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 formed to effect a business combination with one or more target businesses. This Form 10-Q covers the quarterly period ended June 30, 2026, and the six months ended on that date. 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
| Metric | Value (as of/for period ended June 30, 2026) |
|---|---|
| Trust Account Balance | $145,586,328 (Marketable securities) |
| Cash (Outside Trust) | $1,315,359 |
| Working Capital | $1,331,545 |
| Net Income (3 Months) | $1,261,731 |
| Net Income (6 Months) | $1,337,091 |
| General & Administrative Expenses (6 Months) | $346,276 |
| Interest Income (6 Months) | $1,836,328 |
| Deferred Underwriting Fee | $5,031,250 (Payable upon business combination) |
| Outstanding Public Shares | 14,375,000 Class A Ordinary Shares |
| Outstanding Founder Shares | 5,259,857 Class B Ordinary Shares |
Material Changes vs. Prior Period
The reporting period reflects the company's transition from pre-IPO formation to post-IPO operations following the closing of the IPO on February 17, 2026.
- Assets: Total assets increased from $96,652 as of December 31, 2025, to $147,075,889 as of June 30, 2026. This increase is primarily due to the placement of $143,750,000 in the Trust Account and the receipt of cash proceeds from the IPO and Private Placement.
- Liabilities: Total liabilities increased from $115,584 to $5,142,363, driven by the recognition of the $5,031,250 deferred underwriting fee and accrued offering costs.
- Equity: The company recorded a significant accretion of Class A Ordinary Shares to their redemption value, resulting in a Shareholders' Deficit of $(3,652,802) as of June 30, 2026, compared to a deficit of $(18,932) at year-end 2025.
- Operations: The company generated no operating revenue. Net income for the six months ended June 30, 2026, was driven entirely by interest earned on Trust Account investments ($1,836,328), offset by general and administrative expenses and share-based compensation.
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 issuance. The company intends to use substantially all funds in the Trust Account to complete a business combination. If a combination is not completed by February 17, 2028, the company will redeem public shares and liquidate.
Key Risks and Contingencies:
- Business Combination Risk: There is no assurance the company will successfully identify or complete a business combination. Failure to do so within the Combination Period will result in liquidation.
- Investment Company Act Risk: To mitigate the risk of being deemed an investment company, the company may liquidate Trust Account investments into cash or demand deposits.
- Market and Geopolitical Risks: The ability to complete a combination may be adversely affected by economic downturns, inflation, interest rate fluctuations, and geopolitical instability (e.g., conflicts in Ukraine and the Middle East).
- Warrant Redemption: Public Warrants may be redeemed if the Class A share price exceeds $18.00 per share for 20 trading days within a 30-day period.
Unusual Items: The company incurred share-based compensation expense of $152,961 for the six months ended June 30, 2026, related to the transfer of Founder Shares to directors and officers.
Investor Verification Checklist
- Trust Account Yield: Verify the current interest rate environment and its impact on the Trust Account balance, which currently stands at approximately $10.13 per share.
- Combination Deadline: Confirm the February 17, 2028, deadline for consummating a business combination and any potential extension mechanisms requiring shareholder approval.
- Deferred Fees: Note the $5,031,250 deferred underwriting fee payable only upon the successful completion of a business combination.
- Share Structure: Review the conversion terms of Class B Founder Shares (5,259,857 shares) into Class A shares, which are subject to anti-dilution adjustments to maintain a 26.8% ownership stake post-IPO.
- Related Party Transactions: Monitor the $25,000 monthly administrative fee paid to a Sponsor affiliate and the potential for Working Capital Loans from the Sponsor or affiliates.