What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-05-15 · 175 added, 118 removed, 668 unchanged (30% of the section changed)

4 unchanged sentences

(in thousands, except share and par value amounts)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

CURRENT ASSETS

12 unchanged sentences

Accounts payable $ 9,587 $ 7,820

Accounts payable - related party 538 —

Accrued liabilities 2,406 2,164

24 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Revenues 7,832 10,144 $ 14,512 $ 18,301

10 unchanged sentences

Loss on debt extinguishment — — ( 517 ) —

Derecognition of tax receivable agreement liability 41 — 41 —

Expenses for Equity Reserve Facility — — — ( 198 )

16 unchanged sentences

(in thousands except share data)

Three Months Ended March 31, 2026

Six Months Ended June 30, 2026

Preferred Stock Common Stock APIC Accumulated

6 unchanged sentences

Issuance pursuant to the Equity Reserve Facility — — 216,250 1 — — 1,118 — — 1,119

Issuance pursuant to the Committed Equity Facility — — 38,288 — — — 107 — — 107

Settlement of accounts payable through issuance of common stock — — 152,041 — — — 2,028 — — 2,028

2 unchanged sentences

Noncontrolling interest rebalancing — — — — — — ( 270 ) — 270 —

Balance, June 30, 2026 27,077 $ — 740,119 $ 1 42,160 $ — $ 27,899 $ ( 36,365 ) $ ( 5,360 ) $ ( 13,825 )

Three Months Ended June 30, 2026

Preferred Stock Common Stock APIC Accumulated

Deficit Noncontrolling Interest Stockholders’

Series A Convertible Class A Class B

Units Amount Units Amount Units Amount

Balance, March 31, 2026 27,077 $ — 700,759 $ 1 42,160 $ — $ 28,403 $ ( 32,970 ) $ ( 5,155 ) $ ( 9,721 )

Three Months Ended March 31, 2025

Stock-based compensation — — — — — — 84 — — 84

Issuance related to vesting of restricted stock units, net of tax withholdings — — 1,072 — — — — — — —

Issuance pursuant to the Committed Equity Facility — — 38,288 — — — 107 — — 107

Preferred dividends accrued — — — — — — ( 706 ) — — ( 706 )

Net loss — — — — — — — ( 3,395 ) ( 194 ) ( 3,589 )

Noncontrolling interest rebalancing — — — — — — 11 — ( 11 ) —

Balance, June 30, 2026 27,077 $ — 740,119 $ 1 42,160 $ — $ 27,899 $ ( 36,365 ) $ ( 5,360 ) $ ( 13,825 )

Six Months Ended June 30, 2025

Common Stock APIC Accumulated

9 unchanged sentences

Noncontrolling interest rebalancing — — — — ( 5,660 ) — 5,660 —

Balance, June 30, 2025 54,862 $ — 47,491 $ — $ 2,798 $ ( 13,378 ) $ ( 14,001 ) $ ( 24,581 )

Three Months Ended June 30, 2025

Common Stock APIC Accumulated

Deficit Noncontrolling Interest Stockholders’

Class A Class B

Units Amount Units Amount

Balance, March 31, 2025 32,243 $ — 49,082 $ — $ 3,794 $ ( 11,129 ) $ ( 15,980 ) $ ( 23,315 )

Stock-based compensation — — — — 389 — — 389

Issuance related to vesting of restricted stock units, net of tax withholdings 482 — — — — — — —

Issuance pursuant to the Equity Reserve Facility 20,546 — — — 2,541 — — 2,541

Conversion of Class B to Class A Common Stock 1,591 — ( 1,591 ) — ( 518 ) — 518 —

Net loss — — — — — ( 2,249 ) ( 1,947 ) ( 4,196 )

Noncontrolling interest rebalancing — — — — ( 3,408 ) — 3,408 —

Balance, June 30, 2025 54,862 $ — 47,491 $ — $ 2,798 $ ( 13,378 ) $ ( 14,001 ) $ ( 24,581 )

See accompanying notes to the unaudited condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows Used In Operating Activities:

8 unchanged sentences

Loss on debt extinguishment 517 —

Derecognition of tax receivable agreement liability ( 41 ) —

Interest paid in kind 1,100 —

16 unchanged sentences

Payment of deferred financing cost — ( 46 )

Payments on financed insurance premiums ( 36 ) ( 114 )

Payments on loans ( 2 ) —

Advances from related party 538 —

Net cash provided by financing activities 1,726 5,584

Net increase in cash and cash equivalents 68 344

Net (decrease) increase in cash and cash equivalents ( 208 ) 148

Cash and cash equivalents, beginning of the period 728 1,445

4 unchanged sentences

Accrued dividends $ 1,163 $ —

Common stock issued for subscription receivable $ — $ 90

Financed insurance premiums $ 367 $ 291

See accompanying notes to the unaudited condensed consolidated financial statements.

17 unchanged sentences

Direct Digital Holdings, Inc.

owns 100 % of the voting interest in DDH LLC and as of March 31, 2026, it owns 94.3 % of the economic interest in DDH LLC.

owns 100 % of the voting interest in DDH LLC and as of June 30, 2026, it owns 94.6 % of the economic interest in DDH LLC.

DDH LLC was formed on June 21, 2018 and acquired by DDH on February 15, 2022 in connection with its organizational transactions.

10 unchanged sentences

Accordingly, the condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements.

The condensed consolidated balance sheets as of December 31, 2025 included herein was derived from audited financial statements but does not include all disclosures

The condensed consolidated balance sheet as of December 31, 2025 included herein was derived from audited financial statements but does not include all disclosures

required by GAAP for complete financial statements.

In the opinion of the Company’s management, the accompanying condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company’s financial position as of March 31, 2026, the results of its operations for the three months ended March 31, 2026 and 2025, cash flows for the three months ended March 31, 2026 and 2025, and stockholders’ deficit for the three months ended March 31, 2026 and 2025.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the financial statements, and the amounts of revenues and expenses reported during the period.

In the opinion of the Company’s management, the accompanying condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company’s financial position as of June 30, 2026, the results of its operations for the three and six months ended June 30, 2026 and 2025, cash flows for the six months ended June 30, 2026 and 2025, and stockholders’ deficit for the three and six months ended June 30, 2026 and 2025.

The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the condensed consolidated financial statements, and the amounts of revenues and expenses reported during the period.

Actual results could differ from estimates.

28 unchanged sentences

The Company controls the specified goods or services before it is transferred to the end customer.

Additionally, the Company is the primary obligor in its agreements with customers.

Additionally, the Company is the primary obligor in

its agreements with customers.

Therefore, the Company reports revenue on a gross basis inclusive of all supplier costs and pays suppliers for the cost of digital media, advertising inventory, data and any add-on services or features.

11 unchanged sentences

Cash payments received prior to the Company’s delivery of its services are recorded to deferred revenue until the performance obligation is satisfied.

The Company recorded deferred revenue (contract liabilities) to account for billings in excess of revenue recognized, primarily related to contractual minimums billed in advance and customer prepayment, of $ 0.8 million and $ 0.5 million as of March 31, 2026 and December 31, 2025, respectively.

Revenue recognized during the three months ended March 31, 2026 and 2025 from amounts included within the deferred revenue balances at the beginning of each respective period amounted to $ 0.3 million and $ 0.2 million, respectively.

Revenue recognized during the six months ended June 30, 2026 and 2025 from amounts included within the deferred revenue balances at the beginning of each respective period amounted to $ 0.4 million and $ 0.4 million, respectively.

Cash payments made to customers to support integration efforts and long-term contracts are recorded to prepaid expenses or other long-term assets and amortized to revenue over the term of the contract.

The Company recorded these cash payments in prepaid expenses and other current assets for $ 0.3 million and in other long-term assets for $ 0.1 million as of March 31, 2026 and December 31, 2025.

During the three months ended March 31, 2026 and 2025, other assets amortized were less than $ 0.1 million and $ 0 , respectively.

The Company recorded these cash payments in prepaid expenses and other current assets for $ 0.3 million as of June 30, 2026 and December 31, 2025 and in other long-term assets for $ 0 and $ 0.1 million as of June 30, 2026 and December 31, 2025, respectively.

During the six months ended June 30, 2026 and 2025, other assets amortized were $ 0.1 million and $ 0 , respectively.

Accounting Standards Codification ("ASC") 606 provides various optional practical expedients.

The Company elected the use of the practical expedient relating to the disclosure of remaining performance obligations within a contract and will not disclose remaining performance obligations for contracts with an original expected duration of one year or less.

As of March 31, 2026 and December 31, 2025, goodwill was $ 6.5 million, including amounts related to acquisitions in 2018 and in 2020.

As of June 30, 2026 and December 31, 2025, goodwill was $ 6.5 million, including amounts related to acquisitions in 2018 and in 2020.

The goodwill is deductible for tax purposes and is assessed for impairment at least annually (December 31) starting with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value.

3 unchanged sentences

Goodwill is reviewed annually and tested for impairment upon the occurrence of a triggering event.

The Company determined that there was no impairment of goodwill during the three months ended March 31, 2026 and 2025.

The carrying value of the Company was negative as of June 30, 2026.

The Company determined that there was no impairment of goodwill during the six months ended June 30, 2026 and 2025.

Had the Company used the enterprise premise (instead of the equity premise), the results may have differed.

Intangible assets, net

Intangible assets consist of customer relationships, trademarks and non-compete agreements.

Intangible assets are recorded at fair value at the time of their acquisition and are stated within the condensed consolidated balance sheets net of accumulated amortization.

Intangible assets are recorded at fair value at the time of their acquisition and are stated within the condensed consolidated balance sheets net of

accumulated amortization.

Intangible assets are amortized on a straight-line basis over their estimated useful lives and recorded as amortization expense within general and administrative expenses in the condensed consolidated statements of operations.

The Company’s intangible assets are being amortized over their estimated useful lives using the straight-line method with other intangibles over 10 years.

The Company’s intangible assets are being amortized over their estimated useful lives using the straight-line method over 10 years.

Impairment of long-lived assets

1 unchanged sentence

ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows to determine if a write-down to fair value is necessary.

No impairment loss was recognized during the three months ended March 31, 2026 and 2025.

No impairment loss was recognized during the six months ended June 30, 2026 and 2025.

Stock-based compensation

17 unchanged sentences

The Company made an election under Section 754 of the Code for each taxable year in which an exchange of LLC interest occurred.

No shares were exchanged during the three months ended March 31, 2026.

During the three months ended March 31, 2025, members of DDM exchanged 318 shares of Class B Common Stock into shares of Class A Common Stock.

No shares were exchanged during the six months ended June 30, 2026.

During the six months ended June 30, 2025, members of DDM exchanged 1,909 shares of Class B Common Stock into shares of Class A Common Stock.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

3 unchanged sentences

Accounts receivable, net

Accounts receivable primarily consists of billed amounts for products and services rendered to customers under normal trade terms.

Accounts receivable primarily consists of billed amounts for services rendered to customers under normal trade terms.

The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral.

3 unchanged sentences

If warranted, the Company processes a claim with the third-party insurance company to recover uncollected balances, rather than writing the balances off to bad debt expense.

The guaranteed recovery for the claim is approximately 90 % of the original balance, and if the full amount is collected by

the insurance company, the remaining 10 % is remitted to the Company.

The guaranteed recovery for the claim is approximately 90 % of the original balance, and if the full amount is collected by the insurance company, the remaining 10 % is remitted to the Company.

If the insurance company is unable to collect the full amount, the Company records the remaining 10 % to bad debt expense.

3 unchanged sentences

There is an inherent concentration of credit risk associated with accounts receivable arising from revenue from major customers.

For the three months ended March 31, 2026 and 2025, three customers accounted for 44 % and 39 % of revenues, respectively.

As of March 31, 2026 and December 31, 2025, three customers accounted for 45 % and 43 % of accounts receivable, respectively.

As of March 31, 2026 and December 31, 2025, one vendor accounted for 16 % and 21 %, respectively, of accounts payable.

For the three months ended June 30, 2026 and 2025, two customers accounted for 42 % and 31 % of revenues, respectively.

For the six months ended June 30, 2026 and 2025, two and three customers accounted for 38 % and 39 % of revenues, respectively.

As of June 30, 2026 and December 31, 2025, two and three customers accounted for 30 % and 43 % of accounts receivable, respectively.

A s of June 30, 2026 and December 31, 2025, two and one vendors accounted for 29 % and 21 %, respectively, of accounts payable.

Accrued liabilities

The components of accrued liabilities on the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 are as follows (in thousands):

The components of accrued liabilities on the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025 are as follows (in thousands):

2026 December 31,

4 unchanged sentences

Accrued liabilities - related party

The components of accrued liabilities - related party on the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 are as follows (in thousands):

The components of accrued liabilities - related party on the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025 are as follows (in thousands):

2026 December 31,

11 unchanged sentences

Unamortized deferred financing costs are netted against debt or classified as prepaid expenses and other current assets in the condensed consolidated balance sheets.

Fees that are directly associated with an equity offering are recorded to additional paid-in

capital in the event the Company completes an equity issuance.

Fees that are directly associated with an equity offering are recorded to additional paid-in capital in the event the Company completes an equity issuance.

The differences between the face amount and the proceeds upon issuance of debt are recorded as a discount or premium , including debt discount related to the interest reserve added under various amendments to the Company's credit facilities, and netted against debt in the condensed consolidated balance sheets.

22 unchanged sentences

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires a tabular disclosure of the amounts of specified natural expense categories included in each relevant expense caption.

Additionally, ASU 2024-03 requires the disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

Additionally, ASU 2024-03 requires the disclosure of the total amount of selling expenses and, in annual reporting periods,

an entity’s definition of selling expenses.

The new standard, as clarified in ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, on a prospective basis.

2 unchanged sentences

In December 2025, the FASB issued ASU 2025-11, Interim Reporting - Narrow Scope Improvements.

ASU 2025-11 improves the guidance in ASC 270, Interim Reporting, by improving the navigability of the required interim disclosures

and clarifying when that guidance is applicable.

ASU 2025-11 improves the guidance in ASC 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted and the guidance may be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

Early adoption is permitted and the guidance may be applied either prospectively or retrospectively to any or all prior periods presented in the condensed consolidated financial statements.

The Company is currently evaluating the impact of adoption on the Company's condensed consolidated financial statements.

7 unchanged sentences

During 2025, the Company worked with its partners to achieve prior volume levels of revenue but was unable to achieve historical volumes.

Despite these challenges, the Company was able to reduce expenses, pay off the matured Credit Agreement with a term loan from Lafayette Square (see Note 3 — Long-Term Debt), convert existing debt of $ 35.0 million to Series A Convertible Preferred Stock and establish an Equity Reserve Facility raising additional equity of $ 11.6 million through March 31, 2026.

Additionally, the Company (1) incurred a net loss of $ 5.6 million for the three months ended March 31, 2026 including the impact of the disruption described above, (2) reported an accumulated deficit of $ 33.0 million as of March 31, 2026, (3) reported cash and cash equivalents of $ 0.8 million and a working capital deficit of $ 23.9 million as of March 31, 2026, (4) owes its lender $ 17.4 million (combination of principal, accrued fees, interest and the preferred dividends) as of March 31, 2026, under the 2021 Credit Facility (as defined below) which matures in December 2026 and (5) despite demonstrating compliance with the minimum stockholders' equity requirement for continued listing under Nasdaq Listing Rule 5550(b)(1) (the "Stockholders' Equity Rule") on November 7, 2025 and Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule") on February 12, 2026, remains subject to a discretionary Panel Monitor through November 7, 2026 for the Stockholders' Equity Rule and through February 12, 2027 for the Bid Price Rule.

The Company was not in compliance with the Stockholders' Equity Rule as of March 31, 2026 or the Bid Price Rule as of April 23, 2026.

Despite these challenges, the Company was able to reduce expenses, pay off the matured Credit Agreement with a term loan from Lafayette Square (see Note 3 — Long-Term Debt), convert existing debt of $ 35.0 million to Series A Convertible Preferred Stock and raise additional equity through the Equity Reserve Facility and the Committed Equity Facility of $ 11.7 million through June 30, 2026.

Additionally, the Company (1) incurred a net loss of $ 9.2 million for the six months ended June 30, 2026 including the impact of the disruption described above, (2) reported an accumulated deficit of $ 36.4 million as of June 30, 2026, (3) reported cash and cash equivalents of $ 0.5 million and a working capital deficit of $ 27.5 million as of June 30, 2026, (4) owes its lender $ 18.8 million (combination of principal, accrued fees, interest and the preferred dividends) as of June 30, 2026, under the 2021 Credit Facility (as defined below) which matures in December 2026, (5) was notified by Nasdaq that it was not in compliance with the minimum stockholders' equity requirement for continued listing under Nasdaq Listing Rule 5550(b)(1) (the "Stockholders' Equity Rule") on April 2, 2026, and has until August 14, 2026 to demonstrate compliance with the Stockholders’ Equity Rule (a request for extension is currently under review by the Panel to extend this deadline), and (6) despite demonstrating compliance with Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule") on February 12, 2026 and May 21, 2026, remains subject to a discretionary Panel Monitor through February 12, 2027 for the Bid Price Rule.

These factors raise substantial doubt about the Company’s ability to continue as a going concern over the next twelve months.

The Company anticipates sources of liquidity to include cash on hand, cash flow from operations, cash generated from its sales under the Company's new Committed Equity Facility and cash generated from other potential sales of equity and/or debt securities and has taken several actions to address liquidity and performance concerns.

The Company anticipates sources of liquidity to include cash on hand, cash flow from operations, cash generated from its sales under the Company's Committed Equity Facility and cash generated from other potential sales of equity and/or debt securities and has taken several actions to address liquidity and performance concerns.

Such plans include (1) a shift in focus to driving intentional digital marketing spend with current and future customers as well as new enterprise customers accessing the digital advertising market through its recently launched product – Ignition+ allowing for further growth and a return to profitability and (2) refinancing the 2021 Credit Facility by raising additional funds in a registered or private offering.

There can be no assurance that the Company’s actions will be successful or that additional financing will be available when needed or on acceptable terms.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

Note 3 — Long-Term Debt

At March 31, 2026 and December 31, 2025, long-term debt consisted of the following (in thousands):

March 31, 2026 December 31, 2025

At June 30, 2026 and December 31, 2025, long-term debt consisted of the following (in thousands):

June 30, 2026 December 31, 2025

2021 Credit Facility (1) (2)

12 unchanged sentences

Total long-term debt, net of current portion $ 144 $ 146

(1) As of March 31, 2026 and December 31, 2025, amount includes $ 7.5 million and $ 3.5 million of amendment closing fees, respectively, pursuant to the Eleventh and Ninth Amendments defined below, respectively, which are due at maturity or prepayment.

(1) As of June 30, 2026 and December 31, 2025, amount includes $ 7.5 million and $ 3.5 million of amendment closing fees, respectively, pursuant to the Eleventh and Ninth Amendments defined below, respectively, which are due at maturity or prepayment.

(2) These balances are considered related party balances.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Interest expense – 2021 Credit Facility (1)

4 unchanged sentences

Total interest expense and amortization of deferred financing cost and debt discount (premium), net $ 764 $ 1,789 $ 1,327 $ 3,635

(1) For the three months ended March 31, 2025, a portion of the interest expense related to the 2021 Credit Facility was applied against the interest reserve, as described below, and included in amortization of deferred financing cost and debt discount (premium), net in the condensed consolidated statement of cash flows.

(1) For the three and six months ended June 30, 2025, a portion of the interest expense related to the 2021 Credit Facility was applied against the interest reserve, as described below, and included in amortization of deferred financing cost and debt discount (premium), net in the condensed consolidated statement of cash flows.

Lafayette Square

3 unchanged sentences

The loans under the 2021 Credit Facility bear interest at Term SOFR plus the applicable margin minus any applicable impact discount.

The applicable margin under the 2021 Credit Facility is based on the consolidated total leverage ratio of the Company at a rate of 7.00 % per annum if the consolidated total leverage ratio is less than or equal to 1.00 to 1.00 with gradual increases as the ratio increases up to 10.00 % per annum if the consolidated total leverage ratio is greater than 3.50 to 1.00.

1.00 to 1.00 with gradual increases as the ratio increases up to 10.00 % per annum if the consolidated total leverage ratio is greater than 3.50 to 1.00.

The maturity date of the 2021 Credit Facility is December 3, 2026.

5 unchanged sentences

Current financial covenants as of and subsequent to May 15, 2026 include (1) a minimum unrestricted cash balance of $ 0.5 million, (2) minimum quarterly consolidated EBITDA of $ 0.2 million for the fiscal quarter ended June 30, 2026, (3) maximum consolidated total leverage ratio of 3.50 to 1.00 for the quarter ended June 30, 2026 and 3.25 to 1.00 for each quarter thereafter and (4) minimum fixed charge coverage ratio of 1.25 to 1.00 for the quarter ended June 30, 2026 and 1.50 to 1.00 for each quarter thereafter.

As of March 31, 2026, the Company was not in compliance with certain financial covenants under the Credit Agreement, as amended, including the minimum cash balance, minimum quarterly EBITDA and minimum quarterly sell-side revenue;

however, the Company has received a waiver from Lafayette Square pertaining to such non-compliance with the Twelfth Amendment as defined below.

As of June 30, 2026, the Company was not in compliance with certain financial covenants under the Credit Agreement, as amended, including the minimum cash balance, minimum quarterly EBITDA, maximum consolidated total leverage ratio and minimum fixed charge coverage ratio.

The Company has requested a waiver from Lafayette Square pertaining to such non-compliance and is working constructively with Lafayette Square to obtain the waiver.

Prior to entering into the Fifth Amendment as defined below, the Company entered into the second, third and fourth amendments to the 2021 Credit Facility.

14 unchanged sentences

The difference between the fair value of the shares of Series A Convertible Preferred Stock and the carrying value of the existing debt converted into Series A Convertible Preferred Stock is reflected as a debt premium.

On September 8, 2025, the Company and Lafayette Square entered into the Eighth Amendment (the “Eighth Amendment”) to the 2021 Credit Facility which among other things, Lafayette agreed to make a term loan in the principal amount equal to $ 3.8 million (the “Eighth Amendment Term Loan”) to repay in full the outstanding amounts owed under the Credit Agreement (as defined below).

On September 8, 2025, the Company and Lafayette Square entered into the Eighth Amendment (the “Eighth Amendment”) to the 2021 Credit Facility whereby among other things, Lafayette agreed to make a term loan in the principal amount equal to $ 3.8 million (the “Eighth Amendment Term Loan”) to repay in full the outstanding amounts owed under the Credit Agreement (as defined below).

The Eighth Amendment also provided for a $ 0.1 million interest reserve and a less than $ 0.1 million amendment fee.

The maturity date of the Eighth Amendment Term Loan was October 30, 2025

which was extended to October 30, 2026 on November 10, 2025 and later revised to September 30, 2026 pursuant to the Eleventh Amendment (as described below).

The maturity date of the Eighth Amendment Term Loan was October 30, 2025 which was extended to October 30, 2026 on November 10, 2025 and later revised to September 30, 2026 pursuant to the Eleventh Amendment (as described below).

The Eighth Amendment was accounted for prospectively as a modification and no gain or loss was recognized.

15 unchanged sentences

The Eleventh Amendment was accounted for as a debt extinguishment resulting in a $ 0.5 million loss on early debt extinguishment in the first quarter of fiscal 2026, primarily related to the write-off of $ 0.1 million of deferred financing costs and the expensing of $ 0.4 million of lender fees associated with the Eleventh Amendment.

Accrued and unpaid interest was $ 1.3 million and $ 0.8 million as of March 31, 2026 and December 31, 2025, respectively.

Additional deferred financing costs of less than $ 0.1 million were incurred during the three months ended March 31, 2026 and 2025.

Accrued and unpaid interest was $ 1.9 million and $ 0.8 million as of June 30, 2026 and December 31, 2025,

respectively.

Additional deferred financing costs of less than $ 0.1 million were incurred during the six months ended June 30, 2026 and 2025.

2023 Revolving Line of Credit - East West Bank

4 unchanged sentences

with a floor of 0.50 %.

On October 15, 2024, with an effective date of June 30, 2024, the Company and EWB entered into the Third Amendment to the Credit Agreement (the “Third EWB Amendment”) which, among other things, (1) provided that the Company make prepayments of the outstanding principal balance of the Credit Agreement of $ 1.0 million upon execution of the Third EWB Amendment, $ 1.0 million on or before January 15, 2025 and $ 2.0 million on or before April 15, 2025, (2) required the Company to file a registration statement with the SEC to establish an equity line of credit offering on or before October 31, 2024 and to use commercially reasonable efforts to cause such registration statement to become effective, (3) required the net proceeds of a potential equity line of credit to be applied to the outstanding principal balance under the Credit Agreement in an amount that would cause the ratio of the value of eligible accounts to the aggregate amount of revolving credit advances to be not less than 1.00 to 1.00, (4) required the consent of EWB prior to the ability of the Company to make certain restricted payments, including cash dividends, (5) required the Company to make additional prepayments in the amount by which the outstanding loans under the Credit Agreement exceed the borrowing base between the calendar months ending November 30, 2024 and April 15, 2025 in an amount of $ 1.0 million, and (6) replaced the financial covenants under the Credit Agreement, effective as of June 30, 2024, with varying threshold levels by quarter for minimum trailing twelve months EBITDA, minimum liquid assets, maximum total funded debt to EBITDA leverage ratio, minimum fixed charge coverage ratio and revolving credit availability.

On October 15, 2024, with an effective date of June 30, 2024, the Company and EWB entered into the Third Amendment to the Credit Agreement (the “Third EWB Amendment”) which, among other things, (1) provided that the Company make prepayments of the outstanding principal balance of the Credit Agreement of $ 1.0 million upon execution of the Third EWB Amendment, $ 1.0 million on or before January 15, 2025 and $ 2.0 million on or before April 15, 2025, (2) required the Company to file a registration statement with the Securities and Exchange Commission ("SEC") to establish an equity line of credit offering on or before October 31, 2024 and to use commercially reasonable efforts to cause such registration statement to become effective, (3) required the net proceeds of a potential equity line of credit to be applied to the outstanding principal balance under the Credit Agreement in an amount that would cause the ratio of the value of eligible accounts to the aggregate amount of revolving credit advances to be not less than 1.00 to 1.00, (4) required the consent of EWB prior to the ability of the Company to make certain restricted payments, including cash dividends, (5) required the Company to make additional prepayments in the amount by which the outstanding loans under the Credit Agreement exceed the borrowing base between the calendar months ending November 30, 2024 and April 15, 2025 in an amount of $ 1.0 million, and (6) replaced the financial covenants under the Credit Agreement, effective as of June 30, 2024, with varying threshold levels by quarter for minimum trailing twelve months EBITDA, minimum liquid assets, maximum total funded debt to EBITDA leverage ratio, minimum fixed charge coverage ratio and revolving credit availability.

The Third EWB Amendment was accounted for as a modification.

20 unchanged sentences

The loan is secured by substantially all assets of DDH LLC.

As of March 31, 2026, future minimum payments related to long-term debt are as follows (in thousands):

As of June 30, 2026, future minimum payments related to long-term debt are as follows (in thousands):

Remaining 2026 $ 17,539

7 unchanged sentences

Following the completion of its organizational transactions, DDH LLC’s limited liability company agreement was amended and restated to, among other things, appoint the Company as the sole managing member of DDH LLC and effectuate a recapitalization of all outstanding preferred units and common units into (i) economic nonvoting units of DDH LLC held by the Company and, through their indirect ownership of DDM, the Company's Chairman and Chief Executive Officer and President, and (ii) noneconomic voting units of DDH LLC, 100 % of which are held by the Company.

During the three months ended March 31, 2025, members of DDM tendered 318 of its limited liability company units to the Company in exchange for newly issued shares of Class A Common Stock of the Company on a one -for-one basis.

During the six months ended June 30, 2025, members of DDM tendered 1,909 of its limited liability company units to the Company in exchange for newly issued shares of Class A Common Stock of the Company on a one -for-one basis.

In connection with these exchanges, an equivalent number of the holder’s shares of Class B Common Stock were cancelled.

As of March 31, 2026, DDM held 42,160 shares of Class B Common Stock.

As of June 30, 2026, DDM held 42,160 shares of Class B Common Stock.

The Company is authorized to issue 760,000,000 shares of Class A Common Stock, par value $ 0.001 per share, 20,000,000 shares of Class B Common Stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share.

1 unchanged sentence

In connection with the Company’s initial public offering of units (“Units”), each consisting of (i) one share (subject to adjustment for the Company's Reverse Stock Splits) of its Class A Common Stock and (ii) one warrant (subject to adjustment for the Company's Reverse Stock Splits) entitling the holder to purchase one share of its Class A Common Stock at an exercise price of $ 1,210.00 per share, the Company issued to the underwriters of the offering a unit purchase option to purchase (i) an additional 636 Units at a per Unit exercise price of $ 1,452.00 , which was equal to 120 % of the public offering price per Unit sold in the initial public offering, and (ii) underwriter warrants to purchase 95 shares of Class A Common Stock at a per warrant exercise price of $ 2.64 , which was equal to 120 % of the public offering price per warrant sold in the offering.

At March 31, 2026 and December 31, 2025, 318 Units and 47 underwriter warrants were outstanding.

At June 30, 2026 and December 31, 2025, 318 Units and 47 underwriter warrants were outstanding.

The underwriter warrants had a fair value of $ 0 that was calculated using the Black-Scholes option-pricing model and were equity classified.

16 unchanged sentences

The Roth Purchase Agreement contains customary representations, warranties, indemnification provisions and conditions.

During the six months ended June 30, 2026, the Company sold 38,288 shares of the Company's Class A Common Stock for $ 0.1 million.

Subsequent to June 30, 2026, the Company sold 20,358 shares of the Company's Class A Common Stock for less than $ 0.1 million.

In connection with entering into the Roth Purchase Agreement, the Company paid Roth a structuring fee of $ 25,000 , agreed to reimburse certain legal fees and ongoing due diligence expenses of $ 75,000 , and paid $ 50,000 to Digital Offering, LLC as a qualified independent underwriter for purposes of FINRA Rule 5121, with related fees subject to reimbursement up to specified amounts.

1 unchanged sentence

On October 18, 2024, the Company entered into a Share Purchase Agreement (as amended, the “Purchase Agreement” and the facility as a whole, the “Equity Reserve Facility”) with New Circle Principal Investments LLC, a Delaware limited liability company (“New Circle”), and subsequently entered into an amendment with New Circle on October 24, 2025 (the “Amendment”) pursuant to which New Circle has committed to purchase, subject to certain limitations, up to $ 100 million (the “Total Commitment”) of the Company’s Class A Common Stock, par value $ 0.001 per share (the “Class A Common Stock”).

Under the applicable Nasdaq rules, the Company was not permitted to issue to New Circle under the Purchase Agreement more than 19.99 % of the shares of all classes of the Company’s common stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), unless (i) the Company obtained stockholder approval to issue shares of its Class A Common Stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules, or (ii) the average purchase price per share paid by New Circle for all shares of the Company’s Class A Common Stock, if any, that the Company elected to sell to New Circle under the Purchase Agreement equaled or exceeded certain minimums

permitted under the rules of the Nasdaq Stock Market.

(ii) the average purchase price per share paid by New Circle for all shares of the Company’s Class A Common Stock, if any, that the Company elected to sell to New Circle under the Purchase Agreement equaled or exceeded certain minimums permitted under the rules of the Nasdaq Stock Market.

The purchase price of the shares that may be sold to New Circle under the Purchase Agreement is based on an agreed upon fixed discount to the market price of our Class A Common Stock as computed under the Purchase Agreement.

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The Company sold 108,451 shares of the Company's Class A Common Stock for $ 7.3 million during the year ended December 31, 2025.

During the three months ended March 31, 2026, the Company sold 216,250 shares of the Company's Class A Common Stock for $ 1.2 million.

During the three months ended March 31, 2026, the Company incurred incremental issuance costs, which were recorded to additional paid-in capital.

During the six months ended June 30, 2026, the Company sold 216,250 shares of the Company's Class A Common Stock for $ 1.1 million.

During the six months ended June 30, 2026, the Company incurred incremental issuance costs, which were recorded to additional paid-in capital.

On April 23, 2026, the Company and New Circle mutually agreed to terminate effective immediately the Equity Reserve Facility in order for the Company to enter into the Committed Equity Facility.

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Capitalized terms not otherwise defined in this item shall have the meanings given to such terms in the A&R Certificate of Designation.

The Series A Convertible Preferred Stock is not redeemable outside of the Company’s control and is therefore classified in permanent equity as of March 31, 2026 and December 31, 2025.

The Series A Convertible Preferred Stock is not redeemable outside of the Company’s control and is therefore classified in permanent equity as of June 30, 2026 and December 31, 2025.

The following is a summary of key terms of the Series A Convertible Preferred Stock, as amended by the A&R Certificate of Designation:

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Subject to certain limitations described in the A&R Certificate of Designation, the Series A Convertible Preferred Stock is voting stock with Holders entitled to vote together with the Common Stock on an as-if-converted-to-Common-Stock basis.

(subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Convertible Preferred Stock) are outstanding.

In addition, the A&R Certificate of Designation provides for certain protective provisions for Holders of Series A Convertible Preferred Stock, which apply at any time when at least 12,525 shares of Series A Convertible Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Convertible Preferred Stock) are outstanding.

At the option of the Holder thereof, each share of Series A Convertible Preferred Stock shall be convertible into the number of Conversion Shares equal to the Accumulated Conversion Value divided by $ 550.00 per share of Class A Common Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization), rounded down to the nearest whole share.

1 unchanged sentence

During the year ended December 31, 2025, Lafayette Square exchanged 7,923 shares of Series A Convertible Preferred Stock for 136,364 shares of Class A Common Stock pursuant to the Tenth Amendment to the 2021 Credit Facility.

As of March 31, 2026, the amount of cumulative preferred dividends in arrears totaled $ 1.8 million representing $ 66.63 per preferred share of which $ 0.5 million was recorded as accrued liabilities in the condensed consolidated balance sheets.

As of June 30, 2026, the amount of cumulative preferred dividends in arrears totaled $ 2.5 million representing $ 92.72 per preferred share of which $ 1.2 million was recorded as accrued liabilities in the condensed consolidated balance sheets.

In October 2025, the terms of the initial issuance of $ 25.0 million Series A Convertible Preferred Stock were modified by the A&R Certificate of Designation, as described above, and the exchange mechanism between Lafayette Square and the Company was introduced in the Ninth and Tenth Amendments, respectively.

11 unchanged sentences

Accordingly, the issuance of securities under the Settlement Agreement will be exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 3(a)(10) thereunder.

For the three months ended March 31, 2026, $ 0.8 million has been paid to third party vendors and 152,041 shares have been issued pursuant to the Settlement Agreement.

From the date the Settlement Agreement was executed through March 31, 2026, $ 1.6 million has been paid to third party vendors and 204,332 shares have been issued pursuant to the Settlement Agreement.

The Company recognized a loss on settlement of accounts payable for the three months ended March 31, 2026 of $ 1.2 million for the difference between the value of the shares issued and the value of the liabilities settled.

For the six months ended June 30, 2026, $ 0.8 million has been paid to third party vendors and 152,041 shares have been issued pursuant to the Settlement Agreement.

From the date the Settlement Agreement was executed through June 30, 2026, $ 1.5 million has been paid to third party vendors and 204,332 shares have been issued pursuant to the Settlement Agreement.

The Company recognized a loss on settlement of accounts payable for the six months ended June 30, 2026 of $ 1.2 million for the difference between the value of the shares issued and the value of the liabilities settled.

Because of the difference in stock price on the day shares were issued and the pricing mechanism based on the five trading days prior to the share request, the loss was different than the discount established under the Settlement Agreement .

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Therefore, Direct Digital Holdings, Inc.

noncontrolling interest ("NCI") based on the common units of DDH LLC held by DDM.

reports a noncontrolling interest ("NCI") based on the common units of DDH LLC held by DDM.

While Direct Digital Holdings, Inc.

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The Company’s board of directors reserved 15,909 shares of Class A Common Stock for issuance in equity awards under the 2022 Omnibus Plan.

On June 9, 2025 and December 30, 2025, the Company's stockholders approved amendments to the 2022 Omnibus Plan to increase the number of shares issuable by 18,181 shares and 40,909 shares, respectively.

On June 9, 2025, December 30, 2025 and July 31, 2026, the Company's stockholders approved amendments to the 2022 Omnibus Plan to increase the number of shares issuable by 18,181 shares, 40,909 shares and 1,200,000 shares, respectively.

Information on activity for both the stock options and RSUs is detailed below.

As of March 31, 2026, there were 4,363 shares available for grant under the 2022 Omnibus Plan.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 0.2 million and $ 0.3 million, respectively, of total stock-based compensation expense in the condensed consolidated statements of operations in compensation, taxes and benefits.

As of June 30, 2026 and the date of this report, there were 4,698 and 1,204,698 shares, respectively, available for grant under the 2022 Omnibus Plan.

During the six months ended June 30, 2026 and 2025, the Company recognized $ 0.3 million and $ 0.7 million, respectively, of total stock-based compensation expense in the condensed consolidated statements of operations in compensation, taxes and benefits.

Stock Options

Options to purchase shares of common stock vest annually on the grant date anniversary over vesting periods of one to three years and expire 10 years following the date of grant.

The following table summarizes the stock option activity under the 2022 Omnibus Plan during the three months ended March 31, 2026:

The following table summarizes the stock option activity under the 2022 Omnibus Plan during the six months ended June 30, 2026:

Stock Options

8 unchanged sentences

Forfeited and expired ( 432 ) $ 76.04 — $ —

Outstanding at March 31, 2026 63,939 $ 24.29 9.86 $ —

Vested and exercisable at March 31, 2026 2,632 $ 436.89 7.55 $ —

The total fair value of options vested during the three months ended March 31, 2026 was $ 0.1 million.

As of March 31, 2026, unrecognized stock-based compensation of $ 0.3 million was related to 61,307 of unvested stock options which will be recognized on a straight-line basis over a weighted-average vesting period of 2.91 years.

Outstanding at June 30, 2026 63,580 $ 24.28 9.61 $ —

Vested and exercisable at June 30, 2026 2,971 $ 403.84 7.50 $ —

The total fair value of options vested during the six months ended June 30, 2026 was $ 0.1 million.

As of June 30, 2026, unrecognized stock-based compensation of $ 0.3 million was related to 60,609 of unvested stock options which will be recognized on a straight-line basis over a weighted-average vesting period of 2.72 years.

Restricted Stock Units

RSUs generally vest annually on the grant date anniversary over vesting periods of one to three years .

A summary of RSU activity during the three months ended March 31, 2026 and related information is as follows:

A summary of RSU activity during the six months ended June 30, 2026 and related information is as follows:

Restricted Stock Units

5 unchanged sentences

Forfeited ( 76 ) $ 375.71

Unvested - March 31, 2026 2,367 $ 162.40

Unvested - June 30, 2026 1,054 $ 183.76

The majority of vested RSUs were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes.

The total shares withheld were 504 (including 21 sold as of March 31, 2026) and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price.

As of March 31, 2026, there was unrecognized stock-based compensation o f $ 0.2 million related to unvested RSUs which will be recognized on a straight-line basis over a weighted average period of 0.68 yea rs.

The total shares withheld were 1,030 (including 323 sold as of June 30, 2026) and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price.

As of June 30, 2026, there was unrecognized stock-based compensation of $ 0.1 million related to unvested RSUs which will be recognized on a straight-line basis over a weighted average period of 1.63 years.

Note 5 — Tax Receivable Agreement and Income Taxes

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Pursuant to the Company’s election under Section 754 of the Code in 2022, the Company expects to obtain an increase in its share of the tax basis in the net assets of DDH LLC when LLC interests are redeemed or exchanged by the members of DDH LLC.

During the three months ended March 31, 2025, members of DDM exchanged 318 Class B shares into Class A shares.

During the three months ended March 31, 2026, no shares were exchanged.

The Company has recorded a liability related to the tax receivable agreement of less than $ 0.1 million as of March 31, 2026 and December 31, 2025.

The Company has recorded a deferred tax asset of $ 0 as of March 31, 2026 and December 31, 2025 which is net of a valuation allowance.

No TRA payments were made during the three months ended March 31, 2026 and 2025.

During the six months ended June 30, 2025, members of DDM exchanged 1,909 Class B shares into Class A shares.

During the six months ended June 30, 2026, no shares were exchanged.

The Company has recorded a liability related to the tax receivable agreement of $ 0 as of June 30, 2026 and less than $ 0.1 million as of December 31, 2025.

The Company has recorded a deferred tax asset of $ 0 as of June 30, 2026 and December 31, 2025 which is net of a valuation allowance.

No TRA payments were made during the six months ended June 30, 2026 and 2025.

The payments under the TRA will not be conditional on holder of rights under the TRA having a continued ownership interest in either DDH LLC or the Company.

2 unchanged sentences

The Company accounts for any amounts payable under the TRA in accordance with ASC Topic 450, Contingencies, and recognizes subsequent period changes to the measurement of the liability from the TRA in the condensed consolidated statement of operations as a component of income before taxes.

For the three and six months ended June 30, 2026, less than $ 0.1 million was recognized as income due to derecognition of the TRA liability in other income (expense).

The term of the TRA commenced upon completion of the initial public offering and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless the Company exercises its right to terminate the TRA.

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Income tax expense $ — $ — $ — $ —

Effective income tax rate — % — % — % — %

The effective tax rates were different from the statutory rates for the three months ended March 31, 2026 and 2025 primarily due to the Company’s partnership loss that is not subject to federal and state taxes and recording a valuation allowance against deferred taxes.

The Company files income tax returns in the United States federal jurisdiction and

various state jurisdictions.

The effective tax rates were different from the statutory rates for the six months ended June 30, 2026 and 2025 primarily due to the Company’s partnership loss that is not subject to federal and state taxes and recording a valuation allowance against deferred taxes.

The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions.

In the normal course of business, the Company can be examined by various tax authorities, including the Internal Revenue Service in the United States.

2 unchanged sentences

federal, state and local tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions.

Federal and various states returns for the years ended December 2024 and 2023 remain open as of March 31, 2026.

Federal and various states returns for the years ended December 2024 and 2023 remain open as of June 30, 2026.

The Company evaluates tax positions taken or expected to be taken in the course of preparing an entity’s tax returns to determine whether it is “more-likely-than-not” that each tax position will be sustained by the applicable tax authority.

As of March 31, 2026 and December 31, 2025, the Company had no uncertain tax positions.

As of June 30, 2026 and December 31, 2025, the Company had no uncertain tax positions.

Accordingly, the Company has not recognized any penalty, interest or tax impact related to uncertain tax positions.

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Note 6 — Related Party Transactions

Accounts Payable - Related Party

From time to time, DDM’s members advance funds to the Company to support operating cash requirements and working capital needs.

During the six months ended June 30, 2026, DDM members advanced an aggregate of $ 0.5 million to the Company and received repayments of $ 0 .

As of June 30, 2026 and December 31, 2025, the outstanding balance recorded as accounts payable - related party was $ 0.5 million and $ 0 , respectively.

The advances do not bear interest, are unsecured and are payable upon demand.

Management has concluded that the advances represent short-term related-party financing arrangements and has classified the outstanding balance as a current liability in the accompanying condensed consolidated balance sheet.

Up-C Structure

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The Up-C structure also provides DDM with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded.

If the Company ever generates sufficient taxable income to utilize the tax benefits, DDH expects to benefit from the Up-C structure because, in general, the Company expects cash tax savings in amounts equal to 15 % of certain tax benefits arising from such redemptions or exchanges of DDM's LLC Units for Class A Common Stock or cash and certain other tax benefits covered by the TRA.

The aggregate balance of tax receivable liabilities as of March 31, 2026 and December 31, 2025, is as follows (in thousands):

certain tax benefits arising from such redemptions or exchanges of DDM's LLC Units for Class A Common Stock or cash and certain other tax benefits covered by the TRA.

The aggregate balance of tax receivable liabilities as of June 30, 2026 and December 31, 2025, is as follows (in thousands):

2026 December 31,

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During the first quarter of 2026, the Company shifted its focus to driving intentional digital marketing spend with current and future customers historically classified by the Company as buy-side customers as well as new enterprise customers accessing the digital advertising market through its recently launched product - Ignition+.

In connection with this shift in focus, the Company reassessed its reportable segments and determined that it has one reportable segment that is

managed on a consolidated basis - digital advertising.

In connection with this shift in focus, the Company reassessed its reportable segments and determined that it has one reportable segment that is managed on a consolidated basis - digital advertising.

The new focus to streamline operations is expected to enhance the customer experience and better reflects the economics of the Company's current business where revenues reflect primarily contracts for managed advertising campaigns which may or may not access curated publisher audiences managed by the Company's sell-side platform.

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Neither shares of the Company’s Class B Common Stock nor the Company's Series A Convertible Preferred Stock share in the earnings or losses attributable to Direct Digital Holdings, Inc.

and are therefore not participating securities.

and are therefore not

participating securities.

The following table sets forth the computation of the Company’s basic and diluted net loss per share (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Net loss attributable to Class A shareholders and Series A preferred stockholders $ ( 3,395 ) $ ( 2,249 ) $ ( 8,645 ) $ ( 4,604 )

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Series A convertible preferred stock 53 — 53 —

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In connection with this post, one of the Company’s customers paused its connection to the Company while the allegations were investigated.

This customer

reconnected the Company on May 22, 2024 and volumes had resumed but not yet at the levels experienced prior to the pause in May 2024 which has created a significant disruption in the Company's business.

This customer reconnected with the Company on May 22, 2024 and volumes had resumed but not yet at the levels experienced prior to the pause in May 2024 which has created a significant disruption in the Company's business.

During 2025, the Company worked with its partners to achieve prior volume levels but was unable to achieve historical volumes for the year.

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On May 23, 2024, an alleged stockholder, purportedly on behalf of the persons or entities who purchased or acquired publicly traded securities of the Company between April 2023 and March 2024, filed a putative class action against the Company, certain of our officers and directors, and other defendants in the U.S.

District Court for the Southern District of Texas, alleging violations of federal securities laws related to alleged false or misleading disclosures made by the Company in its public filings.

District Court for the Southern District of

Texas, alleging violations of federal securities laws related to alleged false or misleading disclosures made by the Company in its public filings.

On July 9, 2024, another alleged stockholder filed a similar securities class action against the Company, certain of our officers and directors, also in the Southern District of Texas.

5 unchanged sentences

The lead plaintiff filed a reply brief on February 6, 2026.

The Company now awaits the Court's decision about whether to set the case for oral argument.

On August 6, 2026, the parties presented oral arguments and are now awaiting a decision from the Fifth Circuit.

The Company cannot make any predictions about the final outcome of this matter or the timing thereof but believes that plaintiffs’ claims lack merit and intends to vigorously defend these lawsuits.

2 unchanged sentences

Since it was established, the Exit Fee has been reduced by (1) $ 4.3 million for proceeds received by Lafayette upon exchanges pursuant to the Tenth Amendment during the year ended December 31, 2025 and (2) $ 3.6 million for the loss on Exit Fee recognized during the year ended December 31, 2025 for the difference between the face value of the Series A Convertible Preferred Stock exchanged and the proceeds received by Lafayette upon the exchange.

As of March 31, 2026, the maximum potential amount of the Exit Fee that could be payable is $ 27.1 million.

As of June 30, 2026, the maximum potential amount of the Exit Fee that could be payable is $ 27.1 million.

The timing and occurrence of a full redemption are uncertain and may be indefinite.

Accordingly, management has concluded that payment of the maximum potential amount of the Exit Fee as of March 31, 2026 is not probable as of the reporting date and that the ultimate amount of any such payment cannot be reasonably estimated.

Accordingly, management has concluded that payment of the maximum potential amount of the Exit Fee as of June 30, 2026 is not probable as of the reporting date and that the ultimate amount of any such payment cannot be reasonably estimated.

As a result, no additional liability has been recorded in the accompanying condensed consolidated financial statements.

2 unchanged sentences

As described in Note 4 — Stockholders’ Deficit and Stock-Based Compensation, on November 20, 2025, the Company entered into the Settlement Agreement with Continuation Capital, pursuant to which we agreed to issue the Exchange Shares in exchange for the release of certain claims held by Continuation Capital related to third party vendor payables separately assigned by the Company to Continuation Capital in the amount of $ 3 million.

For the three months ended March 31, 2026, $ 0.8 million has been paid to third party vendors and 152,041 shares have been issued pursuant to the Settlement Agreement.

For the six months ended June 30, 2026, $ 0.8 million has been paid to third party vendors and 152,041 shares have been issued pursuant to the Settlement Agreement.

From the date the Settlement Agreement was executed through June 30, 2026, $ 1.5 million has been paid to third party vendors and 204,332 shares have been issued pursuant to the Settlement Agreement.

Operating Leases

During the three months ended March 31, 2026 and 2025, the Company incurred fixed rent expense associated with operating leases for real estate of $ 0.1 million.

During the six months ended June 30, 2026 and 2025, the Company incurred fixed rent expense associated with operating leases for real estate of $ 0.1 million.

The Company did not have any finance leases, short-term leases nor variable leases over this time period.

During the three months ended March 31, 2026 and 2025, the Company had the following cash and non-cash activities associated with leases (in thousands):

Three Months Ended March 31,

During the three and six months ended June 30, 2026 and 2025, the Company had the following cash and non-cash activities associated with leases (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Additions and modifications to ROU asset obtained from new operating liabilities $ — $ — $ — $ 52

The weighted-average remaining lease term and discount rate for the Company’s operating leases is 3.4 years and 8.3 %, respectively, as of March 31, 2026.

The weighted-average remaining lease term and discount rate for the Company's operating leases is 4.3 years and 8.2 %, respectively, as of March 31, 2025 .

The future payments due under operating leases as of March 31, 2026 are as follows (in thousands):

The weighted-average remaining lease term and discount rate for the Company’s operating leases is 3.2 years and 8.3 %, respectively, as of June 30, 2026.

The weighted-average remaining lease term and discount rate for the Company's operating leases is 4.1 years and 8.3 %, respectively, as of June 30, 2025 .

The future payments due under operating leases as of June 30, 2026 are as follows (in thousands):

Total undiscounted lease payments 818

4 unchanged sentences

Property, equipment and software, net consists of the following (in thousands):

Useful Life (Years) March 31,

Useful Life (Years) June 30,

2026 December 31,

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Total property, equipment and software, net $ 99 $ 166

The following table summarizes depreciation and amortization expense related to property, equipment and software by line item for the three months ended March 31, 2026 and 2025 (in thousands):

The following table summarizes depreciation and amortization expense related to property, equipment and software by line item for the three and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Cost of revenues $ — $ 42 $ — $ 84

3 unchanged sentences

The Company records amortization expense on a straight-line basis over the life of the identifiable intangible assets related to an acquisition in September 2020.

For the three months ended March 31, 2026 and 2025, amortization expense of $ 0.4 million and $ 0.5 million was recognized.

As of March 31, 2026 and December 31, 2025, intangible assets net of accumulated amortization was $ 7.4 million and $ 7.9 million, respectively.

As of March 31, 2026, intangible assets and the related accumulated amortization, weighted-average remaining life and future amortization expense are as follows (in thousands):

March 31, 2026

For the six months ended June 30, 2026 and 2025, amortization expense of $ 0.8 million and $ 1.0 million was recognized.

As of June 30, 2026 and December 31, 2025, intangible assets net of accumulated amortization was $ 7.0 million and $ 7.9 million, respectively.

As of June 30, 2026, intangible assets and the related accumulated amortization, weighted-average remaining life and future amortization expense are as follows (in thousands):

June 30, 2026

Weighted-Average Original Accumulated Net

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements