Direct Digital Holdings Regains Compliance with Nasdaq Stockholders' Equity Requirement

Rhea-AI Summary

Direct Digital Holdings (Nasdaq: DRCT) announced it has regained compliance with Nasdaq's minimum stockholders' equity requirement of $2,500,000 under Nasdaq Listing Rule 5550(b)(1).

The Nasdaq Hearings Panel also granted the company an exception until January 30, 2026 to meet the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), which requires a closing price at or above $1.00 for 10 consecutive business days. Management attributed the equity compliance to a strengthened financial position and reiterated standard forward-looking risk disclosures, including financing needs and going-concern risks.

Positive

• Regained Nasdaq equity compliance with $2,500,000 minimum
• Nasdaq granted a bid-price extension until January 30, 2026

Negative

• Bid-price requirement remains unmet; deadline January 30, 2026
• Substantial doubt about ability to continue as a going concern

Insights

Corporate Listings Analyst

Direct Digital regained Nasdaq equity compliance but still must clear the minimum bid price by January 30, 2026.

Direct Digital Holdings regained compliance with Nasdaq Listing Rule 5550(b)(1) by meeting the minimum stockholders' equity threshold of $2,500,000, restoring one key listing requirement and removing an immediate equity-based delisting risk. This improvement reflects an accounting or financing change that satisfies Nasdaq's capital-equity test and preserves continued access to the Nasdaq Capital Market.

The company nonetheless remains under a Nasdaq exception for the minimum bid price under Listing Rule 5550(a)(2), which requires a closing share price at or above $1.00 for 10 consecutive business days; the panel set an exception deadline of January 30, 2026. The press release also discloses material uncertainties, including a stated "substantial doubt about our ability to continue as a going concern" and reliance on additional financing and DDH LLC distributions, which create clear dependencies on financing, client payments, and successful price recovery.

Watch the January 30, 2026 deadline closely, any subsequent Nasdaq notices, and quarterly filings for confirmed equity levels and cash‑flow or financing events. Investors and stakeholders should track: the company\\'s reported stockholders' equity, any announced capital raises or debt amendments, and the 10‑day closing price sequence that would cure the bid-price deficiency within the stated timeframe.

HOUSTON, Nov. 13, 2025 /PRNewswire/ -- Direct Digital Holdings, Inc. (Nasdaq: DRCT) ("Direct Digital Holdings" or the "Company"), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC ("Colossus SSP") and Orange 142, LLC ("Orange 142"), today announced that it has received notice from the Listing Qualifications Department of The Nasdaq Stock Market notifying the Company that it has regained compliance with the minimum stockholders' equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain stockholders' equity of at least $2,500,000.

Additionally, the Nasdaq Hearings Panel has granted the Company an exception until January 30, 2026, to demonstrate compliance with the minimum bid price requirement for continued listing as set forth in Nasdaq Listing Rule 5550(a)(2), which requires the Company's Class A Common Stock to close at or above $1.00 per share for a minimum of 10 consecutive business days.

Mark Walker, Chief Executive Officer of Direct Digital Holdings, commented, "We are pleased to have regained compliance with Nasdaq's minimum stockholders' equity requirement, reflecting our strengthened financial position and continued focus on building long-term shareholder value."

Cautionary Note Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws that are subject to certain risks, trends and uncertainties. We use words such as "could," "would," "may," "might," "will," "expect," "likely," "believe," "continue," "anticipate," "estimate," "intend," "plan," "project" and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the information described under the caption "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Form 10-K") and subsequent periodic and or current reports filed with the Securities and Exchange Commission (the "SEC").

The forward-looking statements contained in this press release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions.

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements. We believe these factors include, but are not limited to, the following: the restrictions and covenants imposed upon us by our credit facilities; the substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing; our ability to secure additional financing to meet our capital needs; our ineligibility to file short-form registration statements on Form S-3, which may impair our ability to raise capital; our failure to satisfy applicable listing standards of the Nasdaq Capital Market resulting in a potential delisting of our common stock; costs, risks and uncertainties related to restatement of certain prior period financial statements; any significant fluctuations caused by our high customer concentration; risks related to non-payment by our clients; reputational and other harms caused by our failure to detect advertising fraud; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; restrictions on the use of third-party "cookies," mobile device IDs or other tracking technologies, which could diminish our platform's effectiveness; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry's technology and practices, and any perceived failure to comply with laws and industry self-regulation; our failure to manage our growth effectively; the difficulty in identifying and integrating any future acquisitions or strategic investments; any changes or developments in legislative, judicial, regulatory or cultural environments related to information collection, use and processing; challenges related to our buy-side clients that are destination marketing organizations and that operate as public/private partnerships; any strain on our resources or diversion of our management's attention as a result of being a public company; the intense competition of the digital advertising industry and our ability to effectively compete against current and future competitors; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers', suppliers' or other partners' computer systems; as a holding company, we depend on distributions from Direct Digital Holdings, LLC ("DDH LLC") to pay our taxes, expenses (including payments under the Tax Receivable Agreement) and any amount of any dividends we may pay to the holders of our common stock; the fact that DDH LLC is controlled by DDM, whose interest may differ from those of our public stockholders; any failure by us to maintain or implement effective internal controls or to detect fraud; and other factors and assumptions discussed in our Form 10-K and subsequent periodic and current reports we may file with the SEC.

Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this press release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. New factors that could cause our business not to develop as we expect emerge from time to time, and it is not possible for us to predict all of them. Further, we cannot assess the impact of each currently known or new factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

About Direct Digital Holdings

Direct Digital Holdings (Nasdaq: DRCT) combines cutting-edge sell-side and buy-side advertising solutions, providing data-driven digital media strategies that enhance reach and performance for brands, agencies, and publishers of all sizes. Our sell-side platform, Colossus SSP, offers curated access to premium, growth-oriented media properties throughout the digital ecosystem. On the buy-side, Orange 142 delivers customized, audience-focused digital marketing and advertising solutions that enable mid-market and enterprise companies to achieve measurable results across a range of platforms, including programmatic, search, social, CTV, and influencer marketing. With extensive expertise in high-growth sectors such as Energy, Healthcare, Travel & Tourism, and Financial Services, our teams deliver performance strategies that connect brands with their ideal audiences.

At Direct Digital Holdings, we prioritize personal relationships by humanizing technology, ensuring each client receives dedicated support and tailored digital marketing solutions regardless of company size. This empowers everyone to thrive by generating billions of monthly impressions across display, CTV, in-app, and emerging media channels through advanced targeting, comprehensive data insights, and cross-platform activation. DDH is "Digital advertising built for everyone."

Contacts:

Investors:
IMS Investor Relations
Walter Frank/Jennifer Belodeau
(203) 972-9200
investors@directdigitalholdings.com

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SOURCE Direct Digital Holdings

FAQ

What did Direct Digital Holdings (DRCT) announce on November 13, 2025 about Nasdaq compliance?

Direct Digital Holdings said it has regained compliance with Nasdaq's $2,500,000 stockholders' equity standard and received a bid-price exception until January 30, 2026.

What is the Nasdaq bid-price requirement DRCT must meet by January 30, 2026?

DRCT must have its Class A common stock close at or above $1.00 per share for at least 10 consecutive business days.

How does regaining Nasdaq equity compliance affect DRCT shareholders?

Regaining the equity minimum restores compliance with Nasdaq Listing Rule 5550(b)(1), reducing immediate delisting risk tied to stockholders' equity.

What risk factors did DRCT highlight alongside the Nasdaq compliance update?

The company noted financing needs, credit facility covenants, high customer concentration, and substantial doubt about its ability to continue as a going concern.

Where can investors find the deadline and requirements for DRCT's Nasdaq listing status?

The company disclosed the January 30, 2026 deadline and the $1.00 for 10 consecutive business days bid-price standard in its November 13, 2025 announcement.