Observational facilities allow now the detection of optical and IR spectra of young M- and L-dwarfs. This enables empirical comparisons with old M- and L- dwarfs, and detailed studies in comparison with synthetic spectra. While classical stellar atmosphere physics seems perfectly appropriate for old M-dwarfs, more physical and chemical processes, cloud formation in particular, needs to be modelled in the substellar regime to allow a detailed spectral interpretation. Not much is known so far about the details of the inset of cloud formation at the spectral transition region between M and L dwarfs. Furthermore there is observational evidence for diversity in the dust properties of objects having the same spectral type. Do we understand these differences? The question is also how young M- and L-dwarfs need to be classified, which stellar parameter do they have and whether degenerations in the stellar parameter space due to the changing atmosphere physics are present, like in the L-T transition region. The Splinter was driven by these questions which we will use to encourage interactions between observation and theory. Given the recent advances, both in observations and spectral modelling, an intensive discussion between observers and theoreticians will create new synergies in our field.
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