Company: WLACW
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010349
Chunk: 11

Company: Willow Lane Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 registration fees that are related to the Initial Public Offering.
FASB ASC Topic 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 Initial Public Offering proceeds
from the Units between Public Shares and Warrants, using the residual method by allocating Initial Public Offering proceeds first to
assigned value of the Warrants and then to the Public Shares. Offering costs allocated to the Public Shares were charged to temporary
equity and offering costs allocated to the Public and Private Placement Warrants were charged to shareholders’ deficit as Public
Warrants and Private Placement Warrants after Management’s evaluation were accounted for under equity treatment.

Concentration
of Credit Risk

Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access
to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

    7

WILLOW
LANE ACQUISITION CORP.

NOTES
TO CONDENSED FINANCIAL STATEMENTS

MARCH
31, 2025

(Unaudited)

Fair
Value of Financial Instruments

The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance sheets,
primarily due to its short-term nature.

Income
Taxes

The
Company complies with the accounting and reporting requirements of FASB ASC Topic 740, “Income Taxes,” which prescribes a
recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination
by taxing authorities. Management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2025, there were
no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under
review that could result in significant payments,