Company: DAAQ
Filing Date: 2025-06-12
Form Type: 10-Q
Source: 0001213900-25-053846
Chunk: 8

Company: Digital Asset Acquisition Corp.
Filing Date: 2025-06-12
Form: 10-Q
Item: Item 8
Chunk 8
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Deferred Offering Costs

The Company complies with the requirements of
ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A, Expenses of Offering. Deferred offering costs consist of legal, accounting,
underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering
costs are charged to temporary equity or permanent equity based upon the relative fair value of the proceeds received from the Units sold
upon the completion of the Initial Public Offering. As of March 31, 2025 and December 31, 2024, the Company had deferred offering
costs of $201,170 and $25,000, respectively. Upon completion of the Initial Public Offering, offering costs were allocated to the separable
financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received.
Offering costs allocated to Class A ordinary shares were initially charged to temporary equity and then accreted to Class A ordinary shares
subject to possible redemption upon the completion of the Initial Public Offering. Offering costs amounted to $10,931,212, of which $10,881,785
was charged to temporary equity upon the completion of the Initial Public Offering and $49,427 was charged to shareholder’s deficit
as a reduction to permanent equity.

8

DIGITAL ASSET ACQUISITION CORP. 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

Income Taxes

The Company accounts for income taxes under ASC
Topic 740, Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both
the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future
tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established
when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 clarifies the accounting for uncertainty
in income taxes recognized in an entity’s unaudited condensed financial statements and prescribes a recognition threshold and measurement
process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those
benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740
also provides guidance on