Company: MKLY
Filing Date: 2025-07-25
Form Type: S-1/A
Source: 0001213900-25-067524
Chunk: 321

Company: McKinley Acquisition Corp
Filing Date: 2025-07-25
Form: S-1/A
Chunk 321
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 liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. F-10 MCKINLEY ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
APRIL 9, 2025 Note 2 — Significant Accounting Policies (cont.) Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Deferred Offering Costs The Company complies with the requirements of the Financial Accounting Standards Board (“FASB”) ASC 340 -10-S99and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Deferred offering costs consist principally of professional and registration fees that are directly related to the Proposed Public Offering. FASB ASC 470 -20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Proposed Public Offering proceeds from the Units between Class A ordinary shares and rights, using the residual method by allocating Proposed Public Offering proceeds first to assigned value of the rights and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares will be charged to temporary equity and offering costs allocated to the Public and Private Placement Rights will be charged to shareholder’s equity as Public and Private Placement Rights after management’s evaluation will be accounted for under equity treatment. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. As of April 9, 2025, the Company had deferred offering costs of $18,372. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short -termnature. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument