Business Context and Reporting Period
Company: McKinley Acquisition Corporation (MKLY)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Quarter ended September 30, 2025 (Inception: March 27, 2025)
Status: Special Purpose Acquisition Company (SPAC) incorporated in the Cayman Islands. The Company has not yet commenced operations or selected a business combination target. It is classified as a shell company, non-accelerated filer, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | Value (as of Sept 30, 2025) |
|---|---|
| Total Assets | $175,514,414 |
| Cash (Operating) | $1,883,395 |
| Cash Held in Trust Account | $173,451,679 |
| Total Liabilities | $4,663,421 |
| Deferred Underwriting Commissions | $4,500,000 |
| Net Income (3 Months Ended Sept 30) | $602,427 |
| Net Income (Inception to Sept 30) | $539,006 |
| Operating Loss (3 Months Ended Sept 30) | $(349,252) |
| Interest Income on Trust Account | $951,679 |
| Working Capital | $1,841,061 |
Material Changes and IPO Activity
The Company consummated its Initial Public Offering (IPO) on August 13, 2025, and the over-allotment option was fully exercised on August 15, 2025. Key capital events include:
- IPO Proceeds: Sold 15,000,000 Public Units at $10.00/unit, generating $150,000,000.
- Over-Allotment: Underwriters exercised the option for 2,250,000 additional units, generating $22,500,000.
- Private Placement: Sold 465,000 Private Placement Units to the Sponsor and underwriters for $4,650,000 (aggregate). $500,000 of this amount remains unpaid and is recorded as a share receivable.
- Trust Account Funding: A total of $172,500,000 was deposited into the Trust Account. As of September 30, 2025, the Trust Account balance is $173,451,679, reflecting interest income.
- Transaction Costs: Total costs were $7,262,013, comprising $1,500,000 in cash underwriting fees, $4,500,000 in deferred fees, and $1,262,013 in other offering costs.
Outlook, Risks, and Management Commentary
Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. As of September 30, 2025, the Company does not have sufficient liquidity to meet current obligations for the next 12 months without completing a business combination or raising additional capital.
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:
- Geopolitical Instability: Risks associated with the Russia-Ukraine conflict and Israel-Hamas conflict, including market volatility and supply chain disruptions.
- Tariffs and Trade Policy: Potential adverse impacts from U.S. tariffs on imports from Canada, Mexico, China, and other nations, which could affect the global economy and target business valuations.
- Liquidity: Reliance on the Trust Account for redemption obligations and limited operating cash outside the Trust.
Management Commentary: The Company has not engaged in substantive discussions with any target business. Future operating revenues will only be generated after a business combination. The Company expects to incur significant costs related to due diligence and public company compliance.
Investor Verification Checklist
- Trust Account Balance: Verify the $173,451,679 balance and the interest income of $951,679 earned since inception.
- Going Concern Status: Confirm the Company's plan to address the substantial doubt regarding its ability to continue as a going concern within the 18-month window.
- Deferred Underwriting Fees: Note the $4,500,000 liability payable only upon the successful completion of a business combination.
- Share Receivable: Verify the $500,000 unpaid portion of the Private Placement Units purchase price.
- Redemption Rights: Review the terms under which public shareholders may redeem shares for their pro-rata share of the Trust Account.
- Related Party Transactions: Review the $10,000 monthly administrative fee payable to the Sponsor and the status of the $30,478 receivable from the Sponsor.