Direct Digital Holdings Files 8-K: Agreements & Equity Sales

TL;DR

DDHI filed an 8-K on Dec 27, 2024, covering new deals and stock sales.

AI Summary

Direct Digital Holdings, Inc. filed an 8-K on January 3, 2025, reporting on events as of December 27, 2024. The filing indicates the entry into a material definitive agreement, unregistered sales of equity securities, and includes financial statements and exhibits. The company is incorporated in Delaware and headquartered in Houston, Texas.

Why It Matters

This 8-K filing signals significant corporate actions, including new agreements and equity transactions, which could impact the company's financial structure and future operations.

Risk Assessment

Risk Level: medium — The filing mentions unregistered sales of equity securities, which can sometimes indicate dilution or financial distress, warranting closer examination.

Key Numbers

• 001-41261 — SEC File Number (Identifies the company's filing history with the SEC.)
• 87-2306185 — IRS Employer Identification No. (Company's tax identification number.)

Key Players & Entities

• Direct Digital Holdings, Inc. (company) — Registrant
• 0001880613 (company) — Central Index Key
• 77027 (dollar_amount) — Zip Code
• 832-402-1051 (dollar_amount) — Business Phone
• December 27, 2024 (date) — Earliest event reported
• January 3, 2025 (date) — Filing Date

FAQ

Key Financial Figures

• $0.001 — tered Class A common stock, par value $0.001 per share DRCT The Nasdaq Stock Market
• $5,000,000 — the Existing Credit Agreement equal to $5,000,000, consisting of (a) $4,000,000 from the
• $4,000,000 — equal to $5,000,000, consisting of (a) $4,000,000 from the proceeds of the LS Amendment (
• $1,000,000 — LS Amendment (as defined below) and (b) $1,000,000 as the Borrowers' out-of-pocket prepaym
• $750,000 — inimum unrestricted cash requirement of $750,000 at all times and to remove the minimum
• $6,000,000 — anges, LS extended a term loan equal to $6,000,000 (the " Sixth Amendment Term Loan "). LS
• $2,000,000 — t Agreement as described above, and (2) $2,000,000 to fund an interest reserve under 2021
• $943,872 — s A Common Stock ") for an aggregate of $943,872 in cash consideration after an total di
• $39,328 — onsideration after an total discount of $39,328. From December 27, 2024 to December 31,
• $697,728 — lass A Common Stock for an aggregate of $697,728 in cash consideration after an total di
• $29,072 — onsideration after an total discount of $29,072. This Form 8-K is being filed because t

Filing Documents

• drct-20241227.htm (8-K) — 36KB
• a101_ddh-ewbfourthamendmen.htm (EX-10.1) — 602KB
• a102_amend6-sixthamendment.htm (EX-10.2) — 1438KB
• image_0.jpg (GRAPHIC) — 0KB
• image_1.jpg (GRAPHIC) — 0KB
• image_2.jpg (GRAPHIC) — 0KB
• image_3.jpg (GRAPHIC) — 0KB
• image_4.jpg (GRAPHIC) — 0KB
• 0001628280-25-000266.txt ( ) — 2549KB
• drct-20241227.xsd (EX-101.SCH) — 2KB
• drct-20241227_lab.xml (EX-101.LAB) — 23KB
• drct-20241227_pre.xml (EX-101.PRE) — 13KB
• drct-20241227_htm.xml (XML) — 3KB

01 Entry into Material Definitive Agreements

Item 1.01 Entry into Material Definitive Agreements. On December 27, 2024, Direct Digital Holdings, Inc. (the " Company ") entered into that certain Waiver and Fourth Amendment (the " EWB Amendment ") to Credit Agreement, dated July 7, 2023 (the " Existing Credit Agreement "), by and among East West Bank (" EWB "), as lender, and Direct Digital Holdings, LLC (" DDH LLC "), the Company, Huddled Masses LLC, Colossus Media, LLC and Orange142, LLC, as borrowers (collectively, " Borrowers "). Under the terms of the EWB Amendment, among other things, (1) the Borrowers made prepayments on the revolving credit notes under the Existing Credit Agreement equal to $5,000,000, consisting of (a) $4,000,000 from the proceeds of the LS Amendment (as defined below) and (b) $1,000,000 as the Borrowers' out-of-pocket prepayment, (2) such prepayments were used to permanently reduce the commitment under the Existing Credit Agreement to $5,000,000, (3) the financial covenants under the Existing Credit Agreement were amended to implement a minimum unrestricted cash requirement of $750,000 at all times and to remove the minimum EBITDA covenant; and (4) EWB waived certain existing events of default related to the prior minimum EBITDA covenant. Additionally, the Borrowers are required to provide to EWB a weekly cash flow forecast, prepared on a cumulative, weekly roll forward basis through a thirteen (13) week projection period. On December 27, 2024, DDH LLC, as borrower, entered into the Sixth Amendment and Waiver (the " LS Amendment ") to the Term Loan and Security Agreement, dated December 3, 2021 (the " 2021 Credit Facility ") with the Company, Colossus Media, LLC, Huddled Masses LLC and Orange142, LLC, as guarantors, and Lafayette Square Loan Servicing, LLC (" LS "), as administrative agent, and the various lenders thereto. Under the terms of the LS Amendment, among other changes, LS extended a term loan equal to $6,000,000 (the " Sixth Amendment Term Loan "). LS and the Borrowers a

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. Since December 24, 2024, the end of the period covered by the most recent Report filed on any of Forms 8-K, 10-K or 10-Q by Direct Digital Holdings, Inc. (" Company "), through December 27, 2024, the Company sold 400,000 shares of its Class A Common Stock, par value $0.001 per share (the " Class A Common Stock ") for an aggregate of $943,872 in cash consideration after an total discount of $39,328. From December 27, 2024 to December 31, 2024, the Company sold an additional 400,000 shares of its Class A Common Stock for an aggregate of $697,728 in cash consideration after an total discount of $29,072. This Form 8-K is being filed because the aggregate number of shares of Class A Common Stock sold in unregistered transactions exceeds five percent (5%) of the total number of such shares issued and outstanding as of December 24, 2024 and December 27, 2024, respectively. The sales of Class A Common Stock referred to herein were made to New Circle Principle Investments LLC (" New Circle ") pursuant to the previously disclosed Equity Reserve Facility under the Share Purchase Agreement (the " Purchase Agreement ") with New Circle. In the Purchase Agreement, New Circle represented to the Company, among other things, that it is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the " Securities Act ")). The securities referred to in this Current Report on Form 8-K were issued and sold in reliance upon the exemptions from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits EXHIBIT INDEX Exhibit No. Description 10.1 Waiver and Fourth Amendment to Credit Agreement, dated December 27, 2024, by and among Direct Digital Holdings, Inc., Direct Digital Holdings, LLC, Colossus Media, LLC, Huddled Masses LLC, and Orange142, LLC, as borrowers, and East West Bank, as lender. 10.2 Sixth Amendment and Waiver to Term Loan and Security Agreement, dated December 27, 2024, by and between Direct Digital, LLC, as borrower, Colossus Media, LLC, Huddled Masses LLC, Orange142, LLC, and Direct Digital Holdings, Inc., as guarantors, and Lafayette Square Loan Servicing, LLC, as administrative agent, and the various lenders thereto. 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. January 3, 2025 (Date) Direct Digital Holdings, Inc. (Registrant) /s/ MARK WALKER Mark Walker Chief Executive Officer

View Full Filing

View this 8-K filing on SEC EDGAR