{"url_path":"/sec/cik-0001852889/10-k/2026/item-9a","section_key":"item-9a","section_title":"Item 9A Controls and Procedures**","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":541,"has_tables":true,"body_markdown":"**Item 9A. Controls and Procedures**\n\n \n\n**Evaluation of Disclosure Controls and Procedures**\n\n \n\nUnder the supervision and\nwith the participation of our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness\nof our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of\nDecember 31, 2025. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure\ncontrols and procedures were not effective as of December 31, 2025, due to a previously identified material weakness in our internal\ncontrol over financial reporting relating to an ineffective review control over the accrual of expenses, which resulted in a\nmaterial adjustment to accrued expenses in connection with our Form 8-K filed on May 26, 2022 and an over-accrual of legal fees\nduring the year ended December 31, 2023. Additionally, the Company did not maintain a control requiring independent\nreconciliation of the total trust account balance to ensure accuracy of the distribution to redeeming shareholders, which resulted\nin an underpayment.in the second quarter of the year ending December 31, 2025. Finally, the Company identified a material weakness during the year ended December 31, 2025 due to lack of controls over complex financial\ninstruments.\n\n \n\n11\n\n \n\n \n\nFollowing the change in\nsponsorship on August 28, 2025, our new management team is in the process of designing and implementing additional review\ncontrols intended to remediate the material weaknesses, including the implementation of a quarterly close checklist requiring sign-off\nby both the chief financial officer and an independent reviewer. In addition, management has implemented an enhanced reconciliation\nprocedure for all future redemption events, requiring: (i) a comprehensive pre-payment reconciliation of all trust account\nsub-components (money market, cash, and any other positions) to a single total trust balance; (ii) comparison of that total to the\ntrust value used in the per-share calculation; and (iii) CFO sign-off on the reconciliation prior to any redemption disbursement.\nAdditionally, we plan to implement a more thorough second level review process over the accounting for complex financial\ninstruments. The material weaknesses will not be considered remediated until the applicable controls have operated for a sufficient\nperiod of time and management has concluded, through testing, that the controls are operating effectively. As of December 31, 2025,\nthe material weaknesses have not been remediated.\n\n \n\n**Management’s Report on Internal Control Over Financial Reporting**\n\n \n\nOur management is responsible for establishing and maintaining adequate internal control over financial reporting. Based on an assessment performed in accordance with the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), management has concluded that our internal control over financial reporting was not effective as of December 31, 2025 due to the material weaknesses described above. We continue our remediation efforts.\n\n \n\nThis Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company.\n\n \n\n**Changes in Internal Control Over Financial Reporting**\n\n \n\nDuring the quarter ended December 31, 2025, there were changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting, as described in “Evaluation of Internal Control Over Financial Reporting.”"}