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

Hello, and welcome to the 2022 Ontrak Inc. Special Meeting of Shareholders. Please note that this meeting is being recorded. It is my pleasure to now turn the meeting over to Terren Peizer. Mr. Peizer, the floor is yours.

Ladies and gentlemen, I'm Terren Peizer, Chairman of the Board of Directors of Ontrak Inc. and Chairman of this Special Meeting. As you know, we are hosting today's special meeting through a virtual online platform hosted by Lumi. Before we proceed with the formal business of the special meeting, I would like to introduce you to the members of the Board who are with us virtually today: Richard Berman, member of our Board and Chairman of our Audit Committee; Edward Zecchini, member of our Board and Compensation Committee; Mr. Jonathan Mayhew, Chief Executive Officer of the company; and Mr. Brandon LaVerne, Chief Financial Officer of the company, are also virtually attending this special meeting of stockholders. Norwood Beveridge and Lili Taheri of Loeb & Loeb, the company's SEC counsel are virtually attending the special meeting as well. After I describe and we fix each item to be voted on, we will open the polls for voting. After voting has been completed on all matters on the agenda, we'll close the polls, and the inspector of election will provide his preliminary report. We will not accept ballots -- I should say he or she. 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 January 25, 2022, you must submit your vote online now in order for it to be counted. If you are a stockholder of record as of that date and have not yet voted, I encourage you to vote online now. I've asked Mr. LaVerne to act as secretary of the special meeting and to record the minutes of the special meeting. Before considering the business to be discussed at this special meeting, I would like Mr. LaVerne to report on the formal steps taken in connection with the special meeting. Brandon?

Mr. Chairman, the Board of Directors has adopted resolutions which provide that this special meeting will be held today and which fix the close of business on January 25, 2022, as the record date for the determination of stockholders entitled to notice of and to vote at the special meeting. I have an affidavit of [ Dominic Vacca ], an employee of American Stock Transfer & Trust Company, the company's transfer agent, which I'll call AST, certifying that the notice of the special meeting of stockholders and proxy card were first mailed on February 3, 2022, to each holder of the company's common stock at the close of business on the record date. I also have at this special meeting a list of stockholders of the company's common stock as of the record date, those compiled by AST. Stockholders of record at the close of business on January 25, 2022, can contact the company to coordinate a view of this list by e-mailing [email protected]. According to this list, there were 20,691,129 shares of common stock issued and outstanding on the record date. Each outstanding share of common stock is entitled to one vote per share on the matters presented to the special meeting.

Thank you, Mr. LaVerne. I'd 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 the special meeting. The Board of Directors has adopted resolutions which appoint Mr. LaVerne to act as inspector of the election of this special meeting. The inspector has executed an oath to carry out his duties impartially and to the best of his ability. His function is to decide upon the qualifications of voters, accept their votes, and then -- and when balloting on all matters is completed, to tally the final votes. Brandon?

Mr. Chairman, we will file the oath signed by the inspector of election with the records of the special meeting.

The oath of the inspector of election will be filed with the minutes of this special meeting. Will the Inspector of Election now provide us with a count of the stockholders virtually present or by proxy? Brandon?

Mr. Chairman, I can report that a preliminary count indicates the presence of a quorum. I'm in the process of completing the count of all stockholders virtually present or by proxy and will render an exact report at the end of the special meeting.

Since the holders of record of at least majority of the outstanding shares of common stock entitled to vote at the special meeting are virtually present or by proxy, I declare that a quorum is present. The first order of business is to authorize the Board of Directors in its discretion to approve and adopt an amendment to the company's amended and restated certificate of incorporation to remove certain protective transfer restrictions originally designed to preserve our ability to use our net operating and net capital loss carryforwards, the charter amendment 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 special meeting. I will entertain a motion for the charter amendment proposal.

I move that the charter amendment proposal be presented to the stockholders.

I second the motion. The charter amendment proposal is now closed and approved for voting. The second order of business is to authorize one or more adjournments of the special meeting to solicit additional proxies in the event there are insufficient votes to approve the charter amendment 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 special meeting. I will entertain a motion for the adjournment proposal.

I move that the adjournment proposal be presented to the stockholders.

I second the motion. The adjournment proposal is now closed and approved for voting. Are there -- as there are no other matters to be brought before the special meeting, I now call for votes for the charter amendment proposal and, two, the adjournment proposal. If you are voting today, you must submit your votes at this time in order for them to be counted by the inspector of election. The inspector 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 inspector of election. Upon certification, the company will publicly announce the results of the voting and items presented at this meeting. The polls for each matter to be voted on at this special meeting are now closed. Now I would like to have the inspector of election provide the preliminary count of the stock represented here today and by proxy and the tally of the votes cast in regard to each proposal. Brandon?

As the inspector of election, I hereby preliminarily report that there are 11,593,711 shares of common stock entitled to vote represented at this special meeting, comprising approximately 56.03% of the outstanding common stock of the company. In voting for the charter amendment proposal, I hereby preliminarily report that 11,412,999 shares of the company's common stock voted in favor of this proposal, representing approximately 55.16% of the shares of common stock represented with respect to this proposal. In voting to approve the adjournment proposal, I hereby preliminarily report 11,188,305 shares of common stock voted in favor of this proposal, representing approximately 54.07% of the shares of common stock represented in person or by proxy with respect to this proposal.

Mr. LaVerne, I declare, based on the preliminary voting results, that the charter amendment proposal has been approved. The adjournment proposal has been approved.

I move that the special meeting be adjourned.

I second the motion. There being no objections to the motion made to adjournment the special meeting. I hereby declare the special meeting adjourned.