Legato Merger Corp. III Announces Receipt of Audit Opinion with Going Concern Explanation

Rhea-AI Summary

Legato Merger Corp. III (NYSE: LEGT) has disclosed that its audited financial statements for the year ended November 30, 2024, include an audit opinion with a going concern explanation from its independent registered public accounting firm. This announcement, made pursuant to NYSE American Company Guide requirements, does not represent any changes to the company's previously filed financial statements or Annual Report.

Legato Merger Corp. III is a Cayman Islands-based Special Purpose Acquisition Company (SPAC) focused on identifying business combination opportunities, particularly in the infrastructure, engineering and construction, industrial and renewables industries. The company's management team includes Gregory Monahan as CEO, Eric S. Rosenfeld as Chief SPAC Officer, and Adam Jaffe as CFO.

Positive

• None.

Negative

• Auditor issued going concern warning, indicating substantial doubt about company's ability to continue operations
• Financial stability concerns may impact ability to complete business combination
• Potential risk to shareholders' investment value

Insights

Financial Analyst

Legato Merger Corp. III's disclosure about receiving an audit opinion with a going concern explanation represents a significant red flag for investors. This accounting designation indicates the company's auditors have substantial doubt about its ability to continue operating for the foreseeable future.

As a SPAC (Special Purpose Acquisition Company), Legato has a timeframe to identify and complete a business combination. The going concern warning suggests serious challenges in meeting these obligations or maintaining sufficient capital reserves until a deal is completed.

While the company notes this information was previously included in their February 2025 Annual Report, this separate announcement is required by NYSE American listing rules due to the severity of the designation. The exchange specifically requires public announcements when audit opinions contain going concern paragraphs to ensure proper investor awareness.

For common shareholders, this raises the risk of a potential liquidation scenario where only trust assets would be returned. For warrant holders, the risk is even more severe, as warrants typically become worthless if the SPAC fails to complete a business combination.

This disclosure fundamentally alters the risk profile of Legato Merger Corp. III and warrants careful consideration by current and potential investors.

NEW YORK, March 13, 2025 (GLOBE NEWSWIRE) -- Legato Merger Corp. III (NYSE American: LEGT U, LEGT, LEGT WS) (the “Company”) announced that, as previously disclosed in its Annual Report on Form 10-K for the year ended November 30, 2024, which was filed on February 19, 2025 with the Securities and Exchange Commission, the audited financial statements contained an audit opinion from its independent registered public accounting firm that included an explanatory paragraph related to the Company’s ability to continue as a going concern. See further discussion in Note 1 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K. This announcement is made pursuant to NYSE American LLC Company Guide Sections 401(h) and 610(b), which requires public announcement of the receipt of an audit opinion containing a going concern paragraph. This announcement does not represent any change or amendment to the Company’s financial statements or to its Annual Report on Form 10-K for the year ended November 30, 2024.

Legato Merger Corp. III is a Cayman Islands exempted company incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. The Company’s efforts to identify a prospective target business will not be limited to a particular industry or geographic region although the Company intends to initially focus on target businesses in the infrastructure, engineering and construction, industrial and renewables industries. The Company’s management team is comprised of Gregory Monahan, Chief Executive Officer and Director, Eric S. Rosenfeld, Chief SPAC Officer, Adam Jaffe, Chief Financial Officer, Secretary and Director, Brian Pratt, Director and Non-Executive Chairman of the Board, David D. Sgro, Director and Non-Executive Vice Chairman of the Board, and Adam Semler and John Ing, each a Director of the Company.

FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute “forward-looking statements.” Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended November 30, 2024 filed with the SEC. Copies are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. 

Contacts:
Gregory Monahan
Chief Executive Officer
Legato Merger Corp. III
(212) 319-7676

FAQ

What does the going concern warning mean for LEGT shareholders?

The going concern warning indicates substantial doubt about the company's ability to continue operating, which could pose significant risks for shareholders' investments.

When did LEGT receive the going concern audit opinion?

The going concern explanation was included in LEGT's Annual Report on Form 10-K for the year ended November 30, 2024, filed on February 19, 2025.

What industries is LEGT targeting for potential business combination?

LEGT is primarily targeting businesses in infrastructure, engineering and construction, industrial and renewables industries.

How does the going concern announcement affect LEGT's NYSE American listing?

The announcement is required by NYSE American Company Guide Sections 401(h) and 610(b), but does not immediately affect the listing status.