Legato Merger Corp. III Liquidation Value

Legato Merger Corp. III (LEGT) is a Cayman Islands-incorporated blank check SPAC that completed its IPO on February 8, 2024, raising $201.25M gross proceeds. As of February 28, 2026, the entity has not commenced operations and faces a hard mandatory liquidation deadline of May 8, 2026, disclosed explicitly in the going concern note. Management acknowledges substantial doubt about the ability to continue as a going concern.

Under the liquidation lens, the balance sheet is dominated by $220.9M of investments held in Trust Account (Level 1, U.S. government money market), which at 100% recovery is essentially par. Against this, the sole identified liability on the face of the balance sheet is $7.04M of deferred underwriting commissions payable to BTIG upon Business Combination closing. Total face-value liabilities are $7.04M.

However, the critical structural point is that $220.8M of the trust assets are classified as temporary equity — ordinary shares subject to possible redemption at $10.98/share across 20,125,000 public shares. These redemption rights are senior to founder/private equity in any wind-up scenario. In a liquidation, public shareholders receive their pro-rata trust balance first; the $7.04M deferred underwriting commission is payable only on a completed Business Combination, not on liquidation per the disclosed terms. If no Business Combination occurs and the company liquidates, deferred underwriting commissions would not be triggered, meaning the full trust value would be available for public share redemption. The non-redeemable shares (5,674,375 founder/private shares) carry no liquidating distribution rights from the Trust Account per the filing.

Outside the trust, unrestricted cash is $519,303 as of February 28, 2026, down from $839,838 at November 30, 2025, reflecting $320,535 of operating cash burn during the quarter (G&A of $356,910 partially offset by $3,952 operating cash interest). The company disclosed no Working Capital Loans outstanding, no operating leases, no long-term debt, and no off-balance sheet arrangements. The Crescendo Advisors II administrative service fee runs $20,000/month and is a recurring cash obligation. At the current burn rate of approximately $107K/month in net operating outflows, the $519K unrestricted cash balance is insufficient to cover more than approximately five months of operations — consistent with the May 8, 2026 liquidation deadline.

The prior filing (PRIOR_FILING_BODY) is a 10-K/A (Amendment No. 1) for the fiscal year ended November 30, 2025, which amended only Item 9A (Controls and Procedures) and contained no balance sheet data. No substantive balance-sheet comparison to a prior annual filing can be performed from this input. The relevant comparison is therefore QoQ: trust grew by $1.95M (trust income accrual) and unrestricted cash fell by $320K. Total assets increased marginally from $219.8M to $221.4M. Shareholder deficit widened from ($6.08M) to ($6.43M) as accretion of redemption value exceeded net income. The deferred underwriting commission balance is unchanged at $7.04M.

Filing discusses the Business Combination Agreement with Einride AB (dated November 12, 2025) in the prior 10-K exhibit list but does not separately tag merger agreement details or contingent liabilities related to the transaction in XBRL. No merger-related accruals appear on the face of the balance sheet.