Ontrak(US:OTRK)2024-11-13 21:06Revenue Performance - Revenue for Q3 2024 was $2.6 million, a decrease of 31% from $3.7 million in Q3 2023; for the nine months ended September 30, 2024, revenue was $7.7 million, down 16% from $9.2 million in the same period in 2023[177]. - Total revenue decreased by $1.1 million, or 31%, in the three months ended September 30, 2024, compared to the same period in 2023, and decreased by $1.5 million, or 16%, in the nine months ended September 30, 2024, compared to the same period in 2023[190]. - Commercial revenue for the three months ended September 30, 2024, was $777,000, a decrease of $439,000 or 36% compared to $1.216 million in the same period of 2023[190]. - Government revenue for the three months ended September 30, 2024, was $1.792 million, a decrease of $707,000 or 28% compared to $2.499 million in the same period of 2023[190]. - A health plan customer accounted for 68% of revenue in Q3 2024, billing approximately $1.7 million, and 64% of revenue for the nine months ended September 30, 2024, totaling $4.9 million[171]. Cash Flow and Expenses - Cash flow from operations for Q3 2024 was $(1.4) million, an improvement of 22% from $(1.8) million in Q3 2023; for the nine months ended September 30, 2024, cash flow was $(9.1) million, a 23% improvement from $(11.9) million in the same period in 2023[178]. - Total cash was $8.0 million as of September 30, 2024[215]. - The average monthly cash burn rate from operations was $1.0 million for the nine months ended September 30, 2024[202]. - Net cash used in operating activities was $9.1 million for the nine months ended September 30, 2024, an improvement from $11.9 million in the same period in 2023[212]. - Total operating expenses decreased by $4.1 million, or 18%, in the nine months ended September 30, 2024 compared to the same period in 2023[195]. - Operating expenses totaled $6.701 million for the three months ended September 30, 2024, a decrease of $38,000 or 1% compared to $6.739 million in the same period of 2023[194]. Profitability and Losses - Gross profit decreased by $1.1 million, or 40%, in the three months ended September 30, 2024, compared to the same period in 2023, with a gross profit margin of 62%[192][193]. - The operating loss for the three months ended September 30, 2024, was $5.107 million, an increase of $1.043 million or 26% compared to the operating loss of $4.064 million in the same period of 2023[194]. - Research and development expenses were $1.224 million for the three months ended September 30, 2024, a decrease of $328,000 or 21% compared to $1.552 million in the same period of 2023[194]. - Research and development costs decreased by $1.4 million, primarily due to a $0.9 million decrease in amortization expense[195]. - Interest expense, net decreased by $1.9 million, or 80%, for the three months ended September 30, 2024 compared to the same period in 2023[200]. Strategic Initiatives - The company launched the Ontrak Engage program on an à la carte basis in the first half of 2024, with a callable outreach pool of 498 as of September 30, 2024[180]. - The company is expanding its program to a larger commercial population with a health plan customer, enhancing its strategic partnership to offer solutions to self-insured groups[179]. - The company aims to increase eligible members by signing new contracts and identifying more eligible members within existing contracts[181]. - The company integrates evidence-based psychosocial and medical interventions, delivered in-person or via telehealth, to improve member health and deliver cost savings to healthcare payors[166]. Debt and Financing - The company entered into an agreement with Acuitas Capital to purchase $5.0 million of Committed Demand Notes, with staggered payments scheduled from August to November 2024[172]. - The company has a minimum guarantee of aggregate invoices of $5.8 million over a two-year contractual period ending on December 31, 2024, with $2.0 million invoiced as of September 30, 2024[183]. - As of the filing date, approximately $11.1 million of secured debt was outstanding under the Keep Well Agreement[205]. - The company received $1.5 million from the exercise of warrants in October 2024, with potential gross proceeds of approximately $13.7 million if all warrants are exercised[206]. Other Notable Events - The callable outreach pool for the WholeHealth+ program decreased to 6,689 as of September 30, 2024, down 29% from 9,377 in the same period in 2023[179]. - The company announced a reverse stock split at a ratio of 1-for-15 effective September 23, 2024, impacting all common share amounts retroactively[168][170]. - The decrease in commercial revenue was primarily related to a health plan customer who notified the company in October 2023 of its intent not to continue using its services after February 2024[191]. - The company incurred significant net losses and negative operating cash flows since inception, raising substantial doubt about its ability to continue as a going concern[210]. - The company plans to explore other sources of capital and manage operating costs through strategic cost optimization initiatives[208].