What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-18 · 288 added, 298 removed, 21 unchanged (97% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (the “Quarterly

Report”) to “we,” “us” or the “Company” refer to Waldencast Acquisition Corp.

References to

our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor”

refer to Waldencast Long-Term Capital LLC.

The following discussion and analysis of the Company’s financial condition and results

of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere

in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements

that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking

statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section

21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially

from those expected and projected.

All statements, other than statements of historical fact included in this Form 10-Q including, without

Management’s Discussion

and Analysis of Financial Condition and Results of Operations.

References in this Quarterly

Report on Form 10-Q (this “Quarterly Report”) to “we,” “us” or the “Company” refer to

Waldencast Acquisition Corp.

References to our “management” or our “management team” refer to our officers and

directors, and references to the “Sponsor” refer to Waldencast Long-Term Capital LLC.

The following discussion and analysis

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

the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

Certain information contained in the discussion and analysis

set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding

Forward-Looking Statements

Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as

amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected

and projected.

All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without

limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations,

are forward-looking statements.

Words such as “expect,” “believe,” “anticipate,” “intend,”

“estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking

Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs,

based on information currently available.

A number of factors could cause actual events, performance or results to differ materially from

the events, performance and results discussed in the forward-looking statements.

For information identifying important factors that could

cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section

of the Company’s final prospectus for its Initial Public Offering filed with the U.S.

Securities and Exchange Commission (the “SEC”).

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.

Except as expressly

required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements

whether as a result of new information, future events or otherwise.

We are a blank check company incorporated in the

Cayman Islands on December 8, 2020 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization

or similar Business Combination with one or more businesses (a “Business Combination”).

We intend to effectuate a Business

Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares,

debt or a combination of cash, shares and debt.

We expect to continue to incur significant costs

in the pursuit of our acquisition plans.

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

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

regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking

Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,”

“seek” and variations and similar words and expressions are intended to identify such forward-looking statements.

Such forward-looking

statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently

A number of factors could cause actual events, performance or results to differ materially from the events, performance and

results discussed in the forward-looking statements.

For information identifying important factors that could cause actual results to

differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the 2021 Annual

Report filed with the SEC on March 31, 2022.

Our securities filings can be accessed on the EDGAR section of the SEC’s website at

Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any

forward-looking statements whether as a result of new information, future events or otherwise.

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

asset acquisition, share purchase, reorganization or similar Business Combination.

We intend to effectuate a Business Combination using

cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt or a combination

of cash, shares and debt.

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

We cannot assure you that our plans to complete

a Business Combination will be successful.

Recent Developments

– Obagi and Milk Business Combinations

Obagi Merger Agreement

and Related Agreements

November 15, 2021, the Company entered into the Obagi Merger Agreement, by and among the Company, Merger Sub and Obagi.

Obagi Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following transactions

the Obagi Closing, upon the terms and subject to the conditions of the Obagi Merger Agreement and in accordance with the 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;

as a result of the Merger, among other things, each outstanding Obagi Common Stock as of immediately prior to the Obagi Merger Effective Time (other than in respect of Excluded Shares (as defined in the Obagi Merger Agreement)) will be cancelled and converted into the right to receive (a) an amount in cash equal to the quotient obtained by dividing (i) the Obagi Cash Consideration (as defined in the Obagi Merger Agreement) by (ii) the number of Aggregate Fully Diluted Company Common Shares (as defined in the Obagi Merger Agreement), and (b) a number of Waldencast plc Class A ordinary shares equal to the quotient obtained by dividing (i) the Obagi Stock Consideration (as defined in the Obagi Merger Agreement) by (ii) the number of Aggregate Fully Diluted Company Common Shares;

upon the effective time of the Domestication, the Company will immediately be renamed “Waldencast plc”.

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

November 15, 2021, the Company entered into the Milk Equity Purchase Agreement, by and among the Company, Holdco Purchaser, Waldencast

LP, Milk, the Milk Members and the Equityholder Representative.

Milk Equity Purchase Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following

transactions will occur:

at the Milk 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 Waldencast plc Class A ordinary shares, and the Waldencast plc Non-Economic ordinary shares (as defined in the Milk Equity Purchase Agreement);

as a result of the Milk Transaction, among other things, (a) Holdco Purchaser will purchase from the Milk Members a percentage of the outstanding membership units in exchange for the (i) Milk Cash Consideration and (ii) a number of Waldencast plc Non-Economic ordinary shares equal to the Milk Equity Consideration and (b) Waldencast LP will purchase from the Milk Members the remainder of the outstanding membership units in exchange for the Milk Equity Consideration;

upon the effective time of the Domestication, the Company will immediately be renamed “Waldencast plc.”

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.

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.

to the Closing, subject to the approval of the Company’s shareholders, and in accordance with the Cayman Act, 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

Cayman Islands to Jersey.

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 a Waldencast plc Class A ordinary share, (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 Waldencast plc Class A ordinary share, (iii) each then issued and outstanding warrant of the Company will convert automatically

into a Waldencast plc 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 Waldencast plc Class A ordinary share and one-third of one Waldencast plc Warrant.

November 15, 2021, the Company entered into the Obagi Sponsor Support Agreement, by and among the Sponsor, Obagi, 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 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 also entered into

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

November 15, 2021, the Company entered 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.

November 15, 2021, the Company also entered into 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

3 unchanged sentences

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.

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.

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 on Form

10-Q 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 nine months ended September 30, 2021 were organizational

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

Our only activities through March 31, 2022 were organizational

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

7 unchanged sentences

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

On March 18, 2021, we consummated the Initial

Public Offering of 34,500,000 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 with the closing

of our Initial Public Offering, the Company consummated the sale of 5,933,333 warrants (the “Private Placement Warrants”),

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

Following the Initial Public Offering and the

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

We incurred $20,169,599 in transaction

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

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.

We intend to use substantially all of the funds held in the Trust Account, including any amounts

representing interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions,

to complete our Business Combination.

the year ended March 31, 2022, we had a net income of $3,022,915, which consisted of operating costs of $4,003,477, offset by a non-cash

change in fair value of warrant derivative liabilities and Forward Purchase Agreement (as defined below) liabilities of $4,358,333 and

$2,664,000, respectively, and interest income from operating bank account of $439, and interest income on marketable securities held in

the Trust Account of $3,620.

the three months ended March 31, 2021, we had a net loss of $1,183,957, which included a loss from operations of $117,515, offering cost

expense allocated to warrants of $719,201, a loss from the change in fair value of warrant liabilities of $348,666, and interest income

from operating bank account of $131, and interest income on marketable securities held in the Trust Account of $1,294.

Liquidity and Capital

On March 18, 2021, we consummated the Initial Public Offering of 34,500,000

Units at $10.00 per Unit, generating gross proceeds of $345,000,000, which is discussed in Note 3 to the condensed financial statements.

Simultaneously with the closing of our Initial Public Offering, we consummated the sale of 5,933,333 Private Placement Warrants, at a

price of $1.50 per Private Placement Warrant, which is discussed in Note 4 to the condensed financial statements.

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

incurred $20,169,599 in transaction costs, including $6,900,000 of underwriting fees, $12,075,000 of deferred underwriting fees and $1,194,599

of other costs.

As of March 31, 2022, cash used in operating activities was $414,788.

Net income of $3,022,915 was affected by non-cash changes in the deferred legal fees of $2,112,194, the fair value of warrant derivative

liabilities, and Forward Purchase Agreement liabilities of $4,358,333 and $2,664,000, respectively, and interest earned on marketable

securities held in the Trust Account of $3,620.

Changes in current assets and liabilities provided $1,476,056 of cash for operating activities.

As of March 31, 2022, we had marketable securities held in the Trust

Account of $345,055,667.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing

interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to

complete our Business Combination.

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

Through 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

or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers

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

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

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

However, if our estimate of the costs of identifying a target

business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so,

we may have insufficient funds available to operate our business prior to our initial Business Combination.

Moreover, we may need to obtain

additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our

public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection

with such Business Combination.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities,

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

We do not participate in transactions that create relationships

with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established

for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements,

established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Through March 31, 2022, 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 March 31, 2022, we had cash of $1,088,980 and a working capital

deficit of $517,158.

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 or finance transaction

costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may,

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

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

Capital Promissory Note in an amount equal to $1,500,000.

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 warrants would be identical to the Private Placement Warrants.

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

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

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

Business Combination.

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

obligated to redeem a significant number of our Public Shares upon completion of our Business Combination, in which case we may issue

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

Going Concern

We anticipate that the $1,088,980 outside of the Trust Account as of

March 31, 2022, will be sufficient to allow us to operate for the remainder of the Business Combination period.

Until consummation of

a Business Combination, we will use the funds not held in the Trust Account, and any additional Working Capital Loans from the initial

shareholders, our officers and directors, or their respective affiliates, or other third parties, 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.

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

if our estimates of the costs of undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount

necessary to do so, we may have insufficient funds available to operate our business prior to the Business Combination.

Moreover, we will

need to raise additional capital through loans from our Sponsor, officers, directors, or third parties.

None of the Sponsor, officers

or directors are under any obligation to advance funds to or to invest in us.

If we are unable to raise additional capital, we may be

required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations,

suspending the pursuit of our business plan, and reducing overhead expenses.

We cannot provide any assurance that new financing will be

available to us on commercially acceptable terms, if at all.

addition, we have 24 months from the closing of the IPO, which occurred on March 18, 2021 (with the ability to extend with shareholder

approval) to consummate a Business Combination (the “Combination Period”).

However, if we are unable to complete a Business

Combination within the Combination Period, we 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 us, 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.

There is no guarantee that the Company will be able to consummate a

Business Combination within the Combination Period, which raises substantial doubt about the Company’s ability to continue as a

going concern until the earlier of the consummation of the Business Combination or the date the Company is required to liquidate.

condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of

the liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet

have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2022 and December

We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often

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

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or

commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease

obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000

for office space administrative and support services provided to the Company.

We began incurring these fees on March 15, 2021 and will

continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation.

The underwriter is entitled to a deferred fee

of $0.35 per Unit, or $12,075,000 in the aggregate.

The deferred fee will become payable to the underwriters from the amounts held in

the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies

This management’s discussion and analysis

of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared

in accordance with GAAP.

The preparation of our unaudited condensed financial statements requires us to make estimates and judgments that

affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our

unaudited condensed financial statements.

On an ongoing basis, we evaluate our estimates and judgments, including those related to fair

value of financial instruments and accrued expenses.

We base our estimates on historical experience, known trends and events and various

other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about

the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates

under different assumptions or conditions.

We have identified the following as our critical accounting policies:

Class A ordinary shares subject to possible redemption

The Company accounts for its ordinary shares subject

to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing

Liabilities from Equity.” Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured

at fair value.

Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within

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

are classified as temporary equity.

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

The Company’s

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

of uncertain future events.

As of 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.

We do not have any long-term debt, capital lease obligations, operating

lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000 for office space administrative

and support services provided to us.

We began incurring these fees on March 15, 2021 and will continue to incur these fees monthly until

the earlier of the completion of a Business Combination or the liquidation.

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

The deferred fee will become payable to

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

terms of the underwriting agreement.

Critical Accounting

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

statements, which have been prepared in accordance with GAAP.

The preparation of our unaudited condensed financial statements requires

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

contingent assets and liabilities in our unaudited condensed financial statements.

On an ongoing basis, we evaluate our estimates and

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

We base our estimates on historical experience,

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

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

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

We have identified the following as our critical accounting

Class A ordinary shares

subject to possible redemption

We account for our ordinary shares subject to possible redemption in accordance

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

are classified as a liability instrument and are 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 our control) are classified as temporary equity.

At all other times, ordinary shares are classified

as shareholders’ deficit.

Our ordinary shares feature certain redemption rights that are considered to be outside of our control

and subject to occurrence of uncertain future events.

As of March 31, 2022 and December 31, 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’ deficit

section of our balance sheets.

Warrant Liabilities

We account for the warrants issued in connection

with our initial public offering in accordance with ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity”

(“ASC 815”), under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities.

The warrants meet the definition of a derivative as contemplated in ASC 815, and therefore the warrants are measured at fair value at

inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized

in the condensed statement of operations in the period of change.

Net Earnings (Loss) Per Ordinary Shares

Net earnings (loss) per share is computed by dividing

net earnings by the weighted-average number of shares of ordinary shares outstanding during the period.

The Company’s statement of operations includes

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

We do not believe that any recently issued, but

not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our unaudited condensed financial

On April 5, 2012, the Jumpstart Our Business Startups

Act of 2012 (the “JOBS Act”) was signed into law.

The JOBS Act contains provisions that, among other things, relax certain

reporting requirements for qualifying public companies.

We qualify as an “emerging growth company” under the JOBS Act and

are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.

We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting

standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

As a result, our unaudited

condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public

company effective dates.

As an “emerging growth company”, we

are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial

reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public

companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by

the Public Company Accounting Oversight Board (the “PCAOB”) regarding mandatory audit firm rotation or a supplement to the

auditor’s report providing additional information about the audit and the unaudited condensed financial statements (auditor discussion

and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and

performance and comparisons of the CEO’s compensation to median employee compensation.

These exemptions will apply for a period

of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,”

whichever is earlier.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

Not required for smaller reporting companies.

and Forward Purchase Agreements

account for the warrants issued in connection with our Initial Public Offering in accordance with ASC 815-40, “Derivatives and Hedging—Contracts

in Entity’s Own Equity” (“ASC 815”), under which the warrants do not meet the criteria for equity classification

and must be recorded as liabilities.

The warrants meet the definition of a derivative as contemplated in ASC 815, and therefore the warrants

are measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with

changes in fair value recognized in the statements of operations in the period of change.

We account for the Forward Purchase Agreements in accordance with ASC

815-40 as a derivative liability.

These liabilities are subject to re-measurement at each balance sheet date, with changes in fair value

recognized in the statements of operations.

Conversion Feature

of Working Capital Promissory Note

On August 18, 2021, we issued the Working Capital Promissory Note to the

The Working Capital Promissory Note was issued in order to finance certain transaction costs in connection with the Business

At the lender’s discretion, it may elect to convert up to $1,500,000 of the unpaid principal balance of the Working

Capital Promissory Note into warrants, at a price of $1.50 per warrant, with each whole warrant exercisable for one of our Class A ordinary

shares upon the consummation of an initial Business Combination.

This embedded conversion feature is subject to remeasurement at each

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

of the conversion features was considered de minimis both as of March 31, 2022, and December 31, 2021.

Net Income (Loss) Per Ordinary Shares

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

Our statements of operations include a presentation of net income (loss)

per share for ordinary shares subject to possible redemption and apply the two-class method in calculating net loss per share.

and diluted net income (loss) per ordinary share 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.

Basic and diluted net income (loss) per share for Class A and Class

B non-redeemable ordinary shares is calculated by dividing the net income (loss), adjusted for income (loss) 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.

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

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

impact on our unaudited condensed financial statements.

April 5, 2012, the JOBS Act was signed into law.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements

for qualifying public companies.

We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with

new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.

We elected to delay

the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the

relevant dates on which adoption of such standards is required for non-emerging growth companies.

As a result, our financial statements

may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

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

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

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

with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report

providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain

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

compensation to median employee compensation.

These exemptions will apply for a period of five years following the completion of our Initial

Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.

and Qualitative Disclosure About Market Risk.

required for smaller reporting companies.

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