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Direct Digital (NASDAQ: DRCT) gets waiver as Nasdaq listing stays at risk

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Direct Digital Holdings, Inc. (DRCT) reports that its subsidiary Direct Digital Holdings, LLC entered into a Waiver Letter on August 18, 2026 with its term loan administrative agent and lender. The waiver covers noncompliance with several financial covenants for the quarter ended June 30, 2026, including minimum unrestricted cash, consolidated total leverage ratio, consolidated fixed charge coverage ratio and minimum consolidated EBITDA requirements, and waives nonpayment of interest for the months ended May 31, June 30 and July 31, 2026. It also defers payment of certain Twelfth Amendment fees and August 2026 interest to September 30, 2026 and waives minimum unrestricted cash and certain refinancing and preferred transaction requirements through August 31, 2026.

Separately, the Nasdaq Hearings Panel granted DRCT an extension of its August 14, 2026 deadline to address the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1). The company must update the Panel by September 15, 2026 on progress toward compliance; its Class A Common Stock continues trading on The Nasdaq Capital Market under “DRCT”, but there is no assurance of continued listing.

Positive

  • Lenders granted covenant and payment waivers covering missed interest and multiple financial covenant breaches, temporarily reducing the risk of immediate default under the Term Loan Facility.
  • Nasdaq granted an extension beyond the August 14, 2026 compliance deadline, allowing DRCT until at least September 15, 2026 to progress toward meeting the stockholders’ equity requirement while its shares continue trading.

Negative

  • Multiple financial covenant violations occurred for the quarter ended June 30, 2026, including minimum unrestricted cash, leverage, fixed charge coverage and EBITDA tests under the Term Loan Facility.
  • Interest payments were missed for the fiscal months ended May 31, June 30 and July 31, 2026, and required fee and interest payments had to be deferred by agreement.
  • Nasdaq stockholders’ equity noncompliance persists under Listing Rule 5550(b)(1), and there is no assurance the Nasdaq Hearings Panel will ultimately continue DRCT’s listing.

Filing Explained

As of June 30, 2026, Direct Digital Holdings reported $520,000 in cash and equivalents, equal to 52.9 days of the last reported operating cash use, adding scale to the minimum-unrestricted-cash covenant waiver.

Sources and calculations
  • Cash and equivalents vs quarterly operating cash outflow, in days of cash use $520,000 / ($884,000 / 90) = [object Object]
Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 8.01 Other Events Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Quarter with covenant noncompliance Fiscal quarter ended June 30, 2026 Period for which multiple financial covenant breaches were waived
Interest nonpayment months waived May 31, 2026; June 30, 2026; July 31, 2026 Fiscal months for which interest nonpayment was waived
Extended deadline for August 2026 interest September 30, 2026 New payment deadline for interest for the month ended August 31, 2026
Waiver of cash and refinancing requirements through August 31, 2026 End date for waivers of minimum unrestricted cash and Section 10.3(a) compliance
Nasdaq equity compliance update due date September 15, 2026 Date by which DRCT must update Nasdaq Hearings Panel on progress toward compliance
Term Loan Facility financial
"related to the Term Loan and Security Agreement, dated December 3, 2021, as amended (the “Term Loan Facility”)"
A term loan facility is a type of loan provided by a lender that is repaid over a set period of time, usually with fixed payments. It functions like a large, upfront loan that a borrower agrees to pay back gradually, often used to fund major investments or projects. For investors, understanding a company's use of such loans helps assess its financial stability and risk level.
consolidated fixed charge coverage ratio financial
"including minimum unrestricted cash, consolidated total leverage ratio, consolidated fixed charge coverage ratio"
minimum stockholders’ equity requirement market
"relating to the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1)"
Nasdaq Hearings Panel market
"The Company was notified by the Nasdaq Hearings Panel (the “Panel”)"
A Nasdaq hearings panel is a group of experts that reviews cases when a company's stock listing is at risk of being removed from the exchange. They evaluate whether the company has met certain standards and determine if it can keep trading on Nasdaq. This process matters to investors because it can affect a company's ability to raise money and maintain credibility in the market.
Nasdaq Listing Rule 5550(b)(1) regulatory
"relating to the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1)"

FAQ

Which financial covenants did DRCT’s lenders waive for the June 30, 2026 quarter?
The lenders agreed to waive noncompliance with minimum unrestricted cash, consolidated total leverage ratio, consolidated fixed charge coverage ratio and minimum consolidated EBITDA requirements for the fiscal quarter ended June 30, 2026.

What missed interest payments did the Waiver Letter for DRCT cover?
The Waiver Letter waives nonpayment of interest for the fiscal months ended May 31, 2026, June 30, 2026 and July 31, 2026, and extends the payment deadline for interest for the month ended August 31, 2026 to September 30, 2026.

How did Nasdaq’s Hearings Panel rule on DRCT’s stockholders’ equity deficiency?
The Nasdaq Hearings Panel granted DRCT an extension beyond August 14, 2026 to address the minimum stockholders’ equity requirement. DRCT must update the Panel by September 15, 2026 on progress toward the transactions intended to restore compliance.

Is DRCT’s Class A Common Stock still trading on Nasdaq?
Yes. DRCT states that its noncompliance with the stockholders’ equity requirement has no immediate effect on listing or trading. The Class A Common Stock continues to trade on The Nasdaq Capital Market under the symbol “DRCT”, pending the Panel’s review.

What future uncertainty does DRCT highlight regarding its Nasdaq listing?
DRCT notes there can be no assurance that the Nasdaq Hearings Panel will determine to continue its listing or that it will be able to evidence compliance with the stockholders’ equity requirement within the current or any further extension period.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Understanding 8-K Material Events →
FALSE000188061300018806132026-04-232026-04-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 14, 2026
Direct Digital Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-4126187-2306185
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
1177 West Loop South, Suite 1310
Houston, Texas
77027
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (832) 402-1051
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Class A Common Stock, par value $0.001 per shareDRCTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”) (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 1.01 Entry into a Material Definitive Agreement.

On August 18, 2026, Direct Digital Holdings, LLC (“DDH LLC”), as borrower, entered into a waiver letter (the “Waiver Letter”) related to the Term Loan and Security Agreement, dated December 3, 2021, as amended (the “Term Loan Facility”) with Direct Digital Holdings, Inc. (the “Company”), Colossus Media, LLC, Huddled Masses LLC and Orange142, LLC, as guarantors (collectively with DDH LLC, the “Credit Parties”), Lafayette Square Loan Servicing, LLC, as administrative agent (the “Agent”) and Lafayette Square USA, Inc., as lender (the “Lender”).

Pursuant to the Waiver Letter, the Agent and the Lender agreed to (i) waive the Credit Parties’ noncompliance with certain financial covenants for the fiscal quarter ended June 30, 2026, including minimum unrestricted cash, consolidated total leverage ratio, consolidated fixed charge coverage ratio and minimum consolidated EBITDA requirements, (ii) waive the Credit Parties’ nonpayment of interest for the fiscal months ended May 31, 2026, June 30, 2026 and July 31, 2026, (iii) waive the nonpayment of Twelfth Amendment related fees until September 30, 2026, and (iv) extend the payment deadline for interest for the month ended August 31, 2026 to September 30, 2026. The Agent and Lender further agreed to waive the Credit Parties’ noncompliance with the minimum unrestricted cash requirement and noncompliance with Section 10.3(a) of the Term Loan Facility related to a refinancing and preferred transaction through August 31, 2026.

The foregoing description of the Waiver Letter is not complete and is qualified in its entirety by the full text of the Waiver Letter, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.

Item 8.01 Other Events.

The Company was notified by the Nasdaq Hearings Panel (the “Panel”) that the Panel was granting the Company’s request for an extension of the August 14, 2026 compliance deadline relating to the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Requirement”).

The Panel granted the Company an extension until September 15, 2026, at which time the Company must provide the Panel with an update regarding the progress of the transactions contemplated by the Company to demonstrate compliance with the Stockholders’ Equity Requirement. The Panel indicated that it will then consider granting additional time for the Company to demonstrate compliance with the Stockholders’ Equity Requirement, based on the progress that has been made by September 15, 2026.

The Company intends to take all reasonable measures available to regain compliance with the Stockholders’ Equity Rule and remain listed on Nasdaq. The Company’s noncompliance has no immediate effect on the listing or trading of the Company’s Class A Common Stock, which will continue to trade on The Nasdaq Capital Market under the symbol “DRCT” pending the Panel’s review. There can be no assurance, however, that the Panel will determine to continue the Company’s listing or that the Company will be able to evidence compliance with the Stockholders’ Equity Requirement within the current extension period or any further extension period that may be granted by the Panel.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

EXHIBIT INDEX
Exhibit No.Description
10.1*
Waiver Letter, dated August 18, 2026, by and among Direct Digital Holdings, LLC, Direct Digital Holdings, Inc., Colossus Media, LLC, Huddled Masses LLC, Orange142, LLC, Lafayette Square Loan Servicing, LLC, and Lafayette Square USA, Inc.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Certain portions of this Exhibit were redacted pursuant to Item 601(a)(6) of Regulation S-K and marked by means of brackets and asterisks (“[****]”).




SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
August 21, 2026
(Date)
Direct Digital Holdings, Inc.
(Registrant)
/s/ DIANA P. DIAZ
Diana P. Diaz
Chief Financial Officer







Source: View Original Filing on SEC EDGAR

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