Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Cash Flows Provided By Operating Activities:          
Net income     $ 2,753,523 $ 623,701  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:          
Amortization of deferred financing costs     463,008 253,887  
Amortization of intangible assets $ 488,455 $ 488,455 1,465,364 1,465,364  
Amortization of right-of-use assets     94,974    
Stock-based compensation     85,437    
Forgiveness of Paycheck Protection Program loan     (287,143) (10,000)  
Paid-in-kind interest       269,260  
Deferred income taxes     (40,591)    
Gain from revaluation and settlement of earnout liability       (21,232)  
Loss on redemption of non-participating preferred units     590,689    
Bad debt expense (22,082) 35,724 2,717 67,541  
Changes in operating assets and liabilities:          
Accounts receivable     (13,520,067) 708,025  
Prepaid expenses and other assets     482,190 (491,560)  
Accounts payable     10,008,327 (153,045)  
Accrued liabilities     1,555,037 118,043  
Income taxes payable     94,440    
Deferred revenues     (201,907) 375,621  
Operating lease liability     (75,396)    
Related party payable     (70,801) (964)  
Net cash provided by operating activities     3,399,801 3,204,641  
Cash Flows Used In Financing Activities:          
Proceeds from note payable     4,260,000    
Payments on term loan     (412,500) (1,206,750)  
Payments on lines of credit     (400,000)    
Payment of deferred financing costs     (525,295)    
Proceeds from Paycheck Protection Program loan       287,143  
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)    
Payments on seller notes and earnouts payable       (369,185)  
Distributions to members     (916,433) (924,695)  
Net cash used in financing activities     (1,073,436) (2,213,487)  
Net increase in cash and cash equivalents     2,326,365 991,154  
Cash and cash equivalents, beginning of the period     4,684,431 1,611,998 $ 1,611,998
Cash and cash equivalents, end of the year $ 7,010,796 $ 2,603,152 7,010,796 2,603,152 $ 4,684,431
Supplemental Disclosure of Cash Flow Information:          
Cash paid for taxes     133,401 14,878  
Cash paid for interest     1,744,365 $ 3,111,628  
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