| Description of Organization, Business Operations and Basis of Presentation | Nebula
Caravel Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on September 18, 2020. The Company
was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company
and, as such, the Company is subject to all of the risks associated with emerging growth companies. As of March 31, 2021, the
Company had not commenced any operations. All activity for the period from September 18, 2020 (inception) through December 31, 2020 relates
to the Company’s formation and the initial public offering (the “Initial Public Offering”) described below, and the
search for a target for its initial Business Combination. The Company will not generate any operating revenues until after the completion
of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on cash
and cash equivalents from the proceeds derived from the Initial Public Offering and placed in Trust Account (as defined below) and is
subject to non-cash fluctuations for change in the fair value of derivative warrant liabilities in its statement of operations. The
Company’s sponsor is Nebula Caravel Holdings LLC, a Delaware limited liability company (the “Sponsor”). The registration
statement for the Company’s Initial Public Offering was declared effective on December 8, 2020. On December 11, 2020, the Company
consummated its Initial Public Offering of 27,500,000 units (the “Units” and, with respect to the Class A common stock included
in the Units being offered, the “Public Shares”), including 2,500,000 additional Units to cover over-allotments (the “Over-Allotment
Units”), at $10.00 per Unit, generating gross proceeds of $275.0 million, and incurring offering costs of approximately $15.7 million,
inclusive of approximately $9.6 million in deferred underwriting commissions (Note 5). Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 5,166,667
warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price
of $1.50 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $7.8 million (Note 4). Upon
the closing of the Initial Public Offering and the Private Placement, $275.0 million ($10.00 per Unit) of the net proceeds of the Initial
Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”) located
in the United States with American Stock Transfer & Trust Company acting as trustee, and are invested only in U.S. “government
securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company
Act”) having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by the Company, until the
earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below. The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net
assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the deferred underwriting
commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business
Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more
of the voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act. The
Company will provide the holders (the “Public Stockholders”) of the Public Shares with the opportunity to redeem all or a
portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholders meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated
to be $10.00 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not
be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares
have been recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance
with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares
voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its
net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold
a stockholder vote for business or other legal reasons, the Company will, pursuant to its Certificate of Incorporation (the “Certificate
of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”)
and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction
is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem
shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally,
each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
If the Company seeks stockholder approval in connection with a Business Combination, the Initial Stockholders (as defined below) agreed
to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering
in favor of a Business Combination. In addition, the Initial Stockholders agreed to waive their redemption rights with respect to their
Founder Shares and Public Shares in connection with the completion of a Business Combination. The
Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person
with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% or more of the Public Shares, without the prior consent of the Company. The
Sponsor and the Company’s officers and any other holders of the Founder Shares immediately prior to the Initial Public Offering
(the “Initial Stockholders”) agreed not to propose an amendment to the Certificate of Incorporation to modify the substance
or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination
within the Combination Period (as defined below) or with respect to any other material provisions relating to stockholders’ rights
or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their
Public Shares in conjunction with any such amendment. If
the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or December
11, 2022 (or 27 months from the closing of the Initial Public Offering, or March 11, 2023, if the Company has executed a letter of intent,
agreement in principle or definitive agreement for an initial Business Combination within 24 months from the closing of the Initial Public
Offering) (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up; (2)
as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation
of the initial Business Combination, including interest (net of amounts withdrawn to fund the Company’s working capital requirements,
subject to an annual limit of $500,000, and/or to pay for the Company’s taxes (“permitted withdrawals”) and up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish
Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject
to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders
and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide
for claims of creditors and the requirements of other applicable law. The
Initial Stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares
if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public
Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect
to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed
to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not
complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds
held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is
possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be
only $10.00. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the
extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered
or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality
or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account
to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date
of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less
taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and
all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under
the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that the Sponsor
will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective
target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account. Basis
of Presentation The
accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted
accounting principles (“U.S. GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting
of normal accruals) considered for a fair presentation have been included. Operating results for the period from September 18, 2020 (inception)
through March 31, 2021 are not necessarily indicative of the results that may be expected for the period ending December 31, 2021 or
any future period. The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the Form 10-K/A filed by the Company with the SEC on May 7, 2021. Emerging
Growth Company The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of
2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected
not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This
may make comparison of the Company’s unaudited condensed financial statements with those of another public company that is neither
an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used. Proposed
Business Combination On
February 10, 2021, the Company, entered into a Business Combination Agreement and Plan of Merger (the “Business Combination Agreement”)
by and among the Company, Fetch Merger Sub, Inc., a Delaware corporation and newly formed direct wholly-owned subsidiary of Company (“Merger
Sub”), and A Place for Rover, Inc., a Delaware corporation (“Rover”), providing for, among other things, and subject
to the terms and conditions therein, a business combination between the Company and Rover pursuant to which, among other things, (i)
Merger Sub will merge with and into Rover, the separate corporate existence of Merger Sub will cease and Rover will continue as the surviving
corporation in the merger and a wholly owned subsidiary of the Company and (ii) the Company will change its name to “Rover Group,
Inc.” The
Business Combination 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 Business Combination Agreement, the
“Business Combination”): (i)
at the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”), upon the terms and
subject to the conditions thereof, and in accordance with the Delaware General Corporation Law, as amended (the “DGCL”),
Merger Sub will merge with and into Rover (the “Merger”), the separate corporate existence of Merger Sub will cease and Rover
will continue as the surviving corporation in the Merger and a wholly owned subsidiary of the Company; (ii)
as a result of the Business Combination, each outstanding share of Rover common stock and preferred stock as of immediately prior to
the effective time of the Business Combination, would be converted into, at the election of the holder thereof (subject to the limitations
on such elections set forth in the Business Combination Agreement) the right to receive (a) an amount of cash or shares of Class A common
stock, par value $0.0001 per share, of the Company’s common stock, based on the pro rata portion applicable to such share of Rover
common stock or preferred stock, as applicable, of an aggregate purchase price equal to $1.350 billion, as adjusted by (1) Rover’s
cash, indebtedness, and accrued tax liabilities as of immediately prior to the effective time of the Merger, (2) the unpaid transaction
expenses of Rover and the Company as of immediately prior to the effective time of the Business Combination, and (3) the aggregate exercise
price of Rover options and Rover warrants outstanding as of immediately prior to the effective time of the Business Combination, which
options and warrants will be assumed by the Company subject to the terms and conditions set forth in the Business Combination Agreement
and (b) the contingent “earn-out” right to receive a pro rata portion of up to 22,500,000 shares of the Company’s Common
Stock in the aggregate based on the achievement of certain trading price targets following the Closing, which amount of “earn-out”
shares will be adjusted based on a formula set forth in the Business Combination Agreement to reflect a portion of the value of such
“earn-out” shares deemed to be earned upon exercise of Rover options and warrants assumed by the Company in the Business
Combination; and (iii)
the Company will immediately be renamed “Rover Group, Inc.” The
Company’s Board of Directors has unanimously (i) approved and declared advisable the Business Combination Agreement, the Business
Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Business Combination Agreement
and related matters by the Company’s stockholders. The
Business Combination Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others,
(i) obtaining required approvals of the Business Combination and related matters by the respective stockholders of the Company and Rover,
(ii) the effectiveness of the proxy statement / registration statement on Form S-4 filed by the Company in connection with the Business
Combination, (iii) receipt of approval for listing on Nasdaq the shares of the Company’s Common Stock to be issued in connection
with the Merger, (iv) that the Company continues to have at least $5,000,001 of net tangible assets upon the Closing and (v) the absence
of any injunctions enjoining or prohibiting the consummation of the Merger. Concurrently
with the execution of the Business Combination Agreement, the Company entered into a backstop subscription agreement with True Wind Capital
II, L.P. and True Wind Capital II-A, L.P. (together, the “TWC Funds”) (the “Sponsor Backstop Subscription Agreement”),
pursuant to which the TWC Funds agreed to, among other things, purchase shares of the Company’s common stock in an aggregate amount
of up to $50,000,000 (or such greater amount at the election of the TWC Funds) to the extent of the amount of redemptions of shares of
the Company’s common stock. The TWC Funds also agreed to purchase additional shares of our common stock in an aggregate amount
of up to $50,000,000 if mutually agreed with Rover. Concurrently
with the execution of the Business Combination Agreement, certain accredited investors (the “PIPE Investors”), entered into
subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors have committed to purchase
5,000,000 shares of our common stock (the “PIPE Shares”) at a purchase price per share of $10.00 and an aggregate purchase
price of $50,000,000 (the “PIPE Investment”). The purchase of the PIPE Shares is conditioned upon, and will be consummated
concurrently with, the closing of the initial business combination. Certain offering related expenses are payable by us, including customary
fees payable to the placement agents, Deutsche Bank Securities and Morgan Stanley & Co. LLC. The purpose of the sale of the PIPE
Shares is to raise additional capital for use in connection with the Proposed Transactions and to meet the minimum cash requirements
provided in the Business Combination Agreement. Concurrently
with the execution of the Business Combination Agreement, the Company entered into stockholder support agreements with Rover and certain
stockholders of Rover (the “Rover Holders Support Agreements”), pursuant to which such stockholders agreed to approve the
Business Combination Agreement and the Proposed Transactions. Liquidity
and Capital Resources As
of March 31, 2021, the Company had approximately $0.2 million in its operating bank account and a working capital deficit of approximately
$2.2 million. The
Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the cash payment of $25,000
from the Sponsor to purchase the Founders Shares (as defined in Note 4), and loan proceeds from the Sponsor of approximately $176,000
under the Note (Note 4). The Company repaid the Note in full on December 11, 2020. Subsequent from the consummation of the Initial Public
Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering
and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a
Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are
not obligated to, provide the Company Working Capital Loans (defined below, see Note 4). As of March 31, 2021, there were no amounts
outstanding under the Working Capital Loans. Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or
an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating the Business Combination. |
