Direct Digital Holdings (DRCT) Announces $20M Equity Reserve Facility

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 entered into a $20 million Equity Reserve Facility ("ERF") with New Circle Principal Investments LLC, an affiliate of New Circle Capital LLC ("New Circle").

Mark D. Walker, CEO and Co-Founder of Direct Digital Holdings, commented, "We are very pleased to announce this $20 million Equity Reserve Facility with New Circle. The funding will enable the expansion of our technology and strategic capabilities, benefiting both publishers and advertisers. It also opens the door to new growth opportunities and strengthens our commitment to increasing shareholder value."

Under the agreement, at our sole election, New Circle will purchase, from time to time, shares of our Class A common stock up to an aggregate of $20 million over a period of 36 months, subject to the conditions in the agreement. The proceeds of these sales may be used for general corporate purposes. The Company anticipates using such proceeds to reduce debt obligations, strengthen the overall balance sheet, and drive key growth initiatives. Those key initiatives extend across Direct Digital Holdings' subsidiaries, and include specifically:

Advancing Innovation for Colossus SSP
The Company expects to make investments to drive technological advancements for Direct Digital Holdings' supply-side platform (SSP), Colossus SSP, including the development of new segment-based products in carbon and attention. It will also support direct integrations with leading demand-side platforms (DSPs), optimizing supply path efficiency for advertisers. Additionally, the funding will expand Colossus SSP's efforts to bring underrepresented publishers into the programmatic ecosystem, with their inventory available through the Company.

Enhancing Growth on the Demand Side
On the demand-side, the Company expects that funding will support the unification of Direct Digital Holdings' advertising consultancy groups, Orange142 and Huddled Masses. This will enable the delivery of new capabilities, particularly in helping clients navigate emerging technologies, such as artificial intelligence (AI) and machine learning (ML), as well as emerging channels such as connected TV (CTV), social media and retail media.

Keith Smith, President and Co-Founder of Direct Digital Holdings, added, "We are pleased to partner with New Circle on this flexible facility which we expect will enhance our financial liquidity, strengthen our shareholder equity and support a host of growth initiatives across both our supply-side and demand-side platforms."

BJ Arnold, Managing Partner of New Circle, commented, "New Circle is pleased to partner with Direct Digital Holdings, helping to fuel the company's growth and support their innovative technology and industry-leading approaches to advertising."

The Company's right to commence sales of Class A common stock to New Circle are subject to certain conditions, including that a registration statement covering the resale of such shares is declared effective by the SEC. Actual sales of shares of Class A common stock to New Circle under the agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding and the Company's operations.

Further information on the financing can be found in the Current Report on Form 8-K filed today with the Securities and Exchange Commission.

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