Southland (SLND) - 2021 Q4 - Annual Report

PART I Business Legato Merger Corp. II, a Delaware-based blank check company, completed its IPO and private placement in late 2021, raising $280.14 million for a business combination - The company is a blank check company (SPAC), formed on July 14, 2021, to pursue a business combination[20] Initial Public Offering (IPO) and Funding Summary (2021) | Event | Date | Units/Shares | Price per Unit | Gross Proceeds | | :--- | :--- | :--- | :--- | :--- | | Initial Public Offering | Nov 24, 2021 | 24,000,000 Units | $10.00 | $240,000,000 | | Private Placement | Nov 24, 2021 | 1,045,000 Private Units | $10.00 | $10,450,000 | | Over-Allotment Option | Dec 1, 2021 | 3,600,000 Units | $10.00 | $36,000,000 | | Additional Private Placement| Dec 1, 2021 | 126,000 Private Units | $10.00 | $1,260,000 | - A total of $280,140,000 was placed in the trust account following the IPO and over-allotment exercise[25][26] Risk Factors The company incorporates by reference the 'Risk Factors' from its November 22, 2021 prospectus, reporting no material changes since that date - Operational risks are detailed in the November 22, 2021 prospectus, with no material changes reported since that date[28] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - Not applicable; the company has no unresolved staff comments[29] Properties The company's principal executive offices are located in New York, NY, with a monthly fee of $15,000 paid to an affiliated entity for services - The company pays $15,000 per month to Crescendo Advisors II, LLC, an affiliate of the Chief SPAC Officer, for office space and administrative services[30] Legal Proceedings The company is not involved in any legal proceedings - The company has no legal proceedings to report[31] Mine Safety Disclosures This section is not applicable to the company - Not applicable; the company has no mine safety disclosures[32] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities are listed on Nasdaq, with no cash dividends paid or intended prior to a business combination, and $280.14 million held in a trust account - Securities are traded on the Nasdaq Global Market under symbols LGTOU, LGTO, and LGTOW[35] - No cash dividends have been paid or are planned prior to a business combination[37] - $280,140,000 from net IPO proceeds was placed into the Trust Account[40] Management's Discussion and Analysis of Financial Condition and Results of Operations From inception to December 31, 2021, the blank check company reported a net loss of $138,439, with $1.1 million in cash and no off-balance sheet arrangements - The company has not engaged in operations or generated revenue to date, focusing on organizational tasks and IPO preparation[47] Results of Operations (Inception to Dec 31, 2021) | Metric | Amount | | :--- | :--- | | Net Loss | ($138,439) | | Operating Costs | $162,602 | | Investment Income on Trust Account | $24,163 | Liquidity Position (as of Dec 31, 2021) | Metric | Amount | | :--- | :--- | | Cash | $1,100,031 | | Working Capital | $1,432,742 | - The company has no off-balance sheet arrangements or long-term debt, capital lease, or operating lease obligations as of December 31, 2021[54][55] Quantitative and Qualitative Disclosures About Market Risk The company has minimal exposure to market and interest rate risk due to investments in short-term U.S. government treasury securities - The company has minimal market and interest rate risk due to investments in short-term U.S. government treasury bills or money market funds[71] Financial Statements and Supplementary Data The company's financial statements and supplementary data are provided following Item 15 of the report - Financial statements and supplementary data are located after Item 15 of this Form 10-K[72] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal controls reported - Management concluded that disclosure controls and procedures were effective as of December 31, 2021[74] - A management report on internal controls over financial reporting is not required for newly public companies under SEC transition rules[76] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[77] PART III Directors, Executive Officers and Corporate Governance The company's leadership includes CEO Gregory Monahan and Chief SPAC Officer Eric S. Rosenfeld, with a majority independent board and established audit, nominating, and compensation committees Key Executive Officers | Name | Position | | :--- | :--- | | Gregory Monahan | Chief Executive Officer and Director | | Eric S. Rosenfeld | Chief SPAC Officer | | Adam Jaffe | Chief Financial Officer and Secretary | - The board of directors consists of a majority of independent directors[94] - Audit, Nominating, and Compensation Committees have been established, each composed solely of independent directors[96] - A code of ethics applies to all executive officers, directors, and employees[107] Executive Compensation No executive officers received cash compensation, but an affiliated entity receives $15,000 monthly for administrative services, with future compensation dependent on the post-combination board - No executive officer received cash compensation; an affiliate is paid $15,000 per month for administrative services[109] - No finder's or consulting fees will be paid to initial stockholders, officers, or directors prior to a business combination[110] - Post-combination compensation for management will be determined by the new board of directors[111] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Directors and executive officers collectively own 17.6% of common stock, with founder's shares subject to escrow and lock-up provisions - All directors and executive officers as a group beneficially own 17.6% of outstanding common stock[115] - Adage Capital Partners, L.P. is the only reported beneficial owner of more than 5%, holding 5.0% of common stock[115][118] - Founders' shares are held in escrow, subject to transfer restrictions for one year post-business combination, with potential early release for 50% if stock price reaches $12.50[119] Principal Accounting Fees and Services WithumSmith+Brown, PC was paid $165,830 in audit fees for the period from inception to December 31, 2021, with no other fees for audit-related, tax, or other services Auditor Fees (July 14, 2021 to Dec 31, 2021) | Fee Category | Amount | | :--- | :--- | | Audit Fees | $165,830 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | - The audit committee has a pre-approval policy for all auditing and permitted non-audit services[129] PART IV Exhibits, Financial Statement Schedules This section includes the company's audited financial statements for the period from inception to December 31, 2021, showing total assets of $281.7 million and a net loss of $138,439 Financial Statements The audited financial statements, with an unqualified opinion from WithumSmith+Brown, PC, present the company's financial position, operations, and cash flows as of December 31, 2021 - WithumSmith+Brown, PC issued an unqualified opinion on the financial statements, confirming fair presentation in conformity with U.S. GAAP[134] Balance Sheet Summary (as of December 31, 2021) | Account | Amount | | :--- | :--- | | Assets | | | Cash | $1,100,031 | | Cash held in Trust Account | $280,164,163 | | Total Assets | $281,680,206 | | Liabilities & Stockholders' Deficit | | | Total Liabilities | $9,743,301 | | Common stock subject to possible redemption | $280,140,000 | | Total Stockholders' Deficit | ($8,203,095) | | Total Liabilities and Stockholders' Deficit | $281,680,206 | Statement of Operations Summary (July 14, 2021 to Dec 31, 2021) | Account | Amount | | :--- | :--- | | General and administrative costs | $162,602 | | Loss from operations | ($162,602) | | Investment income on Trust Account | $24,163 | | Net Loss | ($138,439) | Statement of Cash Flows Summary (July 14, 2021 to Dec 31, 2021) | Activity | Net Cash Flow | | :--- | :--- | | Net cash used in operating activities | ($495,313) | | Net cash used in investing activities | ($280,140,000) | | Net cash provided by financing activities | $281,735,344 | | Net increase in cash and cash equivalents | $1,100,031 | Notes to Financial Statements The notes detail the company's incorporation as a blank check company, its business combination timeline, classification of redeemable common stock, and related party transactions - The company, incorporated July 14, 2021, has 15 months (extendable to 18) from IPO closing to complete a business combination[154][157] - Common stock subject to possible redemption, totaling $280,140,000 (27,600,000 shares at $10.15 per share), is classified as temporary equity[140][177] - Related party transactions include Founder Shares for $25,000, a $15,000 monthly administrative fee to an affiliate, and repaid promissory notes from the Chief SPAC Officer[197][199][200] Form 10-K Summary The company indicates that no Form 10-K summary is provided - No summary is provided for the Form 10-K[222]