WLII

Willow Lane Acquisition Corp. II - 10-Q Summary (Q1 2026)

Business Context and Reporting Period

Willow Lane Acquisition Corp. II (WLII) is a Cayman Islands exempted company and a Special Purpose Acquisition Company (SPAC) incorporated on August 1, 2025. The company is an emerging growth company and a shell company with no operating revenues. Its sole purpose is to effect a business combination with one or more target businesses. The reporting period covers the three months ended March 31, 2026. The company consummated its Initial Public Offering (IPO) on February 17, 2026, and has until February 17, 2028, to complete an initial business combination.

Key Financial Metrics

Material Changes vs. Prior Period

The quarter ended March 31, 2026, represents a material transformation from the prior period (December 31, 2025) due to the consummation of the IPO on February 17, 2026.

• Assets: Total assets increased from $96,652 to $145,789,886, driven by the placement of $143,750,000 into the Trust Account.
• Equity: The company moved from a shareholders' deficit of $(18,932) to $(3,467,014), primarily due to the accretion of Class A Ordinary Shares to their redemption value ($144,118,829) classified as temporary equity.
• Operations: The company generated net income of $75,360, compared to no operations in the prior period. This income was derived from interest earned on the Trust Account ($368,828) offset by general and administrative expenses ($160,488) and share-based compensation ($132,980).
• Cash Flow: Net cash provided by financing activities was $145,547,263, reflecting proceeds from the sale of Public and Private Placement Units.

Outlook, Risks, and Management Commentary

Outlook and Liquidity: Management believes the company has sufficient funds to finance working capital needs for at least one year from the date of the report. The company holds $1,447,573 in cash outside the Trust Account to fund operations and search for a target. The Trust Account holds $144,118,828, which is intended for the business combination or redemption of public shares.

Risks and Contingencies:

• Geopolitical Instability: The filing highlights risks associated with conflicts in Ukraine, the Middle East (specifically involving the U.S., Israel, and Iran), and potential supply chain disruptions or market volatility.
• Combination Deadline: The company must complete a business combination by February 17, 2028. Failure to do so will result in liquidation and redemption of public shares.
• Delisting Risk: If the company does not meet the Nasdaq 36-Month Requirement, its securities may be suspended and delisted.
• Deferred Fees: A deferred underwriting fee of $5,031,250 is payable only upon the completion of a business combination.

Unusual Items: The company recorded $132,980 in share-based compensation expense related to the transfer of Founder Shares to directors and officers. Additionally, the over-allotment option was fully exercised, removing 686,068 Class B shares from forfeiture status.

Investor Verification Checklist

• Trust Account Status: Verify the current balance of the Trust Account ($144,118,828) and confirm the interest rate environment affecting future accruals.
• Combination Timeline: Confirm the strict deadline of February 17, 2028, for completing a business combination to avoid mandatory liquidation.
• Deferred Underwriting Fee: Note the $5,031,250 liability that will reduce net proceeds available to the combined entity upon closing a deal.
• Geopolitical Exposure: Assess the potential impact of ongoing conflicts in the Middle East and Ukraine on the company's ability to identify and close a target.
• Share Structure: Verify the voting rights and conversion ratios between Class A (Public) and Class B (Founder) shares, noting the 26.8% ownership target for founders post-conversion.