Form SC TO-I - Tender offer statement by Issuer

As filed with the Securities and Exchange Commission on August 29, 2023

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934

DIRECT DIGITAL HOLDINGS, INC.
(Name of Subject Company (Issuer))

DIRECT DIGITAL HOLDINGS, INC. (Offeror)
(Names of Filing Persons (Identifying Status as Offeror, Issuer or Other Person))

Warrants exercisable for Class A Common Stock at an exercise price of $5.50 per share
(Title of Class of Securities)

25461T113
(CUSIP Number of Class of Securities)

Mark Walker
Chief Executive Officer
Direct Digital Holdings, Inc.
1177 West Loop S,

Suite 1310
Houston, TX 77027
(832) 402-1051
(Name, Address, and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)

With copies to:
Stephen E. Older, Esq.
Andrew J. Terjesen, Esq.
McGuireWoods LLP
1251 Avenue of the Americas 20^th Floor
New York, NY 10020
Tel: (212) 548-2100

Check the box if the filing relates solely to preliminary communications before the commencement of a tender offer. ¨

Check the appropriate boxes below to designate any transactions to which the statement relates:

¨ third-party tender offer subject to Rule 14d-1.

x issuer tender offer subject to Rule 13e-4.

¨ going-private transaction subject to Rule 13e-3.

¨ amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨

If applicable, check the appropriate box(es) below to designate the appropriate rule provision relied upon:

¨ Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

¨ Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

SCHEDULE TO

This Tender Offer Statement on Schedule TO (“Schedule TO”) relates to the tender offer by Direct Digital Holdings, Inc., a Delaware corporation (“Direct Digital” or the “Company”), to purchase for cash any and all of its outstanding Warrants (as defined in Item 2 below) to purchase Class A common stock, par value $0.001, at a price of $1.20 per Warrant, without interest (the “Offer Purchase Price”). The Company’s offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 29, 2023 (as amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal and Consent (as amended or supplemented from time to time, the “Letter of Transmittal and Consent”), copies of which are attached to this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively (which together, as amended or supplemented from time to time, constitute the “Offer”).

Concurrently with the Offer, the Company is also soliciting consents from holders of its outstanding Warrants to amend (the “Warrant Amendment”) the Warrant Agreement, dated as of February 15, 2022, by and between the Company and Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC) (the “Warrant Agreement”), which governs all of the Company’s Warrants, to permit the Company to redeem each outstanding Warrant for $0.35 in cash, without interest (the “Redemption Price”), which Redemption Price is approximately 71% less than the Offer Purchase Price.

Pursuant to the terms of the Warrant Agreement, the consent of holders of a majority of the outstanding Warrants is required to approve the Warrant Amendment as it relates to the Warrants. Holders of Warrants may not consent to the Warrant Amendment without tendering their Warrants in the Offer and such holders may not tender their Warrants without consenting to the Warrant Amendment.

This Schedule TO is intended to satisfy the reporting requirements of Rule 13e-4 under the Exchange Act. The information contained in the Offer to Purchase and the related Letter of Transmittal and Consent, copies of which are filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively, is incorporated by reference in response to all of the items of this Schedule TO as more particularly set forth below.

Item 1.

Summary Term Sheet.

The information set forth under “Summary Term Sheet” in the Offer to Purchase is incorporated herein by reference.

Item 2.

Subject Company Information.

(a) Name and Address: The name of the subject company is Direct Digital Holdings, Inc., a Delaware corporation. The address of its principal executive office is 1177 West Loop S., Suite 1310, Houston, Texas 77027. and its telephone number is (832) 402-1051.

(b) Securities: The subject class of securities consists of outstanding warrants to purchase the Company’s Class A common stock, par value $0.001, which were publicly issued and sold as part of units of the Company, in connection with the initial public offering of Direct Digital’s securities on February 1, 2021 (the “Direct IPO”), which entitle such warrant holders to purchase one share of Class A common stock at an exercise price of $5.50, subject to adjustments (the “Warrants”).

As of August 28, 2023, there were 3,217,800 Warrants outstanding. Any and all of the Warrants are eligible to be tendered pursuant to the Offer. All Warrants that are validly tendered and accepted for exchange will be cancelled.

(c) Trading Market and Price: The information set forth under “The Offer and Consent Solicitation, Section 6. Price Range of Warrants” in the Offer to Purchase is incorporated herein by reference.

Item 3.

Identity and Background of Filing Person.

(a) Name and Address: Direct Digital is the subject company and the filing person. The business address and telephone number of Direct Digital are set forth under Item 2(a) above. Direct Digital’s internet address is www.directdigitalholdings.com. Unless expressly stated otherwise, the information contained on its website or connected to its website is not incorporated by reference into this Schedule TO and should not be considered part of this Schedule TO.

The names of the executive officers and directors of the Company are set forth below. The business address for each such person is: c/o Direct Digital Holdings, Inc. 1177 West Loop S, Suite 1310, Houston, Texas 77027, and the telephone number for each such person is (832) 402-1051.

Name		Position
Mark Walker		Chief Executive Officer and Chairman of the Board
Keith Smith		President and Director
Anu Pillai		Chief Technology Officer
Diana P. Diaz		Interim Chief Financial Officer
Maria Vilchez Lowrey		Chief Growth Officer
Richard Cohen		Director
Antoinette Leatherberry		Director
Mistelle Locke		Director

The information set forth under “The Offer and Consent Solicitation, Section 5.D. Background and Purpose of the Offer — Interests of Directors and Executive Officers” is incorporated herein by reference.

Item 4.

Terms of the Transaction.

(a) Material Terms: The information set forth under the following headings in the Offer to Purchase is incorporated herein by reference.

“Summary Term Sheet”

“The Offer and Consent Solicitation, Section 1. General Terms”

“The Offer and Consent Solicitation, Section 2. Procedure for Tendering Warrants”

“The Offer and Consent Solicitation, Section 3. Withdrawal Rights”

“The Offer and Consent Solicitation, Section 4. Acceptance of Warrants and Payment of Offer Purchase Price”

“The Offer and Consent Solicitation, Section 5. Background and Purpose of the Offer”

“The Offer and Consent Solicitation, Section 6. Price Range of Public Warrants”

“The Offer and Consent Solicitation, Section 7. Source and Amount of Funds”

“The Offer and Consent Solicitation, Section 8. Transactions and Agreements Concerning the Company’s Securities”

“The Offer and Consent Solicitation, Section 9. Security Ownership of Certain Management”

“The Offer and Consent Solicitation, Section 10. Conditions; Termination; Waivers; Extensions; Amendments”

“The Offer and Consent Solicitation, Section 11. Material U.S. Federal Income Tax Consequences”

“The Offer and Consent Solicitation, Section 12. Forward-Looking Statements; Risk Factors”

“The Offer and Consent Solicitation, Section 13. The Depositary, Information Agent and Dealer Manager”

“The Offer and Consent Solicitation, Section 14. Additional Information; Miscellaneous”

(b) Purchases: The information set forth under “The Offer and Consent Solicitation, Section 5.D. Background and Purpose of the Offer — Interests of Directors and Executive Officers” in the Offer to Purchase is incorporated herein by reference.

Item 5.

Past Contracts, Transactions, Negotiations and Arrangements.

(a) Agreements Involving the Subject Company’s Securities: The information set forth under “The Offer and Consent Solicitation, Section 8. Transactions and Arrangements Concerning the Shares” in the Offer to Purchase is incorporated herein by reference.

Item 6.

Purposes of the Transaction and Plans or Proposals.

(a) Purposes: The information set forth under “The Offer and Consent Solicitation, Section 5.C. Background and Purpose of Our Offer — Purpose of the Offer” in the Offer to Purchase is incorporated herein by reference.

(b) Use of the Securities Acquired: The Warrants tendered will be retired and cancelled by the Company.

(c) Plans: The information set forth under “The Offer and Consent Solicitation, Section 5.E. Background and Purpose of Our Offer — Plans, Proposals or Negotiations” in the Offer to Purchase is incorporated herein by reference.

Item 7.

Source and Amount of Funds or Other Consideration.

(a) Source of Funds: The information set forth under “The Offer and Consent Solicitation, Section 7. Source and Amount of Funds” in the Offer to Purchase is incorporated herein by reference.

(b) Conditions: The information set forth under “The Offer and Consent Solicitation, Section 10. Conditions; Termination; Waivers; Extensions; Amendment” in the Offer to Purchase is incorporated herein by reference.

(c) Borrowed Funds: The information set forth under “The Offer and Consent Solicitation, Section 7. Source and Amount of Funds” in the Offer to Purchase is incorporated herein by reference.

Item 8.

Interest in Securities of the Subject Company.

(a) Securities Ownership: The information set forth under “The Offer and Consent Solicitation, Section 9. Security Ownership of Certain Beneficial Owners and Management” in the Offer to Purchase is incorporated herein by reference.

(b) Securities Transactions: The information set forth under “The Offer and Consent Solicitation, Section 8. Transactions and Arrangements Concerning the Shares” and “The Offer and Consent Solicitation, Section 9. Security Ownership of Certain Beneficial Owners and Management” in the Offer to Purchase is incorporated herein by reference.

Item 9.

Persons/Assets, Retained, Employed, Compensated or Used.

(a) Solicitations or Recommendations: The information set forth under “The Offer and Consent Solicitation, Section 8. Transactions and Agreements Concerning the Company’s Securities” and “The Offer and Consent Solicitation, Section 13. The Depositary, Information Agent and Dealer Manager” is incorporated herein by reference. None of the Company, its directors, officers or employees, nor Equiniti Trust Company, LLC, the depositary for the Offer, nor D.F. King & Co., Inc., the information agent for the Offer, nor Stifel, Nicolaus & Company, Incorporated, the dealer manager for the Offer, is making any recommendation as to whether holders of Warrants should tender their Warrants and consent to the Warrant Amendment. Holders of Warrants must make their own decision as to whether to tender some or all of their Warrants and consent to the Warrant Amendment.

(b) Employees and Corporate Assets: The information set forth under “The Offer and Consent Solicitation, Section 8. Transactions and Agreements Concerning the Company’s Securities” is incorporated herein by reference.

Item 10.

Financial Statements.

(a)

Financial Information: Not applicable.

(b)

Pro Forma Information: Not applicable.

Item 11.

Additional Information.

(a) Agreements, Regulatory Requirements and Legal Proceedings: The information set forth under “The Offer and Consent Solicitation, Section 5.D. Background and Purpose of the Offer — Interests of Directors and Executive Officers” in the Offer to Purchase is incorporated herein by reference. To the knowledge of the Company, no material legal proceedings relating to the tender offer are pending.

(b) Other Material Information: The information set forth under “Summary of Terms”, “The Offer and Consent Solicitation, Section 12. Forward-Looking Statements; Risk Factors” and “The Offer and Consent Solicitation, Section 14. Miscellaneous” in the Offer to Purchase is incorporated herein by reference.

The Company will amend this Schedule TO to include documents that it may file with the SEC after the date of the Offer to Purchase pursuant to Sections 13(a), 13(c) or 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and prior to the expiration of the Offer, to the extent required by Rule 13e-4(d)(2) of the Exchange Act.

Item 12.

Exhibits.

Exhibit Number		Description
(a)(1)(A)		Offer to Purchase and Consent Solicitation, dated August 29, 2023.

(a)(1)(B)		Letter of Transmittal and Consent (including Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Form W-9).

(a)(1)(C)		Form of Notice of Guaranteed Delivery.

(a)(1)(D)		Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated August 29, 2023.

(a)(1)(E)		Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated August 29, 2023.

(a)(2) – (4)		Not Applicable

(a)(5)(i)		Press Release, dated August 29, 2023, announcing cash tender offer for Direct Digital Holdings, Inc. warrants.

(a)(5)(ii)		Summary Advertisement, dated August 29, 2023, announcing cash tender offer for Direct Digital Holdings, Inc. warrants.

(b)(1)		Term Loan and Security Agreement, dated as of December 3, 2021, by and among Direct Digital Holdings, LLC, as borrower, Orange142, LLC, Huddled Masses LLC, Colossus Media, LLC, and Universal Standards for Digital Marketing, LLC, as guarantors, Lafayette Square Loan Servicing, LLC, as administrative agent, and the various financial institutions signatory to the Term Loan and Security Agreement as lenders (incorporated by reference to Exhibit 10.6 to Direct Digital Holdings, Inc.’s Registration Statement on Form S-1 (File No. 333-261059) filed November 15, 2021).

(b)(2)		First Amendment to Term Loan and Security Agreement, dated as of February 3, 2022, by and among Direct Digital Holdings, LLC, as borrower, Colossus Media, LLC, Huddled Masses LLC, Orange142, LLC, and Universal Standards for Digital Marketing, LLC, as guarantors, Lafayette Square Loan Servicing, LLC as administrative agent, and the various financial institutions signatory to the Term Loan and Security Agreement as lenders (incorporated by reference to Exhibit 10.16 to Direct Digital Holdings, Inc.’s Annual Report on Form 10-K filed March 31, 2022).

(b)(3)		Second Amendment and Joinder to Term Loan and Security Agreement, dated effective as of July 28, 2022, by and among Direct Digital Holdings, LLC, as borrower, Colossus Media, LLC, Huddled Masses LLC, Orange142, LLC, Universal Standards for Digital Marketing, LLC and Direct Digital Holdings, Inc., as guarantors, Lafayette Square Loan Servicing, LLC as administrative agent, and the various financial institutions signatory to the Term Loan and Security Agreement as lenders (incorporated by reference to Exhibit 10.1 to Direct Digital Holdings, Inc.’s Quarterly Report on Form 10-Q filed November 14, 2022).

(b)(4)		Early Opt-in Election, dated June 1, 2023, by and among Direct Digital Holdings, Inc., Direct Digital Holdings, LLC, Huddled Masses LLC, Colossus Media, LLC, Orange142, LLC, Lafayette Square Loan Servicing, LLC and Lafayette Square USA, Inc. ((incorporated by reference to Exhibit 10.1 to Direct Digital Holdings, Inc.’s Current Report on Form 8-K filed June 6, 2023).

(d)(1)		Warrant Agreement, dated February 15, 2022, between Direct Digital Holdings, Inc. and Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC), as warrant agent (incorporated by reference to Exhibit 4.3 to Direct Digital Holdings, Inc.’s Current Report on Form 8-K filed February 16, 2022).

(d)(2)		Not Applicable

(g)		Not Applicable

(h)		Not Applicable

107		Filing Fee Table

Item 12(b).

Exhibits.

Filing Fee Exhibit

Item 13.

Information Required by Schedule 13E-3.

Not applicable.

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct.

Dated: August 29, 2023

	Direct Digital Holdings, Inc.


	/s/ Mark Walker
	Name: Mark Walker
	Title: Chairman, Chief Executive Officer and Director

Exhibit (a)(1)(A)

OFFER TO PURCHASE

DIRECT DIGITAL HOLDINGS, INC.

ANY AND ALL OF ITS WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
AT A PURCHASE PRICE OF $1.20 IN CASH PER WARRANT

AND

CONSENT SOLICITATION

THE OFFER PERIOD AND YOUR RIGHT TO WITHDRAW WARRANTS THAT YOU TENDER WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON SEPTEMBER 26, 2023, UNLESS THE OFFER PERIOD IS  EXTENDED. THE COMPANY MAY EXTEND THE OFFER PERIOD AT ANY TIME.

Direct Digital Holdings, Inc., a Delaware corporation (the “Company,” “we,” “us,” or “our”), hereby offers to purchase any and all of its outstanding warrants described below at a purchase price of $1.20 in cash, without interest (the “Offer Purchase Price”), for each outstanding warrant tendered. The “Offer Period” is the period commencing on August 29, 2023 and ending one minute after 11:59 p.m., Eastern Time, on September 26, 2023, or such later date to which the Company may extend the Offer (the “Expiration Date”). The offer is made upon the terms and conditions in this Offer to Purchase (“Offer Letter”) and the related Letter of Transmittal and Consent (together with the Offer Letter, as each may be amended or supplemented from time to time, the “Offer”).

Warrants eligible to be tendered pursuant to the Offer are 3,217,800 publicly traded warrants to purchase shares of our Class A common stock, par value $0.001 (“Class A common stock”), which were publicly issued and sold as part of units of the Company, in connection with the initial public offering of DI securities on February 15, 2022 (the “DIRECT IPO”), which entitle such warrant holders to purchase one share of our Class A common stock at an exercise price of $5.50, subject to adjustments (the “Warrants”).

The Offer is subject to the satisfaction (or, to the extent permitted, waiver) of the conditions described in “The Offer and Consent Solicitation Section 10: Conditions; Termination; Waivers, Extensions; Amendments”, beginning on page 16, including the Minimum Tender Condition (as defined below).

Concurrently with the Offer, we also are soliciting consents (the “Consent Solicitation”) from holders of the Warrants to amend the Warrant Agreement, dated as of February 15, 2022 (the “Warrant Agreement”), by and between the Company and Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC) (the “Transfer Agent” or “Depositary”), which governs all of the Warrants (the “Warrant Amendment”), to permit the Company to redeem each outstanding Warrant for $0.35 in cash, without interest (the “Redemption Price”), which Redemption Price is approximately 71% less than the Offer Purchase Price. Pursuant to the terms of the Warrant Agreement, the consent of holders of at least a majority of the outstanding Warrants is required to approve the Warrant Amendment as it relates to the Warrants. Although we intend to redeem all remaining outstanding Warrants if the Warrant Amendment is approved, we would not be required to effect such a redemption and may defer doing so until it is most advantageous to us. For a valid tender, consent must be given for all Warrants tendered. Accordingly, consents will be deemed to be delivered for all Warrants tendered on or before the Expiration Date for the Offer and Consent Solicitation.

If the Warrants are registered in your name, the execution and delivery of the Letter of Transmittal and Consent will constitute your consent to the Warrant Amendment and will also authorize and direct the Depositary to execute and deliver a written consent to the Warrant Amendment on your behalf with respect to all Warrants that you tender. Custodial entities that are participants in The Depository Trust Company (“DTC”) may tender their Warrants through the Automatic Tender Option Program (“ATOP”) maintained by DTC, by which the custodial entity and the beneficial owner on whose behalf the custodial entity is acting agree to be bound by the Letter of Transmittal and Consent and which constitutes their consent to the Warrant Amendment and also authorizes and directs the Depositary to execute and deliver a written consent to the Warrant Amendment on their behalf with respect to all Warrants thereby tendered. You must deliver your consent to the proposed Warrant Amendment in order to participate in the Offer.

Our Warrants are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “DRCTW”. On August 28, 2023, the last reported sale price on Nasdaq for the Warrants was $0.6534. As of August 28, 2023, 3,217,800 Warrants were outstanding. Warrant holders should obtain current market quotations for the Warrants before deciding whether to tender their Warrants pursuant to the Offer.

The Offer permits holders of Warrants to tender any and all Warrants in exchange for the Offer Purchase Price for each Warrant tendered. A holder may tender as few or as many Warrants as the holder elects. Holders are also entitled to exercise their Warrants during the Offer Period in accordance with the terms of the Warrants.

If you elect to tender Warrants in response to the Offer and Consent Solicitation, please follow the instructions in this Offer Letter and the related documents, including the Letter of Transmittal and Consent. If you wish to exercise your Warrants in accordance with their terms, please follow the instructions for exercise included in the Warrants.

If you tender Warrants, you may withdraw your tendered Warrants at any time before the Expiration Date and retain them on their current terms or amended terms if the Warrant Amendment is approved, by following the instructions in this Offer Letter. If you withdraw the tender of your Warrants, your consent to the Warrant Amendment will be withdrawn as a result.

See “The Offer and Consent Solicitation, Section 12. Forward-Looking Statements; Risk Factors” for a discussion of information that you should consider before tendering Warrants in the Offer.

The Offer and Consent Solicitation will commence on August 29, 2023 and end on the Expiration Date.

A detailed discussion of the Offer and Consent Solicitation is contained in this Offer Letter. We may amend or terminate the Offer and Consent Solicitation at any time with requisite notice, as further described in this Offer Letter. Holders of Warrants are strongly encouraged to read this entire package of materials, and the publicly filed information about the Company referenced herein, as well as any supplemental disclosure regarding the Offer and Consent Solicitation before making a decision regarding the Offer and Consent Solicitation.

THE COMPANY’S BOARD OF DIRECTORS HAS APPROVED THE OFFER AND CONSENT SOLICITATION. HOWEVER, NONE OF THE COMPANY, ITS DIRECTORS, OFFICERS OR EMPLOYEES, NOR THE DEPOSITARY FOR THE OFFER, D.F. KING & CO., INC., THE INFORMATION AGENT FOR THE OFFER (THE “INFORMATION AGENT”), OR STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE COMPANY’S DEALER MANAGER FOR THE OFFER (THE “DEALER MANAGER”), MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER WARRANTS OR CONSENT TO THE WARRANT AMENDMENT. EACH HOLDER OF A WARRANT MUST MAKE HIS, HER OR ITS OWN DECISION AS TO WHETHER TO TENDER SOME OR ALL OF HIS, HER OR ITS WARRANTS AND CONSENT TO THE WARRANT AMENDMENT.

Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the Offer or passed upon the merits or fairness of the Offer or the accuracy or adequacy of the disclosure in this Offer Letter or the Letter of Transmittal and Consent. Any representation to the contrary is a criminal offense.

The Dealer Manager for the Offer and Consent Solicitation is:

Stifel

787 Seventh Avenue, 12^th Floor

New York, New York 10019

Attention: Stifel Syndicate Desk

Email: BaltimoreEqtySynd@stifel.com

Offer to Purchase and Consent Solicitation dated August 29, 2023

IMPORTANT PROCEDURES

If you want to tender some or all of your Warrants, you must do one of the following before the Expiration Date:

· if your Warrants are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact the nominee and have the nominee tender your Warrants for you, which typically can be done electronically;

· if you hold Warrant certificates in your own name, complete and sign the Letter of Transmittal and Consent according to its instructions, and deliver the Letter of Transmittal and Consent, together with any required signature guarantee, the certificates for your Warrants and any other documents required by the Letter of Transmittal and Consent, to the Depositary; or

· if you are an institution participating in DTC, called the “book-entry transfer facility” in this Offer Letter, tender your Warrants according to the procedure for book-entry transfer described under “The Offer and Consent Solicitation, Section 2. Procedure for Tendering Warrants.”

If you want to tender your Warrants, but:

· your certificates for the Warrants are not immediately available or cannot be delivered to the Depositary;

· you cannot comply with the procedure for book-entry transfer; or

· your other required documents cannot be delivered to the Depositary before the expiration of the Offer,

then you can still tender your Warrants if you comply with the guaranteed delivery procedure described under “The Offer and Consent Solicitation, Section 2. Procedure for Tendering Warrants.”

TO TENDER YOUR WARRANTS, YOU MUST CAREFULLY FOLLOW THE PROCEDURES DESCRIBED IN THIS OFFER LETTER, THE LETTER OF TRANSMITTAL AND CONSENT AND THE OTHER DOCUMENTS DISCUSSED HEREIN RELATED TO THE OFFER.

WARRANTS NOT TENDERED FOR PURCHASE WILL EXPIRE IN ACCORDANCE WITH THEIR TERMS ON FEBRUARY 15, 2027, AT 11:59 P.M. EASTERN TIME OR EARLIER UPON REDEMPTION, AND OTHERWISE REMAIN SUBJECT TO THEIR ORIGINAL TERMS, UNLESS THE WARRANT AMENDMENT IS APPROVED BY AT LEAST A MAJORITY OF THE HOLDERS OF THE WARRANTS AS IT RELATES TO THE APPLICABILITY OF THE WARRANT AMENDMENT TO THE WARRANTS.

THE OFFER RELATES TO THE WARRANTS THAT WERE PUBLICLY ISSUED IN CONNECTION WITH THE DIRECT IPO, WHICH TRADE ON NASDAQ UNDER THE SYMBOL “DRCTW.” ANY AND ALL OUTSTANDING WARRANTS ARE ELIGIBLE TO BE TENDERED PURSUANT TO THE OFFER. AS OF AUGUST 28, 2023, THERE WERE 3,217,800 WARRANTS OUTSTANDING.

THE COMPANY RESERVES THE RIGHT TO EXERCISE ITS ABILITY TO REDEEM THE WARRANTS IF AND WHEN IT IS PERMITTED TO DO SO PURSUANT TO THE TERMS OF THE WARRANTS.

If you have any questions or need assistance, you should contact D.F. King & Co., Inc., the Information Agent for the Offer. You may request additional copies of this Offer Letter, the Letter of Transmittal and Consent or the Notice of Guaranteed Delivery from the Information Agent. The Information Agent may be reached at:

D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Investors Call (Toll-Free): (866) 796-1290
Banks and Brokers Call: (212) 269-5550
By Email: drct@dfking.com

The address of the Depositary is:

Equiniti Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Phone: (877) 248-6417

TABLE OF CONTENTS

	Page
SUMMARY TERM SHEET	1
THE OFFER AND CONSENT SOLICITATION	5
1. GENERAL TERMS	5
2. PROCEDURE FOR TENDERING WARRANTS	6
3. WITHDRAWAL RIGHTS	9
4. ACCEPTANCE OF WARRANTS AND PAYMENT OF OFFER PURCHASE PRICE	10
5. BACKGROUND AND PURPOSE OF THE OFFER	10
6. PRICE RANGE OF WARRANTS	12
7. SOURCE AND AMOUNT OF FUNDS	13
8. TRANSACTIONS AND AGREEMENTS CONCERNING THE COMPANY’S SECURITIES	13
9. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	14
10. CONDITIONS; TERMINATION; WAIVERS; EXTENSIONS; AMENDMENTS	16
11. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES	17
12. FORWARD-LOOKING STATEMENTS; RISK FACTORS	20
13. THE DEPOSITARY, INFORMATION AGENT AND DEALER MANAGER	23
14. ADDITIONAL INFORMATION; MISCELLANEOUS	23

We are not making the Offer to, and will not accept any tendered Warrants from, holders of Warrants in any jurisdiction where it would be illegal to do so. However, we may, at our discretion, take any actions necessary for us to make the Offer to holders of Warrants in any such jurisdiction.

You should rely only on the information contained in this Offer Letter and in the Letter of Transmittal and Consent or to which we have referred you. We have not authorized anyone to provide you with information or to make any representation in connection with the Offer other than those contained in this Offer Letter or in the Letter of Transmittal and Consent. If anyone makes any recommendation or gives any information or representation regarding the Offer and Consent Solicitation, you should not rely upon that recommendation, information or representation as having been authorized by us, our board of directors, the Depositary, the Information Agent, or the Dealer Manager. You should not assume that the information provided in this Offer Letter is accurate as of any date other than the date as of which it is shown, or if no date is otherwise indicated, the date of this Offer Letter.

We have no contract, arrangement or understanding relating to the payment of, and will not, directly or indirectly, pay, any commission or other remuneration to any broker, dealer, salesperson, agent or any other person, including the Dealer Manager, for soliciting tenders in the Offer. In addition, none of the Depositary, the Information Agent, the Dealer Manager or any broker, dealer, salesperson, agent or any other person is engaged or authorized to express any statement, opinion, recommendation or judgment with respect to the relative merits and risks of the Offer and Consent Solicitation. Our officers, directors and regular employees may solicit tenders from holders of the Warrants and will answer inquiries concerning the terms of the Offer and Consent Solicitation, but they will not receive additional compensation for soliciting tenders or answering any such inquiries.

SUMMARY TERM SHEET

Unless otherwise stated in this Offer Letter, references to “we,” “our,” “us,” or the “Company” refer to Direct Digital Holdings, Inc. This summary term sheet highlights important information regarding the Offer. To understand the Offer fully and for a more complete description of the terms of the Offer, you should carefully read this entire Offer Letter and the related Letter of Transmittal and Consent that constitute the Offer. We have included references to the sections of this Offer Letter where you will find a more complete description of the topics addressed in this summary term sheet.

The Company	Direct Digital Holdings, Inc., a Delaware corporation. Our principal executive offices are located at 1177 W Loop S., Suite 1310, Houston, Texas 77027. Our telephone number is (832) 402-1051.

The Warrants	As of August 28, 2023, the Company had 3,217,800 Warrants outstanding. Each Warrant is exercisable for one share of our Class A common stock, par value $0.001 per share, at an exercise price of $5.50. By their terms, the Warrants will expire on February 15, 2027, at 11:59 p.m. Eastern Time, unless sooner exercised or redeemed by the Company in accordance with the terms of the Warrants. The Offer relates to the Warrants that were sold as part of the units issued in connection with the DIRECT IPO, which trade on Nasdaq under the symbol “DRCTW.” Any and all outstanding Warrants are eligible to be tendered pursuant to the Offer.

Market Price of the Warrants	The Warrants are listed on Nasdaq under the symbol “DRCTW”. On August 28, 2023, the last reported sale price on Nasdaq for the Warrants was $0.6534.

The Offer	The Offer is to permit holders of Warrants to tender any and all outstanding Warrants for a purchase price of $1.20 in cash, without interest, for each Warrant tendered. A holder may tender as few or as many Warrants as the holder elects.

	See “The Offer and Consent Solicitation, Section 1. General Terms.”

The Consent Solicitation	In order to tender the Warrants in the Offer, holders of the Warrants are required to consent (by executing the Letter of Transmittal and Consent or requesting that their broker or nominee consent on their behalf) to an amendment to the Warrant Agreement governing the Warrants as set forth in the Warrant Amendment attached as Annex A. If approved by at least a majority of the holders of the Warrants, the Warrant Amendment would permit, as it relates, respectively, to the Warrants, the Company to redeem each Warrant as applicable that is outstanding upon the closing of the Offer for $0.35 in cash, without interest, which is approximately 71% less than the Offer Purchase Price. Although we intend to redeem all remaining outstanding Warrants if the Warrant Amendment is approved, we would not be required to effect such a redemption and may defer doing so until it is most advantageous to us.

	See “The Offer and Consent Solicitation, Section 1. General Terms.”

U.S. Federal Income Tax Consequences of the Offer and Warrant Amendment	The exchange of Warrants for cash pursuant to the Offer will be a taxable sale of the Warrants for U.S. federal income tax purposes. A U.S. Holder will recognize gain or loss in an amount equal to the difference between the amount of cash received and the U.S. Holder’s adjusted tax basis in the Warrants.

	Although the issue is not free from doubt, if the Warrant Amendment is approved, we intend to treat all Warrants that are not exchanged for cash pursuant to the Offer as having been exchanged for “new” Warrants pursuant to the Warrant Amendment, and we intend to treat such deemed exchange as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code, pursuant to which (i) the U.S. Holder should not recognize any gain or loss on the deemed exchange of Warrants for “new” Warrants, (ii) the U.S. Holder’s aggregate tax basis in the “new” Warrants deemed to be received should equal its aggregate tax basis in its existing Warrants deemed surrendered, and (iii) the U.S. Holder’s holding period for the “new” Warrants deemed to be received should include its holding period for the Warrants deemed surrendered.

	See “The Offer and Consent Solicitation, Section 11. Material U.S. Federal Income Tax Consequences.”

Reasons for the Offer	The Offer is being made to all holders of Warrants. The purpose of the Offer is to reduce the number of shares of Class A common stock that would become outstanding upon the exercise of Warrants, thus providing investors and potential investors with greater certainty as to the Company’s capital structure.

	See “The Offer and Consent Solicitation, Section 5.C. Background and Purpose of the Offer-Purpose of the Offer.”

Expiration Date of Offer	One minute after 11:59 pm, Eastern Time, on September 26, 2023, or such later date to which we may extend the Offer. All Warrants and related paperwork must be received by the Depositary by this time, as instructed herein.

	See “The Offer and Consent Solicitation, Section 10. Conditions; Termination; Waivers; Extensions; Amendments.”

Withdrawal Rights	If you tender your Warrants and change your mind, you may withdraw your tendered Warrants at any time until the Expiration Date.

	See “The Offer and Consent Solicitation, Section 3. Withdrawal Rights.”

Participation by Executive Officers and Directors	To our knowledge, with the exception of 27,759 Warrants held by Mark Walker, and 71,124 Warrants held by Keith Smith, none of our directors or executive officers beneficially own Warrants. Mark Walker and Keith Smith may tender their Warrants in the Offer and consent to the Warrant Amendment as it relates to the Warrants.

	See “The Offer and Consent Solicitation, Section 5.D. Background and Purpose of the Offer-Interests of Directors and Executive Officers.”

Conditions of the Offer	We will not accept for payment, purchase or pay for any Warrants tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, or the purchase of and the payment for the Warrants tendered, subject to the rules under the Securities Exchange Act of 1934, as amended (the “*Exchange Act*”), if:

	· there has been validly tendered in accordance with the terms of the Offer and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date more than 50.0% of the outstanding Warrants (the “*Minimum Tender Condition*”); or

	· there has been instituted, threatened in writing or is pending any action, suit or proceeding by any government or governmental, regulatory or administrative agency or instrumentality, or by any other person, before any court, authority or other tribunal that, in our reasonable judgment, would or would be reasonably likely to prohibit, prevent, restrict or delay consummation of the Offer or materially impair the contemplated benefits to us of the Offer, or that is, or is reasonably likely to be, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects; or

	· any order, statute, rule, regulation, executive order, stay, decree, judgment or injunction has been proposed, enacted, entered, issued, promulgated, enforced or deemed applicable by any court or governmental, regulatory or administrative agency or instrumentality that, in our reasonable judgment, would or would be reasonably likely to prohibit, prevent, restrict or delay consummation of the Offer or materially impair the contemplated benefits to us of the Offer, or that is, or is reasonably likely to be, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects; or

	· in our reasonable judgment, there shall have occurred or be reasonably likely to occur, any material adverse change to our business, operations, properties, condition, assets, liabilities, or prospects.

	The foregoing conditions are solely for our benefit, and we may assert one or more of the conditions regardless of the circumstances giving rise to any such conditions, provided that, in no event shall the action or inaction of the Company or any of its affiliates be permitted to trigger any of such conditions. We may also, in our sole and absolute discretion, waive these conditions in whole or in part, subject to the potential requirement to disseminate additional information and extend the Offer, or terminate the Offer if these conditions are not satisfied prior to the Expiration Date.

	See “The Offer and Consent Solicitation, Section 10. Conditions; Termination; Waivers; Extensions; Amendments.”

Board of Directors’ Recommendation	Our board of directors has approved the Offer and Consent Solicitation. However, none of the Company, its directors, officers or employees, nor the Depositary, the Information Agent or the Dealer Manager makes any recommendation as to whether holders of Warrants should tender their Warrants and consent to the Warrant Amendment. Holders of Warrants must make their own decision as to whether to tender some or all of their Warrants and consent to the Warrant Amendment.

	See “The Offer and Consent Solicitation, Section 1.C. General Terms-Board Approval of the Offer; No Recommendation; Holder’s Own Decision.”

How to Tender Warrants	To tender your Warrants, you must complete the actions described herein under “The Offer and Consent Solicitation, Section 2. Procedure for Tendering Warrants” before the Offer expires.

Questions or Assistance	Please direct questions or requests for assistance, or for additional copies of this Offer Letter, Letter of Transmittal and Consent or other materials to the Information Agent. The contact information for the Information Agent is located on the back cover of this Offer Letter.

THE OFFER AND CONSENT SOLICITATION

Risks of Participating In the Offer

Participation in the Offer involves a number of risks, including, but not limited to, the risks identified in Section 12 below. Holders of the Warrants should carefully consider these risks and are urged to speak with their financial, investment and/or tax advisors as necessary before deciding whether to participate in the Offer. In addition, we strongly encourage you to read this Offer Letter in its entirety.

1. GENERAL TERMS

The Offer is to permit holders of Warrants that were publicly issued in connection with the DIRECT IPO to tender any and all outstanding Warrants for a purchase price of $1.20 in cash, without interest, for each Warrant tendered. A holder may tender as few or as many Warrants as the holder elects. Holders may also exercise their Warrants during the Offer Period in accordance with the terms of the Warrants.

You may tender some or all of your Warrants on these terms. The Offer relates to the Warrants that were publicly issued in connection with the DIRECT IPO, which trade on Nasdaq under the symbol “DRCTW.” Any and all outstanding Warrants are eligible to be tendered pursuant to the Offer. As of August 28, 2023, there were 3,217,800 Warrants outstanding.

If you elect to tender Warrants in response to the Offer, please follow the instructions in this Offer Letter and the related documents, including the Letter of Transmittal and Consent.

If you tender Warrants, you may withdraw your tendered Warrants before the Expiration Date and retain them on their terms by following the instructions herein.

As part of the Offer, we are also soliciting from holders of the Warrants their consent to the Warrant Amendment. If approved, the Warrant Amendment would permit the Company to redeem each Warrant that is outstanding upon the closing of the Offer for $0.35 in cash, without interest, which is approximately 71% less than the Offer Purchase Price. A copy of the Warrant Amendment is attached hereto as Annex A. We urge that you carefully read the Warrant Amendment in its entirety. Pursuant to the terms of the Warrant Agreement, the consent of holders of at least a majority of the outstanding Warrants is required to approve the Warrant Amendment as it relates to the Warrants. Although we intend to redeem all remaining outstanding warrants if the Warrant Amendment is approved, we would not be required to effect such a redemption and may defer doing so until it is most advantageous to us.

A holder who tenders Warrants in the Offer will automatically be deemed, without any further action, to have given his, her or its consent to approval of the Warrant Amendment (effective upon our acceptance of the Warrants tendered). The consent to the Warrant Amendment is a part of the Letter of Transmittal and Consent relating to the Warrants.

You cannot tender any Warrants in the Offer without giving your consent to the Warrant Amendment. Thus, before deciding whether to tender any Warrants, you should be aware that a tender of Warrants may result in the approval of the Warrant Amendment.

A. Period of Offer

The Offer will only be open for a period beginning on August 29, 2023 and ending on the Expiration Date. We expressly reserve the right, in our sole discretion, at any time or from time to time, prior to the Expiration Date, to extend the period of time during which the Offer is open. There can be no assurance, however, that we will exercise our right to extend the Offer.

B. Minimum Tender Condition

The Offer is subject to the Minimum Tender Condition and will not be consummated unless the Minimum Tender Condition is satisfied or waiver. Based on the 3,217,800 Warrants outstanding as of August 28, 2023, 1,609,222 Warrants would need to be tendered in order to satisfy the Minimum Tender Condition.

C. Partial Tender Permitted

If you choose to participate in the Offer, you may tender less than all of your Warrants pursuant to the terms of the Offer.

HOLDERS MAY ALSO EXERCISE THEIR WARRANTS DURING THE OFFER PERIOD IN ACCORDANCE WITH THE TERMS OF THE WARRANTS.

D. Board Approval of the Offer; No Recommendation; Holder’s Own Decision

THE COMPANY’S BOARD OF DIRECTORS HAS APPROVED THE OFFER AND THE CONSENT SOLICITATION. HOWEVER, NONE OF THE COMPANY, ITS DIRECTORS, OFFICERS OR EMPLOYEES, NOR THE DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, MAKES ANY RECOMMENDATION AS TO WHETHER A HOLDER SHOULD TENDER WARRANTS AND CONSENT TO THE WARRANT AMENDMENT. EACH HOLDER OF A WARRANT MUST MAKE HIS, HER OR ITS OWN DECISION AS TO WHETHER TO TENDER SOME OR ALL OF HIS, HER OR ITS WARRANTS AND CONSENT TO THE WARRANT AMENDMENT.

E. Extensions of the Offer

We expressly reserve the right, in our sole discretion, and at any time or from time to time, prior to the Expiration Date, to extend the period of time during which the Offer is open. There can be no assurance, however, that we will exercise our right to extend the Offer. If we extend the Offer, we will give notice of such extension by press release or other public announcement no later than 9:00 a.m., Eastern Time, on the next business day after the previously scheduled Expiration Date of the Offer.

2. PROCEDURE FOR TENDERING WARRANTS

A. Proper Tender of Warrants

To validly tender Warrants pursuant to the Offer, either (i) a properly completed and duly executed Letter of Transmittal and Consent or photocopy thereof, together with any required signature guarantees, must be received by the Depositary at its address set forth on the last page of this Offer Letter prior to the Expiration Date or (ii) the ATOP procedures for book-entry transfer described below must be complied with prior to the Expiration Date. The method of delivery of all required documents is at the option and risk of the tendering Warrant holders. If delivery is by mail, the Company recommends registered mail with return receipt requested (properly insured). In all cases, sufficient time should be allowed to assure timely delivery.

In the Letter of Transmittal and Consent, the tendering Warrant holder must: (i) set forth his, her or its name and address; (ii) set forth the number of Warrants tendered; and (iii) set forth the number of the Warrant certificate(s) representing such Warrants.

If the Warrants are registered in the name of a person other than the signer of the Letter of Transmittal and Consent, the Warrants must be endorsed or accompanied by appropriate instruments of assignment, in either case signed exactly as the name(s) of the registered owner(s) appear on the Warrants, with the signature(s) on the Warrants or instruments of assignment guaranteed.

A tender of Warrants pursuant to the procedures described below in this Section 2 will constitute a binding agreement between the tendering Warrant holder and the Company upon the terms and subject to the conditions of the Offer and Consent Solicitation.

ALL DELIVERIES IN CONNECTION WITH THE OFFER, INCLUDING A LETTER OF TRANSMITTAL AND CONSENT AND WARRANTS, MUST BE MADE TO THE DEPOSITARY OR THE BOOK-ENTRY TRANSFER FACILITY.

NO DELIVERIES SHOULD BE MADE TO THE COMPANY, AND ANY DOCUMENTS DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY OR THE BOOK-ENTRY TRANSFER FACILITY AND THEREFORE WILL NOT BE DEEMED TO BE PROPERLY TENDERED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

BOOK-ENTRY DELIVERY. The Depositary will establish an account for the Warrants at DTC for purposes of the Offer, within two business days after the date of this Offer Letter. Any financial institution that is a participant in DTC’s system may make book-entry delivery of Warrants by causing DTC to transfer such Warrants into the Depositary’s account in accordance with DTC’s procedure for such transfer. Delivery of the Letter of Transmittal and Consent or Agent’s Message (or other required documentation) to DTC does not constitute delivery to the Depositary. The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Warrants that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and Consent and that the Company may enforce such agreement against the participant. The term “Book-Entry Confirmation” means a timely confirmation of a book-entry transfer of Warrants into the Depositary’s account at DTC.

WARRANTS HELD IN STREET NAME. If Warrants are held through a direct or indirect DTC participant, such as a broker, dealer, commercial bank, trust company or other financial intermediary, you must instruct that holder to tender your Warrants on your behalf. A letter of instructions is included in these materials, and as an exhibit to the Schedule TO. The letter may be used by you to instruct a custodian to tender and deliver Warrants on your behalf.

Unless the Warrants being tendered are delivered to the Depositary by the Expiration Date accompanied by a properly completed and duly executed Letter of Transmittal and Consent or a properly transmitted Agent’s Message, the Company may, at its option, treat such tender as invalid. Payment of the Offer Purchase Price upon tender of Warrants will be made only against the valid tender of Warrants.

GUARANTEED DELIVERY. If you want to tender your Warrants pursuant to the Offer, but (i) your Warrants are not immediately available, (ii) the procedure for book-entry transfer cannot be completed on a timely basis, or (iii) time will not permit all required documents to reach the Depositary prior to the Expiration Date, you can still tender your Warrants, if all of the following conditions are met:

(a) the tender is made by or through an Eligible Institution (as defined in the Letter of Transmittal and Consent);

(b) the Depositary receives by hand, mail or overnight courier, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form the Company has provided with this Offer Letter (with signatures guaranteed by an Eligible Institution); and

(c) the Depositary receives, within two (2) Nasdaq trading days after the date of its receipt of the Notice of Guaranteed Delivery:

(1) the certificates for all tendered Warrants, or confirmation of receipt of the Warrants pursuant to the procedure for book-entry transfer as described above; and

(2) a properly completed and duly executed Letter of Transmittal and Consent (or copy thereof), or any Agent’s Message in the case of a book-entry transfer, and any other documents required by the Letter of Transmittal and Consent.

In any event, the payment of Offer Purchase Price for Warrants tendered pursuant to the Offer and accepted pursuant to the Offer will be made only after timely receipt by the Depositary of Warrants, properly completed and duly executed Letters of Transmittal and Consent and any other required documents.

Warrants tendered by Notice of Guaranteed Delivery will be excluded from the determination of whether the Minimum Tender Condition has been satisfied, unless such Warrants and other required documents are received by the Depositary by the Expiration Date.

B. Conditions of the Offer

We will not accept for payment, purchase or pay for any Warrants tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, or the purchase of and the payment for the Warrants tendered, subject to the rules under the Exchange Act if:

(a) the Minimum Tender Condition has not been satisfied;

(b) there has been instituted, threatened in writing or is pending any action, suit or proceeding by any government or governmental, regulatory or administrative agency or instrumentality, or by any other person, before any court, authority or other tribunal that, in our reasonable judgment, would or would be reasonably likely to prohibit, prevent, restrict or delay consummation of the Offer or materially impair the contemplated benefits to us of the Offer, or that is, or is reasonably likely to be, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects;

(c) any order, statute, rule, regulation, executive order, stay, decree, judgment or injunction has been proposed, enacted, entered, issued, promulgated, enforced or deemed applicable by any court or governmental, regulatory or administrative agency or instrumentality that, in our reasonable judgment, would or would be reasonably likely to prohibit, prevent, restrict or delay consummation of the Offer or materially impair the contemplated benefits to us of the Offer, or that is, or is reasonably likely to be, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects; or

(d) in our reasonable judgment, there shall have occurred or be reasonably likely to occur, any material adverse change to our business, operations, properties, condition, assets, liabilities, or prospects.

The foregoing conditions are solely for our benefit, and we may assert one or more of the conditions regardless of the circumstances giving rise to any such conditions, provided that, in no event shall the action or inaction of the Company or any of its affiliates be permitted to trigger any of such conditions. We may also, in our sole and absolute discretion, waive these conditions in whole or in part, subject to the potential requirement to disseminate additional information and extend the Offer. The determination by us as to whether any condition has been satisfied shall be conclusive and binding on all parties, provided that any such determination may be challenged by a holder of Warrants in any court of competent jurisdiction. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed a continuing right which may be asserted at any time and from time to time prior to the Expiration Date.

We may terminate the Offer if any of the conditions of the Offer are not satisfied prior to the Expiration Date.

C. Determination of Validity

All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for purchase of any tenders of Warrants will be determined by the Company, in its sole discretion, and its determination will be final and binding, subject to the judgment of any court that might provide otherwise. The Company reserves the absolute right, subject to the judgment of any court that might provide otherwise, to reject any or all tenders of Warrants that it determines are not in proper form or reject tenders of Warrants that may, in the opinion of the Company’s counsel, be unlawful. The Company also reserves the absolute right, subject to the judgment of any court that might provide otherwise, to waive any defect or irregularity in any tender of Warrants. Neither the Company nor any other person will be under any duty to give notice of any defect or irregularity in tenders, nor will any of them incur any liability for failure to give any such notice.

D. Tender Constitutes an Agreement

A tender of Warrants made pursuant to any method of delivery set forth herein will also constitute an acknowledgement by the tendering Warrant holder that: (i) the Offer is discretionary and may be extended, modified, suspended or terminated by us as provided herein; (ii) such Warrant holder is voluntarily participating in the Offer; (iii) the future value of our Warrants is unknown and cannot be predicted with certainty; (iv) such Warrant holder has read this Offer Letter; (v) such Warrant holder has consulted his, her or its tax and financial advisors with regard to how the Offer will impact the tendering Warrant holder’s specific situation; (vi) any foreign exchange obligations triggered by such Warrant holder’s tender of Warrants or receipt of the Offer Purchase Price are solely his, her or its responsibility; and (vii) regardless of any action that we take with respect to any or all income/capital gains tax, social security or insurance tax, transfer tax or other tax-related items (“Tax Items”) related to the Offer and the disposition of Warrants, such Warrant holder acknowledges that the ultimate liability for all Tax Items is and remains his, her or its sole responsibility. In that regard, a tender of Warrants authorizes us to withhold all applicable Tax Items potentially payable by a tendering Warrant holder. Our acceptance for payment of Warrants tendered pursuant to the Offer will constitute a binding agreement between the tendering holder and us upon the terms and subject to certain conditions of the Offer, including the consent to the Warrant Amendment.

E. Signature Guarantees

Except as otherwise provided below, all signatures on a Letter of Transmittal and Consent by a person residing in or tendering Warrants in the United States must be guaranteed by an Eligible Institution. Signatures on a Letter of Transmittal and Consent need not be guaranteed if (i) the Letter of Transmittal and Consent is signed by the registered holder of the Warrant(s) tendered therewith; or (ii) such Warrant(s) are tendered for the account of an Eligible Institution. See Instructions 1, 3 and 4 of the Letter of Transmittal and Consent.

3. WITHDRAWAL RIGHTS

Tenders of Warrants made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable. If the Company extends the period of time during which the Offer is open for any reason, then, without prejudice to the Company’s rights under the Offer and in a manner compliant with Rule 14e-1(c) of the Exchange Act, the Company may retain all Warrants tendered and tenders of such Warrants may not be rescinded, except as otherwise provided in this Section 3. Notwithstanding the foregoing, tendered Warrants may also be withdrawn if the Company has not accepted the Warrants for exchange by the 40th business day after the initial commencement of the Offer.

To be effective, a written notice of withdrawal must be timely received by the Depositary at its address identified in this Offer Letter. Any notice of withdrawal must specify the name of the holder who tendered the Warrants for which tenders are to be withdrawn and the number of Warrants to be withdrawn. If the Warrants to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal must be submitted to the Depositary prior to release of such Warrants. In addition, such notice must specify the name of the registered holder (if different from that of the tendering holder). Withdrawal may not be cancelled, and Warrants for which tenders are withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, Warrants for which tenders are withdrawn may be tendered again by following one of the procedures described in Section 2 at any time prior to the Expiration Date.

A holder of Warrants desiring to withdraw tendered Warrants previously delivered through DTC should contact the DTC participant through which such holder holds his, her or its Warrants. In order to withdraw previously tendered Warrants, a DTC participant may, prior to the Expiration Date, withdraw its instruction previously transmitted through DTC’s ATOP procedures by (i) withdrawing its acceptance, or (ii) delivering to the Depositary by mail or hand delivery, a notice of withdrawal of such instruction. Holders of Warrants submitting a tender via DTC’s ATOP procedures are deemed to consent to the Warrant Amendment. The valid revocation of a consent will constitute the concurrent valid withdrawal of the tendered Warrants as to which consent was delivered. The notices of withdrawal must contain the name and number of the DTC participant. A withdrawal of an instruction must be executed by a DTC participant as such DTC participant’s name appears on its transmission to which such withdrawal relates. A DTC participant may withdraw a tendered Warrant only if such withdrawal complies with the provisions described in this paragraph.

A holder who tendered his, her or its Warrants other than through DTC should send written notice of withdrawal to the Depositary specifying the name of the holder who tendered the Warrants being withdrawn. All signatures on a notice of withdrawal must be guaranteed by a Medallion Signature Guarantor; provided, however, that signatures on the notice of withdrawal need not be guaranteed if the Warrants being withdrawn are held for the account of an Eligible Institution. Withdrawal of a prior Warrant tender will be effective upon receipt of the notice of withdrawal by the Depositary. Selection of the method of notification is at the risk of the holder and notice of withdrawal must be timely received by the Depositary.

All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Company, in its sole discretion, which determination will be final and binding, subject to the judgment of any court that might provide otherwise. Neither the Company nor any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or incur any liability for failure to give any such notification, subject to the judgment of any court that might provide otherwise.

4. ACCEPTANCE OF WARRANTS AND PAYMENT OF OFFER PURCHASE PRICE

Upon the terms and subject to the conditions of the Offer, we will purchase Warrants validly tendered as of the Expiration Date for a purchase price of $1.20 per Warrant. The Offer Purchase Price to be paid will be delivered promptly following the Expiration Date. In all cases, Warrants will only be accepted for purchase pursuant to the Offer after timely receipt by the Depositary of a properly completed and duly executed Letter of Transmittal and Consent (or copy thereof), or any Agent’s Message in the case of a book-entry transfer, and any other documents required by the Letter of Transmittal and Consent.

Under no circumstances will we pay interest on the Offer Purchase Price, including, but not limited to, by reason of any delay in making payment. In addition, if certain events occur, we may not be obligated to purchase Warrants in the Offer.

We urge holders of Warrants who hold Warrants through a broker, dealer, commercial bank, trust company or other nominee to consult their nominee to determine whether transaction costs are applicable if they tender Warrants through their nominee and not directly to the Depositary.

5. BACKGROUND AND PURPOSE OF THE OFFER

A. Information Concerning Direct Digital Holdings, Inc.

Direct Digital Holdings, Inc., incorporated as a Delaware corporation on August 23, 2021 and headquartered in Houston, Texas. Direct Digital Holdings, Inc. is the holding company for Direct Digital Holdings, Inc. (“DDH LLC”), which is, in turn, the holding company for the business formed by DDH LLC’s founders in 2018 through the acquisition of Huddled Masses, LLC (“Huddled Masses^TM” or “Huddled Masses”) and Colossus Media, LLC (“Colossus Media”). In late September 2020, DDH LLC acquired Orange142, LLC (“Orange142”) to further bolster its platform and to enhance its offerings across multiple industries. In February 2022, Direct Digital Holdings, Inc. completed an initial public offering of its securities and, together with DDH LLC, effected a series of transactions (together, the “Organizational Transactions”) whereby Direct Digital Holdings, Inc. became the sole managing member of DDH LLC, the holder of 100% of the voting interests of DDH LLC and the holder of 19.7% of the economic interests of DDH LLC, commonly referred to as an “Up-C” structure. Direct Digital Holdings, Inc., and all of the subsidiaries are incorporated in the state of Delaware, except for DDH LLC, which was formed under the laws of the State of Texas.

Direct Digital Holdings, Inc. is an end-to-end, full-service programmatic advertising platform primarily focused on providing advertising technology, data-driven campaign optimization and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem. Colossus Media operates the Company’s proprietary sell-side programmatic platform operating under the trademarked banner of Colossus SSP™. Huddled Masses is the platform for the buy-side of the Company’s business. Orange142 was acquired to further bolster the Company’s overall programmatic buy-side advertising platform and enhance our offerings across multiple industry verticals such as travel, healthcare, education, financial services and consumer products with particular emphasis on small and mid-sized businesses transitioning into digital with growing digital media budgets.

The Company’s principal executive offices are located at 1177 West Loop S, Suite 1310, Houston, Texas 77027, and our telephone number is (832) 402-1051.

B. Establishment of Offer Terms; Approval of the Offer

Our board of directors approved this Offer and Consent Solicitation and the Offer Purchase Price and other terms of this Offer and Consent Solicitation. The board of directors set the Offer Purchase Price in order to provide the holders of the Warrants with an incentive to tender the Warrants in exchange for cash. The board of directors believes that the Offer Purchase Price provides holders of the Warrants with an incentive to tender the Warrants for the Offer Purchase Price because, based on recent trading prices of the Warrants, the Offer Purchase Price is greater than that of the Warrants, and holders who tender Warrants will receive cash.

C. Purpose of the Offer

The Offer is being made to all holders of Warrants. The purpose of the Offer is to reduce the number of shares of Class A common stock that would become outstanding upon the exercise of the Warrants. The Company’s board of directors believes that by allowing holders of Warrants to tender one Warrant for the Offer Purchase Price, the Company can potentially reduce the substantial number of shares of Class A common stock that would be issuable upon exercise of the Warrants, thus reducing the potential dilutive impact of the Warrants, thereby providing investors and potential investors with greater certainty as to the Company’s capital structure. The Warrants acquired pursuant to the tender will be retired and cancelled. The Offer is not made pursuant to a plan to periodically increase any securityholder’s proportionate interest in the assets or earnings and profits of the Company.

D. Interests of Directors and Executive Officers

Name		Position
Mark Walker		Chief Executive Officer and Chairman of the Board
Anu Pillai		Chief Technology Officer
Diana P. Diaz		Interim Chief Financial Officer
Maria Vilchez Lowrey		Chief Growth Officer
Keith Smith		Director
Richard Cohen		Director
Antoinette Leatherberry		Director
Mistelle Locke		Director

As of August 28, 2023, 3,217,800 Warrants were outstanding.

To our knowledge, with the exception of 27,759 Warrants held by Mark Walker, and 71,124 Warrants held by Keith Smith, none of our directors or executive officers beneficially own Warrants. Mark Walker and Keith Smith may tender their Warrants in the Offer and consent to the Warrant Amendment as it relates to the Warrants. The Company does not beneficially own any Warrants.

Except as set forth below, we have not and, to the best of our knowledge, none of our current directors, executive officers or any person holding a controlling interest in us has, engaged in any transactions involving the Warrants during the 60-day period prior to the date of this Offer Letter.

NONE OF THE COMPANY OR ANY OF ITS DIRECTORS, OFFICERS OR EMPLOYEES, OR THE DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER MAKES ANY RECOMMENDATION AS TO WHETHER ANY HOLDER SHOULD TENDER ANY WARRANTS AND CONSENT TO THE WARRANT AMENDMENT. EACH HOLDER OF A WARRANT MUST MAKE HIS, HER OR ITS OWN DECISION AS TO WHETHER TO TENDER SOME OR ALL OF HIS, HER OR ITS WARRANTS AND CONSENT TO THE WARRANT AMENDMENT.

E. Plans, Proposals or Negotiations

Except for the Offer to Purchase and Consent Solicitation and as set forth in Section 8 hereunder, there are no present plans, proposals or negotiations by the Company that relate to or would result in:

· any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries;

· a purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries;

· any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company;

· any change in the present board of directors or management of the Company, including, but not limited to, any plans or proposals to change the number or the term of directors, to fill any existing vacancies on the board or to change any material term of the employment contract of any executive officer;

· any other material change in the Company’s corporate structure or business;

· any class of equity security of the Company being delisted from a national securities exchange;

· any class of equity security of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

· the suspension of the Company’s obligation to file reports pursuant to Section 15(d) of the Exchange Act;

· the acquisition by any person of additional securities of the subject company, or the disposition of securities of the subject company; or changes in the Company’s Certificate of Incorporation or Bylaws or other governing instruments or other actions that could impede the acquisition of control of the Company by any person.

THE COMPANY’S BOARD OF DIRECTORS HAS APPROVED THE OFFER AND CONSENT SOLICITATION. HOWEVER, NONE OF THE COMPANY, ITS DIRECTORS, OFFICERS OR EMPLOYEES, NOR THE DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, MAKES ANY RECOMMENDATION AS TO WHETHER A WARRANT HOLDER SHOULD TENDER ANY WARRANTS AND CONSENT TO THE WARRANT AMENDMENT. EACH HOLDER OF A WARRANT MUST MAKE HIS, HER OR ITS OWN DECISION AS TO WHETHER TO TENDER SOME OR ALL OF HIS, HER OR ITS WARRANTS AND CONSENT TO THE WARRANT AMENDMENT.

6. PRICE RANGE OF WARRANTS

Our Warrants are listed on Nasdaq under the symbol “DRCTW.” On August 28, 2023, the last reported sale price for the Warrants was $0.6534. The following table sets forth the high and low sales prices for the Warrants for the periods shown:

	Warrants
	High		Low
		$		$
Fiscal 2022
First Quarter (beginning on February 11, 2022)	$	1.43	$	0.27
Second Quarter	$	0.86	$	0.30
Third Quarter	$	0.49	$	0.16
Fourth Quarter	$	1.04	$	0.21
Fiscal 2023
First Quarter	$	1.76	$	0.50
Second Quarter	$	0.92	$	0.05
Third Quarter (through August 25, 2023)	$	0.68	$	0.36

The Company recommends that holders consider current market quotations for the Warrants, among other factors, before deciding whether or not to tender their Warrants.

7. SOURCE AND AMOUNT OF FUNDS

Assuming 100% participation in the Offer, we will need approximately $3,861,360 to purchase all of the outstanding Warrants at the purchase price of $1.20 per Warrant. We estimate that the total amount of cash required to complete the Offer and Consent Solicitation, including the payment of any fees, expenses and other related amounts incurred in connection with the Offer and Consent Solicitation will be approximately $277,000, all of which will be funded by us from a combination of cash on hand and borrowings under our Term Loan and Security Agreement (the “2021 Credit Facility”) with Lafayette Square as administrative agent, and the various lenders thereto. Any borrowing under the 2021 Credit Facility will be repaid in installments during the term of the 2021 Credit Facility. No alternative plan exists to finance the purchase of the tendered Warrants.

The loans under the 2021 Credit Facility bear interest at Term SOFR Rate with a credit spread of 0.15% per annum for the interest periods of three months and provides for a credit spread adjustment of 0.10%, 0.15% or 0.25% per annum for interest periods of one month, three months or six months, respectively. The maturity date of the 2021 Credit Facility is December 3, 2026. The obligations under the 2021 Credit Facility are secured by senior, first-priority liens on all or substantially all assets of DDH LLC and its subsidiaries and are guaranteed by the subsidiaries of DDH LLC and include a pledge and guarantee by the Company. The 2021 Credit Facility contains affirmative and negative covenants that, among other things, require the Company to maintain a net leverage ratio of no more than 3.50 to 1.00 as of the last day of each fiscal quarter through December 31, 2023, as adjusted thereafter, and a fixed charge coverage ratio of not less than 1.50 to 1.00 as of the last day of each fiscal quarter, as well as restrictions on the ability to incur indebtedness, create certain liens, make certain investments, make certain dividends and other types of distributions, and enter into or undertake certain mergers, consolidations, acquisitions and sales of certain assets and subsidiaries.

8. TRANSACTIONS AND AGREEMENTS CONCERNING THE COMPANY’S SECURITIES

Except as described herein, none of the Company or, to our knowledge, any of our affiliates, directors or executive officers, is a party to any contract, arrangement, understanding or agreement with any other person relating, directly or indirectly, to the Offer or with respect to any of our securities, including any contract, arrangement, understanding or agreement concerning the transfer or the voting of the securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations.

Warrant Agreement

In connection with the DIRECT IPO and the appointment of a warrant agent for the Warrants, the Company entered into the Warrant Agreement with Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC) on February 15, 2022. The Warrant Agreement provides for the various terms, restrictions and governing provisions that dictate all of the terms of the Warrants.

Transactions with Founders

Mark Walker, Chief Executive Officer and Chairman of the Company’s Board of Directors received shares of our Class A common stock. Shares of our Class A common stock are entitled to one vote per share. As of August 28, 2023, Mr. Walker owned approximately 2% of our outstanding and issued Class A common stock.

Keith Smith, President and member of the Company’s Board of Directors received shares of our Class A common stock. Shares of our Class A common stock are entitled to one vote per share. As of August 28, 2023, Mr. Smith owned approximately 4.6% of our outstanding and issued Class A common stock.

In addition, Mr. Walker and Mr. Smith each own approximately 50% of the equity interests in Direct Digital Management, LLC which holds 11,278,000 shares of the Company’s Class B common stock. Shares of our Class B common stock are also entitled to one vote per share. As of August 28, 2023, Direct Digital Management, LLC owned 100% of our outstanding and issued Class B common stock.

Other Agreements and Transactions

The Company has retained Equiniti Trust Company, LLC to act as the Depositary, D.F. King & Co., Inc. to act as the Information Agent and Stifel, Nicolaus & Company, Incorporated to act as the Dealer Manager. Directors, officers and employees of either us or our affiliates or the Information Agent may contact holders of Warrants by hand, mail or telephone regarding the Offer and may request brokers, dealers and other nominees to forward the Offer Letter and related materials to beneficial owners of the Warrants. Such directors, officers and employees will not be specifically compensated for providing such services. The Depositary and the Information Agent will receive reasonable and customary compensation for their respective services in connection with the Offer, plus reimbursement for out-of-pocket expenses, and will be indemnified by the Company against certain liabilities and expenses in connection therewith.

In connection with our initial public offering, we issued to the underwriters of the offering a unit purchase option to purchase an additional 140,000 Units at a per Unit exercise price of $6.60, which was equal to 120% of the public offering price per Unit sold in the initial public offering. Each Unit consists of one share of the Company’s common stock and one Warrant. The underwriters have not exercised this option as of August 28, 2023.

Rule 13e-4 under the Exchange Act generally prohibits us and our affiliates from purchasing any Warrants, other than in the Offer, until at least ten business days after the Expiration Date, except pursuant to certain limited exceptions provided in Exchange Act Rule 14e-5. Following that time, we expressly reserve the absolute right, in our sole discretion from time to time in the future, to purchase or redeem Warrants, whether or not any Warrants are purchased pursuant to the Offer, through open market purchases, privately negotiated transactions, accelerated stock repurchases, tender offers, exchange offers or otherwise, upon the same or different terms than the terms of the Offer. We cannot assure you as to which, if any, of these alternatives, or combinations thereof, we might pursue.

9. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of our Class A common stock and Class B common stock, as of August 28, 2023 by:

i. each of our directors and executive officers;

ii. all directors and executive officers as a group; and

iii. each person who is known to us to own beneficially more than 5% of our Class A common stock or Class B common stock.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership, we deemed outstanding shares of our common stock subject to options and warrants held by that person that are currently exercisable or exercisable within 60 days. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

The percentage ownership of common stock is based on 2,991,792 shares of Class A common stock and 11,278,000 shares of Class B common stock outstanding as of August 28, 2023.

Unless otherwise indicated and subject to applicable community property laws, we believe that all persons named in the table have sole voting and investment power with respect to all shares of our Class A common stock beneficially owned by them.

	Shares of Class A
	Common						Shares of Class B
	Stock Beneficially						Stock					Total Voting Power
	Owned						Beneficially Owned					Beneficially Owned
Name of Beneficial Owner	No.			Percent			No.		Percent			No.		Percent
5% Stockholders
Direct Digital Management, LLC⁽¹⁾		-			-%			11,278,000		100	%		11,278,000		79.59	%

Named Executive Officers and Directors
Mark Walker⁽²⁾, Chairman, Chief Executive Officer and director		62,915	⁽³⁾		2.0	%		5,689,000		50.4	%		5,751,915		40.0	%
Keith Smith⁽²⁾, President and director		146,780	⁽⁴⁾		4.6	%		5,589,000		49.6	%		5,735,780		39.7	%
Diana Diaz, Interim Chief Financial Officer		—			*	%		—		*	%		—		*	%
Anu Pillai^(5), Chief Technology Officer		10,610			*	%		—		*	%		10,610		*	%
Maria Vichez Lowrey⁽⁶⁾		6,642			*			—		*	%		6,642		*
Richard Cohen, director		16,296			*	%		—		*	%		16,296		*	%
Antoinette R. Leatherberry, director		16,296			*	%		—		*	%		16,296		*	%
Mistelle Locke, director		—			*	%		—		*	%		—		*	%
*All executive officers and directors as a group (8 persons)⁽⁷⁾*		*259,539*			*8.5*	%		*11,278,000*		*100*	%		*11,537,539*		*79.6*	%

* Less than 1%.

	(1)	Direct Digital Management, LLC is a holding company in which Mark Walker, our Chairman and Chief Executive Officer, and Keith Smith, our President, each indirectly hold a 50% economic and voting interest. AJN Energy & Transport Ventures, LLC and SKW Financial LLC each own 50% of the equity interests in Direct Digital Management, LLC. Mr. Walker and his wife share voting and dispositive power with respect to the shares of Class B common stock held by AJN Energy & Transport Ventures, LLC. Mr. Smith and his wife share voting and dispositive power with respect to the shares of Class B common stock held by SKW Financial LLC.
	(2)	Consists of the shares owned by Direct Digital Management, LLC. Each of Messrs. Walker and Smith indirectly hold a 50% economic and voting interest in Direct Digital Management, LLC. AJN Energy & Transport Ventures, LLC and SKW Financial LLC each own 50% of the equity interests in Direct Digital Management, LLC. Mr. Walker and his wife share voting and dispositive power with respect to the shares of Class B common stock held by AJN Energy & Transport Ventures, LLC. Mr. Smith and his wife share voting and dispositive power with respect to the shares of Class B common stock held by SKW Financial LLC.
	(3)	Includes 27,259 shares of Class A common stock underlying warrants exercisable within 60 days of the Determination Date and 20,300 options to purchase Class A common stock.
	(4)	Includes (a) 71,124 shares of Class A common stock underlying warrants exercisable within 60 days of the Determination Date, (b) 40,000 shares of Class A common stock held directly by SKW Financial LLC. Mr. Smith is owner of SKW Financial LLC, and shares voting and dispositive power with his wife over securities held by such entity; as such, Mr. Smith may be deemed to have beneficial ownership of the securities held directly by SKW Financial LLC and (c) 20,300 options to purchase Class A common stock.
	(5)	Includes 6,216 options to purchase Class A common stock.
	(6)	Includes 3,899 options to purchase Class A common stock.
	(7)	Includes each of our directors and all five of our executive officers.

10. CONDITIONS; TERMINATION; WAIVERS; EXTENSIONS; AMENDMENTS

(a) the Minimum Tender Condition is not satisfied;

The foregoing conditions are solely for our benefit, and we may assert one or more of the conditions regardless of the circumstances giving rise to any such conditions, provided that, in no event shall the action or inaction by the Company or any of its affiliates be permitted to trigger any such conditions. We may also, in our sole and absolute discretion, waive these conditions in whole or in part, subject to the potential requirement to disseminate additional information and extend the Offer. The determination by us as to whether any condition has been satisfied shall be conclusive and binding on all parties, provided that, any such determination may be challenged by a holder of Warrants in any court of competent jurisdiction. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed a continuing right which may be asserted at any time and from time to time prior to the Expiration Date.

We may terminate the Offer if any of the conditions of the Offer are not satisfied prior to the Expiration Date. In the event that we terminate the Offer, all Warrants tendered by a holder in connection with the Offer will be returned to such holder and the Warrants will expire in accordance with their terms on February 15, 2027, at 5:00 p.m. Eastern Time, and will otherwise remain subject to their original terms, including the redemption provisions.

Subject to applicable securities laws and the terms and conditions set forth in this Offer Letter, we expressly reserve the right (but will not be obligated), at any time or from time to time, prior to the Expiration Date, regardless of whether or not any of the events set forth above shall have occurred or shall have been determined by us to have occurred, to (a) waive any and all conditions of the Offer, (b) extend the Offer, or (c) otherwise amend the Offer in any respect. The rights reserved by us in this paragraph are in addition to our rights to terminate the Offer described above. Irrespective of any amendment to the Offer, all Warrants previously tendered pursuant to the Offer and not accepted for purchase or withdrawn will remain subject to the Offer and may be accepted thereafter for purchase by us.

If we materially change the terms of the Offer or the information concerning the Offer, or if we waive a material condition to the Offer, we will disseminate additional information and extend the Offer to the extent required by Exchange Act Rules 13e-4(d)(2) and 13e-4(e)(3). In addition, we may, if we deem appropriate, extend the Offer for any other reason. In addition, if the Offer Purchase Price is adjusted, the Offer will remain open at least ten (10) business days from the date we first give notice of such change to Warrant holders, by press release or otherwise.

Any extension, amendment or termination of the Offer by us will be followed promptly by a public announcement thereof. Without limiting the manner in which we may choose to make such announcement, we will not, unless otherwise required by law, have any obligation to advertise or otherwise communicate any such announcement other than by issuing a press release or by such other means of public announcement as we deem appropriate.

If for any reason the acceptance for tender (whether before or after any Warrants have been accepted for tender pursuant to the Offer), or the tender for Warrants subject to the Offer is delayed or if we are unable to accept for tender Warrants pursuant to the Offer, then, without prejudice to our rights under the Offer, tendered Warrants may be retained by the Depositary on our behalf and may not be withdrawn (subject to Exchange Act Rule 14e-1(c), which requires that an offeror deliver the consideration offered or return the securities deposited by or on behalf of the investor promptly after the termination or withdrawal of a tender offer). In addition to being limited by Exchange Act Rule 14e-1(c), our reservation of the right to delay delivery of the Offer Purchase Price for Warrants which we have accepted for tender pursuant to the Offer is limited by Exchange Act Rule 13e-4(f)(5), which requires that an offeror deliver the consideration offered or return the securities tendered pursuant to a tender offer promptly after termination or withdrawal of that tender offer. Notwithstanding the foregoing, tendered Warrants may also be withdrawn if the Company has not accepted the Warrants for tender by the 40th business day after the initial commencement of the Offer.

Pursuant to Exchange Act Rule 13e-4, we have filed the Schedule TO with the SEC which contains additional information with respect to the Offer. The Schedule TO, including the exhibits and any amendments thereto, may be examined, and copies may be obtained, at the same places and in the same manner as set forth under “Additional Information; Miscellaneous” in this Offer Letter.

11. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain material U.S. federal income tax consequences to U.S. Holders and Non-U.S. Holders (each as defined below) of (i) the exchange of Warrants for cash pursuant to the Offer, and (ii) the adoption of the Warrant Amendment if it is approved.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Warrants that is for U.S. federal income tax purposes:

· an individual citizen or resident of the United States;

· a corporation (or other entity treated as a corporation) that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

· an estate whose income is subject to U.S. federal income taxation regardless of its source; or

· a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more “United States persons” within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the “Code”) are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

For purposes of this discussion, a “Non-U.S. Holder” is a beneficial owner of Warrants that is not a U.S. Holder and is not an entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes.

This discussion is based on the Code, final, temporary and proposed Treasury regulations promulgated thereunder, administrative rulings and pronouncements and judicial decisions, all as in effect as of the date hereof. These authorities are subject to change or differing interpretations, possibly on a retroactive basis. There is no assurance that a change in law (including, but not limited to, proposed legislation) will not significantly alter the tax considerations described in this discussion.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances. In particular, this discussion considers only holders that own Warrants as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment), and does not address the alternative minimum tax or the Medicare tax on certain investment income. In addition, this discussion does not address the U.S. federal income tax consequences to holders that are subject to special rules, including:

· financial institutions or financial services entities;

· broker, dealers or traders in securities;

· persons that use the mark-to-market method of accounting for U.S. federal income tax purposes;

· tax-exempt entities;

· governments or agencies or instrumentalities thereof;

· insurance companies;

· regulated investment companies or mutual funds;

· real estate investment trusts;

· former citizens or former long-term residents of the United States;

· “controlled foreign corporations” or “passive foreign investment companies”;

· persons that actually or constructively own 5 percent or more of our shares;

· persons that acquired our Warrants in connection with employee share incentive plans or otherwise as compensation;

· persons that hold Warrants as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or

· U.S. Holders whose functional currency is not the U.S. dollar.

This discussion does not address any tax laws other than U.S. federal income tax laws, such as U.S. federal gift or estate tax laws or state, local or non-U.S. tax laws or, except as discussed herein, any tax reporting obligations of a holder of the Warrants. Additionally, this discussion does not consider the tax treatment of partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes) or other pass-through entities for U.S. federal income tax purposes or persons who hold the Warrants through such entities. If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of the Warrants, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership holding the Warrants, you are urged to consult your own tax advisor regarding the tax consequences of the Offer and the adoption of the Warrant Amendment.

We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the descriptions herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.

THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE ADOPTION OF THE WARRANT AMENDMENT TO U.S. HOLDERS AND NON-U.S. HOLDERS OF OUR WARRANTS. EACH HOLDER OF WARRANTS IS URGED TO CONSULT HIS, HER OR ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE OFFER AND THE ADOPTION OF THE WARRANT AMENDMENT, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.

U.S. Holders

Exchange of Warrants for Cash Pursuant to the Offer

The exchange of Warrants for cash pursuant to the Offer will be a taxable sale of the Warrants for U.S. federal income tax purposes. A U.S. Holder will recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. Holder’s adjusted tax basis in the Warrants. Any such capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the Warrants exceeds one year. A U.S. Holder must calculate gain or loss separately for each block of Warrants exchanged pursuant to the Offer (generally, Warrants acquired at the same cost in a single transaction). Long-term capital gain recognized by a non-corporate U.S. Holder may be eligible for reduced rates of tax. The deduction of capital losses is subject to limitations.

Warrant Amendment

Although the issue is not free from doubt, if the Warrant Amendment is approved, we intend to treat all Warrants that are not exchanged for cash pursuant to the Offer as having been exchanged for “new” Warrants pursuant to the Warrant Amendment, and we intend to treat such deemed exchange as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code, pursuant to which (i) the U.S. Holder should not recognize any gain or loss on the deemed exchange of Warrants for “new” Warrants, (ii) the U.S. Holder’s aggregate tax basis in the “new” Warrants deemed to be received should equal its aggregate tax basis in its existing Warrants deemed surrendered, and (iii) the U.S. Holder’s holding period for the “new” Warrants deemed to be received should include its holding period for the Warrants deemed surrendered. Special tax basis and holding period rules apply to a U.S. Holder that acquired different blocks of Warrants at different prices or at different times. U.S. Holders should consult their tax advisors as to the applicability of these special rules to their particular circumstances.

Because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of the deemed exchange of Warrants for “new” Warrants pursuant to the Warrant Amendment, there can be no assurance that the IRS or a court will agree with the foregoing treatment and alternative characterizations by the IRS or a court are possible, including ones that would require a U.S. Holder to recognize taxable income. If our treatment of the deemed exchange of Warrants for “new” Warrants pursuant to the Warrant Amendment were successfully challenged by the IRS and such exchange were not treated as a recapitalization for U.S. federal income tax purposes, exchanging U.S. Holders may recognize gain or loss for U.S. federal income tax purposes.

If the Warrant Amendment is approved and U.S. Holders subsequently exchange their “new” Warrants for cash pursuant to the terms of the Warrant Amendment, the U.S. Holders will be subject tax in the manner described above under “U.S. Holders - Exchange of Warrants for Cash Pursuant to the Offer.”

If the Warrant Amendment is not approved, U.S. Holders who do not tender any of their Warrants pursuant to the Offer will not recognize any gain or loss for U.S. federal income tax purposes solely as a result of the consummation of the Offer.

Non-U.S. Holders

Exchange of Warrants for Cash Pursuant to the Offer

A Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain or loss realized on the exchange of Warrants for cash pursuant to the Offer unless such gain or loss is effectively connected with such Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such Non-U.S. Holder maintains in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met (in which case, any gain from United States sources, such as any gain recognized on the exchange of Warrants for cash pursuant to the Offer, generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).

Gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.

Warrant Amendment

If the Warrant Amendment is approved, it should generally have the same tax consequences as described above for U.S. Holders under “U.S. Holders - Warrant Amendment.”

Backup Withholding and Information Reporting

In general, information reporting for U.S. federal income tax purposes should apply to the proceeds from sales and other dispositions of Warrants by a U.S. Holder. Payments made (and sales and other dispositions effected at an office) outside the United States by a non-U.S. broker might not be subject to information reporting.

In addition, backup withholding of U.S. federal income tax, currently at a rate of 24%, generally will apply to proceeds from sales and other dispositions of Warrants by a U.S. Holder who: (i) fails to provide an accurate taxpayer identification number; (ii) is notified by the IRS that backup withholding is required; (iii) fails to comply with applicable certification requirements, or (iv) fails to otherwise establish an exemption from backup withholding.

A Non-U.S. Holder generally will not be subject to information reporting and backup withholding if such Non-U.S. Holder provides certification of its non-U.S. status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.

Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a Non-U.S. Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the requisite information is timely furnished to the IRS. Holders are urged to consult their own tax advisors regarding the application of information reporting and backup withholding and the availability of and procedure for obtaining an exemption from backup withholding in their particular circumstances.

12. FORWARD-LOOKING STATEMENTS; RISK FACTORS

This Offer Letter contains forward-looking statements as defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward looking statements usually relate to future events, conditions and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plans,” “may,” “should,” or the negative thereof or similar terms. The absence of these words, however, does not mean that these statements are not forward-looking. These are based on our current expectation, belief and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future development affecting us will be those that we anticipate.

All of our forward-looking statements involve risks and uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include those set forth in this “Item 12. Forward-Looking Statements; Risk Factors.” We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise, except to the extent required by law.

The Warrant Amendment, if approved by the requisite holders of the Warrants as it relates to the applicability of the Warrant Amendment to the Warrants, will allow us to redeem all outstanding Warrants, as applicable, for cash.

If we complete the Offer and Consent Solicitation and obtain the approval of the Warrant Amendment by holders of at least a majority of the Warrants, the Company will have the right to redeem each outstanding Warrant, including Warrants held by holders who do not wish to participate and did not participate in the Offer, for $0.35 in cash, which is approximately 71% less than the Offer Purchase Price, without interest.

Although we intend to redeem all remaining outstanding warrants if the Warrant Amendment is approved, we would not be required to effect such a redemption and may defer doing so until it is most advantageous to us.

There is no guarantee that your decision whether to tender your Warrants in the Offer will put you in a better future economic position.

We can give no assurance as to the price at which a Warrant holder may be able to sell his, her or its Warrants in the future following the completion of the Offer. Certain future events may cause an increase in the price of the Warrants, which could result in you realizing a lower value now than you might realize in the future had you not agreed to tender your Warrants. Similarly, if you do not tender your Warrants in the Offer, you will bear the risk of ownership of your Warrants after the closing of the Offer, and there can be no assurance that you can sell your Warrants (or exercise them for shares of Class A common stock) in the future at a higher price than would have been obtained by participating in the Offer or at all. In addition, if you do not tender your Warrants and if we obtain the approval of the Warrant Amendment, we intend to implement the Warrant Amendment and subsequently redeem your Warrants for the Redemption Price, which is approximately 71% lower than the Offer Purchase Price. You should carefully review the terms of the Warrants, including the Warrant Agreement governing the Warrants, and consult your own individual tax and/or financial advisor for assistance on how the tender of your Warrants may affect your individual situation.

The liquidity of the Warrants that are not tendered may be reduced.

If the Warrant Amendment is approved, we intend to exercise our redemption rights thereunder and thus it is unlikely that any untendered Warrants will remain outstanding for a significant period of time following the completion of the Offer and Consent Solicitation. See “- The Warrant Amendment, if approved by the requisite holders of the Warrants as it relates to the applicability of the Warrant Amendment to the Warrants, will allow us to redeem all outstanding Warrants, as applicable, for cash.” However, if any untendered Warrants remain outstanding due to the Warrant Amendment not being approved, then the ability to sell such Warrants may become more limited due to the reduction in the number of Warrants outstanding upon completion of the Offer and Consent Solicitation. A more limited trading market might adversely affect the liquidity, market price and price volatility of untendered Warrants. If there continues to be a market for our untendered Warrants, these securities may trade at a discount to the price at which the securities would trade if the number outstanding were not reduced, depending on the market for similar securities and other factors.

There is no guarantee that the Warrants will ever be in the money and they may expire worthless.

The exercise price for the Warrants is $5.50 per share. There is no guarantee that the Warrants will ever be in the money prior to their expiration, and as such, the Warrants may expire worthless.

There is no assurance that the Offer will be successful.

The Offer is not conditioned upon any minimum number of Warrants being tendered. The Offer is, however, subject to other conditions. See “The Offer and Consent Solicitation, Section 10. Conditions; Termination; Waivers; Extensions; Amendments.”

Our Warrant Amendment will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Warrants, which could limit the ability of Warrant holders to obtain a favorable judicial forum for disputes with the Company.

Our Warrant Amendment will provide that any action, proceeding or claim against us arising out of or relating in any way to the Warrant Amendment shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and the parties to the Warrant Amendment irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive. Each party to the Warrant Amendment waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the Warrant Amendment will not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in any of our Warrants shall be deemed to have notice of and to have consented to the forum provisions in our Warrant Amendment. If any action, the subject matter of which is within the scope the forum provisions of the Warrant Amendment, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our Warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such Warrant holder in any such enforcement action by service upon such Warrant holder’s counsel in the foreign action as agent for such Warrant holder.

This choice-of-forum provision may limit a Warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our Company relating to the Warrant Amendment, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our Warrant Amendment inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

If we fail to comply with the listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our securities and make obtaining future debt or equity financing more difficult for us.

The Company’s Class A common stock and Warrants are listed on Nasdaq under the symbols “DRCT” and “DRCTW,” respectively. Nasdaq may delist the Company’s Class A Common Stock or Warrants from trading on its exchange for failure to meet the continued listing standards.

If our securities are delisted from trading on such exchange for failure to meet the listing standards, we and our stockholders could face significant adverse consequences including:

· a limited availability of market quotations for our securities;

· reduced liquidity for our securities;

· a determination that the Company’s Class A common stock is a “penny stock,” which will require brokers trading in the Company’s Class A common s Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

· a limited amount of news and analyst coverage; and

· decreased ability to issue additional securities or obtain additional financing in the future.

13. THE DEPOSITARY, INFORMATION AGENT AND DEALER MANAGER

We have retained Equiniti Trust Company, LLC to act as the Depositary and D.F. King & Co., Inc. to act as the Information Agent, in connection with the Offer and Consent Solicitation. All deliveries, correspondence and questions sent or presented to the Depositary or the Information Agent relating to the Offer and Consent Solicitation should be directed to the addresses or telephone numbers set forth on the back cover of this Offer Letter. The Information Agent and the Depositary will receive reasonable and customary compensation for their respective services, will be reimbursed by us for reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection with the Offer and Consent Solicitation, including certain liabilities under the federal securities laws.

We also retained Stifel, Nicolaus & Company, Incorporated to act as the Dealer Manager in connection with the Offer and Consent Solicitation. The Dealer Manager may communicate with, but may not solicit tenders of Warrants from, brokers, dealers, commercial banks and trust companies with respect to the Offer and Consent Solicitation. The Dealer Manager will receive a reasonable and customary fixed fee for these services payable upon the earlier of the Expiration Date or the date on which the Offer and Consent Solicitation is terminated, withdrawn or canceled, which fee is contingent upon the tender of at least a majority of the Warrants in the Offer. We have also agreed to indemnify the Dealer Manager against liabilities in connection with the Offer and Consent Solicitation, including liabilities under the federal securities laws.

The Dealer Manager and its affiliates may in the future provide various investment banking, commercial banking and other services to us for which they have received, or we expect they will receive, customary compensation from us.

We will not pay any fees or commissions to brokers, dealers or other persons for soliciting tenders of Warrants pursuant to the Offer. Warrants holders holding Warrants through a broker, dealer, commercial bank, trust company or other nominee are urged to consult such nominees to determine whether transaction costs may apply if Warrant holders tender Warrants through such nominees and not directly to the Depositary. We will, however, upon request, reimburse brokers, dealers, commercial banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding the Offer and related materials to the beneficial owners of Warrants held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank, trust company or other nominee has been authorized to act as our agent or the agent of the Information Agent or the Depositary for purposes of the Offer and Consent Solicitation.

14. ADDITIONAL INFORMATION; MISCELLANEOUS

The Company has filed with the SEC a Tender Offer Statement on Schedule TO, of which this Offer Letter is a part. This Offer Letter does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. The Company recommends that all holders of the Warrants review the Schedule TO, including the exhibits and the information incorporated by reference in the Schedule TO, and the Company’s other materials that have been filed with the SEC before making a decision on whether to accept the Offer, including the following documents hereby incorporated by reference into this Offer Letter:

1. Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on April 17, 2023.

2. Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2023 and June 30, 2023, filed with the SEC on May 15, 2023 and August 11, 2023, respectively.

3. Current Report on Form 8-K filed with the SEC on January 11, 2023.

4. Current Report on Form 8-K filed with the SEC on January 18, 2023.

5. Current Report on Form 8-K filed with the SEC on May 9, 2023.

6. Current Report on Form 8-K filed with the SEC on June 12, 2023.

7. Current Report on Form 8-K filed with the SEC on July 12, 2023.

Documents we file (but not documents or information deemed to have been furnished and not filed in accordance with the SEC’s rules) with the SEC under Section 13(e), 13(c), 14 or 15(d) of the Exchange Act after the date of this Offer Letter will be incorporated by reference in this Offer Letter only upon our filing of a subsequent amendment to the Schedule TO. Any statement contained in this Offer Letter or in a document (or part thereof) incorporated by reference in this Offer Letter shall be considered to be modified or superseded for purposes of this Offer Letter to the extent that a statement contained in any subsequent amendment to this Offer Letter or amendment to the Schedule TO which this Offer Letter relates modifies or supersedes that statement.

You can obtain any of the documents incorporated by reference in this Offer Letter from the SEC’s website at the address described above. You may also request a copy of these filings, at no cost, by writing or telephoning the Information Agent for the Offer at the telephone numbers and address set forth on the back cover of this Offer Letter.

Each person to whom a copy of this Offer Letter is delivered may obtain a copy of any or all of the referenced documents, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents, at no cost. Requests should be directed to our investor relations representative at:

Direct Digital Holdings, Inc.
Attention: Investor Relations
Brett.Milotte@icrinc.com

Sincerely,

Direct Digital Holdings, Inc.
1177 West Loop S, Suite 1310,

Houston, Texas 77027

The Depositary is Equiniti Trust Company, LLC. The Letter of Transmittal and Consent and certificates representing Warrants, and any other required documents should be sent or delivered by each holder of Warrants or such holder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below.

THE DEPOSITARY FOR THE OFFER IS:

Equiniti Trust Company, LLC

IF DELIVERING BY MAIL, HAND OR COURIER:

Equiniti Trust Company
6201 15^th Ave, Brooklyn, NY 11219
Attention: Corporate Actions Department

THE INFORMATION AGENT FOR THE OFFER IS:

D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Investors Call (Toll-Free): (866) 796-1290
Banks and Brokers Call: (212) 269-5550
By Email: drct@dfking.com

Any question or request for assistance may be directed to the Information Agent at the address, phone number and email address listed above.

Requests for additional copies of the Offer Letter, the Letter of Transmittal and Consent or other documents related to the offer may also be directed to the Information Agent.

The Dealer Manager for the Offer and Consent Solicitation is:

Stifel

787 Seventh Avenue, 12^th Floor

New York, New York 10019

Attention: Stifel Syndicate Desk
Email: BaltimoreEqtySynd@stifel.com

Annex A

AMENDMENT TO WARRANT AGREEMENT

This Amendment to Warrant Agreement (this “Amendment”) is made as of [·], 2023 by and between Direct Digital Holdings, Inc., a Delaware corporation (the “Company”), and Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC), a New York corporation, as warrant agent (the “Warrant Agent”), and constitutes an amendment to that certain Warrant Agreement, dated as of February 15, 2022 (the “Existing Warrant Agreement”), between the Company and the Warrant Agent. Capitalized terms used but not otherwise defined in this Amendment shall have the meanings given to such terms in the Existing Warrant Agreement.

WHEREAS, Section 8.8 of the Existing Warrant Agreement provides that the Company and the Warrant Agent may amend the Existing Warrant Agreement with the written consent of the Registered Holders of a majority of the outstanding Warrants as it relates to the Warrants;

WHEREAS, the Company desires to amend the Existing Warrant Agreement to provide the Company with the right to redeem the Warrants for cash on the terms and subject to the conditions set forth herein; and

WHEREAS, following a consent solicitation undertaken by the Company, the Registered Holders of a majority of the outstanding Warrants have consented to and approved this Amendment.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree to amend the Existing Warrant Agreement as set forth herein.

Amendment of Existing Warrant Agreement. The Existing Warrant Agreement is hereby amended by adding the new Section 6A thereto:

“6A. 6A Redemption.

6A.1 Company Election to Redeem. Notwithstanding any other provision in this Agreement to the contrary, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6A.2 below, for $0.35 in cash for every Warrant held by the holder thereof (the “6A Redemption Price”) (subject to equitable adjustment by the Company in the event of any stock splits, stock dividends, recapitalizations or similar transaction with respect to the Common Stock).

6A.2 Date Fixed for, and Notice of, Redemption. In the event that the Company elects to redeem all of the Warrants, the Company shall fix a date for the redemption (the “6A Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than five (5) days prior to the 6A Redemption Date to the Registered Holders of the Warrants at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice.

6A.3 Exercise After Notice of Redemption. The Warrants may be exercised for cash only in accordance with subsection 3.3.1 of this Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 6A.2 hereof and prior to the 6A Redemption Date. On and after the 6A Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the 6A Redemption Price.

8. Miscellaneous Provisions.

8.1 Severability. This Amendment shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Amendment or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Amendment a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

8.2 Applicable Law and Exclusive Forum. The validity, interpretation and performance of this Amendment shall be governed in all respects by the laws of the State of New York. Subject to applicable law, the parties hereby agree that any action, proceeding or claim against them arising out of or relating in any way to this Amendment shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive forum for any such action, proceeding or claim. Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this section will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.

8.3 Counterparts. This Amendment may be executed in any number of counterparts, and by facsimile or portable document format (pdf) transmission, and each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument.

8.4 Effect of Headings. The section headings herein are for convenience only and are not part of this Amendment and shall not affect the interpretation thereof.

8.5 Entire Agreement. The Existing Warrant Agreement, as modified by this Amendment, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby canceled and terminated.

[Signatures Appear on Following Page]

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be duly executed as of the date first above written.

	DIRECT DIGITAL HOLDINGS, INC.

	By:
		Name: Mark Walker
		Title: Chief Executive Officer


	EQUINITI TRUST COMPANY, LLC

	By:
		Name:
		Title:

[Signature Page to Amendment to Warrant Agreement]

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL AND CONSENT

Offer To Purchase
Warrants to Acquire Shares of Class A Common Stock
of
Direct Digital Holdings, Inc.
and
Consent Solicitation

THE OFFER AND CONSENT SOLICITATION (AS DEFINED BELOW) AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON SEPTEMBER 26, 2023, OR SUCH LATER TIME AND DATE TO WHICH WE MAY EXTEND. WARRANTS (AS DEFINED BELOW) TENDERED PURSUANT TO THE OFFER AND CONSENT SOLICITATION MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW). CONSENTS MAY BE REVOKED ONLY BY WITHDRAWING THE TENDER OF THE RELATED WARRANTS AND THE WITHDRAWAL OF ANY WARRANTS WILL AUTOMATICALLY CONSTITUTE A REVOCATION OF THE RELATED CONSENTS.

The Depositary for the Offer and Consent Solicitation is:

EQUINITI TRUST COMPANY, LLC

6201 15th Avenue

Brooklyn, New York 11219

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT, THE WARRANTS AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH BOOK-ENTRY TRANSFER, IS AT THE OPTION AND RISK OF THE TENDERING WARRANT HOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN THE INSTRUCTIONS BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE WARRANT HOLDER HAS THE RESPONSIBILITY TO CAUSE THIS LETTER OF TRANSMITTAL AND CONSENT, THE TENDERED WARRANTS AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL AND CONSENT, INCLUDING THE INSTRUCTIONS, CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL AND CONSENT.

Direct Digital Holdings, Inc., a Delaware corporation (the “Company,” “we,” “our” and “us”), has delivered to the undersigned a copy of the Offer to Purchase and Consent Solicitation dated August 29, 2023 (as it may be supplemented and amended from time to time, the “Offer to Purchase”) of the Company and this letter of transmittal and consent (as it may be supplemented and amended from time to time, this “Letter of Transmittal and Consent”), which together set forth the offer of the Company to each holder of the Company’s warrants to purchase shares of the Company’s Class A common stock, par value $0.001 per share, to receive $1.20 in cash, without interest, in exchange for each warrant tendered by the holder pursuant to the offer (the “Offer”).

WARRANT HOLDERS SHOULD REVIEW THE OFFER TO PURCHASE, INCLUDING ANNEX A THERETO, IN ITS ENTIRETY, FOR A DESCRIPTION OF THE COMPLETE TERMS OF THE OFFER, INCLUDING THE WARRANT AMENDMENT (AS DEFINED BELOW) WHICH THE WARRANT HOLDERS WILL BE CONSENTING TO IN CONNECTION WITH THE TENDER OF ANY WARRANTS.

Warrants eligible to be tendered pursuant to the Offer include publicly traded warrants to purchase our Class A common stock which were publicly issued and sold as part of units of the Company, in connection with the initial public offering of Direct Digital Holdings securities on February 15, 2022 (the “DIRECT IPO”), which entitle such warrant holders to purchase one share of our Class A common stock at an exercise price of $5.50, subject to adjustments (the “Warrants”).

The Public Warrants are quoted on The Nasdaq Stock Market LLC under the symbol “DRCTW.” As of August 28, 2023, 3,217,800 Warrants were outstanding. Pursuant to the Offer, the Company is offering to purchase each Warrant at a purchase price of $1.20 in cash.

Concurrently with the Offer, the Company is also soliciting consents (the “Consent Solicitation”) from holders of the Warrants to amend the Warrant Agreement, dated as of February 15, 2022, by and between the Company and Equiniti Trust Company, LLC (formerly Equiniti Stock Transfer & Trust Company, LLC) (“Equiniti”), which governs all of the Warrants, to permit the Company to redeem each Warrant that is outstanding upon the closing of the Offer for $0.35 in cash, without interest (the “Warrant Amendment”), which is approximately 71% less than the cash amount applicable to the Offer. Pursuant to the terms of the Warrant Agreement, all modifications or amendments except certain specified modifications or amendments require the vote or written consent of holders of at least a majority of the outstanding Warrants as it relates to the Warrants. Although we intend to redeem all remaining outstanding Warrants if the Warrant Amendment is approved, we would not be required to effect such a redemption and may defer doing so until it is most advantageous to us.

Holders of Warrants may not consent to the Warrant Amendment without tendering Warrants in the Offer and holders may not tender such Warrants without consenting to the Warrant Amendment. The consent to the Warrant Amendment is a part of this Letter of Transmittal and Consent, and therefore by tendering Warrants in the Offer, holders will be delivering to us such consent. Holders of Warrants may revoke their consent at any time prior to the Expiration Date (as defined below) by withdrawing the Warrants tendered in the Offer by such holders.

Warrants not tendered for cash pursuant to the Offer will remain outstanding subject to their current terms or amended terms if the Warrant Amendment is approved. We reserve the right to redeem any of the Warrants, as applicable, pursuant to their current terms at any time, including prior to the completion of the Offer and Consent Solicitation.

The Offer and Consent Solicitation is made solely upon the terms and conditions in the Offer to Purchase and this Letter of Transmittal and Consent. The Offer and Consent Solicitation will be open until one minute after 11:59 p.m., Eastern Time, on September 26, 2023, or such later time and date to which we may extend (the period during which the Offer and Consent Solicitation is open, giving effect to any withdrawal or extension, is referred to as the “Offer Period,” and the date and time at which the Offer Period ends is referred to as the “Expiration Date”).

Each holder whose Warrants are tendered pursuant to the Offer and Consent Solicitation will receive $1.20 in cash, without interest, for each Warrant tendered by such holder. Any Warrant holder that participates in the Offer and Consent Solicitation may tender less than all of his, her or its Warrants.

We may withdraw the Offer and Consent Solicitation only if the conditions to the Offer and Consent Solicitation are not satisfied or waived prior to the Expiration Date.

Promptly upon any such withdrawal, we will return the tendered Warrants to the holders (and the consent to the Warrant Amendment will be revoked).

This Letter of Transmittal and Consent is to be used to accept the Offer and Consent Solicitation if the applicable Warrants are to be tendered by effecting a book-entry transfer into Equiniti’s account at the Depository Trust Company (“DTC”) and instructions are not being transmitted through DTC’s Automated Tender Offer Program (“ATOP”). Except in instances where a holder intends to tender Warrants through ATOP, the holder should complete, execute and deliver this Letter of Transmittal and Consent to indicate the action it desires to take with respect to the Offer and Consent Solicitation.

Holders of Warrants tendering Warrants by book-entry transfer to Equiniti’s account at DTC may execute the tender through ATOP, and in that case need not complete, execute and deliver this Letter of Transmittal and Consent. DTC participants accepting the Offer and Consent Solicitation may transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to Equiniti’s account at DTC. DTC will then send an “Agent’s Message” to Equiniti for its acceptance. Delivery of the Agent’s Message by DTC will satisfy the terms of the Offer and Consent Solicitation as to execution and delivery of a Letter of Transmittal and Consent by the DTC participant identified in the Agent’s Message.

As used in this Letter of Transmittal and Consent with respect to the tender procedures set forth herein, the term “registered holder” means any person in whose name Warrants are registered on the books of the Company or who is listed as a participant in a clearing agency’s security position listing with respect to the Warrants.

THE OFFER AND CONSENT SOLICITATION IS NOT MADE TO THOSE HOLDERS WHO RESIDE IN STATES OR OTHER JURISDICTIONS WHERE AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.

PLEASE SEE THE INSTRUCTIONS TO THIS LETTER OF TRANSMITTAL AND CONSENT BEGINNING ON PAGE 9 FOR THE PROPER USE AND DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT.

DESCRIPTION OF WARRANTS TENDERED

List below the Warrants to which this Letter of Transmittal and Consent relates. If the space below is inadequate, list the registered Warrant certificate numbers on a separate signed schedule and affix the list to this Letter of Transmittal and Consent.

Name(s) and Address(es) of Registered Holder(s) of Warrants		Number of Warrants Tendered


		Total:

¨ CHECK HERE IF THE WARRANTS LISTED ABOVE ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY EQUINITI WITH DTC AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

Name of Tendering Institution:

Account Number:

Transaction Code Number:

By crediting the Warrants to Equiniti’s account at DTC using ATOP and by complying with applicable ATOP procedures with respect to the Offer and Consent Solicitation, including, if applicable, transmitting to Equiniti an Agent’s Message in which the holder of the Warrants acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal and Consent, the participant in DTC confirms on behalf of itself and the beneficial owner(s) of such Warrants all provisions of this Letter of Transmittal and Consent (including consent to the Warrant Amendment and all representations and warranties) applicable to it and such beneficial owner(s) as fully as if it had completed the required information and executed and transmitted this Letter of Transmittal and Consent to Equiniti.

NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Direct Digital Holdings, Inc.
c/o Equiniti Trust Company, as Depositary
6201 15^th Avenue
Brooklyn, NY 11219
Attn: Corporate Actions Department

Upon and subject to the terms and conditions set forth in the Offer to Purchase and in this Letter of Transmittal and Consent, receipt of which is hereby acknowledged, the undersigned hereby:

(i) tenders to the Company pursuant to the Offer and Consent Solicitation the number of Warrants indicated above in the table under the heading “Number of Warrants Tendered” under “Description of Warrants Tendered”;

(ii) accepts the amount payable upon the tender of Warrants pursuant to the Offer and Consent Solicitation, being $1.20 in cash, without interest, for each Warrant so tendered; and

(iii) consents to the Warrant Amendment.

Except as stated in the Offer to Purchase, the tender made hereby is irrevocable. The undersigned understands that this tender will remain in full force and effect unless and until such tender is withdrawn and revoked in accordance with the procedures set forth in the Offer to Purchase and this Letter of Transmittal and Consent. The undersigned understands that this tender may not be withdrawn after the Expiration Date, and that a notice of withdrawal will be effective only if delivered to Equiniti in accordance with the specific withdrawal procedures set forth in the Offer to Purchase.

If the undersigned holds Warrants for beneficial owners, the undersigned represents that it has received from each beneficial owner thereof a duly completed and executed form of “Instructions Form” in the form attached to the “Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees” which was sent to the undersigned by the Company with this Letter of Transmittal and Consent, instructing the undersigned to take the action described in this Letter of Transmittal and Consent.

If the undersigned is not the registered holder of the Warrants indicated under “Description of Warrants Tendered” above or such holder’s legal representative or attorney-in-fact (or, in the case of Warrants held through DTC, the DTC participant for whose account such Warrants are held), then the undersigned has obtained a properly completed irrevocable proxy that authorizes the undersigned (or the undersigned’s legal representative or attorney-in fact) to deliver a consent in respect of such Warrants on behalf of the holder thereof, and such proxy is being delivered to Equiniti with this Letter of Transmittal and Consent.

The undersigned understands that, upon and subject to the terms and conditions set forth in the Offer to Purchase and this Letter of Transmittal and Consent, any Warrants properly tendered and not withdrawn which are accepted will be exchanged for a cash payment. The undersigned understands that, under certain circumstances, the Company may not be required to accept any of the Warrants tendered (including any Warrants tendered after the Expiration Date). If any Warrants are not accepted for tender for any reason or if tendered Warrants are withdrawn, such unexchanged or withdrawn Warrants will be returned without expense to the tendering holder and the related consent to the Warrant Amendment will be revoked.

The undersigned understands that, upon and subject to the terms and conditions set forth in the Offer to Purchase and this Letter of Transmittal and Consent, any Warrants properly tendered and not validly withdrawn which are accepted constitute the holder’s validly delivered consent to the Warrant Amendment. A holder of Warrants may not consent to the Warrant Amendment without tendering his, her or its Warrants in the Offer and a holder of Warrants may not tender his, her or its Warrants without consenting to the Warrant Amendment. A holder may revoke his, her or its consent to the Warrant Amendment at any time prior to the Expiration Date by withdrawing the Warrants tendered by such holder.

Subject to, and effective upon, the Company’s acceptance of the undersigned’s tender of Warrants pursuant to the Offer and Consent Solicitation as indicated above in the table under the heading “Number of Warrants Tendered” under “Description of Warrants Tendered”, the undersigned hereby:

(i) assigns and transfers to, or upon the order of, the Company, all right, title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of the undersigned’s status as a holder of, such Warrants;

(ii) waives any and all rights with respect to such Warrants;

(iii) releases and discharges the Company from any and all claims the undersigned may have now, or may have in the future, arising out of or related to such Warrants;

(iv) acknowledges that the Offer is discretionary and may be extended, modified, suspended or terminated by the Company as provided in the Offer to Purchase; and

(v) acknowledges the future value of the Warrants is unknown and cannot be predicted with certainty.

The undersigned understands that tenders of Warrants pursuant to any of the procedures described in the Offer to Purchase and in the instructions in this Letter of Transmittal and Consent, if and when accepted by the Company, will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer and Consent Solicitation.

Effective upon acceptance, the undersigned hereby irrevocably constitutes and appoints Equiniti, acting as agent for the Company, as the true and lawful agent and attorney-in-fact of the undersigned with respect to the Warrants tendered hereby, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to:

(i) transfer ownership of such Warrants on the account books maintained by DTC together with all accompanying evidences of transfer and authenticity to or upon the order of the Company;

(ii) present such Warrants for transfer of ownership on the books of the Company;

(iii) cause ownership of such Warrants to be transferred to, or upon the order of, the Company on the books of the Company or its agent and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Company; and

(iv) receive all benefits and otherwise exercise all rights of beneficial ownership of such Warrants;

all in accordance with the terms of the Offer and Consent Solicitation, as described in the Offer to Purchase and this Letter of Transmittal and Consent.

The undersigned hereby represents, warrants and agrees that:

(i) the undersigned has full power and authority to tender the Warrants tendered hereby and to sell, exchange, assign and transfer all right, title and interest in and to such Warrants;

(ii) the undersigned has good, marketable and unencumbered title to the Warrants tendered hereby, and upon acceptance of such Warrants by the Company pursuant to the Offer and Consent Solicitation the Company will acquire good, marketable and unencumbered title to such Warrants, in each case free and clear of any security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations of any kind, and not subject to any adverse claim;

(iii) the undersigned has full power and authority to consent to the Warrant Amendment;

(iv) the undersigned will, upon request, execute and deliver any additional documents deemed by the Company or Equiniti to be necessary or desirable to complete and give effect to the transactions contemplated hereby;

(v) the undersigned has received and reviewed the Offer to Purchase, this Letter of Transmittal and Consent and the Warrant Amendment;

(vi) the undersigned acknowledges that none of the Company, Equiniti, the information agent, the dealer manager or any person acting on behalf of any of the foregoing has made any statement, representation or warranty, express or implied, to the undersigned with respect to the Company, the Offer and Consent Solicitation or the Warrants, other than the information included in the Offer to Purchase (as amended or supplemented prior to the Expiration Date);

(vii) the terms and conditions set forth in the Offer to Purchase shall be deemed to be incorporated in, and form a part of, this Letter of Transmittal and Consent, which shall be read and construed accordingly;

(viii) the undersigned understands that tenders of Warrants pursuant to the Offer and Consent Solicitation and in the instructions hereto constitute the undersigned’s acceptance of the terms and conditions of the Offer and Consent Solicitation;

(ix) the undersigned is voluntarily participating in the Offer; and

(x) the undersigned agrees to all of the terms of the Offer and Consent Solicitation.

The acknowledgments, representations, warranties and agreements of the undersigned in this Letter of Transmittal and Consent will be deemed to be automatically repeated and reconfirmed on and as of each of the Expiration Date and completion of the Offer and Consent Solicitation. The authority conferred or agreed to be conferred in this Letter of Transmittal and Consent shall not be affected by, and shall survive, the death or incapacity of the undersigned, and every obligation of the undersigned under this Letter of Transmittal and Consent shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned.

The undersigned acknowledges that the undersigned has been advised to consult with its own legal counsel and other advisors (including tax advisors) as to the consequences of participating or not participating in the Offer and Consent Solicitation.

IMPORTANT: PLEASE SIGN HERE

(SEE INSTRUCTIONS AND ALSO COMPLETE ACCOMPANYING IRS FORM W-9 OR APPROPRIATE IRS FORM W-8)

By completing, executing and delivering this Letter of Transmittal and Consent, the undersigned hereby tenders the Warrants indicated in the table above entitled “Description of Warrants Tendered.”

SIGNATURES REQUIRED
Signature(s) of Registered Holder(s) of Warrants

Name:

Address:

Date:

(The above lines must be signed by the registered holder(s) of Warrants as the name(s) appear(s) on the Warrants or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed assignment from the registered holder(s), a copy of which must be transmitted with this Letter of Transmittal and Consent. If Warrants to which this Letter of Transmittal and Consent relates are held of record by two or more joint holders, then all such holders must sign this Letter of Transmittal and Consent. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, then such person must set forth his or her full title below and, unless waived by the Company, submit evidence satisfactory to the Company of such person’s authority so to act. See Instruction 3 regarding the completion and execution of this Letter of Transmittal and Consent.)

Name:

Address:

Date:

Area Code and Telephone Number:

(PLEASE PRINT OR TYPE)
(INCLUDE ZIP CODE)

GUARANTEE OF SIGNATURE(S) (IF REQUIRED)
(SEE INSTRUCTIONS, INCLUDING INSTRUCTION 4)

Certain signatures must be guaranteed by Eligible Institution.
Signature(s) guaranteed by an Eligible Institution:

Authorized Signature

Title

Name of Firm

Address, Including Zip Code

Date:

INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER AND CONSENT SOLICITATION

1. Delivery of Letter of Transmittal and Consent and Warrants. This Letter of Transmittal and Consent is to be used only if tenders of Warrants are to be made by book-entry transfer to Equiniti account at DTC and instructions are not being transmitted through ATOP with respect to such tenders.

Warrants may be validly tendered pursuant to the procedures for book-entry transfer as described in the Offer to Purchase. In order for Warrants to be validly tendered by book-entry transfer, Equiniti must receive the following prior to the Expiration Date, except as otherwise permitted by use of the procedures for guaranteed delivery as described below:

(i) timely confirmation of the transfer of such Warrants to Equiniti’s account at DTC (a “Book-Entry Confirmation”);

(ii) either a properly completed and duly executed Letter of Transmittal and Consent, or a properly transmitted “Agent’s Message” if the tendering Warrant holder has not delivered a Letter of Transmittal and Consent; and

(iii) any other documents required by this Letter of Transmittal and Consent.

The term “Agent’s Message” means a message, transmitted by DTC to, and received by, Equiniti and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC exchanging the Warrants that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and Consent and that the Company may enforce such agreement against the participant. If you are tendering by book-entry transfer, you must expressly acknowledge that you have received and agree to be bound by the Letter of Transmittal and Consent and that the Letter of Transmittal and Consent may be enforced against you.

Delivery of a Letter of Transmittal and Consent to the Company or DTC will not constitute valid delivery to Equiniti. No Letter of Transmittal and Consent should be sent to the Company or DTC.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT, TENDERED WARRANTS AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OR AGENT’S MESSAGE DELIVERED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE TENDERING WARRANT HOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN THESE INSTRUCTIONS, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY EQUINITI. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE WARRANT HOLDER HAS THE RESPONSIBILITY TO CAUSE THIS LETTER OF TRANSMITTAL AND CONSENT, THE TENDERED WARRANTS AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

Neither the Company nor Equiniti is under any obligation to notify any tendering holder of the Company’s acceptance of tendered Warrants.

2. Guaranteed Delivery. Warrant holders desiring to tender Warrants pursuant to the Offer but whose Warrants cannot otherwise be delivered with all other required documents to Equiniti prior to the Expiration Date may nevertheless tender Warrants, as long as all of the following conditions are satisfied:

(i) the tender must be made by or through an “Eligible Institution” (as defined in Instruction 4);

(ii) properly completed and duly executed Notice of Guaranteed Delivery in the form provided by the Company to the undersigned with this Letter of Transmittal and Consent (with any required signature guarantees) must be received by Equiniti, at its address set forth in this Letter of Transmittal and Consent, prior to the Expiration Date; and

(iii) a confirmation of a book-entry transfer into Equiniti’s account at DTC of all Warrants delivered electronically, in each case together with a properly completed and duly executed Letter of Transmittal and Consent with any required signature guarantees (or, in the case of a book-entry transfer without delivery of a Letter of Transmittal and Consent, an Agent’s Message), and any other documents required by this Letter of Transmittal and Consent, must be received by Equiniti within two days that the Nasdaq is open for trading after the date Equiniti receives such Notice of Guaranteed Delivery, all as provided in the Offer to Purchase.

A holder of Warrants may deliver the Notice of Guaranteed Delivery by mail to Equiniti.

Except as specifically permitted by the Offer to Purchase, no alternative or contingent tenders will be accepted.

3. Signatures on Letter of Transmittal and Consent and other Documents. For purposes of the tender and consent procedures set forth in this Letter of Transmittal and Consent, the term “registered holder” means any person in whose name Warrants are registered on the books of the Company or who is listed as a participant in a clearing agency’s security position listing with respect to the Warrants.

If this Letter of Transmittal and Consent is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or others acting in a fiduciary or representative capacity, such person must so indicate when signing and, unless waived by the Company, must submit to Equiniti proper evidence satisfactory to the Company of the authority so to act.

4. Guarantee of Signatures. No signature guarantee is required if:

(i) this Letter of Transmittal and Consent is signed by the registered holder of the Warrants; or

(ii) such Warrants are tendered for the account of an “Eligible Institution.” An “Eligible Institution” is a bank, broker dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an “eligible guarantor institution,” as that term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended.

IN ALL OTHER CASES, AN ELIGIBLE INSTITUTION MUST GUARANTEE ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL AND CONSENT BY COMPLETING AND SIGNING THE TABLE ENTITLED “GUARANTEE OF SIGNATURE(S)” ABOVE.

5. Warrants Tendered. Any holder of Warrants who chooses to participate in the Offer and Consent Solicitation may tender some or all of such holder’s Warrants pursuant to the terms of the Offer and Consent Solicitation.

6. Inadequate Space. If the space provided under “Description of Warrants Tendered” is inadequate, the name(s) and address(es) of the registered holder(s), number of Warrants being delivered herewith, and number of such Warrants tendered hereby should be listed on a separate, signed schedule and attached to this Letter of Transmittal and Consent.

7. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the transfer of Warrants to the Company in the Offer and Consent Solicitation. If transfer taxes are imposed for any other reason, the amount of those transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder. Other reasons transfer taxes could be imposed include if tendered Warrants are registered in the name of any person other than the person signing this Letter of Transmittal and Consent.

If satisfactory evidence of payment of or exemption from those transfer taxes is not submitted with this Letter of Transmittal and Consent, the amount of those transfer taxes will be billed directly to the tendering holder and/or withheld from any payment due with respect to the Warrants tendered by such holder.

8. Validity of Tenders. All questions as to the number of Warrants to be accepted, and the validity, form, eligibility (including time of receipt) and acceptance of any tender of Warrants will be determined by the Company in its reasonable discretion, which determinations shall be final and binding on all parties.

The Company reserves the absolute right to reject any or all tenders of Warrants it determines not to be in proper form or to reject those Warrants, the acceptance of which may, in the opinion of the Company’s counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in the tender of any particular Warrants, whether or not similar defects or irregularities are waived in the case of other tendered Warrants. The Company’s interpretation of the terms and conditions of the Offer and Consent Solicitation (including this Letter of Transmittal and Consent and the instructions hereto) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Warrants must be cured within such time as the Company shall determine. None of the Company, Equiniti, the information agent, the dealer manager or any other person is or will be obligated to give notice of any defects or irregularities in tenders of Warrants, and none of them will incur any liability for failure to give any such notice. Tenders of Warrants will not be deemed to have been validly made until all defects and irregularities have been cured or waived. Any Warrants received by Equiniti that are not validly tendered and as to which the defects or irregularities have not been cured or waived will be returned by Equiniti to the holders, unless otherwise provided in this Letter of Transmittal and Consent, as soon as practicable following the Expiration Date. Warrant holders who have any questions about the procedure for tendering Warrants in the Offer and Consent Solicitation should contact the Information Agent at the address and telephone number indicated herein. Warrants properly tendered and not validly withdrawn that are accepted constitute the holder’s validly delivered consent to the Warrant Amendment.

9. Waiver of Conditions. The Company reserves the absolute right to waive any condition as described in the section of the Offer to Purchase titled “The Offer and Consent Solicitation, Section 10. Conditions; Termination; Waivers; Extensions; Amendments.”

10. Withdrawal. Tenders of Warrants may be withdrawn only pursuant to the procedures and subject to the terms set forth in the section of the Offer to Purchase titled “The Offer and Consent Solicitation, Section 3. Withdrawal Rights.” Warrant holders can withdraw tendered Warrants at any time prior to the Expiration Date, and Warrants that the Company has not accepted by the Expiration Date may thereafter be withdrawn at any time after such date until such Warrants are accepted by the Company pursuant to the Offer and Consent Solicitation. Except as otherwise provided in the Offer to Purchase, in order for the withdrawal of Warrants to be effective, a written notice of withdrawal satisfying the applicable requirements for withdrawal set forth in the section of the Offer to Purchase titled “The Offer and Consent Solicitation, Section 3. Withdrawal Rights” must be timely received from the holder by Equiniti at its address stated herein, together with any other information required as described in such section of the Offer to Purchase. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Company, in its reasonable discretion, and its determination shall be final and binding. None of the Company, Equiniti, the information agent, the dealer manager or any other person is under any duty to give notification of any defect or irregularity in any notice of withdrawal or will incur any liability for failure to give any such notification. Any Warrants properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer and Consent Solicitation. However, at any time prior to the Expiration Date, a Warrant holder may re-tender withdrawn Warrants by following the applicable procedures discussed in the Offer to Purchase and this Letter of Transmittal and Consent. Consents may be revoked only by withdrawing the Warrants and the withdrawal of any Warrants will automatically constitute a revocation of the related consents.

11. Questions and Requests for Assistance and Additional Copies. Please direct questions or requests for assistance, or additional copies of the Offer to Purchase, Letter of Transmittal and Consent or other materials, in writing to the information agent for the Offer and Consent Solicitation at:

The Information Agent for the Offer and Consent Solicitation is:

D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Investors Call (Toll-Free): (866) 796-1290
Banks and Brokers Call: (212) 269-5550
By Email: drct@dfking.com

IMPORTANT: THIS LETTER OF TRANSMITTAL AND CONSENT, OR THE “AGENT’S MESSAGE” (IF TENDERING PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER WITHOUT EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL AND CONSENT), TOGETHER WITH THE TENDERED WARRANTS AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY EQUINITI ON OR PRIOR TO ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON THE EXPIRATION DATE, UNLESS A NOTICE OF GUARANTEED DELIVERY IS RECEIVED BY EQUINITI BY SUCH DATE.

F'"'" W - 9 (Rev. 2018) ƒ """""""1011"',TrUMY lnlemalltaYeruService R e qu es t f o r T ax p aye r Id e ntifi ca ti o n Numb e r a nd C e rtifi ca ti o n ► Go to www.lrs.go v /FormW9 lor Instructions and Ille latest Information . Give Form to the requester . Do not send to the IRS . . . ; , [ . . & . ii - I S ., ·2 E 0.. ! " i: i ! 1 Name las ShOwn on yoor Income tax retur , n) Nmne is n,quired on 11111 lne: do not leave this 1.ne blank. 2 Bu - ""'1l<lldls,"9"'dod entAy - , i diff«ent '""" · - 3 CtteCI< IPllfOl)fiat8 bo• lor ,_, ta, claafflc8llon of the poraon - name II.,_ o In I t Check only ... of Ille following ......., boxes 0 lndMduav.ote llfoprielor ot 0 cCctp<Yauon D s eorporaUon D PilMl!<!hlp 0 Trust/llSlate "'1gle - rnembor u.c u N . o c t. < Ch e u o k . c I l • l e • · - MU, I n th e lin e - . ... lh o ... clMsl!icallo n O l lh e olngl& - - - O o noe check 0 i..nltod labllotf ccn,pan , y eniertt>e taJC - lon 10 - C corl>Of1ltion. S - Scorpo,MJon. 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TheT IN provided ml'St match the name given on line l to avoid I Soclal socuri ly number I backup wrlhholdln . g For Individuals. this ,s generally your social secumy number (SSN). However, for a - - resident allen. sole proprei tor , or dJSregarded entity. see lhe Instructions for Part I, tater. For other enlltJeS. It ls your emp r ldentihcatlon number (EIN). I f you donol have a number. see How to gel a ,. . .._, , TIN, later. o r r ":: - - , - ..,.., - ,, ,, - .,,.. - - ,. - - - - , Note : If the account ,s ,n more than onenan,e, see thelnstr JC1forrs for llne 1. Also see What Name Md l!mployor ldenllf loallon numbe r Nvmber To Give the F/4queSter for guldellnes on whose number to enter . Certi f ic a t i on Underpenalties of perjury. I certify that: 1. The number Shown on thls form JS mycor r ect 1axpayer ident i ficat,onnumber (or I am wal1.,g f0< a numoo, to be Issued to me); and 2. I am not subjeC1to backup Wlthholding because: (a) I am exempt frombaclOJp wilhholding , or {b) I have not been notified by the Internal Reve<1ue Service ( I RS)!hat I amsubject t o backup wlihholding asaresutt or a failure10repQn all Interest or dividends, or (c ) the IRS hasnotified me that I am no longer subject to backup withholding; and 3. I ama U.S. citizen or other U . S. person (daflned beiowj; and 4. The FATCA code(s) entered on this form ( If any) lndrcating thet I amexempt from FATCA repon,ng Is c:orreot . Certiflcalion lnstruclions. You must crossoutItem 2 above II you have been notified by the IRS that youarecurrently subject lo bael(up wlthholdi'IQ because )'OU h1M1 r8Jled to report oilrnlllrest end dM<lends on your tax return. For real estate tran sae11on&, Item 2 does notallflly. For mongage Interest peid, acquisition or abandonment of secured p,operty, cancetlallon ordebt, contributions to an lndlviduDI rourement amingement ORAi, and gene,ally, payrnenlS other than inlM!St and div i dends , you are notrequired l o sign the certificauon.but )'OU mU$1prolli<» )'OUt corr.ct T I N . 5<18 the i nstructions for Part II,later . Sign Here I Si9naturo or u .s. .,....on Ź Date Ź G ene r a l In s t ru c ti on s Sectlon references are to the lmemal Revenue Code unless othe<wlSe noted. Future developmen t s . F0< the latest informat,on about developmen t s related to Form W - 9 andIts ins tn,ctlons. such aslegislation enaC1ed alter they were pub l ished,go to www.lrs.govF/ ormW9 . P urpose o f F orm An Individual or entity (Fonn W•9requeste<) wt,o Is required to file an i nfonnation return with Iha IRS must ob1alnyour correC1 taxpayer ldentiflcati0t1number (TIN) which may be your social security numbe r (SSN), ind1Vic:klal taxpayer Identification number (rTIN), adoption tax . payerIdentificationnumber (ATIN), or employer I dentifci ationnumber (E:IN). to report on an lnfonnation return theamount paid to you, ot other amount reportable on an in f ormationreturn. Examples ol lnlonnatlon returns,nciude. but are not lmlted to, the follow ing. • Form I099 - INT (Olteres t earned or paid) • Form 1099 - 0111(dlvtdends, Including those from atoekS or mutua l funds) • Form 1099 - MISC (various typos of Income . privis.awatds, 0< gross proceeds) • Form 1099 - 8(stoc k or mutual fund sales and certain other trenaactlons by bro k ers) • Form 1099 - S (proceeds from reelestate transactions) • Form 1099 - K(merchant card andthwdparty network trllnsactlons) • Form 1098 (home mongage Inte res t), 109S·E (student loan Interest). 1098 - T (1u l a on) • Form l 099.C (canoe ltd dtbt) • Form 1099 - A (acqu,slllon or abandonmeot ot securedprope<ly) useForm W •9 only II you area U.S.person Qncllld.ing a resident alien), to provide your CQffect TIN. If you cto not return Fotrn W - 9 10 I/le requester wdh a TIN, you m/9111 be sr,t,ject to l:>BClrup withholding. See What Is backup wtthholdlng. tater. ca t . N o . 1 0231 x Fonn W - 9 (Rev . 10 - 2018)

Paoo 3 Crim i nal permlly for fallifyinu information. Wilfllly bloify,ng - blleatlons o, 11lttm.ibon8 may subject you to crimlNI lncfudlng ._ attd/01lmp,,sonmtt1L Mi - • o f TJ N t, . I f th 9 n>quelltr diadoM a or ... TIN . ,n liol.ltio n of 1 - •llow. lho• may b9 ..ibjoc:t l o c:, 'il and crimonw 1)911 - Specif ic I n structio n s U n e 1 You m111t e111M one of Ille lollow,ng on Ihle tiw. do n ot lffv• l . hil lne blank. The,_ aholM ma.leh th• name on 'fO'Jl tall r•tum. If ltlilForm W • 8 It IOI11 jOlnt account ( Olhlr!NII an OCC4Unt ffllil'UlMd by • JOfev, linwlciallnablullonIFfll).t..i Int. and II - , circle. the,..,,,. of th• penon or em,1y whoH number )'OIi •nt•ed in Patt I of FormW , 8 Uyou ate po<Wld,ng Form W - 9 IO an FFI todoci.m«tt o )Otrll aocount. - h hOlder of tht - nt that • a U.S . perton m11'1 pro - ,de a Form W•II . L lnc : 11 /lduat . Go - 1111 1 . • ntor Iha namo atiown on your lllX 1 , 11 rn II you dlan d your last n . im . Wllhoiil inlorffing lhe Soc,al Secl#ily Admril 1 rlllon (SSA) of lht, .. ,, .. dlange , . , . ,,er your firll name . 1 ht IIIJI name as lhown on you, : . - 1 NaKlly co,d, and your - new lall ,_,,, . _ No!At : ITI N a.ant Enl• your k,d1vklu.>l...,,,. at WU Wll«ed on your Form W 7 opplletll,C , )n lin. ta, Th,. lhOll!d .ito be lht 11m• at tilt name you ,mered on lht Fotm 104(){t040A/1040EZ you f"9d Wllh your apploclilon. b Solo iwoprle tor or a,ngle , membor U . C . Enttt you, : lndMoUII name M llllown on)'OlK 104 <V 1040 A/ 1040 EZ on fine I . Yt>u may MUI yourbYeinea . era . er • doing bla>N 1 _ . (D 8 All'IIW'M on in<I 2 . c. Pa,tn.,. hlp , LLC lhat II no t • t l ngle - mombor I.L , C C cor po, etlon , or S corponidon. Enter tilt ent,cy't NWM M 1hown on !he onbly Ŷ Ill)( rtlurn on line I and IJl'f bu - . - lrade, er DBA """18 on llne 2. d 011>.. - ..,dd01,. Entt<V - nMM ••hown on required U.S. tldetal 18'1 doc:urnenla on ine I . Thia,,..,. ahould match the name ahown on Ille ohalW o, olh« legal doc.,,,_ t crtllbng the Wltity . You mrt •nw ony -- .1rado. c, OBA narr - .on lone 2 • · Olv898rded enti ty . Fo, U.S. t tdn w an ent,ly tNt • cfitre9ardtd •e., enbty - nte from ,ta a,,,_ I, trNIAtd u a ·d• dtd otlbty .• Ste ReglAatlonueetion 301 . 7701 - 2(e}(2)C,i) . Entt1 the owntr't n:wnt on •ne 1 . Tht name ol lht en1,y...,..,td on n 1 "10IAd ,.._ bt D d•tglt'o.d tnl ly . TIit - on ltne 1 5hould bt tht name thown on the lnoome w ren,m on which tht 1ncom. thould be roporttd. For axomple. d a lor•9'LLC that i Ŷ lreatad n • 0 11<1,; Ŷ ded - ty for U.S l«leral tax I'll' hlls u.,glt o....,.,.. thllt hi• U . S 1)4t!lon . the US ow - •• - •• td IObt poO oid.clonlll'lt 1 , lt tht di'oet ownt< of tt.. tnll(y ,s llso a dosregtWded enltly, onte, tht rot - tllal • net dhlrega,ded fc, ttdwal tall p,.,poses Ent• Ille d. - .garded em,ty's name on ltn. 2. •Busn,ss nntM/dloregardad enbty nam..• II lht - o tl l Mt ... - egarotd tnltty Is a lor11gn P4t.on . 0 - fflU6 I complol t an app,oprlat • Fo, m W • 8 Inti.a d o l a Fo, m W - 9. lhsllllht caH even If the fortilJ'P4'410n h3s oU.S ll N Line 2 IIyou t,aw • bualMM """"'•trade name , OBA nnmt . 0t uagrdtd entity ,..,,.._ you rrwtt entt1 It on line 2 . Une3 Chod<Iha app,opnait boX on hnU fOf U . S lt<Wol tax c:lultf1COuon ol tht per - , wlloee name ii .,.,,.,ad on tine 1 Chee k ont bo• ƒ " ltM 3 - IF tho •nllty/ponoon on lne 1 1• ll(n) ... - • Corl)O(Mlon THEN choc k lho b o x fo, ••. Corpcrll,ot'I • l rd h•d • SoleproprMttorlhip. o, • S,nglt - mamb6r lirn, t td oornpm,y (I.LC) owMd by an IN!Mdual Ind d,mga,dod let U . S . ltdoraltlll<purpoNS. lnciYiduaVtote proprietor or tinoie -- mtmbGrlLC • UC trNltd aa a por1nor$htp tor U S ftlltrll tax purpc>Mt. • LLC that NS tiled fo,m 8832 0t 25$3 1 0 be 18'1td AS a COll)Oflllon. 0( Llmilad llablftly oomparty aftd ent.01 1Mapp!Opria!e tDX clasarflcat>OI . (P• P.v - thlp, CaC co,po,allon; or Sa S cotpOtll! • LLC thal It cMrtgrdtd Al an tnltty tepll'ate fromIts o - but tht - ,a another UC !NI II net di Ŷ r1garded lo, U . S . l edt<ll WC • Partrwshlp Parowuilp • Tl'UIV.. late TrutVeslall Line 4, Exemptions II '/OU we • x tl'lll)Itom becl<up w lN>old,ng and/cw FATCA rapor11ng. enter ,n tht apprcp,11141 on • ne .t any codt(ljlhat may IPP')r to )'OU. Exempt P'Y.• code . • Ganoraly , indovidua 6"<:lud,ng tolt prOl)ttttora) re ne t • • - Pl from bac"' - 'P wi1hholofng • ,.. p,OY!dod btlcw, corpor•bo"' er• utmpt lrom P w,thhOlcffig to, certOln peymenta. includ"1g lnteoffl and dMdendt • Corpora,ons at• not exampt trom backup wlthhokMg tor payments In Mlllamtnt of payment wd Of llwd parly nelWOrlc lUIJWaCliO,... • Co,porai,on,a an not eumpt trom bac k up wlthholding w,lh re,;pect to oll« neys ' ,_ or gross pr p4Jd 10 &tt0tneys. and eorpor a boM 1h11 p<ovlde medical or hNlth car• ee,vic. are not txtmpt w,tt, r - .p to ptymtnll reportable on F0tm t IJSC . The follOWWIQ oodts tde,,lily payttl t t ilr• tMmpl horn b;idwp w,thhOldc,g. Enter I/It app,oproalt 1n the $pa« 1n Unt 4 . 1 An Oflll"IZD! , on exempt lrom true under HCltion 501(.a). arPJ I RA. o, a cuatodlll account und« Mellon )(7) W Ille accoum aat1$1tff lht rtq lrtmonts of stct,on401(1)Q) 2 Thi United Sllu• or - any of itt agencie Ŷ or instrumentlliDN 3 - A lt nlt , Iha 0...Ct ol Cdumboa, a U .S. oom h Of 0t lf'I'/ ot tht,ir pol,t.oCll 8'lbdMtlonl orinlln.tmtni.fl.ee 4 - A lortigngovw - t c, any ol 118 pol,tlcal aubd"' - agencies. Of ,natru,nentll),t,es 5 - A eorporallon 6 - A dealerIn aecu - i" orcommod,t!U required to • i the Untied Sia:es.1M OISlrlCt ol Columbia. o, a U.S. convnonwea.'11 er poueas,on 7 - A IUlll• OOtlVTllteion merehMt registered with !ht Commo6ty Futur.. Tridng Commi151on 8 - A 1N1 eatelt lnllttnntnt 11 1111 8 - Anentity reg,a - atall ti,,.a dumg lilt tu year under the ,,,_._,,.Company Act ol 1940 10 - A common trLllt lund opMaled by a bank undet aec1JOn 5&4{a) 11 - A n,nc:Ql snstotutlon 1 2 - A rroddt.man i.no,m ir, t he -- =m.nt convnunity u a nomtnM o, eusloct., 1 3 - A 11' 111 &Ump t fro m t u under - " ƒ " 684 o, delctibe d ln - n 4947

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Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY
OF WARRANTS OF
DIRECT DIGITAL HOLDINGS, INC.
PURSUANT TO THE OFFER DATED AUGUST 29, 2023

This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if:

· Warrants are not immediately available or Warrant holders cannot deliver Warrants to Equiniti Trust Company, LLC (the “Depositary”) prior to the Expiration Date (as defined in the Offer to Purchase), or

· The procedure for book-entry transfer cannot be completed on a timely basis, or

· Time will not permit all required documents, including a properly completed and duly executed Letter of Transmittal and Consent and any other required documents, to reach the Depositary prior to the Expiration Date.

The Offer to Purchase and Consent Solicitation dated August 29, 2023 (the “Offer to Purchase”) and the related Letter of Transmittal and Consent, as each may be amended or supplemented from time to time, together constitute the “Offer.”

The Offer relates to the warrants that were publicly issued in connection with the DIRECT IPO (as defined in the Offer to Purchase), which trade on The Nasdaq Global Market under the symbol “DRCTW” (the “Warrants”). Any and all outstanding Warrants are eligible to be tendered pursuant to the Offer.

IF NECESSARY, MAIL THIS NOTICE OF GUARANTEED DELIVERY TO:

If delivering by mail or overnight courier:
Equiniti Trust Company, LLC
6201 15th Avenue, Brooklyn, NY 11219
Attention: Corporate Actions Department

If delivering by facsimile transmission:
(718) 765-8758

This Notice of Guaranteed Delivery, properly completed and duly executed, may be delivered by hand, mail, or overnight courier to the Depositary. See the discussion in the Offer to Purchase under “The Offer and Consent Solicitation, Section 2. Procedure for Tendering Warrants.”

For this notice to be validly delivered, it must be received by the Depositary at the above address before the Offer expires. Delivery of this notice to another mailing address will not constitute a valid delivery. Delivery to the Company, the information agent or the book-entry transfer facility will not be forwarded to the Depositary and will not constitute a valid delivery.

This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal and Consent is required to be guaranteed by an Eligible Institution (as defined in the Letter of Transmittal and Consent) under the instructions to the Letter of Transmittal and Consent, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal and Consent.

By signing this Notice of Guaranteed Delivery, you exchange, upon the terms and subject to the conditions described in the Offer to Purchase and the related Letter of Transmittal and Consent, receipt of which you hereby acknowledge, the number of Warrants specified below pursuant to the guaranteed delivery procedure described in the Offer to Purchase under “The Offer and Consent Solicitation, Section 2. Procedure for Tendering Warrants.”

NUMBER OF WARRANTS EXCHANGED:

SIGNATURES

Signatures:

Name(s) of Warrant Holders(s):

(please type or print)

Certificate Nos.:

Address:

(Include Zip Code)

Daytime Area Code and Telephone Number:

Date:

If Warrants will be delivered by book-entry transfer, provide the Account Number.

Account Number(s):

GUARANTEE OF DELIVERY
(Not to be Used for Signature Guarantee)

The undersigned, a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an “eligible guarantor institution,” as that term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an “Eligible Institution”), guarantees delivery to the Depositary of the Warrants tendered, in proper form for transfer, or a confirmation that the Warrants tendered have been delivered pursuant to the procedure for book-entry transfer described in the Offer to Purchase into the Depositary’s account at the book-entry transfer facility, in each case together with a properly completed and duly executed Letter(s) of Transmittal, or an Agent’s Message (as defined in the Offer to Purchase) in the case of a book-entry transfer, and any other required documents, all within two Nasdaq Stock Market trading days after the date of receipt by the Depositary of this Notice of Guaranteed Delivery.

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and Consent and certificates for Warrants to the Depositary within the time set forth above.

Failure to do so could result in a financial loss to such Eligible Institution.

Name of Firm:

Authorized Signature:

Name:

(Please Print)

Title:

Address:

Areas Code(s) and Telephone Number(s):

Dated: , 2023

NOTE: DO NOT SEND WARRANTS WITH THIS FORM. WARRANTS SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL AND CONSENT.

Exhibit (a)(1)(D)

Offer to Purchase
Warrants to Acquire Shares of Class A Common Stock
of
Direct Digital Holdings, Inc.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE ONE MINUTE AFTER 11:59 P.M.,
EASTERN TIME, ON SEPTEMBER 26, 2023,
UNLESS THE OFFER IS EXTENDED.

August 29, 2023

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

Direct Digital Holdings, Inc., a Delaware corporation (“Direct Digital” or the “Company”) is offering to holders of any and all outstanding publicly traded warrants to purchase Class A common stock which were publicly issued and sold as part of units of the Company, in connection with the initial public offering of Direct Digital’s securities on February 15, 2022 (the “DIRECT IPO”), which entitle such warrant holders to purchase one share of the Company’s Class A common stock at an exercise price of $5.50, subject to adjustments (the “Warrants”), the opportunity to receive, upon the terms and subject to the conditions of the Offer, $1.20 in cash, without interest (the “Offer Purchase Price”) and less any required withholding taxes, for each outstanding Warrant tendered.

The offer is upon the terms and subject to certain conditions described in the Offer to Purchase and Consent Solicitation (the “Offer to Purchase”) and in the related Letter of Transmittal and Consent (the “Letter of Transmittal and Consent,” which together with the Offer to Purchase, as they may be amended or supplemented from time to time, constitute the “Offer”).

As part of the Offer, the Company is also soliciting consents from the holders of the Warrants to amend the Warrant Agreement, dated as of February 15, 2022, by and between the Company and American Stock Transfer & Trust Company (the “Warrant Agreement”), which governs all of the Warrants (the “Warrant Amendment”), to permit the Company to redeem each outstanding Warrant for $0.35 in cash, without interest (the “Redemption Price”), which Redemption Price is 71% less than the Offer Purchase Price. Pursuant to the terms of the Warrant Agreement, the consent of holders of at least a majority of the outstanding Warrants is required to approve the Warrant Amendment as it relates to the Warrants. Holders of the Warrants who desire to tender their Warrants pursuant to the Offer are required to consent to the Warrant Amendment. The foregoing is only a summary of the Warrant Amendment, and is qualified by reference to the full text of the Warrant Amendment, set forth as Annex A to the Offer to Purchase.

Warrants eligible to be tendered pursuant to the Offer include all of the Company’s Warrants.

Please furnish copies of the enclosed materials to your clients for whom you hold Warrants registered in your name or in the name of your nominee.

Enclosed with this letter are copies of the following documents:

1. Offer to Purchase and Consent Solicitation dated August 29, 2023;

2. Letter of Transmittal and Consent (including Form W-9), for your use in accepting the Offer and tendering Warrants of your clients;

3. Notice of Guaranteed Delivery with respect to Warrants, to be used to accept the Offer in the event (a) your Warrants are not immediately available, (b) the procedure for book-transfer cannot be completed on a timely basis, or (c) time will not permit all required documents to reach the Depositary prior to the Expiration Date (as defined in the Letter of Transmittal and Consent); and

4. Letter to Clients, for you to send to your clients and for whose account you hold Warrants registered in your name or in the name of a nominee, with an Instruction Form provided for obtaining such client’s instructions with regard to the Offer.

Warrant holders must make their own decision as to whether to tender their Warrants and, if so, how many Warrants to tender. Your clients should read carefully the information set forth or incorporated by reference in the Offer to Purchase and in the Letter of Transmittal and Consent, including the Company’s reasons for making the Offer.

It is the Company’s current intent not to conduct another tender offer to purchase the Warrants. However, the Company reserves the right to do so in the future, including by redemption of the Warrants if and when the Company is permitted to do so pursuant to the terms of the Warrants.

All tenders must be in proper form as described in Section 2 of the Offer to Purchase to be valid.

We urge you to contact your clients promptly. Please note that the Offer period and withdrawal rights will expire one minute after 11:59 p.m., Eastern Time, on September 26, 2023, unless the Offer period is extended.

Under no circumstances will interest be paid on the Offer Purchase Price regardless of any extension of, or amendment to, the Offer or any delay in paying for such warrants.

The Company will not pay any fees or commissions to any broker, dealer or other person in connection with the solicitation of tenders of Warrants pursuant to the Offer. However, the Company will, on request, reimburse you for customary mailing and handling expenses incurred by you in forwarding copies of the enclosed Offer materials to your clients.

As withholding agent for your clients, you are instructed to backup withhold on the gross proceeds of the Offer to Purchase paid to your clients that do not submit the Form W-9, Form W-8BEN, W-8IMY or Form W-8ECI, as applicable, in accordance with appropriate, accepted procedures. This withholding is disclosed in the Offer to Purchase.

Questions and requests for assistance or for additional copies of the enclosed material may be directed to the Information Agent at the telephone numbers and address listed below.

Very truly yours,

Direct Digital Holdings, Inc.

Nothing contained in this letter or in the enclosed documents shall render you or any other person the agent of the Company, the Dealer Manager, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to give any information or use any document or make any statement on behalf of any of them with respect to the offer other than the enclosed documents and the statements contained therein.

The Information Agent for the Offer is:
D.F. King & Co., Inc.
48Wall Street, 22nd Floor
New York, NY 10005

Banks & Brokers May Call: (212) 269-5550
All Others`Call Toll-Free: (866) 796-1290

Email: drct@dfking.com

Exhibit (a)(1)(E)

Offer to Purchase
Warrants to Acquire Shares of Class A Common Stock
of
Direct Digital Holdings, Inc.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE ONE MINUTE AFTER 11:59 P.M.,
EASTERN TIME, ON SEPTEMBER 26, 2023,
UNLESS THE OFFER IS EXTENDED.

August 29, 2023

To Our Clients:

Enclosed for your consideration are the Offer to Purchase and Consent Solicitation dated August 29, 2023 (the “Offer to Purchase”) and the related Letter of Transmittal and Consent (the “Letter of Transmittal and Consent” and, together with the Offer to Purchase and any amendments or supplements thereto, collectively, the “Offer”) in connection with the Offer by Direct Digital Holdings, Inc., a Delaware corporation (“Direct Digital” or the “Company”), to holders of any and all outstanding publicly traded warrants to purchase Class A common stock which were publicly issued and sold as part of units of the Company, in connection with the initial public offering of Direct Digital’s securities on February 15, 2022 (the “DIRECT IPO”), which entitle such warrant holders to purchase one share of the Company’s Class A common stock at an exercise price of $5.50, subject to adjustments (the “Warrants”), the opportunity to receive, upon the terms and subject to the conditions of the Offer, $1.20 in cash, without interest (the “Offer Purchase Price”) and less any required withholding taxes, for each outstanding Warrant tendered.

The Offer is open for all outstanding Warrants.

All tenders must be in proper form as described in Section 2 of the Offer to Purchase to be valid.

We are the holder of record of Warrants held for your account. As such, we are the only ones who can tender your Warrants, and then only pursuant to your instructions. We are sending you the Letter of Transmittal and Consent for your information only; you cannot use it to tender Warrants we hold for your account.

Please instruct us as to whether you wish us to tender any or all of the Warrants we hold for your account upon the terms and subject to the conditions of the Offer.

Please note the following:

1. You may tender your Warrants for the Offer Purchase Price, as indicated in the attached Instruction Form.

2. The Offer is subject to certain conditions set forth in the Offer to Purchase under Section 10.

3. The Offer and withdrawal rights will expire one minute after 11:59 p.m., Eastern Time, at the end of the day on September 26, 2023, unless Direct Digital extends the Offer period.

4. The Offer is for any and all of the Company’s outstanding Warrants as of August 29, 2023.

5. Tendering Warrant holders who are registered Warrant holders or who tender their Warrants directly to the Equiniti Trust Company, LLC, as the Depositary, will not be obligated to pay any brokerage commissions or fees, solicitation fees, or, except as set forth in the Offer to Purchase and the Letter of Transmittal and Consent.

If you wish to have us tender any or all of your Warrants, please so instruct us by completing, executing, detaching and returning the attached Instruction Form.

Your prompt action is requested. Your instruction form should be forwarded to us in ample time to permit us to submit a tender on your behalf before the Expiration Date of the Offer. Please note that the Offer and withdrawal rights will expire one minute after 11:59 p.m., Eastern Time, at the end of the day on September 26, 2023, unless the Offer period is extended.

The Offer is being made solely pursuant to the Offer to Purchase and Consent Solicitation and the Letter of Transmittal and Consent and is being made to all record holders of the Warrants. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Warrants residing in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the securities laws of that jurisdiction.

The Company’s Board of Directors has approved the Offer. However, neither the Company, its Board of Directors, nor the Depositary, the Information Agent or Dealer Manager or any other person makes any recommendation to Warrant holders as to whether to tender or refrain from tendering their Warrants. Warrant holders must make their own decision as to whether to tender their Warrants and, if so, how many Warrants to tender. In doing so, Warrant holders should read carefully the information set forth or incorporated by reference in the Offer to Purchase and in the Letter of Transmittal and Consent, including the purposes and effects of the Offer.

INSTRUCTION FORM WITH RESPECT TO

Offer to Purchase

Outstanding Warrants to Acquire Class A Common Stock

Direct Digital Holdings, Inc.

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer in connection with the Offer by Direct Digital to holders of any and all outstanding Warrants of the opportunity to receive, upon the terms and subject to the conditions of the Offer $1.20 in cash, without interest and less any required withholding taxes, for every outstanding Warrant tendered by the holder.

The undersigned hereby instruct(s) you to tender to the Company the number of Warrants indicated below for the account of the undersigned, on the terms and subject to the conditions of the Offer. This Instruction Form will instruct you to tender to the Company the number of Warrants indicated below which are beneficially owned by (us) (me) and registered in your name, upon the terms and subject to the conditions set forth in the Offer.

NUMBER OF WARRANTS TO BE TENDERED HEREBY: WARRANTS

The method of delivery of this document is at the election and risk of the tendering Warrant holder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

SIGN HERE

Account Number:		Signature(s):


Print Name(s):


Address(es):


Area Code and Telephone Number:


Taxpayer Identification or Social Security Number:


Date:

Exhibit (a)(5)(i)

Direct Digital Holdings Announces Commencement of an Offer to Purchase and Consent Solicitation Relating to its Warrants

Houston, August 29, 2023 -- 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"), Huddled Masses LLC ("Huddled Masses") and Orange142, LLC ("Orange142"), today announced that the Company has commenced an offer to purchase (the “Offer”) all of its outstanding publicly traded warrants (the “Warrants”) to purchase shares of its Class A common stock, par value $0.001 per share, at a purchase price of $1.20 in cash, without interest. The purpose of the Offer is to reduce the number of shares of Class A common stock that would become outstanding upon the exercise of Warrants, thus simplifying, and providing investors and potential investors with greater certainty as to, Direct Digital Holdings’ capital structure.

Direct Digital Holdings is also soliciting consents (the “Consent Solicitation”) to amend the Warrant Agreement, dated as of February 15, 2022 (the “Warrant Agreement”), by and between Direct Digital Holdings and Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC (the “Transfer Agent”), which governs all of the Warrants, to permit Direct Digital Holdings to redeem each outstanding Warrant for $0.35 in cash, without interest, which is approximately 71% less than the price applicable to the Offer (such amendment, the “Warrant Amendment”). Pursuant to the terms of the Warrant Agreement, the adoption of the Warrant Amendment will require the consent of holders of at least a majority of the outstanding Warrants. In order to tender the Warrants in the Offer and receive $1.20 in cash for each of their Warrants, holders of the Warrants are required to consent to the Warrant Amendment. The Offer will be open until one minute after 11:59 p.m., Eastern Time, on September 26, 2023, unless extended or earlier terminated by Direct Digital Holdings (the “Expiration Date”). Tendered Warrants may be withdrawn by holders at any time prior to the Expiration Date. The Company’s obligation to complete the Offer is conditioned on the tender of more than 50% of the outstanding Warrants.

The Offer and Consent Solicitation are being made pursuant to an Offer to Purchase dated August 29, 2023, and Schedule TO, dated August 29, 2023, each of which will be filed with the Securities and Exchange Commission (“SEC”) and more fully set forth the terms and conditions of the Offer and Consent Solicitation.

The Company’s Class A common stock and Warrants are listed on The Nasdaq Stock Market LLC under the symbols “DRCT” and “DRCTW,” respectively. As of August 29, 2023, a total of 3,217,800 Warrants were outstanding.

Stifel, Nicolaus & Company, Incorporated has been appointed as the Dealer Manager for the Offer and Consent Solicitation, D.F. King, Co., Inc. (“D.F. King”) has been appointed as the Information Agent for the Offer and Consent Solicitation, and Equiniti Trust Company, LLC has been appointed as the Depositary for the Offer and Consent Solicitation. All questions concerning tender procedures and requests for additional copies of the offer materials, including the letter of transmittal and consent should be directed to D.F. King.

Important Additional Information Has Been Filed with the SEC

Copies of the Schedule TO and Offer to Purchase will be available free of charge at the website of the SEC at www.sec.gov. Requests for documents may also be directed to D.F. King at (866) 796-1290 (toll-free) or drct@dfking.com.

This announcement is for informational purposes only and shall not constitute an offer to purchase or a solicitation of an offer to sell the Warrants. The Offer and Consent Solicitation are being made only through the Schedule TO and Offer to Purchase, and the complete terms and conditions of the Offer and Consent Solicitation are set forth in the Schedule TO and Offer to Purchase.

Holders of the Warrants are urged to read the Schedule TO and Offer to Purchase carefully before making any decision with respect to the Offer and Consent Solicitation because they contain important information, including the various terms of, and conditions to, the Offer and Consent Solicitation.

None of Direct Digital Holdings, any of its management or its board of directors, or the Dealer Manager or the Information Agent or Depositary or any other person makes any recommendation as to whether or not Warrant holders should tender Warrants for exchange in the Offer or consent to the Warrant Amendment in the Consent Solicitation. Warrant holders must make their own decision as to whether to tender their Warrants and, if so, how many Warrants to tender.

About Direct Digital Holdings

Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled Masses, and Orange 142, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings' sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The Company's subsidiaries Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Direct Digital Holdings' sell- and buy-side solutions manage on average over 136,000 clients monthly, generating approximately 250 billion impressions per month across display, CTV, in-app and other media channels.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are subject to certain risks, trends and uncertainties.

As used below, “we,” “us,” and “our” refer to the Company. We use words such as “could,” “would,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements.

All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Our forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements, including, but not limited to: our dependence on the overall demand for advertising, which could be influenced by economic downturns; any slow-down or unanticipated development in the market for programmatic advertising campaigns; the effects of health epidemics; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers', suppliers' or other partners' computer systems; any unavailability or non-performance of the non-proprietary technology, software, products and services that we use; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry's technology and practices, and any perceived failure to comply with laws and industry self-regulation; restrictions on the use of third-party "cookies," mobile device IDs or other tracking technologies, which could diminish our platform's effectiveness; any inability to compete in our intensely competitive market; any significant fluctuations caused by our high customer concentration; our limited operating history, which could result in our past results not being indicative of future operating performance; any violation of legal and regulatory requirements or any misconduct by our employees, subcontractors, agents or business partners; any strain on our resources, diversion of our management's attention or impact on our ability to attract and retain qualified board members as a result of being a public company; our dependence, as a holding company, on receiving distributions from Direct Digital Holdings, LLC to pay our taxes, expenses and dividends; the satisfaction of the conditions to the Offer, including the minimum tender condition; and other factors and assumptions discussed in the "Risk Factors," "Management's Discussion and Analysis of Financial Conditions and Results of Operations" and other sections of our filings with the Securities and Exchange Commission that we make from time to time. Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this press release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Contacts:

Investors:

Brett Milotte, ICR

Brett.Milotte@icrinc.com

Exhibit (a)(5)(ii)

Notice of Offer to Purchase by

Direct Digital Holdings, Inc.

of Warrants to Acquire Class A Common Stock

Direct Digital Holdings, Inc. (the “Company”), hereby offers to purchase any and all outstanding warrants to purchase Class A common stock which were publicly issued and sold as part of units of the Company, in connection with the initial public offering of the Company’s securities on February 15, 2022, which entitle such warrant holders to purchase one share of the Company’s Class A common stock at an exercise price of $5.50, subject to adjustments (the “Warrants”), for $1.20 in cash, without interest (“Offer Purchase Price”) and less any required withholding taxes, in exchange for each Warrant tendered by the holder.

The offer is upon the terms and subject to the conditions described in the Offer to Purchase and Consent Solicitation dated August 29, 2023 (the “Offer to Purchase”), the related Letter of Transmittal and Consent (the “Letter of Transmittal”) and the other materials filed with the SEC as exhibits to the Tender Offer Statement on Schedule TO-I (collectively with the Offer to Purchase, as each may be amended or supplemented from time to time, the “Offer Materials”). The terms and conditions set forth in the Offer Materials collectively constitute the “Offer”.

As part of the Offer, the Company is also soliciting consents from the holders of the Warrants to amend the Warrant Agreement, dated as of February 15, 2022, by and between the Company and Equiniti Trust Company, LLC (the “Warrant Agreement”), which governs the terms of all Warrants, to permit the Company to redeem each Warrant that is outstanding upon the closing of the Offer for $0.35 in cash, without interest (the “Warrant Amendment”), which is 71% less than the Offer Purchase Price. Although we intend to redeem all remaining outstanding Warrants if the Warrant Amendment is approved, we would not be required to effect such a redemption and may defer doing so until it is most advantageous to us. Pursuant to the terms of the Warrant Agreement, the consent of holders of at least a majority of the outstanding Warrants is required to approve the Warrant Amendment. Holders of the Warrants who desire to tender their Warrants pursuant to the Offer are required to consent to the Warrant Amendment. Accordingly, consents will be deemed to be delivered for all Warrants tendered on or before the Expiration Date for the Offer. The foregoing is only a summary of the Warrant Amendment, and is qualified by reference to the full text of the Warrant Amendment, set forth as Annex A to the Offer to Purchase.

The Offer is conditioned upon more than 50% of the outstanding Warrants being tendered in the Offer and subject to other conditions described in the Offer to Purchase.

THE OFFER EXPIRES ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, AT THE END OF THE DAY ON SEPTEMBER 26, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

The Company expressly reserves the right to extend the Offer at any time and from time to time by notice to the Depositary (as defined in the Offer to Purchase) and by making a public announcement of such extension, in which event the term “Expiration Date” shall mean the latest time and date to which the Offer, as so extended by the Company, shall expire. During any such extension, all Warrants previously tendered and not properly withdrawn will remain subject to the Offer and to the right of the tendering holder to withdraw such holder’s Warrants.

The Company may terminate the Offer if any of the conditions of the Offer are not satisfied prior to the Expiration Date. In the event that the Company terminates the Offer, all Warrants tendered by a holder in connection with the Offer will be returned to such holder and the Warrants will expire in accordance with their terms on February 15, 2027, at 5:00 p.m. Eastern Time, and will otherwise remain subject to their original terms.

Warrant holders wishing to tender their Warrants must follow the procedures set forth in Section 2 of the Offer to Purchase and in the Letter of Transmittal. To validly tender Warrants pursuant to the Offer, a properly completed and duly executed Letter of Transmittal or photocopy thereof, together with any required signature guarantees, must be received by the Depositary at its address set forth on the last page of the Offer to Purchase prior to the Expiration Date.

Warrant holders who hold Warrants in a brokerage account or otherwise through a broker, dealer, custodian or other nominee and are not the holder of record on the Company’s books must contact their broker, dealer, custodian or other nominee and comply with their policies and procedures and provide them with any necessary paperwork order to have them tender their Warrants. Warrant holders holding their Warrants through a broker, dealer, custodian or other nominee must not deliver a Letter of Transmittal directly to the Depositary. The broker, dealer, custodian or other nominee holding such Warrants must submit the Letter of Transmittal that pertains to such Warrants via DTC’s ATOP procedures on the holder’s behalf.

Warrant holders wishing to tender their Warrants but who are unable to deliver them physically or by book-entry transfer prior to the Expiration Date, or who are unable to make delivery of all required documents to the Depositary prior to the Expiration Date, may tender their Warrants by complying with the procedures set forth in Section 2 of the Offer to Purchase for tendering by Notice of Guaranteed Delivery.

Tenders of Warrants made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable. Notwithstanding the foregoing, tendered Warrants may also be withdrawn if the Company has not accepted the Warrants for exchange by the 40th business day after the initial commencement of the Offer. To be effective, a written notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of the Offer to Purchase prior to the release of such Warrants. Any notice of withdrawal must specify the name of the holder who tendered the Warrants for which tenders are to be withdrawn and the number of Warrants to be withdrawn, and the name of the registered holder of the Warrants, if different from that of the person who tendered such Warrants. A holder of Warrants desiring to withdraw tendered Warrants previously delivered through DTC’s ATOP procedures should contact the DTC participant through which such holder holds his, her or its Warrants. In order to withdraw previously tendered Warrants, a DTC participant may, prior to the Expiration Date, withdraw its instruction previously transmitted through DTC’s ATOP procedures by withdrawing its acceptance. Holders of Warrants submitting a tender via DTC’s ATOP procedures are deemed to consent to the Warrant Amendment. The valid revocation of a consent will constitute the concurrent valid withdrawal of the tendered Warrants as to which consent was delivered. The notices of withdrawal must contain the name and number of the DTC participant. A withdrawal of an instruction must be executed by a DTC participant as such DTC participant’s name appears on its transmission to which such withdrawal relates. However, Warrants for which tenders are withdrawn may be tendered again by following one of the procedures described in Section 2 of the Offer to Purchase at any time prior to the Expiration Date.

Upon the terms and subject to the conditions of the Offer, the Company will purchase Warrants validly tendered and not withdrawn as of the Expiration Date for a purchase price of $1.20 per Warrant, without interest. The Offer Purchase Price to be paid will be delivered promptly following the Expiration Date. In all cases, Warrants will only be accepted for purchase pursuant to the Offer after timely receipt by the Depositary of a properly completed and duly executed Letter of Transmittal (or copy thereof), or any Agent’s Message (as defined in the Offer to Purchase) in the case of a book-entry transfer, and any other documents required by the Letter of Transmittal. The Company will be deemed to have accepted for purchase, and therefore purchased, Warrants that are properly tendered and are not properly withdrawn, only when, as and if it gives oral or written notice to the Depositary of its acceptance of the Warrants for purchase under the Offer.

Under no circumstances will the Company pay interest on the Offer Purchase Price, including, but not limited to, by reason of any delay in making payment. In addition, if certain events occur, the Company may not be obligated to purchase Warrants in the Offer.

The Offer is being made to all holders of Warrants. The purpose of the Offer is to reduce the number of shares of Class A Common Stock that would become outstanding upon the exercise of Warrants. The Company’s Board of Directors believes that by allowing holders of Warrants to tender one Warrant for the Offer Purchase Price, the Company can potentially reduce the substantial number of shares of Class A Common Stock that would be issuable upon exercise of the Warrants, thus providing investors and potential investors with greater certainty as to the Company’s capital structure. The Warrants acquired pursuant to the Offer will be retired and cancelled. The Offer is not made pursuant to a plan to periodically increase any security holder’s proportionate interest in the assets or earnings and profits of the Company.

The Company’s Board of Directors has approved the Offer. However, none of the Company, its Board of Directors, the Dealer Manager, the Information Agent or the Depositary or any of their respective affiliates makes any recommendation to any Warrant holder whether to tender or refrain from tendering any or all Warrants. Warrant holders must make their own decision whether to tender Warrants and, if so, how many Warrants to tender.

Generally, the tender of Warrants for cash pursuant to the Offer will be a taxable sale of the Warrants for U.S. federal income tax purposes. For a discussion of the U.S. federal income tax consequences of the tender of Warrants pursuant to the Offer and the consent of the Warrant Amendment, see Section 11 of the Offer to Purchase. WARRANT HOLDERS ARE STRONGLY ENCOURAGED TO CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF TENDERING WARRANTS IN THE OFFER.

The information required to be delivered by Rule 13e-4(d)(1) under the U.S. Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase, which is incorporated herein by reference.

Copies of the Offer to Purchase and Consent Solicitation and the Letter of Transmittal and Consent will be mailed to record holders of the Warrants, including any custodians, brokers, dealers, commercial banks, trust companies and other nominees whose names, or the names of whose nominees, appear on the Company’s warrant holder list.

The Offer to Purchase and Consent Solicitation and the related Letter of Transmittal and Consent contain important information that should be carefully read in their entirety before any decision is made with respect to the Offer.

Questions regarding the terms of the Offer may be directed to the Dealer Manager. Questions regarding how to tender the Warrants or requests for additional copies of the Offer Materials may be directed to the Information Agent. Warrant holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. To confirm delivery of Warrants, holders of Warrants are directed to contact the Information Agent.

The Dealer Manager for the Offer is:

The Depositary for the Offer is:

The Information Agent for the Offer is:

Stifel

787 Seventh Avenue, 12th Floor

New York, New York 10019

Phone: (443) 224-1254

Email: BaltimoreEqtySynd@stifel.com

Equiniti Trust Company, LLC
6201 15th Avenue
Brooklyn, New York 11219
Phone: (877) 248-6417

D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Investors Call (Toll-Free): (866) 796-1290
Banks and Brokers Call: (212) 269-5550
By Email: drct@dfking.com

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Warrants (as defined below). The Offer (as defined below) is made solely pursuant to the Offer to Purchase and Letter of Transmittal (each as defined below). The information contained or referred to therein is incorporated herein by reference. The Offer is being made to all holders of Warrants, provided that the Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Warrants in any state in which making or accepting the Offer would violate that state’s laws. In any state where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on the Company’s behalf by the Dealer Manager (as defined below) or one or more registered brokers or dealers licensed under the laws of such state.

Direct Digital Holdings, Inc.
August 29, 2023

EX-FILING FEES

Calculation of Filing Fee Tables

SC TO-I
(Form Type)

Direct Digital Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)

Table 1: Transaction Valuation

	Transaction Valuation		Fee Rate	Amount of Filing Fee
Fees to Be Paid	$	3,861,360.00	$110.20 per $1,000,000	$	425.52
Fees Previously Paid					-
Total Transaction Valuation
Total Fees Due for Filing				$	425.52
Total Fees Previously Paid					-
Total Fee Offsets					-
Net Fee Due				$	425.52

The transaction valuation is estimated for purposes of calculating the amount of the filing fee only. The amount is based upon the offer to purchase up to 3,217,800 warrants for a purchase price of $1.20 per Warrant, for a transaction valuation of $3,861,360.00.

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