaintiff brings this action against the Company; its officers: Terren S. Peizer, Brandon H. LaVerne, and Christopher Shirley; its board members: Richard A. Berman, Sharon Gabrielson, Gustavo Giraldo, Katherine B. Quinn, Robert Rebak, Diane Seloff, Michael Sherman, and Edward Zecchini; and the investment banking firms that acted as underwriters for the Preferred Stock Offerings: B. Riley Securities, Inc., Ladenburg Thalmann & Co., Inc., William Blair & Company, LLC, Aegis Capital Corp., Insperex LLC (f/k/a Incapital LLC), The Benchmark Company, LLC, Boenning & Scatteredgood, Inc., Colliers Securities, LLC, Kingswood Capital Markets, and ThinkEquity (the "Underwriters"). The plaintiff asserts three causes of action alleging that Ontrak violated § 11, § 12(a)(2), and § 15 of the Securities Act of 1933, respectively, (1) by failing to disclose facts required to be disclosed under SEC Regulation S-K items 105 and 303 – that Aetna had turned off the data feed of customer records to Ontrak citing dissatisfaction with the Company’s value proposition and billing practices and thereafter submitted a CAP to which Ontrak’s senior executives were unable to effectively respond; and (2) by issuing allegedly false or misleading statements in its Registration Statements and Prospectuses: (a) regarding Ontrak’s growing customer base; (b) regarding its ability to scale its operations; (c) that revenue from a limited number of its customers would continue; (d) that its services are provided to customers continuously; (e) that revenue increases were attributable to continued expansion of the Ontrak program; and (f) regarding the healthcare experience of its executives. The plaintiff seeks damages in an indeterminate amount. On July 7, 2022, the defendants filed demurrers to the complaint. On October 4, 2022, the Court issued its ruling, allowing the case to proceed but with a narrowed scope. Specifically, of the six alleged misleading statements, only two remain (that Ontrak had a growing “growing customer base” and that Ontrak’s revenue growth was attributed to “[t]he continued expansion of [its] Ontrak program with [its] existing health plan customers”). The Court sustained the Company’s demurrer to the second cause of action, for violation of Section 12 of the Securities Act of 1933; while the Court granted leave to amend the plaintiff determined not to amend to pursue that claim. The Company believes that the remaining allegations lack merit and intends to defend against the action vigorously. On November 18, 2022, plaintiff filed his Motion for Class Certification. On February 17, 2023, the Company filed its opposition and joined in the opposition of the Underwriters. On October 12, 2023, the Court issued its ruling granting plaintiff's Motion and certifying the class as to the Section 11 and Section 15 claims only. The parties were engaged in discovery until November 3, 2023, when the United States Attorneys' Office filed an application for leave to intervene and stay discovery pending resolution of a federal criminal case. On November 8, 2023, the Court set the Government's motion for hearing on December 14, 2023 and issued an order temporarily staying all discovery in the action pending resolution of the motion. On December 14, 2023, the Court granted the application for leave to intervene and stay discovery, staying discovery until June 25, 2024, or until criminal case reaches its conclusion at the trial level. The Court also vacated the previously set trial and related dates. On June 25, 2024, the Court lifted the stay on discovery and ordered (a) a further status conference to be held August 29, 2024, at 9:00 a.m., (b) the parties to meet and confer in advance of that status conference regarding a new case schedule and (c) the parties to submit a joint status report in advance thereof. Securities Investigation On November 15, 2022, the Company received a notification from the SEC, Division of Enforcement, that it is conducting an investigation captioned “In the Matter of Trading in the Securities of Ontrak, Inc. (HO-14340)” and issued a preservation letter as well as a subpoena for documents relating to the investigation. The notification indicates the investigation is a fact-finding inquiry for compliance with federal securities laws and should not be construed as an indication by the SEC that any violation of law has occurred, nor as a reflection upon any person, entity or security. The Company cooperated with the terms of the subpoena. On March 1, 2023, the DOJ announced charges and the SEC filed a civil complaint against Terren S. Peizer, Ontrak's former Chief Executive Officer and Chairman of our Board of Directors, alleging unlawful insider trading in our stock. Neither the Company nor any other current or former director or employee of the Company were charged by the DOJ or sued by the SEC. On June 21, 2024, a federal jury convicted Mr. Peizer of one count of securities fraud and two counts of insider trading. He is scheduled to be sentenced on October 21, 2024. The Company cannot predict whether any other governmental authorities will initiate separate investigations or litigation. Investigations and any related legal and administrative proceedings could include a wide variety of outcomes, including the institution of administrative, civil injunctive or criminal proceedings involving the Company and/or its current or former executives and/or directors, the imposition of fines and other penalties, remedies and/or sanctions.

v3.24.2.u1

Subsequent Event	6 Months Ended
	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn August 13, 2024, the Company entered into an agreement with Acuitas pursuant to which Acuitas agreed to purchase $5.0 million of Demand Notes (the “Committed Demand Notes”) as follows: (a) $1.5 million no later than August 15, 2024; (b) $1.0 million no later than August 30, 2024; (c) $1.0 million no later than September 1, 2024; (d) $1.0 million no later than October 1, 2024; and (e) $0.5 million no later than November 1, 2024. To the extent the Company receives proceeds from a capital contribution or the issuance of any capital stock on or after August 13, 2024 and on or before November 1, 2024, in its sole discretion, Acuitas has the right to elect to reduce the amount of Committed Demand Notes to be purchased on a dollar-for-dollar basis (the “Offset Right”). Also, pursuant to the agreement, Acuitas agreed not to exercise its right to require that any amounts due under any Demand Note be paid until after August 30, 2025. Notwithstanding the foregoing, if Acuitas has purchased all $5.0 million of the Committed Demand Notes, less any amounts not purchased pursuant to its exercise of the Offset Right, and the Company receives any proceeds from a capital contribution or the issuance of any capital stock after November 1, 2024, Acuitas, in its sole discretion, may require that the net proceeds therefrom be applied to pay any amounts due under the Committed Demand Notes. As a result of the foregoing, the Company has classified the $4.6 million of outstanding balance (including accrued paid-in-kind interest) under Demand Notes as part of long-term debt on its condensed consolidated balance sheet as of June 30, 2024.

v3.24.2.u1

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net loss	$ (10,289)	$ (6,756)	$ (14,747)	$ (15,106)

v3.24.2.u1

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

v3.24.2.u1

Organization (Policies)	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements include Ontrak, Inc., its wholly-owned subsidiaries and its variable interest entities. The accompanying condensed consolidated financial statements for Ontrak, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and instructions to Form 10-Q and Article 8 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed financial statements includes all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the entire fiscal year. The accompanying unaudited financial information should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year-ended December 31, 2023 (the “2023 10-K”), filed with the Securities and Exchange Commission (“SEC”), from which the consolidated balance sheet as of December 31, 2023 has been derived. The Company operates as one segment.
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements	Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements Since the date on which the Company filed the 2023 10-K, there were no recently adopted account standards or new accounting standards issued, but not yet adopted by the Company, which are expected to materially affect the Company's condensed consolidated financial statements.
Fair Value Measurements	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input Input Definition Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Financial instruments classified as Level III in the fair value hierarchy as of June 30, 2024 and December 31, 2023 represent liabilities measured at market value on a recurring basis and include warrant liabilities relating to warrants issued in connection with an amendment to our Note Purchase Agreement dated September 24, 2019, and contingent consideration relating to a stock price guarantee provided in an acquisition (see further discussion below regarding this contingent consideration). In accordance with current accounting rules, the warrant liabilities and contingent consideration liability are marked-to-market each quarter-end until they are completely settled or expire. The fair value of the warrant liabilities was valued using the Black-Scholes pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. The fair value of the contingent consideration liability was valued using the Monte Carlo simulation model, using both observable and unobservable inputs and assumptions.
Variable Interest Entities	Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. As discussed under the heading Management Services Agreements (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSAs, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSAs. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH, including its decision making and approvals are conducted for its benefit, as evidenced by the fact that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee by TIH and CIH is subordinate to payments of the other obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans, the Company has determined that TIH and CIH are VIEs. The Company, as the primary beneficiary, is required to consolidate the VIE entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreements In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSAs, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks, and provides all required day-to-day business management services, including, but not limited to: •general administrative support services; •information systems; •recordkeeping; •billing and collection; and •obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five-year period), (b) 10%-15% of the foregoing costs, and (c) any performance bonus amount, as determined by TIH at its sole discretion. CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five-year period), and (b) any performance bonus amount, as determined by CIH at its sole discretion.

v3.24.2.u1

Restricted Cash (Tables)	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Schedule of restricted cash	The following table provides a reconciliation of total cash and restricted cash as presented in the Company's condensed consolidated statement of cash flows for the periods presented (in thousands): June 30, 2024 2023 Cash $ 7,292  $ 6,094  Restricted cash - current: Cash in escrow (1) —  4,000         Subtotal - Restricted cash - current —  4,000  Cash and restricted cash $ 7,292  $ 10,094  ____________ (1) Represents cash received under the Keep Well Agreement in June 2023 and held in a separate account pursuant to the terms of the Keep Well Agreement. See Note 10 below for more information. The amount was included in "Other accrued liabilities" on the Company's condensed consolidated balance sheet as of June 30, 2023.

v3.24.2.u1

Receivables and Revenue Concentration (Tables)	6 Months Ended
	Jun. 30, 2024
Receivables [Abstract]
Schedule of concentration of risk	The following table is a summary of concentration of credit risk by customer revenues as a percentage of our total revenue: Three Months Ended June 30, Six Months Ended June 30, Percentage of Revenue 2024 2023 2024 2023 Customer A 61.3  % 55.4  % 61.7  % 53.8  % Customer B 30.9  3.2  20.0  2.5  Customer C —  33.5  10.7  34.6  Remaining customers 7.8  7.9  7.6  9.1     Total 100.0  % 100.0  % 100.0  % 100.0  % The following table is a summary of concentration of credit risk by customer accounts receivables as a percentage of our total accounts receivable: Percentage of Accounts Receivable June 30, 2024 December 31, 2023 Customer B 53.1  % —  % Customer A 46.9  —     Total 100.0  % —  %

v3.24.2.u1

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Property and equipment consisted of the following (in thousands): June 30, December 31, 2024 2023 Software $ 4,713  $ 4,575  Computers and equipment 416  416  ROU assets - finance lease 300  300  Software development in progress —  59     Subtotal 5,429  5,350  Less: Accumulated depreciation and amortization (4,846) (4,437)     Property and equipment, net $ 583  $ 913

v3.24.2.u1

Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of finite-lived intangible assets	The following table sets forth amounts recorded for intangible assets subject to amortization (in thousands): At December 31, 2023 Weighted Average Estimated Useful Life (years) Gross Value Accumulated Amortization Net Carrying Value Acquired software technology 3 $ 3,500  $ (3,500) $ —  Customer relationships 5 270 (171) 99      Total $ 3,770  $ (3,671) $ 99

v3.24.2.u1

Common Stock and Preferred Stock (Tables)	6 Months Ended
	Jun. 30, 2024
Earnings Per Share [Abstract]
Schedule of basic and diluted net loss per share	Basic and diluted net loss per common share were as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net loss $ (10,289) $ (6,756) $ (14,747) $ (15,106) Dividends on preferred stock - undeclared (2,238) (2,238) (4,477) (4,477) Net loss attributable to common stockholders $ (12,527) $ (8,994) $ (19,224) $ (19,583) Weighted-average shares of common stock outstanding 66,141  4,887  63,512  4,787  Net loss per common share - basic and diluted $ (0.19) $ (1.84) $ (0.30) $ (4.09)
Schedule of shares excluded from net loss per share	The following number of shares issuable upon exercise of stock options and warrants outstanding as of June 30, 2024 and 2023 have been excluded from the diluted earnings per share calculation as their effect would be anti-dilutive: June 30, 2024 2023 Warrants to purchase common stock 234,416,187  7,082,788  Options to purchase common stock 60,971,977  1,202,676  Total 295,388,164  8,285,464

v3.24.2.u1

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]
Schedule of assumptions used in the Black-Scholes option-pricing model	The assumptions used in the Black-Scholes option-pricing model were as follows: Six Months Ended June 30, 2024 Volatility      96.0% Risk-free interest rate 4.09% - 4.52% Expected life (in years)   3.52 - 4.45 Dividend yield 0  %
Schedule of stock option activity	A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2023 1,162,109  $ 6.63  Granted 59,942,262  0.23  Forfeited (132,394) 13.11  Outstanding as of June 30, 2024 60,971,977  0.32  Options vested and exercisable as of June 30, 2024 928,003  $ 5.18
Schedule of restricted stock units activity	The following table summarizes our RSU award activity issued under the 2017 Plan: Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2023 120,637  $ 13.06  Vested and settled (721) 236.79  Forfeited (3,514) 196.49  Non-vested at June 30, 2024 116,402  6.14
Schedule of warrant activity	A summary of warrants activity was as follows: Number of Warrants Weighted Average Exercise Price Outstanding as of December 31, 2023 114,243,865  $ 0.63  Granted 370,781,350  0.34  Exercised (9,499,062) 0.21  Cancelled (222,776,633) 0.53  Outstanding as of June 30, 2024 252,749,520  0.31  Warrants exercisable as of June 30, 2024 252,749,520  0.31
Schedule of valuation assumptions	The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: Six Months Ended June 30, 2024 Volatility 93% - 98% Risk-free interest rate 4.31% - 4.50% Expected life (in years)  3.33 - 5.00 Dividend yield 0  % The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: June 30, 2024 Volatility 100.0  % Risk-free interest rate 4.52  % Weighted average expected life (in years) 2.27 Dividend yield 0  %

v3.24.2.u1

Leases (Tables)	6 Months Ended
	Jun. 30, 2024
Leases [Abstract]
Schedule of quantitative information for leases	Quantitative information for our leases is as follows (in thousands): Condensed Consolidated Balance Sheets Balance Sheet Classification June 30, 2024 December 31, 2023 Assets Operating lease assets "Operating lease right-of-use-assets" $ 171  $ 195  Total lease assets $ 171  $ 195  Liabilities Current      Operating lease liabilities "Current portion of operating lease liabilities" $ 62  $ 56  Non-current      Operating lease liabilities "Long-term operating lease liabilities" 134 166 Total lease liabilities $ 196  $ 222  Three Months Ended June 30, Six Months Ended June 30, Condensed Consolidated Statements of Operations 2024 2023 2024 2023 Operating lease expense $ 21  $ 32  $ 41  $ 119  Short-term lease rent expense 1  —  2  1  Variable lease expense —  8  —  23  Operating sublease income —  —  —  (65) Total rent expense $ 22  $ 40  $ 43  $ 78  Finance lease expense   Amortization of leased assets $ —  $ 25  $ —  $ 50    Interest on lease liabilities —  1  —  3  Total $ —  $ 26  $ —  $ 53  Six Months Ended June 30, Condensed Consolidated Statements of Cash Flows 2024 2023 Cash paid for amounts included in the measurement of lease liabilities:    Operating cash flows from operating leases $ 43  $ 179     Financing cash flows from finance leases —  100  Other Cash received for operating sublease —  97  Other Information June 30, 2024 December 31, 2023 Weighted-average remaining lease term (years):    Operating leases 2.7 3.2 Weighted-average discount rate (%):    Operating leases 16.25  % 16.25  %    Finance leases —  15.15  %
Schedule of maturities of operating lease liabilities	The following table sets forth maturities of our lease liabilities (in thousands): Operating Leases At June 30, 2024 Remainder of 2024 $ 44  2025 90 2026 93 2027 16 Total lease payments 243     Less: imputed interest (47) Present value of lease liabilities 196     Less: current portion (62) Lease liabilities, non-current $ 134

v3.24.2.u1

Debt (Tables)	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
Schedule of carrying amounts of debt	The net carrying amounts of the liability components consists of the following (in thousands): June 30, 2024 December 31, 2023 Long-term debt:     Principal $ 6,933  $ 2,057      Less: debt discount (261) (590)     Net carrying amount $ 6,672  $ 1,467
Schedule of interest expense recognized	The following table presents the interest expense recognized related to the Company's borrowings under the Keep Well Agreement (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Contractual interest expense $ 265  $ 1,088  $ 377  $ 1,936  Accretion of debt discount 46  1,119  85  1,640  Total interest expense $ 311  $ 2,207  $ 462  $ 3,576

v3.24.2.u1

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2024
Fair Value Disclosures [Abstract]
Schedule of fair value measurements by level	The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis as of the periods presented (in thousands): Balance as of June 30, 2024 Level I Level II Level III Total Warrant liabilities (1) $ —  $ —  $ 4  $ 4  Total liabilities $ —  $ —  $ 4  $ 4  Balance as of December 31, 2023 Level I Level II Level III Total Contingent consideration (2) $ —  $ —  $ 64  $ 64  Warrant liabilities (1) —  —  8  8  Total liabilities $ —  $ —  $ 72  $ 72  ___________________ (1) Relates to warrants issued in connection with the Eight Amendment to the Note Purchase Agreement with Goldman Sachs Specialty Lending Group, L.P., executed on March 8, 2022, and included in "Other accrued liabilities" on our condensed consolidated balance sheet as of June 30, 2024 and December 31, 2023. (2) Included in "Other accrued liabilities" on our condensed consolidated balance sheets as of December 31, 2023.
Schedule of fair value measurements using significant Level III inputs	The fair value measurements using significant Level III inputs, and changes therein, was as follows (in thousands): Level III Contingent Consideration Balance as of December 31, 2023 $ 64      Settlement of contingent consideration (64) Balance as of June 30, 2024 $ —  Level III Warrant Liabilities Balance as of December 31, 2023 $ 8  Gain on change in fair value of warrant liabilities (4) Balance as of June 30, 2024 $ 4
Schedule of valuation assumptions	The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: Six Months Ended June 30, 2024 Volatility 93% - 98% Risk-free interest rate 4.31% - 4.50% Expected life (in years)  3.33 - 5.00 Dividend yield 0  % The assumptions used in the Black-Scholes warrant-pricing model were determined as follows: June 30, 2024 Volatility 100.0  % Risk-free interest rate 4.52  % Weighted average expected life (in years) 2.27 Dividend yield 0  %

v3.24.2.u1

Variable Interest Entities (Tables)	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Variable Interest Entities	The Company's condensed consolidated balance sheets include the following assets and liabilities from its TIH and CIH VIEs (in thousands): June 30, 2024 December 31, 2023 Cash $ 459  $ 1,433  Accounts receivable 443  —  Unbilled receivables 76  85  Prepaid and other current assets 16  45  Total assets $ 994  $ 1,563  Accrued liabilities $ 9  $ 52  Deferred revenue 50  64  Payables to Ontrak 1,608  2,281  Total liabilities $ 1,667  $ 2,397

v3.24.2.u1

Organization (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($) segment	Aug. 14, 2024 USD ($)	Aug. 13, 2024 USD ($)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)
Debt Instrument [Line Items]
Number of segments | segment	1
Cash	$ 7,292			$ 9,701	$ 6,094
Working capital	8,100
Average monthly cash burn rate	1,300
Principal	6,933			$ 2,057
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Debt outstanding including paid-in kind interest	$ 6,900
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Subsequent event
Debt Instrument [Line Items]
Debt outstanding including paid-in kind interest		$ 7,100
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand notes | Subsequent event
Debt Instrument [Line Items]
Principal		$ 4,800
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Subsequent event
Debt Instrument [Line Items]
Remaining borrowing capacity, after commitment for issuance			$ 5,500

v3.24.2.u1

Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Restricted Cash and Cash Equivalents Items [Line Items]
Cash	$ 7,292	$ 9,701	$ 6,094
Restricted cash - current	0		4,000
Cash and restricted cash	7,292	$ 9,701	10,094	$ 9,713
Cash in escrow
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash - current	$ 0		$ 4,000

v3.24.2.u1

Receivables and Revenue Concentration (Details) - Customer Concentration Risk	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue
Concentration Risk [Line Items]
Concentration risk	100.00%	100.00%	100.00%	100.00%
Revenue | Customer A
Concentration Risk [Line Items]
Concentration risk	61.30%	55.40%	61.70%	53.80%
Revenue | Customer B
Concentration Risk [Line Items]
Concentration risk	30.90%	3.20%	20.00%	2.50%
Revenue | Customer C
Concentration Risk [Line Items]
Concentration risk	0.00%	33.50%	10.70%	34.60%
Revenue | Remaining customers
Concentration Risk [Line Items]
Concentration risk	7.80%	7.90%	7.60%	9.10%
Accounts receivable
Concentration Risk [Line Items]
Concentration risk			100.00%
Accounts receivable | Customer A
Concentration Risk [Line Items]
Concentration risk			46.90%
Accounts receivable | Customer B
Concentration Risk [Line Items]
Concentration risk			53.10%

v3.24.2.u1

Receivables and Revenue Concentration - Narrative (Details) - USD ($)	1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2024	Feb. 29, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Concentration Risk [Line Items]
Bad debt expense			$ 0	$ 0	$ 0	$ 0
Revenue			2,451,000	$ 2,960,000	5,131,000	5,489,000
Amount of insurance claims filed			4,400,000		4,400,000
Decrease in other receivable due to payment by insurer to third parties					221,000	326,000
Decrease in other accrued liabilities due to payment by insurer to third parties					(620,000)	$ 1,529,000
Insurance claim receivable			800,000		800,000
Accrued insurance			$ 800,000		800,000
Insurance Settlement
Concentration Risk [Line Items]
Decrease in other receivable due to payment by insurer to third parties					3,600,000
Decrease in other accrued liabilities due to payment by insurer to third parties					$ 3,600,000
Health Plan Customer, Cancelled Services
Concentration Risk [Line Items]
Revenue		$ 500,000
Payment received from customer	$ 500,000

v3.24.2.u1

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 5,429	$ 5,350
Less: Accumulated depreciation and amortization	(4,846)	(4,437)
Property and equipment, net	583	913
Software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	4,713	4,575
Computers and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	416	416
ROU assets - finance lease
Property, Plant and Equipment [Line Items]
Property and equipment, gross	300	300
Software development in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 0	$ 59

v3.24.2.u1

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 200	$ 300	$ 400	$ 600
Capitalized internal use software costs, additions	40	100	100	200
Capitalized internal use software costs, amortization	$ 200	$ 300	$ 400	$ 500

v3.24.2.u1

Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 5,713		$ 5,713		$ 5,713
Amortization of intangible assets	$ 50	$ 300	$ 100	$ 600

v3.24.2.u1

Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Finite-Lived Intangible Assets [Line Items]
Gross Value	$ 3,770
Accumulated Amortization	(3,671)
Net Carrying Value	$ 99
Acquired software technology
Finite-Lived Intangible Assets [Line Items]
Weighted Average Estimated Useful Life (years)	3 years
Gross Value	$ 3,500
Accumulated Amortization	(3,500)
Net Carrying Value	$ 0
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Estimated Useful Life (years)	5 years
Gross Value	$ 270
Accumulated Amortization	(171)
Net Carrying Value	$ 99

v3.24.2.u1

Restructuring, Severance and Related Costs (Details) - One-time termination benefits - USD ($) $ in Millions	1 Months Ended
	Feb. 29, 2024	Mar. 31, 2023
Restructuring Cost and Reserve [Line Items]
Positions eliminated	21.00%	19.00%
Restructuring costs	$ 0.3	$ 0.5

v3.24.2.u1

Common Stock and Preferred Stock - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share [Abstract]
Net loss	$ (10,289)	$ (6,756)	$ (14,747)	$ (15,106)
Dividends on preferred stock - undeclared	(2,238)	(2,238)	(4,477)	(4,477)
Net loss attributable to common stockholders, basic	(12,527)	(8,994)	(19,224)	(19,583)
Net loss attributable to common stockholders, diluted	$ (12,527)	$ (8,994)	$ (19,224)	$ (19,583)
Weighted-average common shares outstanding, basic (in shares)	66,141	4,887	63,512	4,787
Weighted-average common shares outstanding, diluted (in shares)	66,141	4,887	63,512	4,787
Net loss per common share, basic (in dollars per share)	$ (0.19)	$ (1.84)	$ (0.30)	$ (4.09)
Net loss per common share, diluted (in dollars per share)	$ (0.19)	$ (1.84)	$ (0.30)	$ (4.09)

v3.24.2.u1

Common Stock and Preferred Stock - Narrative (Details) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended
	Jul. 27, 2023	Feb. 28, 2023 shares	Jun. 30, 2024 USD ($) $ / shares shares	Jun. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2020 director $ / shares shares
Class of Stock [Line Items]
Shares issuable upon exercise of warrants included in common stock outstanding (in shares) | shares			18,333,333	18,333,333
Reverse stock split ratio	0.17
Preferred stock, voting rights, number of directors able to elect | director					2
Series A Cumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Preferred stock issued (in shares) | shares					3,770,265
Preferred stock, dividend rate				9.50%	9.50%
Preferred stock, redemption price (in dollars per share)					$ 25.00
Preferred stock, liquidation preference (in dollars per share)			$ 25.00	$ 25.00
Preferred stock, liquidation preference, per annum (in dollars per share)			$ 2.375	2.375
Preferred stock, dividend rate (in dollars per share)				$ 0.593750
Preferred stock, undeclared dividends | $			$ 20.9	$ 20.9
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Effect of reverse stock split
Class of Stock [Line Items]
Sale of stock, shares issued (in shares) | shares		339,689

v3.24.2.u1

Common Stock and Preferred Stock - Antidilutive Shares (Details) - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	295,388,164	8,285,464
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	234,416,187	7,082,788
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	60,971,977	1,202,676

v3.24.2.u1

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 02, 2024	Apr. 05, 2024	Mar. 28, 2024	Oct. 31, 2023	Sep. 01, 2023	Feb. 28, 2023	Apr. 15, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)	2,849,746	2,849,746		2,849,746
Expiration period (in years)				10 years
Shares reserved for future award (in shares)	579,751	579,751		579,751
Share-based compensation expense		$ 0.4	$ 0.9	$ 0.8	$ 1.5
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of warrants (in dollars per share)										$ 0.92	$ 0.45
Number of shares of common stock exercisable for each warrant (in shares)									1
Public Offering Warrants and Private Placement Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of warrants (in dollars per share)							$ 0.3442	$ 0.36
Demand Warrants | Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock exercisable for each warrant (in shares)	31,500,000	31,500,000		31,500,000
Employees and directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted (in shares)				59,942,262
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)				1 year
Minimum | Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of warrants (in dollars per share)												$ 1.69
Minimum | Demand Warrants | Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of warrants (in dollars per share)	$ 0.26	$ 0.26		$ 0.26		$ 0.12
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)				4 years
Maximum | Demand Warrants | Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of warrants (in dollars per share)	$ 0.3442	$ 0.3442		$ 0.3442		$ 0.3442
Stock options and RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options and RSUs outstanding (in shares)	61,088,379	61,088,379		61,088,379
Restricted Stock Units (RSUs) | Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 0.5	$ 0.5		$ 0.5
Unrecognized compensation costs, recognition period (in years)				1 year 1 month 28 days
Restricted Stock Units (RSUs) | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)				3 years
Restricted Stock Units (RSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)				5 years
Stock options | Employees and directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted (in shares)	59,200,000
Unrecognized compensation costs	$ 11.3	$ 11.3		$ 11.3
Unrecognized compensation costs, recognition period (in years)				3 years 8 months 23 days

v3.24.2.u1

Stock-Based Compensation - Assumptions Used in the Black-Scholes Option-pricing Model (Details)	6 Months Ended
	Jun. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	96.00%
Risk-free interest rate, minimum	4.09%
Risk-free interest rate, maximum	4.52%
Dividend yield	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	3 years 6 months 7 days
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	4 years 5 months 12 days

v3.24.2.u1

Stock-Based Compensation - Employee and Director Stock Option Activity (Details) - Employees and directors - $ / shares	6 Months Ended
	Jun. 30, 2024
Number of Shares
Beginning balance (in shares)	1,162,109
Granted (in shares)	59,942,262
Forfeited (in shares)	(132,394)
Ending balance (in shares)	60,971,977
Options vested and exercisable (in shares)	928,003
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 6.63
Granted (in dollars per share)	0.23
Forfeited (in dollars per share)	13.11
Ending balance (in dollars per share)	0.32
Options vested and exercisable (in dollars per share)	$ 5.18

v3.24.2.u1

Stock Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - Employee	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Restricted Stock Units
Non-vested beginning balance (in shares) | shares	120,637
Vested and settled (in shares) | shares	(721)
Forfeited (in shares) | shares	(3,514)
Non-vested ending balance (in shares) | shares	116,402
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 13.06
Vested and settled (in dollars per share) | $ / shares	236.79
Forfeited (in dollars per share) | $ / shares	196.49
Ending balance (in dollars per share) | $ / shares	$ 6.14

v3.24.2.u1

Stock-Based Compensation - Summary of Warrant Activity (Details) - Nonemployee	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Number of Warrants
Beginning balance (in shares) | shares	114,243,865
Granted (in shares) | shares	370,781,350
Exercised (in shares) | shares	(9,499,062)
Cancelled (in shares) | shares	(222,776,633)
Ending balance (in shares) | shares	252,749,520
Exercisable (in shares) | shares	252,749,520
Weighted Average Exercise Price
Beginning balance (in dollars per share) | $ / shares	$ 0.63
Granted (in dollars per share) | $ / shares	0.34
Exercised (in dollars per share) | $ / shares	0.21
Cancelled (in dollars per share) | $ / shares	0.53
Ending balance (in dollars per share) | $ / shares	0.31
Exercisable (in dollars per share) | $ / shares	$ 0.31

v3.24.2.u1

Stock-Based Compensation - Assumptions used in the Black-Scholes warrant-pricing model (Details)	Jun. 30, 2024 year
Volatility
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	1.000
Volatility | Nonemployee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0.98
Volatility | Nonemployee | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0.93
Risk-free interest rate
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0.0452
Risk-free interest rate | Nonemployee | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0.0431
Risk-free interest rate | Nonemployee | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0.0450
Expected life (in years)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	2.27
Expected life (in years) | Nonemployee | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	3.33
Expected life (in years) | Nonemployee | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	5.00
Dividend yield
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0
Dividend yield | Nonemployee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant liability assumptions	0

v3.24.2.u1

Leases - Narrative (Details) $ in Thousands		6 Months Ended
	Feb. 28, 2023 USD ($)	Jun. 30, 2024 USD ($) ft² contract	Jun. 30, 2023 USD ($)	Dec. 31, 2023 contract
Leases [Abstract]
Area of real estate property (in sq. ft) | ft²		2,721
Operating lease, term		58 months
Finance lease, term		36 months
Number of finance lease contracts | contract		0		0
Lease, early termination fee	$ 100
Operating lease right-of-use assets, written off	300
Current operating lease liabilities, written off	600
Long-term operating lease liabilities, written off	$ 200
Gain on termination of operating lease		$ 0	$ 471

v3.24.2.u1

Leases - Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets
Operating lease assets	$ 171	$ 195
Total lease assets	171	195
Current
Operating lease liabilities	62	56
Non-current
Operating lease liabilities	134	166
Total lease liabilities	$ 196	$ 222

v3.24.2.u1

Leases - Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating lease expense	$ 21	$ 32	$ 41	$ 119
Short-term lease rent expense	1	0	2	1
Variable lease expense	0	8	0	23
Operating sublease income	0	0	0	(65)
Total rent expense	22	40	43	78
Amortization of leased assets	0	25	0	50
Interest on lease liabilities	0	1	0	3
Total	$ 0	$ 26	$ 0	$ 53

v3.24.2.u1

Leases - Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 43	$ 179
Financing cash flows from finance leases	0	100
Cash received for operating sublease	$ 0	$ 97

v3.24.2.u1

Leases - Other Information (Details)	Jun. 30, 2024	Dec. 31, 2023
Weighted-average remaining lease term (years):
Operating leases	2 years 8 months 12 days	3 years 2 months 12 days
Weighted-average discount rate (%):
Operating leases	16.25%	16.25%
Finance leases	0.00%	15.15%

v3.24.2.u1

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 44
2025	90
2026	93
2027	16
Total lease payments	243
Less: imputed interest	(47)
Present value of lease liabilities	196
Less: current portion	(62)	$ (56)
Lease liabilities, non-current	$ 134	$ 166

v3.24.2.u1

Debt - Keep Well Agreement (Details) - Acuitas Capital, LLC - Keep Well Agreement - Affiliated Entity - USD ($) $ in Millions			6 Months Ended
	Jun. 23, 2023	Apr. 15, 2022	Jun. 30, 2024
Debt Instrument [Line Items]
Covenant, recurring revenue minimum	$ 11.0	$ 15.0	$ 11.0
Covenant, liquidity minimum			$ 5.0

v3.24.2.u1

Debt - Keep Well Agreement, The Original, Second, Third and Fourth Amendments (Details) - USD ($) $ / shares in Units, $ in Thousands							1 Months Ended			2 Months Ended	6 Months Ended
	Sep. 07, 2023	Jun. 26, 2023	Jun. 23, 2023	Mar. 06, 2023	Jan. 05, 2023	Apr. 15, 2022	Sep. 30, 2023	Jun. 30, 2023	Feb. 28, 2023	Sep. 07, 2023	Jun. 30, 2024	Jun. 30, 2023	Sep. 01, 2023	Aug. 03, 2023	Nov. 19, 2022	Aug. 12, 2022
Debt Instrument [Line Items]
Proceeds from Keep Well Notes											$ 0	$ 8,000
Proceeds from Keep Well Agreement held in escrow											0	4,000
Loss on extinguishment of debt with related party											521	$ 2,153
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Maximum issuance amount						$ 25,000
Warrant coverage, covenant, percentage of amount borrowed						20.00%			20.00%
Exercise price of warrants (in dollars per share)									$ 0.45				$ 0.92
Covenant, recurring revenue minimum			$ 11,000			$ 15,000					$ 11,000
Conversion right (in dollars per share)			$ 0.15						$ 0.15
Maximum additional principal amount to be issued																$ 10,700
Term of warrants									5 years
Shares issued for warrants, amount converted, multiplier									100.00%
Stock that can be purchased with warrants (in shares)									1,775,148
Potential warrants (in shares)									33,333,333
Additional warrants (in shares)									31,558,185
Warrant exercise price, volume-weighted average price threshold, trading days									5 days
Loss on extinguishment of debt with related party									$ 2,200
Debt issuance costs									$ 300
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Keep Well Notes, Second Amendment
Debt Instrument [Line Items]
Maximum additional principal amount to be issued			$ 6,000												$ 14,000
Proceeds from Keep Well Notes				$ 4,000	$ 4,000
Proceeds from Keep Well Agreement held in escrow							$ 2,000	$ 4,000
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Keep Well Notes, Fourth Amendment
Debt Instrument [Line Items]
Maximum additional principal amount to be issued			6,000
Proceeds from Keep Well Agreement held in escrow	$ 2,000	$ 4,000								$ 6,000
Qualified cash threshold (less than)			1,000
Qualified cash, withdrawal amount			1,000
Qualified financing threshold (at least)			$ 10,000
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Effect of reverse stock split
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share)									$ 2.70
Conversion right (in dollars per share)			$ 0.90						$ 0.90
Potential warrants (in shares)									5,555,557
Additional warrants (in shares)									5,259,696
Sale of stock, shares issued (in shares)									339,689
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share)						$ 1.69
Conversion price (in dollars per share)									$ 0.40
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum | Effect of reverse stock split
Debt Instrument [Line Items]
Conversion price (in dollars per share)									$ 2.39					$ 2.44

v3.24.2.u1

Debt - Keep Well Agreement, Fifth Amendment (Details) $ / shares in Units, $ in Thousands						2 Months Ended	6 Months Ended
	Dec. 20, 2023 $ / shares shares	Nov. 14, 2023 USD ($) $ / shares shares	Oct. 31, 2023 USD ($) warrant $ / shares shares	Sep. 07, 2023 USD ($)	Jun. 26, 2023 USD ($)	Sep. 07, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Mar. 28, 2024 $ / shares	Dec. 31, 2023 USD ($)	Nov. 09, 2023 USD ($)	Sep. 01, 2023 $ / shares	Jun. 23, 2023 USD ($)	Feb. 28, 2023 $ / shares shares	Apr. 15, 2022 $ / shares
Debt Instrument [Line Items]
Proceeds from Keep Well Agreement held in escrow							$ 0	$ 4,000
Unrestricted cash							7,292	6,094		$ 9,701
Restricted cash							$ 0	$ 4,000
Public Offering Warrants
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.85							$ 0.36
Term of warrants		5 years
Public Offering
Debt Instrument [Line Items]
Sale of stock, shares issued (in shares) | shares		4,592,068
Sale of stock, price (in dollars per share) | $ / shares		$ 0.60
Proceeds from offering		$ 6,300
Sale of stock, net proceeds		5,300
Stock issuance, fees and expenses		$ 1,000
Public Offering | Public Offering Accompanying Warrants
Debt Instrument [Line Items]
Warrants outstanding (in shares) | shares		9,184,136
Stock that can be purchased with warrants (in shares) | shares		9,184,136
Public Offering | Public Offering Pre-Funded Warrants
Debt Instrument [Line Items]
Warrants outstanding (in shares) | shares		5,907,932
Stock that can be purchased with warrants (in shares) | shares		5,907,932
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.0001
Public Offering | Public Offering Pre-Funded Accompanying Warrants
Debt Instrument [Line Items]
Warrants outstanding (in shares) | shares		11,815,864
Stock that can be purchased with warrants (in shares) | shares		11,815,864
Public Offering | Public Offering Pre-Funded Warrants and Accompanying Warrants
Debt Instrument [Line Items]
Warrant, offering price (in dollars per share) | $ / shares		$ 0.5999
Private Placement | Private Placement Pre-Funded Warrants and Private Placement Warrants
Debt Instrument [Line Items]
Stock issuance, fees and expenses		$ 400
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Consideration to be received for private placement of warrants			$ 11,000
Amount of Surviving Note after completion of private placement			$ 2,000
Number of private placement warrants to be sold with each private placement pre-funded warrants (in warrants) | warrant			2
Number of shares of common stock exercisable for each warrant (in shares) | shares			1
Stock that can be purchased with warrants (in shares) | shares														1,775,148
Exercise price of warrants (in dollars per share) | $ / shares												$ 0.92		$ 0.45
Term of warrants														5 years
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum
Debt Instrument [Line Items]
Conversion price (in dollars per share) | $ / shares														$ 0.40
Exercise price of warrants (in dollars per share) | $ / shares															$ 1.69
Acuitas Capital, LLC | Keep Well Notes, Fourth Amendment | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Qualified financing threshold (at least)													$ 10,000
Proceeds from Keep Well Agreement held in escrow				$ 2,000	$ 4,000	$ 6,000
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Qualified financing threshold (at least)			$ 8,000
Reduction to conversion amount			$ 7,000
Remaining term of debt from closing date of offering that constitutes a Qualified Financing			2 years 6 months
Maximum common stock permitted to be issued without approval as a percent of total common stock outstanding			19.99%
Sale of stock, shares issued (in shares) | shares	9,027,395
Debt cancelled		5,000
Notes conversion amount		$ 16,200
Stock issued upon note conversion (in shares) | shares		18,054,791
Write-off of debt issuance costs related to conversion of Keep Well Notes		$ 3,700
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Reclassification
Debt Instrument [Line Items]
Unrestricted cash		6,000
Restricted cash		$ (6,000)
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Conversion Warrants
Debt Instrument [Line Items]
Conversion price (in dollars per share) | $ / shares		$ 0.90
Stock that can be purchased with warrants (in shares) | shares	9,027,395	18,054,791
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.90
Acuitas Capital, LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Minimum
Debt Instrument [Line Items]
Conversion price (in dollars per share) | $ / shares	$ 0.60		$ 0.90
Acuitas Capital, LLC | Keep Well Notes, November 2023 Letter Agreement | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Qualified financing threshold (at least)											$ 6,000
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Write-off of debt issuance costs related to cancelled Keep Well Notes in Private Placement		$ 1,500
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Private Placement | Private Placement Pre-Funded Warrants
Debt Instrument [Line Items]
Stock that can be purchased with warrants (in shares) | shares		18,333,333
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.0001
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Private Placement | Private Placement Warrants
Debt Instrument [Line Items]
Stock that can be purchased with warrants (in shares) | shares		36,666,666
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.85
Humanitario Capital LLC | Keep Well Notes, Fifth Amendment | Keep Well Agreement | Affiliated Entity | Private Placement | Private Placement Pre-Funded Warrants and Private Placement Warrants
Debt Instrument [Line Items]
Sale of stock, net proceeds		$ 11,000

v3.24.2.u1

Debt - Keep Well Agreement, Sixth Amendment (Details) $ / shares in Units, $ in Thousands					1 Months Ended	3 Months Ended		6 Months Ended
	May 14, 2026 $ / shares	Jun. 02, 2024 USD ($) $ / shares	Apr. 04, 2024 $ / shares	Mar. 28, 2024 USD ($) $ / shares	Feb. 28, 2023 USD ($) $ / shares	Jun. 30, 2024 USD ($) $ / shares shares	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) $ / shares shares	Jun. 30, 2023 USD ($)	Aug. 12, 2024 USD ($)	Jun. 05, 2024 USD ($)	Jun. 01, 2024 $ / shares	May 08, 2024 USD ($)	Apr. 05, 2024 USD ($) $ / shares	Dec. 31, 2023 USD ($)	Nov. 14, 2023 $ / shares	Oct. 31, 2023 shares	Sep. 01, 2023 $ / shares	Aug. 12, 2022 USD ($)	Apr. 15, 2022 USD ($) $ / shares
Debt Instrument [Line Items]
Long-term debt, net						$ 6,672		$ 6,672							$ 1,467
Debt issuance cost expense						$ 5,921	$ 0	5,921	$ 0
Loss on extinguishment of debt with related party								521	2,153
VWAP, minimum (in dollars per share) | $ / shares			$ 0.3442
Debt issuance costs recorded at warrants relative fair value								10,651	85
Demand Warrants
Debt Instrument [Line Items]
Debt issuance cost expense								2,659	0
Public Offering Warrants
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares				$ 0.36												$ 0.85
Term of warrants																5 years
Warrant exercise price, volume-weighted average price threshold, trading days				5 days
Public Offering Warrants and Private Placement Warrants
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares				$ 0.36										$ 0.3442
Debt issuance cost expense								3,262	$ 0
Debt issuance costs recorded at warrants relative fair value								10,700
Debt issuance costs recorded in other long-term assets											$ 10,900
Legal costs								$ 200
November 2023 Warrants
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares														$ 0.3442
Warrant exercise price adjustment, trading days following stock combination event				16 days
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, trading days				5 days
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, consecutive trading days				20 days
Warrant exercise price adjustment, stock combination event, denominator				5
Warrant exercise price adjustment, volume-weighted average price threshold, trading days following restricted transaction				5 days
Warrant, percent of common stock outstanding, threshold				50.00%
Warrant, percent of voting power represented by common stock outstanding, threshold				50.00%
November 2023 Warrants | Forecast
Debt Instrument [Line Items]
Warrant exercise price, volume-weighted average price threshold, trading days	5 days
November 2023 Warrants | Maximum | Forecast
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares	$ 0.1584
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Maximum issuance amount																				$ 25,000
Maximum additional principal amount to be issued																			$ 10,700
Exercise price of warrants (in dollars per share) | $ / shares					$ 0.45													$ 0.92
Number of shares of common stock exercisable for each warrant (in shares) | shares																	1
Term of warrants					5 years
Loss on extinguishment of debt with related party					$ 2,200
Warrant exercise price, volume-weighted average price threshold, trading days					5 days
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Minimum
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares																				$ 1.69
Conversion price (in dollars per share) | $ / shares					$ 0.40
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants
Debt Instrument [Line Items]
Warrant coverage percentage		200.00%
Threshold of subsequent issuances for exercise price calculation		$ 4,500
Number of shares of common stock exercisable for each warrant (in shares) | shares						31,500,000		31,500,000
Debt issuance cost expense								$ 2,700
Term of warrants		5 years
Warrant exercise price adjustment, trading days following stock combination event				16 days
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, trading days				5 days
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, consecutive trading days				20 days
Warrant exercise price adjustment, stock combination event, denominator				5
Warrant exercise price adjustment, volume-weighted average price threshold, trading days following restricted transaction				5 days
Warrant, percent of common stock outstanding, threshold				50.00%
Warrant, percent of voting power represented by common stock outstanding, threshold				50.00%
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Forecast
Debt Instrument [Line Items]
Warrant exercise price, volume-weighted average price threshold, trading days	5 days
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Maximum
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.3442				$ 0.3442		$ 0.3442
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Maximum | Forecast
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares	$ 0.1584
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | Demand Warrants | Minimum
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares		0.12				$ 0.26		$ 0.26
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | New Keep Well Warrants
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.3442
Term of warrants		5 years
Warrant exercise price adjustment, trading days following stock combination event				16 days
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, trading days				5 days
Warrant exercise price adjustment, stock combination event, volume-weighted average price threshold, consecutive trading days				20 days
Warrant exercise price adjustment, stock combination event, denominator				5
Warrant exercise price adjustment, volume-weighted average price threshold, trading days following restricted transaction				5 days
Warrant, percent of common stock outstanding, threshold				50.00%
Warrant, percent of voting power represented by common stock outstanding, threshold				50.00%
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | New Keep Well Warrants | Forecast
Debt Instrument [Line Items]
Warrant exercise price, volume-weighted average price threshold, trading days	5 days
Acuitas Capital, LLC | Keep Well Agreement | Affiliated Entity | New Keep Well Warrants | Maximum | Forecast
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) | $ / shares	$ 0.1584
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity
Debt Instrument [Line Items]
Conversion price (in dollars per share) | $ / shares												$ 0.60
Loss on extinguishment of debt with related party		$ 500
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Maximum
Debt Instrument [Line Items]
Conversion price (in dollars per share) | $ / shares		$ 0.36
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Minimum
Debt Instrument [Line Items]
Conversion price (in dollars per share) | $ / shares		$ 0.12
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Demand notes
Debt Instrument [Line Items]
Maximum issuance amount				$ 15,000
Principal amount issued						$ 4,500		$ 4,500			$ 1,500		$ 1,500	$ 1,500
Maximum additional principal amount to be issued						10,500		10,500
Long-term debt, net						$ 4,600		$ 4,600
Acuitas Capital, LLC | Keep Well Notes, Sixth Amendment | Keep Well Agreement | Affiliated Entity | Demand notes | Subsequent event
Debt Instrument [Line Items]
Notes to be purchased										$ 5,000

v3.24.2.u1

Debt - Keep Well Agreement, Borrowings Under Keep Well Agreement (Details) - Acuitas Capital, LLC - Keep Well Agreement - Affiliated Entity $ in Millions	Jun. 30, 2024 USD ($)
Debt Instrument [Line Items]
Debt outstanding including paid-in kind interest	$ 6.9
Accrued paid-in-kind interest	$ 0.4
Effective weighted average interest rate	21.29%

v3.24.2.u1

Debt - Net Carrying Amounts (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Long-term debt:
Long-term debt, gross	$ 6,933	$ 2,057
Less: debt discount	(261)	(590)
Net carrying amount	$ 6,672	$ 1,467

v3.24.2.u1

Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Debt Disclosure [Abstract]
Contractual interest expense	$ 265	$ 1,088	$ 377	$ 1,936
Accretion of debt discount	46	1,119	85	1,640
Total interest expense	$ 311	$ 2,207	$ 462	$ 3,576

v3.24.2.u1

Debt - Stockholders Agreement (Details) - Acuitas Capital, LLC - Keep Well Agreement - Affiliated Entity	Feb. 21, 2023 director
Debt Instrument [Line Items]
Percent of capital stock, threshold	50.00%
Minimum number of independent directors	3

v3.24.2.u1

Debt - Other (Details) - Insurance Premium Financing $ in Millions	4 Months Ended
	Nov. 30, 2023 USD ($) installment	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Short-Term Debt [Line Items]
Principal amount issued	$ 2.1
Weighted average interest rate (in percentage)	8.70%
Repayments of debt	$ 0.4
Short-term debt in other accrued liabilities		$ 0.3	$ 1.4
Minimum
Short-Term Debt [Line Items]
Repayment of debt, number of installments | installment	9
Maximum
Short-Term Debt [Line Items]
Repayment of debt, number of installments | installment	11

v3.24.2.u1

Fair Value Measurements - Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration		$ 64
Warrant liabilities	$ 4	8
Total liabilities	4	72
Level I
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration		0
Warrant liabilities	0	0
Total liabilities	0	0
Level II
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration		0
Warrant liabilities	0	0
Total liabilities	0	0
Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration		64
Warrant liabilities	4	8
Total liabilities	$ 4	$ 72

v3.24.2.u1

Fair Value Measurements - Fair Value Measurements Using Significant Level III Inputs (Details) - Level III $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Contingent consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 64
Settlement of contingent consideration	(64)
Ending balance	0
Warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	8
Gain on change in fair value of warrant liabilities	(4)
Ending balance	$ 4

v3.24.2.u1

Fair Value Measurements - Narrative (Details) - LifeDojo Inc. - USD ($) $ in Millions	1 Months Ended
	Jan. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration liability		$ 0.1
Common stock issued relating to settlement of contingent consideration (in shares)	1,238

v3.24.2.u1

Fair Value Measurements - Fair Value Assumptions, Warrant Liabilities (Details)	Jun. 30, 2024 year
Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	1.000
Risk-free interest rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	0.0452
Expected life (in years)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	2.27
Dividend yield
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	0

v3.24.2.u1

Variable Interest Entities - Narrative (Details)	6 Months Ended
	Jun. 30, 2024
TIH
Variable Interest Entity [Line Items]
Capitalized cost, amortization period	5 years
TIH | Minimum
Variable Interest Entity [Line Items]
Foregoing costs, percent	10.00%
TIH | Maximum
Variable Interest Entity [Line Items]
Foregoing costs, percent	15.00%
CIH
Variable Interest Entity [Line Items]
Capitalized cost, amortization period	5 years

v3.24.2.u1

Variable Interest Entities - Summary of Amounts and Classification of Assets and Liabilities of VIE (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Variable Interest Entity [Line Items]
Cash	$ 7,292	$ 9,701	$ 6,094
Prepaid and other current assets	2,358	2,743
Total assets	25,275	19,846
Deferred revenue	58	97
Total liabilities	9,862	5,575
VIE, Primary beneficiary
Variable Interest Entity [Line Items]
Cash	459	1,433
Accounts receivable	443	0
Unbilled receivables	76	85
Prepaid and other current assets	16	45
Total assets	994	1,563
Accrued liabilities	9	52
Deferred revenue	50	64
Payables to Ontrak	1,608	2,281
Total liabilities	$ 1,667	$ 2,397

v3.24.2.u1

Commitments and Contingencies (Details)	Jun. 21, 2024 count
Securities Investigation, Securities Fraud
Loss Contingencies [Line Items]
Number of counts convicted	1
Securities Investigation, Insider Trading
Loss Contingencies [Line Items]
Number of counts convicted	2

v3.24.2.u1

Subsequent Event (Details) - USD ($) $ in Thousands	Aug. 13, 2024	Jun. 30, 2024	Dec. 31, 2023
Subsequent Event [Line Items]
Long-term debt, net		$ 6,672	$ 1,467
Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes
Subsequent Event [Line Items]
Long-term debt, net		$ 4,600
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes
Subsequent Event [Line Items]
Notes to be purchased	$ 5,000
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes | No later than August 15, 2024
Subsequent Event [Line Items]
Notes to be purchased	1,500
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes | No later than August 30, 2024
Subsequent Event [Line Items]
Notes to be purchased	1,000
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes | No later than September 1, 2024
Subsequent Event [Line Items]
Notes to be purchased	1,000
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes | No later than October 1, 2024
Subsequent Event [Line Items]
Notes to be purchased	1,000
Subsequent event | Acuitas Capital, LLC | Keep Well Notes, August 2024 Letter Agreement | Keep Well Agreement | Affiliated Entity | Demand notes | No later than November 1, 2024
Subsequent Event [Line Items]
Notes to be purchased	$ 500

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