8-K: Digital Asset Acquisition Corp. to Merge with Old Glory Bank

Digital Asset Acquisition Corp. (DAAQ) announced a definitive agreement for a business combination with Old Glory Bank, a digital-first financial institution focused on the freedom and crypto economy.

Summary

• Digital Asset Acquisition Corp. (DAAQ) has entered into a definitive agreement for a business combination with Old Glory Holding Company (Old Glory Bank).
• Old Glory Bank is an FDIC-insured, digital-first financial institution targeting the "freedom and crypto economy" with a physical branch in Elmore City, OK.
• The transaction is expected to close in Q2 2026, subject to customary closing conditions and shareholder approvals.
• The business combination is anticipated to be funded by DAAQ's cash in trust and a targeted $50 million PIPE raise, resulting in approximately $207 million net cash on the balance sheet at closing (assuming 0% redemptions).
• The implied pro forma enterprise value for the combined company is approximately $441.8 million.
• Existing Old Glory shareholders will roll over 100% of their equity, holding about 47% ownership in the combined company.
• Old Glory Bank has experienced significant growth, increasing online retail deposit accounts from 0 to ~79,000 and online business deposit accounts from 0 to ~4,000 between April 2023 and December 2025.
• Deposits grew from $10 million in April 2023 to $247 million by December 2025.
• The bank boasts a low cost of funds at 0.86% for Q3 2025, placing it among top-decile performers in its peer group.
• Post-merger, Old Glory Bank plans to unify crypto into daily banking, including a consolidated dashboard, easy on/off blockchain, issuance of OGBUSD stablecoin, and stablecoin-as-a-service offerings.
• The company serves a market segment concerned with "debanking and government surveillance," including crypto, oil & gas, firearms, and conservative individuals and businesses.

Sentiment

Score: 7

Explanation: The filing announces a definitive merger agreement for a rapidly growing bank with a unique market niche and strong financial metrics (low cost of funds, high customer engagement). The planned crypto integration offers significant future potential. However, the current high regulatory capital requirement and small loan portfolio present challenges, and the success hinges on the execution of the business combination and regulatory adjustments.

Positives

• Old Glory Bank has demonstrated rapid growth in deposit accounts, reaching ~79,000 retail and ~4,000 business accounts by December 2025.
• Total deposits grew substantially from $10 million in April 2023 to $247 million by December 2025.
• The bank maintains a low cost of funds at 0.86% for Q3 2025, indicating strong funding efficiency.
• Old Glory Bank has a unique market position serving the "freedom and crypto economy," which is currently unrepresented by other publicly traded financial institutions.
• High customer engagement is noted, with 72% of customers logging in every 3.22 days and $1.5 billion in customer transactions.
• Low fraud and dispute losses of only $414,000 in 2025.
• Efficient customer acquisition is observed, with less than 35% of customers coming from paid media.
• The business combination is expected to provide approximately $207 million in net cash to the balance sheet, addressing capital constraints and supporting growth.
• Plans for crypto integration, including a proprietary stablecoin (OGBUSD) and stablecoin-as-a-service, position the combined company for future growth in the digital asset space.
• The bank has influential co-founders and board members with significant experience in government, media, and finance.

Negatives

• Old Glory Bank's recent deposit growth has been moderated by capital constraints.
• The bank is currently subject to a Consent Order from the FDIC and Oklahoma State Banking Department (issued May 1, 2024) mandating a Tier 1 Leverage Ratio of 14%, which is higher than the industry standard.
• Profitability is substantially dependent on the bank's ability to open new accounts at a consistent customer acquisition cost.
• The bank has a very small loan portfolio (currently less than 4% of assets), making its net interest income highly dependent on interest from the Federal Reserve and its portfolio of treasuries and securities.
• The combined company's ability to recognize anticipated benefits of the business combination may be affected by competition and the ability to manage growth profitably.
• The implementation of planned crypto banking integration is subject to regulatory requirements and approval.

Risks

• Inability to obtain the necessary financing from this transaction to continue growing deposits and achieve profitability.
• Profitability is substantially dependent on the ability to open new bank accounts at a customer acquisition cost in line with historical success.
• The Consent Order from the FDIC and OSBD (FDIC-24-0016b, May 1, 2024) mandates a Tier 1 Leverage Ratio of 14%, which, if not adjusted to industry standards (8% or 9%) post-transaction, could limit activities.
• Negative public opinion could damage Old Glory Bank's reputation and adversely affect its earning potential.
• Failure to maintain a consistently high level of consumer satisfaction and trust could materially and adversely affect financial condition.
• Reliance on earned media and social media for customer acquisition, with limitations on these channels potentially affecting profitability.
• Fluctuations in interest rates by the Federal Reserve Board may reduce net interest income and negatively impact financial condition.
• Small loan portfolio (less than 4% of assets) makes net interest income dependent on interest from the Federal Reserve and its treasuries/securities portfolio.
• Small and medium-sized business borrowers may have fewer resources to weather economic downturns, impairing loan repayment ability if the loan portfolio substantially increases.
• The company is limited in the amount it can loan to a single borrower by its capital, though this limit is expected to be less of a factor post-transaction.
• Risk of being required to repurchase loans originated for sale by the residential lending department, although this has not occurred since 2024.
• Inability to reach a critical mass of bank account openings, debit card users, and a safe and sound loan portfolio to support full-service operations in all 50 states could prevent achievement of financial goals.
• Failure to meet stringent capital requirements could limit activities if not adjusted to industry standards.
• Non-compliance with consumer protection laws (CRA, fair lending) could lead to sanctions.
• Risks of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes.
• Technology disruptions or failures, including in operational or security systems, or those of third parties, could disrupt business, cause legal/reputational harm, and adversely impact results.
• Cyberattacks and other data/security breaches could result in serious harm to reputation and adversely affect business.
• Liabilities arising from the collection, processing, storage, use, and disclosure of personal data due to governmental regulation, conflicting legal requirements, or differing privacy views.
• Conditions to complete the business combination may not be satisfied or may be waived.
• Failure to obtain approval of DAAQ or Old Glory Bank shareholders for the business combination.
• DAAQ Sponsor LLC and certain DAAQ shareholders affiliated with the Sponsor have agreed to vote in favor, regardless of how public shareholders vote.
• DAAQ's Sponsor, directors, and executive officers have interests in the business combination that differ from public shareholders (e.g., founder shares, private placement warrants).
• DAAQ's Board has potential conflicts of interest in recommending the business combination.
• Shareholders of Old Glory Bank and DAAQ will experience dilution as a consequence of the business combination.
• Future resales of the combined company's outstanding shares may cause the market price to drop significantly.
• No assurance that the combined company's or DAAQ's stock price will not decline or be subject to significant volatility.
• Exercise of redemption rights by DAAQ's public shareholders could reduce the combined company's public float.
• Business uncertainties and contractual restrictions once documentation for the business combination is executed.
• Inadequate due diligence by DAAQ could lead to shareholders losing investment.
• No assurance of compliance with Nasdaq listing standards or development of an active and liquid public market.
• If securities or industry analysts cease publishing research or change recommendations adversely, the price and trading volume could decline.
• Inability to obtain additional financing to fund operations or growth.
• As an emerging growth company, the combined company may take advantage of certain exemptions, potentially making securities less attractive to investors.
• Significant transaction costs will be incurred.
• Sponsor and DAAQ's officers/directors/advisors may purchase Class A ordinary shares from public shareholders, reducing public float.

Future Outlook

The combined company plans to integrate crypto into daily banking post-De-SPAC, offering a consolidated dashboard for banking and crypto, easy on/off blockchain capabilities, and the issuance of its own payment stablecoin (OGBUSD) under the GENIUS Act. It also intends to provide stablecoin-as-a-service to other companies and offer liquidity access lines. Management believes the transaction will provide the necessary financing to grow deposits and achieve profitability, and expects the mandated Tier 1 Leverage Ratio to be adjusted to an industry standard of 8% or 9% upon successful consummation of the transaction.

Management Comments

• "Old Glory Bank's proposed digital-first approach coupled with America first values is not currently represented by other publicly traded financial institutions, providing investors the only public access point to invest in a bank with this unique approach."
• "Management believes [the 14% Tier 1 Leverage Ratio] will be changed to an industry standard ratio of 8% or 9% upon the successful consummation of this transaction."

Industry Context

Old Glory Bank is positioning itself as a unique player in the financial sector by explicitly targeting the "freedom and crypto economy," a niche that it claims is underserved by traditional banks and currently unrepresented in the public market. This strategy directly addresses concerns about "debanking" faced by certain industries (crypto, oil & gas, firearms) and conservative individuals. The planned integration of stablecoin payments and crypto-backed credit aligns with the broader trend of increasing convergence between traditional finance and digital assets, aiming to provide alternative financing tools and payment solutions. Its focus on a digital-first, cloud-enabled infrastructure also reflects the ongoing digital transformation within the banking industry, emphasizing efficiency and scalability.

Comparison to Industry Standards

• Old Glory Bank's 0.86% cost of funds for Q3 2025 places it among the top-decile performers in funding efficiency within its peer group (insured commercial banks with assets between $100M and $300M, 2 or fewer full-service banking offices, not in a metropolitan statistical area).
• The current mandated Tier 1 Leverage Ratio of 14% for Old Glory Bank is significantly higher than the Community Bank Leverage Ratio of 9% otherwise available to banks with less than $10 billion in assets, which management expects to be adjusted to 8% or 9% post-transaction.
• Old Glory Bank's loan portfolio, currently less than 4% of assets, is very small compared to typical commercial banks, which usually have a much larger proportion of assets in loans.

Corporate Governance

Legal Proceedings

• Old Glory Bank consented to the issuance of a Consent Order by the FDIC and the Oklahoma State Banking Department (FDIC-24-0016b) on May 1, 2024. This order did not require a fine or impose a penalty but mandated the adoption, operationalization, and audit of written policies and a Tier 1 Leverage Ratio of 14%.

Stakeholder Impact

• Shareholders (DAAQ & Old Glory Bank): Will experience dilution as a consequence of the business combination. DAAQ shareholders will vote on the transaction. Existing Old Glory shareholders will roll over 100% of their equity.
• Customers (Old Glory Bank): Expected to benefit from expanded services, including planned crypto integration, and continued focus on "freedom and crypto economy" values.
• Employees (Old Glory Bank): No direct impact mentioned, but potential for growth and expanded operations post-merger.
• Regulators (FDIC, OSBD, SEC): The transaction is subject to regulatory approvals, and the combined entity will continue to be subject to stringent banking and securities regulations. The Consent Order's terms are a key regulatory consideration.
• PIPE Investors: Opportunity to invest in a unique banking platform with growth potential.

Next Steps

• DAAQ and Old Glory Bank intend to file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus.
• The business combination will be submitted to the shareholders of DAAQ for their consideration and approval.
• The transaction is targeted to close in Q2 2026.
• Post-De-SPAC, Old Glory Bank plans to launch OGBUSD stablecoin and stablecoin-as-a-service offerings.
• The combined company plans to integrate NetSuite into its Pocket CFO business banking tool in Q3.

Key Dates

Recommendation

The definitive agreement for the business combination between DAAQ and Old Glory Bank presents a compelling investment opportunity. Old Glory Bank has demonstrated impressive growth in deposits and customer accounts, coupled with a highly efficient cost of funds, indicating strong operational performance. Its unique market positioning, catering to the "freedom and crypto economy," addresses a significant underserved niche and offers a differentiated value proposition. The planned integration of stablecoin and crypto services positions the combined entity for substantial future growth in the evolving digital asset landscape. While regulatory hurdles like the current Tier 1 Leverage Ratio requirement exist, management anticipates a favorable adjustment post-transaction, and the capital infusion from the SPAC and PIPE is expected to fuel further expansion. The strong leadership team and clear strategic vision further support a positive outlook, making this an attractive long-term 'buy' for investors seeking exposure to innovative banking models and the digital asset space.

Keywords

SPAC, Fintech, Banking, Digital Assets, Crypto Economy, Merger, Old Glory Bank, DAAQ, Financial Services, Stablecoin, Community Bank, De-SPAC, Bank Holding Company, SEC Filing