Company: DAAQ
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110841
Chunk: 14

Company: Digital Asset Acquisition Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 14
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 reconciled in the following table:

    Gross proceeds 
    $172,500,000 
  
    Less: 

    Proceeds allocated to Public Warrants (as defined below) 
     (500,250)
  
    Issuance costs allocated to Class A ordinary shares 
     (10,881,785)
  
    Plus: 

    Accretion of carrying value to redemption value 
     14,348,103 
  
    Class A ordinary shares subject to possible redemption 
    $175,466,068 

Offering Costs Associated with the Initial
Public Offering

The Company complies with the requirements of
ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of professional
and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly
attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for
equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting
to $10,931,212, consisting of $1,725,000 of cash underwriting fees, $1,725,000 of underwriting fees paid via the issuance of Private Placement
Warrants, $6,900,000 of deferred underwriting fees and $581,212 of other offering costs. As such, the Company recorded $10,881,785 of
offering costs as a reduction of temporary equity and $49,427 of offering costs as a reduction of permanent equity.

9

DIGITAL ASSET ACQUISITION CORP.

SEPTEMBER 30, 2025

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

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 statements 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 also clarifies the accounting for
uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and