Item 4.02. Non-Reliance on Previously Issued Financial Statements
or a Related Audit Report or Completed Interim Review.
In connection with the preparation
of the financial statements of Capitalworks Emerging Markets Acquisition Corp (the “Company”) as of March 31, 2022, the Company’s
management, in consultation with its advisors, re-evaluated the Company’s accounting for complex financial instruments, specifically
forward purchase agreement liabilities. After further review of the Company’s accounting for its forward purchase agreement, it
was determined that an adjustment was required to the Company’s financial statements as of December 3, 2021, and as of and for the
quarter ended December 31, 2021.
Therefore, on July 13, 2022,
the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded
that the Company’s previously issued (i) audited balance sheet included in the Company’s Current Report on Form 8-K as of
December 3, 2021, filed with the SEC on December 9, 2021 and (ii) unaudited interim financial statements included in the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2021, filed with the SEC on February 14, 2022 (collectively,
the “Affected Periods”), should be restated to treat the forward purchase agreement as a liability and should no longer be
relied upon. As such, the Company will restate its financial statements for the Affected Periods in the Company’s Annual Report
on Form 10-K for the annual period ended March 31, 2022, to be filed with the SEC (the “2022 Form 10-K”), as described therein.
The Company does not expect
any of the above changes will have any impact on its cash position and cash held in the trust account established in connection with the
Company’s initial public offering (the “Trust Account”).
The Company’s management
has concluded that in light of the classification error described above, a material weakness exists in the Company’s internal control
over financial reporting and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation
plan with respect to such material weakness will be described in more detail in the 2022 Form 10-K.
The Company’s management
and the Audit Committee have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with Marcum
LLP, the Company’s independent registered public accounting firm.
Forward-Looking Statements
This Current Report on Form
8-K may include, and oral statements made from time to time by representatives of the Company may include, “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact included in this Current Report on Form 8-K are forward-looking statements.
When used in this Current Report on Form 8-K, words such as “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “will”, “would” and
similar expressions, as they relate to the Company or its management team, identify forward-looking statements. Such forward-looking statements
may include, but are not limited to, statements regarding the impact of the Company’s restatement of certain historical financial
statements, the Company’s cash position, and cash held in the Trust Account and any proposed remediation measures with respect to
identified material weaknesses. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by,
and information currently available to, the Company’s management on the date of this Current Report on Form 8-K. Actual results
could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in the Company’s
filings with the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf
are qualified in their entirety by this paragraph. Forward-looking statements are subject to numerous conditions, many of which are beyond
the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement for the
Company’s initial public offering filed with the SEC. The Company undertakes no obligation to update these statements for revisions
or changes after the date of this release, except as required by law.