Keith W. Smith - Aug 26, 2022 Form 4 Insider Report for Direct Digital Holdings, Inc. (DRCT)

Role: President, Director, 10%+ Owner
Signature: /s/ Susan Echard, Attorney-in-fact for Keith W. Smith
Stock symbol: DRCT
Transactions as of: Aug 26, 2022
Transactions value $: -$187,800
Form type: 4
Date filed: 8/30/2022, 05:00 PM
Previous filing: Jun 13, 2022
Next filing: Nov 25, 2022

Transactions Table

Type	Sym	Class	Transaction	Value $	Shares	Change %	* Price $	Shares After	Date	Ownership	Footnotes
transaction	DRCT	Class A Common Stock	Conversion of derivative security		+100K			100K	Aug 26, 2022	By Direct Digital Management, LLC	F1, F2
transaction	DRCT	Class A Common Stock	Sale	-$188K	-60K	-60%	$3.13	40K	Aug 26, 2022	By SKW Financial LLC	F3

Derivative Securities (e.g., puts, calls, warrants, options, convertible securities)

Type	Sym	Class	Transaction	Value $	Shares	Change %	* Price $	Shares After	Date	Underlying Class	Amount	Exercise Price	Ownership	Footnotes
transaction	DRCT	Class A Common Units of Direct Digital Holdings LLC	Conversion of derivative security	$0	-100K	-1.76%	$0.00	5.59M	Aug 26, 2022	Class A Common Stock	100K		By Direct Digital Management, LLC	F1

* An asterisk sign (*) next to the price indicates that the price is likely invalid.

Explanation of Responses:

Id	Content
F1	Pursuant to the Second Amended and Restated Limited Liability Company Agreement of Direct Digital Holdings, LLC, dated as of February 15, 2022, Class A Common Units (as defined therein) held by the Reporting Person (indirectly through the Reporting Person's ownership interest in Direct Digital Management, LLC) are exchangeable for shares of Class A Common Stock on a one-for-one basis, subject to certain exceptions, conditions and adjustments. The Class A Common Units have no expiration date. At the time of any such exchange, an equal number of shares of Class B Common Stock of the Issuer held by the Reporting Person, which have no economic value and entitle holders thereof to one vote per share on all matters on which stockholders of the Issuer are entitled to vote generally, are cancelled.
F2	Upon receipt of the securities converted from Table II, Direct Digital Management, LLC distributed 100,000 shares of Class A Common Stock to one of its members, SKW Financial LLC, for no consideration. The Reporting Person, as owner of SKW Financial LLC and a Managing Partner of Direct Digital Management, LLC, may be deemed to have beneficial ownership of the securities directly held by SKW Financial LLC and Direct Digital Management, LLC.
F3	Shares were transferred at fair market value in payment of an obligation owed by the Reporting Person to the transferee.