Business Context and Reporting Period
Digital Asset Acquisition Corp. (DAAQ) is a Cayman Islands-incorporated blank check company formed on December 9, 2024, for the purpose of effecting a merger, share exchange, or similar business combination. The company is an emerging growth company and a shell company. This Form 10-Q covers the quarterly period ended September 30, 2025, and the nine months ended on that date. The company consummated its Initial Public Offering (IPO) on April 30, 2025, and has not yet commenced any operations other than organizational activities and the search for a target business.
Key Financial Metrics
| Metric | Value (as of/for period ended Sept 30, 2025) |
|---|---|
| Total Assets | $176,739,725 |
| Cash and Cash Equivalents (Operating) | $1,149,892 |
| Marketable Securities in Trust Account | $175,466,068 |
| Total Liabilities | $7,035,726 |
| Deferred Underwriting Fee | $6,900,000 |
| Net Income (3 Months) | $1,690,631 |
| Net Income (9 Months) | $2,665,323 |
| General & Administrative Expenses (9 Months) | $289,520 |
| Shares Outstanding (Class A) | 17,250,000 |
| Shares Outstanding (Class B) | 5,750,000 |
Material Changes vs. Prior Period
The financial position changed significantly compared to December 31, 2024, due to the consummation of the IPO on April 30, 2025.
- Assets: Total assets increased from $25,000 to $176.7 million. This includes the deposit of $172.5 million into the Trust Account.
- Liabilities: Total liabilities increased from $5,112 to $7.0 million, primarily driven by the recognition of a $6.9 million deferred underwriting fee payable.
- Equity: The company moved from a shareholders' equity of $19,888 to a deficit of $(5.8) million. This shift is largely due to the classification of 17,250,000 Class A ordinary shares as temporary equity (subject to redemption) valued at $175.5 million, and the accretion of these shares to their redemption value.
- Operations: The company generated no operating revenue. Net income for the nine months ended September 30, 2025, was $2.7 million, driven almost entirely by investment earnings ($2.9 million) on the Trust Account, offset by administrative expenses.
Outlook, Risks, and Management Commentary
Business Combination Timeline: The company must complete a Business Combination by October 30, 2026 (18 months from IPO), or January 30, 2027, if a definitive agreement is executed within the first 18 months. Failure to do so will result in mandatory liquidation.
Liquidity and Going Concern: Management has concluded there is substantial doubt about the company's ability to continue as a going concern for one year from the issuance date, as the company will be required to liquidate if a Business Combination is not consummated by the deadline. However, management intends to complete a transaction before this date.
Capital Resources: Following the IPO, $172.5 million was placed in the Trust Account. The company holds approximately $1.15 million in operating cash. The Sponsor has agreed to fund operating expenses and has waived redemption rights for Founder Shares.
Risks: Key risks include the inability to complete a Business Combination within the specified timeframe, potential dilution from warrant exercises, and the risk that the Trust Account balance may be insufficient to cover redemption requests if a significant number of shareholders elect to redeem their shares.
Investor Verification Checklist
- Trust Account Balance: Verify the current balance of the Trust Account ($175.5 million) and the per-share redemption value ($10.17) to ensure it meets the $10.00 per share minimum requirement.
- Deferred Underwriting Fee: Confirm the $6.9 million deferred fee liability and its impact on net proceeds available for a Business Combination.
- Going Concern Status: Review the "substantial doubt" disclosure regarding the company's ability to continue operations beyond the mandatory liquidation date.
- Warrant Terms: Verify the exercise price ($11.50) and redemption triggers ($18.00 per share) for the 14,075,000 outstanding warrants.
- Related Party Transactions: Review the $81,647 due to related parties and the $20,000 monthly administrative support fee paid to the Sponsor.