MCAG faces cash crunch, heavy liabilities and going-concern risk despite $1.18M trust

Mountain Crest Acquisition Corp. V (NASDAQ: MCAG)

Quick read: MCAG is a blank‑check/SPAC that has not commenced operating activities - it holds the IPO proceeds in a trust account while pursuing a business combination (BCA with CUBEBIO). The company is running low on cash outside the trust, carries significant liabilities and records a going‑concern uncertainty with a mandatory liquidation deadline (Nov 16, 2025 unless extended).

Key facts & numbers (as of June 30, 2025)
* Cash (outside trust): $25,321
* Investments held in Trust Account: $1,181,623 (includes ~$114,460 of interest income)
* Total assets: $1,269,864
* Total liabilities: $3,838,304
* Promissory note - related party (current): $920,000
* Deferred underwriting fee payable (long‑term): $2,070,000
* Common stock subject to possible redemption (temporary equity): $1,166,352 (101,104 shares at $11.54)
* Accumulated deficit: $(5,957,702); Stockholders' deficit: $(3,734,792)

Income statement / cash flow highlights (periods ended June 30)
* Net loss - three months: $(110,574); six months: $(291,952)
* General & administrative expense - three months: $120,471; six months: $311,696
* Interest earned on Trust - three months: $12,192; six months: $24,311
* Provision for income taxes - three months: $2,295; six months: $4,567
* Net cash used in operating activities (six months): $(321,337) - cash fell from $116,658 to $25,321

Positive points
* Trust account intact: $1.18M in money‑market/mutual funds preserves value for redemptions or a transaction.
* Ongoing sponsor support: multiple unsecured sponsor promissory notes in place and the sponsor has provided or committed working capital loans (some notes convertible or forgiven under certain conditions).
* Active M&A process: a Business Combination Agreement with CUBEBIO is in place - that is the intended path to create operating revenue post‑close.

Negative / risk points (what's happening inside)
* Very limited operating liquidity: only $25k outside the trust - insufficient to fund operations or close a deal without sponsor funding.
* Heavy liabilities vs. assets: total liabilities ($3.84M) exceed total assets; stockholders' deficit $(3.73M).
* Rising accretions/taxes & excise exposure: excise tax payable recorded $212,457 and interest/penalties recognized ($18,166 through June 30, 2025).
* Operating losses and cash burn: six‑month net loss $(292k) and operating cash burn $(321k) - G&A is the main driver.
* Governance / controls issues: management disclosed material weaknesses in internal controls and prior restatements; disclosure controls were judged not effective as of June 30, 2025.
* Listing / market status: the company was delisted from Nasdaq and is trading on the OTC Pink market (Form 25‑NSE filed April 11, 2025) - liquidity and investor access are constrained.
* Going concern: management states substantial doubt about ability to continue unless a Business Combination is completed by Nov 16, 2025 (or further extensions funded).

What to watch next (catalysts & immediate risks)
* Closing of the Business Combination with CUBEBIO or other target - this is the primary value catalyst.
* Sponsor funding draws and promissory note availability (April 2025 note had $380k available) - these determine near‑term survival.
* Any additional deposit(s) to extend the Combination Period (each extension requires deposits into the trust) - failure leads to mandatory liquidation.
* Updates on excise tax filings/payments and any additional penalties that reduce cash available for a deal.
* Remediation of internal control weaknesses and any further SEC/Nasdaq regulatory developments.

Bottom line: MCAG still holds its trust assets (~$1.18M) and has a signed BCA, but it is cash‑starved outside the trust, carries significant current liabilities (including a $920k related‑party note) and faces substantial going‑concern risk with an imminent liquidation deadline if it cannot close a deal or secure sponsor funding. Investors should treat MCAG as a high‑risk SPAC play where near‑term sponsor support and a completed business combination are binary outcomes.