What changed in this filing

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Item 1. Financial Statements

2021-11-18 compared with 2021-08-16 · 614 added, 352 removed, 379 unchanged (72% of the section changed)

2 unchanged sentences

CONDENSED BALANCE SHEETS

September 30,

Current assets:

2 unchanged sentences

Total current assets

Prepaid expenses – non-current

Marketable securities held in Trust Account

Liabilities and Shareholders’ Equity

Prepaid expenses – non-current portion

Investment held in Trust Account

Liabilities and Shareholders’ Deficit

Current liabilities:

7 unchanged sentences

Total liabilities

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:

Class A ordinary shares subject to possible redemption, 34,500,000 and no shares at redemption value at September 30, 2021 and December 31, 2020, respectively

Shareholders’ deficit:

Preference shares, $ 0.0001 par value;

3 unchanged sentences

500,000,000 shares authorized;

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

no shares issued and outstanding (excluding 34,500,000 and no shares subject to redemption) at September 30, 2021 and December 31, 2020, respectively

Class B ordinary shares, $ 0.0001 par value;

50,000,000 shares authorized;

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

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

Additional paid-in capital

1 unchanged sentence

( 35,360,269 )

Total shareholders’ equity

Total liabilities and shareholders’ equity

Total shareholders’ deficit

( 35,359,406 )

Total liabilities and shareholders’ deficit

$ 345,702,585

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

2 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Formation and operating costs

6 unchanged sentences

Change in fair value of warrant liabilities

( 1,046,000 )

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

Total other income

Weighted average shares outstanding, Class A ordinary shares subject to possible redemption

Basic and diluted net income per share, Class A ordinary shares subject to possible redemption

Weighted average shares outstanding, Non-redeemable Class B ordinary shares

Basic and diluted net income per share, Non-redeemable Class B ordinary shares

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

ACQUISITION CORP.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

Ordinary Shares

9 unchanged sentences

( 1,183,957 )

Balance as of March 31, 2021

( 1,183,957 )

Class A ordinary shares subject to possible redemption

Balance as of March 31, 2021, as restated

$ ( 41,566,169 )

$ ( 41,565,306 )

Balance as of June 30, 2021

( 1,551,509 )

Balance as of June 30, 2021, as restated

$ ( 43,117,678 )

$ ( 43,116,815 )

Balance as of September 30, 2021

$ ( 35,360,269 )

$ ( 35,359,406 )

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

1 unchanged sentence

STATEMENT OF CASH FLOWS

Six months ended

Nine months ended

September 30,

Cash Flows from Operating Activities:

$ ( 2,735,465 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Interest earned on Trust Account

Change in fair value of warrant liabilities

( 4,009,667 )

Change in fair value of forward purchase agreement liabilities

( 2,664,000 )

Offering costs allocated to warrants

1 unchanged sentence

Prepaid assets

Due to related party

Accounts payable

Due to related party

Net cash used in operating activities

( 1,168,310 )

Cash Flows from Investing Activities:

15 unchanged sentences

$ 345,000,000

Accretion of Class A ordinary shares to redemption value

Initial value of warrant liabilities

Initial value of forward purchase agreement liabilities

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

$ ( 1,999,790 )

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

Initial value of forward purchase agreement liabilities

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

2 unchanged sentences

1 — Organization and Business Operations

Waldencast Acquisition Corp.

(the “Company”)

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

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

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated

with early stage and emerging growth companies.

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

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.

Acquisition Corp.

(the “Company”) was incorporated in the Cayman Islands on December 8, 2020.

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 Combination.

The Company is an early stage and emerging growth company and,

as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

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

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 4.

Simultaneously

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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 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

the total transaction 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.

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:

(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

(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.

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

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 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

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.

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 of an agreement to enter into

a Business Combination.

The Company will provide its public shareholders

with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either

(i) in connection with a shareholder meeting called to approve the initial Business Combination or (ii) by means of a tender offer.

decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer

will be made by the Company, solely in its discretion.

The shareholders will be entitled to redeem their shares for a pro rata portion

of the amount then on deposit in the Trust Account (initially $ 10.00 per share, plus any pro rata interest earned on the funds held in

the Trust Account and not previously released to the Company to pay its tax obligations).

The Class A ordinary shares subject to redemption

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,

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

prior to or upon consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding

shares voted are voted in favor of the Business Combination.

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

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

100 % of the outstanding public shares for a pro rata portion of the funds held in the Trust Account, equal to the aggregate amount then

on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company,

divided by the number of then outstanding public shares, subject to applicable law and as further described in the registration statement,

and then seek to dissolve and liquidate.

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 Combination.

Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion

of the initial Business Combination either (i) in connection with a shareholder meeting called to approve the initial Business Combination

or (ii) by means of a tender offer.

The decision as to whether the Company will seek shareholder approval of a proposed initial Business

Combination or conduct a tender offer will be made by the Company, solely in its discretion.

The shareholders will be entitled to redeem

their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $ 10.00 per share, plus any pro

rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).

Class A ordinary shares subject to redemption 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, the Company will proceed with a Business Combination if the Company has net tangible assets

of at least $ 5,000,001 either immediately prior to or upon consummation of a Business Combination and, if the Company seeks shareholder

approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.

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”).

However, if the Company is unable to complete a Business Combination

within the Combination Period, the Company will redeem 100 % of the outstanding public shares for a pro rata portion of the funds

held in the Trust Account, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds

held in the Trust Account and not previously released to the Company, divided by the number of then outstanding public shares, subject

to applicable law and as further described in the registration statement, and then seek to dissolve and liquidate.

The Company’s Sponsor, officers and directors

1 unchanged sentence

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

shares if the Company fails to complete the initial Business Combination within the Combination Period.

ACQUISITION CORP.

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,

or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement

or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.00 per public share

and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less

than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply

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

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

However, the Company has not

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

of the Company.

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

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 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.

Until consummation of

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 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

target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate

documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating

and consummating the Business Combination.

shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles

of association, and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares

and private placement shares if the Company fails to complete the initial Business Combination within the Combination Period.

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, or a prospective target business with which the Company has entered into a written letter of

intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below

the lesser of (i) $ 10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of

the liquidation of the Trust Account, if less than $ 10.00 per share due to reductions in the value of the trust assets, less taxes payable,

provided that such liability will not apply 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 of the Initial Public Offering against certain liabilities, including liabilities under

the Securities Act.

However, the Company has not 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 of the Company.

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

those obligations.

As of September 30, 2021, the Company had cash

in an operating bank account, outside of the Trust Account, of $335,058 available for working capital needs.

As of September 30, 2021

the Company had working capital of $ 422,644 .

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, to redeem Class A ordinary

shares or with respect to the interest earned, to be withdrawn for the payment of taxes.

As of September 30, 2021, none of the amount

in the Trust Account was withdrawn as described above.

September 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 Warrants.

On October 28, 2021, the Sponsor funded the $ 1,500,000

available under the Working Capital Loans to the Company (see Notes 6 and 12).

The Company anticipates that the $ 335,058 in its operating

bank account as of September 30, 2021, in addition to the subsequent $1,500,000 draw down of the Working Capital Loans available, 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.

Until consummation of 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 is described in Note 6), for identifying and evaluating

prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices,

plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target

businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

The Company does not believe It will need to raise

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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

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.

Note 2 — Restatement of Previously Issued

Financial Statements

In the Company’s previously issued financial

statements, a portion of the public shares were classified as permanent equity to maintain shareholders’ equity greater than $ 5,000,000

on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least

$ 5,000,001 .

Thus, the Company had historically classified a portion of the public shares in permanent

in light of recent comment letters issued by the Securities & Exchange Commission (“SEC”) to several special purpose

acquisition companies, management re-evaluated the Company’s application of ASC 480-10-99 to its accounting classification of public

Upon re-evaluation, management determined that the public shares include certain provisions that require classification of the

public shares as temporary equity, regardless of the minimum net tangible asset required by the Company to complete its initial business

In accordance

with SEC Staff Accounting Bulletin No.

99, “Materiality,” and SEC Staff Accounting Bulletin No.

108, “Considering the

Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated

the changes and has determined that the related impacts were material to any previously presented financial statements.

Therefore, the

Company, in consultation with its Audit Committee, concluded that its previously issued financial statements impacted should be restated

to report all public shares as temporary equity.

As such, the Company is restating those periods in this Quarterly Report.

Impact of the Restatement

The impact to the balance sheet as of March 18,

2021, the balance sheet and income statement as of March 31, 2021 and the balance sheet and income statement as of June 30, 2021 is presented

Previously Reported

Balance Sheet as of March 18, 2021

(as revised in Note 2 of Form 10-Q filed on July 19, 2021)

Class A ordinary shares subject to possible redemption

Class A ordinary shares, $ 0.0001 par value

Class B ordinary shares, $ 0.0001 par value

Additional Paid-in Capital

Accumulated Deficit

Total Shareholder’’ Equity (Deficit)

Number of shares subject to redemption

Balance Sheet as of March 31, 2021

Class A ordinary shares subject to possible redemption

Class A ordinary shares, $ 0.0001 par value

Class B ordinary shares, $ 0.0001 par value

Additional Paid-in Capital

Accumulated Deficit

Total Shareholder’’ Equity (Deficit)

Number of shares subject to redemption

Income Statement as of March 31, 2021

Weighted average Redeemable Class A ordinary shares

Basic and diluted net loss per share, redeemable Class A ordinary shares

Weighted average non-redeemable Class B ordinary shares

Basic and diluted net loss per share, non-redeemable Class B ordinary shares

Balance Sheet as of June 30, 2021

Class A ordinary shares subject to possible redemption

Class A ordinary shares, $ 0.0001 par value

Class B ordinary shares, $ 0.0001 par value

Additional Paid-in Capital

Accumulated Deficit

Total Shareholder’’ Equity (Deficit)

Number of shares subject to redemption

Income Statement as of June 30, 2021

Weighted average Redeemable Class A ordinary shares

Basic and diluted net loss per share, redeemable Class A ordinary shares

Weighted average non-redeemable Class B ordinary shares

Basic and diluted net loss per share, non-redeemable Class B ordinary shares

Weighted average Redeemable Class A ordinary shares

Basic and diluted net loss per share, redeemable Class A ordinary shares

Weighted average non-redeemable Class B ordinary shares

Basic and diluted net loss per share, non-redeemable Class B ordinary shares

3 — Significant Accounting Policies

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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.

for the three months and nine months ended September 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

18 unchanged sentences

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

The preparation of financial statements in conformity

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

preparation of financial statements in conformity 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 period.

Actual results could differ from those estimates.

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.

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.

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

As of September 30, 2021, the Company had $ 335,058 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.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

September 30, 2021, the Trust Account had $ 345,030,985 held in marketable securities.

As of September 30, 2021, the Company has

not withdrawn any of the interest income from the Trust Account to pay its tax obligations.

Concentration

2 unchanged sentences

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.

At September 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.”

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.

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.” 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’ 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 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’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, all 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.

All of the Class A ordinary shares sold as part

of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s

liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain

amendments to the Company’s amended and restated memorandum and articles of association (except that in no event may we redeem our

public shares in an amount that would cause our net tangible assets to be less than $ 5,000,001 following such redemptions pursuant to

our amended and restated memorandum and articles of association).

In accordance with the SEC and its staff guidance on redeemable equity

instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary

shares subject to redemption to be classified outside of permanent equity.

As of September 30, 2021, the Class A ordinary

shares reflected on the balance sheet are reconciled in the following table:

Gross proceeds

$ 345,000,000

Proceeds allocated to public warrants

( 11,960,000 )

Issuance costs related to Class A ordinary shares

( 19,450,398 )

Accretion of carrying value to redemption value

Contingently redeemable Class A ordinary shares

$ 345,000,000

Income per Ordinary Share

The Company applies the two-class method in calculating

earnings per share.

The contractual formula utilized to calculate the redemption amount approximates fair value.

The Class feature to

redeem at fair value means that there is effectively only one class of stock.

Changes in fair value are not considered a dividend of the

purposes of the numerator in the earnings per share calculation.

Net loss per ordinary share is computed by dividing the pro rata net

loss between the Class A ordinary shares and the Class B ordinary shares by the weighted average number of ordinary shares outstanding

for each of the periods.

The calculation of diluted loss per ordinary share does not consider the effect of the warrants and rights issued

in connection with the IPO since the exercise of the warrants and rights are contingent upon the occurrence of future events and the inclusion

of such warrants would be anti-dilutive.

The warrants and FPA units are exercisable for 61,833,333 shares of Class A ordinary shares

in the aggregate.

Accretion of the carrying value of Class A ordinary shares to redemption value is excluded from net income per ordinary

share because the redemption value approximates fair value.

Three Months ended

September 30,

Nine Months ended

September 30,

Ordinary shares subject to possible redemption

Net income allocable to Class A ordinary shares subject to possible redemption

Weighted Average Redeemable Class A Ordinary shares, Basic and Diluted

Basic and Diluted net income per share, Redeemable Class A Ordinary shares

Non-Redeemable Ordinary shares

Net income allocable to Class B ordinary shares not subject to redemption

Weighted Average Non-Redeemable Ordinary shares, Basic and Diluted

Basic and diluted net income per share, ordinary shares

Offering Costs

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 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

costs 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

September 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’ 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.

Fair Value of Financial Instruments

The fair value of the Company’s assets and

1 unchanged sentence

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.

Derivative Warrant Liabilities

The Company evaluates its financial instruments,

including issued share 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 has determined its public warrants,

private warrants and contingent forward purchase warrants are derivative instruments.

The Company accounts for its 17,433,333 ordinary

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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

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

FASB ASC 470-20, Debt with Conversion and Other

Options addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components.

The Company applied

this guidance to allocate IPO proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating

IPO proceeds first to fair value of the warrants and contingent forward purchase units and then the Class A ordinary shares.

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 September 30, 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 immaterial for the nine months

ended September 30, 2021.

Recent Accounting Standards

In August 2020, the FASB issued ASU 2020-06, “Debt-Debt

with Conversion and Other Options” (Subtopic 470-20) and “Derivatives and Hedging-Contracts in an 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.

removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies

the diluted earnings per share calculation in certain areas.

The Company adopted ASU 2020-06 on January 1, 2021.

Adoption of the ASU did

not impact the Company’s financial position, results of operations or cash flows.

The Company’s management does not believe

that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying

financial statements.

Note 4 — 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 — 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 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

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 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 worthless.

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 — Related Party Transactions

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.

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.

The Sponsor has agreed, subject to limited exceptions,

6 unchanged sentences

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

Related Party Loans

On January 12, 2021, the Sponsor agreed to loan the

Company up to $ 300,000 to be used for the payment of costs related to the Initial Public Offering pursuant to a promissory note (the “Promissory

The Promissory Note was non-interest bearing, unsecured and due upon the earlier of June 30, 2021 and the closing of the

Initial Public Offering.

The Company had no borrowings under the Promissory Note at the closing of the Initial Public Offering.

In addition, in order to finance transaction costs

in connection with a Business Combination, the Sponsor may, but is not obligated to, loan the Company funds as may be required (“Working

Capital Loans”).

If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds

of the Trust Account released to the Company.

Otherwise, the Working Capital Loans would be repaid only out of funds held outside the

Trust Account.

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

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s

discretion, up to $ 1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity

at a price of $ 1.50 per warrant.

The warrants would be identical to the Private Placement Warrants.

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.

The balance of $ 65,000 represents the amount

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

Administrative Support Agreement

1 unchanged sentence

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.

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

the three months and nine months ended September 30, 2021, the Company has recognized $ 30,000 and $ 65,000 , 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.

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”).

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.

Such warrants would be identical to the Private Placement Warrants.

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.

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

In 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.

As of September 30, 2021, the Company had no

outstanding borrowings under the Working Capital Loans.

On October 28, 2021, the Company drew down the entire available balance of the

Working Capital Loans and the Sponsor deposited $ 1,500,000 in the Company’s operating bank account (see Note 12).

Forward Purchase Agreement

2 unchanged sentences

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.

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

of 13,000,000 units, with each unit consisting of one Class A ordinary share and one-third of one redeemable warrant,

for an aggregate purchase price of $ 130,000,000 , or $ 10.00 per unit, 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 units, with each unit consisting of one Class A ordinary share and one-third of one redeemable warrant,

for an aggregate purchase price of up to $ 173,000,000 (subject to the below), or $ 10.00 per unit, 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.

On October 20, 2021, the Company received

(i) an allocation notice from the Sponsor and Dynamo Master Fund committing to purchase 16,000,000 units, with each unit consisting of

one Class A ordinary share and one-third of one redeemable warrant, for an aggregate purchase price of $160,000,000, or $10.00 per unit

and (ii) an allocation notice from Beauty Ventures committing to purchase to purchase 17,300,000 units, with each unit consisting of one

Class A ordinary share and one-third of one redeemable warrant, for an aggregate purchase price of $173,000,000, or $10.00 per unit.

Note 7 — Commitments & Contingencies

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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

underwriting discount of $ 0.35 per Unit, or $ 12,075,000 in the aggregate, will be payable to the underwriters from the amounts held in

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

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.

Additionally,

a deferred underwriting discount of $0.35 per Unit, or $12,075,000 in the aggregate, will be payable to the underwriters from

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

of the underwriting agreement.

Transaction Agreements

On November 15, 2021, the Company entered into the

Obagi Merger Agreement (as defined in Note 12) with Obagi (as defined in Note 12) and Merger Sub (as defined in Note 12).

The transactions

contemplated by the Obagi Merger Agreement are described in more detail in Note 12.

On November 15, 2021, the Company entered into the

Milk Equity Purchase Agreement (as defined in Note 12) with the Purchasers (as defined in Note 12), Milk (as defined in Note 12), Milk

Members (as defined in Note 12) and Equityholder Representative (as defined in Note 12).

The transactions contemplated by the Milk Equity

Purchase Agreement are described in more detail in Note 12.

Note 8 — Class A Ordinary Shares Subject

to Possible Redemption

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 September 30, 2021, 34,500,000 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

The value of these redeemable shares was calculated as the gross proceeds from the sale of the Public Units reduced by the proceeds

allocable to the Public Warrants, issuance costs related to the Public Units and the accretion of the carrying value to the redemption

Upon the consummation of the IPO, the Company recorded $ 31,410,398 in accretion.

Note 9 — Shareholder’s Deficit

Preference Shares — The

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

At September 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

30, 2021, there were no shares issued and outstanding (excluding 34,500,000 shares subject to possible redemption).

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.

At September 30, 2021, there were 8,625,000 Class B ordinary shares issued or outstanding.

Only holders of the Class B ordinary shares

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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 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

13 unchanged sentences

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

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,

14 unchanged sentences

● 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

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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

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

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

September 30,

Marketable Securities held in Trust Account

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$ 335,715,985

WALDENCAST ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

$ ( 13,856,333 )

The Company utilizes a Monte Carlo simulation

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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 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 nine-month period ended September 30, 2021.

The following table provides quantitative information regarding Level 3

fair value measurements:

September 30,

Term (in years)

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Fair value as of June 30, 2021

Change in fair value of warrant liabilities

( 3,335,000 )

( 1,720,667 )

( 5,055,667 )

Fair value as of September 30, 2021

Prior to their transfer to Level 1 inputs, the

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Inherent in a binomial options pricing model are assumptions

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

related to expected share-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.

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 dividend rate is

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

The Company has initially classified the FPA as

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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

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

– forward purchase agreement.

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Derivative liability – forward purchase agreement at June 30, 2021

Change in fair value of derivative liability – forward purchase agreement

( 3,330,000 )

Derivative liability – forward purchase agreement at September 30, 2021

Note 12 — Subsequent Events

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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.

Based upon this review, other than

as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial

On October 28, 2021, the Company drew down the

entire available balance of the Working Capital Loans and the Sponsor deposited $ 1,500,000 in the Company’s operating bank account

(see Note 6).

Obagi and Milk Business Combinations

Obagi Merger Agreement and Related Agreements

On November 15, 2021, the Company entered into an Agreement and Plan

of Merger (the “Obagi Merger Agreement”), by and among the Company, Obagi Merger Sub, Inc., a Cayman Islands exempted company

limited by shares and an indirect wholly owned subsidiary of the Company (“Merger Sub”), and Obagi Global Holdings Limited,

a Cayman Islands exempted company limited by shares (“Obagi”).

The Obagi Merger Agreement provides that, among other things and upon

the terms and subject to the conditions thereof, the following transactions will occur (together with the other agreements and transactions

contemplated by the Obagi Merger Agreement, the “Obagi Transaction”):

(i) at the closing of the transactions contemplated by the

Obagi Merger Agreement (the “Obagi Closing”), upon the terms and subject to the conditions of the Obagi Merger Agreement and

in accordance with the Companies Act (As Revised) of the Cayman Islands (“Cayman Act”), Merger Sub will merge with and into

Obagi, the separate corporate existence of Merger Sub will cease and Obagi will be the surviving company and an indirect wholly owned

subsidiary of the Company (the “Merger”);

(ii) as a result of the Merger, among other things, each

share of common stock of Obagi that is issued and outstanding immediately prior to the effective time of the Merger (other than in respect

of Excluded Shares (as defined in the Obagi Merger Agreement)) will be cancelled and converted into the right to receive (i) an amount

in cash equal to (A) the Obagi Cash Consideration (as defined in the Obagi Merger Agreement), subject to substitution for Obagi Stock

Consideration (as defined in the Obagi Merger Agreement) based on the amount of cash available to the Company at the Closing (as defined

below), taking into account, among other things, the level of shareholder redemptions, divided by (B) the number of Aggregate Fully Diluted

Company Common Shares (as defined in the Obagi Merger Agreement), and (ii) a number of shares of Company Common Stock equal to (A) the

Obagi Stock Consideration divided by (B) the number of Aggregate Fully Diluted Company Common Shares;

(iii) upon the effective time of the Domestication (as defined

below), the Company will immediately be renamed “Waldencast plc”.

The Company’s board of directors has unanimously (i) approved

and declared advisable the Obagi Merger Agreement, the Obagi Transaction and the other transactions contemplated thereby and (ii) resolved

to recommend approval of the Obagi Merger Agreement and related matters by the shareholders of the Company.

Milk Equity Purchase Agreement

On November 15, 2021, the Company entered into an Equity Purchase Agreement

(the “Milk Equity Purchase Agreement” and together with the Obagi Merger Agreement, the “Transaction Agreements”),

by and among the Company, Obagi Holdco 1 Limited, a limited company incorporated under the laws of Jersey (“Holdco Purchaser”),

Waldencast Partners LP, a Cayman Islands exempted limited partnership (“Waldencast LP” and together with Holdco Purchaser,

the “Purchasers”), Milk Makeup LLC, a Delaware limited liability company (“Milk”), certain members of Milk (the

“Milk Members”), and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity

as representative of Milk’s equityholders (the “Equityholder Representative”).

The Milk Equity Purchase Agreement provides that,

among other things and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the

other agreements and transactions contemplated by the Milk Equity Purchase Agreement, the “Milk Transaction” and, together

with the Obagi Transaction, the “Obagi and Milk Business Combinations”):

(i) at the closing of the transactions contemplated by the

Milk Equity Purchase Agreement (the “Milk Closing” and together with the Obagi Closing, the “Closing”), upon the

terms and subject to the conditions of the Milk Equity Purchase Agreement, the Purchasers will acquire from the Milk Members and the Milk

Members will sell to the Purchasers all of the issued and outstanding membership units of Milk in exchange for the Milk Cash Consideration

(as defined in the Milk Equity Purchase Agreement), and the Milk Equity Consideration (as defined in the Milk Equity Purchase Agreement),

which consist of partnership units of Waldencast LP exchangeable for Domesticated Acquiror Common Stock, and the Domesticated Acquiror

Non-Economic Common Stock (each as defined in the Milk Equity Purchase Agreement);

(ii) as a result of the Milk Transaction, among other things,

(i) Holdco Purchaser will purchase from the Milk Members a percentage of the outstanding membership units in exchange for the Milk Cash

Consideration and the Domesticated Acquiror Non-Economic Common Stock equal to the Milk Equity Consideration and (ii) Waldencast LP will

purchase from the Milk Members the remainder of the outstanding membership units in exchange for the Milk Equity Consideration;

(iii) upon the effective time of the Domestication, the Company

will immediately be renamed “Waldencast plc.”

Immediately following consummation of the Milk Transaction, (i) Holdco

Purchaser will contribute its equity interest in (a) Milk to Waldencast LP in exchange for limited partnership units in Waldencast LP

and (b) Holdco 2 in exchange for limited partnership units in Waldencast LP.

The combined company will be organized in an “Up-C”

structure, in which the equity interests of Obagi and Milk will be held by Waldencast LP.

The Company will in turn hold its interests

in Obagi and Milk through Waldencast LP and Holdco Purchaser.

The Board has unanimously (i) approved and declared advisable the Milk

Equity Purchase Agreement, the Milk Transaction and the other transactions contemplated thereby and (ii) resolved to recommend approval

of the Milk Equity Purchase Agreement and related matters by the shareholders of the Company.

Prior to the Closing, subject to the approval of the Company’s

shareholders, and in accordance with the Cayman Act, the Companies (Jersey) Law 1991, as amended (the “Jersey Companies Law”)

and the Company’s amended and restated memorandum and articles of association, the Company will effect a deregistration under the

Cayman Act and a domestication under Part 18C of the Jersey Companies Law (by means of filing a memorandum and articles of association

with the Registrar of Companies in Jersey), pursuant to which the Company’s jurisdiction of incorporation will be changed from the

Cayman Islands to Jersey (the “Domestication”).

In connection with the Domestication, (i) each of the then issued and

outstanding Class A ordinary shares, par value $0.0001 per share, of the Company, will convert automatically, on a one-for-one basis,

into an ordinary share of common stock, par value $0.0001 per share, of the Company (following its Domestication) (the “Waldencast

Common Stock”), (ii) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of the Company,

will convert automatically, on a one-for-one basis, into a share of Waldencast Common Stock, (iii) each then issued and outstanding warrant

of the Company will convert automatically into a warrant to acquire one share of Waldencast Common Stock (“Domesticated Waldencast

Warrant”), pursuant to the Warrant Agreement, dated March 15, 2021, between the Company and Continental Stock Transfer & Trust

Company, as warrant agent, and (iv) each then issued and outstanding unit of the Company shall be cancelled and will entitle the holder

thereof to one share of Waldencast Common Stock and one-third of one Domesticated Waldencast Warrant.

On November 15, 2021, the Company entered into a Sponsor Support Agreement

(the “Obagi Sponsor Support Agreement”), by and among the Sponsor, Obagi, the Company and the persons set forth on Schedule

I attached thereto (the “Sponsor Persons”), pursuant to which the Sponsor and the Sponsor Persons agreed to, among other things,

vote in favor of the Obagi Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions

contemplated by the Obagi Sponsor Support Agreement.

On November 15, 2021, the Company entered into a Sponsor Support Agreement

(the “Milk Sponsor Support Agreement”), by and among the Sponsor, the Equityholder Representative, the Company and the Sponsor

Persons, pursuant to which the Sponsor and the Sponsor Persons agreed to, among other things, vote in favor of the Milk Equity Purchase

Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Milk Sponsor

Support Agreement.

On November 15, 2021, the Company also entered into

a Stockholder Support Agreement (the “Stockholder Support Agreement”), by and among the Company, Obagi and Cedarwalk.

to the Stockholder Support Agreement, Cedarwalk agreed to, among other things, within two (2) business days after the proxy statement/prospectus

relating to the approval by the Company shareholders of the Obagi and Milk Business Combinations is declared effective by the SEC and

delivered or otherwise made available to the Company shareholders, execute and deliver a written consent with respect to the outstanding

ordinary shares of Obagi held by Cedarwalk adopting the Obagi Merger Agreement and related transactions and approving the Obagi and Milk

Business Combinations.

The consummation of the proposed Obagi and Milk Business

Combinations is subject to certain conditions as further described in the Obagi Merger Agreement and the Milk Equity Purchase Agreement.

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