Direct Digital (DRCT) 10-Q 9 Nov 23 2023 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Nov. 07, 2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-41261
Entity Registrant Name	DIRECT DIGITAL HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-2306185
Entity Address, Address Line One	1177 West Loop South
Entity Address, Adress Line Two	Suite 1310
Entity Address, City or Town	Houston
Entity Address State Or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	832
Local Phone Number	402-1051
Title of 12(b) Security	Class A Common Stock, par value $0.001 per share
Trading Symbol	DRCT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Central Index Key	0001880613
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Class A
Entity Common Stock, Shares Outstanding		2,992,425
Common Class B
Entity Common Stock, Shares Outstanding		11,278,000

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 5,481,949	$ 4,047,453
Accounts receivable, net	54,637,634	26,354,114
Prepaid expenses and other current assets	1,426,925	883,322
Total current assets	61,546,508	31,284,889
Property, equipment and software, net of accumulated depreciation and amortization of $219,386 and $34,218, respectively	625,028	673,218
Goodwill	6,519,636	6,519,636
Intangible assets, net	12,172,396	13,637,759
Deferred tax asset, net	5,082,424	5,164,776
Operating lease right-of-use assets	674,846	798,774
Other long-term assets	127,492	46,987
Total assets	86,748,330	58,126,039
CURRENT LIABILITIES
Accounts payable	45,021,034	17,695,404
Accrued liabilities	4,071,128	4,777,764
Liability related to tax receivable agreement, current portion	41,141	182,571
Notes payable, current portion	1,146,250	655,000
Deferred revenues	1,044,069	546,710
Operating lease liabilities, current portion	49,977	91,989
Income taxes payable	113,355	174,438
Related party payables	1,428,093	1,448,333
Total current liabilities	52,915,047	25,572,209
Notes payable, net of short-term portion and deferred financing cost of $1,722,716 and $2,115,161, respectively	22,323,534	22,913,589
Economic Injury Disaster Loan	150,000	150,000
Liability related to tax receivable agreement, net of current portion	4,245,234	4,149,619
Operating lease liabilities, net of current portion	717,632	745,340
Total liabilities	80,351,447	53,530,757
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Additional paid-in capital	8,782,092	8,224,365
Accumulated deficit	(2,399,479)	(3,643,261)
Total stockholders' equity	6,396,883	4,595,282
Total liabilities and stockholders' equity	86,748,330	58,126,039
Class A
STOCKHOLDERS' EQUITY
Common stock	2,992	2,900
Class B
STOCKHOLDERS' EQUITY
Common stock	$ 11,278	$ 11,278

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accumulated amortization and depreciation	$ 219,386	$ 34,218
Deferred financing costs	$ 1,722,716	$ 2,115,161
Class A
Common stock , par value	$ 0.001	$ 0.001
Common stock , Authorized	160,000,000	160,000,000
Common stock , shares issued	2,991,792	2,900,000
Common stock , shares outstanding	2,991,792	2,900,000
Class B
Common stock , par value	$ 0.001	$ 0.001
Common stock , Authorized	20,000,000	20,000,000
Common stock , shares issued	11,278,000	11,278,000
Common stock , shares outstanding	11,278,000	11,278,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues
Total revenues	$ 59,472,124	$ 25,985,375	$ 116,098,834	$ 58,617,020
Cost of revenues
Total cost of revenues	47,719,306	18,524,631	87,840,328	38,039,657
Gross profit	11,752,818	7,460,744	28,258,506	20,577,363
Operating expenses
Compensation, taxes and benefits	4,747,081	3,845,918	12,934,406	9,895,646
General and administrative	2,512,330	1,770,002	8,717,584	5,187,875
Total operating expenses	7,259,411	5,615,920	21,651,990	15,083,521
Income from operations	4,493,407	1,844,824	6,606,516	5,493,842
Other income (expense)
Other income	83,331		175,472	47,982
Forgiveness of Paycheck Protection Program loan				287,143
Loss on redemption of non-participating preferred units				(590,689)
Contingent loss on early termination of line of credit			(299,770)
Interest expense	(1,059,890)	(905,605)	(3,104,684)	(2,269,643)
Total other expense	(976,559)	(905,605)	(3,228,982)	(2,525,207)
Income before taxes	3,516,848	939,219	3,377,534	2,968,635
Tax expense	165,994	128,436	165,658	215,112
Net income	$ 3,350,854	$ 810,783	$ 3,211,876	$ 2,753,523
Net income per common share:
Basic (in dollars per share)	$ 0.23	$ 0.06	$ 0.23	$ 0.23
Diluted (in dollars per share)	$ 0.23	$ 0.06	$ 0.22	$ 0.23
Weighted-average number of shares of common stock outstanding:
Basic (in shares)	14,268,168	14,178,000	14,216,211	11,846,601
Diluted (in shares)	14,827,165	14,545,241	14,817,770	11,996,969
Buy-side advertising
Revenues
Total revenues	$ 7,850,058	$ 7,130,736	$ 27,092,816	$ 22,283,044
Cost of revenues
Total cost of revenues	3,113,491	2,471,170	10,650,541	7,694,987
Sell-side advertising
Revenues
Total revenues	51,622,066	18,854,639	89,006,018	36,333,976
Cost of revenues
Total cost of revenues	$ 44,605,815	$ 16,053,461	$ 77,189,787	$ 30,344,670

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Units	Common Stock Common Class A	Common Stock Common Class B	APIC	Accumulated equity (deficit)	Total
Balance, at beginning of period at Dec. 31, 2021	$ 4,294,241				$ (4,669,097)	$ (374,856)
Balance, at beginning of period (in shares) at Dec. 31, 2021	34,182
Issuance of Class A common shares, net of transaction costs (in shares)		2,800,000
Issuance of Class A common shares, net of transaction costs		$ 2,800		$ 10,164,243		10,167,043
Conversion of Class B shares to Class A common stock (in shares)		100,000	(100,000)
Conversion of Class B shares to Class A common stock		$ 100	$ (100)
Conversion of member units to Class B shares (in shares)	(28,545)		11,378,000
Conversion of member units to Class B shares	$ (200)		$ 11,378	(11,178)
Redemption of common units (in shares)	(5,637)
Redemption of common units	$ (4,294,041)			(2,905,959)		(7,200,000)
Stock-based compensation				85,437		85,437
Distributions to members					(916,433)	(916,433)
Additional paid-in capital related to tax receivable agreement				485,100		485,100
Net income					2,753,523	2,753,523
Balance, at end of period at Sep. 30, 2022		$ 2,900	$ 11,278	7,817,643	(2,832,007)	4,999,814
Balance, at end of period (in shares) at Sep. 30, 2022		2,900,000	11,278,000
Balance, at beginning of period at Dec. 31, 2021	$ 4,294,241				(4,669,097)	(374,856)
Balance, at beginning of period (in shares) at Dec. 31, 2021	34,182
Additional paid-in capital related to tax receivable agreement						823,481
Balance, at end of period at Dec. 31, 2022		$ 2,900	$ 11,278	8,224,365	(3,643,261)	4,595,282
Balance, at end of period (in shares) at Dec. 31, 2022		2,900,000	11,278,000
Balance, at beginning of period at Jun. 30, 2022		$ 2,800	$ 11,378	7,747,613	(3,036,348)	4,725,443
Balance, at beginning of period (in shares) at Jun. 30, 2022		2,800,000	11,378,000
Conversion of Class B shares to Class A common stock (in shares)		100,000	(100,000)
Conversion of Class B shares to Class A common stock		$ 100	$ (100)
Stock-based compensation				70,030		70,030
Distributions to members					(606,442)	(606,442)
Net income					810,783	810,783
Balance, at end of period at Sep. 30, 2022		$ 2,900	$ 11,278	7,817,643	(2,832,007)	4,999,814
Balance, at end of period (in shares) at Sep. 30, 2022		2,900,000	11,278,000
Balance, at beginning of period at Dec. 31, 2022		$ 2,900	$ 11,278	8,224,365	(3,643,261)	4,595,282
Balance, at beginning of period (in shares) at Dec. 31, 2022		2,900,000	11,278,000
Stock-based compensation				545,504		545,504
Issuance related to vesting of restricted stock units, net of tax withholdings (in shares)		89,459
Issuance related to vesting of restricted stock units, net of tax withholdings		$ 90		(90)
Warrants exercised (in shares)		2,200
Warrants exercised		$ 2		12,098		12,100
Stock options exercised				215		215
Stock options exercised (in shares)		133
Distributions to members					(1,968,094)	(1,968,094)
Net income					3,211,876	3,211,876
Balance, at end of period at Sep. 30, 2023		$ 2,992	$ 11,278	8,782,092	(2,399,479)	6,396,883
Balance, at end of period (in shares) at Sep. 30, 2023		2,991,792	11,278,000
Balance, at beginning of period at Jun. 30, 2023		$ 2,989	$ 11,278	8,540,389	(4,534,925)	4,019,731
Balance, at beginning of period (in shares) at Jun. 30, 2023		2,988,916	11,278,000
Stock-based compensation				241,491		241,491
Issuance related to vesting of restricted stock units, net of tax withholdings (in shares)		2,743
Issuance related to vesting of restricted stock units, net of tax withholdings		$ 3		(3)
Stock options exercised				215		215
Stock options exercised (in shares)		133
Distributions to members					(1,215,408)	(1,215,408)
Net income					3,350,854	3,350,854
Balance, at end of period at Sep. 30, 2023		$ 2,992	$ 11,278	$ 8,782,092	$ (2,399,479)	$ 6,396,883
Balance, at end of period (in shares) at Sep. 30, 2023		2,991,792	11,278,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows Provided By Operating Activities:
Net income	$ 3,211,876	$ 2,753,523
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs	434,847	463,008
Amortization of intangible assets	1,465,363	1,465,364
Amortization of right-of-use assets	123,928	94,974
Amortization of capitalized software	159,057
Depreciation of property and equipment	26,112
Stock-based compensation	545,504	85,437
Forgiveness of Paycheck Protection Program loan		(287,143)
Deferred income taxes	82,352	(40,591)
Payment on tax receivable agreement	(45,815)
Loss on redemption of non-participating preferred units		590,689
Contingent loss on early termination of line of credit	299,770
Bad debt expense	97,740	2,717
Changes in operating assets and liabilities:
Accounts receivable	(28,381,260)	(13,520,067)
Prepaid expenses and other assets	(524,098)	482,190
Accounts payable	27,325,629	10,008,327
Accrued liabilities	(513,138)	1,555,037
Income taxes payable	(61,083)	94,440
Deferred revenues	497,359	(201,907)
Operating lease liability	(69,720)	(75,396)
Related party payable		(70,801)
Net cash provided by operating activities	4,674,423	3,399,801
Cash Flows Used In Investing Activities:
Cash paid for capitalized software and property and equipment	(136,978)
Net cash used in investing activities	(136,978)
Cash Flows Used In Financing Activities:
Proceeds from note payable		4,260,000
Payments on term loan	(491,250)	(412,500)
Payments of litigation settlement	(193,500)
Payments on lines of credit		(400,000)
Payment of deferred financing costs	(442,181)	(525,295)
Proceeds from Issuance of Class A common stock, net of transaction costs		11,167,043
Redemption of common units		(7,200,000)
Redemption of non-participating preferred units		(7,046,251)
Proceeds from options exercised	215
Proceeds from warrants exercised	12,100
Distributions to members	(1,988,333)	(916,433)
Net cash used in financing activities	(3,102,949)	(1,073,436)
Net increase in cash and cash equivalents	1,434,496	2,326,365
Cash and cash equivalents, beginning of the period	4,047,453	4,684,431
Cash and cash equivalents, end of the period	5,481,949	7,010,796
Supplemental Disclosure of Cash Flow Information:
Cash paid for taxes	348,862	133,401
Cash paid for interest	2,667,283	1,744,365
Non-cash Financing Activities:
Transaction costs related to issuances of Class A shares included in accrued liabilities		1,000,000
Outside basis difference in partnership		3,234,000
Tax receivable agreement payable to Direct Digital Management, LLC		278,900
Tax benefit on tax receivable agreement		$ 485,100
Issuance related to vesting of restricted stock units, net of tax withholdings	$ 90

Organization and Description of

Organization and Description of Business	9 Months Ended
	Sep. 30, 2023
Organization and Description of Business
Organization and Description of Business	Note 1 — Organization and Description of Business Direct Digital Holdings, Inc., incorporated as a Delaware corporation on August 23, 2021 and headquartered in Houston, Texas, together with its subsidiaries, operates 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. Direct Digital Holdings, Inc. is the holding company for Direct Digital Holdings, LLC (“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 TM The subsidiaries of Direct Digital Holdings, Inc. are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Advertising ​ ​ ​ ​ ​ ​ Solution ​ ​ ​ Date ​ ​ Current % ​ and ​ ​ ​ of Subsidiary Ownership Segment Date of Formation Acquisition Direct Digital Holdings, LLC 100.0 % N/A ​ June 21, 2018 ​ August 26, 2021 Huddled Masses, LLC 100.0 % Buy-side ​ November 13, 2012 ​ June 21, 2018 Colossus Media, LLC 100.0 % Sell-side ​ September 8, 2017 ​ June 21, 2018 Orange142, LLC 100.0 % Buy-side ​ March 6, 2013 ​ September 30, 2020 ​ Both buy-side subsidiaries, Huddled Masses and Orange142, offer technology-enabled advertising solutions and consulting services to clients through multiple leading demand side platforms (“DSPs”). Colossus SSP is a stand-alone tech-enabled, data-driven platform that helps deliver targeted advertising to diverse and multicultural audiences, including African Americans, Latin Americans, Asian Americans and LGBTQIA+ customers, as well as other specific audiences. Providing both the front-end, buy-side operations coupled with the Company’s proprietary sell-side operations enables the Company to curate the first through the last mile in the ad tech ecosystem execution process to drive higher results.

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Summary of Significant Accounting Policies	Note 2 — Basis of Presentation and Summary of Significant Accounting Policies Basis of presentation The Company’s consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations and cash flows for all periods presented. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on April 17, 2023. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the results for the periods presented. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards otherwise applicable to public companies until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) it affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The adoption dates discussed below reflect this election. Basis of consolidation The consolidated financial statements include the accounts of Direct Digital Holdings, Inc. and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Business combinations The Company analyzes acquisitions to determine if the acquisition should be recorded as an asset acquisition or a business combination. The Company accounts for acquired businesses using the acquisition method of accounting under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations Fair Value Measurement Significant judgments are used in determining the estimated fair values assigned to the assets acquired and liabilities assumed and in determining estimates of useful lives of long-lived assets. Fair value determinations and useful life estimates are based on, among other factors, estimates of expected future net cash flows, estimates of appropriate discount rates used to calculate the present value of expected future net cash flows, the assessment of each asset’s life cycle, and the impact of competitive trends on each asset’s life cycle and other factors. These judgments can materially impact the estimates used to allocate acquisition date fair values to assets acquired and liabilities assumed, and the resulting timing and amounts charged to, or recognized in, current and future operating results. For these and other reasons, actual results may vary significantly from estimated results. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates include the allocation of purchase price consideration in the business combination and the related valuation of acquired assets and liabilities, intangible assets, and goodwill impairment testing. The Company bases its estimates on past experiences, market conditions, and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Cash and cash equivalents Cash and cash equivalents consist of funds deposited with financial institutions and highly liquid instruments with original maturities of three months or less. Such deposits may, at times, exceed federally insured limits. As of September 30, 2023, $4,555,527 of the Company’s cash and cash equivalents exceeded the federally insured limits, none of which is held at Silicon Valley Bank (“SVB”). The Company has not experienced any losses in such amounts and believes it is not exposed to any significant credit risk to cash. Accounts receivable, net Accounts receivable primarily consists of billed amounts for products and services rendered to customers under normal trade terms. The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral. Accounts receivables are stated at net realizable value. The Company insures a significant portion of its accounts receivable with unrelated third-party insurance companies in an effort to mitigate any future write-offs and establishes an allowance for doubtful accounts as deemed necessary for accounts not covered by this insurance. As of September 30, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $46,433 and $4,323, respectively. Management periodically reviews outstanding accounts receivable for reasonableness. If warranted, the Company processes a claim with the third-party insurance company to recover uncollected balances, rather than writing the balances off to bad debt expense. The guaranteed recovery for the claim is approximately 90% of the original balance, and if the full amount is collected by the insurance company, the remaining 10% is remitted to the Company. If the insurance company is unable to collect the full amount, the Company records the remaining 10% to bad debt expense. Bad debt expense was $46,208 for the three months ended September 30, 2023 and for the three months ended September 30, 2022, the Company recovered $22,082 on receivables previously written off. Bad debt expense was $97,740 and $2,717 for the nine months ended September 30, 2023 and 2022, respectively. Concentration of customers There is an inherent concentration of credit risk associated with accounts receivable arising from revenue from major customers on both the buy-side and sell-side of the business. For the three months ended September 30, 2023 and 2022, one customer represented 82% and 70% of revenues, respectively. For the nine months ended September 30, 2023 and 2022, one customer represented 72% and 60% of revenues. As of September 30, 2023 and December 31, 2022, one customer accounted for 90% and 80%, respectively, of accounts receivable. Property and equipment, net Property and equipment are recognized in the consolidated balance sheets at cost less accumulated depreciation and amortization. The Company capitalizes purchases and depreciates its property and equipment using the straight-line method of depreciation over the estimated useful lives of the respective assets, generally ranging from three The cost of repairs and maintenance are expensed as incurred. Major renewals or improvements that extend the useful lives of the assets are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation thereon are removed, and any resulting gain or loss is recognized in the consolidated statements of operations. Internal Use of Software Development Costs (Capitalized Software) The Company capitalizes costs related to the development of internal-use software. Costs incurred during the application development phase are capitalized and amortized using the straight-line method over the estimated useful life, estimated at three years. Goodwill Under the purchase method of accounting pursuant to ASC 805, goodwill is calculated as the excess of purchase price over the fair value of the net tangible and identifiable intangible assets acquired. In testing goodwill for impairment, the Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in management, strategy and primary user base. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative goodwill impairment analysis is performed, which is referred to as “Step 1”. Depending upon the results of the Step 1 measurement, the recorded goodwill may be written down, and an impairment expense is recorded in the consolidated statements of operations when the carrying amount of the reporting unit exceeds the fair value of the reporting unit. Goodwill is reviewed annually and tested for impairment upon the occurrence of a triggering event. As of September 30, 2023, goodwill was $6,519,636, which includes $2,423,936 as a result of the acquisition of Huddled Masses and Colossus Media in 2018 and $4,095,700 of goodwill recognized from the acquisition of Orange142 in September 2020. Intangible assets, net Intangible assets consist of customer relationships, trademarks and non-compete agreements. Intangible assets are recorded at fair value at the time of their acquisition and are stated within the consolidated balance sheets net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives and recorded as amortization expense within general and administrative expenses in the consolidated statements of operations. Impairment of long-lived assets The Company evaluates long-lived assets, including property and equipment, and acquired intangible assets consisting of customer relationships, trademarks and trade names, and non-compete agreements, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is assessed based on the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized. Any impairment loss, if indicated, is measured as the amount by which the carrying amount of the asset exceeds its estimated fair value and is recognized as a reduction in the carrying amount of the asset. As of September 30, 2023 and December 31, 2022, there were no events or changes in circumstances to indicate that the carrying amount of the assets may not be recoverable. Fair value measurements The Company follows ASC 820-10, Fair Value Measurement Level 1 — Inputs to the valuation methodology are quoted prices available in active markets for identical securities as of the reporting date; Level 2 — Inputs to the valuation methodology are other significant observable inputs, including quoted prices for similar securities, interest rates, credit risk etc. as of the reporting date, and the fair value can be determined through the use of models or other valuation methodologies; and Level 3 — Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity of the securities and the reporting entity makes estimates and assumptions relating to the pricing of the securities, including assumptions regarding risk. The Company segregates all financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Deferred financing costs The Company records costs related to its line of credit and the issuance of debt obligations as deferred financing costs. These costs are deferred and amortized to interest expense using the straight-line method over the life of the debt. In December 2021, the Company amended its line of credit with East West Bank (see Note 6 – Long-Term Debt) and incurred additional deferred financing costs of $4,613 during the nine months ended September 30, 2022. On July 26, 2022, the Company repaid the line of credit and terminated the revolving credit facility as of such date and the remaining deferred financing costs of $33,434 were amortized to interest expense during the year ended December 31, 2022. On July 7, 2023, the Company entered into a new revolving credit facility with East West Bank and incurred deferred financing costs of $214,680 during the three months ended September 30, 2023. Unamortized deferred financing costs related to the new line of credit were $187,845 and $0 as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023, $80,505 of these unamortized deferred financing costs were included in prepaid expenses and other current assets with the balance in other long-term assets. In January 2023, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (the “SVB Loan Agreement”) and incurred $211,934 of deferred financing costs during the nine months ended September 30, 2023. As the Company had not yet drawn any amounts on the agreement, on March 13, 2023 the Company issued a notice of termination and expensed the deferred financing costs which totaled $299,770 to contingent loss on early termination of line of credit during the nine months ended September 30, 2023. Termination of the facility with Silicon Valley Bank (“SVB”) became effective April 20, 2023. ​ In December 2021, the Company entered into an agreement with Lafayette Square Loan Servicing, LLC (“Lafayette Square”) (see Note 6 – Long-Term Debt) and incurred additional deferred financing costs of $15,567 and $520,682 during the nine months ended September 30, 2023 and 2022, respectively. Unamortized deferred financing costs for the note payable was $1,722,716 and $2,115,161 as of September 30, 2023 and December 31, 2022, respectively, and netted against the outstanding debt on the consolidated balance sheets. Right-of-use assets The Company adopted ASU 2016-02 (“ASU 2016-02”), Leases (Topic 842) Revenue recognition The Company recognizes revenue using the following five steps: 1) identification of a contract(s) with a customer; 2) identification of the performance obligation(s) in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligation(s) in the contract; and 5) recognition of revenue when, or as, the performance obligation(s) are satisfied. The Company’s revenues are derived primarily from two sources: buy-side advertising and sell-side advertising. Buy-side advertising The Company purchases media based on the budget established by its customers with a focus on leveraging data services, customer branding, real-time market analysis and micro-location advertising. The Company offers its services on a fully managed basis, which is recognized over time using the output method when the performance obligation is fulfilled. An “impression” is delivered when an advertisement appears on pages viewed by users. The performance obligation is satisfied over time as the volume of impressions are delivered up to the contractual maximum for fully managed revenue. Many customers run several different campaigns throughout the year to capitalize on different seasons, special events and other happenings at their respective regions and localities. The Company provides digital advertising and media buying capabilities with a focus on generating measurable digital and financial life for its customers. Revenue arrangements are evidenced by a fully executed insertion order (“IO”) and/or a master service agreement (“MSA”) covering a combination of marketing tactics. Generally, IOs specify the number and type of advertising impressions to be delivered over a specified time at an agreed upon price and performance objectives for an ad campaign. Performance objectives are generally a measure of targeting, as defined by the parties in advance, such as number of ads displayed, consumer clicks on ads or consumer actions (which may include qualified leads, registrations, downloads, inquiries or purchases). These payment models are commonly referred to as CPM (cost per impression), CPC (cost per click) and CPA (cost per action). The majority of the Company’s contracts are flat-rate, fee-based contracts. In instances where the Company contracts with third-party advertising agencies on behalf of their advertiser clients, a determination is made to recognize revenue on a gross or net basis based on an assessment of whether the Company is acting as the principal or an agent in the transaction. The Company is acting as the principal in these arrangements and therefore revenue earned and costs incurred are recognized on a gross basis as the Company has control of the digital ad units and is responsible for fulfilling the advertisement delivery, establishing the minimum selling prices, delivering the advertisements, providing updates and performing all billing and collection activities for the applicable platform. Cash payments received prior to the Company’s delivery of its services are recorded to deferred revenue until the performance obligation is satisfied. The Company recorded deferred revenue (contract liabilities) to account for billings in excess of revenue recognized, primarily related to contractual minimums billed in advance and customer prepayment, of $1,044,069 and $546,710 as of September 30, 2023 and December 31, 2022, respectively. Sell-side advertising The Company partners with publishers to sell advertising inventory to the Company’s Colossus Media-curated clients and the open markets (collectively referred to as “buyers”) seeking to access the general market as well as unique multi-cultural audiences. The Company generates revenue from the delivery of targeted digital media solutions, enabling advertisers to connect intelligently with their audiences across online display, video, social and mobile mediums using its proprietary programmatic sell-side platform (“SSP”). The Company refers to its publishers, app developers, and channel partners collectively as its publishers. The Company generates revenue through the monetization of publisher ad impressions on its platform. The Company’s platform allows the Company to sell, in real time, ad impressions from publishers to buyers and provides automated inventory management and monetization tools to publishers across various device types and digital ad formats. The Company recognizes revenue when an ad is delivered or displayed in response to a winning bid request from ad buyers. The Company is acting as the principal in these arrangements and therefore revenue earned and costs incurred are recognized on a gross basis, as the Company has control of the digital ad units and is responsible for fulfilling the advertisement delivery, establishing the minimum selling prices, delivering the advertisements, providing updates and performing all billing and collection activities for its proprietary platform. Overall The Company maintains agreements with its customers in the form of written service agreements, which set out the terms of the relationship, including payment terms (typically 30 to 90 days) and access to its platform. In an effort to reduce the risk of nonpayment, the Company has insurance with a third-party carrier for its accounts receivable as noted above. Cost of revenues Buy-side advertising Cost of revenues consists primarily of digital media fees, third-party platform access fees, and other third-party fees associated with providing services to the Company’s customers. Sell-side advertising The Company pays publishers a fee, which is typically a percentage of the value of the ad impressions monetized through the Company’s platform. Cost of revenues consists primarily of publisher media fees and data center co-location costs. Media fees include the publishing and real-time bidding costs to secure advertising space. Advertising costs The Company expenses advertising costs as incurred. Advertising expense incurred during the three months ended September 30, 2023 and 2022 was $471,987 and $295,794, respectively and $1,474,250 and $618,461 for the nine months ended September 30, 2023 and 2022, respectively. These costs are included in general and administrative expenses in the consolidated statements of operations. Stock-based compensation The Company recognizes and measures compensation expense for all stock-based payment awards granted to employees, directors and non-employee directors, including stock options and restricted stock units (“RSUs”), based on the fair value of the awards on the date of grant. The fair value of stock options is estimated using the Black Scholes option pricing model. The grant date fair value of RSUs is based on the prior day closing market price of the Company’s Class A common stock. The Black Scholes option pricing model inputs include the fair value of the Company’s common stock, as well as assumptions regarding the expected common stock price volatility over the term of the stock options, the expected term of the stock options, risk-free interest rates, and the expected dividend yield. For additional information regarding stock-based compensation and the assumptions used for determining the fair value of stock options, see Note 10 — Stockholders’ Equity and Stock-Based Compensation Plans. Income per share Basic income per share is calculated by dividing net income available to common stockholders by the weighted average number of shares outstanding for the period. Potentially dilutive securities include potential shares of common stock related to the Company’s stock options and RSUs. Income taxes Effective February 15, 2022, concurrent with the closing of the Company’s initial public offering, the Company entered into a tax receivable agreement (“Tax Receivable Agreement” or “TRA”) with DDH LLC and Direct Digital Management, LLC (“DDM” or the “Continuing LLC Owner”). The TRA provides for certain income (loss) allocations between the Company and DDH LLC under the agreement. DDH LLC is a limited liability company and will continue to be treated as a partnership for federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax and certain state and local income taxes. Any taxable income or loss generated by the Company will be allocated to holders of LLC units (“LLC Units”) in accordance with the Second Amended and Restated Limited Liability Company Agreement (“LLC Agreement”), and distributions to the owners of LLC Units in an amount sufficient to fund their tax obligations will be made. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss under the LLC Agreement. Pursuant to the Company’s election under Section 754 of the Internal Revenue Code (the “Code”), the Company expects to obtain an increase in its share of the tax basis in the net assets of DDH, LLC when LLC Units are redeemed or exchanged by the members of DDH, LLC. The Company made an election under Section 754 of the Code for each taxable year in which a redemption or exchange of LLC interest occurred. During the year ended December 31, 2022, a member of DDM exchanged 100,000 Class B shares into Class A shares. The Company applies ASC 740-10, Income Taxes Segment information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chairman and Chief Executive Officer. The Company views its business as two reportable segments, buy-side advertising, which includes the results of Huddled Masses and Orange142, and sell-side advertising, which includes the results of Colossus Media. Recent Accounting Pronouncements Accounting pronouncements recently adopted In June 2016, the FASB issued ASU No. 2016-13 , Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments Accounting pronouncements not yet adopted There are no accounting pronouncements that the Company has not yet adopted that it believes are applicable or would have a material impact on the consolidated financial statements of the Company. ​ Liquidity and capital resources As of September 30, 2023, the Company had cash and cash equivalents of $5,481,949. Based on projections of growth in revenue and operating results in the coming year, the available cash held by the Company and the amounts the Company may borrow under the Credit Agreement (as defined below) executed in July 2023, the Company believes that it will have sufficient cash resources to finance its operations and service any maturing debt obligations for at least the next twelve months following the issuance of these financial statements.

Property, Equipment and Softwar

Property, Equipment and Software, net	9 Months Ended
	Sep. 30, 2023
Property, Equipment and Software, net
Property, Equipment and Software, net	Note 3 — Property, Equipment and Software, net Property, equipment and software, net consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ ​ 2023 2022 ​ Furniture and fixtures ​ $ 127,932 ​ $ 118,601 ​ Computer equipment ​ ​ 19,636 ​ ​ 16,985 ​ Leasehold Improvements ​ ​ 36,230 ​ ​ — ​ Capitalized software ​ ​ 660,616 ​ ​ 571,850 ​ Property, equipment and software, gross ​ ​ 844,414 ​ ​ 707,436 ​ Less: accumulated depreciation and amortization ​ ​ (219,386) ​ ​ (34,218) ​ Total property, equipment and software, net ​ $ 625,028 ​ $ 673,218 ​ ​ The Company moved headquarters in 2022 and capitalized furniture and fixtures, computer equipment and leasehold improvements related to the move. The Company acquired the license to its proprietary Colossus SSP platform in November 2022 from its third-party developer. The following table summarizes depreciation and amortization expense related to property, equipment and software by line item for the three and nine months ended September 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2023 2022 ​ 2023 2022 ​ Cost of revenue ​ $ 55,051 ​ $ — ​ $ 159,057 ​ $ — ​ General and administrative ​ ​ 8,638 ​ ​ — ​ ​ 26,112 ​ ​ — ​ Total depreciation and amortization ​ $ 63,689 ​ $ — ​ $ 185,169 ​ $ — ​ ​

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2023
Intangible Assets
Intangible Assets	Note 4 — Intangible Assets Effective September 30, 2020, the Company acquired 100% of the equity interests of Orange142 for a purchase price of $26,207,981. The acquisition of Orange142 was recorded by allocating the total purchase consideration to the fair value of the net tangible assets acquired, including goodwill and intangible assets, in accordance with ASC 805. The purchase consideration exceeded the fair value of the net assets, resulting in goodwill of $4,095,700 and intangible assets of $18,033,850. The Company records amortization expense on a straight-line basis over the life of the identifiable intangible assets. For the three months ended September 30, 2023 and 2022, amortization expense of $488,455 and $488,455, respectively, and for the nine months ended September 30, 2023 and 2022, amortization expense of $1,465,363 and $1,465,364, respectively, was recognized. As of September 30, 2023 and December 31, 2022, intangible assets net of accumulated amortization was $12,172,396 and $13,637,759, respectively. As of September 30, 2023, intangible assets and the related accumulated amortization, weighted-average remaining life and future amortization expense are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trademarks and ​ Non-compete ​ ​ ​ ​ Customer lists tradenames agreements Total Fair value at acquisition date ​ $ 13,028,320 ​ $ 3,501,200 ​ $ 1,504,330 ​ $ 18,033,850 Accumulated amortization ​ (3,908,496) ​ (1,050,360) ​ (902,598) ​ (5,861,454) Intangible assets, net ​ $ 9,119,824 ​ $ 2,450,840 ​ $ 601,732 ​ $ 12,172,396 Estimated life (years) ​ 10.0 ​ 10.0 ​ 5.0 ​ Weighted-average remaining life (years) ​ 7.0 ​ ​ 7.0 ​ 2.0 ​ ​ ​ ​ ​ ​ ​ Total 2023 $ 488,456 2024 ​ 1,953,818 2025 ​ 1,878,602 2026 ​ 1,652,952 2027 ​ 1,652,952 Thereafter ​ 4,545,616 Total future amortization expense ​ $ 12,172,396 ​ The Company expects to deduct goodwill for tax purposes in future years. The factors that make up goodwill include entry into new markets not previously accessible and generation of future growth opportunities.

Accrued Liabilities

Accrued Liabilities	9 Months Ended
	Sep. 30, 2023
Accrued Liabilities
Accrued Liabilities	Note 5 — Accrued Liabilities Accrued liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 2022 ​ Accrued compensation and benefits ​ $ 2,967,115 ​ $ 4,128,505 ​ Accrued expenses ​ 547,661 ​ 206,639 ​ Accrued severance ​ ​ 309,618 ​ ​ — ​ Accrued litigation settlement ​ 235,596 ​ 429,096 ​ Accrued interest ​ 11,138 ​ 13,524 ​ Total accrued liabilities ​ $ 4,071,128 ​ $ 4,777,764 ​ ​ On July 10, 2019, Huddled Masses was named as a defendant in a lawsuit related to a delinquent balance to a vendor. On July 28, 2022, the Company entered into a settlement agreement with the vendor and agreed to pay a total of $515,096 with monthly installment payments over 24 months beginning September 1, 2022.

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2023
Long-Term Debt.
Long-Term Debt	Note 6 — Long-Term Debt Lafayette Square On December 3, 2021, DDH LLC entered into the Term Loan and Security Agreement (the “2021 Credit Facility”) with Lafayette Square as administrative agent, and the various lenders thereto. The term loan under the 2021 Credit Facility provides for a term loan in the principal amount of up to $32,000,000, consisting of a $22,000,000 closing date term loan and an up to $10,000,000 delayed draw term loan (“Delayed Draw Loan”). The loans under the 2021 Credit Facility bear interest at LIBOR plus the applicable margin minus any applicable impact discount. The applicable margin under the 2021 Credit Facility is determined based on the consolidated total net leverage ratio of the Company and its consolidated subsidiaries, at a rate of 6.50% per annum if the consolidated total net leverage ratio is less than 2.00 to 1.00 and up to 9.00% per annum if the consolidated total net leverage ratio is greater than 4.00 to 1.00. The applicable impact discount under the 2021 Credit Facility is a discount of 0.05% per annum to the extent that DDH LLC adopts certain services intended to improve overall employee satisfaction and retention plus an additional discount of 0.05% per annum to the extent that DDH LLC maintains a B Corp certification by Standards Analysts at the non-profit B Lab (or a successor certification or administrator). On June 1, 2023 the Company entered into an agreement with Lafayette Square to convert the existing LIBOR based rate to a 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. On July 28, 2022, the Company entered into the Second Amendment and Joinder to Term Loan and Security Agreement (the “Term Loan Amendment”) and received proceeds of $4,260,000 borrowed under the Delayed Draw Loan to pay the balance owed on the common unit redemption as well as costs associated with the transaction. Pursuant to the 2021 Credit Facility, as amended by the Term Loan Amendment, DDH LLC will indemnify the Company from and against any claims, losses, expenses and other liabilities incurred by the Company arising from the Company’s guarantor obligations under the 2021 Credit Facility and related term loan documents. The Delayed Draw Loan is required to be repaid in quarterly installments payable on the last day of each fiscal quarter in an amount equal to (i) commencing with the fiscal quarter ending December 31, 2022 through and including the fiscal quarter ending December 31, 2023, $26,250, and (ii) commencing March 31, 2024 and continuing on the last day of each fiscal quarter thereafter, $52,500, with a final installment due December 3, 2026 in an amount equal to the remaining entire principal balance thereof. 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. As of September 30, 2023, the Company owed a balance on the 2021 Credit Facility of $25,192,500 . Additional deferred financing costs of 2022. 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. The Company was in compliance with all the financial covenants under the 2021 Credit Facility as of September 30, 2023. On October 3, 2023, the Company entered into the Fourth Amendment to the 2021 Credit Facility and received proceeds of $3.6 million borrowed under the Delayed Draw Term Loan to make payments in connection with the consummation of the 2023 warrant tender offer and fees and expenses incurred as described in Note 16 – Subsequent Events. In connection with this Fourth Amendment, the Company agreed it would not be permitted to request any additional funds under the Delayed Draw Term Loan, and Lafayette Square would not be obligated to fund any such requests. The components of interest expense and related fees for the 2021 Credit Facility are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2023 2022 ​ 2023 2022 ​ Interest expense – Lafayette Square ​ $ 895,638 ​ $ 696,818 ​ $ 2,665,091 ​ $ 1,673,648 ​ Amortization of deferred financing costs – Lafayette Square ​ 136,004 ​ 128,064 ​ 408,012 ​ 362,243 ​ Total interest expense and amortization of deferred financing costs ​ $ 1,031,642 ​ $ 824,882 ​ $ 3,073,103 ​ $ 2,035,891 ​ ​ 2023 Revolving Line of Credit - East West Bank On July 7, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”), by and among East West Bank (“EWB”), as lender, and DDH LLC, the Company, Huddled Masses, Colossus Media, and Orange142, as borrowers. The Credit Agreement provides for a revolving credit facility (the “2023 Credit Facility”) in the original principal amount of up to $5 million, subject to a borrowing base determined based on eligible accounts, and an up to $5 million uncommitted incremental revolving facility. Loans under the 2023 Credit Facility mature on July 7, 2025 (the “Maturity Date”), unless the 2023 Credit Facility is otherwise terminated pursuant to the terms of the Credit Agreement. Borrowings under the 2023 Credit Facility bear interest at a rate per annum equal to the one-month Term Secured Overnight Financing Rate, as administered by the CME Group Benchmark Administration Limited (“CBA”) (or a successor administrator of the secured overnight financing rate) and displayed by Bloomberg LP (or any successor thereto, or replacement thereof, as approved by EWB) and as determined by EWB on the first day of the applicable interest period, plus 0.10% (10 basis points), plus 3.00% per annum (the “Loan Rate”); provided, that, in no event shall the Loan Rate be less than 0.50% of the Loan Rate effective as of the date of the Credit Agreement nor more than the maximum rate of interest allowed under applicable law. Upon an event of default under the Credit Agreement, the outstanding principal amounts of any advances will accrue interest at a rate per annum equal to the Loan Rate plus five percent (5%), but in no event in excess of the maximum rate of interest allowed under applicable law. At the Company’s option, the Company may at any time prepay the outstanding principal balance of the 2023 Credit Facility in whole or in part, without fee, penalty or premium. All accrued but unpaid interest on outstanding advances under the Credit Agreement are payable in monthly installments on the last day of each monthly interest period until the Maturity Date when the then outstanding principal balance of the advances and all accrued but unpaid interest thereon becomes due and payable. The obligations under the 2023 Credit Facility are secured by all or substantially all of the borrowers’ assets. The Company and the other borrowers are required to maintain compliance at all times with the following financial covenants on a consolidated basis: (i) a fixed charge coverage ratio of not less than 1.25 to 1.0, beginning with the fiscal quarter ended on June 30, 2023 and at the end of each fiscal quarter thereafter; (ii) a total funded debt-to-EBITDA ratio of 3.50 to 1.00 as of the last day of each fiscal quarter from June 30, 2023 through December 31, 2023, 3.25 to 1.00 as of the last day of each fiscal quarter from March 31, 2024 through March 31, 2025 and 3.00 to 1.00 as of the last day of each fiscal quarter from June 30, 2025 and thereafter; and (iii) a liquidity covenant requiring the Company and the other borrowers to maintain minimum liquid assets at all times (calculated using unencumbered cash and cash equivalents and marketable securities), in one or more accounts held with EWB plus Revolving Credit Availability in the amount of $1,000,000. Revolving Credit Availability is defined as an amount such that the ratio of the value of eligible accounts to the aggregate amount of all outstanding advances under the credit agreement at such time is not less than 2.0 to 1.0. The Company was in compliance with all the financial covenants under the 2023 Credit Facility as of September 30, 2023. The Credit Agreement contains customary representations and warranties and includes affirmative and negative covenants applicable to the borrowers and their respective subsidiaries. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal existence and governmental compliance, deliver certain financial reports and maintain insurance coverage. The negative covenants include, among others, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. The Credit Agreement also includes customary events of default, including, among other things, non-payment defaults, covenant defaults, inaccuracy of representations and warranties, defaults under any of the loan documents, certain cross-defaults to other indebtedness, certain bankruptcy and insolvency events, invalidity of guarantees or grant of security interest, certain ERISA-related transactions and events, certain orders of forfeiture, change of control, certain undischarged attachments, sequestrations, or similar proceedings, and certain undischarged or non-stayed judgments, in certain cases subject to certain thresholds and grace periods. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Agreement of the Company or other borrowers. During the nine months ended September 30, 2023, the Company incurred $214,680 of deferred financing costs associated with the 2023 Credit Facility. 2020 Revolving Line of Credit - East West Bank On September 30, 2020, the Company entered into a credit agreement that provided for a revolving credit facility with EWB in the amount of $4,500,000 with an initial availability of $1,000,000 (the “2020 Revolving Credit Facility”). On December 17, 2021, the Company amended the 2020 Revolving Credit Facility, which increased the amount of the revolving loan to $5,000,000 with an initial availability of $2,500,000, and in connection with the amendment, the Company incurred additional deferred financing fees of $4,613 in January 2022. The loans under the 2020 Revolving Credit Facility bore interest at the LIBOR rate plus 3.5% per annum, and as of March 31, 2022, the rate was 7.0% with a 0.50% unused fee. On July 26, 2022, the Company terminated the 2020 Revolving Credit Facility. As of September 30, 2023 and December 31, 2022, the Company did not have any outstanding borrowings or deferred financing costs under the Revolving Credit Facility. The components of interest expense and related fees for the 2023 Revolving Credit Facility and 2020 Revolving Credit Facility are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Interest expense – 2020 Revolving Credit Facility ​ $ — ​ $ 3,573 ​ $ — ​ $ 23,391 ​ Amortization of deferred financing costs – 2023 Revolving Credit Facility ​ ​ 26,835 ​ ​ — ​ ​ 26,835 ​ ​ — ​ Amortization of deferred financing costs – 2020 Revolving Credit Facility ​ ​ — ​ ​ 33,434 ​ ​ — ​ ​ 100,765 ​ Total interest expense and amortization of deferred financing costs ​ $ 26,835 ​ $ 37,007 ​ $ 26,835 ​ $ 124,156 ​ ​ Silicon Valley Bank (“SVB”) Financing On January 9, 2023, the Company entered into the SVB Loan Agreement, by and among SVB, as lender, and DDH LLC, the Company, Huddled Masses, Colossus Media and Orange142, as borrowers. The SVB Loan Agreement provided for a revolving credit facility (the “SVB Revolving Credit Facility”) in the original principal amount of $5 million, subject to a borrowing base determined based on eligible accounts, and up to an additional $2.5 million incremental revolving facility subject to the lender’s consent, which would increase the aggregate principal amount of the Credit Facility to $7.5 million. Loans under the SVB Revolving Credit Facility were to mature on September 30, 2024 unless the Credit Facility was otherwise terminated pursuant to the terms of the Loan Agreement. ​ On March 10, 2023, the California Department of Financial Protection and Innovation closed SVB and appointed the Federal Deposit Insurance Corporation as receiver. As the Company had not yet drawn any amounts under the SVB Revolving Credit Facility, on March 13, 2023, the Company issued a notice of termination of the SVB Loan Agreement. The termination of the SVB Revolving Credit Facility became effective April 20, 2023. Prior to issuing the notice of termination, the Company received consent to terminate the SVB Revolving Credit Facility and a waiver of the terms relating to the SVB Revolving Credit Facility under its Term Loan and Security Agreement, dated as of December 3, 2021, with Lafayette Square Loan Servicing, LLC (“Lafayette Square”). The Company did not hold material cash deposits or securities at Silicon Valley Bank and as of the date of this report, has not experienced any adverse impact to its liquidity or to its current and projected business operations, financial condition or results of operations. During the nine months ended September 30, 2023, the Company incurred $211,934 of deferred financing costs. After the Company issued the notice of termination, total deferred financing costs of $299,770 were expensed to contingent loss on early termination of line of credit during the nine months ended September 30, 2023. ​ U.S. Small Business Administration Loans Economic Injury Disaster Loan In 2020, the Company applied and was approved for a loan pursuant to the Economic Injury Disaster Loan (“EIDL”), administered by the U.S. Small Business Administration (“SBA”). The Company received the loan proceeds of $150,000 on June 15, 2020. The loan bears interest at a rate of 3.75% and matures on June 15, 2050. Installment payments, including principal and interest, of $731 began monthly on December 15, 2022. Each payment will first be applied to pay accrued interest, then the remaining balance will be used to reduce principal. The loan is secured by substantially all assets of DDH LLC. Accrued and unpaid interest expense as of September 30, 2023 and December 31, 2022 was $11,138 and $13,524, respectively, and is included in accrued expenses on the consolidated balance sheets. Paycheck Protection Program In 2020, the Company applied and was approved for a loan pursuant to the Paycheck Protection Program (“PPP”), administered by the SBA (the “PPP-1 Loan”). The PPP was authorized in the Coronavirus Aid, Relief, and Economic Security Act and was designed to provide a direct financial incentive for qualifying business to keep their workforce employees. The SBA made PPP loans available to qualifying businesses in amounts up to 2.5 times their average monthly payroll expenses, and loans were forgivable after a “covered period” (eight or twenty-four weeks) as long as the borrower maintained its payroll and utilities. The forgiveness amount would be reduced if the borrower terminated employees or reduced salaries and wages more than 25% during the covered period. Any unforgiven portion was payable over two years if issued before, or five years if issued after, June 5, 2020 at an interest rate of 1.0% with payments deferred until the SBA remits the borrower’s loan forgiveness amount to the lender, or if the borrower did not apply for forgiveness, then six months after the end of the covered period. In March 2021, DDH LLC applied for and received a PPP loan (the “PPP-2 Loan”) for a principal amount of $287,143 and there were no collateral or guarantee requirements. On April 11, 2022 Overall As of September 30, 2023, future minimum payments related to long-term debt are as follows for the years ended December 31: ​ ​ ​ ​ 2023 $ 163,750 2024 1,310,000 2025 1,310,473 2026 22,411,965 2027 3,337 Thereafter ​ 142,975 Total ​ 25,342,500 Less current portion ​ (1,146,250) Less deferred financing costs ​ (1,722,716) Long-term debt, net ​ $ 22,473,534 ​

Mandatorily Redeemable Preferre

Mandatorily Redeemable Preferred Units	9 Months Ended
	Sep. 30, 2023
Mandatorily Redeemable Preferred Units
Mandatorily Redeemable Preferred Units	Note 7 — Mandatorily Redeemable Preferred Units In connection with the Orange142 acquisition, DDH LLC issued 7,076 non-voting Class B Preferred Units at a purchase price of $7,046,251, and a fair value of $6,455,562. Class B Preferred Units were mandatorily redeemable for $7,046,251 on September 30, 2024, with 7% preferred annual returns paid on a quarterly basis. Due to the mandatory redemption feature, the Class B Preferred Units were classified as a liability rather than as a component of equity, with the preferred annual returns being accrued and recorded as interest expense. In February 2022, DDH LLC redeemed the Class B Preferred Units and recognized a loss on the redemption of $590,689 in connection with the write-off of the fair value associated with the units. The Company recorded interest expense relating to the Class B Preferred Units of $0 and $0 , for the three months ended September 30, 2023 and 2022, respectively, and $0 and $62,162 for the nine months ended September 30, 2023 and 2022, respectively.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2023
Related Party Transactions
Related Party Transactions	Note 8 — Related Party Transactions Related Party Transactions Member Payable As of September 30, 2023 and December 31, 2022, the Company had a net payable to members that totaled $1,428,093 and $1,448,333, respectively, which is included as a related party payable on the consolidated balance sheets. Up-C Structure In February 2022, the Company completed an initial public offering of its securities, and through the Organizational Transactions, formed an Up-C structure, which is often used by partnerships and limited liability companies and allows the Continuing LLC Owner, a Delaware limited liability company indirectly owned by Mark Walker (“Walker”) and Keith Smith (“Smith”), to retain its equity ownership in DDH LLC and to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity, for U.S. federal income tax purposes. The Continuing LLC owner holds economic nonvoting LLC Units in DDH LLC and also holds noneconomic voting equity interests in the form of the Class B common stock in Direct Digital Holdings (See Note 10 – Stockholders’ Equity and Stock-Based Compensation Plans). One of the tax benefits to the Continuing LLC Owner associated with this structure is that future taxable income of DDH LLC that is allocated to the Continuing LLC Owner will be taxed on a pass-through basis and therefore will not be subject to corporate taxes at the entity level. Additionally, the Continuing LLC Owner may, from time to time, redeem or exchange its LLC Units for shares of the Company’s Class A common stock on a one-for-one basis. The Up-C structure also provides the Continuing LLC Owner with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. If the Company ever generates sufficient taxable income to utilize the tax benefits, Digital Direct Holdings expects to benefit from the Up-C structure because, in general, the Company expects cash tax savings in amounts equal to 15% of certain tax benefits arising from such redemptions or exchanges of the Continuing LLC Owner's LLC Units for Class A common stock or cash and certain other tax benefits covered by the TRA. (See Note 13 - Tax Receivable Agreement and Income Taxes). The aggregate change in the balance of gross unrecognized tax benefits, which includes interest and penalties for 2023 and 2022, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ As of ​ ​ September 30, ​ December 31, ​ 2023 2022 Liability related to tax receivable agreement ​ ​ ​ ​ ​ ​ Short term ​ $ 41,141 ​ $ 182,571 Long term ​ ​ 4,245,234 ​ ​ 4,149,619 Total liability related to tax receivable agreement ​ $ 4,286,375 ​ $ 4,332,190 ​ Board Services and Consulting Agreement On September 30, 2020, the Company entered into board services and consulting agreements with Walker, Smith and Leah Woolford (“Woolford”). Walker, Smith and Woolford were then all members of DDH LLC. Prior to the Organizational Transactions, Walker served as a Manager on the Board of Managers of DDH LLC, and now serves as Chairman of the Board of Directors and Chief Executive Officer of the Company. Prior to the Organizational Transactions, Smith served as a Manager on the Board of Managers of DDH LLC and now serves as a director on the Board of Directors and President of the Company. Woolford previously served as a Manager on the Board of Managers of DDH LLC and Senior Advisor of DDH LLC. In exchange for these services, the Company paid Walker and Smith annual fees of $450,000 each and employee benefits for their direct families. The Company paid Woolford $300 per hour for up to 50 hours per month and employee benefits for Woolford and her direct family. In connection with the Organizational Transactions, the consulting agreements were canceled, and, for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023, no fees were paid to Walker, Smith and Woolford. For the nine months ended September 30, 2022, total fees paid to Walker, Smith, and Woolford were $56,250, $56,250, and $22,500, respectively.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies.
Commitments and Contingencies	Note 9 — Commitments and Contingencies Litigation The Company may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. In management’s opinion, the outcome of any such currently pending litigation will not materially affect the Company’s financial condition. Nevertheless, due to uncertainties in the settlement process, it is at least reasonably possible that management’s view of the outcome could change materially in the near term. Huddled Masses was named as a defendant in a lawsuit on July 10, 2019 related to a delinquent balance to a vendor. On July 28, 2022, the Company entered into a settlement agreement with the vendor and agreed to pay a total of $515,096 with monthly installment payments over 24 months beginning September 1, 2022. The liability has been recorded and included in accrued liabilities on the consolidated balance sheets as of September 30, 2023 and December 31, 2022 (See Note 5 – Accrued Liabilities). Operating Leases In June 2019, the Company entered into a sublease for its corporate office headquarters at 1233 West Loop South, Suite 1170 in Houston, TX. The lease term expired on July 1, 2022 and had a base monthly rent of approximately $3,600 per month. In March 2022, the Company entered into a new lease to move its corporate headquarters to 1177 West Loop South, Suite 1310 in Houston, TX effective July 1, 2022, and paid a security deposit of approximately $29,000. The lease is for 7,397 square feet of office space that expires February 28, 2030. The base monthly rent varies annually over the term of the lease. The Company also leased office furniture for its corporate headquarters under a lease agreement effective April 2019 which expired July 2023. In March 2021, the Company extended its lease for office space at 716 Congress Ave, Suite 100 in Austin, Texas with an effective date of January 1, 2022. The lease expires on December 31, 2023 and has a base rent of approximately $6,700 per month. For the three months ended September 30, 2023 and 2022, the Company incurred rent expense of $73,496 and $89,452, respectively, for the combined leases. For the nine months ended September 30, 2023 and 2022, the Company incurred rent expense of $231,982 and $193,013, respectively, for the combined leases. Supplemental balance sheet information related to operating leases is included in the table below as of September 30, 2023: ​ ​ ​ ​ ​ 2023 Operating lease right-of-use asset ​ $ 674,846 ​ ​ ​ ​ Operating lease liabilities - current ​ $ 49,977 Operating lease liabilities - long-term ​ 717,632 Total operating lease liability ​ $ 767,609 ​ The weighted-average remaining lease term for the Company’s operating lease is 6.25 years as of September 30, 2023, with a weighted-average discount rate of 8%. Lease liability with enforceable contract terms that have greater than one-year terms are as follows: ​ ​ ​ ​ 2023 $ 37,251 2024 ​ 110,215 2025 ​ 156,077 2026 ​ 159,775 2027 ​ 163,474 Thereafter ​ 366,830 Total lease payments ​ 993,622 Less imputed interest ​ (226,013) Total lease liability ​ $ 767,609 ​

Stockholders' Equity and Stock-

Stockholders' Equity and Stock-Based Compensation	9 Months Ended
	Sep. 30, 2023
Stockholders' Equity and Stock-Based Compensation
Stockholders' Equity and Stock-Based Compensation	Note 10 — Stockholders’ Equity and Stock-Based Compensation Stockholders’ Equity – Initial Public Offering Following the completion of the Organizational Transactions, DDH LLC’s limited liability company agreement was amended and restated to, among other things, appoint the Company as the sole managing member of DDH LLC and effectuate a recapitalization of all outstanding preferred units and common units into (i) economic nonvoting units of DDH LLC held by the Company and, through their indirect ownership of DDM, its Chairman and Chief Executive Officer and its President, and (ii) noneconomic voting units of DDH LLC, 100% of which are held by the Company. In August 2022, DDM tendered 100,000 of its limited liability company units to the Company in exchange for newly issued shares of Class A common stock of the Company on a one-for-one basis. In connection with this exchange, an equivalent number of the holder’s shares of Class B common stock were cancelled. As of September 30, 2023, DDM held 11,278,000 shares of Class B common stock. The Company is authorized to issue 160,000,000 shares of Class A common stock, par value $0.001 per share, 20,000,000 shares of Class B common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On February 15, 2022, the Company completed its initial public offering of 2,800,000 units (“Units”), each consisting of (i) one share of its Class A common stock and (ii) one warrant entitling the holder to purchase one share of its Class A Common Stock at an exercise price of $5.50 per share. The warrants became immediately exercisable upon issuance and are exercisable for a period of five years after the issuance date. The shares of Class A Common Stock and warrants were immediately transferable separately upon issuance. At September 30, 2023, 2,797,800 of these warrants are outstanding and the intrinsic value of these warrants is $0. The underwriters in the initial public offering were granted a 45-day option to purchase up to an additional 420,000 shares and/or warrants, or any combination thereof, to cover over-allotments, which they initially exercised, in part, electing to purchase warrants to purchase an additional 420,000 shares of Class A Common Stock. As of September 30, 2023, 420,000 of these warrants are outstanding. In connection with the Company’s initial public offering, the Company issued to the underwriters of the offering a unit purchase option to purchase (i) 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, and (ii) warrants to purchase 21,000 shares of Class A Common Stock at a per warrant exercise price of $0.012, which was equal to 120% of the public offering price per warrant sold in the offering. The underwriters have not exercised this option as of September 30, 2023. The Units were sold at a price of $5.50 per Unit, and the net proceeds from the offering were $10,167,043, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The offering expenses recorded in accrued liabilities are approximately $1,000,000 as of September 30, 2023, and relate to executive performance bonuses which are payable upon a certain level of cash generated by warrant exercises. DDH LLC used the proceeds, together with pre-existing cash and cash equivalents, to purchase all of the remaining 5,637 common units and 7,046 Class B Preferred Units held indirectly by Woolford for an aggregate purchase price of approximately $14,246,251, of which $10,284,089 was paid on the closing date of the initial public offering. On July 28, 2022, DDH LLC entered into the Redemption Agreement Amendment with USDM Holdings, Inc. that amended the previously disclosed Redemption Agreement by and between DDH LLC and USDM Holdings, Inc. dated as of November 14, 2021 (the “Original Redemption Agreement”), as amended by the Amendment to Redemption Agreement dated as of February 15, 2022. The Redemption Agreement Amendment, among other things, amended the remainder of the principal and interest for the Common Units Redemption Price to be $3,998,635, which was paid in full on July 28, 2022. The warrants had a fair value of $0 that was calculated using the Black-Scholes option -pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.94% based on the applicable U.S. Treasury bill rate, (2) expected life of 5 years, (3) expected volatility of approximately 66% based on the trading history of similar companies, and (4) zero expected dividends. The following table summarizes warrant activity as of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrants ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Contractual Life ​ Aggregate ​ Shares Exercise Price (in years) Intrinsic Value Outstanding at January 1, 2023 3,220,000 ​ $ 5.50 4.13 ​ $ — Granted — ​ $ — — ​ $ — Exercised (2,200) ​ $ 5.50 — ​ $ — Canceled — ​ $ — — ​ $ — Outstanding at September 30, 2023 3,217,800 ​ $ 5.50 3.38 ​ $ — Exercisable at September 30, 2023 3,217,800 ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-Based Compensation Plans In connection with the IPO, the Company adopted the 2022 Omnibus Incentive Plan (“2022 Omnibus Plan”) to facilitate the grant of equity awards to the Company’s employees, consultants and non-employee directors. The Company’s board of directors reserved 1,500,000 shares of Class A common stock for issuance in equity awards under the 2022 Omnibus Plan. Information on activity for both the stock options and RSUs is detailed below. During the nine months ended September 30, 2023, the Company recognized $545,504 of total stock-based compensation expense in the consolidated statement of operations in compensation, tax and benefits. Stock Options Options to purchase shares of common stock vest annually on the grant date anniversary over a period of three years and expire 10 years following the date of grant. The following table summarizes the stock option activity under the 2022 Omnibus Plan as of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Options ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ Weighted Average ​ Contractual Life ​ Aggregate ​ ​ Shares ​ Exercise Price ​ (in years) ​ Intrinsic Value Outstanding at January 1, 2023 254,000 ​ $ 1.69 8.76 $ 193,486 Granted 135,015 ​ $ 3.96 9.47 ​ $ 24,303 Exercised (133) ​ $ 1.62 — ​ $ 93 Forfeited (26,215) ​ $ 2.22 — ​ $ 33,550 Outstanding at September 30, 2023 362,667 ​ $ 2.49 8.98 ​ $ 207,788 Vested and exercisable at September 30, 2023 77,130 ​ $ 1.62 8.71 ​ $ 68,837 ​ As of September 30, 2023, unrecognized stock-based compensation of $389,598 related to 285,537 of unvested stock options will be recognized on a straight-line basis over a weighted-average vesting period of 2.21 years. Restricted Stock Units RSUs vest annually on the grant date anniversary over a period of three years. A summary of RSU activity and related information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted Stock Units ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant Date Fair Value ​ Number of Shares ​ per Share Unvested- January 1, 2023 ​ 352,764 ​ $ 1.67 Granted 310,599 ​ $ 3.77 Vested ​ (110,184) ​ $ 1.67 Forfeited (26,215) ​ $ 2.22 Unvested- September 30, 2023 526,964 ​ $ 2.88 ​ The majority of vested RSUs were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes. The total shares withheld were 20,725 and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. As of September 30, 2023, unrecognized stock-based compensation of $1,159,610 related to unvested RSUs will be recognized on a straight-line basis over a weighted average period of 2.04 years.

Income Per Share

Income Per Share	9 Months Ended
	Sep. 30, 2023
Income Per Share
Income Per Share	Note 11 — Income Per Share The Company has two classes of common stock, Class A and Class B. Basic and diluted earnings per share (“EPS”) attributable to common stockholders for Class A and Class B common stock were the same because they were entitled to the same liquidation and dividend rights. The following table sets forth the computation of the Company’s basic and diluted income per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Net income ​ $ 3,350,854 ​ $ 810,783 ​ $ 3,211,876 ​ $ 2,753,523 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding - basic ​ 14,268,168 ​ 14,178,000 ​ 14,216,211 ​ 11,846,601 ​ Options to purchase common stock ​ 32,033 ​ — ​ 74,595 ​ — ​ Unvested restricted stock units ​ ​ 526,964 ​ ​ 367,241 ​ ​ 526,964 ​ ​ 150,368 ​ Weighted average common shares outstanding - diluted ​ 14,827,165 ​ 14,545,241 ​ 14,817,770 ​ 11,996,969 ​ Net income per common share, basic ​ $ 0.23 ​ $ 0.06 ​ $ 0.23 ​ $ 0.23 ​ Net income per common share, diluted ​ $ 0.23 ​ $ 0.06 ​ $ 0.22 ​ $ 0.23 ​ ​ ​ ​ ​ ​ The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Warrants to purchase common stock ​ 3,217,800 ​ 3,220,000 ​ 3,217,800 ​ 3,220,000 ​ Options to purchase common stock ​ 142,650 ​ 261,600 ​ 139,950 ​ 261,600 ​ Total excludable from net income per share attributable to common stockholders - diluted ​ 3,360,450 ​ 3,481,600 ​ 3,357,750 ​ 3,481,600 ​ ​

Employee Benefit Plans

Employee Benefit Plans	9 Months Ended
	Sep. 30, 2023
Employee Benefit Plans
Employee Benefit Plans	Note 12 — Employee Benefit Plans The Company sponsors a safe harbor, defined contribution 401(k) and profit-sharing plan (the “Plan”) that allows eligible employees to contribute a percentage of their compensation. The Company matches employee contributions up to a maximum of 100% of the participant’s salary deferral, limited to 4% of the employee’s salary. For the three and nine months ended September 30, 2023 and 2022, the Company’s matching contributions were $53,981 and $56,158, respectively and $184,935 and $159,219, respectively. Additionally, the Company may make a discretionary profit- sharing contribution to the Plan. During the three and nine months ended September 30, 2023 and 2022, no profit-sharing contributions were made. The Company has an Employee Benefit Plan Trust (the “Trust”) to provide for the payment or reimbursement of all or a portion of covered medical, dental and prescription expenses for the employees of the Company. The Trust is funded with contributions made by the Company and participating employees at amounts sufficient to keep the Trust on an actuarially sound basis. The self-funded plan has an integrated stop loss insurance policy for the funding of the Trust benefits in excess of the full funding requirements. As of September 30, 2023 and December 31, 2022, the Company analyzed the incurred but not reported claims and recorded an estimated liability, as required within accrued compensation and benefits in accrued liabilities.

Tax Receivable Agreement and In

Tax Receivable Agreement and Income Taxes	9 Months Ended
	Sep. 30, 2023
Tax Receivable Agreement and Income Taxes
Tax Receivable Agreement and Income Taxes	Note 13 — Tax Receivable Agreement and Income Taxes Tax Receivable Agreement In connection with the initial public offering in February 2022, the Company entered into a tax receivable agreement (“TRA”) with DDH LLC and DDM (together, the “TRA Holders”) which provides for payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that the Company actually realizes or is deemed to realize in certain circumstances. Direct Digital Holdings, Inc. will retain the benefit of the remaining 15% of these net cash savings, and as a result, the Company recorded $823,481 during 2022 as additional paid-in capital. The TRA liability is calculated by determining the tax basis subject to the TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the resulting impact. The blended tax rate consists of the U.S. federal income tax rate and assumed combined state and local income tax rate driven by the apportionment factors applicable to each state. Any taxable income or loss generated by the Company will be allocated to TRA Holders in accordance with the TRA, and distributions to the owners of LLC Units in an amount sufficient to fund their tax obligations will be made. Pursuant to the Company’s election under Section 754 of the Code, the Company expects to obtain an increase in its share of the tax basis in the net assets of DDH, LLC when LLC interests are redeemed or exchanged by the members of DDH, LLC. The Company plans to make an election under Section 754 if the Code for each taxable year in which a redemption or exchange of LLC interest occurs. During the year ended December 31, 2022, a member of DDM exchanged 100,000 Class B shares into Class A shares. As of September 30, 2023, the Company has recorded a deferred tax asset primarily from the outside basis difference in the partnership interest of $5,082,424, and a total TRA liability of $4,286,375, of which $41,141 is reflected as a current liability in which $45,815 was paid during the nine months ended September 30, 2023. The payments under the TRA will not be conditional on holder of rights under the TRA having a continued ownership interest in either DDH LLC or the Company. The Company may elect to defer payments due under the TRA if the Company does not have available cash to satisfy its payment obligations under the TRA. Any such deferred payments under the TRA generally will accrue interest from the due date for such payment until the payment date. The Company accounts for any amounts payable under the TRA in accordance with ASC Topic 450, Contingencies, and will recognize subsequent period changes to the measurement of the liability from the TRA in the statement of operations as a component of income before taxes. The term of the TRA commenced upon completion of the IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless the Company exercises its right to terminate the TRA. If the Company elects to terminate the TRA early (or it is terminated early due to changes in control), the obligations under the TRA would accelerate and the Company would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by the Company under the TRA. Income Taxes Through the Organizational Transactions completed in February 2022, the Company formed an Up-C structure which allows DDM to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership for U.S. federal income tax purposes. Under the Up-C structure, the Company is subject to corporation income tax on the variable ownership changes of 19.7% and 20.45% that occurred in the first and third quarters of 2022, respectively. As a result, the Company recorded a tax provision for federal and state income tax for the three months ended September 30, 2023 and 2022 of $165,994 and $128,436, respectively, and for the nine months ended September 30, 2023 and 2022 of $165,658 and $215,112, respectively. Income tax expense is based on the estimated annual effective rate for the year, which includes estimated federal and state income taxes on the Company’s projected pre-tax income. The expense for income taxes and the effective income tax rates were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2023 2022 2023 2022 Income tax expense ​ $ 165,994 ​ $ 128,436 ​ $ 165,658 ​ $ 215,112 ​ Effective income tax rate ​ 4.7% ​ 13.7% ​ 4.9% ​ 7.2% ​ ​ The effective tax rates were lower than the statutory tax rates for the three and nine months ended September 30, 2023 primarily due to the Company’s partnership income that is not subject to federal and state taxes. ​ The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions. In the normal course of business, the Company can be examined by various tax authorities, including the Internal Revenue Service in the United States. There are currently no federal or state audits in process.

Correction of Immaterial Error

Correction of Immaterial Error in Prior Consolidated Financial Statements	9 Months Ended
	Sep. 30, 2023
Correction of Immaterial Error in Prior Consolidated Financial Statements
Correction of Immaterial Error in Prior Consolidated Financial Statements	Note 14 — Correction of Immaterial Error in Prior Consolidated Financial Statements During the quarter ended September 30, 2023 Materiality Considering the Effects of Misstatements when Quantifying Misstatements in the Current Year Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Balance Sheet as of December 31, 2022 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,252,764 ​ ​ 2,900,000 ​ Class A Common Stock Amount ​ $ 3,253 ​ $ 2,900 ​ APIC ​ $ 8,224,012 ​ $ 8,224,365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Operations for the Nine Months Ended September 30, 2022 As Reported As Revised ​ Weighted-average number of shares of common stock outstanding - basic ​ ​ 11,996,969 ​ ​ 11,846,601 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Operations for the Three Months Ended September 30, 2022 As Reported As Revised ​ Weighted-average number of shares of common stock outstanding - basic ​ ​ 14,545,241 ​ ​ 14,178,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Changes in Stockholders' Equity as of December 31, 2022 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,252,764 ​ ​ 2,900,000 ​ Class A Common Stock Amount ​ $ 3,253 ​ $ 2,900 ​ APIC ​ $ 8,224,012 ​ $ 8,224,365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Changes in Stockholders' Equity as of June 30, 2023 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,519,780 ​ ​ 2,988,916 ​ Class A Common Stock Amount ​ $ 3,520 ​ $ 2,989 ​ APIC ​ $ 8,539,858 ​ $ 8,540,389 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Changes in Stockholders' Equity as of June 30, 2022 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,163,214 ​ ​ 2,800,000 ​ Class A Common Stock Amount ​ $ 3,163 ​ $ 2,800 ​ APIC ​ $ 7,747,250 ​ $ 7,747,613 ​ ​

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2023
Segment Information
Segment Information	Note 15 — Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is its Chairman and Chief Executive Officer. The Company views its business as two reportable segments, buy-side advertising, which includes the results of Huddled Masses and Orange142, and sell-side advertising, which includes the results of Colossus Media. All of the Company’s revenues are attributed to the United States. Revenue by business segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months For the Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Buy-side advertising $ 7,850,058 ​ $ 7,130,736 ​ $ 27,092,816 ​ $ 22,283,044 ​ Sell-side advertising ​ 51,622,066 ​ 18,854,639 ​ ​ 89,006,018 ​ 36,333,976 ​ Total revenues ​ $ 59,472,124 ​ $ 25,985,375 ​ $ 116,098,834 ​ $ 58,617,020 ​ ​ Operating income by business segment reconciled to income before taxes is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months For the Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Buy-side advertising ​ $ 1,550,827 ​ $ 1,357,635 ​ $ 6,979,766 ​ $ 5,620,194 ​ Sell-side advertising ​ 6,206,398 ​ 2,365,495 ​ 9,656,686 ​ 4,599,629 ​ Corporate office expenses ​ (3,263,818) ​ (1,878,306) ​ (10,029,936) ​ (4,725,981) ​ Total operating income ​ ​ 4,493,407 ​ ​ 1,844,824 ​ ​ 6,606,516 ​ ​ 5,493,842 ​ Corporate other expense ​ ​ (976,559) ​ ​ (905,605) ​ ​ (3,228,982) ​ ​ (2,525,207) ​ Income before taxes ​ $ 3,516,848 ​ $ 939,219 ​ $ 3,377,534 ​ $ 2,968,635 ​ ​ Total assets by business segment are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2023 2022 ​ Buy-side advertising ​ $ 23,809,849 ​ $ 25,685,528 ​ Sell-side advertising ​ 54,139,638 ​ 25,512,367 ​ Corporate office ​ 8,798,843 ​ 6,928,144 ​ Total assets ​ $ 86,748,330 ​ $ 58,126,039 ​ ​

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2023
Subsequent Events
Subsequent Events	Note 16 — Subsequent Events The Company has evaluated events and transactions occurring subsequent to September 30, 2023, through the date of this report and determined there were no events or transactions other than those described below that would require recognition or disclosure. ​ On August 29, 2023, the Company filed a Tender Offer Statement on Schedule TO pursuant to which the Company offered to purchase all of its outstanding warrants for $1.20 per warrant in cash. The Tender Offer expired at one minute after 11:59 PM, Eastern Time on September 28, 2023. The Company accepted all validly tendered warrants for purchase and settlement on October 2, 2023. As a result of the Tender Offer, a total of 2,213,652 warrants were tendered and not validly withdrawn prior to the expiration of the tender offer for a total purchase price of approximately $2.7 million. On October 23, 2023, the Company distributed a notice of redemption to the registered holders of the remaining outstanding warrants announcing the redemption of those warrants for $0.35 per warrant. The redemption closed on October 30, 2023, and all remaining 1,004,148 warrants were purchased for an aggregate price of approximately $0.4 million. ​ On October 3, 2023, the Company entered into the Fourth Amendment to the . Under the terms of the Fourth Amendment, among other changes, the Company entered into a delayed draw term loan under the 2021 Credit Facility in the principal amount of $3,587,274.03 (the “ ”) to make payments due, among other things, in connection with the consummation of the 2023 warrant tender offer and fees and expenses incurred in connection therewith. After giving effect to the Delayed Draw Term Loan made on the effective date of the Amendment, no additional term loans or Delayed Draw Term Loan will be available under the 2021 Credit Facility. Additionally, the Amendment made certain technical amendments to the negative covenants under the 2021 Credit Facility in order to permit the transactions consummated pursuant to the 2023 warrant tender.

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Basis of Presentation and Summary of Significant Accounting Policies
Basis of presentation	Basis of presentation The Company’s consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations and cash flows for all periods presented. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on April 17, 2023. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the results for the periods presented. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards otherwise applicable to public companies until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) it affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The adoption dates discussed below reflect this election.
Basis of consolidation	Basis of consolidation The consolidated financial statements include the accounts of Direct Digital Holdings, Inc. and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.
Business combinations	Business combinations The Company analyzes acquisitions to determine if the acquisition should be recorded as an asset acquisition or a business combination. The Company accounts for acquired businesses using the acquisition method of accounting under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations Fair Value Measurement Significant judgments are used in determining the estimated fair values assigned to the assets acquired and liabilities assumed and in determining estimates of useful lives of long-lived assets. Fair value determinations and useful life estimates are based on, among other factors, estimates of expected future net cash flows, estimates of appropriate discount rates used to calculate the present value of expected future net cash flows, the assessment of each asset’s life cycle, and the impact of competitive trends on each asset’s life cycle and other factors. These judgments can materially impact the estimates used to allocate acquisition date fair values to assets acquired and liabilities assumed, and the resulting timing and amounts charged to, or recognized in, current and future operating results. For these and other reasons, actual results may vary significantly from estimated results.
Use of estimates	Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates include the allocation of purchase price consideration in the business combination and the related valuation of acquired assets and liabilities, intangible assets, and goodwill impairment testing. The Company bases its estimates on past experiences, market conditions, and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis.
Cash and cash equivalents	Cash and cash equivalents Cash and cash equivalents consist of funds deposited with financial institutions and highly liquid instruments with original maturities of three months or less. Such deposits may, at times, exceed federally insured limits. As of September 30, 2023, $4,555,527 of the Company’s cash and cash equivalents exceeded the federally insured limits, none of which is held at Silicon Valley Bank (“SVB”). The Company has not experienced any losses in such amounts and believes it is not exposed to any significant credit risk to cash.
Accounts receivable, net	Accounts receivable, net Accounts receivable primarily consists of billed amounts for products and services rendered to customers under normal trade terms. The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral. Accounts receivables are stated at net realizable value. The Company insures a significant portion of its accounts receivable with unrelated third-party insurance companies in an effort to mitigate any future write-offs and establishes an allowance for doubtful accounts as deemed necessary for accounts not covered by this insurance. As of September 30, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $46,433 and $4,323, respectively. Management periodically reviews outstanding accounts receivable for reasonableness. If warranted, the Company processes a claim with the third-party insurance company to recover uncollected balances, rather than writing the balances off to bad debt expense. The guaranteed recovery for the claim is approximately 90% of the original balance, and if the full amount is collected by the insurance company, the remaining 10% is remitted to the Company. If the insurance company is unable to collect the full amount, the Company records the remaining 10% to bad debt expense. Bad debt expense was $46,208 for the three months ended September 30, 2023 and for the three months ended September 30, 2022, the Company recovered $22,082 on receivables previously written off. Bad debt expense was $97,740 and $2,717 for the nine months ended September 30, 2023 and 2022, respectively.
Concentration of customers	Concentration of customers There is an inherent concentration of credit risk associated with accounts receivable arising from revenue from major customers on both the buy-side and sell-side of the business. For the three months ended September 30, 2023 and 2022, one customer represented 82% and 70% of revenues, respectively. For the nine months ended September 30, 2023 and 2022, one customer represented 72% and 60% of revenues. As of September 30, 2023 and December 31, 2022, one customer accounted for 90% and 80%, respectively, of accounts receivable.
Property and equipment, net	Property and equipment, net Property and equipment are recognized in the consolidated balance sheets at cost less accumulated depreciation and amortization. The Company capitalizes purchases and depreciates its property and equipment using the straight-line method of depreciation over the estimated useful lives of the respective assets, generally ranging from three The cost of repairs and maintenance are expensed as incurred. Major renewals or improvements that extend the useful lives of the assets are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation thereon are removed, and any resulting gain or loss is recognized in the consolidated statements of operations.
Internal Use of Software Development Costs (Capitalized Software)	Internal Use of Software Development Costs (Capitalized Software) The Company capitalizes costs related to the development of internal-use software. Costs incurred during the application development phase are capitalized and amortized using the straight-line method over the estimated useful life, estimated at three years.
Goodwill	Goodwill Under the purchase method of accounting pursuant to ASC 805, goodwill is calculated as the excess of purchase price over the fair value of the net tangible and identifiable intangible assets acquired. In testing goodwill for impairment, the Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in management, strategy and primary user base. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative goodwill impairment analysis is performed, which is referred to as “Step 1”. Depending upon the results of the Step 1 measurement, the recorded goodwill may be written down, and an impairment expense is recorded in the consolidated statements of operations when the carrying amount of the reporting unit exceeds the fair value of the reporting unit. Goodwill is reviewed annually and tested for impairment upon the occurrence of a triggering event. As of September 30, 2023, goodwill was $6,519,636, which includes $2,423,936 as a result of the acquisition of Huddled Masses and Colossus Media in 2018 and $4,095,700 of goodwill recognized from the acquisition of Orange142 in September 2020.
Intangible assets, net	Intangible assets, net Intangible assets consist of customer relationships, trademarks and non-compete agreements. Intangible assets are recorded at fair value at the time of their acquisition and are stated within the consolidated balance sheets net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives and recorded as amortization expense within general and administrative expenses in the consolidated statements of operations.
Impairment of long-lived assets	Impairment of long-lived assets The Company evaluates long-lived assets, including property and equipment, and acquired intangible assets consisting of customer relationships, trademarks and trade names, and non-compete agreements, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is assessed based on the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized. Any impairment loss, if indicated, is measured as the amount by which the carrying amount of the asset exceeds its estimated fair value and is recognized as a reduction in the carrying amount of the asset. As of September 30, 2023 and December 31, 2022, there were no events or changes in circumstances to indicate that the carrying amount of the assets may not be recoverable.
Fair value measurements	Fair value measurements The Company follows ASC 820-10, Fair Value Measurement Level 1 — Inputs to the valuation methodology are quoted prices available in active markets for identical securities as of the reporting date; Level 2 — Inputs to the valuation methodology are other significant observable inputs, including quoted prices for similar securities, interest rates, credit risk etc. as of the reporting date, and the fair value can be determined through the use of models or other valuation methodologies; and Level 3 — Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity of the securities and the reporting entity makes estimates and assumptions relating to the pricing of the securities, including assumptions regarding risk. The Company segregates all financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.
Deferred financing costs	Deferred financing costs The Company records costs related to its line of credit and the issuance of debt obligations as deferred financing costs. These costs are deferred and amortized to interest expense using the straight-line method over the life of the debt. In December 2021, the Company amended its line of credit with East West Bank (see Note 6 – Long-Term Debt) and incurred additional deferred financing costs of $4,613 during the nine months ended September 30, 2022. On July 26, 2022, the Company repaid the line of credit and terminated the revolving credit facility as of such date and the remaining deferred financing costs of $33,434 were amortized to interest expense during the year ended December 31, 2022. On July 7, 2023, the Company entered into a new revolving credit facility with East West Bank and incurred deferred financing costs of $214,680 during the three months ended September 30, 2023. Unamortized deferred financing costs related to the new line of credit were $187,845 and $0 as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023, $80,505 of these unamortized deferred financing costs were included in prepaid expenses and other current assets with the balance in other long-term assets. In January 2023, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (the “SVB Loan Agreement”) and incurred $211,934 of deferred financing costs during the nine months ended September 30, 2023. As the Company had not yet drawn any amounts on the agreement, on March 13, 2023 the Company issued a notice of termination and expensed the deferred financing costs which totaled $299,770 to contingent loss on early termination of line of credit during the nine months ended September 30, 2023. Termination of the facility with Silicon Valley Bank (“SVB”) became effective April 20, 2023. ​ In December 2021, the Company entered into an agreement with Lafayette Square Loan Servicing, LLC (“Lafayette Square”) (see Note 6 – Long-Term Debt) and incurred additional deferred financing costs of $15,567 and $520,682 during the nine months ended September 30, 2023 and 2022, respectively. Unamortized deferred financing costs for the note payable was $1,722,716 and $2,115,161 as of September 30, 2023 and December 31, 2022, respectively, and netted against the outstanding debt on the consolidated balance sheets.
Right-of-use assets	Right-of-use assets The Company adopted ASU 2016-02 (“ASU 2016-02”), Leases (Topic 842)
Revenue recognition	Revenue recognition The Company recognizes revenue using the following five steps: 1) identification of a contract(s) with a customer; 2) identification of the performance obligation(s) in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligation(s) in the contract; and 5) recognition of revenue when, or as, the performance obligation(s) are satisfied. The Company’s revenues are derived primarily from two sources: buy-side advertising and sell-side advertising. Buy-side advertising The Company purchases media based on the budget established by its customers with a focus on leveraging data services, customer branding, real-time market analysis and micro-location advertising. The Company offers its services on a fully managed basis, which is recognized over time using the output method when the performance obligation is fulfilled. An “impression” is delivered when an advertisement appears on pages viewed by users. The performance obligation is satisfied over time as the volume of impressions are delivered up to the contractual maximum for fully managed revenue. Many customers run several different campaigns throughout the year to capitalize on different seasons, special events and other happenings at their respective regions and localities. The Company provides digital advertising and media buying capabilities with a focus on generating measurable digital and financial life for its customers. Revenue arrangements are evidenced by a fully executed insertion order (“IO”) and/or a master service agreement (“MSA”) covering a combination of marketing tactics. Generally, IOs specify the number and type of advertising impressions to be delivered over a specified time at an agreed upon price and performance objectives for an ad campaign. Performance objectives are generally a measure of targeting, as defined by the parties in advance, such as number of ads displayed, consumer clicks on ads or consumer actions (which may include qualified leads, registrations, downloads, inquiries or purchases). These payment models are commonly referred to as CPM (cost per impression), CPC (cost per click) and CPA (cost per action). The majority of the Company’s contracts are flat-rate, fee-based contracts. In instances where the Company contracts with third-party advertising agencies on behalf of their advertiser clients, a determination is made to recognize revenue on a gross or net basis based on an assessment of whether the Company is acting as the principal or an agent in the transaction. The Company is acting as the principal in these arrangements and therefore revenue earned and costs incurred are recognized on a gross basis as the Company has control of the digital ad units and is responsible for fulfilling the advertisement delivery, establishing the minimum selling prices, delivering the advertisements, providing updates and performing all billing and collection activities for the applicable platform. Cash payments received prior to the Company’s delivery of its services are recorded to deferred revenue until the performance obligation is satisfied. The Company recorded deferred revenue (contract liabilities) to account for billings in excess of revenue recognized, primarily related to contractual minimums billed in advance and customer prepayment, of $1,044,069 and $546,710 as of September 30, 2023 and December 31, 2022, respectively. Sell-side advertising The Company partners with publishers to sell advertising inventory to the Company’s Colossus Media-curated clients and the open markets (collectively referred to as “buyers”) seeking to access the general market as well as unique multi-cultural audiences. The Company generates revenue from the delivery of targeted digital media solutions, enabling advertisers to connect intelligently with their audiences across online display, video, social and mobile mediums using its proprietary programmatic sell-side platform (“SSP”). The Company refers to its publishers, app developers, and channel partners collectively as its publishers. The Company generates revenue through the monetization of publisher ad impressions on its platform. The Company’s platform allows the Company to sell, in real time, ad impressions from publishers to buyers and provides automated inventory management and monetization tools to publishers across various device types and digital ad formats. The Company recognizes revenue when an ad is delivered or displayed in response to a winning bid request from ad buyers. The Company is acting as the principal in these arrangements and therefore revenue earned and costs incurred are recognized on a gross basis, as the Company has control of the digital ad units and is responsible for fulfilling the advertisement delivery, establishing the minimum selling prices, delivering the advertisements, providing updates and performing all billing and collection activities for its proprietary platform. Overall The Company maintains agreements with its customers in the form of written service agreements, which set out the terms of the relationship, including payment terms (typically 30 to 90 days) and access to its platform. In an effort to reduce the risk of nonpayment, the Company has insurance with a third-party carrier for its accounts receivable as noted above.
Cost of revenues	Cost of revenues Buy-side advertising Cost of revenues consists primarily of digital media fees, third-party platform access fees, and other third-party fees associated with providing services to the Company’s customers. Sell-side advertising The Company pays publishers a fee, which is typically a percentage of the value of the ad impressions monetized through the Company’s platform. Cost of revenues consists primarily of publisher media fees and data center co-location costs. Media fees include the publishing and real-time bidding costs to secure advertising space.
Advertising costs	Advertising costs The Company expenses advertising costs as incurred. Advertising expense incurred during the three months ended September 30, 2023 and 2022 was $471,987 and $295,794, respectively and $1,474,250 and $618,461 for the nine months ended September 30, 2023 and 2022, respectively. These costs are included in general and administrative expenses in the consolidated statements of operations.
Stock-Based Compensation	Stock-based compensation The Company recognizes and measures compensation expense for all stock-based payment awards granted to employees, directors and non-employee directors, including stock options and restricted stock units (“RSUs”), based on the fair value of the awards on the date of grant. The fair value of stock options is estimated using the Black Scholes option pricing model. The grant date fair value of RSUs is based on the prior day closing market price of the Company’s Class A common stock. The Black Scholes option pricing model inputs include the fair value of the Company’s common stock, as well as assumptions regarding the expected common stock price volatility over the term of the stock options, the expected term of the stock options, risk-free interest rates, and the expected dividend yield. For additional information regarding stock-based compensation and the assumptions used for determining the fair value of stock options, see Note 10 — Stockholders’ Equity and Stock-Based Compensation Plans.
Income per share	Income per share Basic income per share is calculated by dividing net income available to common stockholders by the weighted average number of shares outstanding for the period. Potentially dilutive securities include potential shares of common stock related to the Company’s stock options and RSUs.
Income taxes	Income taxes Effective February 15, 2022, concurrent with the closing of the Company’s initial public offering, the Company entered into a tax receivable agreement (“Tax Receivable Agreement” or “TRA”) with DDH LLC and Direct Digital Management, LLC (“DDM” or the “Continuing LLC Owner”). The TRA provides for certain income (loss) allocations between the Company and DDH LLC under the agreement. DDH LLC is a limited liability company and will continue to be treated as a partnership for federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax and certain state and local income taxes. Any taxable income or loss generated by the Company will be allocated to holders of LLC units (“LLC Units”) in accordance with the Second Amended and Restated Limited Liability Company Agreement (“LLC Agreement”), and distributions to the owners of LLC Units in an amount sufficient to fund their tax obligations will be made. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss under the LLC Agreement. Pursuant to the Company’s election under Section 754 of the Internal Revenue Code (the “Code”), the Company expects to obtain an increase in its share of the tax basis in the net assets of DDH, LLC when LLC Units are redeemed or exchanged by the members of DDH, LLC. The Company made an election under Section 754 of the Code for each taxable year in which a redemption or exchange of LLC interest occurred. During the year ended December 31, 2022, a member of DDM exchanged 100,000 Class B shares into Class A shares. The Company applies ASC 740-10, Income Taxes
Segment information	Segment information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chairman and Chief Executive Officer. The Company views its business as two reportable segments, buy-side advertising, which includes the results of Huddled Masses and Orange142, and sell-side advertising, which includes the results of Colossus Media.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Accounting pronouncements recently adopted In June 2016, the FASB issued ASU No. 2016-13 , Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments Accounting pronouncements not yet adopted There are no accounting pronouncements that the Company has not yet adopted that it believes are applicable or would have a material impact on the consolidated financial statements of the Company.
Liquidity and capital resources	Liquidity and capital resources As of September 30, 2023, the Company had cash and cash equivalents of $5,481,949. Based on projections of growth in revenue and operating results in the coming year, the available cash held by the Company and the amounts the Company may borrow under the Credit Agreement (as defined below) executed in July 2023, the Company believes that it will have sufficient cash resources to finance its operations and service any maturing debt obligations for at least the next twelve months following the issuance of these financial statements.

Organization and Description _2

Organization and Description of Business (Tables)	9 Months Ended
	Sep. 30, 2023
Organization and Description of Business
Schedule of ownership in subsidiaries	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Advertising ​ ​ ​ ​ ​ ​ Solution ​ ​ ​ Date ​ ​ Current % ​ and ​ ​ ​ of Subsidiary Ownership Segment Date of Formation Acquisition Direct Digital Holdings, LLC 100.0 % N/A ​ June 21, 2018 ​ August 26, 2021 Huddled Masses, LLC 100.0 % Buy-side ​ November 13, 2012 ​ June 21, 2018 Colossus Media, LLC 100.0 % Sell-side ​ September 8, 2017 ​ June 21, 2018 Orange142, LLC 100.0 % Buy-side ​ March 6, 2013 ​ September 30, 2020

Property, Equipment and Softw_2

Property, Equipment and Software, net (Tables)	9 Months Ended
	Sep. 30, 2023
Property, Equipment and Software, net
Schedule of property, equipment and software, net	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ ​ 2023 2022 ​ Furniture and fixtures ​ $ 127,932 ​ $ 118,601 ​ Computer equipment ​ ​ 19,636 ​ ​ 16,985 ​ Leasehold Improvements ​ ​ 36,230 ​ ​ — ​ Capitalized software ​ ​ 660,616 ​ ​ 571,850 ​ Property, equipment and software, gross ​ ​ 844,414 ​ ​ 707,436 ​ Less: accumulated depreciation and amortization ​ ​ (219,386) ​ ​ (34,218) ​ Total property, equipment and software, net ​ $ 625,028 ​ $ 673,218 ​
Schedule of depreciation and amortization	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2023 2022 ​ 2023 2022 ​ Cost of revenue ​ $ 55,051 ​ $ — ​ $ 159,057 ​ $ — ​ General and administrative ​ ​ 8,638 ​ ​ — ​ ​ 26,112 ​ ​ — ​ Total depreciation and amortization ​ $ 63,689 ​ $ — ​ $ 185,169 ​ $ — ​ ​

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2023
Intangible Assets
Schedule of intangible assets and related accumulated amortization	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trademarks and ​ Non-compete ​ ​ ​ ​ Customer lists tradenames agreements Total Fair value at acquisition date ​ $ 13,028,320 ​ $ 3,501,200 ​ $ 1,504,330 ​ $ 18,033,850 Accumulated amortization ​ (3,908,496) ​ (1,050,360) ​ (902,598) ​ (5,861,454) Intangible assets, net ​ $ 9,119,824 ​ $ 2,450,840 ​ $ 601,732 ​ $ 12,172,396 Estimated life (years) ​ 10.0 ​ 10.0 ​ 5.0 ​ Weighted-average remaining life (years) ​ 7.0 ​ ​ 7.0 ​ 2.0 ​
Schedule of future amortization expense	​ ​ ​ ​ ​ ​ Total 2023 $ 488,456 2024 ​ 1,953,818 2025 ​ 1,878,602 2026 ​ 1,652,952 2027 ​ 1,652,952 Thereafter ​ 4,545,616 Total future amortization expense ​ $ 12,172,396

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2023
Accrued Liabilities
Schedule of accrued liabilities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 2022 ​ Accrued compensation and benefits ​ $ 2,967,115 ​ $ 4,128,505 ​ Accrued expenses ​ 547,661 ​ 206,639 ​ Accrued severance ​ ​ 309,618 ​ ​ — ​ Accrued litigation settlement ​ 235,596 ​ 429,096 ​ Accrued interest ​ 11,138 ​ 13,524 ​ Total accrued liabilities ​ $ 4,071,128 ​ $ 4,777,764 ​

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Instrument [Line Items]
Schedule of future minimum payments related to long-term debt	As of September 30, 2023, future minimum payments related to long-term debt are as follows for the years ended December 31: ​ ​ ​ ​ 2023 $ 163,750 2024 1,310,000 2025 1,310,473 2026 22,411,965 2027 3,337 Thereafter ​ 142,975 Total ​ 25,342,500 Less current portion ​ (1,146,250) Less deferred financing costs ​ (1,722,716) Long-term debt, net ​ $ 22,473,534
Lafayette Square | 2021 Credit Facility
Debt Instrument [Line Items]
Schedule of components of interest expense and related fees for the lines of credit	The components of interest expense and related fees for the 2021 Credit Facility are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2023 2022 ​ 2023 2022 ​ Interest expense – Lafayette Square ​ $ 895,638 ​ $ 696,818 ​ $ 2,665,091 ​ $ 1,673,648 ​ Amortization of deferred financing costs – Lafayette Square ​ 136,004 ​ 128,064 ​ 408,012 ​ 362,243 ​ Total interest expense and amortization of deferred financing costs ​ $ 1,031,642 ​ $ 824,882 ​ $ 3,073,103 ​ $ 2,035,891 ​
East West Bank | 2020 and 2023 Revolving credit facilities
Debt Instrument [Line Items]
Schedule of components of interest expense and related fees for the lines of credit	The components of interest expense and related fees for the 2023 Revolving Credit Facility and 2020 Revolving Credit Facility are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Interest expense – 2020 Revolving Credit Facility ​ $ — ​ $ 3,573 ​ $ — ​ $ 23,391 ​ Amortization of deferred financing costs – 2023 Revolving Credit Facility ​ ​ 26,835 ​ ​ — ​ ​ 26,835 ​ ​ — ​ Amortization of deferred financing costs – 2020 Revolving Credit Facility ​ ​ — ​ ​ 33,434 ​ ​ — ​ ​ 100,765 ​ Total interest expense and amortization of deferred financing costs ​ $ 26,835 ​ $ 37,007 ​ $ 26,835 ​ $ 124,156 ​

Related Party Transactions (Tab

Related Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2023
Related Party Transactions
Schedule of aggregate changes in balance of gross unrecognized tax benefits	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ As of ​ ​ September 30, ​ December 31, ​ 2023 2022 Liability related to tax receivable agreement ​ ​ ​ ​ ​ ​ Short term ​ $ 41,141 ​ $ 182,571 Long term ​ ​ 4,245,234 ​ ​ 4,149,619 Total liability related to tax receivable agreement ​ $ 4,286,375 ​ $ 4,332,190

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies.
Schedule of supplemental balance sheet information related to operating leases	Supplemental balance sheet information related to operating leases is included in the table below as of September 30, 2023: ​ ​ ​ ​ ​ 2023 Operating lease right-of-use asset ​ $ 674,846 ​ ​ ​ ​ Operating lease liabilities - current ​ $ 49,977 Operating lease liabilities - long-term ​ 717,632 Total operating lease liability ​ $ 767,609 ​
Schedule of maturity of lease liability	Lease liability with enforceable contract terms that have greater than one-year terms are as follows: ​ ​ ​ ​ 2023 $ 37,251 2024 ​ 110,215 2025 ​ 156,077 2026 ​ 159,775 2027 ​ 163,474 Thereafter ​ 366,830 Total lease payments ​ 993,622 Less imputed interest ​ (226,013) Total lease liability ​ $ 767,609 ​

Stockholders' Equity and Stoc_2

Stockholders' Equity and Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2023
Stockholders' Equity and Stock-Based Compensation
Schedule of warrant activity	The following table summarizes warrant activity as of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrants ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Contractual Life ​ Aggregate ​ Shares Exercise Price (in years) Intrinsic Value Outstanding at January 1, 2023 3,220,000 ​ $ 5.50 4.13 ​ $ — Granted — ​ $ — — ​ $ — Exercised (2,200) ​ $ 5.50 — ​ $ — Canceled — ​ $ — — ​ $ — Outstanding at September 30, 2023 3,217,800 ​ $ 5.50 3.38 ​ $ — Exercisable at September 30, 2023 3,217,800 ​ ​ ​ ​ ​ ​ ​ ​
Schedule of stock option activity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Options ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ Weighted Average ​ Contractual Life ​ Aggregate ​ ​ Shares ​ Exercise Price ​ (in years) ​ Intrinsic Value Outstanding at January 1, 2023 254,000 ​ $ 1.69 8.76 $ 193,486 Granted 135,015 ​ $ 3.96 9.47 ​ $ 24,303 Exercised (133) ​ $ 1.62 — ​ $ 93 Forfeited (26,215) ​ $ 2.22 — ​ $ 33,550 Outstanding at September 30, 2023 362,667 ​ $ 2.49 8.98 ​ $ 207,788 Vested and exercisable at September 30, 2023 77,130 ​ $ 1.62 8.71 ​ $ 68,837
Schedule of RSU activity and related information	​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted Stock Units ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant Date Fair Value ​ Number of Shares ​ per Share Unvested- January 1, 2023 ​ 352,764 ​ $ 1.67 Granted 310,599 ​ $ 3.77 Vested ​ (110,184) ​ $ 1.67 Forfeited (26,215) ​ $ 2.22 Unvested- September 30, 2023 526,964 ​ $ 2.88

Income Per Share (Tables)

Income Per Share (Tables)	9 Months Ended
	Sep. 30, 2023
Income Per Share
Schedule of basic and diluted income per share	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Net income ​ $ 3,350,854 ​ $ 810,783 ​ $ 3,211,876 ​ $ 2,753,523 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding - basic ​ 14,268,168 ​ 14,178,000 ​ 14,216,211 ​ 11,846,601 ​ Options to purchase common stock ​ 32,033 ​ — ​ 74,595 ​ — ​ Unvested restricted stock units ​ ​ 526,964 ​ ​ 367,241 ​ ​ 526,964 ​ ​ 150,368 ​ Weighted average common shares outstanding - diluted ​ 14,827,165 ​ 14,545,241 ​ 14,817,770 ​ 11,996,969 ​ Net income per common share, basic ​ $ 0.23 ​ $ 0.06 ​ $ 0.23 ​ $ 0.23 ​ Net income per common share, diluted ​ $ 0.23 ​ $ 0.06 ​ $ 0.22 ​ $ 0.23 ​
Schedule of antidilutive securities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Warrants to purchase common stock ​ 3,217,800 ​ 3,220,000 ​ 3,217,800 ​ 3,220,000 ​ Options to purchase common stock ​ 142,650 ​ 261,600 ​ 139,950 ​ 261,600 ​ Total excludable from net income per share attributable to common stockholders - diluted ​ 3,360,450 ​ 3,481,600 ​ 3,357,750 ​ 3,481,600 ​ ​

Tax Receivable Agreement and _2

Tax Receivable Agreement and Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2023
Tax Receivable Agreement and Income Taxes
Schedule of expense for income taxes and the effective income tax rates	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2023 2022 2023 2022 Income tax expense ​ $ 165,994 ​ $ 128,436 ​ $ 165,658 ​ $ 215,112 ​ Effective income tax rate ​ 4.7% ​ 13.7% ​ 4.9% ​ 7.2% ​

Correction of Immaterial Erro_2

Correction of Immaterial Error in Prior Consolidated Financial Statements - (Tables)	9 Months Ended
	Sep. 30, 2023
Correction of Immaterial Error in Prior Consolidated Financial Statements
Schedule of correction of immaterial error in prior consolidated financial statements	​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Balance Sheet as of December 31, 2022 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,252,764 ​ ​ 2,900,000 ​ Class A Common Stock Amount ​ $ 3,253 ​ $ 2,900 ​ APIC ​ $ 8,224,012 ​ $ 8,224,365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Operations for the Nine Months Ended September 30, 2022 As Reported As Revised ​ Weighted-average number of shares of common stock outstanding - basic ​ ​ 11,996,969 ​ ​ 11,846,601 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Operations for the Three Months Ended September 30, 2022 As Reported As Revised ​ Weighted-average number of shares of common stock outstanding - basic ​ ​ 14,545,241 ​ ​ 14,178,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Changes in Stockholders' Equity as of December 31, 2022 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,252,764 ​ ​ 2,900,000 ​ Class A Common Stock Amount ​ $ 3,253 ​ $ 2,900 ​ APIC ​ $ 8,224,012 ​ $ 8,224,365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Changes in Stockholders' Equity as of June 30, 2023 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,519,780 ​ ​ 2,988,916 ​ Class A Common Stock Amount ​ $ 3,520 ​ $ 2,989 ​ APIC ​ $ 8,539,858 ​ $ 8,540,389 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated Statement of Changes in Stockholders' Equity as of June 30, 2022 As Reported As Revised ​ Class A Common Stock Units ​ ​ 3,163,214 ​ ​ 2,800,000 ​ Class A Common Stock Amount ​ $ 3,163 ​ $ 2,800 ​ APIC ​ $ 7,747,250 ​ $ 7,747,613 ​

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2023
Segment Information
Schedule of information by segment	Revenue by business segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months For the Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Buy-side advertising $ 7,850,058 ​ $ 7,130,736 ​ $ 27,092,816 ​ $ 22,283,044 ​ Sell-side advertising ​ 51,622,066 ​ 18,854,639 ​ ​ 89,006,018 ​ 36,333,976 ​ Total revenues ​ $ 59,472,124 ​ $ 25,985,375 ​ $ 116,098,834 ​ $ 58,617,020 ​ ​ Operating income by business segment reconciled to income before taxes is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months For the Nine Months Ended ​ ​ ​ Ended Ended ​ ​ ​ September 30, September 30, ​ ​ 2023 2022 2023 2022 ​ Buy-side advertising ​ $ 1,550,827 ​ $ 1,357,635 ​ $ 6,979,766 ​ $ 5,620,194 ​ Sell-side advertising ​ 6,206,398 ​ 2,365,495 ​ 9,656,686 ​ 4,599,629 ​ Corporate office expenses ​ (3,263,818) ​ (1,878,306) ​ (10,029,936) ​ (4,725,981) ​ Total operating income ​ ​ 4,493,407 ​ ​ 1,844,824 ​ ​ 6,606,516 ​ ​ 5,493,842 ​ Corporate other expense ​ ​ (976,559) ​ ​ (905,605) ​ ​ (3,228,982) ​ ​ (2,525,207) ​ Income before taxes ​ $ 3,516,848 ​ $ 939,219 ​ $ 3,377,534 ​ $ 2,968,635 ​ ​ Total assets by business segment are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2023 2022 ​ Buy-side advertising ​ $ 23,809,849 ​ $ 25,685,528 ​ Sell-side advertising ​ 54,139,638 ​ 25,512,367 ​ Corporate office ​ 8,798,843 ​ 6,928,144 ​ Total assets ​ $ 86,748,330 ​ $ 58,126,039 ​ ​

Organization and Description _3

Organization and Description of Business (Details)	9 Months Ended
	Sep. 30, 2023
Direct Digital Holdings, LLC
Schedule of Organization and Description of Business [Line Items]
Percentage of voting interests	100%
Percentage of economic voting interests	19.70%
Percentage of ownership interest	100%
Huddled Masses, LLC | Buy-side advertising
Schedule of Organization and Description of Business [Line Items]
Percentage of ownership interest	100%
Colossus Media, LLC | Sell-side advertising
Schedule of Organization and Description of Business [Line Items]
Percentage of ownership interest	100%
Orange142, LLC | Buy-side advertising
Schedule of Organization and Description of Business [Line Items]
Percentage of ownership interest	100%

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details)	Sep. 30, 2023 USD ($)
Basis of Presentation and Summary of Significant Accounting Policies
Cash deposits insured by FDIC	$ 4,555,527

Basis of Presentation and Sum_4

Basis of Presentation and Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Allowance for doubtful accounts	$ 46,433		$ 46,433		$ 4,323
Guaranteed recovery from insurance (as a percent)			90%
Remittance, if full amount collected (as a percent)			10%
Provision for bad debts (as a percent)			10%
Bad debt expense (recovery)	$ 46,208	$ (22,082)	$ 97,740	$ 2,717

Basis of Presentation and Sum_5

Basis of Presentation and Summary of Significant Accounting Policies - Concentration of customers (Details) - customer	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Concentrations of credit risk
Number of customers	1	1	1	1	1
Revenue | Customer concentration risk | Customer 1
Concentrations of credit risk
Concentration risk (as a percent)	82%	70%	72%	60%
Accounts receivables | Credit concentration risk | Customer 1
Concentrations of credit risk
Concentration risk (as a percent)			90%		80%

Basis of Presentation and Sum_6

Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment, Net (Details)	9 Months Ended
	Sep. 30, 2023
Minimum
Property and equipment, net
Useful lives	3 years
Maximum
Property and equipment, net
Useful lives	5 years

Basis of Presentation and Sum_7

Basis of Presentation and Summary of Significant Accounting Policies - Internal Use of Software Development Costs (Capitalized Software) (Details)	9 Months Ended
	Sep. 30, 2023
Capitalized Software
Finite-Lived Intangible Assets [Line Items]
Estimated life (years)	3 years

Basis of Presentation and Sum_8

Basis of Presentation and Summary of Significant Accounting Policies - Goodwill (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2020	Dec. 31, 2018
Goodwill
Goodwill	$ 6,519,636	$ 6,519,636	$ 4,095,700
Huddled Masses and Colossus Media LLC
Goodwill
Goodwill				$ 2,423,936
Orange 142 LLC
Goodwill
Goodwill			$ 4,095,700

Basis of Presentation and Sum_9

Basis of Presentation and Summary of Significant Accounting Policies - Deferred Financing Costs (Details) - USD ($)	3 Months Ended		5 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Credit facility
Deferred financing costs	$ 1,722,716		$ 2,115,161	$ 1,722,716
Additional deferred financing costs				442,181	$ 525,295
East West Bank | Revolving credit facility
Credit facility
Amortization of deferred financing costs			33,434
Additional deferred financing costs					4,613
East West Bank | Revolving credit facility 2023
Credit facility
Deferred financing costs	187,845		0	187,845
Amortization of deferred financing costs	26,835			26,835
Additional deferred financing costs	214,680			214,680
East West Bank | Revolving credit facility 2023 | Prepaid Expenses and Other Current Assets
Credit facility
Unamortized deferred financing costs	80,505			80,505
Silicon Valley Bank [Member] | Revolving credit facility
Credit facility
Additional deferred financing costs				211,934
Write-off of deferred financing costs				299,770
Lafayette Square | 2021 Credit Facility
Credit facility
Deferred financing costs	1,722,716		$ 2,115,161	1,722,716
Amortization of deferred financing costs	$ 136,004	$ 128,064		408,012	362,243
Additional deferred financing costs				$ 15,567	$ 520,682

Basis of Presentation and Su_10

Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Concentrations of credit risk
Contract liabilities	$ 1,044,069	$ 546,710
Minimum
Concentrations of credit risk
Payment term	30 days
Maximum
Concentrations of credit risk
Payment term	90 days

Basis of Presentation and Su_11

Basis of Presentation and Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Advertising expense	$ 471,987	$ 295,794	$ 1,474,250	$ 618,461

Basis of Presentation and Su_12

Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($)	1 Months Ended	12 Months Ended
	Aug. 31, 2022	Dec. 31, 2022	Sep. 30, 2023
Subsidiary, Sale of Stock [Line Items]
Uncertain tax positions		$ 0	$ 0
DDM | Common Class A
Subsidiary, Sale of Stock [Line Items]
Number of units exchanged	100,000	100,000

Basis of Presentation and Su_13

Basis of Presentation and Summary of Significant Accounting Policies - Segment Information (Details)	9 Months Ended
	Sep. 30, 2023 segment
Basis of Presentation and Summary of Significant Accounting Policies
Number of reportable segments	2

Basis of Presentation and Su_14

Basis of Presentation and Summary of Significant Accounting Policies - Liquidity and Capital Resources (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Cash and cash equivalents	$ 5,481,949	$ 4,047,453

Property, Equipment and Softw_3

Property, Equipment and Software, net - Components (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Property and equipment, net
Property, equipment and software, gross	$ 844,414	$ 707,436
Less: accumulated depreciation and amortization	(219,386)	(34,218)
Total property, equipment and software, net	625,028	673,218
Furniture and fixtures
Property and equipment, net
Property, equipment and software, gross	127,932	118,601
Computer equipment
Property and equipment, net
Property, equipment and software, gross	19,636	16,985
Leasehold Improvements
Property and equipment, net
Property, equipment and software, gross	36,230
Capitalized Software
Property and equipment, net
Property, equipment and software, gross	$ 660,616	$ 571,850

Property, Equipment and Softw_4

Property, Equipment and Software, net - Depreciation and Amortization (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Property and equipment, net
Depreciation and amortization	$ 63,689	$ 185,169
Cost of revenue
Property and equipment, net
Depreciation and amortization	55,051	159,057
General and administrative expenses
Property and equipment, net
Depreciation and amortization	$ 8,638	$ 26,112

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Intangible Assets
Goodwill	$ 4,095,700	$ 6,519,636		$ 6,519,636		$ 6,519,636
Intangible assets acquired	$ 18,033,850
Amortization of intangible assets		488,455	$ 488,455	1,465,363	$ 1,465,364
Intangible assets, net		$ 12,172,396		$ 12,172,396		$ 13,637,759
Orange 142 LLC
Intangible Assets
Equity interests acquired (as a percent)	100%
Purchase price	$ 26,207,981
Goodwill	$ 4,095,700

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets and Related Accumulated Amortization (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Intangible assets
Fair value at acquisition date	$ 18,033,850
Accumulated amortization	(5,861,454)
Intangible assets, net	12,172,396	$ 13,637,759
Customer lists
Intangible assets
Fair value at acquisition date	13,028,320
Accumulated amortization	(3,908,496)
Intangible assets, net	$ 9,119,824
Estimated life (years)	10 years
Weighted-average remaining life (years)	7 years
Trademarks and tradenames
Intangible assets
Fair value at acquisition date	$ 3,501,200
Accumulated amortization	(1,050,360)
Intangible assets, net	$ 2,450,840
Estimated life (years)	10 years
Weighted-average remaining life (years)	7 years
Non-compete agreements
Intangible assets
Fair value at acquisition date	$ 1,504,330
Accumulated amortization	(902,598)
Intangible assets, net	$ 601,732
Estimated life (years)	5 years
Weighted-average remaining life (years)	2 years

Intangible Assets - Future Amor

Intangible Assets - Future Amortization Expense (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Future amortization expense
2023	$ 488,456
2024	1,953,818
2025	1,878,602
2026	1,652,952
2027	1,652,952
Thereafter	4,545,616
Total future amortization expense	$ 12,172,396	$ 13,637,759

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accrued Liabilities
Accrued compensation and benefits	$ 2,967,115	$ 4,128,505
Accrued expenses	547,661	206,639
Accrued severance	309,618
Accrued litigation fees	235,596	429,096
Accrued interest	11,138	13,524
Total accrued liabilities	$ 4,071,128	$ 4,777,764

Accrued Liabilities - Additiona

Accrued Liabilities - Additional information (Details) - USD ($)	Sep. 01, 2022	Jul. 28, 2022
Accrued Liabilities
Amount agreed to pay to vendor in settlement agreement		$ 515,096
Installment payment period in settlement agreement (in months)	24 months

Long-Term Debt - Lafayette Squa

Long-Term Debt - Lafayette Square (Details)					9 Months Ended
	Oct. 03, 2023 USD ($)	Jun. 01, 2023	Jul. 28, 2022 USD ($)	Dec. 03, 2021 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Long-Term Debt
Additional deferred financing costs					$ 442,181	$ 525,295
Deferred financing costs					1,722,716		$ 2,115,161
Accrued interest					11,138		13,524
Delayed Draw Term Loan | Subsequent Event
Long-Term Debt
Face amount	$ 3,587,274.03
Proceeds from lines of credit	$ 3,600,000
Lafayette Square | SOFR | Interest period of one month
Long-Term Debt
Basis spread agreed (as a percent)		0.10%
Lafayette Square | SOFR | Interest period of three months
Long-Term Debt
Basis spread agreed (as a percent)		0.15%
Lafayette Square | SOFR | Interest period of six months
Long-Term Debt
Basis spread agreed (as a percent)		0.25%
Lafayette Square | 2021 Credit Facility
Long-Term Debt
Borrowing capacity				$ 32,000,000
Applicable impact discount				0.05%
Outstanding borrowings					25,192,500
Additional deferred financing costs					15,567	$ 520,682
Deferred financing costs					1,722,716		2,115,161
Accrued interest					$ 0		$ 0
Quarterly maximum net leverage ratio					3.50
Quarterly minimum fixed coverage ratio					1.50
Lafayette Square | 2021 Credit Facility | London Interbank Offered Rate (LIBOR) | Consolidated Total Net Leverage Ratio is Less Than 2
Long-Term Debt
Spread on variable rate				6.50%
Lafayette Square | 2021 Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | Consolidated Total Net Leverage Ratio is Greater Than 4
Long-Term Debt
Spread on variable rate				9%
Lafayette Square | Closing Date Term Loan
Long-Term Debt
Borrowing capacity				$ 22,000,000
Lafayette Square | Delayed Draw Term Loan
Long-Term Debt
Borrowing capacity				$ 10,000,000
Amount of proceeds			$ 4,260,000
Lafayette Square | Delayed Draw Term Loan | December 31, 2022 through December 31, 2023
Long-Term Debt
Installment payments			26,250
Lafayette Square | Delayed Draw Term Loan | March 31, 2024 through December 3, 2026
Long-Term Debt
Installment payments			$ 52,500

Long-Term Debt - Interest Expen

Long-Term Debt - Interest Expense and 2021 Credit Facility (Details) - Lafayette Square - 2021 Credit Facility - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Long-Term Debt
Interest expense	$ 895,638	$ 696,818	$ 2,665,091	$ 1,673,648
Amortization of deferred financing costs	136,004	128,064	408,012	362,243
Total interest expense and amortization of deferred financing costs	$ 1,031,642	$ 824,882	$ 3,073,103	$ 2,035,891

Long-Term Debt - Revolving Line

Long-Term Debt - Revolving Line of Credit (Details) - USD ($)			1 Months Ended		3 Months Ended		9 Months Ended
	Jul. 07, 2023	Dec. 17, 2021	Mar. 31, 2022	Jan. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2020
Long-Term Debt
Additional deferred financing costs							$ 442,181	$ 525,295
East West Bank | 2020 revolving credit facility
Long-Term Debt
Borrowing capacity		$ 5,000,000							$ 4,500,000
Initial availability		$ 2,500,000							$ 1,000,000
Interest rate			7%
Unused line fee			0.50%
Additional deferred financing costs				$ 4,613
Amortization of deferred financing costs						$ 33,434		$ 100,765
East West Bank | 2020 revolving credit facility | London Interbank Offered Rate (LIBOR)
Long-Term Debt
Spread on variable rate		3.50%
East West Bank | Revolving credit facility 2023
Long-Term Debt
Borrowing capacity	$ 5,000,000
Additional incremental borrowing capacity	$ 5,000,000
Spread on variable rate	0.10%
Minimum loan rate to be maintained on loan effective rate	0.50%
Interest rate	3%
Additional deferred financing costs					$ 214,680		214,680
Quarterly minimum fixed coverage ratio	1.25
Amortization of deferred financing costs					$ 26,835		$ 26,835
Revolving credit availability for defining value of eligible advances to aggregate amount of all outstanding advances ratio	$ 1,000,000
Percentage of interest rate added to loan rate in the event of default	5%
Value of eligible accounts to the aggregate amount of all outstanding advances ratio	2
East West Bank | Revolving credit facility 2023 | Last day of each fiscal quarter from June 30, 2023 through December 31, 2023
Long-Term Debt
Total funded Debt-to-EBITDA ratio	3.50
East West Bank | Revolving credit facility 2023 | Last day of each fiscal quarter from March 31, 2024 through March 31, 2025
Long-Term Debt
Total funded Debt-to-EBITDA ratio	3.25
East West Bank | Revolving credit facility 2023 | Last day of each fiscal quarter from June 30, 2025 and thereafter
Long-Term Debt
Total funded Debt-to-EBITDA ratio	3

Long-Term Debt - Interest Exp_2

Long-Term Debt - Interest Expense (Details) - East West Bank - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
2020 revolving credit facility
Long-Term Debt
Interest expense		$ 3,573		$ 23,391
Amortization of deferred financing costs		33,434		100,765
Revolving credit facility 2023
Long-Term Debt
Amortization of deferred financing costs	$ 26,835		$ 26,835
2020 and 2023 Revolving credit facilities
Long-Term Debt
Total interest expense and amortization of deferred financing costs	$ 26,835	$ 37,007	$ 26,835	$ 124,156

Long-Term Debt - Silicon Valley

Long-Term Debt - Silicon Valley Bank Financing (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jan. 09, 2023
Long-Term Debt
Additional deferred financing costs	$ 442,181	$ 525,295
Revolving credit facility | Silicon Valley Bank [Member]
Long-Term Debt
Borrowing capacity			$ 5,000,000
Additional incremental borrowing capacity			2,500,000
Maximum borrowing capacity			$ 7,500,000
Additional deferred financing costs	211,934
Write-off of deferred financing costs	$ 299,770

Long-Term Debt - U.S. Small Bus

Long-Term Debt - U.S. Small Business Administration Loans (Details) - USD ($)				1 Months Ended
	Dec. 15, 2022	Apr. 11, 2022	Jun. 15, 2020	Mar. 31, 2021	Sep. 30, 2023	Dec. 31, 2022	Jun. 05, 2020
Long-Term Debt
Accrued interest					$ 11,138	$ 13,524
Economic Injury Disaster Loan
Long-Term Debt
Loan proceeds			$ 150,000
Interest rate			3.75%
Installment payments	$ 731
Accrued interest					$ 11,138	$ 13,524
Paycheck Protection Program
Long-Term Debt
Loan proceeds				$ 287,143
Loan forgiven		$ 287,143
Loan collateral or guarantee				$ 0
Unforgiven loan interest rate							1%

Long-Term Debt - Future Minimum

Long-Term Debt - Future Minimum Payments (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Long-Term Debt.
2023	$ 163,750
2024	1,310,000
2025	1,310,473
2026	22,411,965
2027	3,337
Thereafter	142,975
Total	25,342,500
Less current portion	(1,146,250)	$ (655,000)
Less deferred financing costs	(1,722,716)	$ (2,115,161)
Long-term debt, net	$ 22,473,534

Mandatorily Redeemable Prefer_2

Mandatorily Redeemable Preferred Units (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Loss on redemption of non-participating preferred units					$ 590,689
Interest expense		$ 1,059,890	$ 905,605	$ 3,104,684	2,269,643
Class B Preferred Units | DDH LLC
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Loss on redemption of non-participating preferred units	$ 590,689
Interest expense		0	$ 0	$ 0	$ 62,162
Class B Preferred Units | Orange 142 Acquisition | DDH LLC
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Number of shares issued				7,076
Value of shares issued				$ 7,046,251
Fair value of shares issued				6,455,562
Mandatory redemption of fair value		$ 7,046,251		$ 7,046,251
Preferred dividend				7%

Related Party Transactions (Det

Related Party Transactions (Details)		1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) item	Feb. 28, 2022 shares	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Related Party Transactions
Percentage of net cash saving to be retained					15%
Up C Structure
Related Party Transactions
Percentage of net cash saving to be retained		15%
Common Class A | Up C Structure
Related Party Transactions
Units of share converted | shares		1
Walker and Smith | Loans From Related Party
Related Party Transactions
Due to related parties			$ 1,428,093		$ 1,428,093		$ 1,448,333
Walker and Smith | Board Services and Consulting Agreements
Related Party Transactions
Payment of fees	$ 450,000
Walker | Board Services and Consulting Agreements
Related Party Transactions
Fees amount			0	$ 0	0	$ 56,250
Smith | Board Services and Consulting Agreements
Related Party Transactions
Fees amount			0	0	0	56,250
Woolford | Board Services and Consulting Agreements
Related Party Transactions
Fees per hour	$ 300
Number of hours | item	50
Fees amount			$ 0	$ 0	$ 0	$ 22,500

Related Party Transactions - Sc

Related Party Transactions - Schedule of aggregate changes in balance of gross unrecognized tax benefits (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Related Party Transactions
Short Term	$ 41,141	$ 182,571
Long Term	4,245,234	4,149,619
Total liability related to tax receivable agreement	$ 4,286,375	$ 4,332,190

Commitments and Contingencies -

Commitments and Contingencies - Litigation (Details) - USD ($)	Sep. 01, 2022	Jul. 28, 2022
Commitments and Contingencies.
Amount agreed to pay to vendor in settlement agreement		$ 515,096
Installment payment period in settlement agreement (in months)	24 months

Commitments and Contingencies_2

Commitments and Contingencies - Leases (Details)	1 Months Ended		3 Months Ended		9 Months Ended
	Mar. 31, 2021 USD ($)	Jun. 30, 2019 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Jul. 01, 2022 USD ($)
Office leases
Rent expense			$ 73,496	$ 89,452	$ 231,982	$ 193,013
Operating lease right-of-use assets			674,846		674,846		$ 798,774
Operating lease liabilities - current			49,977		49,977		91,989
Operating lease liabilities - long-term			717,632		717,632		$ 745,340
Total lease liability			$ 767,609		$ 767,609
Operating lease, weighted-average remaining lease term			6 years 3 months		6 years 3 months
Operating lease, weighted-average discount rate			8%		8%
Operating Lease, Corporate Office Headquarters
Office leases
Base monthly rent		$ 3,600
Area of property leased | ft²					7,397
Security deposit								$ 29,000
Operating Lease, Congress Ave Texas Office [Member]
Office leases
Base monthly rent	$ 6,700

Commitments and Contingencies_3

Commitments and Contingencies - Maturity of Leases (Details)	Sep. 30, 2023 USD ($)
Maturity of leases
2023	$ 37,251
2024	110,215
2025	156,077
2026	159,775
2027	163,474
Thereafter	366,830
Total lease payments	993,622
Less imputed interest	(226,013)
Total lease liability	$ 767,609

Stockholders' Equity and Stoc_3

Stockholders' Equity and Stock-Based Compensation - Narrative (Details) - USD ($)		1 Months Ended	9 Months Ended	12 Months Ended
	Feb. 15, 2022	Aug. 31, 2022	Sep. 30, 2023	Dec. 31, 2022	Jul. 28, 2022
Subsidiary, Sale of Stock [Line Items]
Preferred stock authorized (in shares)			10,000,000
Preferred stock par value (in dollar per share)			$ 0.001
Remainder of the principal and interest for the common units redemption price					$ 3,998,635
Warrants outstanding			3,217,800	3,220,000
Warrants exercise price	$ 5.50
Net proceeds from the offering	$ 10,167,043
Accounts Payable and Accrued Liabilities
Subsidiary, Sale of Stock [Line Items]
Accrued offering expense			$ 1,000,000
Initial public offering
Subsidiary, Sale of Stock [Line Items]
Units issued in IPO	2,800,000
Number of shares of common stock	1
Number of warrants to purchase each share	1
Warrants exercisable term	5 years
Warrants exercise price	$ 5.50
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Term of underwriters	45 days
Purchase option - number of additional units	140,000
Exercise price of additional units	$ 6.60
Public offering price per unit sold	120%
Over-Allotment Option | Maximum
Subsidiary, Sale of Stock [Line Items]
Warrants issued	420,000
Common Class A
Subsidiary, Sale of Stock [Line Items]
Common stock , Authorized			160,000,000	160,000,000
Common stock , par value			$ 0.001	$ 0.001
Intrinsic value			$ 0
Warrants outstanding			2,797,800
Common Class A | Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Warrants issued	420,000
Warrants outstanding			420,000
Purchase option - number of Warrants	21,000
Warrants exercise price	$ 0.012
Public offering price per warrant sold	120%
Common Class B
Subsidiary, Sale of Stock [Line Items]
Common stock , Authorized			20,000,000	20,000,000
Common stock , par value			$ 0.001	$ 0.001
DDH LLC
Subsidiary, Sale of Stock [Line Items]
Noneconomic voting rights (as a percent)			100%
DDH LLC | Woolford
Subsidiary, Sale of Stock [Line Items]
Aggregate purchase price of units issued			$ 14,246,251
DDH LLC | Common Units | Woolford
Subsidiary, Sale of Stock [Line Items]
Remaining number of units issuable			5,637
DDH LLC | Class B Preferred Units. | Woolford
Subsidiary, Sale of Stock [Line Items]
Remaining number of units issuable			7,046
DDH LLC | Initial public offering | Woolford
Subsidiary, Sale of Stock [Line Items]
Purchase price paid			$ 10,284,089
DDM | Common Class A
Subsidiary, Sale of Stock [Line Items]
Number of units exchanged		100,000		100,000
DDM | Common Class B
Subsidiary, Sale of Stock [Line Items]
Number of shares of common stock			11,278,000

Stockholders' Equity and Stoc_4

Stockholders' Equity and Stock-Based Compensation - Warrants assumptions (Details)	Sep. 30, 2023 USD ($) Y
Class of Warrant or Right [Line Items]
Warrants fair value | $	$ 0
Measurement Input, Discount Rate
Class of Warrant or Right [Line Items]
Measurement input	0.0194
Measurement Input, Expected Term
Class of Warrant or Right [Line Items]
Measurement input | Y	5
Measurement Input, Price Volatility
Class of Warrant or Right [Line Items]
Measurement input	0.66
Measurement Input, Expected Dividend Rate
Class of Warrant or Right [Line Items]
Measurement input	0

Stockholders' Equity and Stoc_5

Stockholders' Equity and Stock-Based Compensation - Warrants Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance	3,220,000
Warrants exercised	(2,200)
Ending balance	3,217,800	3,220,000
Exercisable	3,217,800
Beginning balance	$ 5.50
Warrants exercised	5.50
Ending balance	$ 5.50	$ 5.50
Outstanding	3 years 4 months 17 days	4 years 1 month 17 days

Stockholders' Equity and Stoc_6

Stockholders' Equity and Stock-Based Compensation - Options and RSU Narrative (Details)	9 Months Ended
	Sep. 30, 2023 USD ($) shares
RSU
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting Period	3 years
Number of shares withheld | shares	20,725
Unrecognized stock-based compensation related to unvested RSUs | $	$ 1,159,610
Weighted-average period over which unamortized stock-based compensation expense will recognized	2 years 14 days
2022 Omnibus Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares reserved for issuance | shares	1,500,000
Stock-based compensation recognized | $	$ 545,504
2022 Omnibus Plan | Stock options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting Period	3 years
Contractual period	10 years
Unrecognized stock-based compensation related to unvested stock options | $	$ 389,598
Number of shares related to unvested stock options | shares	285,537
Weighted-average period over which unamortized stock-based compensation expense will recognized	2 years 2 months 15 days

Stockholders' Equity and Stoc_7

Stockholders' Equity and Stock-Based Compensation - Options Activity (Details) - 2022 Omnibus Plan - Stock options	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Number of Options
Balances at the beginning | shares	254,000
Granted | shares	135,015
Exercised | shares	(133)
Forfeited | shares	(26,215)
Balances at the ending | shares	362,667	254,000
Vested and exercisable at September 30, 2023 | shares	77,130
Weighted-Average Exercise Price
Balances at the beginning (in dollars per share) | $ / shares	$ 1.69
Granted (in dollars per share) | $ / shares	3.96
Exercised (in dollars per share) | $ / shares	1.62
Forfeited (in dollars per share) | $ / shares	2.22
Balances at the ending (in dollars per share) | $ / shares	2.49	$ 1.69
Vested and exercisable at September 30, 2023 (in dollars per share) | $ / shares	$ 1.62
Weighted Average Contractual Life (in years)
Granted (in years)	9 years 5 months 19 days
Balances at the ending (in years)	8 years 11 months 23 days	8 years 9 months 3 days
Vested and exercisable at September 30, 2023 (in years)	8 years 8 months 15 days
Aggregate Intrinsic Value
Granted (intrinsic value) | $	$ 24,303
Exercised | $	93
Forfeited | $	33,550
Outstanding | $	207,788	$ 193,486
Vested and exercisable at September 30, 2023 (intrinsic value) | $	$ 68,837

Stockholders' Equity and Stoc_8

Stockholders' Equity and Stock-Based Compensation - RSU activity and related information (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Number of Shares
Unvested- January 1, 2023 | shares	352,764
Granted | shares	310,599
Vested | shares	(110,184)
Forfeited | shares	(26,215)
Unvested- September 30, 2023 | shares	526,964
Weighted Average Grant Date Fair Value per Share
Unvested- January 1, 2023 | $ / shares	$ 1.67
Granted | $ / shares	3.77
Vested | $ / shares	1.67
Forfeited | $ / shares	2.22
Unvested- September 30, 2023 | $ / shares	$ 2.88

Income Per Share (Details)

Income Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Per Share
Net income , Basic	$ 3,350,854	$ 810,783	$ 3,211,876	$ 2,753,523
Net income , Diluted	$ 3,350,854	$ 810,783	$ 3,211,876	$ 2,753,523
Weighted average common shares outstanding, Basic	14,268,168	14,178,000	14,216,211	11,846,601
Options to purchase common stock	32,033		74,595
Unvested restricted stock units	526,964	367,241	526,964	150,368
Weighted average common shares outstanding , Diluted	14,827,165	14,545,241	14,817,770	11,996,969
Net income per common share, basic	$ 0.23	$ 0.06	$ 0.23	$ 0.23
Net income per common share, diluted	$ 0.23	$ 0.06	$ 0.22	$ 0.23

Income Per Share - Schedule of

Income Per Share - Schedule of antidilutive securities (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,360,450	3,481,600	3,357,750	3,481,600
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,217,800	3,220,000	3,217,800	3,220,000
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	142,650	261,600	139,950	261,600

Employee Benefit Plans (Details

Employee Benefit Plans (Details) - Pension Plan - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Contribution Plan Disclosure [Line Items]
Employee contributions maximum percentage of match			100%
Employee compensation (as a percent)			4%
Employer matching contribution	$ 53,981	$ 56,158	$ 184,935	$ 159,219
Employer discretionary contribution amount	$ 0	$ 0	$ 0	$ 0

Tax Receivable Agreement and _3

Tax Receivable Agreement and Income Taxes - Tax Receivable Agreement (Details) - USD ($)	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	Aug. 31, 2022	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Subsidiary, Sale of Stock [Line Items]
Percentage of net cash saving to be paid					85%
Percentage of net cash saving to be retained					15%
Additional paid-in capital related to tax receivable agreement						$ 485,100	$ 823,481
Outside basis difference in partnership					$ 5,082,424
Total TRA liability recognized		$ 4,286,375			4,286,375		4,332,190
Liability related to tax receivable agreement, current portion		41,141			41,141		$ 182,571
Aggregate Payment on tax receivable agreement					45,815
Corporation income tax rate (in percent)			19.70%	20.45%
Income tax expense		$ 165,994		$ 128,436	$ 165,658	$ 215,112
DDM | Common Class A
Subsidiary, Sale of Stock [Line Items]
Number of units exchanged	100,000						100,000

Tax Receivable Agreement and _4

Tax Receivable Agreement and Income Taxes - Provision for income taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Provision for income taxes
Income tax expense	$ 165,994	$ 128,436	$ 165,658	$ 215,112
Effective income tax rate	4.70%	13.70%	4.90%	7.20%

Correction of Immaterial Erro_3

Correction of Immaterial Error in Prior Consolidated Financial Statements - Balance Sheet (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Consolidated Balance Sheet
Additional paid-in capital	$ 8,782,092	$ 8,224,365
Class A
Consolidated Balance Sheet
Common stock , shares outstanding	2,991,792	2,900,000
Common stock	$ 2,992	$ 2,900
As Reported
Consolidated Balance Sheet
Additional paid-in capital		$ 8,224,012
As Reported | Class A
Consolidated Balance Sheet
Common stock , shares outstanding		3,252,764
Common stock		$ 3,253

Correction of Immaterial Erro_4

Correction of Immaterial Error in Prior Consolidated Financial Statements - Statement of Operations (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Consolidated Statement of Operations
Weighted average common shares outstanding, Basic	14,268,168	14,178,000	14,216,211	11,846,601
As Reported
Consolidated Statement of Operations
Weighted average common shares outstanding, Basic		14,545,241		11,996,969

Correction of Immaterial Erro_5

Correction of Immaterial Error in Prior Consolidated Financial Statements - Stockholders Equity (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Consolidated Statement of Changes in Stockholders' Equity
Equity	$ 6,396,883	$ 4,019,731	$ 4,595,282	$ 4,999,814	$ 4,725,443	$ (374,856)
Additional Paid-in Capital
Consolidated Statement of Changes in Stockholders' Equity
Equity	$ 8,782,092	$ 8,540,389	$ 8,224,365	$ 7,817,643	$ 7,747,613
Class A | Common Stock
Consolidated Statement of Changes in Stockholders' Equity
Shares, Outstanding	2,991,792	2,988,916	2,900,000	2,900,000	2,800,000
Equity	$ 2,992	$ 2,989	$ 2,900	$ 2,900	$ 2,800
As Reported | Additional Paid-in Capital
Consolidated Statement of Changes in Stockholders' Equity
Equity		$ 8,539,858	$ 8,224,012		$ 7,747,250
As Reported | Class A | Common Stock
Consolidated Statement of Changes in Stockholders' Equity
Shares, Outstanding		3,519,780	3,252,764		3,163,214
Equity		$ 3,520	$ 3,253		$ 3,163

Segment Information (Details)

Segment Information (Details)	9 Months Ended
	Sep. 30, 2023 segment
Segment Information
Number of reportable segments	2

Segment Information - Revenue (

Segment Information - Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenues	$ 59,472,124	$ 25,985,375	$ 116,098,834	$ 58,617,020
Buy-side advertising
Segment Reporting Information [Line Items]
Revenues	7,850,058	7,130,736	27,092,816	22,283,044
Sell-side advertising
Segment Reporting Information [Line Items]
Revenues	$ 51,622,066	$ 18,854,639	$ 89,006,018	$ 36,333,976

Segment Information - Operating

Segment Information - Operating Income (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Total operating income (loss)	$ 4,493,407	$ 1,844,824	$ 6,606,516	$ 5,493,842
Income before taxes	3,516,848	939,219	3,377,534	2,968,635
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Total operating income (loss)	(3,263,818)	(1,878,306)	(10,029,936)	(4,725,981)
Corporate other expense	(976,559)	(905,605)	(3,228,982)	(2,525,207)
Buy-side advertising | Operating Segments
Segment Reporting Information [Line Items]
Total operating income (loss)	1,550,827	1,357,635	6,979,766	5,620,194
Sell-side advertising | Operating Segments
Segment Reporting Information [Line Items]
Total operating income (loss)	$ 6,206,398	$ 2,365,495	$ 9,656,686	$ 4,599,629

Segment Information - Assets (D

Segment Information - Assets (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Total assets	$ 86,748,330	$ 58,126,039
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Total assets	8,798,843	6,928,144
Buy-side advertising | Operating Segments
Segment Reporting Information [Line Items]
Total assets	23,809,849	25,685,528
Sell-side advertising | Operating Segments
Segment Reporting Information [Line Items]
Total assets	$ 54,139,638	$ 25,512,367

Subsequent Events (Details)

Subsequent Events (Details) - USD ($)	Oct. 30, 2023	Oct. 23, 2023	Oct. 03, 2023	Oct. 02, 2023	Aug. 29, 2023
Subsequent Event [Line Items]
Warrant price in cash					$ 1.20
Subsequent Event
Subsequent Event [Line Items]
Number of warrants tendered				2,213,652
Purchase price of warrants	$ 400,000			$ 2,700,000
Redemption price per warrant		$ 0.35
Warrants purchased	1,004,148
Subsequent Event | Delayed Draw Term Loan
Subsequent Event [Line Items]
Principal amount			$ 3,587,274.03