Company: LEGT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001829126-25-001098
Chunk: 347

Company: Legato Merger Corp. III
Filing Date: 2025-02-19
Form: 10-K
Item: Item 2
Chunk 347
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 Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires an entity to utilize a new impairment model known as the current expected credit loss (CECL) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized costs, loans, and available-for-sale debt securities. The adoption of this standard did not have a material effect on the Company’s operating results or financial position as the only securities to which this standard applies are the Treasury Bills, which the Company deemed to have no credit losses.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

Related Party Transactions

Founder Shares

In November 2023, the Company issued an aggregate of 5,031,250 founder share for an aggregate purchase price of $25,000, to cover legal expenses of the Company. The founder shares included an aggregate of up to 656,250 shares subject to forfeiture by the holders to the extent that the over-allotment in the IPO was not exercised in full or in part, so that the holders would collectively own 20% of the Company’s issued and outstanding shares after the IPO (assuming the holders did not purchase any units in the IPO and excluding the representative founder shares and shares underlying the Private Placement Units. On February 6, 2024, the underwriters exercised the over-allotment option in full and accordingly none of the founder shares continue to be subject to forfeiture.

The holders of the founder shares have agreed not to transfer, assign or sell any of the founder shares (except to certain permitted transferees) until (i) the earlier of 180 days after the completion of a business combination and the date on which the closing price of the ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after a business combination and (ii) if, subsequent to a business combination, the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the