Company: WLACW
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021938
Chunk: 16

Company: Willow Lane Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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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.

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” (“ASC 740”),
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
September 30, 2025 and December 31, 2024, 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, accruals or material deviation
from its position.

There
is currently no taxation imposed on income by the government of the Cayman Islands. In accordance with Cayman Islands federal income
tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the accompanying unaudited
condensed financial statements. Management does not expect that the total amount of unrecognized tax benefits will materially change
over the next twelve months.

Warrant
Instruments

The
Company accounted for the 6,325,000 Public Warrants and the 5,145,722 Private Placement Warrants issued in connection with the Initial
Public Offering and the Private Placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”
(“ASC 815”). Accordingly, the Company evaluated and classified the Warrant instruments under equity treatment at their assigned
values.

    11

WILLOW
LANE ACQUISITION CORP.

NOTES
TO CONDENSED FIN