Direct Digital converts $10M debt to preferred; adds EBITDA loss covenants

Direct Digital Holdings, Inc.

Converted $10M term loans into 10,000 Series A Preferred shares; total preferred face now $35M.
Paid $3.5M amendment fee added to principal; $9.99M term loans remain outstanding.
New covenants: min cash $0.45M, min quarterly EBITDA loss $(0.652M) and $(1.921M) for Q4 2025 and Q1 2026.
Existing defaults (non-payment, EBITDA miss, cash covenant) waived; must appoint independent director by Oct 29.
Preferred pays 10% cumulative dividend, converts at $2.50/sh, liquidation preference 3x accumulation.

item 1.01 item 2.03 item 3.02 item 3.03 item 5.03 item 9.01

Key facts

Extracted from this filing and checked against the source text.

Equity Issuances SEC 8-K Item 3.02/3.03 confidence 0.9

Direct Digital Holdings, Inc. issued $10.0 million face amount of Series A Preferred Stock of preferred stock to Lafayette Square USA, Inc. for conversion and exchange of $10.0 million aggregate principal amount of term loans and other debt obligations.

Security: preferred stock
Shares: $10.0 million face amount of Series A Preferred Stock
Purchaser: Lafayette Square USA, Inc.
Consideration: conversion and exchange of $10.0 million aggregate principal amount of term loans and other debt obligations

Exact text from the filing

the parties agreed to convert and exchange term loans and other debt obligations with an aggregate principal amount of $10.0 million for newly authorized shares of Series A Preferred Stock, par value $0.001, of the Company (the “ Series A Preferred Stock ”), with an aggregate face amount of $10.0 million issued to Lafayette.

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Governance Changes SEC 8-K Item 5.03/5.05/5.06 confidence 0.9

Direct Digital Holdings, Inc.: Amended and restated Certificate of Designation of Series A Convertible Preferred Stock, increasing designated shares from 25,000 to 35,000 and modifying dividend and voting terms (effective 2025-10-15).

Change: charter amendment
Effective: 2025-10-15

Exact text from the filing

Pursuant to the terms of the Ninth Amendment, on October 15, 2025, the Company filed the Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock (the “ A&R Certificate of Designation ”) with the Secretary of State of the State of Delaware, which amended and restated in its entirety the Certificate of Designation establishing the Series A Convertible Preferred Stock, filed on August 8, 2025.

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Direct Digital Holdings, Inc. filing history →

Source: SEC EDGAR

accession 0001880613-25-000123

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