SEC Investigation and Compliance Risks - The company is subject to an ongoing SEC investigation due to prior restatements of financial results and identified material weaknesses in internal controls over financial reporting [47]. - The company has incurred substantial costs related to the SEC investigation and anticipates continued expenses regardless of the outcome [48]. - The company is currently subject to an SEC investigation, which may impact its business operations and financial results [81]. - The company received a notice from Nasdaq regarding non-compliance with listing standards due to late filing of financial reports, risking delisting of its securities [99]. - The company regained compliance with Nasdaq's filing requirements as of March 21, 2024, following the publication of interim financial statements for the period ended June 30, 2023 [100]. - The company is subject to a "Mandatory Panel Monitor" for one year, which could lead to delisting if compliance with Nasdaq's standards is not maintained [101]. - Legal proceedings and investigations could be costly and time-consuming, potentially harming the company's financial condition and reputation [80]. - The company may incur significant legal fees and expenses related to potential securities litigation and shareholder activism, which could divert management's attention [84]. - The company is subject to anti-corruption laws, and any violations could lead to severe penalties and disrupt operations [89]. Financial Performance and Growth Strategies - Future growth and profitability of the Obagi Skincare and Milk Makeup businesses depend on successful implementation of growth strategies, which may require significant investments [55]. - The company acknowledges that achieving growth targets may result in short-term cost increases with net sales materializing over a longer horizon [56]. - The company plans to expand its Obagi Skincare and Milk Makeup businesses through acquisitions and new product launches, which will increase operational demands and costs [61]. - The company anticipates increased expenses related to developing localized products for international markets, which may impact its financial condition [69]. - The historical financial results of the company's Obagi Skincare and Milk Makeup businesses may not be indicative of future performance due to significant costs incurred from the business combination and public company reporting [94]. - The company expects capital and operating expenditures to rise as it expands its infrastructure and international footprint, with a recent private placement raising $70 million through the issuance of 14 million Class A ordinary shares at $5.00 each [70]. - The company may face challenges in acquiring additional businesses, including management distraction and integration difficulties, which could adversely affect its operations [75]. - The company anticipates variability in quarterly operating results due to factors such as consumer spending, manufacturing costs, and competition [90]. - The company may experience significant risks associated with international business, including political instability and regulatory compliance challenges [69]. Market and Competitive Landscape - The competitive landscape for Obagi Skincare is intense, with significant competition from well-established companies, which may limit sales growth [129]. - The company faces risks from global conflicts and trade restrictions, particularly in expanding sales of Obagi and Milk products in China [117]. - The company may face challenges in maintaining relationships with key customers and distributors, which could adversely affect sales [58]. - The company is focused on enhancing brand recognition and reputation for Obagi and Milk brands, which is critical for competing in the skincare and cosmetics industries [63]. - The business is highly dependent on Sephora, which accounted for a large majority of net revenue, and the loss of this reseller could materially impact future operating results [212]. - The cosmetics industry is highly competitive, with significant risks from large multinational companies that may offer products at lower prices, potentially affecting profitability [215]. Regulatory and Compliance Challenges - Regulatory actions from authorities such as the FDA could impact the company's product offerings and market performance [59]. - The company is dependent on third-party logistics providers for distribution, with no long-term contracts in place, posing risks to supply chain stability [146]. - The company relies on third-party contract manufacturers for all Obagi products, exposing it to risks such as capacity constraints and regulatory compliance issues [135]. - Compliance with the FDA's current Good Manufacturing Practices (cGMPs) is mandatory for drug products, and new regulations under the MoCRA will be enforced by December 29, 2025, potentially increasing manufacturing costs [194]. - The company must navigate complex healthcare regulations, including the federal Anti-Kickback Statute and False Claims Act, which could expose it to legal challenges and penalties [209]. - Regulatory changes affecting the formulation and marketing of products could increase operational costs and impact product launches, potentially harming financial performance [157]. - The FDA may require premarket approval for products marketed as cosmetics, which could necessitate lengthy clinical trials and significant resources [163]. - The FDA's OTC drug monograph regulates certain products, and non-compliance could lead to costly reformulations or halting sales [165]. - The company faces risks if foreign regulatory authorities impose bans or restrictions on certain ingredients, which could hinder product marketing [207]. Product Development and Supply Chain - The company modified business practices in response to COVID-19, including launching a redesigned Obagi website and creating an e-commerce platform for physician customers [120]. - The company is establishing its own distribution resources in Southeast Asia, requiring initial investments in facilities and personnel, with potential delays in product sales due to regulatory approvals [62]. - The management of inventory is critical, as misestimating demand could lead to excess inventory or stockouts, adversely affecting financial results [149]. - The ability to launch new products may be hindered by supply chain delays or manufacturing issues, impacting sales objectives [220]. - The company relies on licensing agreements for certain products, and any breach or termination of these agreements could negatively impact gross margins and operational results [151]. International Operations and Market Expansion - International sales of Obagi Skincare products are increasingly significant, with a majority interest acquired in Obagi Vietnam in March 2023, although revenue in Vietnam decreased in 2023 compared to prior periods [62]. - The company aims to expand Obagi product sales in international markets, which requires obtaining separate regulatory approvals that can be lengthy and complex [201]. - In June 2023, Obagi Vietnam received necessary approvals to distribute products in Vietnam after a prolonged delay [202]. - The company acknowledges that its success in new markets will depend on its ability to secure necessary licenses and develop relationships with local partners [64]. - The company faces challenges in successfully integrating acquired businesses and technologies, which could adversely affect revenue and operating results [78]. Financial Risks and Shareholder Concerns - There is a risk of dilution of ownership interests due to potential future issuance of additional securities [40]. - The company may issue additional securities without shareholder approval, which could dilute ownership interests and depress market prices [103]. - Outstanding warrants to purchase 29,533,282 Class A ordinary shares at an exercise price of $11.50 per share could lead to further dilution for existing shareholders [107]. - The company may incur additional operating losses in the future due to significant investments required for product development and marketing [218]. - Future economic conditions, including inflation and rising interest rates, may negatively impact consumer spending on beauty and wellness products, affecting sales and profitability [114].

Exhibit 99.1 OBAGI GLOBAL HOLDINGS LIMITED TABLE OF CONTENTS | Unaudited Condensed Consolidated Balance Sheets as of March 31, 2022 (restated) and December 31, 2021 | F-2 | | --- | --- | | Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March | | | 31, 2022 (restated) and March 31, 2021 (restated) | F-3 | | Unaudited Condensed Consolidated Statements of Shareholder's Equity for the three months ended March 31, 2022 | | | (restated) and March 31, 20 ...

Financial Performance - Waldencast reported U.S. GAAP net revenue of $92.4 million for the 2022 Successor Period, with $61.1 million from Obagi Skincare and $31.3 million from Milk Makeup[2]. - Combined Group Net Revenue for Obagi Skincare and Milk Makeup for fiscal year 2022 was $207.4 million, up 9.4% from $189.5 million in the prior year[2]. - Obagi Skincare achieved Combined Net Revenue of $134.9 million in 2022, down 5.3% from $142.5 million in 2021[10]. - Milk Makeup's Combined Net Revenue was $72.5 million in 2022, representing a 54% increase from $47.1 million in 2021[13]. - Net revenue for the Successor period (July 28, 2022 to December 31, 2022) was $92,373,000, while the Predecessor period (January 1, 2022 to July 27, 2022) reported $73,760,000, indicating a growth of 25.2%[21]. - The company reported a comparable net revenue of $75,154,000 for the Successor period, which is a decrease of 9.3% compared to the previous year[24]. - Net revenue for the year ended December 31, 2022, was $92,373,000, a decrease from $142,472,000 in 2021[41]. Losses and Expenses - The company recognized a net loss of $(120.6) million during the 2022 Successor Period, which included a goodwill impairment of $68.7 million for Obagi Skincare[4]. - The net loss for the Successor period was $120,557,000, while the Predecessor period reported a net loss of $21,057,000, showing a substantial increase in losses[21]. - The net loss for the period from July 28, 2022, to December 31, 2022, was $(120.56) million, which is a net loss margin of (130.5)%[37]. - The company reported a loss on impairment of goodwill amounting to $68.72 million, which significantly impacted the overall financial results[37]. - The total operating expenses for the Successor period were $159,437,000, compared to $58,155,000 in the Predecessor period, reflecting a significant increase[21]. EBITDA and Margins - Adjusted EBITDA for the combined group was $(8.8) million in fiscal year 2022, compared to $17.2 million in 2021[4]. - Adjusted EBITDA for the Successor period was $(16,027,000), compared to $7,263,000 in the Predecessor period, indicating a decline in operational performance[23]. - Adjusted EBITDA for the year ended December 31, 2022, was $(16.03) million, compared to $20.57 million in 2021, indicating a significant decline in operational profitability[37]. - The Adjusted EBITDA Margin for the year ended December 31, 2022, was (17.4)%, down from 14.4% in 2021, reflecting challenges in maintaining profitability[37]. - The adjusted gross profit for the Successor period was $10,690,000, down from $42,892,000 in the Predecessor period, representing a decline of 75.1%[23]. - The adjusted gross margin for the Successor period was 17.5%, down from 58.2% in the Predecessor period, reflecting a significant margin compression[23]. Cash and Debt Position - As of December 31, 2022, cash and cash equivalents were $8.7 million, with a net debt position of $176.1 million[4]. - The company reported a net debt position of $176,076,000 as of December 31, 2022[42]. Market Strategy and Growth - The skincare market in Southeast Asia is approximately $11 billion and growing rapidly, with Obagi Skincare aiming to capture opportunities in this region[11]. - The company plans to enhance its digitalization and online sales through direct-to-consumer channels and internalizing Amazon operations[11]. - Waldencast aims to build a global beauty and wellness platform focused on high-growth, purpose-driven brands, despite challenges faced in 2022[5]. - The company launched two high-profile products, Pore Eclipse Powder and Contouring Sticks, contributing to brand awareness and market presence[16]. - The company expanded into high-demand markets, including the U.K., with launches in Space NK and Sephora, enhancing its market footprint[16]. - The company is focusing on building its "Gen Z" community and enhancing brand awareness through increased marketing investments[16]. - The company aims to build a global beauty and wellness platform through the acquisition and scaling of purpose-driven brands[45]. - Waldencast's vision includes maintaining brand distinctiveness while leveraging operational scale and market responsiveness[45]. Transaction and Restructuring Costs - The company incurred transaction-related costs primarily due to legal expenses associated with the Business Combination, amounting to $9.37 million[37]. - The relocation costs associated with moving Obagi's headquarters from California to Texas were included in restructuring costs, totaling $160,000[37]. - The company incurred transaction-related costs of $170,000 during the successor period[39]. Other Financial Metrics - Gross margin for Milk Makeup was 49.9% for the year ended December 31, 2022, while Obagi's gross margin was 26.4%[41]. - Adjusted gross profit for Milk Makeup was $18,875,000, with an adjusted gross margin of 60.3%[41]. - The total diluted shares outstanding as of December 31, 2023, was 129,695,296[44]. - Management believes that non-GAAP financial measures provide a better perspective on ongoing performance, despite the limitations of excluding certain significant components[26]. - The company has excluded sales related to the former Obagi China business from its Combined Comparable Group Net Revenue, which is crucial for accurate performance evaluation[29].

Regulatory and Compliance Risks - The company is currently under investigation by the SEC due to material weaknesses in internal control over financial reporting, which may adversely affect investor confidence and the price of its securities [45]. - Material weaknesses identified include insufficient segregation of duties and review procedures, which could lead to misstatements in financial reporting [48]. - The company has restated financial results for previous periods, including misstatements related to the classification of Class A ordinary shares, impacting its financial position [49]. - Legal and regulatory risks could impact the introduction and marketing of products, potentially harming business operations [43]. - The company is subject to various financial covenants under its 2022 Credit Agreement, and failure to comply could result in an event of default, adversely affecting its financial position [69]. - The company received a notice from Nasdaq regarding non-compliance with listing standards due to late filing of its Annual Report, and is currently appealing to avoid delisting [73]. - The company is subject to anti-corruption laws, and violations could lead to significant penalties and operational disruptions [86]. - Non-compliance with FDA and other regulatory requirements could lead to significant penalties and adversely affect business operations [153]. - The company markets certain products, such as eyelash serums and chemical peels, as cosmetics without FDA approval, which may lead to regulatory challenges [157]. - The FDA has issued warning letters to cosmetic companies for improper claims, which could result in reputational damage and legal actions against the company [158]. - The company is subject to FTC rules and state consumer protection laws, and failure to substantiate product claims could result in enforcement actions or penalties [162]. - New government regulations could increase compliance costs and lead to civil remedies, including fines or product recalls, adversely affecting the company's financial condition [164]. - The company markets prescription-only products containing hydroquinone without FDA premarket authorization, which could lead to enforcement actions if required approvals are not obtained [165]. - The unpredictable nature of the FDA approval process could hinder the company's ability to market its products, significantly affecting its business prospects [174]. - The company has not sought regulatory approval for its HQ products in major markets like the U.S., EU, Canada, Australia, and Japan, instead offering alternatives containing arbutin [177]. - Regulatory changes, including the MoCRA, will impose new compliance obligations for cosmetic products, potentially increasing operational costs [156]. - Compliance with the FDA's cGMPs and similar regulations is mandatory for drug product manufacturers, with potential penalties for violations including fines and product recalls [192]. - The MoCRA requires cosmetic manufacturers to register with the FDA and report serious adverse events, with compliance deadlines set for December 2025 [192]. - The company relies on third-party contract manufacturers for compliance with cGMPs, which may increase manufacturing costs and impact net income [194]. Financial Performance and Growth Strategy - Future growth of the Obagi Skincare and Milk Makeup businesses is uncertain, as historical growth may not indicate future performance [53]. - The company faces risks related to customer dependency, particularly in the Obagi Skincare business, which could materially affect financial results [43]. - The company expects capital and operating expenditures to increase as it expands its infrastructure and international footprint, with a recent private placement raising $70 million through the issuance of 14 million Class A ordinary shares at $5.00 each [67]. - The company anticipates that its future funding requirements will depend on its ability to generate sufficient cash flow from operations, which may impact its growth strategy [68]. - The company plans to expand its Obagi Skincare and Milk Makeup businesses, which will increase the number of employees and operational scope, but faces uncertainties in forecasting employee needs and associated costs [57]. - The company generated a significant portion of its revenue from international sales, with a focus on expanding operations in Vietnam and other Southeast Asian countries, requiring initial investments in facilities and personnel [58]. - The company plans to pursue acquisitions or investments in other businesses to complement existing offerings, but faces challenges in identifying suitable candidates and successfully integrating them [76]. - The company may incur significant costs related to the SEC investigation, regardless of the outcome, which could affect financial condition [46]. - The company is investing in research and development to maintain its competitive position in the skincare and makeup markets, which will require significant capital [71]. - The company expects increased competition as it enters new markets and distribution channels, which may affect pricing and market share [125]. - The company is facing risks associated with international expansion, including regulatory compliance, local market conditions, and potential disruptions in supply and distribution chains [65]. - The company may face delisting from The Nasdaq Capital Market if compliance with continued listing standards is not regained, which could materially impair shareholders' ability to trade securities [74]. - If delisted, dividends on Class A ordinary shares may not be eligible for preferential tax rates, impacting shareholder returns [75]. - The company may issue equity or incur debt for acquisitions, potentially diluting shareholder ownership and adversely affecting financial condition [78]. - Successful integration of acquired businesses is uncertain, and failure to do so could negatively impact revenue and operating results [79]. - The company anticipates variability in quarterly operating results due to factors such as consumer spending and manufacturing costs, making future performance difficult to predict [91]. - Historical financial results of the Obagi Skincare and Milk Makeup businesses may not be indicative of future performance due to significant costs incurred from the Business Combination and public company compliance [95]. Market and Competitive Landscape - The competitive landscape for Obagi Skincare is intense, with significant competition from well-established companies in pharmaceuticals and cosmetics [125]. - The cosmetics industry is highly competitive, with pressure from multinational companies that may leverage greater resources for pricing and marketing advantages [211]. - Competitive pricing pressures may force the company to reduce prices, impacting profitability and sales volume [212]. - The company faces challenges in maintaining brand recognition and reputation, which are critical for its financial success, especially as competition increases [219]. - Milk has relatively low brand awareness compared to other cosmetics brands, making it essential to enhance its recognition for future growth [220]. - The company must continuously innovate and respond to beauty trends to maintain competitiveness in the cosmetics industry [214]. - The company relies on third-party suppliers for product manufacturing, which may affect product quality and availability if suppliers do not meet standards [224]. - The company is dependent on third-party logistics providers for storage and distribution, with no long-term contracts in place, posing risks to operational stability [140]. - The management of inventory is critical, as demand forecasts can significantly change, affecting sales and inventory levels [144]. Operational Challenges - The company recorded a non-cash impairment charge of $68.7 million within the Obagi Skincare reportable segment due to actual results being less than projected results at the time of acquisition [101]. - The company relies on third-party contract manufacturers for all Obagi products, which exposes it to risks such as capacity constraints and regulatory compliance issues [131]. - The SA Distributor accounted for a material portion of net revenue for the Obagi Skincare business, but faced delays in product distribution due to COVID-19 restrictions [136]. - The agreement with the SA Distributor was amended to expand distribution rights in Southeast Asia, but the distributor experienced prolonged delays in obtaining product licenses [136]. - The company experienced delays in product imports to Vietnam due to regulatory compliance issues, affecting distribution [181]. - The ongoing conflict between Russia and Ukraine has led to executive orders prohibiting the import of products into Russia, which could affect future sales [182]. - The company relies on third-party CMOs for the production of its products, which are subject to regulatory inspections [191]. - The company modified business practices in response to COVID-19, including launching a redesigned Obagi website and creating an e-commerce platform for physician customers [116]. - Costs of goods sold increased in the 2022 Successor Period due to inventory reserve provisions and write-offs, impacting future financial performance [145]. - The company may encounter difficulties in asserting its intellectual property rights in Vietnam and other Southeast Asian countries, which could impact its operations [63]. - The company may face challenges in expanding sales of Obagi and Milk products in China due to increased tariffs and trade restrictions [112]. - Milk Makeup sources important components from third-party suppliers in China, exposing the company to risks related to cost increases and regulatory changes [118]. - The U.S. government has imposed increased tariffs on imports from China, which may lower the gross margin on affected Milk Makeup products [120]. - The company relies on third-party contract manufacturers for compliance with cGMPs, which may increase manufacturing costs and impact net income [194]. - The company is exposed to unknown or contingent liabilities that could negatively affect its financial condition and results of operations [101]. Shareholder and Equity Considerations - Members of the Sponsor and their affiliates own a combined ownership interest of 50.8% of the Class A ordinary shares, with Cedarwalk Skincare Ltd. holding an additional 28.3% [104]. - The company may issue additional Class A ordinary shares or other equity securities without shareholder approval, which could significantly dilute existing holders' equity interests [100]. - Future resales of Class A ordinary shares may cause the market price of the company's securities to drop significantly, even if the business performs well [106]. - The company has outstanding warrants to purchase an aggregate of 29,533,282 Class A ordinary shares at an exercise price of $11.50 per share, which could result in dilution if exercised [103]. - The average selling prices of Milk Makeup products may decline due to various factors, potentially reducing net sales and operating income [223]. - Milk's strategic plan requires significant investment in product development, marketing, and technology, which may not guarantee accelerated revenue growth [215]. - Milk's ability to provide a high-quality consumer experience is crucial for brand growth, relying on effective e-commerce platforms and product offerings [221]. - The company may face delisting from The Nasdaq Capital Market if compliance with continued listing standards is not regained, which could materially impair shareholders' ability to trade securities [74].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40207 WALDENCAST ACQUISITION CORP. (Exact name of registrant as specified in its charter) | Cayman Islands | 98-1575727 | | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40207 WALDENCAST ACQUISITION CORP. (Exact name of registrant as specified in its charter) Cayman Islands 98-1575727 (State or other juri ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40207 WALDENCAST ACQUISITION CORP. (Exact name of registrant as specified in its charter) | Cayman Islands | 98-1575727 | | --- | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40207 WALDENCAST ACQUISITION CORP. (Exact name of registrant as specified in its charter) | Cayman Islands | 98-1575727 | | --- | --- | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40207 WALDENCAST ACQUISITION CORP. (Exact name of registrant as specified in its charter) Cayman Islands 98-1575727 (State or other ju ...