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United States securities and exchange commission logo
March 6, 2022
Michael Brousset
Chief Executive Officer
Waldencast Acquisition Corp.
10 Bank Street, Suite 560
White Plains, NY 10606
Re: Waldencast
Acquisition Corp.
Registration
Statement on Form F-4
Filed February 14,
2022
File No. 333-262692
Dear Mr. Brousset:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Form F-4 filed February 14, 2022
Selected Definitions, page iii
1. We acknowledge your
revised disclosures in response to prior comments 1 and 3. We note
the definition of
Beauty Ventures discloses that it is managed by the Sponsor. We also
note that the
disclosures regarding expected ownership percentages separately discusses
the percentage
ownership of the Sponsor and Beauty Ventures. Please explain why this
presentation is
appropriate. In addition, as previously noted, it is unclear why a defined
term is needed for
"Total Implied Obagi Cash Consideration Amount when it means
$380.0 million.
Questions and Answers for Shareholders of Waldencast
Q: What is the transaction structure?, page xx
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FirstName
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Acquisition Corp.Brousset
Comapany
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2. We acknowledge your revised disclosures in response to prior comment
4. You state that
Milk Members will receive Waldencast LP common units as part of the
transaction.
Please also clarify here whether the transaction involving the
issuance of Waldencast LP
common units will be exempt from registration.
Summary of the Proxy Statement/Prospectus
Obagi, page 2
3. We acknowledge your revised disclosures in response to prior comment
9. Your revised
disclosures state that you have not received marketing authorization
from the FDA. To the
extent correct, please revise here and elsewhere as appropriate,
including in your summary
risk factor on page 29, to clarify that such marketing authorization
is required. As
previously noted, please also disclose that the FDA has cited safety
concerns for the
HQ ingredient, even at the lower concentrations, and that you could be
found to be
marketing and selling these products in violation of the law, as you
state on page 48, and
add corresponding disclosures to your summary risk factors. Please
also ensure that
such disclosures are prominently disclosed.
Waldencast's Board of Directors' Reasons for the Business Combination, page 7
4. We acknowledge your revised disclosures in response to prior comment
10. As previously
noted, please revise your discussion of the board's reasons for the
business combination by
removing some of the detailed discussion that is more appropriate for
elsewhere in the
prospectus.
Sources and Uses of Funds for the Business Combination, page 24
5. We acknowledge your revised disclosures in response to prior comment
16. Please further
revise footnotes 2 to the tables to further explain how the cash is
intended to be used in the
operations of Obagi and Milk, and provide some context to investors to
understand the
differences in the use of cash in the different scenarios.
Regulations could prohibit physicians from dispensing our prescription only
products..., page 50
6. We note your disclosure in response to our prior comment 20 that
certain jurisdictions and
credit card authorization vendors have taken action against physician
customers who sell
your prescription products over the Internet. As previously noted,
please quantify any
effect thus far of such actions to the sales of your prescription only
products. You also
state that certain states prohibit the dispensing of prescription
products without a
pharmacy or license unless certain conditions are met. Please explain
whether your sales
in these listed states meet those conditions and what those conditions
are. Additionally,
disclose in your discussion of Obagi beginning on page 2 that certain
states, including
California, Massachusetts, New York, and Texas require a pharmacy or
other license or
authorization to dispense your prescription products unless certain
conditions are met, and
that credit card authorization vendors and the state of Texas and
Puerto Rico have taken
Michael Brousset
FirstName
WaldencastLastNameMichael
Acquisition Corp.Brousset
Comapany
March NameWaldencast Acquisition Corp.
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action against physician customers who sell your prescription products
to patients over the
Internet.
We are involved, and may become involved in the future, in disputes and other
legal or
regulatory proceedings. . ., page 84
7. We refer to your revised disclosure regarding the indemnification
agreement. Please
remove this mitigating discussion from your risk factor.
Background to the Business Combination, page 173
8. We refer to your revised disclosure in response to prior comment 28.
Regarding the
rationale set forth in clause (ii), please further revise to explain
why Waldencast did not
pursue further negotiations to discuss valuation expectations and
disclose how many
potential targets this rationale affected. Regarding the rationale set
forth in clause (iv),
please further discuss why the other target business was not as
aligned with Waldencast's
investment criteria as Obagi and Milk's businesses. Also revise to
clarify whether any of
the potential targets were in the beauty sector.
9. We note your response to our prior comment 31. Please revise to
clarify how the
negotiations relating to the Obagi China Business evolved, including
the different values
attributed to the Obagi China Business and various regulatory issues
discussed.
10. We note your responses to our prior comments 30 and 32, which we
reissue in part. You
disclose that the parties and their respective advisors agreed to
effect the Up-C structure
following several weeks of discussions. Please revise to further
expand on the evolution
of the proposed transaction structure, including the tax aspects of
the structure. Please also
further clarify how the consideration evolved during the negotiations,
including the
changes to the purchase price mechanic and removal of a purchase price
adjustment that
are referenced, and disclose any negotiations regarding the
consideration amount and type
that occurred prior to the letters of interest. Also include a
discussion regarding any
negotiations regarding Cedarwalk's ability to appoint one director.
Waldencast's Board of Directors' Reasons for the Business Combination, page 186
11. We note your revised disclosure in response to our prior comment 34,
which we reissue in
part. Disclose whether any companies meeting the selection criteria
were excluded from
the analysis and please expand your discussion to disclose the
financial data used to derive
the multiples.
U.S. Federal Income Tax Considerations, page 225
12. We note your response to our prior comment 37. Please revise to remove
statements
assuming the domestication qualifies as an F reorganization. Please
also expand your
disclosure regarding the tax consequences to U.S. holders of
Waldencast Class A ordinary
shares who exercise redemption rights and disclose the tax
consequences on the holding
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FirstName
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Acquisition Corp.Brousset
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period caused by the redemption rights. For guidance concerning
assumptions and
opinions subject to uncertainty, please refer to Staff Legal Bulletin
No. 19. Revise
corresponding sections in the prospectus as appropriate, and revise
the opinion exhibit to
cover all the material tax consequences to U.S. holders.
Skintrinsiq Device, page 275
13. We refer to your revised disclosures in response to prior comment 41.
You state that the
Skintrinsiq device is regulated by the FDA, but that you believe it is
exempt from FDA
premarket review requirements. Please further explain to us the basis
of your belief.
Innovative Research & Development, page 276
14. We note your response to our prior comment 40. Please revise
throughout the prospectus
your references to your products' efficacy and/or safety and studies
determining your
products' efficacy and/or safety as your prescription products have
not been approved by
the FDA, and efficacy and safety determinations are within the FDA's
authority. Balance
all references that Obagi Medical products are "scientifically-backed"
and "clinically
proven" to state that your Obagi Medical products have not been
approved by the FDA or
a similar regulatory authority, and that you're marketing certain of
your products without
required FDA approval, or revise.
Sales & Marketing, page 279
15. We note your revised disclosure in response to prior comment 42.
Please also revise to
clarify, if true, that the referenced Chinese business would be part
of the Obagi China
Distribution. In addition, please disclose that your agreement with
Boxout Health does not
contain any minimum purchase requirements and expand your discussion
of the material
terms of your Boxout Health distribution agreement to disclose the
termination provisions
and rights and obligations of each party pursuant to the agreement.
Intellectual Property, page 283
16. We note the addition of the table on page 276 of your material
patents. Please clarify, if
correct, that each of the material patents listed are owned by Obagi.
Please also expand
your disclosure of the patent rights under your license agreement with
Osmotics, including
the materiality of such patent rights that you have licensed, the type
of patent protection,
patent expiration dates and the applicable jurisdictions. In addition,
we note the upcoming
expiration dates for certain of your patents, including patents
licensed under the agreement
with Osmotics. Please disclose the material effects of expiring
patents, if any.
Information about Milk, page 289
17. We note your response to our prior comment 43, which we reissue in
part. Please expand
your disclosure for Milk's master services agreement to identify the
parties to such
agreement and the material terms of the agreement or tell us why it is
not material. We
Michael Brousset
FirstName
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Acquisition Corp.Brousset
Comapany
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refer to your reference to the master services agreement on page 298.
Sales and Distribution Strategy, page 293
18. We note your response to our prior comment 47. Please expand your
disclosure of the
material terms of the distribution agreements with Sephora, including
the termination
provision.
Growth Opportunities, page 295
19. We note your response to our prior comment 49, which we reissue in
part. Please also
disclose the number of participants in the Sephora online survey
conducted in June 2020.
Beneficial Ownership of Securities, page 337
20. We acknowledge your response to prior comment 52. Please revise
footnote 3 to explain
that the voting and investment power is exercised jointly by
Waldencast Ventures, LP,
Burwell Mountain Trust, and Dynamo Master Fund.
Milk Makeup LLC Financial Statements for the Nine Months ended September 30,
2021 and
2020
8. Commitments and Contingencies, page F-107
21. We note your response to prior comment 54. You stated "management
believes these
allegations are without merit and any reasonably possible losses are
not expected to have a
material impact on the Company s condensed financial statement."
Since it appears that
there is at least a reasonable possibility that a loss or an
additional loss may have been
incurred, item b. of ASC 450-20-50-4 requires disclosure of an
estimate of the possible
loss or range of loss or a statement that such an estimate cannot be
made. Please
revise accordingly.
Exhibits
22. We refer to the 59,126,449 "Ordinary shares" shown as being registered
in your fee table
exhibit. This amount appears to include both Waldencast plc Class A
ordinary shares and
Waldencast plc Non-Economic ordinary shares. Please revise so that the
number of shares
of each class of shares is separately disclosed in the table. Refer to
Item 21 of Form F-4.
In addition, certain disclosures on the cover page was removed along
with the filing fee
table, such as the asterisk disclosure regarding the Domestication.
Please restore the
disclosures.
General
23. We note your revised disclosure in response to our prior comment 55.
Please specify the
sources that conducted the industry research in 2020 referenced in
your disclosure. Please
also restore the deleted reference to the survey conducted by Kline &
Co. on page 281 or
advise.
Michael Brousset
Waldencast Acquisition Corp.
March 6, 2022
Page 6
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Jenn Do at 202-551-3743 or Lynn Dicker at 202-551-3616
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jane Park at 202-551-7439 or Dorrie Yale at 202-551-8776 with any other
questions.
Sincerely,
FirstName LastNameMichael Brousset
Division of
Corporation Finance
Comapany NameWaldencast Acquisition Corp.
Office of Life
Sciences
March 6, 2022 Page 6
cc: Max Mayer-Cesiano
FirstName LastName