He looks very similar to SpongeBob, both in shape and clothing, except that he is dark green and wears ripped clothing. He also has long black eyelashes, two broken buck teeth sticking out from his mouth, and wears no shoes. As well as this, his limbs both resemble claws and he has mushrooms growing from the side of his head.
Role in short
Mr. Krabs tells SpongeBob to take some moldy kitchen sponges out to the garbage. When he looks at the full moon while standing on a pile of moldy sponges, he transforms into Moldy Sponge. Mr. Krabs, mistaking him for an inanimate moldy kitchen sponge, then throws him in the dumpster.