What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-18 compared with 2021-08-16 · 167 added, 64 removed, 152 unchanged (60% of the section changed)

43 unchanged sentences

We cannot assure you that our plans to complete a Business Combination will be successful.

Recent Developments – Obagi and Milk Business

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.

For more information about the Obagi Merger Agreement

and the Milk Equity Purchase Agreement and the proposed Obagi and Milk Business Combinations, see our Current Report on Form 8-K filed

with the SEC on November 15, 2021.

Unless specifically stated, this Quarterly Report does not give effect to the proposed Obagi and Milk

Business Combinations and does not contain the risks associated with the proposed Obagi and Milk Business Combinations.

Results of Operations

We have neither engaged in any operations nor

generated any operating revenues to date.

Our only activities from for the three months and six months ended June 30, 2021 were organizational

activities and those necessary to prepare for the Initial Public Offering, described below.

We do 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.

For the six months ended June 30, 2021, we had

a net loss of $2,735,465, which consisted of operating costs of $319,082, a non-cash change in fair value of warrant derivative liabilities

and FPA liabilities of $1,046,000 and $666,000, respectively, 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 $442, and interest income on marketable securities held in the Trust

Account of $14,376.

For the three months ended June 30, 2021, we had

a net loss of $1,551,508, which consisted of operating costs of $201,567 and a non-cash change in fair value of warrant derivative liabilities

and FPA liabilities of $697,334 and $666,000, respectively, offset by interest income from operating bank account of $311, and interest

income on marketable securities held in the Trust Account of $13,082.

We have neither engaged in any operations nor generated

any operating revenues to date.

Our only activities from for the three months and nine months ended September 30, 2021 were organizational

activities and those necessary to prepare for the Initial Public Offering, the search for a prospective initial Business Combination,

and the negotiation and execution of the proposed Obagi and Milk Business Combinations.

We do 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.

For the nine months ended September 30, 2021,

we had a net income of $5,021,944, which consisted of operating costs of $964,205, a non-cash charge for offering expenses related to

issuance of warrants of $719,201, offset by a non-cash change in fair value of warrant derivative liabilities and FPA liabilities of $4,009,667

and $2,664,000, respectively, and interest income from operating bank account of $698, and interest income on marketable securities held

in the Trust Account of $30,985.

For the three months ended September 30, 2021,

we had a net income of $7,757,409 , which consisted of operating costs of $645,123 offset by a non-cash change in fair value of warrant

derivative liabilities and FPA liabilities of $5,055,667 and $3,330,000, respectively, interest income from operating bank account of

$256, and interest income on marketable securities held in the Trust Account of $16,609.

Liquidity and Capital Resources

9 unchanged sentences

costs, including $6,900,000 of underwriting fees, $12,075,000 of deferred underwriting fees and $1,194,599 of other costs.

For the six months ending June 30, 2021 cash used

in operating activities was $651,509.

Net loss of $2,735,465 was affected by a non-cash change in the fair value of warrant derivative

liabilities, and FPA liabilities of $1,046,000 and $666,000, respectively, and offering costs related to warrant issuance of $719,201,

and interest earned on marketable securities held in the Trust Account of $14,376.

Changes in operating assets and liabilities used $332,869

of cash for operating activities.

As of June 30, 2021, we had marketable securities

For the nine months ending September 30, 2021

cash used in operating activities was $1,168,310.

Net income of $5,021,944 was affected by a non-cash change in the fair value of warrant

derivative liabilities, and FPA liabilities of $4,009,667 and $2,664,000, respectively, and offering costs related to warrant issuance

of $719,201, and interest earned on marketable securities held in the Trust Account of $30,985.

Changes in operating assets and liabilities

used $180,210 of cash for operating activities.

As of September 30, 2021, we had marketable securities

held in the Trust Account of $345,030,985.

3 unchanged sentences

We may withdraw interest from the Trust Account to pay taxes, if any.

Through June 30, 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.

As of June 30, 2021, we had cash of $851,860.

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.

Through September 30, 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 (including the proposed Obagi and Milk Business Combinations), 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.

As of September 30, 2021, we had cash of $335,058

and working capital of $422,644.

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 (including the proposed Obagi and Milk Business Combinations).

In order to fund working capital deficiencies

1 unchanged sentence

and directors may, but are not obligated to, loan us funds as may be required.

If we complete a Business Combination, we may repay such

loaned amounts out of the proceeds of the Trust Account released to us.

In the 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 Warrants.

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

If 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

We do not believe we will need to raise additional

9 unchanged sentences

We have no obligations, assets or liabilities,

which would be considered off-balance sheet arrangements as of June 30, 2021.

which would be considered off-balance sheet arrangements as of September 30, 2021.

We do not participate in transactions that create relationships

31 unchanged sentences

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

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)

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.

3 unchanged sentences

of uncertain future events.

As of June 30, 2021 and December 31, 2020, 29,688,318 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.

As of September 30, 2021 and December 31, 2020, 34,500,000 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.

Warrant Liabilities

9 unchanged sentences

The 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

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.

a presentation of net earnings (loss) per share for ordinary shares subject to possible redemption and applies the two-class method in

calculating net earnings (loss) per share.

Net earnings per ordinary 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.

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.

Recent Accounting Pronouncements

27 unchanged sentences

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 2. Management’s Discussion and Analysis