Company: LEGT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001829126-25-001098
Chunk: 64

Company: Legato Merger Corp. III
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1
Chunk 64
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 of the IPO or (iii) the determination by the Company not to proceed with the IPO.

41

On January 5, 2024, Mr. Rosenfeld loaned to the Company $50,000 to cover additional expenses of the IPO. The loan was evidenced by a promissory note. The loan was non-interest bearing, unsecured and was due at the earlier of (i) December 31, 2024, (ii) the closing of the IPO or (iii) the determination by the Company not to proceed with the IPO.

The note balance of $146,785 under these promissory notes had been settled shortly after the IPO, and borrowings under the notes are no longer available.

Working Capital Loans

In order to finance transaction costs in connection with a business combination, the initial shareholders, the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds from time to time or at any time, as may be required. Each working capital loan would be evidenced by a promissory note. The working capital loans would either be paid upon consummation of a business combination, without interest or up to $1,500,000 may be converted into units identical to the Private Placement Units. In the event that a business combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of November 30, 2024, no working capital loans were outstanding.

Investments held in Trust Account

The Company’s portfolio of investments is comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in in money market funds that invest in U.S. government securities, or a combination thereof. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in investment income on Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.

Accounting for Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable