Oak Woods Acquisition Corporation Reports Q1 2025 Financial Results with Net Loss of $47,787

Oak Woods Acquisition Corporation has reported its financial results for the first quarter of 2025, revealing a net loss of $47,787 compared to a net income of $143,504 in the same period of the previous year. The company generated $503,108 in total other income, primarily from interest earned on investments held in its Trust Account, which amounted to $498,071. This represents a significant decrease from the prior year's interest income of $785,928, reflecting a decline in the average balance of investments held. Operating expenses for the quarter were $550,895, down from $648,672 in the previous year, indicating a reduction in formation and operating costs.

In terms of balance sheet performance, Oak Woods reported total assets of $41.6 million as of March 31, 2025, a decrease from $48.4 million at the end of 2024. The decline in total assets was primarily driven by a reduction in cash and investments held in the Trust Account, which fell from $48.1 million to $41.6 million. The company’s liabilities also increased, with total current liabilities rising to $5.5 million from $4.4 million, largely due to an increase in promissory notes and accrued expenses.

Strategically, Oak Woods is in the process of completing a merger with Huajin (China) Holdings Limited, which was formalized through a Merger Agreement on August 11, 2023. The company has made several extensions to the timeline for completing this business combination, with the latest extension allowing until September 28, 2025. As part of this process, Huajin has deposited $330,969 with Oak Woods, which will be used to fund expenses related to the merger. The company has also engaged Asian Legend International Investment Holding Limited as a financial advisor for the transaction.

Operationally, Oak Woods has not yet commenced any revenue-generating activities, as it is primarily focused on the merger process. The company has a working capital deficit of $5.5 million as of March 31, 2025, and has incurred significant costs related to remaining a publicly traded entity. To address liquidity needs, the company may rely on loans from its sponsor or affiliates, which could be converted into equity upon the completion of the merger. The company has indicated that it may need to raise additional capital to meet its operational and transaction costs.

Looking ahead, Oak Woods remains focused on finalizing the merger with Huajin, which is subject to various conditions. The company has expressed uncertainty regarding its ability to complete the business combination within the specified timeframe, which raises concerns about its ability to continue as a going concern. Management has noted that if the merger is not completed, the company may need to liquidate its assets and dissolve. The financial statements do not include adjustments that might result from this uncertainty, highlighting the risks associated with the ongoing merger process.