Direct Digital Holdings Reports Filings for Full-Year 2023, Q1 2024 and Q2 2024
Direct Digital Holdings (Nasdaq: DRCT) has filed its Form 10-K for 2023 and Form 10-Q reports for Q1 and Q2 2024. The company believes these filings demonstrate compliance with Nasdaq Listing Rule 5250(c)(1) and awaits formal confirmation. CEO Mark D. Walker expressed satisfaction with completing the filings, while President Keith Smith addressed challenges faced, including their previous auditor's resignation and alleged misinformation attacks. The company has taken actions to address these issues, including expense reduction, debt covenant relief, and engaging BDO USA as their new auditor.
Direct Digital Holdings expects to regain Nasdaq compliance, access capital markets, and rebuild sell-side volumes. However, due to recent challenges, the company is unable to provide guidance for full-year 2024 at this time. CFO Diana Diaz reaffirmed commitment to reestablishing normal financial reporting cadence.
Direct Digital Holdings (Nasdaq: DRCT) ha presentato il suo Modulo 10-K per il 2023 e i report del Modulo 10-Q per il Q1 e Q2 del 2024. L'azienda ritiene che queste presentazioni dimostrino la conformità con la Regola di Quotazione 5250(c)(1) del Nasdaq e attende una conferma formale. Il CEO Mark D. Walker ha espresso soddisfazione per il completamento delle presentazioni, mentre il Presidente Keith Smith ha affrontato le difficoltà incontrate, inclusa la rinuncia del loro precedente revisore e presunti attacchi di disinformazione. L'azienda ha intrapreso azioni per affrontare queste problematiche, tra cui riduzione delle spese, alleviamento dei vincoli sul debito e l'ingaggio di BDO USA come nuovo revisore.
Direct Digital Holdings prevede di riconquistare la conformità con il Nasdaq, accedere ai mercati dei capitali e ricostruire i volumi di vendita. Tuttavia, a causa delle recenti sfide, l'azienda è impossibilitata a fornire indicazioni per l'intero anno 2024 in questo momento. La CFO Diana Diaz ha riaffermato l'impegno a ripristinare una normale cadenza di reporting finanziario.
Direct Digital Holdings (Nasdaq: DRCT) ha presentado su Formulario 10-K para 2023 y los informes del Formulario 10-Q para el Q1 y Q2 de 2024. La empresa cree que estas presentaciones demuestran el cumplimiento de la Regla de Listado 5250(c)(1) de Nasdaq y espera una confirmación formal. El CEO Mark D. Walker expresó su satisfacción por haber completado las presentaciones, mientras que el Presidente Keith Smith abordó los desafíos enfrentados, incluida la renuncia de su auditor anterior y supuestos ataques de desinformación. La empresa ha tomado medidas para abordar estos problemas, incluyendo reducción de gastos, alivio de convenios de deuda y el compromiso de BDO USA como su nuevo auditor.
Direct Digital Holdings espera recuperar el cumplimiento con Nasdaq, acceder a los mercados de capital y reconstruir los volúmenes de venta. Sin embargo, debido a los recientes desafíos, la empresa se ve imposibilitada para proporcionar orientación para el año completo 2024 en este momento. La CFO Diana Diaz reafirmó su compromiso de restablecer un ritmo normal de informes financieros.
Direct Digital Holdings (Nasdaq: DRCT)는 2023년 10-K 양식 및 2024년 1분기 및 2분기 10-Q 보고서를 제출했습니다. 회사는 이러한 제출이 Nasdaq 상장 규정 5250(c)(1)을 준수하고 있음을 나타낸다고 믿으며 공식 확인을 기다리고 있습니다. CEO Mark D. Walker는 제출 완료에 대한 만족감을 표명했으며, 회장 Keith Smith는 이전 감사인의 사임 및 정보 왜곡 공격과 같은 직면한 도전과제를 언급했습니다. 회사는 비용 절감, 부채 계약 완화, BDO USA를 새로운 감사인으로 고용하는 등의 조치를 취했습니다.
Direct Digital Holdings는 Nasdaq 준수를 회복하고, 자본 시장에 접근하며, 매도 측 거래량을 재건할 것으로 기대합니다. 그러나 최근의 도전 과제로 인해 현재 2024년 전체 연도에 대한 가이드를 제공할 수 없다고 밝혔습니다. CFO Diana Diaz는 정상적인 재무 보고 주기를 재확립하려는 의지를 재확인했습니다.
Direct Digital Holdings (Nasdaq: DRCT) a déposé son Formulaire 10-K pour 2023 ainsi que les rapports du Formulaire 10-Q pour le Q1 et le Q2 2024. L'entreprise estime que ces dépôts démontrent la conformité avec la Règle de cotation 5250(c)(1) du Nasdaq et attend une confirmation formelle. Le PDG Mark D. Walker a exprimé sa satisfaction quant à la finalisation des dépôts, tandis que le Président Keith Smith a abordé les défis rencontrés, y compris la démission de leur ancien auditeur et des allégations d'attaques de désinformation. L'entreprise a pris des mesures pour résoudre ces problèmes, notamment la réduction des dépenses, le soulagement des engagements d'endettement et l'engagement de BDO USA comme nouveau réviseur.
Direct Digital Holdings s'attend à retrouver la conformité avec le Nasdaq, à accéder aux marchés de capitaux et à reconstruire les volumes de vente. Cependant, en raison des défis récents, l'entreprise ne peut pas fournir d'orientation pour l'année entière 2024 en ce moment. La CFO Diana Diaz a réaffirmé son engagement à rétablir un rythme normal de reporting financier.
Direct Digital Holdings (Nasdaq: DRCT) hat sein Formblatt 10-K für 2023 sowie die Formblatt 10-Q Berichte für Q1 und Q2 2024 eingereicht. Das Unternehmen ist der Ansicht, dass diese Einreichungen die Einhaltung der Nasdaq-Listing-Regel 5250(c)(1) zeigen und wartet auf eine offizielle Bestätigung. CEO Mark D. Walker drückte seine Zufriedenheit über den Abschluss der Einreichungen aus, während Präsident Keith Smith die Herausforderungen ansprach, mit denen man konfrontiert war, einschließlich des Rücktritts des vorherigen Wirtschaftsprüfers und angeblicher Desinformationsangriffe. Das Unternehmen hat Maßnahmen ergriffen, um diese Probleme zu beheben, einschließlich Reduzierung der Ausgaben, Erleichterung von Schuldenverpflichtungen und der Engagement von BDO USA als neuen Wirtschaftsprüfer.
Direct Digital Holdings erwartet, die Nasdaq-Compliance wieder zu erlangen, Zugang zu den Kapitalmärkten zu erhalten und wieder Verkaufsvolumen aufzubauen. Aufgrund der jüngsten Herausforderungen ist das Unternehmen jedoch derzeit nicht in der Lage, eine Prognose für das gesamte Jahr 2024 abzugeben. CFO Diana Diaz bekräftigte das Engagement, einen normalen Rhythmus der finanziellen Berichterstattung wiederherzustellen.
- Filed Form 10-K for 2023 and Form 10-Q reports for Q1 and Q2 2024
- Believes to have evidenced compliance with Nasdaq Listing Rule 5250(c)(1)
- Executed expense reduction plan and obtained temporary debt covenant relief
- Engaged BDO USA as new independent registered public accounting firm
- Unable to provide guidance for full-year 2024
- Faced challenges due to previous auditor's resignation and alleged misinformation attacks
- Experienced disruption in business and existing capital-raising efforts
- Incurred additional audit, legal, and other expenses
Insights
Direct Digital Holdings' filing of its 2023 Annual Report and Q1/Q2 2024 Quarterly Reports is a significant step towards regaining Nasdaq compliance and restoring investor confidence. However, the company faces several challenges:
- Unexpected auditor resignation and misinformation attacks disrupted business operations and capital-raising efforts
- Implemented cost-cutting measures including staff reductions and hiring freeze
- Working with lenders on debt covenant relief
- Unable to provide 2024 financial guidance due to ongoing challenges
The company's immediate focus appears to be on rebuilding sell-side volumes, raising capital and reestablishing normal financial reporting. While these efforts are positive, the lack of forward guidance and recent disruptions create uncertainty around near-term financial performance and stability. Investors should closely monitor upcoming announcements on Nasdaq compliance status, capital raising efforts and Q3 2024 results to better assess the company's recovery trajectory and long-term prospects.
The company's disclosure of coordinated misinformation attacks and publication of allegedly false and defamatory content raises significant legal concerns. These events may have exposed Direct Digital Holdings to reputational damage and potential litigation risks. Key legal considerations include:
- Potential for defamation lawsuits against the third parties responsible for the alleged misinformation
- Necessity of robust disclosure and investor communication strategies to mitigate legal risks associated with the delayed filings and business disruptions
- Importance of maintaining compliance with Nasdaq listing requirements to avoid further regulatory issues
- Possible scrutiny from regulators regarding the company's financial reporting processes and internal controls
The engagement of a new auditor and filing of delayed reports are positive steps, but the company may face ongoing legal and regulatory challenges as it works to rebuild credibility and stabilize operations. Careful management of these legal risks will be important for the company's recovery and future growth prospects.
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,
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
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