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

Company: Digital Asset Acquisition Corp.
Filing Date: 2025-06-12
Form: 10-Q
Item: Item 8
Chunk 10
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 per ordinary share is computed by dividing
net loss by the weighted average number of ordinary shares outstanding during the period. Weighted average shares were reduced for the
effect of an aggregate of 750,000 ordinary shares that are subject to forfeiture if the over-allotment option was not exercised by the
Underwriter (see Note 7). At March 31, 2025, the Company did not have any dilutive securities or other contracts that could, potentially,
be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per ordinary share
is the same as basic loss per ordinary share for the period presented.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities,
which qualify as financial instruments under FASB ASC Topic 820, Fair Value Measurement, approximates the carrying amounts represented
in the accompanying balance sheets, primarily due to their short-term nature.

Warrants

The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in ASC 480 and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are
freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s
own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment,
is conducted at the time of warrant issuance and as of each subsequent period end date while the warrants are outstanding.

For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in
the estimated fair value of the warrants are recognized as a non-cash gain or loss in the statement of operations.

The warrants are not precluded from equity classification,
and will be accounted for as such on the date of issuance.

Share-Based Compensation 

The Company records share-based compensation in
accordance with ASC Topic 718, Compensation-Share Compensation (“ASC 718”).