Company: DAAQ
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078074
Chunk: 175

Company: Digital Asset Acquisition Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Item 1
Chunk 175
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 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 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 derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain
tax positions requiring recognition in the Company’s financial statements.

The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of June 30, 2025. 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 an
exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands
or the United States. Consequently, income taxes are not reflected in the Company’s financial statements.

Concentration
of Credit Risk

Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.

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. The calculation of diluted income per share does not consider the effect of the warrants issued in connection with the Initial
Public Offering since the exercise of the warrants are contingent upon the occurrence of future events. The Company has two classes of
ordinary shares, which are referred to as redeemable Class A ordinary shares and Class B ordinary shares. Accretion associated with the
redeemable shares of Class A ordinary shares is excluded