Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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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