Business Context and Reporting Period
Digital Asset Acquisition Corp. (DAAQ) is a Cayman Islands blank check company formed on December 9, 2024, for the purpose of effecting a business combination. This Form 10-Q covers the quarterly period ended March 31, 2025. As of the balance sheet date, the Company had not commenced operations; all activity related to formation and preparation for its Initial Public Offering (IPO).
Subsequent to the reporting period, the Company consummated its IPO on April 30, 2025, selling 17,250,000 Units (including full exercise of the over-allotment option) and 5,450,000 Private Placement Warrants, generating gross proceeds of $177,950,000.
Key Financial Metrics
| Metric | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Total Assets | $201,170 | $25,000 |
| Total Liabilities | $235,898 | $5,112 |
| Shareholder's Equity (Deficit) | $(34,728) | $19,888 |
| Net Loss (3 months) | $(54,616) | N/A |
| Cash and Cash Equivalents | $0 | $0 |
| Working Capital Deficit | $(235,898) | $(5,112) |
Revenue: $0 (No operating revenues generated).
Debt: $112,848 outstanding under a related-party promissory note as of March 31, 2025. This was repaid in full upon the closing of the IPO.
Material Changes vs. Prior Period
- Liabilities: Total liabilities increased from $5,112 to $235,898, driven primarily by the accrual of $88,322 in offering costs and $112,848 in borrowings via a related-party promissory note to fund IPO preparation.
- Equity: Shareholder's equity shifted from a positive balance of $19,888 to a deficit of $(34,728) due to the net loss of $54,616 incurred during the quarter.
- Assets: Total assets grew to $201,170, consisting entirely of deferred offering costs, up from $25,000.
- Share Structure: While 5,750,000 Class B shares were outstanding at period end, 750,000 were subject to forfeiture pending the over-allotment option. This option was exercised in full on April 30, 2025, securing the full share count.
Outlook, Risks, and Management Commentary
Liquidity and Capital Resources: As of March 31, 2025, the Company had $0 cash and a working capital deficit. Management noted a lack of liquidity to sustain operations for one year prior to the IPO. Following the April 30, 2025 IPO, $172,500,000 was placed in a Trust Account, and $1,602,224 was held outside the Trust for working capital.
Business Combination Timeline: The Company has until October 30, 2026 (18 months from IPO) to complete a business combination. This may be extended to January 30, 2027 (21 months) if a definitive agreement is executed within the first 18 months.
Risks:
- Going Concern: The Company's ability to continue as a going concern is dependent on completing a business combination. If not achieved by the deadline, the Company will liquidate.
- Redemption Risk: Public shareholders may redeem shares for a pro-rata portion of the Trust Account (initially $10.00 per share), which could reduce funds available for the transaction.
- Market Risk: As an emerging growth company, the Company is subject to risks associated with early-stage entities and the volatility of the SPAC market.
Unusual Items: The financial statements reflect significant non-cash financing activities, including deferred offering costs paid via promissory notes and accrued expenses.
Investor Verification Checklist
- IPO Closing Confirmation: Verify the Form 8-K filed May 6, 2025, confirming the $172.5M gross proceeds and the full exercise of the over-allotment option.
- Trust Account Status: Confirm that $172,500,000 ($10.00 per Unit) is properly segregated in the Trust Account as required.
- Related Party Repayment: Verify the repayment of the $112,848 promissory note to the Sponsor upon IPO closing.
- Deferred Underwriting Fees: Note the $6,900,000 deferred fee payable only upon successful completion of a business combination.
- Share Forfeiture: Confirm that the 750,000 Class B shares previously subject to forfeiture are now permanently issued following the over-allotment exercise.