Zeta Global Holdings Corp

From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not currently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending any such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

We and members of our senior executive team have received subpoenas from the SEC in connection with an investigation into Kubient, Inc., a company we worked with prior to our initial public offering, and from the United States Attorney’s Office for the Southern District of New York, which is conducting a parallel investigation. The amount of business that we conducted with Kubient was quantitively insignificant to Zeta, and we have not worked with Kubient since 2020. We are cooperating with the investigation.

On November 22, 2024, a purported stockholder of the Company filed putative class action lawsuit in the U.S. District Court for the Southern District of New York against the Company and the Company’s Chief Executive Officer, David A. Steinberg, and the Company’s Chief Financial Officer, Christopher Greiner, entitled Davoodi v. Zeta Global Holdings Corp. Lead Plaintiff motions are due on January 21, 2025. The Complaint alleges, based in part on the report from Culper Research, that the defendants made false and misleading statements and omissions about the Company’s business, operations, and prospects between February 27, 2024 and November 13, 2024. We are vigorously defending ourselves against this lawsuit, and we believe the claims made in the report are without merit. The lawsuit seeks, among other things, damages in connection with the Company’s allegedly artificially inflated stock price between February 27, 2024 and November 13, 2024 as a result of those allegedly false and misleading statements and omissions, as well as interest, attorneys’ fees, and costs. This matter is at the very early stages of the legal process, and as a result, the Company is not able to estimate a range of possible loss.

On December 11, 2024 and December 23, 2024, purported stockholders of the Company filed shareholder derivative complaints in the U.S. District Court for the Southern District of New York purportedly on the Company’s behalf against members of the Company’s board of directors and the Company as a nominal defendant, which have been consolidated into a single lawsuit captioned In re Zeta Global Holdings Corp. Stockholder Derivative Litigation, based on the same underlying allegations as in the Davoodi case (described above). The complaints allege (i) violations of Section 14(a) of the Securities Exchange Act of 1934, (ii) breach of fiduciary duty, (iii) unjust enrichment, (iv) abuse of control, (v) gross mismanagement, (vi) waste of corporate assets, (vii) contribution under Section 10(b) and 21D of the Securities Exchange Act of 1934, and (viii) aiding and abetting. We are vigorously defending ourselves against this lawsuit, and we believe the claims made in the report are without merit. The Company’s board members are each party to an indemnification agreement with the Company that may require the Company to reimburse the board members for certain expenses and other costs related to this lawsuit. This matter is at the very early stages of the legal process, and as a result, the Company is not able to estimate a range of possible loss.

For a description of our legal proceedings, see Note 12 to our audited consolidated financial statements in the “Financial Statements and Supplementary Data” section of this Annual Report on Form 10-K.