HOUSTON, Oct. 15,
2024 /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"),
Orange142, LLC ("Orange 142") and Huddled Masses LLC ("Huddled
Masses"), today announced the Company has filed its Form 10-K for
the full-year ended December 31, 2023
(the "2023 Annual Report"), as well as its Form 10-Q for the first
quarter ended March 31, 2024 (the
"March 2024 Quarterly Report") and
its Form 10-Q for the second quarter ended June 30, 2024 (the "June
2024 Quarterly Report").
Upon the filing of the 2023 Annual Report, the March 2024 Quarterly Report and the June 2024 Quarterly Report with the SEC, Direct
Digital Holdings believes it has evidenced compliance with Nasdaq
Listing Rule 5250(c)(1). However, the Company is awaiting a formal
compliance determination from the Nasdaq Stock Market staff. The
Company will provide an update upon receipt of such
determination.
Mark D. Walker, CEO and
Co-Founder of Direct Digital Holdings, commented, "We are pleased
to complete these filings, which we believe will allow us to regain
compliance with Nasdaq and put us on the path back to our regular
reporting cadence. At Direct Digital Holdings, we remain excited to
return to the normal execution of our industry-leading business
model and company mission."
Keith Smith, President and
Co-Founder of Direct Digital Holdings, commented, "Since we last
reported earnings, Direct Digital Holdings has encountered
challenges due to two factors: first, the unexpected resignation of
our previous auditor; and second, a series of coordinated and
malicious misinformation attacks against the company, including the
publication of false and defamatory articles and blog posts by a
third party, which, we believe, have been comprehensively refuted.
The proximity of these two events was then used to create a
disparaging narrative which disrupted our business and existing
capital-raising efforts, as well as creating additional audit,
legal and other expenses. We have been fully engaged in addressing
the issues, and I am proud of our team's resilience during this
time."
The Company has taken several actions to address these
challenges including (i) the execution on July 1, 2024 of a plan to reduce expenses through
a staff reduction, a pause on hiring and cost savings measures,
(ii) working with lenders to provide temporary relief from debt
covenants while rebuilding sell-side volumes via debt amendments
executed on October 15, 2024, (iii)
engaging BDO, USA, P.C. as
the Company's independent registered public accounting firm for the
audit of the Company's consolidated financial statements for the
fiscal year ended December 31, 2023
and (iv) filing its 2023 Annual Report, March 2024 Quarterly Report and June 2024 Quarterly Report.
Going forward, Direct Digital Holdings expects to (i) receive
notification from Nasdaq that by filing the Annual and Quarterly
Reports, the Company has regained compliance with respect to the
delinquent SEC filings, which will allow the Company to access the
capital markets as well as other financing sources, (ii) raise
capital through arrangements with various providers, and (iii)
continue to work with the Company's partners to rebuild sell-side
volumes.
Financial Outlook Update
Due to the aforementioned challenges, Direct Digital Holdings is
unable to provide guidance for the full-year 2024 at this time.
Diana Diaz, Chief Financial
Officer, stated, "As we move forward, we are committed to
reestablishing a normal cadence of reporting our financial results
which will provide our investors with the timely and accurate
information they deserve. We remain dedicated to creating long-term
value for our shareholders and will continue to provide
best-in-class advertising solutions to our partners."
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 (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, including the establishment of any equity
line of credit facility; 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; 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; 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), owner of operating
companies Colossus SSP, Huddled Masses, and Orange 142, brings
state-of-the-art sell- and buy-side advertising platforms together
under one umbrella company. Direct Digital Holdings' sell-side
platform, Colossus SSP, offers advertisers of all sizes extensive
reach within general market and multicultural media properties. The
Company's subsidiaries Huddled Masses and Orange142 deliver
significant ROI for middle market advertisers by providing
data-optimized programmatic solutions at scale for businesses in
sectors that range from energy to healthcare to travel to financial
services. Direct Digital Holdings' sell- and buy-side solutions
generate billions of impressions per month across display, CTV,
in-app and other media channels.
Contacts:
Investors:
Brett
Milotte, ICR
Brett.Milotte@icrinc.com
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SOURCE Direct Digital Holdings
