Company: MKLY
Filing Date: 2025-06-30
Form Type: S-1
Source: 0001213900-25-059789
Chunk: 33

Company: McKinley Acquisition Corp
Filing Date: 2025-06-30
Form: S-1
Chunk 33
---
 our initial business combination would be disproportionately dilutive to our Class A ordinary shares. The low price that our sponsor, executive officers and directors (directly or indirectly) paid for the founder shares creates an incentive whereby our officers and directors could potentially make a substantial profit even if we select an acquisition target that subsequently declines in value and is unprofitable for public shareholders. If we are unable to complete our initial business combination within the completion window, or by such earlier liquidation date as our board of directors may approve, the founder shares, private placement shares and private placement rights will be worthless, except to the extent they receive liquidating distributions from assets outside the trust account. Additionally, we will repay up to $125,000 in loans made to us by our sponsor to cover offering -relatedand organizational expenses. We will repay any loans which may be made by our sponsor or an affiliate of our sponsor or certain of our directors and officers to finance transaction costs in connection with an intended initial business combination; up to $1,150,000 of such loans may be convertible into private placement units at a price of $10.00 per unit at the option of the lender. The conversion of the working capital loans into units may result in a material dilution to the equity interest of investors in this offering. For example, if $1,150,000 of loans were made and converted into units, it would result in the issuance of an additional 126,500 ordinary shares at the closing of the business combination (115,000 ordinary shares underlying the units and 11,500 ordinary shares issuable upon conversion of the rights underlying the units). Because our sponsor acquired the founder shares at a nominal price (an aggregate of $25,000, or approximately $0.004 per founder share), our public shareholders will incur immediate and substantial dilution upon the closing of this offering. See the section titled “ Risk Factors — Risks Relating to our Securities — The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public shares upon

15 Table of Contents

the consummation of our initial business combination, and our sponsor is likely to make a substantial profit on its investment in us in the event we consummate an initial business combination, even if the business combination causes the trading price of our ordinary shares to materially decline.” Pursuant to a letter agreement to be entered with us, each of our sponsor, directors and officers has agreed to restrictions on its ability to transfer, assign, or sell