PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed interim financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Condensed Interim Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Interim%20Financial%20Statements) This section presents Legato Merger Corp. III's unaudited condensed financial statements, including balance sheets, statements of operations, equity changes, cash flows, and comprehensive notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) This section presents the company's condensed balance sheets as of August 31, 2025, and November 30, 2024 | Metric | August 31, 2025 (unaudited) | November 30, 2024 | | :--------------------------------------- | :-------------------------- | :------------------ | | Total assets | $217,966,099 | $211,914,067 | | Investments held in Trust Account | $216,806,288 | $210,061,362 | | Cash | $1,078,756 | $1,625,752 | | Total liabilities | $7,043,750 | $7,043,750 | | Ordinary shares subject to possible redemption | $216,711,289 | $209,966,362 | | Accumulated deficit | $(5,789,508) | $(5,096,613) | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) This section presents the company's condensed statements of operations for the three and nine months ended August 31, 2025, and 2024 | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :--------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | General and administrative costs | $269,064 | $284,948 | $744,740 | $506,106 | | Income from Investments held in Trust Account | $2,260,109 | $2,842,357 | $6,744,927 | $6,255,687 | | Interest income on cash accounts | $8,340 | $16,083 | $51,845 | $36,247 | | Net income | $1,999,385 | $2,573,492 | $6,052,032 | $5,785,828 | | Basic and diluted net income per share, Public Shares | $0.08 | $0.10 | $0.23 | $0.22 | [Condensed Statements of Changes in Shareholders' (Deficit) Equity](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders'%20Deficit%20Equity) This section presents the company's condensed statements of changes in shareholders' deficit equity | Metric | August 31, 2025 (unaudited) | November 30, 2024 | | :--------------------------------------- | :-------------------------- | :------------------ | | Balance at period end (Shareholders' Deficit) | $(5,788,940) | $(5,096,045) | | Net income (9 months ended Aug 31, 2025) | $6,052,032 | N/A | | Ordinary shares - accretion redemption value (9 months ended Aug 31, 2025) | $(6,744,927) | N/A | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section presents the company's condensed statements of cash flows for the nine months ended August 31, 2025, and 2024 | Metric | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(546,996) | $(727,064) | | Cash deposited into trust account | $0 | $(201,250,000) | | Net cash provided by financing activities | $0 | $203,715,244 | | Cash at end of period | $1,078,756 | $1,738,180 | [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed notes explaining the company's organization, accounting policies, and specific financial instrument treatments [Note 1 — Organization and Plan of Business Operations](index=9&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Plan%20of%20Business%20Operations) This note details the company's incorporation, IPO, trust account setup, liquidity, and going concern considerations - Legato Merger Corp. III was incorporated on November 6, 2023, as an exempted company in the Cayman Islands, with the primary objective of acquiring one or more businesses through a Business Combination[21](index=21&type=chunk) - The Company consummated its Initial Public Offering (IPO) on February 8, 2024, raising gross proceeds of **$201,250,000** from **20,125,000 units**, and simultaneously completed a private placement of **555,625 units** for **$5,556,250**[24](index=24&type=chunk)[25](index=25&type=chunk) - Following the IPO, **$201,250,000** was placed in a Trust Account, invested in U.S. government securities or money market funds, to be used for a Business Combination or redemption of public shares[27](index=27&type=chunk) - As of August 31, 2025, the Company had **$1,078,756** in cash outside the Trust Account and working capital of **$1,159,811**[34](index=34&type=chunk) - Management has determined that the liquidity conditions and the mandatory liquidation date (February 8, 2026, or May 8, 2026, if an LOI is executed) raise substantial doubt about the Company's ability to continue as a going concern[37](index=37&type=chunk) [Note 2 — Summary of Significant Accounting Policies](index=12&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's accounting principles, including U.S. GAAP compliance, emerging growth company status, and fair value measurements - The unaudited condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules for interim financial information, with certain disclosures condensed or omitted[38](index=38&type=chunk)[39](index=39&type=chunk) - The Company is an "emerging growth company" and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[41](index=41&type=chunk)[42](index=42&type=chunk) - Investments held in the Trust Account are classified as trading securities and presented at fair value, with gains and losses included in income from investments[46](index=46&type=chunk) - Ordinary shares subject to possible redemption are classified outside of permanent equity as redeemable, with accretion from initial book value to redemption amount recognized[47](index=47&type=chunk) - No income taxation is imposed by the government of the Cayman Islands, and thus income taxes are not reflected in the financial statements[53](index=53&type=chunk) [Note 3 — Initial Public Offering](index=18&type=section&id=Note%203%20%E2%80%94%20Initial%20Public%20Offering) This note details the terms and proceeds of the company's Initial Public Offering on February 8, 2024 - On February 8, 2024, the Company sold **20,125,000 units** in its Initial Public Offering at **$10.00 per unit**[65](index=65&type=chunk) - Each unit consisted of one ordinary share and one-half of one redeemable warrant, with each whole warrant exercisable at **$11.50 per share**[65](index=65&type=chunk) [Note 4 — Private Placement](index=18&type=section&id=Note%204%20%E2%80%94%20Private%20Placement) This note describes the private placement of units conducted simultaneously with the Initial Public Offering - Simultaneously with the IPO, **555,625 Private Units** were purchased by Insiders and underwriters at **$10.00 per unit**, generating **$5,556,250**[66](index=66&type=chunk) - Proceeds from the Private Units were added to the Trust Account[66](index=66&type=chunk) [Note 5 — Related Party Transactions](index=18&type=section&id=Note%205%20%E2%80%94%20Related%20Party%20Transactions) This note discloses transactions with related parties, including founder shares, administrative fees, and loans from the Chief SPAC Officer - The Company issued **5,031,250 Founder Shares** for **$25,000**, with no shares subject to forfeiture after the underwriters' over-allotment option was fully exercised[67](index=67&type=chunk) - An administrative service fee of **$20,000 per month** is paid to Crescendo Advisors II, LLC, an affiliate, for office space and administrative support[69](index=69&type=chunk) Administrative Service Fee

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended May 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-41945 LEGATO MERGER CORP. III (Exact Name of Registrant as Specified in Its Charter) Cayman Islands 98-1761148 (State or other jurisdiction o ...

Financial Performance - For the three months ended February 28, 2025, the company reported a net income of $1,942,553, primarily from interest income of $2,251,160, offset by operating expenses of $308,607[103]. - The company incurred $60,000 in administrative service fees for the three months ended February 28, 2025, compared to $15,172 for the same period in 2024[117]. - Net income per share is calculated by dividing net income applicable to ordinary shareholders by the weighted average number of shares outstanding, with diluted net income per share being the same as basic net income per share for the period[127]. - The company has not included the effect of warrants for 10,340,313 shares in the diluted net income per share calculation as the contingency had not been met[127]. Cash and Working Capital - As of February 28, 2025, the company had $1,377,000 in cash and working capital of $1,555,321[104]. - As of February 28, 2025, there were no outstanding Working Capital Loans[122]. Operations and Revenue Generation - The company has not engaged in any operations or generated revenues to date, with non-operating income derived solely from interest on marketable securities held in the Trust Account[102]. - The company intends to use substantially all funds in the Trust Account to acquire a target business and cover related expenses[106]. Business Combination and Liquidation - The company has until February 8, 2026, to complete its initial Business Combination, or face mandatory liquidation[108]. Shareholder Equity - The company issued 5,031,250 Founder Shares for a total purchase price of $25,000, with no shares subject to forfeiture after the underwriters exercised the over-allotment option[115]. - The company has 20,125,000 ordinary shares subject to possible redemption, classified as temporary equity[125]. - Changes in redemption value are recognized and the carrying value of redeemable ordinary shares is adjusted to equal the redemption value at the end of each reporting period[126]. Investments - The company's investments held in the Trust Account consist solely of U.S. government securities or money market funds investing in U.S. government securities[123]. Accounting Standards - The company adopted ASU 2020-06 on November 6, 2023, which did not impact its financial position or results of operations[112]. Reporting Classification - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[128].

Company Overview - Legato Merger Corp. III is a Cayman Islands exempted company focused on mergers, share exchanges, asset acquisitions, and similar business combinations with various businesses or entities [2] - The company intends to initially target businesses in the infrastructure, engineering and construction, industrial, and renewables industries [2] - The management team includes Gregory Monahan (CEO), Eric S. Rosenfeld (Chief SPAC Officer), Adam Jaffe (CFO), and other directors [2] Financial Disclosure - The company announced an audit opinion from its independent registered public accounting firm, which included an explanatory paragraph regarding its ability to continue as a going concern [1] - This announcement follows the filing of the Annual Report on Form 10-K for the year ended November 30, 2024, which was submitted to the SEC on February 19, 2025 [1] - The announcement does not represent any changes to the company's financial statements or the Annual Report [1]

Financial Performance - For the year ended November 30, 2024, the company reported a net income of $8,215,998, primarily from interest income of $8,886,424, offset by operating costs of $670,426[212]. - The company has not engaged in any operations or generated any revenues to date, with only non-operating income from interest on marketable securities held in the Trust Account[211]. Cash and Working Capital - As of November 30, 2024, the company had $1,625,752 in cash and working capital of $1,852,705[213]. Business Operations and Plans - The company intends to use substantially all funds held in the Trust Account to acquire a target business and cover related expenses[216]. - The company has until February 8, 2026, to consummate an initial business combination, with a potential extension to May 8, 2026, if certain conditions are met[218]. Administrative Expenses - The company incurred and paid $215,172 to Crescendo Advisors II, LLC for administrative services during the year ended November 30, 2024[227]. Capital Structure - The company issued 5,031,250 founder shares for an aggregate purchase price of $25,000, with certain shares subject to forfeiture based on IPO over-allotment[225]. - The company has no long-term debt, capital lease obligations, or long-term liabilities as of November 30, 2024[220]. - The company has not had any off-balance sheet arrangements as of November 30, 2024[219]. - The company accounts for its ordinary shares subject to possible redemption as temporary equity, with 20,125,000 public shares featuring redemption rights[235].

Financial Performance - As of August 31, 2024, the company reported a net income of $2,573,492 for the three months and $5,785,828 for the nine months, primarily from interest income of $2,858,440 and $6,291,934 respectively[98]. - The company incurred administrative service fees of $20,000 per month, totaling $60,000 and $135,172 for the three and nine months ended August 31, 2024 respectively[113]. - Diluted net income per share is the same as basic net income per share for the period due to unmet contingencies[125]. Financial Position - The company had cash of $1,738,180 and working capital of $1,978,209 as of August 31, 2024[100]. - The company has no long-term debt or off-balance sheet arrangements as of August 31, 2024[104][105]. - The company has not raised additional capital and may need to conserve liquidity if unable to do so[103]. Operations - The company has not engaged in any operations or generated revenues to date, with expenses incurred primarily for legal and compliance activities[97]. - The company plans to utilize substantially all funds in the Trust Account for acquiring target businesses and covering related expenses[102]. Shareholder Equity - The company issued 5,031,250 Founder Shares for a total of $25,000, with a potential forfeiture of up to 656,250 shares based on the over-allotment option[111]. - The company accounts for its ordinary shares subject to possible redemption as temporary equity, with 20,125,000 Public Shares classified accordingly[122]. Accounting Policies - The company adopted ASU 2020-06 and ASU 2016-13, which did not materially affect its financial position or results of operations[107][109]. - The Company complies with FASB ASC Topic 260 for earnings per share calculations[125]. - The Company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[126].

Financial Performance - As of May 31, 2024, the company reported a net income of $2,682,228 for the three months and $3,212,335 for the six months, primarily from interest income of $2,868,144 and $3,433,494 respectively[95]. - The company incurred operating costs of $185,916 for the three months and $221,159 for the six months ended May 31, 2024[95]. - Diluted net income per share is the same as basic net income per share for the period due to unmet contingencies[122]. Cash and Working Capital - The company had $1,953,950 in cash and a working capital balance of $2,247,074 as of May 31, 2024[97]. - The company has no long-term debt or significant contractual obligations as of May 31, 2024[102]. - The company has not had any off-balance sheet arrangements as of May 31, 2024[101]. Business Operations - The company has not engaged in any operations or generated revenues to date, with expectations to generate operating revenues only after completing its initial Business Combination[94]. - The company plans to utilize substantially all funds in the Trust Account for acquiring target businesses and related expenses[99]. - The company may require additional capital to pursue potential transactions, with no assurance that new financing will be available on acceptable terms[100]. Shareholder Information - The company issued 5,031,250 Founder Shares for a total purchase price of $25,000, with an agreement that holders will collectively own 20% of the company's shares post-IPO[108]. Accounting Policies - The company adopted ASU 2020-06 and ASU 2016-13, which did not materially affect its financial position or results of operations[104][106]. - The Company has not considered the effect of warrants sold in the Initial Public Offering and Private Placement for the calculation of diluted net income per share[122]. - The Company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[123].

Financial Performance - For the three months ended February 29, 2024, the company reported a net income of $2,039,570, which included interest income of $565,350 and a reversal of expenses amounting to $1,509,375 [97]. - The company incurred expenses of $35,242 during the same period, primarily due to being a public company [97]. Cash and Working Capital - As of February 29, 2024, the company had $2,067,209 in cash and a working capital balance of $2,413,427 [99]. - The company has no long-term debt or significant contractual obligations as of February 29, 2024 [104]. - The company has not recognized any Working Capital Loans as of February 29, 2024, indicating no outstanding loans for operational financing [118]. Business Operations - The company has not engaged in any operations or generated any revenues to date, with expectations to generate operating revenues only after completing its initial Business Combination [96]. - The company intends to use substantially all funds held in the Trust Account to acquire a target business and cover related expenses [101]. Shareholder Information - The company issued 5,031,250 Founder Shares for a total purchase price of $25,000, with a portion subject to forfeiture based on the over-allotment in the Initial Public Offering [110]. Accounting and Regulatory Compliance - The company adopted ASU 2020-06 on November 6, 2023, which did not impact its financial position or results of operations [106]. - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act and is not required to provide additional market risk disclosures [125]. Off-Balance Sheet Arrangements - The company has not had any off-balance sheet arrangements as of February 29, 2024 [103].