Legato Merger Corp. III(LEGT) - 2025 Q3 - Quarterly Report

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 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 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 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 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 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 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 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] - 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][25] - 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] - 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] - 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] Note 2 — Summary of Significant Accounting Policies 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][39] - 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][42] - 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] - 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] - No income taxation is imposed by the government of the Cayman Islands, and thus income taxes are not reflected in the financial statements[53] Note 3 — Initial Public Offering 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] - 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] Note 4 — Private Placement 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] - Proceeds from the Private Units were added to the Trust Account[66] Note 5 — Related Party Transactions 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] - 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] Administrative Service Fee