Business Context and Reporting Period
Company: McKinley Acquisition Corporation (MKLY), a Cayman Islands exempted company and Special Purpose Acquisition Company (SPAC).
Reporting Period: Quarterly period ended June 30, 2026.
Status: The Company has not yet commenced operations. Its sole activities involve formation, the Initial Public Offering (IPO) consummated in August 2025, and seeking a target business for an initial Business Combination. The Company is classified as a shell company, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | As of/For Period Ended June 30, 2026 | As of/For Period Ended Dec 31, 2025 |
|---|---|---|
| Cash (Operating) | $1,027,588 | $1,663,042 |
| Cash in Trust Account | $178,185,780 | $175,137,749 |
| Total Assets | $179,336,091 | $176,922,057 |
| Working Capital | $826,791 | $1,655,718 |
| Net Income (3 Months) | $899,136 | N/A (Pre-IPO) |
| Net Income (6 Months) | $2,185,631 | N/A (Pre-IPO) |
| Operating Expenses (6 Months) | $862,400 | N/A (Pre-IPO) |
| Deferred Underwriting Commissions | $5,175,000 | $4,500,000 |
| Class A Shares Subject to Redemption | 17,250,000 shares ($10.33/share) | 17,250,000 shares ($10.15/share) |
Material Changes vs. Prior Period
- Trust Account Growth: The Trust Account balance increased by approximately $3.05 million to $178.19 million, driven by interest income on U.S. Treasury obligations.
- Profitability: The Company reported a net income of $899,136 for the three months ended June 30, 2026, compared to a net loss of $54,820 for the same period in 2025 (pre-IPO). This shift is due to significant interest income ($1.53 million) offsetting operating expenses ($629k).
- Deferred Commissions: Deferred underwriting commissions increased by $675,000 to $5.175 million following the full exercise of the underwriters' over-allotment option in August 2025.
- Liquidity: Operating cash decreased by approximately $635,000 during the six months ended June 30, 2026, primarily due to operating expenses and prepaid expenses, despite net income.
Outlook, Risks, and Subsequent Events
- Business Combination Agreement: On July 30, 2026 (subsequent to the reporting period), the Company entered into a Business Combination Agreement with Space-Eyes, Inc. The transaction involves a domestication to Delaware and a merger where Space-Eyes becomes a wholly-owned subsidiary.
- PIPE Financing: Concurrent with the merger agreement, the Company secured a PIPE financing agreement for up to approximately $83.66 million in senior secured convertible notes and warrants, with net proceeds to Space-Eyes of up to $75 million.
- Earn-Out Provisions: The merger agreement includes up to 8 million earn-out shares issuable to Space-Eyes holders based on stock price milestones ($12.50, $15.00, and $17.50).
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern without completing a business combination, citing insufficient liquidity to meet obligations for one year. However, the subsequent merger agreement addresses this uncertainty.
- Risks: Risks include geopolitical instability (Russia-Ukraine, Middle East conflicts), market volatility, and the failure to complete the Business Combination within the required timeframe (18 months from IPO).
Investor Verification Checklist
- Merger Terms: Verify the final exchange ratio and the specific conditions for the Space-Eyes merger, including the $275 million equity value assumption.
- Redemption Rights: Confirm the redemption price per share ($10.33 as of June 30, 2026) and the potential impact of shareholder redemptions on the cash available for the transaction.
- PIPE Closing Conditions: Review the conditions precedent for the $75 million PIPE financing, specifically the filing of the Form S-4 and the subordination of existing Space-Eyes debt.
- Trust Account Interest: Monitor the interest rate environment, as the Trust Account yield directly impacts the redemption value and the Company's ability to pay taxes.
- Deferred Fees: Note the $5.175 million deferred underwriting fee payable upon successful completion of the Business Combination.