What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-16 compared with 2021-07-19 · 567 added, 817 removed, 164 unchanged (89% of the section changed)

FINANCIAL STATEMENTS

WALDENCAST ACQUISITION CORP.

ACQUISITION CORP.

CONDENSED BALANCE SHEETS

Current assets:

Prepaid expenses

Deferred offering costs associated with

initial private offering

Prepaid expenses - current

Deferred offering costs associated with initial private offering

Total current assets

Marketable securities held in

Trust account

Liabilities and Shareholders’

Prepaid expenses – non-current

Marketable securities held in Trust Account

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

Due to related party

Total current liabilities

2 unchanged sentences

Forward purchase agreement liabilities

Deferred underwriters’

Deferred underwriters’ discount

Total liabilities

Class A ordinary shares subject to possible

redemption, 29,843,469 shares at redemption value

Shareholders’

Class A ordinary shares subject to possible redemption, 29,688,318 and no shares at redemption value at June 30, 2021 and December 31, 2020, respectively

Shareholders’ equity:

Preference shares, $ 0.0001 par value;

1 unchanged sentence

none issued and outstanding

Class A ordinary shares, $0.0001 par

Class A ordinary shares, $ 0.0001 par value;

500,000,000 shares authorized;

4,656,531 shares and 0 shares issued and outstanding at March 31, 2021 and December 31, 2020,

Class B ordinary shares, $0.0001 par

4,811,682 shares and no shares issued and outstanding (excluding 29,688,318 and no shares subject to redemption) at June 30, 2021 and December 31, 2020, respectively

Class B ordinary shares, $ 0.0001 par value;

50,000,000 shares authorized;

8,625,000 and 0 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

8,625,000 and no shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

Accumulated deficit

Total shareholders’

Total liabilities and shareholders’

The accompanying notes are an integral part of these unaudited condensed

financial statements.

WALDENCAST ACQUISITION CORP.

CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

( 2,746,416 )

Total shareholders’ equity

Total liabilities and shareholders’ equity

$ 346,304,851

accompanying notes are an integral part of these unaudited condensed financial statements.

ACQUISITION CORP.

STATEMENTS OF OPERATIONS

Three months ended

Six months ended

Formation and operating costs

Loss from operations

Other Income (Loss)

Other income (expense):

Interest income on operating account

Interest income on marketable securities

held in Trust account

Change in fair value of warrant liabilities

Interest income on marketable securities held in Trust Account

Offering expenses related to warrant issuance

Total other income

Change in fair value of forward purchase agreement liabilities

Change in fair value of warrant liabilities

( 1,046,000 )

Weighted average shares outstanding - Class A ordinary shares.

Basic and diluted net loss per ordinary share –

Class A ordinary shares

Weighted average shares outstanding - Class B ordinary shares

Basic and diluted net loss per ordinary share –

Class B ordinary shares

The accompanying notes are an integral part of these unaudited condensed

financial statements.

Total other expense

( 1,349,941 )

( 2,416,383 )

( 1,551,508 )

( 2,735,465 )

Weighted average shares outstanding, Common stock subject to possible redemption

Basic and diluted net loss per share, Common stock subject to possible redemption

Weighted average shares outstanding, Non-redeemable common stock

Basic and diluted net loss per share, Non-redeemable common stock

accompanying notes are an integral part of these unaudited condensed financial statements.

ACQUISITION CORP.

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’

FOR THE THREE MONTHS ENDED MARCH 31, 2021

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Ordinary Shares

Shareholders’

Balance as of December 31, 2020

Issuance of Founders Shares

Sale of Units in Initial Public Offering, less initial fair value of public warrants

and forward purchase agreements, net of offering expenses, plus excess cash received over initial fair value of private warrants

Issuance of Founder Shares

Sale of Units in Initial Public Offering, less initial fair value of public warrants and forward purchase agreements, net of offering expenses, plus excess cash received over initial fair value of private warrants

Class A ordinary shares subject to possible redemption

( 29,843,469 )

( 298,431,706 )

( 298,434,690 )

( 1,183,957 )

Balance as of March 31, 2021

The accompanying notes are an integral part of these unaudited condensed

financial statements.

WALDENCAST ACQUISITION CORP.

CONDENSED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

$ ( 1,194,908 )

Class A ordinary shares subject to possible redemption

( 1,551,508 )

Balance as of June 30, 2021

$ ( 2,746,416 )

accompanying notes are an integral part of these unaudited condensed financial statements.

ACQUISITION CORP.

STATEMENT OF CASH FLOWS

Six months ended

Cash Flows from Operating Activities:

3 unchanged sentences

Change in fair value of warrant liabilities

Change in fair value of forward purchase agreement liabilities

Offering costs allocated to warrants

1 unchanged sentence

Prepaid assets

Due to related party

Accounts payable

6 unchanged sentences

Cash Flows from Financing Activities:

Proceeds from issuance of Founders Shares

Proceeds from Initial Public Offering, net of underwriters’

Proceeds from issuance of Founder Shares

Proceeds from Initial Public Offering, net of underwriters’ discount

Proceeds from issuance of Private Placement Warrants

8 unchanged sentences

Initial value of warrant liabilities

Initial value of forward purchase liabilities

Initial value of forward purchase agreement liabilities

Change in value of Class A ordinary shares subject to possible redemption

Deferred underwriters’

discount payable charged to additional paid-in capital

The accompanying notes are an integral part of these unaudited condensed

financial statements.

$ ( 1,999,790 )

Deferred underwriters’ discount payable charged to additional paid-in capital

accompanying notes are an integral part of these unaudited condensed financial statements.

ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Note 1 —

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1 — Organization and Business Operations

Organization and General

Waldencast Acquisition Corp.

(the “Company”)

was incorporated in the Cayman Islands on December 8, 2020.

The Company was formed for the purpose of entering a merger, capital stock

exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business

Combination”).

The Company was formed for the purpose of entering into a merger, capital

stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (a “Business

Combination”).

The Company is not limited to a particular industry or geographic region for purposes of consummating a Business

2 unchanged sentences

The Company has selected December 31 as its fiscal year end.

Company was formed on December 8, 2020 and remained dormant through December 31, 2020.

For the period from December 8,

2020 (inception) through December 31, 2020, there had been no activity since the formation of the entity and no equity shares were

The Company commenced operations on January 12, 2021 when the founder shares were issued.

All activity since January 12,

2021 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), as

described below.

The Company will not generate any operating revenues until after the completion of its initial Business Combination,

at the earliest.

The Company will generate non-operating income in the form of interest income on cash and cash equivalents from

the proceeds derived from the Initial Public Offering .

On March 18, 2021, the Company consummated the

Initial Public Offering of 34,500,000 units (the “Units”

and, with respect to the Class A ordinary shares included in the

Units being offered, the “public share”), at $10.00 per Unit, generating gross proceeds of $345,000,000, which is discussed

Simultaneously with the closing of the Initial

Public Offering, the Company completed the private sale of 5,933,333 warrants (the “Private Placement Warrants”), at

a price of $1.50 per Private Placement Warrant, which is discussed in Note 5.

The Company was formed on December 8, 2020

and remained dormant through December 31, 2020.

For the period from December 8, 2020 (inception) through December 31, 2020,

there had been no activity since the formation of the entity and no equity shares were issued.

The Company commenced operations on January 12,

2021 when the Founder Shares were issued.

All activity since January 12, 2021 relates to the Company’s formation and the initial

public offering (the “Initial Public Offering”), as described below.

The Company will not generate any operating revenues

until after the completion of its initial Business Combination, at the earliest.

The Company will generate non-operating income in

the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering.

March 18, 2021, the Company consummated the Initial Public Offering of 34,500,000 units (the “Units” and, with respect to

the Class A ordinary shares included in the Units being offered, the “public share”), at $ 10.00 per Unit, generating gross

proceeds of $ 345,000,000 , which is discussed in Note 3.

Simultaneously

with the closing of the Initial Public Offering, the Company completed the private sale of 5,933,333 warrants (the “Private

Placement Warrants”), at a price of $ 1.50 per Private Placement Warrant, which is discussed in Note 4.

Transaction costs amounted to $ 20,169,599 consisting

1 unchanged sentence

Of the total transaction

cost $719,201 was reclassed to expense as non-operating expense in that statement of operations with the rest of the offering cost charged

to shareholders’

The transaction costs were allocated based on the relative fair value basis, compared to the total offering

proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.

Trust Account

Following the closing of the Initial Public Offering on March 18, 2021,

an amount of $345,000,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement

Warrants was placed in a trust account (“Trust Account”) which is invested in U.S.

government securities, within the

meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment

company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined

by the Company.

Except with respect to interest earned on the funds held in the trust account that may be released to the Company to pay

its taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of:

the completion of the Company’s initial business combination;

(2) the redemption of any public shares properly submitted in connection

with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance

or timing of the Company’s obligation to allow redemption in connection with its initial business combination or to redeem 100%

of its public shares if the Company does not complete its initial business combination within 24 months from the closing of the Initial

Public Offering or (B) with respect to any other provision relating to shareholders’

rights or pre-initial business combination

and (3) the redemption of the Company’s public shares if the Company has not completed its initial business combination

within 24 months from the closing of the Initial Public Offering, subject to applicable law.

The proceeds deposited in the trust account

could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s

public shareholders.

WALDENCAST ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Initial Business Combination

The Company’s management has broad discretion

costs, $ 719,201 was reclassified as non-operating expense in the condensed statement of operations with the rest of the offering costs

charged to shareholders’ equity.

The transaction costs were allocated based on a relative fair value basis, compared to the total

offering proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.

Following the closing of the Initial Public Offering

on March 18, 2021, an amount of $ 345,000,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the sale

of the Private Placement Warrants was placed in a trust account (“Trust Account”) which is invested in U.S.

securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in

any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company

Act, as determined by the Company.

Except with respect to interest earned on the funds held in the Trust Account that may be released

to the Company to pay its taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest

(1) the completion of the Company’s initial Business Combination;

(2) the redemption of any public shares properly

submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association

(A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination

or to redeem 100 % of its public shares if the Company does not complete its initial Business Combination within 24 months from the closing

of the Initial Public Offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business

Combination activity;

and (3) the redemption of the Company’s public shares if the Company has not completed its initial Business

Combination within 24 months from the closing of the Initial Public Offering, subject to applicable law.

The proceeds deposited in the

Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of

the Company’s public shareholders.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Business Combination

The Company’s management has broad discretion

with respect to the specific application of the net proceeds of the Initial Public Offering, although substantially all of the net proceeds

are intended to be generally applied toward consummating a Business Combination.

The Company’s business combination must

The Company’s Business Combination must

be with one or more target businesses that together have a fair market value equal to at least 80 % of the balance in the Trust Account

(as defined below) (net of taxes payable) at the time of the signing an agreement to enter into a business combination.

However, the Company

will only complete a business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting

securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as

an investment company under the Investment Company Act.

There is no assurance that the Company will be able to successfully effect a business

(as defined below) (net of taxes payable) at the time of the signing of an agreement to enter into a Business Combination.

Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50 % or more of the outstanding

voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register

as an investment company under the Investment Company Act.

There is no assurance that the Company will be able to successfully effect

a Business Combination.

The Company will provide its public shareholders

8 unchanged sentences

is recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance

with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”

In such case,

with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case,

the Company will proceed with a Business Combination if the Company has net tangible assets of at least $ 5,000,001 either immediately

2 unchanged sentences

The Company will have 24 months from the closing

of the Initial Public Offering (with the ability to extend with shareholder approval) to consummate a business combination (the “Combination

Period”).

of the Initial Public Offering (with the ability to extend with shareholder approval) to consummate a Business Combination (the “Combination

However, if the Company is unable to complete a Business Combination within the Combination Period, the Company will redeem

3 unchanged sentences

and then seek to dissolve and liquidate.

The Company’s sponsor, officers and directors have agreed to

(i) waive their redemption rights with respect to their founder shares, private placement shares and public shares in connection with

the completion of the initial business combination, (ii) waive their redemption rights with respect to their founder shares and public

shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation,

The Company’s Sponsor, officers and directors

have agreed to (i) waive their redemption rights with respect to their Founder Shares, private placement shares and public shares in connection

with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and public

shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation,

and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares and private placement

1 unchanged sentence

ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

The Company’s sponsor has agreed that it

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The Company’s Sponsor has agreed that it

will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company,

4 unchanged sentences

to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust

account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters

Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters

of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act.

1 unchanged sentence

asked its Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its Sponsor has

sufficient funds to satisfy its indemnity obligations and believe that the Company’s sponsor’s only assets are securities

sufficient funds to satisfy its indemnity obligations and believe that the Company’s Sponsor’s only assets are securities

of the Company.

Therefore, the Company cannot assure that its Sponsor would be able to satisfy those obligations.

As of March 31, 2021, the Company had cash outside

the Trust Account of $1,449,687 available for working capital needs.

All remaining cash held in the Trust Account are generally unavailable

for the Company’s use, prior to an initial business combination, and is restricted for use either in a Business Combination or to

redeem Class A ordinary shares.

As of March 31, 2021, none of the amount in the Trust Account was available to be withdrawn as described

Through March 31, 2021, the Company’s liquidity

As of June 30, 2021, the Company had cash in an

operating bank account, outside of the Trust Account, of $851,860 available for working capital needs.

All remaining funds held in the

Trust Account are generally unavailable for the Company’s use, prior to an initial Business Combination, and are restricted for

use either in a Business Combination or to redeem Class A ordinary shares.

As of June 30, 2021, none of the amount in the Trust Account

was available to be withdrawn as described above.

Through June 30, 2021, the Company’s liquidity

needs were satisfied through receipt of $ 25,000 from the sale of the Founder Shares and the remaining net proceeds from the Initial

Public Offering and the sale of Private Placement Units.

The Company anticipates that the $1,449,687 outside

of the Trust Account as of March 31, 2021, will be sufficient to allow the Company to operate for at least the next 12 months from the

Public Offering and the sale of Private Placement Warrants.

The Company anticipates that the $ 851,860 in its

operating bank account as of June 30, 2021 will be sufficient to allow the Company to operate for at least the next 12 months from the

issuance of the financial statements, assuming that a Business Combination is not consummated during that time.

1 unchanged sentence

its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans

(as defined in Note 6) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which

(as defined in Note 5) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which

is described in Note 5), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective

4 unchanged sentences

additional funds in order to meet the expenditures required for operating its business.

However, if the Company’s estimates of the

costs of undertaking in-depth due diligence and negotiating Business Combination is less than the actual amount necessary to

9 unchanged sentences

that new financing will be available to it on commercially acceptable terms, if at all.

WALDENCAST ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic

on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s

financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as

of the date of these financial statements.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

Note 2 –

Revision of Previously Issued Financial

On April 12, 2021, the Staff of the SEC issued a statement entitled

“Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies.”

In the statement, the SEC Staff, among other things, highlighted potential accounting implications of certain terms that are common in

warrants issued in connection with the initial public offerings of special purpose acquisition companies such as the Company.

of the Staff statement and in light of evolving views as to certain provisions commonly included in warrants issued by special purpose

acquisition companies, the Company re-evaluated the accounting for Public and Private Placement Warrants, collectively (“Warrants”)

under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , and concluded that they do not meet

the criteria to be classified in shareholders’

Since the Warrants meet the definition of a derivative under ASC 815-40,

the Company has revised the financial statements to classify the Warrants and Forward Purchase Agreements (“FPA”) that

contain warrants as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized

in the statement of operations at each reporting date.

The following summarizes the effect of the Revision on each financial

statement line item as of the date of the Company’s consummation of its Initial Public Offering.

As of March 18, 2021

Balance Sheet

Warrant Liabilities

FPA liabilities

Total Liabilities

Shares Subject to Redemption

Class A Ordinary shares

Class B Ordinary shares

Additional Paid in Capital

(Accumulated Deficit)

Total Shareholders’

WALDENCAST ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Note 3—

and Uncertainties

Management continues to evaluate the impact of

the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily

determinable as of the date of these condensed financial statements.

The condensed financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

2 — Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial

statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S.

and Exchange Commission (“SEC”).

Certain information or footnote disclosures normally included in financial statements prepared

in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results

of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments,

consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and

cash flows for the periods presented.

The accompanying unaudited condensed financial

statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on

March 17, 2021, as well as the Company’s Current Reports on Form 8-K.

The interim results for the three months ended March 31, 2021

are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.

Emerging Growth Company Status

The Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart

our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting

requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being

required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations

regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding

advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts

emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that

is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company

can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but

any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that

when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging

growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison

of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

Use of Estimates

of Presentation

accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form

10-Q and Article 8 of Regulation S-X of the U.S.

Securities and Exchange Commission (“SEC”).

Certain information or footnote

disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the

rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes

necessary for a complete presentation of financial position, results of operations, or cash flows.

In the opinion of management, the

accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary

for a fair presentation of the financial position, operating results and cash flows for the periods presented.

accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial

Public Offering as filed with the SEC on March 17, 2021, as well as the Company’s Current Reports on Form 8-K.

The interim results

for the three months and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending

December 31, 2021 or for any future interim periods.

Growth Company Status

Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities

Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage

of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth

companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the

Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden

parachute payments not previously approved.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting

standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do

not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of

such extended transition period which means that when a standard is issued or revised and it has different application dates for public

or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies

adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company which

is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult

or impossible because of the potential differences in accounting standards used.

The preparation of financial statements in conformity

with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting

Actual results could differ from those estimates.

Cash and Cash Equivalents

and Cash Equivalents

The Company considers all short-term investments

with an original maturity of three months or less when purchased to be cash equivalents.

Marketable Securities Held in Trust Account

At March 31, 2021, the Trust Account had $345,001,294

held in marketable securities.

During period January 1, 2021 to March 31, 2021, the Company did not withdraw any of interest income from

the Trust Account to pay its tax obligations.

As of June 30, 2021, the Company had $ 851,860

in cash in its operating bank account, outside of the Trust Account, and had no cash equivalents.

Held in Trust Account

June 30, 2021, the Trust Account had $ 345,014,376 held in marketable securities.

As of June 30, 2021, the Company has not withdrawn any

of the interest income from the Trust Account to pay its tax obligations.

ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Concentration of Credit Risk

Financial instruments that potentially subject

the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal

Depository Insurance Coverage of $250,000.

At March 31, 2021, the Company has not experienced losses on this account.

Class A Ordinary Shares Subject to Possible

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Concentration

of Credit Risk

instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,

which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 .

At June 30, 2021, the Company has not experienced

losses on this account.

A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary

shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.”

shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.”

Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value.

Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control

of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified

as temporary equity.

At all other times, ordinary shares are classified as shareholders’

The Company’s Class A ordinary

shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence

At all other times, ordinary shares are classified as shareholders’ equity.

The Company’s Class A ordinary

shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence

of uncertain future events.

Accordingly, as of March 31, 2021, 29,843,469 shares of Class A ordinary shares subject to possible redemption

are presented at redemption value as temporary equity, outside of the shareholders’

equity section of the Company’s balance

Net Loss per Ordinary Shares

Net loss per ordinary shares is computed by dividing

net loss by the weighted average number of ordinary shares outstanding for the period.

The Company applies the two-class method in calculating

earnings per share.

Shares of Class A ordinary shares subject to possible redemption at March 31, 2021, which are not currently redeemable

and are not redeemable at fair value, have been excluded from the calculation of basic net loss per ordinary shares since such shares,

if redeemed, only participate in their pro rata share of the Trust Account earnings.

The Company has not considered the effect of warrants

sold in the Initial Public Offering and the private placement to purchase an aggregate 17,433,333 ordinary shares in the calculation of

diluted loss per share, since the exercise of the warrants into ordinary shares is contingent upon the occurrence of future events.

a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the period presented.

Offering Costs

Accordingly, as of June 30, 2021, 29,688,318 shares of Class A ordinary shares subject to possible redemption

are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance

Loss per Ordinary Shares

loss per ordinary shares is computed by dividing net loss by the weighted average number of ordinary shares outstanding for the period.

The Company applies the two-class method in calculating earnings per share.

Shares of Class A ordinary shares subject to possible redemption

at June 30, 2021, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of

basic net loss per ordinary shares since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings.

The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate

17,433,333 ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants into ordinary shares is contingent

upon the occurrence of future events.

As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share

for the period presented.

The Company complies with the requirements of

the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”.

Offering costs

consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering

and that were charged to shareholders’

equity upon the completion of the Initial Public Offering.

Accordingly, on March 31, 2021,

offering costs totaling $20,169,599 have been charged to shareholders’

equity (consisting of $6,900,000 of underwriting fee, $12,075,000

of deferred underwriting fee and $1,194,599 of other offering costs).

Of the total transaction cost $719,201 was reclassed to expense

as a non-operating expense in the statement of operations with the rest of the offering cost charged to shareholders’

transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value

of the public warrant liabilities and the Class A ordinary shares.

Fair Value of Financial Instruments

The fair value of the Company’s assets and

liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair

Value Measurements and Disclosures,”

approximates the carrying amounts represented in the balance sheet.

Derivative Warrant Liabilities

The Company does not use derivative instruments

to hedge exposures to cash flow, market, or foreign currency risks.

The Company evaluates all of its financial instruments, including

issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,

pursuant to ASC 480 and ASC 815-15.

The classification of derivative instruments, including whether such instruments should be recorded

as liabilities or as equity, is re-assessed at the end of each reporting period.

consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public

Offering and that were charged to shareholders’ equity upon the completion of the Initial Public Offering.

Accordingly, on June

30, 2021, offering costs totaling $ 20,169,599 have been charged to shareholders’ equity (consisting of $ 6,900,000 of underwriting

fee, $ 12,075,000 of deferred underwriting fee and $ 1,194,599 of other offering costs).

Of the total transaction costs, $ 719,201 was reclassified

as a non-operating expense in the condensed statement of operations with the rest of the offering cost charged to shareholders’

The transaction costs were allocated based on a relative fair value basis, compared to the total offering proceeds, between the

fair value of the public warrant liabilities and the Class A ordinary shares.

Value of Financial Instruments

The fair value of the Company’s assets and

liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair

Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet.

Warrant Liabilities

Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company evaluates

all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain

features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15.

The classification of derivative instruments, including

whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The Company accounts for its 17,433,333 ordinary

share warrants issued in connection with its Initial Public Offering (11,500,000) and Private Placement (5,933,333) as derivative warrant

liabilities in accordance with ASC 815-40.

Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and

adjusts the instruments to fair value at each reporting period.

The liabilities are subject to re-measurement at each balance sheet date

until exercised, and any change in fair value is recognized in the Company’s statement of operations.

The fair value of warrants

issued by the Company in connection with the Public Offering and Private Placement has been estimated using Monte-Carlo simulations at

each measurement date.

WALDENCAST ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

The Company accounts for income taxes under ASC

Topic 740, “Income Taxes,”

which requires an asset and liability approach to financial accounting and reporting for income

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets

and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods

in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred

tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold

and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in

a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing

The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction.

recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

As of March 31, 2021, there were

no unrecognized tax benefits and no amounts accrued for interest and penalties.

The Company is currently not aware of any issues under

review that could result in significant payments, accruals or material deviation from its position.

The Company is considered to be an exempted Cayman

Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing

requirements in the Cayman Islands or the United States.

As such, the Company’s tax provision was zero for the period presented.

Recent Accounting Standards

Management does not believe that any recently

issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Note 4 —

share warrants issued in connection with its Initial Public Offering ( 11,500,000 ) and Private Placement Warrants ( 5,933,333 ) as derivative

warrant liabilities in accordance with ASC 815-40.

Accordingly, the Company recognizes the warrant instruments as liabilities at fair

value and adjusts the instruments to fair value at each reporting period.

The liabilities are subject to re-measurement at each balance

sheet date until exercised, and any change in fair value is recognized in the Company’s condensed statement of operations.

value of warrants issued by the Company in connection with its Initial Public Offering and Private Placement Warrants has been estimated

using Monte-Carlo simulations at each measurement date.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to

financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed for differences between

the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted

tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are

established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax

positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than

not to be sustained upon examination by taxing authorities.

The Company’s management determined that the Cayman Islands is the

Company’s major tax jurisdiction.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as

income tax expense.

As of June 30, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties.

Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from

its position.

Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently

not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

As such, the Company’s

tax provision was immaterial for the six months ended June 30, 2021.

Accounting Standards

does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect

on the Company’s financial statements.

3 — Initial Public Offering

Pursuant to the Initial Public Offering, the Company

sold 34,500,000 Units, (at a price of $10.00 per Unit.

Each Unit consists of one share of Class A Ordinary shares, par value $0.0001 per

share one-third of one redeemable warrant (“Public Warrant”).

Each whole Public Warrant entitles the holder to purchase one

share of Class A Ordinary shares at a price of $11.50 per share.

Note 5 —

to the Initial Public Offering, the Company sold 34,500,000 Units, (at a price of $ 10.00 per Unit.

Each Unit consists of one share of

Class A Ordinary shares, par value $0.0001 per share one-third of one redeemable warrant (“Public Warrant”).

Each whole Public

Warrant entitles the holder to purchase one share of Class A Ordinary shares at a price of $ 11.50 per share.

4 — Private Placement Warrants

Simultaneously with the closing of the

Initial Public Offering, the Sponsor purchased an aggregate of 5,933,333 Private Placement Warrants at a price of $1.50 per Private

Placement Warrant, for an aggregate price of $8,900,000.

Each Private Placement Warrant is exercisable for one Class A Share at

a price of $11.50 per share, subject to adjustment (see Note 7).

If the Company does not complete a Business Combination within the

Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the

redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire

The initial fair value of the private warrants was recorded as a liability

of $6,230,000 with the excess of cash received over initial fair value of the warrants of $2,670,000 recorded as additional paid in capital.

Note 6 —

Simultaneously with the closing of the Initial

Public Offering, the Sponsor purchased an aggregate of 5,933,333 Private Placement Warrants at a price of $ 1.50 per Private Placement

Warrant, for an aggregate price of $ 8,900,000 .

Each Private Placement Warrant is exercisable for one Class A ordinary share at a price

of $ 11.50 per share, subject to adjustment (see Note 6).

If the Company does not complete a Business Combination within the Combination

Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of

the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

fair value of the private warrants was recorded as a liability of $ 6,230,000 with the excess of cash received over initial fair value

of the warrants of $ 2,670,000 recorded as additional paid-in capital.

5 — Related Party Transactions

January 12, 2021, the Company issued 7,187,500 Class B ordinary shares to the Sponsor for an aggregate purchase price of $ 25,000 (the

“Founder Shares”).

On January 12, 2021, the Company issued 7,187,500

Class B ordinary shares to the Sponsor for an aggregate purchase price of $25,000 (the “Founder Shares”).

On March 15, 2021,

the Company effected a dividend of 0.2 of a share of Class B ordinary shares for each share of Class B ordinary shares, resulting

in 8,625,000 shares of Class B ordinary shares being issued and outstanding.

Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of

its Class B ordinary shares or Class A ordinary shares received upon conversion thereof (together,

“Founder Shares”) until the earlier of:

(A) one year after the completion of

a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported

sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted

for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations,

recapitalizations and the like) for any 20 trading days within any 30-trading day period

commencing at least 150 days after a Business Combination, or (y) the date on which the Company

completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar

transaction that results in all of the Company’s shareholders having the right to exchange

their ordinary shares for cash, securities or other property.

Related Party

January 12, 2021, the Company issued the Promissory Note to the Sponsor, pursuant to which the Company may borrow up to an aggregate

principal amount of $300,000.

As of March 31, 2021, the Company had repaid the Sponsor note in full.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Administrative

Support Agreement

on the date of the Initial Public Offering, the Company has agreed to pay the Sponsor a total of $10,000 per month for office space and

administrative support services.

Upon completion of the Initial Business Combination or the Company’s liquidation, the Company

will cease paying these monthly fees.

Capital Loans

order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain

of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working

Capital Loans”).

Such Working Capital Loans would be evidenced by promissory notes.

The notes may be repaid upon completion of

a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion

of a Business Combination into warrants at a price of $1.50 per warrant.

On March 15, 2021, the Company effected a dividend of 0.2 of a share of Class B ordinary shares for

each share of Class B ordinary shares, resulting in 8,625,000 shares of Class B ordinary shares being issued and outstanding.

The Sponsor has agreed, subject to limited exceptions,

not to transfer, assign or sell any of its Class B ordinary shares or Class A ordinary shares received upon conversion thereof until the

(A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last

reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends,

rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day

period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger,

amalgamation, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having

the right to exchange their ordinary shares for cash, securities or other property.

Note — Related Party

On January 12, 2021, the Company issued the Promissory

Note to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $ 300,000 .

As of June 30, 2021,

the Company had no borrowing outstanding under the Promissory Note.

WALDENCAST ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Due to Related Party

The balance of $ 35,000 represents the amount accrued

for the administrative support services provided by the Sponsor from date of the IPO (defined below) to June 30, 2021.

Administrative Support Agreement

Commencing on the date of the Initial Public Offering,

the Company has agreed to pay the Sponsor a total of $ 10,000 per month for office space and administrative support services.

Upon completion

of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.

For the three

months and six months ended June 30, 2021, the Company has recognized $ 5,000 and $ 35,000 , respectively, of administrative service fee, which

is included in formation and operating costs on the condensed statements of operations.

Working Capital Loans

In order to finance transaction costs in

connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and

directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

Working Capital Loans would be evidenced by promissory notes.

The notes may be repaid upon completion of a Business Combination,

without interest, or, at the lender’s discretion, up to $ 1,500,000 of notes may be converted upon completion of a Business

Combination into warrants at a price of $ 1.50 per warrant.

Such warrants would be identical to the Private Placement Warrants.

In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to

the event that a Business Combination does not close, the Company may use a portion of proceeds held outside of the Trust Account to

repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

of March 31, 2021, the Company had not outstanding borrowings under the Working Capital Loans.

As of June 30, 2021, the Company had no outstanding borrowings under the Working Capital Loans.

Forward Purchase Agreement

The Company entered into two separate forward

purchase agreements as follows.

The sponsor and Dynamo Master Fund (a member of our sponsor) entered into a forward purchase agreement

(the “Sponsor Forward Purchase Agreement”), dated as of February 22, 2021, with the Company that will provide for the purchase

of an aggregate of 13,000,000 Class A ordinary shares and 4,333,333 redeemable warrants, for an aggregate purchase price of $130,000,000,

or $10.00 per one Class A ordinary shares and one-third of one redeemable warrant, in a private placement to close substantially concurrently

with the closing of our initial business combination.

The Sponsor Forward Purchase Agreement provides that the applicable forward purchase

investors may, in their sole discretion, increase the amount of capital committed under the Sponsor Forward Purchase Agreement up to an

amount not to exceed $160,000,000.

Beauty Ventures LLC (“Beauty Ventures”) entered into a forward purchase agreement (the

“Beauty Forward Purchase Agreement”), dated as of March 1, 2021, with the Company that provides for the purchase of an aggregate

of up to 17,300,000 Class A ordinary shares and up to 5,766,667 redeemable warrants, for an aggregate purchase price of up to $173,000,000

(subject to the below), or $10.00 per one Class A ordinary share and one-third of one redeemable warrant, in a private placement to close

substantially concurrently with the closing of the initial business combination.

To the extent that the amounts available from the trust

account and other financing (including the Sponsor Forward Purchase Agreement) are sufficient for the cash requirements in connection

with our initial business combination, the sponsor may, in its sole discretion, as the managing member of Beauty Ventures, reduce its

purchase obligation, up to the full amount, under the Beauty Forward Purchase Agreement.

Members of the sponsor or their affiliates will

receive a performance fee allocation when the return on the securities underlying the Beauty Forward Purchase Agreement exceeds certain

benchmark returns.

The obligations under the forward purchase agreements will not depend on whether any Class A ordinary shares are redeemed

by our public shareholders.

The forward purchase shares and the forward purchase warrants included in the units being sold in this offering,

respectively, will be identical to the public shares and public warrants included in the units being sold in this offering, respectively,

except that the holders thereof will have certain registration rights, as described herein.

Commitments & Contingencies

holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans

(and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the

Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights

agreement to be signed prior to or on the effective date of the Initial Public Offering requiring the Company to register such securities

The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company

In addition, the holders have certain “piggy-back”

registration rights with respect to registration

statements filed subsequent to the completion of a Business Combination.

The Company will bear the expenses incurred in connection with

the filing of any such registration statements.

March 18, 2021, the Company paid a fixed underwriting discount of $0.20 per Unit, or $6,900,000 in the aggregate.

The Company entered into two separate forward purchase

agreements as follows.

The Sponsor and Dynamo Master Fund (a member of the Sponsor) entered into a forward purchase agreement (the “Sponsor

Forward Purchase Agreement”), dated as of February 22, 2021, with the Company that will provide for the purchase of an aggregate

of 13,000,000 Class A ordinary shares and 4,333,333 redeemable warrants, for an aggregate purchase price of $ 130,000,000 , or $ 10.00 per

one Class A ordinary shares and one-third of one redeemable warrant, in a private placement to close substantially concurrently with the

closing of our initial Business Combination.

The Sponsor Forward Purchase Agreement provides that the applicable forward purchase investors

may, in their sole discretion, increase the amount of capital committed under the Sponsor Forward Purchase Agreement up to an amount not

to exceed $ 160,000,000 .

Beauty Ventures LLC (“Beauty Ventures”) entered into a forward purchase agreement (the “Beauty

Forward Purchase Agreement”, and together with the Sponsor Forward Purchase Agreement, the “Forward Purchase Agreements”

or “FPA”), dated as of March 1, 2021, with the Company that provides for the purchase of an aggregate of up to 17,300,000

Class A ordinary shares and up to 5,766,667 redeemable warrants, for an aggregate purchase price of up to $ 173,000,000 (subject to the

below), or $ 10.00 per one Class A ordinary share and one-third of one redeemable warrant, in a private placement to close substantially

concurrently with the closing of the initial Business Combination.

To the extent that the amounts available from the Trust Account and

other financing (including the Sponsor Forward Purchase Agreement) are sufficient for the cash requirements in connection with our initial

Business Combination, the Sponsor may, in its sole discretion, as the managing member of Beauty Ventures, reduce its purchase obligation,

up to the full amount, under the Beauty Forward Purchase Agreement.

Members of the Sponsor or their affiliates will receive a performance

fee allocation when the return on the securities underlying the Beauty Forward Purchase Agreement exceeds certain benchmark returns.

obligations under the forward purchase agreements will not depend on whether any Class A ordinary shares are redeemed by our public shareholders.

The forward purchase shares and the forward purchase warrants included in the units being sold in this offering, respectively, will be

identical to the public shares and public warrants included in the units being sold in this offering, respectively, except that the holders

thereof will have certain registration rights, as described herein.

Note 6 — Commitments & Contingencies

Registration Rights

The holders of the Founder Shares, Private Placement

Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the

exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the

Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective

date of the Initial Public Offering requiring the Company to register such securities for resale.

The holders of these securities will

be entitled to make up to three demands, excluding short form demands, that the Company register such securities.

In addition, the holders

have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of

a Business Combination.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

On March 18, 2021, pursuant to the consummation

of the IPO, the Company paid a fixed underwriting discount of $ 0.20 per Unit, or $ 6,900,000 in the aggregate.

Additionally, a deferred

1 unchanged sentence

the Trust Account solely in the event that the Company completes an initial Business Combination, subject to the terms of the underwriting

Shareholder’s Equity

Shares —

The Company is authorized to issue a total of 5,000,000 preference shares at par value of $0.0001 each.

31, 2021, there were no preference shares issued or outstanding.

A Ordinary Shares —

The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $0.0001

At March 31, 2021, there were 4,656,531 shares issued and outstanding (excluding 29,843,469 shares subject to possible redemption)

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

B Ordinary Shares —

The Company is authorized to issue a total of 50,000,000 shares of Class B ordinary shares at par value

of $0.0001 each.

At March 31, 2021, there were 8,625,000 Class B ordinary shares issued or outstanding.

holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination.

Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters

submitted to a vote of the Company’s shareholders except as otherwise required by law.

Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the completion of the Business

Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment.

In the case that additional

Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Proposed

Public Offering and related to the closing of a Business Combination, the ratio at which Founder Shares will convert into Class A

ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares) so that the number

of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis,

20% of the sum of the ordinary shares issued and outstanding upon completion of the Proposed Public Offering plus the number of Class A

ordinary shares and equity-linked securities issued or deemed issued in connection with a Business Combination, excluding any Class A

ordinary shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination.

Warrants may only be exercised for a whole number of shares.

No fractional warrants will be issued upon separation of the Units and only

whole warrants will trade.

The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business

Combination and (b) 12 months from the closing of the Initial Public Offering.

The Public Warrants will expire five years after the completion

of a Business Combination or earlier upon redemption or liquidation.

Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation

to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary

shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying

its obligations with respect to registration.

No Public Warrant will be exercisable and the Company will not be obligated to issue any

shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified

under the securities laws of the state of the exercising holder, or an exemption is available.

Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the Company’s

Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the

registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants.

The Company will use its

commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement,

and a current prospectus relating thereto, until the expiration or redemption of the warrants in accordance with the provisions of the

warrant agreement.

If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective

by the 60 th business day after the closing of a Business Combination, warrant holders may, until such time as there is an

effective registration statement and during any period when the Company will have failed to maintain an effective registration statement,

exercise warrants on a “cashless basis”

in accordance with Section 3(a)(9) of the Securities Act or another exemption.

Notwithstanding

the above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such

that they satisfy the definition of a “covered security”

under Section 18(b)(1) of the Securities Act, the Company may, at

its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis”

in accordance with

Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in

effect a registration statement, and in the event the Company does not so elect, it will use its commercially reasonable efforts to register

or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

warrants become exercisable, the Company may redeem the Public Warrants for redemption:

Note 7 — Shareholder’s Equity

Preference Shares — The Company

is authorized to issue a total of 5,000,000 preference shares at par value of $ 0.0001 each.

At June 30, 2021, there were no preference

shares issued or outstanding.

Class A Ordinary Shares —

The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $ 0.0001 each.

At June 30, 2021, there

were 4,811,682 shares issued and outstanding (excluding 29,688,318 shares subject to possible redemption).

WALDENCAST ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Class B Ordinary Shares —

The Company is authorized to issue a total of 50,000,000 shares of Class B ordinary shares at par value of $ 0.0001 each.

At June 30, 2021,

there were 8,625,000 Class B ordinary shares issued or outstanding.

Only holders of the Class B ordinary shares

will have the right to vote on the election of directors prior to the Business Combination.

Holders of Class A ordinary shares and

holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s

shareholders except as otherwise required by law.

The Class B ordinary shares will automatically

convert into Class A ordinary shares at the time of the completion of the Business Combination, or earlier at the option of the holder,

on a one-for-one basis, subject to adjustment.

In the case that additional Class A ordinary shares, or equity-linked securities,

are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination,

the ratio at which Founder Shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority

of the Class B ordinary shares) so that the number of Class A ordinary shares issuable upon conversion of all Founder Shares

will equal, in the aggregate, on an as-converted basis, 20 % of the sum of the ordinary shares issued and outstanding upon completion

of the Initial Public Offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued

in connection with a Business Combination, excluding any Class A ordinary shares or equity-linked securities issued, or to be

issued, to any seller in a Business Combination.

Note 8 — Warrants

Public Warrants may only be exercised for a whole

number of shares.

No fractional warrants will be issued upon separation of the Units and only whole warrants will trade.

The Public Warrants

will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing

of the Initial Public Offering.

The Public Warrants will expire five years after the completion of a Business Combination or earlier upon

redemption or liquidation.

The Company will not be obligated to deliver any

Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise

unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the Public Warrants is

then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration.

No Public Warrant will be exercisable, and the Company will not be obligated to issue any shares to holders seeking to exercise their

warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the

exercising holder, or an exemption is available.

The Company has agreed that as soon as practicable,

but in no event later than 15 business days, after the closing of the Company’s Business Combination, the Company will use its commercially

reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary

shares issuable upon exercise of the warrants.

The Company will use its commercially reasonable efforts to cause the same to become effective

and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption

of the warrants in accordance with the provisions of the warrant agreement.

If a registration statement covering the Class A ordinary

shares issuable upon exercise of the warrants is not effective by the 60 th business day after the closing of a Business Combination,

warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have

failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section

3(a)(9) of the Securities Act or another exemption.

Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise

of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under

Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants

to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects,

the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect,

it will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption

is not available.

Once the warrants become exercisable, the Company may redeem the Public

Warrants for redemption:

● in whole and not in part;

● at a price of $0.01 per Public Warrant;

upon not less than 30 days’

prior written notice

of redemption to each warrant holder;

if, and only if, the reported

last sale price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading

day prior to the date on which the Company sends the notice of redemption the warrant holders (the “Reference Value”)

equals or exceeds $18.00 per share (as adjusted).

Public Warrants become exercisable, the Company may redeem the Public Warrants:

whole and not in part;

$0.10 per warrant upon a minimum of 30 days’

prior written notice of redemption

provided that holders will be able to exercise their warrants on a cashless basis prior to

redemption and receive that number of shares determined by reference to the table below,

based on the redemption date and the “fair market value”

of the Class A

ordinary shares;

and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted);

the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants

must also be concurrently called for redemption on the same terms as the outstanding Public

Warrants, as described above.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register

or qualify the underlying securities for sale under all applicable state securities laws.

exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including

in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation.

However, except

as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price.

Additionally,

in no event will the Company be required to net cash settle the Public Warrants.

If the Company is unable to complete a Business Combination

within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive

any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held

outside of the Trust Account with respect to such Public Warrants.

● upon not less than 30 days’ prior written notice of redemption to each warrant holder;

● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted).

Once the Public Warrants become exercisable, the Company may redeem

the Public Warrants:

● in whole and not in part;

● at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of the Class A ordinary shares;

● if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted);

● if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

WALDENCAST ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

If and when the warrants become redeemable by

the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale

under all applicable state securities laws.

The exercise price and number of ordinary shares

issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary

dividend or recapitalization, reorganization, merger or consolidation.

However, except as described below, the Public Warrants will not

be adjusted for issuances of ordinary shares at a price below its exercise price.

Additionally, in no event will the Company be required

to net cash settle the Public Warrants.

If the Company is unable to complete a Business Combination within the Combination Period and

the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect

to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with

respect to such Public Warrants.

Accordingly, the Public Warrants may expire worthless.

addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection

with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with

such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of

any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,

as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent

more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination, and (z) the volume

weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the

day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, then

the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the

Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal

to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.

Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except

that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will

not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above,

so long as they are held by the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable

by the Company and exercisable by such holders on the same basis as Public Warrants.

Fair Value Measurements

value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction

between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs

used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets

or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

In addition, if (x) the Company issues additional

Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination

at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price

to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates,

without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly

Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest

thereon, available for the funding of a Business Combination, and (z) the volume weighted average trading price of the Class A ordinary

shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination

(such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the

nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption

trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued

Price, respectively.

The Private Placement Warrants will be identical

to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and

the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable

until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement

Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial

purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders

on the same basis as Public Warrants.

Note 9 — Fair Value Measurements

Fair value is defined as the price that would

be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives

the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the

lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices

for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,

such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31,

2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Securities held in Trust Account

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table presents information about

the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 and indicates the fair value hierarchy

of the valuation inputs the Company utilized to determine such fair value:

Marketable Securities held in Trust Account

$ 345,014,376

FPA liabilities

Forward purchase agreement liabilities

( 12,321,000 )

Warrant liabilities

( 19,236,000 )

1 unchanged sentence

$ 313,457,376

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Company utilizes a Monte Carlo simulation model to value the warrants at each reporting period, with changes in fair value recognized

in the statement of operations.

The estimated fair value of the warrant liability is determined using Level 3 inputs.

a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and

dividend yield.

The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected

remaining life of the warrants.

The risk-free interest rate is based on the U.S.

Treasury zero-coupon yield curve on the grant date for

a maturity similar to the expected remaining life of the warrants.

The expected life of the warrants is assumed to be equivalent to their

remaining contractual term.

The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

The aforementioned

warrant liabilities are not subject to qualified hedge accounting.

no transfers between Levels 1, 2 or 3 during the quarter ended March 31, 2021.

The following

table provides quantitative information regarding Level 3 fair value measurements:

$ 325,778,376

$ ( 12,321,000 )

WALDENCAST ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The Company utilizes a Monte Carlo simulation

model to value the warrants at each reporting period, with changes in fair value recognized in the condensed statement of operations.

The estimated fair value of the warrant liabilities is determined using Level 3 inputs.

Inherent in a binomial options pricing model

are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield.

The Company estimates

the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants.

The risk-free

interest rate is based on the U.S.

Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining

life of the warrants.

The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

rate is based on the historical rate, which the Company anticipates to remain at zero.

The aforementioned warrant liabilities are not subject to qualified

hedge accounting.

The value of the warrant liabilities was transferred from Level 3 to

Level 1 during the period due to the fact that they are now listed on an active market.

There were no other transfers between Levels 1,

2 or 3 during the three and six-month period ended June 30, 2021.

The following table provides quantitative information regarding Level 3

fair value measurements:

Term (in years)

1 unchanged sentence

Dividend yield

following table presents the changes in the fair value of warrant liabilities:

value as of December 31, 2020

measurement on March 18, 2021

Change in valuation inputs or other assumptions

value as of March 31, 2021

The estimated fair value of the warrant liability

is determined using Level 3 inputs.

Inherent in a binomial options pricing model are assumptions related to expected stock-price volatility,

expected life, risk-free interest rate and dividend yield.

The Company estimates the volatility of its common stock based on historical

volatility that matches the expected remaining life of the warrants.

The risk-free interest rate is based on the U.S.

Treasury zero-coupon

yield curve on the grant date for a maturity similar to the expected remaining life of the warrants.

The expected life of the warrants

is assumed to be equivalent to their remaining contractual term.

The dividend rate is based on the historical rate, which the Company

anticipates to remain at zero.

The Company has initially classified the FPA as a liability.

financial instrument is subject to re-measurement at each balance sheet date.

With each such re-measurement, the FPA asset or liability

will be adjusted to fair value, with the change in fair value recognized in the Company's statement of operations.

As such, the Company

recorded a $11,655,000 derivate liability related to the FPA as of March 18, 2021.

At March 31, 2021, the re-measurement of the derivative

associated with the FPA resulted in no change in the derivative liability –

The following table presents the changes in the fair value of warrant

Fair value as of December 31, 2020

Initial measurement on March 18, 2021

Change in fair value of warrant liabilities

Fair value as of March 31, 2021

Change in fair value of warrant liabilities

Fair value as of June 30, 2021

Prior to their transfer to Level 1 inputs, the

estimated fair value of warrant liabilities is determined using Level 3 inputs.

Inherent in a binomial options pricing model are assumptions

related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield.

The Company estimates the volatility

of its common stock based on historical volatility that matches the expected remaining life of the warrants.

The risk-free interest rate

is based on the U.S.

Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants.

The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

The dividend rate is based on the historical

rate, which the Company anticipates to remain at zero.

The Company has initially classified the FPA as

This financial instrument is subject to re-measurement at each balance sheet date.

With each such re-measurement,

the FPA asset or liability will be adjusted to fair value, with the change in fair value recognized in the Company's condensed statement

of operations.

As such, the Company recorded a $ 11,655,000 of derivative liabilities related to the FPA as of March 18, 2021.

30, 2021, the re-measurement of the derivative associated with the FPA resulted in the following change in the derivative liabilities

– forward purchase agreement.

FPA Liabilities

Derivative liability –

forward purchase agreement at March 18, 2021

Change in fair value of derivative liability –

forward purchase agreement

Derivative liability –

forward purchase agreement at March 31, 2021

Subsequent Events

Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements

Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure

in the financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

in this report (the “Quarterly Report”) to “we,”

“us”

or the “Company”

refer to Waldencast

Acquisition Corp.

References to our “management”

or our “management team”

refer to our officers and directors,

and references to the “Sponsor”

refer to Waldencast Long-Term Capital LLC.

The following discussion and analysis of the Company’s

financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the

notes thereto contained elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below

includes forward-looking statements that involve risks and uncertainties.

Note Regarding Forward-Looking Statements

Quarterly Report includes “forward-looking statements”

within the meaning of Section 27A of the Securities Act of 1933, as

amended (the “Securities Act”) and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties

that could cause actual results to differ materially from those expected and projected.

All statements, other than statements of historical

fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of

Financial Condition and Results of Operations”

regarding the Company’s financial position, business strategy and the plans

and objectives of management for future operations, are forward-looking statements.

Words such as “expect,”

“believe,”

“anticipate,”

“intend,”

“estimate,”

“seek”

and variations and similar words and expressions

are intended to identify such forward-looking statements.

Such forward-looking statements relate to future events or future performance,

but reflect management’s current beliefs, based on information currently available.

A number of factors could cause actual events,

performance or results to differ materially from the events, performance and results discussed in the forward-looking statements.

information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking

statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with

Securities and Exchange Commission (the “SEC”).

The Company’s securities filings can be accessed on the EDGAR

section of the SEC’s website at www.sec.gov.

Except as expressly required by applicable securities law, the Company disclaims any

intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

are a blank check company incorporated in the Cayman Islands on December 8, 2020 formed for the purpose of effecting a merger, share

exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business

Combination”).

We intend to effectuate a Business Combination using cash derived from the proceeds of the Initial Public Offering

and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.

expect to continue to incur significant costs in the pursuit of our acquisition plans.

We cannot assure you that our plans to complete

a Business Combination will be successful.

of Operations

have neither engaged in any operations nor generated any operating revenues to date.

Our only activities from for the three months ended

March 31, 2021 were organizational activities and those necessary to prepare for the Initial Public Offering, described below.

not expect to generate any operating revenues until after the completion of a Business Combination.

We expect to generate non-operating

income in the form of interest income on marketable securities held after the Initial Public Offering.

We expect that we will incur increased

expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due

diligence expenses in connection with searching for, and completing, a Business Combination.

the three months ended March 31, 2021, we had a net loss of $1,183,957, which consisted of operating costs of $117,515 and a non-cash

change in fair value of derivative liability of $348,666, and a non-cash charge for offering expenses related to issuance of warrants

of $719,201, offset by interest income from operating bank account of $131, and interest income on marketable securities held in the

Trust Account of $1,294.

and Capital Resources

March 18, 2021, we consummated the Initial Public Offering of 34,500,000 units (the “Units”

and, with respect to the Class

A ordinary shares included in the Units being offered, the “public share”), at $10.00 per Unit, generating gross proceeds

of $345,000,000, which is discussed in Note 3.

Simultaneously with the closing of our Initial Public Offering, the Company consummated

the sale of 5,933,333 warrants (the “Private Placement Warrant”), at a price of $1.50 per Private Placement Warrant, which

is discussed in Note 4.

the Initial Public Offering and the sale of the Private Placement Warrants, a total of $345,000,000 was placed in the Trust Account.

We incurred $20,169,599 in transaction costs, including $6,900,000 of underwriting fees, $12,075,000 of deferred underwriting fees and

$1,194,599 of other costs.

the three months ending March 31, 2021 cash used in operating activities was $53,682.

Net loss of $1,183,957 was affected by a non-cash

charges including the change in fair value of warrant liability of $348,666 and offering cost related to warrant issuance of $719,201,

and interest earned on marketable securities held in the Trust Account of $1,294.

Changes in operating assets and liabilities provided

$63,702 of cash for operating activities.

of March 31, 2021, we had marketable securities held in the Trust Account of $345,001,294.

We intend to use substantially all

of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall

be net of taxes payable and excluding deferred underwriting commissions, to complete our Business Combination.

We may withdraw interest

from the Trust Account to pay taxes, if any.

Through March 31, 2021, we did not withdraw any interest earned on the Trust Account to

pay our taxes.

To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination,

the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or

businesses, make other acquisitions and pursue our growth strategies.

of March 31, 2021, we had cash of $1,449,687.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate

target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar

locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of

prospective target businesses, structure, negotiate and complete a Business Combination.

order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an

affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required.

we complete a Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us.

event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay

such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.

Up to $1,500,000 of such loans may be convertible

into warrants, at a price of $1.50 per warrant, at the option of the lender.

The warrants would be identical to the Private Placement

do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination

are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial

Business Combination.

Moreover, we may need to obtain additional financing either to complete our Business Combination or because we

become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may

issue additional securities or incur debt in connection with such Business Combination.

Sheet Arrangements

have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2021.

participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable

interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered

into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other

entities, or purchased any non-financial assets.

do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement

to pay the Sponsor a monthly fee of $10,000 for office space administrative and support services provided to the Company.

We began incurring

these fees on March 15, 2021 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination

and the Company’s liquidation.

underwriter is entitled to a deferred fee of $0.35 per Unit, or $12,075,000 in the aggregate.

The deferred fee will become payable to

the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the

terms of the underwriting agreement.

Accounting Policies

management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial

statements, which have been prepared in accordance with GAAP.

The preparation of our unaudited condensed financial statements requires

us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure

of contingent assets and liabilities in our unaudited condensed financial statements.

On an ongoing basis, we evaluate our estimates

and judgments, including those related to fair value of financial instruments and accrued expenses.

We base our estimates on historical

experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of

which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other

Actual results may differ from these estimates under different assumptions or conditions.

We have identified the following as

our critical accounting policies:

A ordinary shares subject to possible redemption

Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards

Codification (“ASC”) Topic 480 Distinguishing Liabilities from Equity.

Ordinary shares subject to mandatory redemption

is classified as a liability instrument and is measured at fair value.

Conditionally redeemable ordinary shares (including ordinary

shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence

of uncertain events not solely within the Company’s control) are classified as temporary equity.

At all other times, ordinary

shares are classified as shareholders’

The Company’s ordinary shares feature certain redemption rights that are

considered to be outside of the Company’s control and subject to occurrence of uncertain future events.

As of March 31,

2021 and December 31, 2020, 31,008,969 and no shares of Class A ordinary shares subject to possible redemption are presented at

redemption value as temporary equity, outside of the shareholders’

equity section of the Company’s balance sheet,

respectively.

account for the warrants issued in connection with our initial public offering in accordance with Accounting Standards Codification (“ASC”)

815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815”), under which the warrants do not

meet the criteria for equity classification and must be recorded as liabilities.

As the warrants meet the definition of a derivative

as contemplated in ASC 815, the Warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820,

Fair Value Measurement, with changes in fair value recognized in the Statement of Operations in the period of change.

(Loss) Per Ordinary Shares

earnings (loss) per share is computed by dividing net earnings by the weighted-average number of shares of ordinary shares outstanding

during the period.

Company’s statement of operations includes a presentation of net earnings (loss) per share for common shares subject to possible

redemption and applies the two-class method in calculating net earnings (loss) per share.

Net earnings per common share, basic and diluted,

for Class A redeemable ordinary shares is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable

franchise and income taxes, by the weighted average number of Class A ordinary shares subject to possible redemption outstanding since

original issuance.

Net loss per share, basic and diluted, for Class A and Class B non-redeemable ordinary shares is calculated by dividing

the net loss, adjusted for income attributable to Class A redeemable ordinary shares, by the weighted average number of Class A and Class

B non-redeemable ordinary shares outstanding for the period.

Class B non-redeemable ordinary shares include the Founder Shares as these

shares do not have any redemption features and do not participate in the income earned on the Trust Account.

Accounting Pronouncements

August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation

models required under current GAAP.

The ASU also removes certain settlement conditions that are required for equity-linked contracts

to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas.

adopted ASU 2020-06 on January 1, 2021.

Adoption of the ASU did not impact our financial position, results of operations or cash flows.

do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material

impact on our unaudited condensed financial statements.

April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was signed into law.

The JOBS Act contains

provisions that, among other things, relax certain reporting requirements for qualifying public companies.

We qualify as an “emerging

growth company”

under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective

date for private (not publicly traded) companies.

We elected to delay the adoption of new or revised accounting standards, and as a result,

we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for

non-emerging growth companies.

As a result, our unaudited condensed financial statements may not be comparable to companies that comply

with new or revised accounting pronouncements as of public company effective dates.

an “emerging growth company”, we are not required to, among other things, (i) provide an auditor’s attestation report

on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure

that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)

comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) regarding

mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the

unaudited condensed financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related

items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median

employee compensation.

These exemptions will apply for a period of five years following the completion of our initial public offering

or until we are no longer an “emerging growth company,”

whichever is earlier.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

required for smaller reporting companies.

Derivative liability – forward purchase agreement at March 18, 2021

Change in fair value of derivative liability – forward purchase agreement

Derivative liability – forward purchase agreement at March 31, 2021

Change in fair value of derivative liability – forward purchase agreement

Derivative liability – forward purchase agreement at June 30, 2021

Note 10 — Subsequent Events

The Company evaluated subsequent events and transactions

that occurred after the balance sheet date through the date that the financial statements were issued.

Based upon this review, the Company

did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements