Direct Digital Holdings, Inc. SEC Filings

Direct Digital Holdings (DRCT) Form 4 shows Mark D. Walker, the company's Chairman, CEO and a reported 10% owner, executed a series of stock sales in mid‑August 2025. On 08/15/2025 he sold 22,369 shares at a weighted average price of $0.41; on 08/18/2025 he sold 24,313 shares at a weighted average price of $0.39 and retained an indirect holding of 23,000 shares through AJN Energy & Transport Ventures, LLC; and on 08/19/2025 he sold 23,000 shares at a weighted average price of $0.39, after which the reported indirect holding is shown as 0. The report discloses only non‑derivative common stock transactions, executed in multiple trades with prices ranging from $0.39 to $0.43 per share, and contains no derivative holdings or additional explanatory narrative.

Direct Digital Holdings disclosed that it sold 1,000,000 shares of its Class A common stock for an aggregate of $439,531 in cash after a total discount of $18,359. The report states the sales were to New Circle Principal Investments LLC under an Equity Reserve Facility established by a previously disclosed Share Purchase Agreement.

The company reports the aggregate unregistered sales exceeded 5% of the Class A shares issued and outstanding as of the period reference, which triggered the current report. The securities were issued relying on the exemption in Section 4(a)(2) of the Securities Act, and New Circle represented it is an "accredited investor" under Rule 501(a) of Regulation D.

Amendment No. 3 to Schedule 13D reports that the Reporting Persons — Direct Digital Management, AJN, SKW, Keith Smith and Mark Walker — hold economic interests equal to 10,448,000 Class A Common Units (exchangeable one-for-one into Class A common shares) and report aggregate beneficial ownership figures ranging from 46.0% to 46.8% depending on the reporting person. The calculation uses 12,069,388 Class A shares outstanding as of August 4, 2025, plus the exchangeable units and certain option/RSU amounts. The amendment discloses unit exchanges and distributions (including a 350,000-unit exchange and distribution on June 18, 2025), numerous open-market sales executed under 10b5-1 plans by AJN and SKW in June–July 2025, and vesting of 20,300 RSU shares for each of Messrs. Smith and Walker with 4,944 shares withheld for taxes each. The Reporting Persons state transactions were for investment purposes and that they may buy or sell additional securities in the future.

Direct Digital Holdings, Inc. amended its term loan facility and issued 25,000 shares of Series A Convertible Preferred Stock in exchange for $25,000,000 of term loan principal, reducing outstanding term loans to $9,362,359.84. The Series A Preferred Stock carries a stated value of $1,000 per share, a cumulative 10% annual dividend compounded quarterly, conversion into Class A common stock at $2.50 per share, and a beneficial ownership conversion cap of 4.99% until October 15, 2025. Holders receive senior liquidation preference equal to 1.25x the Accumulated Conversion Value before October 15, 2025 and 3.0x thereafter.

The amendment also imposes new financial covenants requiring the Credit Parties to maintain a consolidated total leverage ratio of no more than 3.50x (then 3.25x), a fixed charge coverage ratio of at least 1.25x (then 1.50x), minimum unrestricted cash of $1.5 million, and minimum consolidated EBITDA of $1.0 million for the quarters ending September 30, 2025 and December 31, 2025 and $0.5 million thereafter. The Credit Parties agreed to a $1.0 million closing fee and a contingent $25.0 million exit fee tied to redemption mechanics; the exit fee can be eliminated if Series A is redeemed at the Series A Liquidation Amount on or prior to December 31, 2026, and it reduces with certain redemptions or conversions. The Certificate of Designation and amendment exhibits are filed with the report.

Direct Digital Holdings (Nasdaq: DRCT) filed its Q2-25 10-Q showing a sharp top-line contraction driven by a temporary loss of a key sell-side customer.

• Revenue: Q2-25 fell 54 % YoY to $10.1 M; YTD revenue down 59 % to $18.3 M.
• Mix shift: Sell-side advertising collapsed 83 % YoY to $2.5 M as a major partner paused activity in May 2024; buy-side revenue was flat at $7.7 M.
• Profitability: Gross margin slipped to 35.1 % (vs 27.1 % prior year) but could not offset lower scale; operating loss widened to $2.4 M (-18 % margin). Net loss attributable to DRCT widened to $2.2 M (-0.23 per share) and to $10.1 M for the half.
• Liquidity: Cash rose modestly to $1.6 M after raising $4.6 M via the New Circle Equity Reserve Facility (6.1 M shares sold). Operating cash use was $5.4 M YTD. Revolver balance of $3.7 M now matures 31 Aug 2025 after two one-month extensions; 2021 term loan balance $37.4 M (matures Dec-26). Total debt $41.2 M vs assets $23.3 M.
• Capital structure: Stockholders’ deficit deepened to -$24.6 M; company faces Nasdaq delisting if equity not improved.
• Going concern: Management cites “substantial doubt” about 12-month viability given sell-side disruption, covenant pressure and limited cash. Cost-cutting and further equity raises are underway.
• Share count: 12.07 M Class A and 10.45 M Class B shares outstanding as of 4 Aug 2025; weighted-average diluted shares 9.9 M for Q2.

The quarter highlights execution risk around heavy customer concentration on the SSP side, high leverage (net leverage >10× annualized EBITDA) and dependence on external capital while buy-side operations remain relatively stable.

Event: Direct Digital Holdings, Inc. furnished an 8-K on August 5, 2025 announcing a press release with the company’s financial results for the six and three months ended June 30, 2025.

Key facts:

• Press release is included as Exhibit 99.1.
• Cover Page Interactive Data File is included as Exhibit 104 (Inline XBRL).
• The filing states the information in Item 2.02 and Exhibit 99.1 is furnished, not filed, and therefore not subject to Section 18 liabilities.
• The 8-K is signed by Diana P. Diaz, Chief Financial Officer, dated August 5, 2025.