Company: LEGT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001829126-25-001098
Chunk: 131

Company: Legato Merger Corp. III
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1A
Chunk 131
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We must conduct a due diligence investigation of the target businesses we intend to acquire. Intensive due diligence is time consuming and expensive due to the operations, accounting, finance and legal professionals who must be involved in the due diligence process. Even if we conduct extensive due diligence on a target business, this diligence may not reveal all material issues that may affect a particular target business, and factors outside the control of the target business and outside of our control may later arise. If our diligence fails to identify issues specific to a target business, industry or the environment in which the target business operates, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our ordinary shares. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.

20

If we effect a business combination with a company located in a foreign jurisdiction, we would be subject to a variety of additional risks that may negatively impact our operations.

If we consummate a business combination with a target business in a foreign country, we would be subject to any special considerations or risks associated with companies operating in the target business’ home jurisdiction, including any of the following:

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    rules and regulations or currency conversion or corporate withholding taxes on individuals; 

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        tariffs and trade barriers;  

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    regulations related to customs and import/export matters; 

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    longer payment cycles; 

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    tax issues, such as tax law changes and variations in tax laws as compared to the United States; 

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    currency fluctuations and exchange controls; 

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    challenges in collecting accounts receivable; 

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    cultural and language differences; 

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    employment regulations; 

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    crime, strikes, riots, civil disturbances, terrorist attacks and wars; and 

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    deterioration of political relations with the United States. 

We cannot assure you that we would be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.

If we effect a business combination with a company located outside of