Capitalworks Emerging Markets Acquisition p(CMCA) - 2025 Q4 - Annual Report

Financial Performance - For the year ended March 31, 2025, the company reported a net income of $1,637,099, primarily from interest income of $541,412 and a change in fair value of the derivative warrant liability of $1,116,244 [267]. - For the year ended March 31, 2024, the company had a net income of $4,686,986, with interest income from cash and marketable securities amounting to $3,400,607 [268]. - The company incurred net cash used in operating activities of $358,373 for the year ended March 31, 2025, primarily due to non-cash adjustments related to the derivative warrant liability [272]. Working Capital and Financing - As of March 31, 2025, the company had a working capital deficit of $1.99 million and only $1,611 in cash [270]. - The company executed a Working Capital Loan Agreement on February 1, 2023, with a maximum loan amount of $1,500,000, of which $1,471,195 had been borrowed as of March 31, 2025 [271]. - The company can raise additional capital through Working Capital Loans or loans from third parties, but failure to secure financing may require operational cutbacks [277]. - There is substantial doubt about the company's ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements [278]. Shareholder Activities - During the 2023 Extraordinary Meeting, shareholders redeemed 18,751,603 Class A Ordinary Shares for approximately $197.19 million at a redemption price of $10.51 per share [256]. - On February 28, 2025, shareholders approved a further extension of the Business Combination deadline to March 3, 2026, with 1,066,745 Class A Ordinary Shares redeemed at approximately $10.91 per share, totaling about $11.64 million [261]. Debt and Obligations - The company had no long-term debt obligations or off-balance sheet arrangements as of March 31, 2025 [269]. - The Lexasure Business Combination Agreement was terminated on March 22, 2024, resulting in the cancellation of a $600,000 loan with no amounts owed by the company [252]. Cash Management - As of March 31, 2025, the company holds $1,611 in cash outside the Trust Account, which may not be sufficient to operate for at least 12 months if an Initial Business Combination is not completed [276]. - The company deposited $50,000 per month into the Trust account, totaling up to $450,000, to facilitate the completion of an Initial Business Combination [256]. IPO and Underwriting - The underwriters of the IPO exercised their over-allotment option, resulting in the sale of an additional 3,000,000 Units at $10.00 per Unit, generating gross proceeds of $30,000,000 [280]. - The underwriters received a cash underwriting discount of $0.20 per Unit, totaling $4,600,000, and are entitled to a deferred fee of $0.35 per Unit, amounting to $8,050,000, payable upon completion of an Initial Business Combination [281]. Advisory Fees - The Capital Markets Advisory Fee for the First Strategic Advisor is set at $1,500,000 plus an Incremental Advisory Fee based on Trust Proceeds, which could range from $250,000 to $2,500,000 depending on the amount [282]. Operations and Risk - The company has not engaged in any operations or generated any revenues to date, and the net proceeds from the Public Offering have not been invested, indicating no material exposure to interest rate risk [293]. - The company has not engaged in any hedging activities since inception and does not expect to do so in the future [294].