UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) DIGITAL ASSET ACQUISITION CORP. (Exact name of registrant as specified in its charter) Cayman Islands N/A (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number 001-42612 ☒ QUARTERLY REPORT UNDER SEC ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed financial statements and management's analysis of financial condition and results of operations for Digital Asset Acquisition Corp [Item 1. Unaudited Condensed Financial Statements](index=4&type=section&id=Item%201.%20UNAUDITED%20CONDENSED%20FINANCIAL%20STATEMENTS) This section presents Digital Asset Acquisition Corp.'s unaudited condensed financial statements, detailing its financial position and performance [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) This section provides a summary of the company's financial position through its condensed balance sheets as of June 30, 2025, and December 31, 2024 Condensed Balance Sheet Highlights | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | | :----- | :------------ | :---------------- | :----- | | Total Assets | 175,066,597 | 25,000 | +175,041,597 | | Total Liabilities | 7,053,229 | 5,112 | +7,048,117 | | Marketable securities held in Trust Account | 173,664,886 | — | +173,664,886 | | Class A ordinary shares subject to possible redemption | 173,664,886 | — | +173,664,886 | | Total Shareholders' Equity (Deficit) | (5,651,518) | 19,888 | (5,671,406) | [Condensed Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025) This section details the company's financial performance through its condensed statements of operations for the three and six months ended June 30, 2025 Condensed Statements of Operations Highlights | Metric | Three Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2025 ($) | | :----- | :------------------------------- | :----------------------------- | | General and administrative expenses | 118,212 | 172,828 | | Net earnings on marketable securities held in Trust Account | 1,147,520 | 1,147,520 | | Net income | 1,029,308 | 974,692 | | Basic and diluted net income per Class A ordinary share | 0.06 | 0.09 | | Basic and diluted net income per Class B ordinary share | 0.06 | 0.09 | [Condensed Statements of Changes in Shareholders' Equity (Deficit)](index=6&type=section&id=Unaudited%20Condensed%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20(Deficit)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025) This section outlines changes in the company's shareholders' equity (deficit) for the three and six months ended June 30, 2025 Shareholders' Equity (Deficit) Changes | Metric | Balance at January 1, 2025 ($) | Balance at June 30, 2025 ($) | Change ($) | | :----- | :------------------------- | :----------------------- | :----- | | Total Shareholders' Equity (Deficit) | 19,888 | (5,651,518) | (5,671,406) | | Accretion of Class A ordinary shares subject to redemption to redemption value | — | (12,546,921) | (12,546,921) | | Net income (six months) | — | 974,692 | +974,692 | [Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) This section presents the company's cash flow activities for the six months ended June 30, 2025 Condensed Statements of Cash Flows Highlights (Six Months Ended June 30, 2025) | Cash Flow Activity | Amount ($) | | :-------------------------------------------------- | :----- | | Net cash provided by operating activities | 158,436 | | Net cash used in investing activities | (172,500,000) | | Net cash provided by financing activities | 172,341,564 | | Net Change in Cash | — | [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanatory notes accompanying the unaudited condensed financial statements [Note 1. Description of Organization, Business Operations and Going Concern](index=8&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20ORGANIZATION%2C%20BUSINESS%20OPERATIONS%20AND%20GOING%20CONCERN) This note describes the company's formation, business operations, and assessment of its ability to continue as a going concern - Digital Asset Acquisition Corp. was incorporated on **December 9, 2024**, as a blank check company to pursue a Business Combination[25](index=25&type=chunk) - The Initial Public Offering was consummated on **April 30, 2025**, generating gross proceeds of **$172,500,000**, which were placed in a Trust Account[27](index=27&type=chunk)[29](index=29&type=chunk) - The company has until **October 30, 2026** (or **January 30, 2027**, with an extension) to complete a Business Combination[37](index=37&type=chunk)[41](index=41&type=chunk) - As of **June 30, 2025**, the company had a working capital surplus of **$1,193,936**, alleviating substantial doubt about its ability to sustain operations for one year[40](index=40&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and policies applied in preparing the financial statements - The company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new accounting standards[44](index=44&type=chunk)[46](index=46&type=chunk) - Marketable securities held in the Trust Account as of **June 30, 2025**, consist of U.S. government treasury bills totaling **$173,664,886**[50](index=50&type=chunk) - Class A ordinary shares subject to possible redemption are classified as temporary equity, with changes in redemption value adjusted to equal **$10.07 per share** as of **June 30, 2025**[51](index=51&type=chunk) - Offering costs amounted to **$10,931,212**, with **$10,881,785** recorded as a reduction of temporary equity and **$49,427** as a reduction of permanent equity[54](index=54&type=chunk) - The company adopted **ASU 2023-07 (Segment Reporting)** on **December 9, 2024**, requiring enhanced disclosures for significant segment expenses and the CODM's use of segment profit or loss[71](index=71&type=chunk)[72](index=72&type=chunk) [Note 3. Initial Public Offering](index=16&type=section&id=NOTE%203.%20INITIAL%20PUBLIC%20OFFERING) This note details the specifics of the company's Initial Public Offering, including proceeds and shares issued - The IPO closed on **April 30, 2025**, issuing **17,250,000 Units** (including the full exercise of the over-allotment option) and generating gross proceeds of **$172,500,000**[74](index=74&type=chunk) [Note 4. Private Placement](index=16&type=section&id=NOTE%204.%20PRIVATE%20PLACEMENT) This note describes the private placement of warrants conducted concurrently with the Initial Public Offering - Simultaneously with the IPO, **5,450,000 Private Placement Warrants** were sold at **$1.00 per warrant**, generating **$5,450,000**, with proceeds added to the Trust Account[75](index=75&type=chunk) [Note 5. Segment Information](index=16&type=section&id=NOTE%205.%20SEGMENT%20INFORMATION) This note clarifies the company's operating segments and how management assesses performance - The company operates as a single reportable segment, with the Chief Financial Officer identified as the Chief Operating Decision Maker (CODM)[77](index=77&type=chunk) - The CODM reviews total assets, general and administrative expenses, and net income to manage resources and assess performance[78](index=78&type=chunk)[80](index=80&type=chunk) [Note 6. Related Party Transactions](index=17&type=section&id=NOTE%206.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions and balances with related parties, including the Sponsor - The Sponsor was issued **5,750,000 Class B ordinary shares (Founder Shares)** for **$25,000**, with **75,000 shares** transferred to director nominees and **40,000** to company advisors[82](index=82&type=chunk)[83](index=83&type=chunk) - A promissory note from the Sponsor for up to **$300,000** to cover IPO expenses was fully repaid during the three months ended **June 30, 2025**[91](index=91&type=chunk)[138](index=138&type=chunk) - As of **June 30, 2025**, the company had **$75,321** outstanding due to related parties[92](index=92&type=chunk) - The company pays the Sponsor up to **$20,000 per month** for administrative services, totaling **$40,000** for the three and six months ended **June 30, 2025**[93](index=93&type=chunk) [Note 7. Commitments and Contingencies](index=21&type=section&id=NOTE%207.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's significant commitments and potential contingent liabilities - Holders of Founder Shares, Private Placement Warrants, and potential working capital loan warrants have registration rights for up to **12,700,000 Class A ordinary shares** and **6,500,000 warrants**[96](index=96&type=chunk)[137](index=137&type=chunk) - Underwriters are entitled to a deferred fee of **$6,900,000**, payable from the Trust Account upon completion of a Business Combination[99](index=99&type=chunk)[140](index=140&type=chunk) [Note 8. Shareholders' Equity (Deficit)](index=23&type=section&id=NOTE%208.%20SHAREHOLDERS'%20EQUITY%20(DEFICIT)) This note details the components of shareholders' equity (deficit), including ordinary shares and warrants - As of **June 30, 2025**, there were **17,250,000 Class A ordinary shares** issued and outstanding (all subject to possible redemption) and **5,750,000 Class B ordinary shares** issued and outstanding[102](index=102&type=chunk)[103](index=103&type=chunk) - Class B ordinary shares automatically convert into Class A ordinary shares on a one-for-one basis upon the consummation of a Business Combination, subject to adjustment[105](index=105&type=chunk) - A total of **14,075,000 warrants** were issued, comprising **8,625,000 Public Warrants** and **5,450,000 Private Placement Warrants**[106](index=106&type=chunk)[113](index=113&type=chunk) - Public Warrants are exercisable at **$11.50 per share**, commencing **30 days** after the Business Combination, and expire **five years** thereafter[106](index=106&type=chunk) - Warrants may be called for redemption at **$0.01 per warrant** if the Class A ordinary share closing price equals or exceeds **$18.00** for **20 trading days** within a **30-trading day period**[110](index=110&type=chunk)[115](index=115&type=chunk) Fair Value Assumptions for Warrants (Black-Scholes Model) | Assumption | Value | | :--------- | :---- | | Risk-free interest rate | 3.6% | | Expected term (years) | 2.52 | | Expected volatility | 7.9% | | Stock price on valuation date ($) | 10.21 | | Exercise price ($) | 11.5 | | Expected dividend | —% | | Market pricing adjustment | 15% | [Note 9. Fair Value Measurements](index=26&type=section&id=NOTE%209.%20FAIR%20VALUE%20MEASUREMENTS) This note provides information on the fair value measurements of the company's assets and liabilities Fair Value Hierarchy of Assets (June 30, 2025) | Asset | Level | June 30, 2025 ($) | | :---- | :---- | :------------ | | Marketable securities held in Trust Account | 1 | 173,664,886 | [Note 10. Subsequent Events](index=26&type=section&id=NOTE%2010.%20SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the balance sheet date - On **August 14, 2025**, the company received the outstanding balance of **$1,221,540** from the Sponsor, fully settling the 'Due from Sponsor' balance[119](index=119&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition, operational results, liquidity, and capital resources [Special Note Regarding Forward-Looking Statements](index=27&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights the inherent risks and uncertainties associated with forward-looking statements in the report - This Quarterly Report includes forward-looking statements that involve risks and uncertainties, and actual results could differ materially from those projected[123](index=123&type=chunk) [Overview](index=27&type=section&id=Overview) This section provides a brief overview of Digital Asset Acquisition Corp.'s formation and purpose as a blank check company - Digital Asset Acquisition Corp. is a blank check company incorporated on **December 9, 2024**, formed to pursue a Business Combination[124](index=124&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on revenues, expenses, and net income - The company has not generated any operating revenues to date, with activities limited to organizational matters and the Initial Public Offering[125](index=125&type=chunk)[127](index=127&type=chunk) Net Income Summary | Metric | Three Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2025 ($) | | :----- | :------------------------------- | :----------------------------- | | Net income | 1,029,308 | 974,692 | | Investment earnings on marketable securities | 1,147,520 | 1,147,520 | | General and administrative expenses | 118,212 | 172,828 | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, sources of funds, and ability to meet its financial obligations Cash Flow Summary (Six Months Ended June 30, 2025) | Cash Flow Activity | Amount ($) | | :----------------- | :----- | | Net cash provided by operating activities | 158,436 | | Net cash used in investing activities | (172,500,000) | | Net cash provided by financing activities | 172,341,564 | - **$172,500,000** from the Initial Public Offering and Private Placement Warrants was placed in a Trust Account[133](index=133&type=chunk) - The company expects sufficient funds for operations but may need additional financing to complete its initial Business Combination[135](index=135&type=chunk) [Off-Balance Sheet Arrangements](index=29&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements as of the reporting date - As of **June 30, 2025**, the company did not have any off-balance sheet arrangements[136](index=136&type=chunk) [Contractual Obligations](index=29&type=section&id=Contractual%20Obligations) This section details the company's significant contractual commitments, including registration rights and deferred fees - Registration rights exist for up to **12,700,000 Class A ordinary shares** and **6,500,000 warrants** held by founders, private placement warrant holders, and potential working capital loan warrant holders[137](index=137&type=chunk) - A promissory note from the Sponsor for up to **$300,000** was fully repaid during the three months ended **June 30, 2025**[138](index=138&type=chunk) - Underwriters are entitled to a deferred fee of **$6,900,000**, payable from the Trust Account upon completion of a Business Combination[140](index=140&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting estimates and judgments that significantly impact the financial statements - The calculation of net income per ordinary share does not consider the effect of warrants due to their exercise being contingent upon future events[142](index=142&type=chunk) - Class A ordinary shares subject to possible redemption are classified as temporary equity, with changes in redemption value (**$10.07 per share** as of **June 30, 2025**) recognized immediately[145](index=145&type=chunk) [Recent Accounting Standards](index=31&type=section&id=Recent%20Accounting%20Standards) This section discusses the adoption and impact of recently issued accounting standards on the company - The company adopted **ASU 2023-07 (Segment Reporting)** on **December 9, 2024**, which requires enhanced disclosures for significant segment expenses and the CODM's use of segment profit or loss[146](index=146&type=chunk)[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Digital Asset Acquisition Corp. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide market risk disclosures[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) The Principal Executive Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective. No material changes in internal control over financial reporting occurred during the quarter [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures by executive officers - The Principal Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of **June 30, 2025**[151](index=151&type=chunk) [Changes in Internal Control Over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting - There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter[152](index=152&type=chunk) [PART II - OTHER INFORMATION](index=32&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company reported no legal proceedings for the period - No legal proceedings were reported[153](index=153&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's final prospectus for its Initial Public Offering filed on April 30, 2025 - No material changes to risk factors have occurred since the IPO prospectus filed on **April 30, 2025**[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details unregistered sales of equity securities, including private placement warrants, and the use of proceeds from the Initial Public Offering - The IPO generated **$172,500,000** in gross proceeds from **17,250,000 Units**[155](index=155&type=chunk) - **5,450,000 Private Placement Warrants** were sold for **$5,450,000**, issued under the **Section 4(a)(2)** exemption from registration[156](index=156&type=chunk) - Private Placement Warrants are not redeemable, have transfer restrictions, and can be exercised on a cashless basis[157](index=157&type=chunk) - **$172,500,000** from the IPO and Private Placement Warrants proceeds was placed in the Trust Account[158](index=158&type=chunk) - Total underwriting discounts and commissions were **$10,350,000**, with **$6,900,000** deferred, and other IPO costs were approximately **$700,000**[159](index=159&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[161](index=161&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Mine safety disclosures are not applicable to the company[162](index=162&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20OTHER%20INFORMATION) The company reported no other information - No other information was reported[163](index=163&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20EXHIBITS) This section lists the exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including various agreements and certifications - The report includes various exhibits such as the Underwriting Agreement, Amended and Restated Memorandum of Association, Warrant Agreement, and certifications[165](index=165&type=chunk) [Signatures](index=34&type=section&id=SIGNATURES) The report was signed by Peter Ort, Principal Executive Officer and Co-Chairman, and Jeff Tuder, Chief Financial Officer and Co-Chairman, on August 18, 2025 - The report was signed by **Peter Ort** (Principal Executive Officer and Co-Chairman) and **Jeff Tuder** (Chief Financial Officer and Co-Chairman) on **August 18, 2025**[170](index=170&type=chunk)

[PART 1 - FINANCIAL INFORMATION](index=4&type=section&id=PART%201%20-%20FINANCIAL%20INFORMATION) This part presents the company's condensed financial statements, management's discussion, market risk disclosures, and controls and procedures [Item 1. CONDENSED FINANCIAL STATEMENTS](index=4&type=section&id=Item%201.%20CONDENSED%20FINANCIAL%20STATEMENTS) This section presents Digital Asset Acquisition Corp.'s unaudited condensed financial statements and detailed notes for Q1 2025, covering balance sheets, operations, equity changes, cash flows, and key accounting policies [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) This table presents the company's condensed balance sheets as of March 31, 2025, and December 31, 2024, detailing assets, liabilities, and shareholder's equity | Metric | March 31, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------- | :------------------ | | **ASSETS** | | | | Deferred offering costs | $201,170 | $25,000 | | TOTAL ASSETS | $201,170 | $25,000 | | **LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)** | | | | Accrued expenses | $34,407 | $4,791 | | Accrued offering costs | $88,322 | — | | Due to related party | $321 | $321 | | Promissory note - related party | $112,848 | — | | Total Liabilities | $235,898 | $5,112 | | Total Shareholder's Equity (Deficit) | $(34,728) | $19,888 | | LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT) | $201,170 | $25,000 | [Unaudited Condensed Statement of Operations](index=5&type=section&id=Unaudited%20Condensed%20Statement%20of%20Operations) This table presents the unaudited condensed statement of operations for the three months ended March 31, 2025, including net loss and loss per share | Metric | For the Three Months Ended March 31, 2025 (Unaudited) | | :---------------------------------- | :---------------------------------------------------- | | General and administrative expenses | $54,616 | | Net loss | $(54,616) | | Weighted average shares outstanding | 5,000,000 | | Basic and diluted net loss per ordinary share | $(0.01) | [Unaudited Condensed Statement of Changes in Shareholder's Deficit](index=6&type=section&id=Unaudited%20Condensed%20Statement%20of%20Changes%20in%20Shareholder%27s%20Deficit) This table presents the unaudited condensed statement of changes in shareholder's deficit from January 1 to March 31, 2025 | Metric | Balance at January 1, 2025 | Net loss | Balance at March 31, 2025 | | :-------------------------- | :------------------------- | :------- | :------------------------ | | Class B Ordinary Shares (Amount) | $575 | — | $575 | | Additional Paid-in Capital | $24,425 | — | $24,425 | | Accumulated Deficit | $(5,112) | $(54,616) | $(59,728) | | Total Shareholder's Equity (Deficit) | $19,888 | $(54,616) | $(34,728) | [Unaudited Condensed Statement of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Statement%20of%20Cash%20Flows) This table presents the unaudited condensed statement of cash flows for the three months ended March 31, 2025, detailing operating and non-cash activities | Metric | For the Three Months Ended March 31, 2025 (Unaudited) | | :------------------------------------------------ | :---------------------------------------------------- | | Net loss | $(54,616) | | Operating expenses paid via promissory note - related party | $25,000 | | Changes in operating assets and liabilities: Accrued expenses | $29,616 | | Net cash used in operating activities | — | | Net Change in Cash | — | | Cash - Beginning of period | — | | Cash - End of period | $— | | Non-Cash Investing and Financing Activities: Deferred offering costs included in accrued offering costs | $88,322 | | Non-Cash Investing and Financing Activities: Deferred offering costs paid via promissory note - related party | $87,848 | | Non-Cash Investing and Financing Activities: Operating expenses paid via promissory note - related party | $25,000 | [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed notes explaining the company's financial statements, accounting policies, and related transactions [NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY](index=8&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20ORGANIZATION%2C%20BUSINESS%20OPERATIONS%20AND%20LIQUIDITY) This note describes Digital Asset Acquisition Corp.'s formation as a blank check company, its IPO, the establishment of a Trust Account, and its liquidity position and timeline for a business combination - Digital Asset Acquisition Corp. is a blank check company (SPAC) incorporated on December 9, 2024, with the purpose of entering into a business combination[21](index=21&type=chunk) - The company completed its Initial Public Offering (IPO) on April 30, 2025, issuing **17,250,000 units** and generating gross proceeds of **$172,500,000**[23](index=23&type=chunk) - Simultaneously with the IPO, the company sold **5,450,000 Private Placement Warrants** for **$5,450,000**[24](index=24&type=chunk) - Following the IPO, **$172,500,000** from the net proceeds was placed in a Trust Account, to be invested in U.S. government treasury obligations or money market funds[25](index=25&type=chunk) - The company has until **October 30, 2026** (or January 30, 2027, with an extension) to complete a Business Combination[35](index=35&type=chunk) Liquidity and Capital Resources (March 31, 2025) | Metric | Amount | | :-------------------- | :------- | | Cash | $0 | | Working Capital Deficit | $(235,898) | [NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the company's significant accounting policies, including GAAP basis, emerging growth company status, deferred offering costs, income taxes, and treatment of shares and warrants - The company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[42](index=42&type=chunk)[43](index=43&type=chunk) - Deferred offering costs of **$201,170** as of March 31, 2025, were incurred and will be charged to temporary or permanent equity upon IPO completion[47](index=47&type=chunk) - The company is an exempted Cayman Islands Company and is not subject to income taxes in the Cayman Islands or the United States[51](index=51&type=chunk) - Class A ordinary shares with redemption features are classified as temporary equity in accordance with ASC 480[52](index=52&type=chunk) - Warrants are accounted for as equity-classified instruments, with changes in fair value not recognized as long as they remain equity-classified[57](index=57&type=chunk)[59](index=59&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) for the annual period ended December 31, 2024, and the interim period for the three months ended March 31, 2025, with no material impact[61](index=61&type=chunk)[63](index=63&type=chunk) [NOTE 3. INITIAL PUBLIC OFFERING](index=15&type=section&id=NOTE%203.%20INITIAL%20PUBLIC%20OFFERING) The company completed its Initial Public Offering, selling 17,250,000 Units, including the full exercise of the over-allotment option, generating $172,500,000 in gross proceeds. Each Unit consisted of one Class A ordinary share and one-half of one redeemable warrant - The Company sold **17,250,000 Units** in its Initial Public Offering, including the full exercise of the over-allotment option[65](index=65&type=chunk) - The IPO generated gross proceeds of **$172,500,000**[65](index=65&type=chunk) - Each Unit comprised one Class A ordinary share and one-half of one redeemable warrant[65](index=65&type=chunk) [NOTE 4. PRIVATE PLACEMENT](index=15&type=section&id=NOTE%204.%20PRIVATE%20PLACEMENT) Concurrently with the IPO, the company sold 5,450,000 Private Placement Warrants at $1.00 per warrant, generating $5,450,000. These proceeds were added to the Trust Account, and the warrants will expire worthless if a business combination is not completed within the Combination Period - The Company sold **5,450,000 Private Placement Warrants** at **$1.00 per warrant**[66](index=66&type=chunk) - This sale generated gross proceeds of **$5,450,000**, which were added to the Trust Account[66](index=66&type=chunk) - The Private Placement Warrants will expire worthless if a Business Combination is not completed within the Combination Period[66](index=66&type=chunk) [NOTE 5. SEGMENT INFORMATION](index=15&type=section&id=NOTE%205.%20SEGMENT%20INFORMATION) The company operates as a single reportable segment, with the Chief Financial Officer identified as the Chief Operating Decision Maker (CODM). The CODM reviews overall operating results, including net income/loss and total assets, to make resource allocation and performance assessment decisions. Key metrics reviewed include general and administrative expenses and deferred offering costs - The Company has determined it has only one reportable segment[68](index=68&type=chunk) - The Chief Financial Officer is identified as the Chief Operating Decision Maker (CODM)[68](index=68&type=chunk) - The CODM assesses performance and allocates resources based on net income or loss and total assets[70](index=70&type=chunk) Key Metrics Reviewed by CODM | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Deferred offering costs | $201,170 | $25,000 | | Total Assets | $201,170 | $25,000 | | General and administrative expenses (3 months ended March 31, 2025) | $54,616 | N/A | | Net Loss (3 months ended March 31, 2025) | $54,616 | N/A | [NOTE 6. RELATED PARTY TRANSACTIONS](index=16&type=section&id=NOTE%206.%20RELATED%20PARTY%20TRANSACTIONS) This section details transactions with related parties, including the issuance and transfer of Founder Shares to the Sponsor, directors, and advisors. It also covers a non-interest bearing promissory note from the Sponsor to cover IPO expenses, which was repaid in full after the IPO, and an administrative support agreement with the Sponsor for monthly services - The Sponsor was issued **5,750,000 Class B ordinary shares (Founder Shares)** for **$25,000**[72](index=72&type=chunk) - **750,000 Founder Shares** were initially subject to forfeiture but are no longer subject to forfeiture as the over-allotment option was exercised in full[72](index=72&type=chunk) - The Sponsor transferred **75,000 Founder Shares** to director nominees and **40,000** to company advisors[73](index=73&type=chunk) - A non-interest bearing promissory note from the Sponsor for up to **$300,000** to cover IPO expenses had **$112,848** outstanding as of March 31, 2025, and was repaid in full after the IPO[81](index=81&type=chunk) - The Company has an administrative support agreement to pay the Sponsor up to **$20,000 per month** for office space and administrative services[83](index=83&type=chunk) [NOTE 7. COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%207.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has commitments related to registration rights for holders of Founder Shares, Private Placement Warrants, and warrants from working capital loans, obligating it to register up to 12,700,000 Class A ordinary shares and 6,500,000 warrants. Additionally, the underwriting agreement includes a lock-up period for certain securities and details the underwriting discount and deferred fees, with the deferred fee payable only upon completion of a Business Combination - Holders of Founder Shares, Private Placement Warrants, and warrants from working capital loans have registration rights[86](index=86&type=chunk) - The Company is obligated to register up to **12,700,000 Class A ordinary shares** and **6,500,000 warrants**[86](index=86&type=chunk) - The Sponsor, executive officers, and directors are subject to a **180-day lock-up period** on certain securities post-IPO[87](index=87&type=chunk) - Underwriters received a **$0.20 per Unit discount ($3,450,000 total)** and a deferred fee of **$0.40 per Unit ($6,900,000 total)**, payable only upon completion of a Business Combination[89](index=89&type=chunk) [NOTE 8. SHAREHOLDER'S EQUITY](index=21&type=section&id=NOTE%208.%20SHAREHOLDER%27S%20EQUITY) This note details the company's authorized and outstanding share capital, including preference shares (none issued), Class A ordinary shares (17,250,000 outstanding post-IPO, subject to redemption), and Class B ordinary shares (5,750,000 outstanding, held by the Sponsor and related parties, convertible to Class A). It also describes the 14,075,000 warrants issued in connection with the IPO, their exercise terms, redemption conditions, and accounting classification as equity - The Company is authorized to issue **5,000,000 preference shares**, none of which are issued or outstanding[92](index=92&type=chunk) - Post-IPO, there are **17,250,000 Class A ordinary shares** issued and outstanding, all subject to possible redemption[93](index=93&type=chunk) - There are **5,750,000 Class B ordinary shares** issued and outstanding, held by the Sponsor, which automatically convert to Class A shares upon a Business Combination[94](index=94&type=chunk)[96](index=96&type=chunk) - **14,075,000 warrants** were issued in connection with the IPO (**8,625,000 Public Warrants** and **5,450,000 Private Placement Warrants**)[98](index=98&type=chunk)[105](index=105&type=chunk) - Public Warrants are exercisable at **$11.50 per share**, commencing 30 days after a Business Combination, and expire five years after completion of the Business Combination[98](index=98&type=chunk) - The Company may call warrants for redemption if Class A ordinary shares equal or exceed **$18.00 per share** for 20 trading days within a 30-trading day period[101](index=101&type=chunk) [NOTE 9. SUBSEQUENT EVENTS](index=23&type=section&id=NOTE%209.%20SUBSEQUENT%20EVENTS) The company reviewed subsequent events up to the financial statement issuance date and identified no events requiring adjustment or disclosure beyond the Initial Public Offering, which is already disclosed throughout the document - No subsequent events requiring adjustment or disclosure were identified, other than the Initial Public Offering[106](index=106&type=chunk) [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition and operational results, detailing net loss, post-IPO liquidity, and contractual obligations as a blank check company focused on a business combination - The Company is a blank check company formed to effect a business combination and has not generated any operating revenues to date[109](index=109&type=chunk)[110](index=110&type=chunk) Results of Operations (Three Months Ended March 31, 2025) | Metric | Amount | | :-------------------------- | :------- | | Net loss | $(54,616) | | General and administrative expenses | $54,616 | - Net cash used in operating activities for the three months ended March 31, 2025, was **$25,000**[112](index=112&type=chunk) - Following the IPO, **$172,500,000** was placed in a Trust Account, intended primarily for the initial Business Combination[115](index=115&type=chunk)[116](index=116&type=chunk) - The Company does not anticipate needing additional funds for operating its business post-IPO, but may require financing for a business combination or significant redemptions[117](index=117&type=chunk) - As of March 31, 2025, the Company did not have any off-balance sheet arrangements[118](index=118&type=chunk) - Contractual obligations include registration rights for up to **12,700,000 Class A ordinary shares** and **6,500,000 warrants**, and a deferred underwriting fee of **$6,900,000** payable upon completion of a Business Combination[119](index=119&type=chunk)[122](index=122&type=chunk) [Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=27&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Digital Asset Acquisition Corp. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[124](index=124&type=chunk) [Item 4. CONTROLS AND PROCEDURES](index=27&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) The Principal Executive Officer and Chief Financial Officer evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2025, concluding they were effective. There have been no material changes in internal control over financial reporting during the most recently completed fiscal quarter - The Principal Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[126](index=126&type=chunk) - There have been no material changes in internal control over financial reporting during the most recently completed fiscal quarter[127](index=127&type=chunk) [PART II - OTHER INFORMATION](index=28&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, unregistered equity sales, defaults, mine safety, other information, and exhibits [Item 1. LEGAL PROCEEDINGS](index=28&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company reported no legal proceedings - The Company has no legal proceedings[130](index=130&type=chunk) [Item 1A. RISK FACTORS](index=28&type=section&id=Item%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's final prospectus for its Initial Public Offering filed on April 30, 2025 - No material changes to the risk factors disclosed in the final prospectus for the Initial Public Offering filed on April 30, 2025[131](index=131&type=chunk) [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=28&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the unregistered sale of 5,450,000 Private Placement Warrants for $5,450,000, issued under Section 4(a)(2) of the Securities Act. These warrants are identical to Public Warrants but are not redeemable, have transfer restrictions, and can be exercised on a cashless basis. The proceeds from both the IPO and Private Placement Warrants, totaling $172,500,000, were placed in a Trust Account - The Company consummated the sale of **5,450,000 Private Placement Warrants** at **$1.00 per warrant**, generating gross proceeds of **$5,450,000**[133](index=133&type=chunk) - The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act[133](index=133&type=chunk) - Private Placement Warrants are not redeemable, have transfer restrictions, may be exercised on a cashless basis, and are entitled to registration rights[134](index=134&type=chunk) - Following the IPO, **$172,500,000** from the net proceeds of the Units and Private Placement Warrants was placed in the Trust Account[135](index=135&type=chunk) - The Company paid **$10,350,000** in underwriting discounts and commissions and incurred approximately **$700,000** for other IPO-related costs[136](index=136&type=chunk) [Item 3. DEFAULTS UPON SENIOR SECURITIES](index=28&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities - The Company reported no defaults upon senior securities[137](index=137&type=chunk) [Item 4. MINE SAFETY DISCLOSURES](index=28&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the Company[138](index=138&type=chunk) [Item 5. OTHER INFORMATION](index=28&type=section&id=Item%205.%20OTHER%20INFORMATION) The company reported no other information - The Company reported no other information[139](index=139&type=chunk) [Item 6. EXHIBITS](index=29&type=section&id=Item%206.%20EXHIBITS) This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including various agreements (Underwriting, Warrant, Letter, Trust, Registration Rights, Private Placement Warrants Purchase, Administrative Services) and certifications (Principal Executive Officer, Principal Financial and Accounting Officer) - The report includes various exhibits such as the Underwriting Agreement, Warrant Agreement, Letter Agreement, Investment Management Trust Agreement, Registration Rights Agreement, Private Placement Warrants Purchase Agreements, and Administrative Services and Indemnification Agreement[141](index=141&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial and Accounting Officer are filed/furnished as exhibits[141](index=141&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers [Signatures](index=30&type=section&id=Signatures) The report is duly signed on behalf of Digital Asset Acquisition Corp. by Peter Ort, Principal Executive Officer and Co-Chairman, and Jeff Tuder, Chief Financial Officer and Co-Chairman, on June 12, 2025 - The report was signed by Peter Ort, Principal Executive Officer and Co-Chairman, and Jeff Tuder, Chief Financial Officer and Co-Chairman[146](index=146&type=chunk)[147](index=147&type=chunk) - The signing date for the report was **June 12, 2025**[146](index=146&type=chunk)[147](index=147&type=chunk)