Direct Digital Holdings Inc.
04/07/2026 | Press release | Distributed by Public on 04/07/2026 14:22
Failure to Satisfy Listing Rule (Form 8-K)
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On April 2, 2026, Direct Digital Holdings, Inc. (the "Company") received a Staff Delisting Determination letter (the "Nasdaq Letter") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq"), notifying the Company that it is not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $2.5 million in stockholders' equity for continued listing on The Nasdaq Capital Market (the "Stockholders' Equity Rule"), nor is it in compliance with either of the alternative listing standards, market value of listed securities of at least $35 million or net income of $500,000 from continuing operations in the most recently completed fiscal year, or in two of the three most recently completed fiscal years. The Company's failure to comply with the Stockholders' Equity Rule was based on the Company's filing of its Annual Report on Form 10-K for the year ended December 31, 2025, reporting a stockholders' deficit of ($7.0 million).
As previously disclosed, on November 7, 2025, the Company received a decision from the Nasdaq Hearings Panel (the "Panel") regarding the Company's continued listing on Nasdaq, which among other things indicated that the Panel had granted the Company an exception through January 30, 2026, to demonstrate compliance with Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). Additionally, Nasdaq imposed a discretionary Panel Monitor pursuant to Listing Rule 5815(d)(4)(A) (the "Panel Monitor"), which requires Nasdaq to issue a Staff Delisting Determination letter in the event that the Company fails to maintain compliance in the ensuing year.
On February 12, 2026, the Company was notified by Nasdaq that the Company had evidenced compliance with the Bid Price Rule, due to the closing bid price for the Company's Class A Common Stock having closed at or above $1.00 per share for over 20 consecutive business days. Nasdaq also indicated that the Company would remain subject to a Panel Monitor through February 12, 2027.
Under the terms of the Panel Monitor, if the Listing Qualifications Department determines that the Company fails any listing standard during the one-year monitoring period, then, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide the Listing Qualifications Department with a plan of compliance with respect to any deficiency that arises during the one-year monitoring period, and the Listing Qualifications Department will not be permitted to grant additional time for the Company to regain compliance with respect to any deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Rather, the Listing Qualifications Department will promptly issue a Staff Delisting Determination letter.
As described in the Nasdaq Letter, unless the Company timely requests a hearing before the Panel by April 9, 2026, the Company's Class A Common Stock would be subject to suspension and delisting. Accordingly, the Company intends to timely request a hearing before the Panel. The hearing request will automatically stay any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing.
The Company intends to take all reasonable measures available to regain compliance under the Stockholders' Equity Rule and remain listed on Nasdaq. However, there can be no assurance that Nasdaq will grant the Company's request for a hearing or that the Company will ultimately regain compliance with all applicable requirements for continued listing.
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