Business Context and Reporting Period
Company: Legato Merger Corp. IV (a Cayman Islands exempted company and Special Purpose Acquisition Company).
Reporting Period: Quarter ended November 30, 2025 (Inception: September 1, 2025).
Status: Pre-operational SPAC. The company was formed to effect a business combination. As of the balance sheet date, no operations had commenced. The Initial Public Offering (IPO) was consummated on January 26, 2026, subsequent to the reporting period.
Key Financial Metrics
| Metric | Value |
|---|---|
| Total Assets | $70,535 |
| Cash and Cash Equivalents | $85 |
| Total Liabilities | $79,241 |
| Shareholders' Deficit | $(8,706) |
| Net Loss (Inception to Nov 30, 2025) | $(33,756) |
| Revenue | $0 (Interest income: $85) |
| General & Administrative Costs | $33,841 |
| Net Cash Used in Operating Activities | $(12,415) |
| Notes Payable to Shareholder | $35,000 |
Material Changes and Subsequent Events
The financial statements reflect the pre-IPO formation phase. Significant capital events occurred subsequent to the reporting period (November 30, 2025) but prior to the filing date:
- IPO Completion: On January 26, 2026, the company consummated an IPO of 23,000,000 units at $10.00 per unit, generating gross proceeds of $230,000,000. The underwriters' over-allotment option was exercised in full.
- Private Placement: Simultaneously with the IPO, 550,000 Private Units were sold to insiders and underwriters for $5,500,000.
- Debt Repayment: The outstanding promissory notes totaling $94,225 owed to the Chief SPAC Officer were repaid on January 26, 2026.
- Trust Account: $230,000,000 was deposited into a Trust Account following the IPO closing.
Outlook, Risks, and Management Commentary
Business Plan: The company intends to acquire one or more target businesses. It has 24 months from the IPO closing (extendable to 27 months) to complete a business combination. If unsuccessful, the company will liquidate and redeem public shares.
Liquidity: As of November 30, 2025, the company had a working capital deficit and insufficient liquidity to meet obligations for the next year without the IPO proceeds. Management determined that post-IPO, sufficient funds would be available for working capital needs.
Risks:
- Going Concern: Prior to the IPO, the company relied on shareholder loans and the sale of Founder Shares to fund operations.
- Geopolitical: Global conflicts and sanctions could disrupt capital markets and affect the search for a target business.
- Redemption Risk: Public shareholders may redeem shares for cash from the Trust Account, potentially reducing funds available for the business combination.
Related Party Transactions:
- Founder Shares were issued for $25,000.
- Administrative services are provided by a related party (Crescendo Advisors II, LLC) for $25,000/month post-IPO.
- Executive compensation is set at $5,000/month for the CEO and CFO.
Investor Verification Checklist
- IPO Proceeds: Verify the final amount deposited in the Trust Account ($230,000,000) and the status of the deferred underwriting commission (up to $8,050,000).
- Debt Status: Confirm that the $94,225 in shareholder notes has been fully repaid and no new working capital loans are outstanding.
- Share Count: Verify the total outstanding shares post-IPO (23,000,000 public units + 550,000 private units + 7,716,667 founder shares).
- Redemption Rights: Review the specific terms regarding the 24-month deadline to complete a business combination and the conditions for extension.
- Related Party Agreements: Confirm the terms of the administrative service agreement and the lock-up periods for Founder Shares and Private Units.