Business Context and Reporting Period
Company: McKinley Acquisition Corporation (MKLY)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: March 31, 2026
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, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | Three Months Ended March 31, 2026 | As of March 31, 2026 |
|---|---|---|
| Net Income | $1,286,495 | — |
| Operating Loss | $(233,447) | — |
| Interest Income (Trust Account) | $1,519,942 | — |
| Cash (Outside Trust) | — | $1,410,014 |
| Cash Held in Trust Account | — | $176,657,691 |
| Total Assets | — | $178,231,254 |
| Total Liabilities | — | $5,285,052 |
| Deferred Underwriting Commissions | — | $5,175,000 |
| Working Capital | — | $1,438,915 |
| Shares Outstanding (Class A) | — | 17,801,250 (17,250,000 subject to redemption) |
| Shares Outstanding (Class B) | — | 6,543,103 |
Material Changes vs. Prior Period
- Profitability: The Company reported a net income of $1,286,495 for the quarter, driven primarily by $1,519,942 in interest income earned on the Trust Account. This contrasts with the prior period (inception through March 31, 2025), which reported a net loss of $8,601.
- Trust Account Growth: Cash held in the Trust Account increased from $175,137,749 as of December 31, 2025, to $176,657,691 as of March 31, 2026, due to accrued interest.
- Liabilities: Total liabilities increased to $5,285,052 from $4,587,350. This includes an adjustment of $675,000 to deferred underwriting commissions to reflect the full exercise of the underwriters' over-allotment option.
- Cash Position: Operating cash flow resulted in a net cash outflow of $253,028, reducing cash outside the Trust Account from $1,663,042 to $1,410,014.
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 March 31, 2026, the Company does not have sufficient liquidity to meet obligations for a reasonable period (one year) without completing a business combination or raising additional capital.
- Business Combination Deadline: The Company must complete an initial business combination within 18 months of the IPO closing (August 13, 2025) or risk liquidation. No target has been selected.
- Risk Factors: Significant risks include geopolitical conflicts (Russia-Ukraine, Middle East), global market volatility, and the inability to secure a business combination. These factors could adversely affect the Company's ability to complete a transaction.
- Related Party Transactions: The Company pays its Sponsor $10,000 per month for administrative services. As of March 31, 2026, $3,824 was payable to the Sponsor. The Sponsor also holds a promissory note for $500,000 related to private placement units, which remains outstanding.
- Correction of Error: The Company identified and corrected an error regarding the deferred underwriting fee balance as of December 31, 2025, adjusting it to $5,175,000 to account for the over-allotment exercise.
Investor Verification Checklist
- Liquidity Runway: Verify if the $1.41 million in operating cash is sufficient to cover the estimated $2.4 million in annual operating expenses until the 18-month deadline.
- Trust Account Yield: Monitor the interest rate environment to assess if Trust Account income will remain sufficient to cover tax obligations and operating costs.
- Over-Allotment Exercise: Confirm the status of the $675,000 deferred underwriting commission adjustment and its impact on the final redemption value per share.
- Related Party Receivables: Review the $500,000 subscription note receivable from the Sponsor and the $3,824 administrative fee payable to ensure no defaults or disputes.
- Extension Options: Determine if shareholders have approved any extensions to the 18-month completion window, as the filing indicates a strict deadline.