Company: MKLY
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-109976
Chunk: 16

Company: McKinley Acquisition Corp
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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480-10-S99, the Company classifies the Class A ordinary shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. Given that the 15,000,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering were issued with other freestanding instruments (i.e., rights), the initial carrying value of Class A ordinary shares classified as temporary equity has been allocated to the proceeds determined in accordance with ASC 470-20. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The initial accretion and subsequent remeasurements will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital). Accordingly, as of September 30, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. As of September 30, 2025, the Class A ordinary shares subject to redemption reflected in the balance sheet are reconciled in the following table:    Gross proceeds from Initial Public Offering  $150,000,000    Less:       Proceeds allocated to Public Rights   (3,446,879)   Proceeds allocated to over-allotment option liability   (145,402)   Offering costs allocated to Class A ordinary shares subject to possible redemption   (6,941,246)   Offering costs allocated to Public Rights   (175,365)   Plus:       Underwriter exercise of over-allotment option   22,500,000    Accretion of Class A ordinary shares subject to possible redemption   11,660,571    Class A ordinary shares subject to possible redemption at September 30, 2025  $173,451,679    10  MCKINLEY ACQUISITION CORPORATION NOTES TO