Direct Digital Holdings, Inc., a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC (“Colossus SSP”) and Orange 142, LLC (“Orange 142”), announced the issuance of $25 million of a new series of Series A Convertible Preferred Stock, at a premium conversion price of $2.50 per share of Class A Common Stock. The investment was made through the conversion of a portion of existing debt into the new class of perpetual convertible preferred stock. The preferred stock is redeemable in whole or in part at the Company’s direction, votes on an as-converted basis with the Class A common stock, and carries a 10% cumulative annual dividend payable if, as and when declared by the Company’s board of directors.
The investment results in a $25 million increase in the Company’s stockholders’ equity from a deficit of $24.6 million at June 30, 2025 to an estimated positive shareholders’ equity of approximately $0.4 million (subject to any other period adjustments). It further reduces the Company’s ongoing debt service by more than $3.5 million and significantly reduces maturing debt obligations in December 2026.
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Mark Walker, CEO of Direct Digital Holdings, commented, “This investment bolsters our balance sheet, provides financial flexibility to support our growth strategy, and significantly closes the gap on the shareholders’ equity needed to regain compliance with Nasdaq’s listing requirement regarding minimum stockholders’ equity. We continue to actively seek additional funding and strategic opportunities that maximize shareholder value.”
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Further details of the terms of the new preferred stock are disclosed in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on the date hereof.
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Source – PR Newswire
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