Business Context and Reporting Period
Company: McKinley Acquisition Corporation (MKLY)
Reporting Period: Quarterly period ended June 30, 2025 (Inception: March 27, 2025)
Status: Pre-IPO Special Purpose Acquisition Company (SPAC). The company was incorporated for the purpose of effecting a business combination but had not commenced operations or selected a target as of the balance sheet date. The Initial Public Offering (IPO) was consummated on August 13, 2025, subsequent to the reporting period.
Key Financial Metrics (As of June 30, 2025)
| Metric | Value |
|---|---|
| Total Assets | $129,701 |
| Total Liabilities | $168,122 |
| Shareholder's Deficit | ($38,421) |
| Net Loss (Inception to June 30) | ($63,421) |
| Cash and Cash Equivalents | $0 |
| Working Capital Deficit | ($98,122) |
| Promissory Note (Related Party) | $121,210 |
Note: The company had no operating revenue. Expenses consisted entirely of formation, general, and administrative costs.
Material Changes and Subsequent Events
The financial statements reflect the pre-IPO formation phase. Significant capital events occurred subsequent to June 30, 2025, which are not reflected in the June 30 balance sheet but are disclosed in the notes:
- Initial Public Offering (August 13, 2025): Sold 15,000,000 Public Units at $10.00 per unit, generating gross proceeds of $150,000,000.
- Private Placement (August 13, 2025): Sold 465,000 Private Placement Units to the Sponsor and underwriters for $4,650,000.
- Over-Allotment Exercise (August 15-19, 2025): Underwriters exercised the full over-allotment option for 2,250,000 additional Units, generating an additional $22,500,000 in proceeds.
- Trust Account Funding: A total of $172,500,000 ($150M from IPO + $22.5M from over-allotment) was deposited into the Trust Account.
- Debt Repayment: The related party promissory note of $121,210 (plus accrued interest/fees) was repaid in full using IPO proceeds.
Outlook, Risks, and Management Commentary
- Going Concern: As of June 30, 2025, the company had no cash and a working capital deficit, raising substantial doubt about its ability to continue as a going concern without the successful completion of the IPO and a business combination.
- Business Combination Timeline: The company has 18 months from the closing of the IPO (August 13, 2025) to complete an initial business combination. If unsuccessful, the company will liquidate and redeem public shares.
- Risk Factors: Management highlights risks related to geopolitical instability (Russia-Ukraine, Israel-Hamas conflicts), global market volatility, and new U.S. tariff policies (including a 10% baseline tariff on imports and higher tariffs on specific nations) which could impact the search for a target business.
- Use of Proceeds: Funds in the Trust Account are invested in U.S. government treasury obligations. Interest income may be used to pay taxes. The company expects to incur significant costs for legal, accounting, and due diligence post-IPO.
Investor Verification Checklist
- IPO Closing Confirmation: Verify the final closing date and total proceeds deposited into the Trust Account ($172.5M expected).
- Trust Account Status: Confirm the current balance and investment composition of the Trust Account post-IPO.
- Related Party Agreements: Review the terms of the Administrative Services Agreement ($10,000/month) and the status of the Private Placement Units Note ($500,000 principal).
- Over-Allotment Finalization: Confirm the delivery of the 2,250,000 over-allotment units and the associated cash settlement.
- Target Search Progress: Monitor for any announcements regarding substantive discussions with potential business combination targets.