Digital value-based care behavioral health provider Ontrak Inc. has ceased operations and will file for Chapter 7 bankruptcy.

Founded in 2003, Ontrak disclosed in public documents that it was dealt a death blow by a prospective customer opting not to partner with the company. It publicly disclosed the development on July 2. The missed prospect meant losing the potential to serve up to 29,000 lives with two of Ontrack’s core products.

Miami-based Ontrack’s business centered on identifying and treating patients whose “behavioral conditions… 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,” the company states in public filings. It partnered with health plans to engage patients with behavioral health needs, even if they weren’t in care.

In July, Ontrak executives said in filings that it had four late-stage sales prospects, whose potential client pool totaled a similar number to that of the unnamed partner and 20 additional prospects at various stages of progress.

However, by the end of the month, the company’s board of directors evaluated its financial situation and its relationship with its lenders and decided to completely shutter the company.

“Based on the foregoing evaluation and the absence of realistic prospects to continue to fund our operations, on July 29, 2025, our board of directors determined to cease our operations and to terminate the employment of all our employees, including our executive officers, on July 31, 2025,” the company said in a filing with the SEC. The company was also delisted from the Nasdaq Stock Market due to failure to maintain a minimum stock price.

On Thursday, Ontrak announced in filings that it had approval from the board to file for Chapter 7 bankruptcy, liquidating what parts of the business still exist. A search of federal court documents does not show a filing is available yet.

While Ontrak, by all measures, is a fledgling operation, the failure of a business that sought close, value-minded partnerships with payers is still a potential warning for other businesses seeking to build similar types of arrangements.

In 2024, revenue diminished by 15% to $10.8 million, while its net loss diminished slightly to $25.5 million. The company’s cash assets dwindled by 25% year-over-year in 2024, according to its annual financial report.

The company ended 2024 with 112 employees. It’s not clear how many employees it had going into July. A representative of this company has not responded to a request for comment.

Ontrak has had a tough go of it for years. The company had never been profitable in its 22 years of business and had lost several customers in 2024. It also disclosed earlier in the year that it needed to raise new capital to keep going beyond the second quarter of 2025, its annual report states. 

The company announced the pricing of a $4 million public offering on June 27. It ultimately raised about $3.2 million.