Legato Merger Corp. III Swings to $1.6M Net Income Despite Operating Loss in Q1 2026

Legato Merger Corp. III, a special purpose acquisition company, reported net income of $1.60 million for the three months ending February 28, 2026, a decline of 18% from $1.94 million in the same quarter last year. The profit came despite widening operating losses and a deteriorating balance sheet position. Read more earnings reports.

The company posted an operating loss of $356,910 for the quarter, compared to an operating loss of $308,607 in the prior-year period. The swing from operating loss to net profit reflects non-operating income, though the company reported no revenue for either quarter.

Cash holdings dropped sharply to $519,303 as of February 28, 2026, down 38% from $839,838 three months earlier and down 62% from $1.38 million a year ago. Cash used in operations totaled $320,535 during the quarter, compared to $248,752 in the year-earlier period.

Total assets stood at $221.41 million as of quarter-end, up slightly from $219.81 million at the end of November 2025. However, stockholders' equity remained deeply negative at $6.43 million, compared to a deficit of $6.08 million three months prior and $5.39 million a year earlier.

The company's accumulated deficit reached $6.43 million as of February 28, 2026. Total liabilities held steady at $7.04 million for the quarter, unchanged from three months earlier.

Earnings per share came in at $0.06 on both a basic and diluted basis, down from $0.08 per share in the first quarter of fiscal 2025. The company had 5.67 million common shares outstanding as of quarter-end, unchanged from the prior quarter.