Company: MKLY
Filing Date: 2025-06-30
Form Type: CORRESP
Source: 0001213900-25-059801
Chunk: 1

Company: McKinley Acquisition Corp
Filing Date: 2025-06-30
Form: CORRESP
Chunk 1
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 needs have been satisfied in part “through $25,000 paid by the sponsor[,]” tell us how you determined such activities are cash related activities within the statement of cash flows, rather than included in the supplemental disclosure only as non-cash financing activities consistent with ASC 230-10-45-1 and -50-4 guidance. Please advise and revise as necessary. |

RESPONSE: The Company acknowledges the Staff’s comment,
and after having reviewed the guidance under ASC 230-10-45-1 and ASC 230-10-50-4, determined that including the activity as cash related
activities within the statement of cash flows, rather than inclusion in the supplemental disclosure only as non-cash financing activities,
is appropriate under the concept of constructive receipt and disbursement. Additionally, the examples of noncash investing and financing
transactions listed in ASC 230-10-50-4 are not consistent with the Company’s circumstances. When an entity enters into arrangements where
cash is received or disbursed by another party on behalf of the entity, even though an entity may not directly exchange cash, the same
economic results may be achieved and therefore in substance represent constructive receipt and disbursement. ASC 230 does not specifically
address this concept, but interpretive guidance from Deloitte, PwC, KPMG, and EY state that judgment is required and an entity may still
need to report corresponding constructive receipt and disbursement as cash flows in instances where the same economic results are obtained
as if an exchange of currency or an entry into its cash account had occurred.

The following is interpretive guidance provided in Chapter
7.2 Constructive Receipt and Disbursement of Deloitte’s Roadmap: Statement of Cash Flows:

“An entity may enter into arrangements in which cash
is received by or disbursed to another party on behalf of the entity. Although these arrangements may not result in a direct exchange
of cash to or from the entity, the same economic result is achieved if cash is received by or disbursed to the entity directly (i.e.,
constructive receipt and constructive disbursement, respectively). Consequently, it is often difficult to determine whether the entity
should report these cash flows in its statement of cash flows.”

The application of a payment for a vendor retainer, recorded
as a prepaid expense, paid by the Sponsor on behalf of the Company in lieu of a $25,000 cash purchase of the Class B ordinary shares,
in substance, achieves the same economic result as a $25