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Jumbo was seen putting them inside a dumpster at the Big Top Burger restaurant. Later, a Big Top Burger employee was curious about the strange noises coming from inside the dumpster, when he investigated he was dragged in, screaming, presumably to be killed by the Offspring.
When Debbie stepped out of her shower, the Killer Klown Offspring, (grown from popcorn clinging to her clothes after she was shot with a Popcorn Bazooka), emerged from the laundry basket, the medicine cabinet, and even the toilet, and violently attacked her. Debbie fought off the laundry basket and medicine cabinet Offspring with a spray can, then used her shower head to stop the Offspring in the toilet, sending it spinning from the high pressure. She then used a towel to cover the laundry basket Offspring before running from her bathroom.
The Offsprings' fates remain unknown: they could remain in the places they were hatched, growing larger, perhaps even becoming full-grown Klowns. It is most likely that the police or military captured or killed those in Debbie's bathroom, though it is unknown if they discovered the ones hidden in the dumpster.
The source of the popcorn larvae is unknown, but it interesting to note that when Slim used a shadow puppet to attack a group of humans, they were transformed into popcorn in his hand, then placed in a bag filled with popcorn. Perhaps this is one manner in which the Klowns reproduce, by turning other creatures into larval Klowns.
The presence of female Klowns only deepens the mystery, as their existence would seem to imply more traditional reproduction methods. The Offspring can, apparently, only develop in the dark, and the popcorn was observed moving (crawling) under it's own power while Debbie was showering. They grow very quickly, going from popcorn stage to Jack-in-The-Box creatures in the time it took Debbie to shower and dress.
Both Debbie and Mike were covered with popcorn from the Popcorn Bazooka, giving rise to the possibility of other Offspring. It is also likely that the Klowns left even more Offspring hidden in other locations around the town and surrounding forest.