{"url_path":"/sec/cik-0001852889/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-22","source_url":"https://www.sec.gov/Archives/edgar/data/1852889/0001829126-26-006699-index.html","accession_number":"0001829126-26-006699","cik":"0001852889","ticker":null,"issuer_name":"Libity","edgar_url":"https://www.sec.gov/Archives/edgar/data/1852889/0001829126-26-006699-index.html","primary_entity_key":"0001852889","primary_entity_name":"Libity"},"word_count":2181,"has_tables":true,"body_markdown":"**Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations**\n\n \n\nThe following discussion should be read together with our audited financial statements and related notes included elsewhere in this Form 10-K. Forward-looking statements are subject to the risks and uncertainties described under “Item 1A. Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”\n\n \n\n**Overview**\n\n \n\nWe are a Cayman Islands exempted company formed on February 19, 2021 for the purpose of effecting an Initial Business Combination. Significant events during fiscal 2025 include: (i) the April 29, 2025 Nasdaq delisting determination and the subsequent July 14, 2025 formal removal of our securities from Nasdaq; (ii) the May 12, 2025 shareholder approval of an extension of the Combination Period to May 12, 2027 (subsequently extended to May 12, 2028 at the 2026 Extraordinary General Meeting held on May 14, 2026), and the related redemption of 1,449,359 Class A ordinary shares for $17,521,050; (iii) the August 28, 2025 closing of the Sponsor Purchase Agreement, pursuant to which Samara Special Opportunities acquired control of the Company and the Former Sponsor paid or forgave $5,050,793 of Company liabilities; and (iv) the subsequent appointment of Vikas Mittal as Principal Executive Officer and Director and James DeAngelis as Principal Financial Officer and Director. Subsequent to year-end, on April 8, 2026, we entered into the Business Combination Agreement with Blue Finance.\n\n \n\n**Redemption and Supplemental (“Stub”) Payment**\n\n \n\nSubsequent to May 15, 2025, in connection with the redemption of 1,449,359 Class A ordinary shares, management identified that $150,000 of principal, representing three extension contribution payments, had not been included in the trust account balance used to calculate the redemption price paid to redeeming shareholders. This amount remained in the Citibank cash portion of the trust account and had not been invested as of the May 12, 2025 date used to determine the redemption value based on the trust balance reported by Citibank. Citibank subsequently credited the trust account with $1,055 of accrued interest on the uninvested $150,000 through May 12, 2025 (the “Omitted Amount”). As a result, the corrected trust account balance as of May 12, 2025, was approximately $17,986,669, compared to the $17,836,382 previously used to determine the redemption price.\n\n \n\nConsequently, the Company approved a supplemental (“stub”) payment to the shareholders who redeemed their shares on May 15, 2025. Based on the trust account reconciliation from Continental Stock Transfer & Trust Company (“CST”) as of May 13, 2026, the Omitted Amount represented approximately 32.44% of the adjusted net trust balance remaining after the May 15, 2025, redemption payments. Applying the same proportional allocation to trust interest earned from May 12, 2025, through May 13, 2026, approximately $7,702 of additional interest was calculated as allocable to the redeeming shareholders. The aggregate stub distribution amounted to approximately $155,957, or approximately $0.1076 per redeemed share, after accounting for rounding and administrative holdbacks. The stub payment was distributed on May 15, 2026, which resulted in the trust account balance of approximately $181,337, or approximately $12.84 per remaining public share outstanding.\n\n \n\nFollowing the stub payment\nof approximately $155,957 and redemption payment of approximately $152,721, the trust account balance was approximately $181,337, or\napproximately $12.84 per remaining public share outstanding as of May 15, 2026.\n\n \n\n**Results of Operations**\n\n \n\nWe have not generated any operating revenue. For\nthe fiscal year ended December 31, 2025, we had a net loss of $783,216, consisting of operating costs of $777,685 and loss on the\nchange in fair value of warrant liability of $290,250, partially offset by interest earned on investments held in the Trust Account of\n$284,719. For the fiscal year ended December 31, 2024, we had net income of $2,326,207, consisting of operating costs of $1,948,874,\noffset by interest earned on investments held in the Trust Account of $3,984,831 and gain on the change in fair value of warrant liability\nof $290,250. The significant decrease in Trust Account interest income reflects the dramatic reduction in Trust Account funds following\nthe May 2025 redemptions.\n\n \n\n8\n\n \n\n \n\n**Liquidity, Capital Resources and Going Concern**\n\n \n\nAs of December 31, 2025, we had cash of $1\nheld outside the Trust Account, working capital deficit of $176,223, and investments held in the Trust Account of $482,661 (including\nthe amount payable to redeeming shareholders of $155,957). Our working capital position at year end reflects the August 2025 extinguishment\nof substantially all legacy sponsor liabilities in connection with the Sponsor Purchase Agreement and the discharge by the Former Sponsor\nof approximately $1,118,982 of third-party vendor obligations. Our ongoing operations are funded by a Working Capital Loan from the Current\nSponsor of up to $300,000, of which $4,194 was outstanding at December 31, 2025.\n\n \n\nFor the year ended December 31, 2025, net\ncash used in operating activities was $2,216,260. Net loss of $783,216 was affected by the change in fair value of the warrant liability\nof $290,250 and interest income of $284,719. Changes in operating assets and liabilities used $1,438,575 of cash, primarily reflecting\nthe reduction of accounts payable and accrued expenses (which were paid by the Company in connection with the Purchase Agreement) and\npayoff of the Due to Sponsor balance.\n\n \n\nFor the year ended December 31, 2025, net cash provided by investing activities was $17,321,050, primarily driven by the $17,521,050 withdrawn from the Trust Account for payment to redeeming shareholders in May 2025, partially offset by $200,000 of extension contributions deposited into the Trust Account during the year.\n\n \n\nFor the year ended December 31, 2025, net cash used in financing activities was $16,137,387, reflecting $17,521,050 in payments to redeeming shareholders, partially offset by $200,000 in proceeds from the convertible promissory note from the Original Sponsor, $1,046,172 in proceeds from the working capital loan from the Original Sponsor, $133,297 in accounts payable paid by Original Sponsor on behalf of the Company, and $4,194 from the Samara Working Capital Loan.\n\n \n\nWe intend to use substantially all of the funds in the Trust Account to complete our Business Combination. To the extent share capital or debt is used as consideration, the remaining Trust proceeds will be used as working capital to finance the operations of the target business, make other acquisitions, and pursue our growth strategies.\n\n \n\nIn order to finance transaction costs in connection with a Business Combination, our Sponsor, its affiliates, or our officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loan”), evidenced by promissory notes. The Working Capital Loan is non-interest bearing and is repayable upon the earlier of the consummation of a Business Combination or the date the Company determines to cease pursuing a Business Combination. If a Business Combination does not close, the Company may use proceeds held outside the Trust Account — but no Trust proceeds — to repay the Working Capital Loan.\n\n \n\nThe Company has incurred and expects to continue to incur significant costs in pursuit of its Business Combination. The Company is dependent upon Samara Special Opportunities to fund operating expenses and Trust Account extension contributions, and there is no assurance that the Company will successfully consummate a Business Combination prior to May 12, 2028. Management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance date of these financial statements. Management’s plans to address these conditions include consummating the Business Combination prior to May 12, 2028 and obtaining additional financial support from Samara as needed; however, these plans are outside the Company’s control and accordingly substantial doubt has not been alleviated. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.\n\n \n\n**Off-Balance Sheet Arrangements**\n\n \n\nAs of December 31, 2025 and December 31, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.\n\n \n\nWe do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or other long-term liabilities, other than described below:\n\n \n\n9\n\n \n\n \n\n**Registration Rights**\n\n \n\nThe holders of the Founder Shares and Private Placement Warrants (and any Class A ordinary shares issuable upon exercise of the Private Placement Warrants) are entitled to registration rights pursuant to a registration rights agreement. The holders are entitled to make up to three demands, excluding short-form demands, that the Company register such securities, and have certain “piggy-back” registration rights with respect to registration statements filed by the Company. The Company will bear the expenses incurred in connection with the filing of any such registration statements.\n\n \n\n**Working Capital Loan**\n\n \n\nIn order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loan”), evidenced by promissory notes. The Working Capital Loan is non-interest bearing and is repayable upon the earlier of the consummation of a Business Combination or the date the Company determines to cease pursuing a Business Combination. In the event that a Business Combination does not close, the Company may use proceeds held outside the Trust Account — but no proceeds held in the Trust Account — to repay the Working Capital Loan.\n\n \n\n**Critical Accounting Estimates**\n\n \n\nThis management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following as its critical accounting estimate:\n\n \n\n**Warrants**\n\n \n\nThe Company accounts for its Public Warrants and Private Placement Warrants in accordance with ASC 815, *Derivatives and Hedging*. The warrants do not meet the criteria for equity classification under ASC 815-40 and are therefore recorded as liabilities at fair value, with subsequent changes in fair value recognized in the statements of operations.\n\n \n\nPublic Warrants are measured\nusing quoted market prices when available. Depending on trading volume and market activity, the Public Warrants are classified as Level\n1 or Level 2 within the fair value hierarchy. When observable market prices are not considered representative of an active market, alternative\nobservable inputs may be used to estimate fair value. The fair value of the Private Placement Warrants has subsequently been measured\nby reference to the trading price of the Public Warrants, which is considered to be a Level 2 fair value measurement.\n\n \n\n10\n\n \n\n \n\n**Recently Issued and Adopted Accounting Standards**\n\n \n\nIn December 2023, the FASB issued ASU No. 2023-09,\nIncome Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional quantitative and qualitative income\ntax disclosures to enable financial statements users to better assess how an entity’s operations and related tax risks and tax planning\nand operational opportunities affect its tax rate and prospects for future cash flows. For public business entities, ASU 2023-09 is effective\nfor annual periods beginning after December 15, 2024, which will be fiscal 2025. The Company adopted ASU 2023-09 during the fiscal\nyear ended December 31, 2025 on a prospective basis. The adoption did not have a material impact on the Company’s consolidated financial\nposition, results of operations, or cash flows and primarily resulted in enhanced income tax-related disclosures.\n\n \n\nManagement does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.\n\n \n\n**JOBS Act**\n\n \n\nThe Company is an “emerging growth company” within the meaning of the JOBS Act and has elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As a result, the Company will adopt new or revised accounting standards on the effective dates applicable to private companies, and the Company’s financial statements may not be comparable to those of companies that comply with public company effective dates. The Company also intends to rely on other exemptions available to emerging growth companies, including exemptions from the requirement to provide an auditor’s attestation report on internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act and from certain executive compensation disclosure requirements. The Company will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of its initial public offering, (ii) the date it qualifies as a “large accelerated filer,” (iii) the date its annual gross revenues exceed $1.235 billion, or (iv) the date it has issued more than $1.0 billion in non-convertible debt over the prior three-year period."}