Direct Digital Holdings Faces Delisting Concerns

TL;DR

DDHI might get delisted, changing accountants, and has FD disclosures.

AI Summary

Direct Digital Holdings, Inc. filed an 8-K on April 23, 2024, reporting events as of April 17, 2024. The filing indicates a notice of delisting or failure to meet continued listing rules, a change in certifying accountant, and Regulation FD disclosures. The company is incorporated in Delaware and headquartered in Houston, Texas.

Why It Matters

This filing signals potential issues with Direct Digital Holdings' compliance with stock exchange listing requirements, which could impact its stock's tradability and investor confidence.

Risk Assessment

Risk Level: high — The primary risk is the potential delisting from a stock exchange, which severely impacts liquidity and investor confidence.

Key Players & Entities

• Direct Digital Holdings, Inc. (company) — Registrant
• April 17, 2024 (date) — Earliest event reported
• April 23, 2024 (date) — Filing date
• Delaware (jurisdiction) — State of incorporation
• Houston, Texas (location) — Principal executive offices

FAQ

Key Financial Figures

• $0.001 — tered Class A common stock, par value $0.001 per share DRCT The Nasdaq Stock Mar

Filing Documents

• tm249764d2_8k.htm (8-K) — 42KB
• tm249764d2_ex16-1.htm (EX-16.1) — 3KB
• tm249764d2_ex99-1.htm (EX-99.1) — 12KB
• tm249764d2_ex99-1img01.jpg (GRAPHIC) — 18KB
• 0001104659-24-050575.txt ( ) — 265KB
• drct-20240417.xsd (EX-101.SCH) — 3KB
• drct-20240417_lab.xml (EX-101.LAB) — 33KB
• drct-20240417_pre.xml (EX-101.PRE) — 22KB
• tm249764d2_8k_htm.xml (XML) — 4KB

01

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. On April 17, 2024, Direct Digital Holdings, Inc. (the "Company") received a notice (the "Notice") from the Listing Qualifications Department of the Nasdaq Stock Market LLC ("Nasdaq"), which indicated that, as a result of the Company's delay in filing its Annual Report on Form 10-K for the year ended December 31, 2023 (the "Form 10-K") by the applicable due date, the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the "Rule"), which requires Nasdaq-listed companies to timely file all required periodic financial reports with the U.S. Securities and Exchange Commission (the "SEC"). The Notice states that the Company has 60 calendar days from the date of the Notice, or until June 16, 2024, to submit to Nasdaq a plan to regain compliance with the Rule. If Nasdaq accepts the Company's plan to regain compliance, then Nasdaq may grant the Company up to 180 calendar days from the prescribed due date of the Form 10-K, or until October 14, 2024, to file the Form 10-K to regain compliance; however, there can be no assurance that these events will occur. Neither the Notice nor the Company's noncompliance with the Rule has an immediate effect on the listing or trading of the Company's securities on Nasdaq, which will continue to trade on The Nasdaq Capital Market under the symbol "DRCT." The Company continues to work diligently to complete the Form 10-K and plans to file the same as promptly as possible to regain compliance with the Rule.

01

Item 4.01 Changes in Registrant's Certifying Accountant. On April 17, 2024, Marcum LLP ("Marcum"), the Company's independent registered public accounting firm, notified the Company and the Audit Committee of the Company's board of directors (the "Audit Committee") of Marcum's decision to resign as the independent registered public accounting firm of the Company, effective immediately. Although their audit was not designed to identify or detect violations of law or fraud, Marcum's resignation was not a result of any violation of law or fraud of the Company identified during its audit procedures to date. The reports of Marcum on the Company's consolidated financial statements as of and for the fiscal years ended December 31, 2022 and 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. Additionally, during the fiscal years ended December 31, 2022 and 2021, as well as subsequent interim periods preceding Marcum's resignation, there were no "disagreements" (as that term is described in Item 304(a)(1)(iv) of Regulation S-K and related instructions) between the Company and Marcum with respect to any matter relating to accounting principles or practices, financial statement disclosure or auditing scope or procedures which, if not resolved to the satisfaction of Marcum, would have caused Marcum to make reference to the subject matter of the disagreements in its reports on the Company's consolidated financial statement with respect to such periods, and there were no "reportable events" (as that term is defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions), except for the material weakness identified in the Company's internal controls over completeness of revenue that existed as of December 31, 2022, which was previously disclosed in Item 9A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and which was di

01

Item 7.01 Regulation FD Disclosure. On April 23, 2024, the Company issued a press release in accordance with Nasdaq Listing Rule 5810(b) announcing that the Company had received the Notice. A copy of the press release is attached hereto as Exhibit 99.1. The information under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information under this Item 8.01 of this Current Report on Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall otherwise be expressly set forth by specific reference in such filing. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Current Report on Form 8-K may contain forward-looking As used below, "we," "us," and "our" refer to the Company. 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 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 (the "Form 10-K") and subsequent periodic and or current reports filed with the Securities and Exchange Commission. The forward-looking statements contained in this Current Report on Form 8-K are based on assumptions

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits EXHIBIT INDEX Exhibit No. Description 16.1 Letter from Marcum LLP to the Securities and Exchange Commission, dated April 23, 2024. 99.1 Press Release, dated April 23, 2024. 104 Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL). 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. April 23, 2024 (Date) Direct Digital Holdings, Inc. (Registrant) /s/ Diana P. Diaz Diana P. Diaz Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR