Company: PCAP
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001213900-25-108209
Chunk: 14

Company: ProCap Acquisition Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 14
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 primarily due to their short-term nature.

Income Taxes

The Company accounts for income taxes under ASC
Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions 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. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2025, there
were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues
under review that could result in significant payments, accruals or material deviation from its position.

The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero.

8

PROCAP ACQUISITION CORP

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

(Unaudited)

Net Income per Ordinary Share

Net income per ordinary share is computed by dividing
net income by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture.
Weighted average shares were reduced for the effect of an aggregate of 75,000 ordinary shares that were forfeited on July 6, 2025 as the
over-allotment option was not exercised by the underwriters (see Note 5). As of September 30, 2025, the Company did not have any dilutive
securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings
of the Company for the periods presented