Item 1.01. Entry into a Material Definitive
Agreement.
On
May 15, 2023, Capitalworks Emerging Markets Acquisition Corp (the “Company” or “we”) and the Company’s
sponsor, CEMAC Sponsor LP (the “Sponsor”), entered into non-redemption agreements (the “Non-Redemption Agreements”)
with certain unaffiliated third parties (each, a “Holder,” and collectively, the “Holders”) in exchange for the
Holder or Holders agreeing either not to request redemption, or to reverse any previously submitted redemption demand with respect to
an aggregate of 400,000 Class A ordinary shares, par value $0.0001 per share (the “Class A ordinary shares”), of
the Company sold in its initial public offering in connection with the extraordinary general meeting called by the Company (the “Meeting”)
to, among other things, approve an amendment to the Company’s amended and restated memorandum and articles of association (the “Charter”)
to (i) extend the date by which the Company must consummate an initial business combination from June 3, 2023 to March 3,
2024 (the “Extension”) and (ii) permit the Company’s board of directors, in its sole discretion, to elect to wind
up the Company’s operations on a date earlier than March 3, 2024 (including prior to June 3, 2023) (together, the “Charter
Amendments”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing
of an initial business combination, (i) the Sponsor (or its designees) will surrender and forfeit to the Company for no consideration
an aggregate of 100,000 shares of the Company’s Class B ordinary shares, par value $0.0001 per share, held by the Sponsor (the
“Forfeited Shares”) and (ii) the Company shall issue to the Holders a number of Class A ordinary shares equal to
the Forfeited Shares.
The
Company estimates that as of May 15, 2023, the pro rata portion of the funds available in the Company’s trust account (the
“Trust Account”) for the redemption of public shares will be approximately $10.49249855 per share (which may be adjusted prior
to redemptions for tax withholdings, if any, and accrued interest).
If
the Charter Amendments are approved at the Meeting, the Company will deposit $50,000 per month, or portion thereof, that is needed to
complete an initial business combination, for up to an aggregate of $450,000.
As
previously disclosed, the Company has entered into a Business Combination Agreement (the “Business Combination Agreement”)
by and among the Company, Lexasure Financial Group Limited, a Cayman Islands exempted company limited by shares (“Lexasure”)
and other parties thereto for a proposed business combination (the “Lexasure Business Combination”). Pursuant to a side letter
that the Company entered into with Lexasure on April 19, 2023, Lexasure agreed to loan the Company reasonable amounts that the Company
is obligated to deposit into the Trust Account in connection with the Extension and related expenses such as the filing of an additional
Quarterly Report on Form 10-Q, up to a maximum of $600,000 (the “Loan”). The Loan is unsecured and interest free. In
connection with the Loan, at the closing of the Lexasure Business Combination (or in the event that the Business Combination Agreement
is terminated in accordance with its terms and we consummate another transaction constituting a business combination, upon the consummation
of such business combination (an “Alternative Closing”)), the Sponsor has agreed to transfer a number of Class B ordinary
shares to Lexasure or its designee equal to (x) the amount of the Loan that is used by us and not returned to Lexasure at or prior
to the closing of the Lexasure Business Combination or Alternative Closing (less any amounts applied pursuant to the termination fee provision
of the Business Combination Agreement), divided by (y) $10.00 per share. We will repay the Loan amount directly to Lexasure at the
closing of the Lexasure Business Combination, and in the event of the termination of the Business Combination Agreement for any reason,
the Loan shall be cancelled and no amounts shall be owed by us, provided that any amounts advanced by Lexasure pursuant to the side letter
shall reduce the amounts payable by Lexasure pursuant to the termination fee provision of the Business Combination Agreement.
The
Non-Redemption Agreements are not expected to increase the likelihood that the Charter Amendments are approved by Company’s shareholders
but are expected to increase the amount of funds that remain in the Trust Account following the Meeting. The Company may enter into additional
Non-Redemption Agreements.
The
foregoing summary of the Non-Redemption Agreements does not purport to be complete and is qualified in its entirety by reference to the
form of Non-Redemption Agreement filed herein as Exhibit 10.1 and incorporated herein by reference.
Shareholders
may withdraw redemptions at any time until May 23, 2023 with respect to the Extension. Shareholders may request to withdraw their
redemption by contacting the Company’s transfer agent, Continental Stock Transfer & Trust Company, at One State Street,
30th Floor, New York, New York 10004, Attn: Mark Zimkind (e-mail:mzimkind@continentalstock.com).
Forward-Looking Statements
This
Current Report on Form 8-K (the “Report”) includes forward-looking statements that involve risks and uncertainties. Forward-looking
statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which
could cause actual results to differ from the forward-looking statements. These forward-looking statements and factors that may cause
such differences include, without limitation, uncertainties relating to the Company’s shareholder approval of the Charter Amendments,
its expectation that the Non-Redemption Agreements will increase the amount remaining in the Trust Account following the Meeting, its
inability complete an initial business combination within the required time period and other risks and uncertainties indicated from time
to time in filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on
Form 10-K for the fiscal year ended March 31, 2022 under the heading “Risk Factors” and other documents the Company
has filed, or to be filed, with the SEC. Readers are cautioned not to place undue reliance upon any forward-looking statements, which
speak only as of the date made. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions
to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any
change in events, conditions or circumstances on which any statement is based.
Participants in the
Solicitation
The
Company and its directors, executive officers, other members of management and employees, under SEC rules, may be deemed to be participants
in the solicitation of proxies from the shareholders of the Company in favor of the approval of the Charter Amendments. Investors and
shareholders may obtain more detailed information regarding the names, affiliations and interests of the Company’s directors and
officers in the definitive proxy statement dated May 3, 2023, as supplemented to date (the “Extension Proxy Statement”),
which may be obtained free of charge from the sources indicated below.
No Offer or Solicitation
This
Report shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Charter
Amendments. This communication shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.
Additional Information
and Where to Find It
The
Company urges investors, shareholders and other interested persons to read the Extension Proxy Statement as well as other documents filed
by the Company with the SEC, because these documents will contain important information about the Company and the Charter Amendments.
Shareholders may obtain copies of the Extension Proxy Statement, without charge, at the SEC’s website at www.sec.gov or by directing
a request to the Company’s proxy solicitor: Advantage Proxy, Inc., PO Box 10904, Yakima, WA 98909, Attn: Karen Smith, e-mail:
ksmith@advantageproxy.com.