Ontrak, Inc. (OTRKQ) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Ontrak's Annual Meeting of Stockholders. Ladies and gentlemen, I'm Terren Peizer, Chairman of the Board of Directors of Ontrak and Chairman of this Annual Meeting. As you know, we are hosting today's annual meeting through a virtual online platform hosted by Lumi. Before we proceed with formal business of the annual meeting, I'd like to introduce to you members of the Board who are with us virtually today, at least we hope they're with us virtually today. I'll do a quick road call, Richard Berman. Maybe you can't speak, but I'll tell you he's here today. Richard Berman, who's a member of our Board and Chairman of our Audit Committee; Edward Zecchini, member of our Board and Compensation Committee; Robert Rebak, member of our Board Nominations and Governance Committee; Gustavo Giraldo, member of our Board and Compensation Committee; Katherine Quinn, member of our Board and Nominations and Governance Committee. Also with us in today's meeting is Mr. Jonathan Mayhew, our Chief Executive Officer of the company; Mr. Brandon LaVerne, Chief Financial Officer of the company; and Mr. Robert Newton, General Counsel and Secretary of the company, are also virtually attending this Annual Meeting of Stockholders. [ Norwich Beverage ] and Lili Taheri of Loeb & Loeb LLP, the company's SEC counsel, are virtually attending the annual meeting. In addition, Marc Fogarty and Ryan Berman of EisnerAmper LLP, the company's auditors are virtually attending the annual meeting. After I describe and we fix each item to be voted on, we will open the polls for voting. After voting has completed on all matters on the agenda, we will close the polls and the inspectors of the election will provide their preliminary report. We will not accept ballots, proxies, revocations or changes after the closing of the polls. If you have already submitted your vote by proxy and do not wish to change your vote, you do not need to vote now and your shares will be voted as previously instructed. If you intend to vote and have not already done so and are a stockholder of record, which means you hold your shares in your own name and not through a brokerage account as of June 14, 2021, you must submit your vote online now in order for it to be counted. If you are a stockholder of record as of the -- that date and have not yet voted, I encourage you to vote online now. I've asked Mr. Newton to act as our Secretary of this annual meeting and to record the minutes of this annual meeting. Before considering the business to be discussed at this annual meeting, I would like Mr. Newton to report on the formal steps taken in connection with the annual meeting. Robert?

Mr. Chairman, the Board of Directors has adopted resolutions, which provide that this annual meeting be held today and which fixed the close of business on June 14, 2021, as the record date for the determination of stockholders entitled to notice of and to vote at this annual meeting. I have attached an affidavit of [ Dominic Vaca ], American Stock Transfer & Trust Company. The company's transfer agent, I'll refer to as AST, certifying that the Notice of Annual Meeting of Shareholders, proxy statement, annual report on Form 10-K and the proxy card were first mailed on June 30, 2021, to each holder of the company's common stock at the close of business on the record date. I also have, at this annual meeting, a list of stockholders of the company's common stock as of the record date that was compiled by AST. Stockholders of record at the close of business on June 14, 2021, can contact the company to coordinate a view of this list by e-mailing investors at ontrack-inc.com. According to this list, there were 18,590,895 shares common stock issued and outstanding on the record date. Each outstanding share of common stock is entitled to 1 vote per share on the matters presented at this annual meeting.

Thank you, Mr. Newton. I would like you to file the affidavit as to the mailing of the proxy material in the minute book of the company with the minutes of this annual meeting. The Board of Directors has adopted resolutions, which appoint Mr. Newton and Mr. LaVerne to act as inspectors of election of this annual meeting. The inspectors have executed an oath to carry out their duties impartially and to the best of their ability. Their function is to decide upon the qualifications of voters, accept their votes and when balloting on all matters is completed, to tally the final votes.

Mr. Chairman, we will file the oath, signed by the inspectors of elections with the records of the annual meeting.

The oaths of the inspectors of elections will be filed with the minutes of this annual meeting. Will the inspectors of election now provide us with a count of the stockholders virtually present or by proxy?

Mr. Chairman, I can report that the number of shares virtually present or by proxy is more than 50% of the outstanding voting stock of Ontrak. We, therefore, have a quorum and this annual meeting is duly constituted.

Since the holders of record of at least a majority of the outstanding shares of common stock entitled to vote at this annual meeting are virtually present or by proxy, I declare that a quorum is present. The first order of business is the election of 8 directors to hold office until the next annual meeting and until their respective successors are elected and qualified, the Board election proposal. The persons receiving an affirmative vote of shares of common stock, representing a plurality of the votes cast on the proposal at the annual meeting shall hold that position for a term of 1 year or until the next annual meeting or until another is chosen in his or her staff. I hereby open the floor for nominations.

Mr. Chairman, a proxy for a stockholder of record of the company, I move that we nominate the slate of director candidates recommended to the stockholders by the Board of Directors, including the following persons, each to serve for 1-year term as described in the proxy statement: Mr. Terren Peizer; Mr. Richard Berman; Mr. Michael Sherman; Mr. Edward Zecchini; Ms. Diane Seloff; Mr. Robert Rebak, Mr. Gustavo Giraldo; and Ms. Katherine Quinn.

I second the motion.

We have received no other nominations to elect directors of the company. The nominations are now closed, and the Board proposal is approved for voting. The second order of business is the ratification of the appointment of EisnerAmper LLP as the company's independent registered public accounting firm for the 2021 fiscal year. The auditor's ratification proposal. This proposal needs to be approved by the affirmative vote of shares of common stock representing a majority of votes cast on the proposal virtually present or represented by proxy at the annual meeting. I will entertain a motion for the auditor's ratification proposal.

I so move.

I second the motion.

The auditor's ratification proposal is now closed and approved for voting. The third order of business is the approval of a nonbinding advisory resolution to approve the compensation paid to the company's named executive officers, the say-on-pay proposal. This proposal needs to be approved by an affirmative vote of at least a majority of the votes cast on the proposal virtually present or represented by proxy at the annual meeting. I will entertain a motion for the say-on-pay proposal.

I move that the say-on-pay proposal be presented to the stockholders.

I second the motion.

The say-on-pay proposal is now closed and approved for voting. As there are no other matters to be brought before this annual meeting, I now call for votes for: One, the Board election proposal; two, the auditor ratification proposal; and three, the say-on-pay proposal. If you are voting today, you must submit your votes at this time in order for them to be counted by the inspectors of election. The inspectors of election will not accept proxies, ballots or votes or any changes or revocations submitted after the closing of the polls. The results of the balloting will be certified by the inspectors of election. Upon certification, the company will publicly announce the results of the voting on items presented at this meeting. [Voting]

The polls for each matter to be voted on at this annual meeting are now closed. Now I would like to have the Corporate Secretary Inspector of Election provide the preliminary count of the stock represented here today and by proxy and the tally of votes cast in regard to each proposal.

As the Corporate Secretary and the inspector of election, I hereby report that there are 15,237,814 shares of common stock entitled to vote represented at this annual meeting, compromising approximately 82% of the outstanding common stock of the company. In voting for directors, I hereby preliminary report that Mr. Terren Peizer, Mr. Richard Berman, Mr. Michael Sherman, Mr. Edward Zecchini, Ms. Diane Seloff, Mr. Robert Rebak, Mr. Gustavo Giraldo and Ms. Katherine Quinn, each received a plurality of the votes cast. In voting for the auditor ratification proposal, I hereby preliminarily report that 15,184,313 shares of the company's common stock voted in favor of this proposal representing approximately 99.6% of the shares of common stock represented in person or by proxy with respect to this proposal. In voting to approve the say-on-pay proposal, I hereby preliminarily report 11,785,329 shares of common stock voted in favor of this proposal, representing approximately 77.3% of the shares of common stock represented in person or by proxy with respect to this proposal.

Mr. Newton, I declare based on the preliminary voting results that Mr. Richard Berman, Mr. Michael Sherman, Mr. Edward Zecchini, Ms. Diane Seloff; Mr. Robert Rebak, Mr. Gustavo Giraldo, Ms. Katherine Quinn and I have been elected as directors of the company to serve for a 1-year term in accordance with the Board proposal and the appointment of EisnerAmper LLP as independent auditors of the company for the fiscal year December 31, 2021, has been ratified and the say-on-pay proposal has been approved.

I move to the annual meeting be adjourned.

I second the motion.

There being no objections to the motion made to adjourn this annual meeting, I hereby declare the annual meeting adjourned. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.