•

the (a) historical audited financial statements of Caravel as of December 31, 2020 and for the period from September 18, 2020 (inception) through December 31, 2020, as restated, included in Caravel’s amended Annual Report on Form 10-K filed with the SEC on May 7, 2021 and incorporated by reference and (b) historical unaudited condensed financial statements of Caravel as of and for the six months ended June 30, 2021 included in Rover Group, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on August 16, 2021 and incorporated by reference;

•

the (a) historical audited consolidated financial statements of Legacy Rover as of and for the year ended December 31, 2020 included in the Proxy Statement beginning on page F-2 and (b) historical unaudited condensed consolidated financial statements of Legacy Rover as of and for the six months ended June 30, 2021 included as Exhibit 99.1 to this Amendment No. 1 to Current Report on Form 8-K/A and are incorporated herein by reference.

•

other information relating to Caravel and Legacy Rover included in the Proxy Statement, including the Business Combination Agreement and the description of certain terms thereof set forth under the section titled “Proposal No. 1—The Business Combination Agreement” beginning on page 112 of the Proxy Statement and incorporated herein by reference.

•

the conversion of all outstanding shares of Legacy Rover redeemable convertible preferred stock into shares of Legacy Rover common stock at the then-effective conversion rate as calculated pursuant to Legacy Rover’s certificate of incorporation;

•

the cancellation of each issued and outstanding share of Legacy Rover common stock (including shares of Legacy Rover common stock resulting from the conversion of Legacy Rover redeemable convertible preferred stock) and the conversion into a number of shares of New Rover Common Stock equal to the exchange ratio of 1.0379; and

•

the conversion of all outstanding vested and unvested Legacy Rover Options into New Rover Options exercisable for shares of New Rover Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the exchange ratio of 1.2006 for Legacy Rover Options.

•

Issuance and sale of 5,000,000 New Rover Class A Common Stock at a purchase price of $10.00 per share pursuant to the PIPE Investment.

•

Issuance and sale of 8,000,000 New Rover Class A Common Stock at a purchase price of $10.00 per share pursuant to the Sponsor Backstop Subscription Agreement and the issuance and sale of 1,000,000 New Rover Class A Common Stock at a purchase price of $10.00 per share pursuant to an assignment and assumption agreement entered into between Broad Bay, TWC Funds, and Caravel on July 26, 2021 (the “Assignment Agreement”).

•

Immediately before the Merger, the Legacy Rover chief executive officer (the “CEO”) net exercised 1.8 million outstanding Legacy Rover Options. 0.7 million shares were withheld to cover the tax withholding and remittance obligations of Legacy Rover of $6.8 million. The net exercise of outstanding Legacy Rover Options by the CEO was contingent on the Merger closing.

•

Repayment of $8.2 million and $30.2 million in principal and accrued interest to settle amounts outstanding under Legacy Rover’s PPP Loan and Subordinated Credit Facility, respectively, following the Closing.

•

Payment of direct and incremental transaction fees of $35.2 million for underwriting/banking, legal, accounting and other fees.

•

8,770,748 shares will be earned if the volume weighted average price of New Rover Class A Common Stock is greater than or equal to $12.00 over any twenty trading days within any thirty trading day period during the Earnout Period.

•

8,770,748 shares will be earned if the volume weighted average price of New Rover Class A Common Stock is greater than or equal to $14.00 over any twenty trading days within any thirty trading day period during the Earnout Period.

•

2,192,687 shares will be earned if the volume weighted average price of New Rover Class A Common Stock is greater than or equal to $16.00 over any twenty trading days within any thirty trading day period during the Earnout Period.

•

If, during the Earnout Period, there is a change of control transaction, then all remaining triggering events that have not previously occurred shall be deemed to have occurred and a total of 19,734,183 shares will be issued to Legacy Rover equity holders to participate in the change of control transaction.

•

984,651 shares will vest if the volume weighted average price of New Rover Class A Common Stock is greater than or equal to $12.00 over any twenty trading days within any thirty trading day period during the Earnout Period.

•

984,651 shares will vest if the volume weighted average price of New Rover Class A Common Stock is greater than or equal to $14.00 over any twenty trading days within any thirty trading day period during the Earnout Period.

•

492,325 shares will vest if the volume weighted average price of New Rover Class A Common Stock is greater than or equal to $16.00 over any twenty trading days within any thirty trading day period during the Earnout Period.

•

If during the Earnout Period, there is a change of control transaction, then immediately prior to the consummation of the change of control transaction the following will occur: (i) any triggering event that has not previously occurred shall be deemed to have occurred and (ii) all unvested Founder Shares will vest and be eligible to participate in the change of control transaction.  

•

Legacy Rover stockholders comprising a relative majority of the voting power of New Rover;

•

Legacy Rover will have the ability to nominate a majority of the members of the board of directors of New Rover;

•

Legacy Rover’s operations prior to the acquisition comprising the only ongoing operations of New Rover;

•

Legacy Rover’s senior management comprising a majority of the senior management of New Rover; and

•

New Rover substantially assuming the Legacy Rover name.

Shares

%

Former Caravel stockholders ⁽⁶⁾

12,822,192

8.2

Sponsor and related parties ^(1)(2)(7)

13,899,127

8.8

Former Legacy Rover stockholders ⁽³⁾⁽⁴⁾

124,477,819

79.2

Third party investors in PIPE Investment and Assignment Agreement ⁽⁵⁾

6,000,000

3.8

Total shares of New Rover Common Stock outstanding at closing

   of the Merger

157,199,138

100.0

(1)

Amount includes 8,000,000 shares of New Rover Common Stock the Sponsor purchased as part of the Sponsor Backstop Subscription Agreement for $80.0 million.

(2)

The Sponsor and related parties hold 2,461,627 Founder Shares that vest upon certain triggering events and are included in the outstanding total shares at the Merger closing. Upon the Merger closing, 3,437,500 Founder Shares vested and 975,873 Founder Shares were forfeited.

(3)

Amount excludes Legacy Rover Options converted to equivalent New Rover Options that are exercisable for 20,412,603 shares of New Rover Common Stock.

(4)

Following the closing of the Merger, the eligible Legacy Rover stockholders (including holders of Legacy Rover common stock and Legacy Rover preferred stock) have the right to receive up to 19,734,183 Earnout Shares in tranches upon the occurrence of the triggering events during the Earnout Period. Because the Earnout Shares are contingently issuable based upon the triggering events that have not yet been achieved, the New Rover Common Stock issued and outstanding immediately after the Merger excludes the 19,734,183 Earnout Shares.

(5)

Amount includes 5,000,000 shares of New Rover Common Stock subscribed for by PIPE Investors and 1,000,000 shares of New Rover Common Stock purchased as part of the Assignment Agreement for $10.0 million.

(6)

Amount excludes 5,500,000 outstanding Public Warrants issued in connection with the Caravel IPO as such securities are not exercisable until the later of (i) the date that is thirty (30) days after the first date on which the Company completes a merger, share exchange, asset acquisitions, share purchase, reorganization or similar transaction, involving the Company and one or more businesses and (ii) the date that is twelve (12) months from the date of the closing of the Caravel IPO.

(7)

Amount excludes 2,574,164 Private Placement Warrants held by the Sponsor. Prior to the Merger closing, there were 5,166,667 Private Placement Warrants issued and outstanding and 2,592,503 were forfeited upon the Merger closing.

June 30, 2021

Transaction

Caravel

(Historical)

Legacy Rover

(Historical)

Accounting

Adjustments

(Note 2)

Pro Forma

Combined

ASSETS

Current assets:

Cash and cash equivalents

$

31

$

103,386

275,034

A

$

299,404

50,000

B

(9,625

)

C

(24,235

)

D

(146,778

)

F

90,000

G

(38,409

)

O

Accounts receivable, net

—

12,187

—

12,187

Prepaid expenses and other current assets

571

2,782

—

3,353

Total current assets

602

118,355

195,987

314,944

Investments held in trust account

275,034

—

(275,034

)

A

—

Property and equipment, net

—

22,914

—

22,914

Operating lease right-of-use assets

—

21,876

—

21,876

Intangible assets, net

—

6,162

—

6,162

Goodwill

—

33,159

—

33,159

Deferred tax asset, net

—

1,574

—

1,574

Other noncurrent assets

—

4,955

(4,782

)

D

173

Total assets

$

275,636

$

208,995

(83,829

)

$

400,802

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK

   AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$

47

$

2,813

—

$

2,860

Accrued compensation and related expenses

—

4,381

6,757

P

11,138

Accrued expenses and other current liabilities

3,612

5,545

(3,430

)

D

5,441

(286

)

O

Deferred revenue

—

8,167

—

8,167

Pet parent deposits

—

33,838

—

33,838

Pet service provider liabilities

—

8,680

—

8,680

Debt, current portion

—

7,746

(7,746

)

O

—

Operating lease liabilities, current portion

—

2,303

—

2,303

Total current liabilities

3,659

73,473

(4,705

)

72,427

Debt, net of current portion

—

29,969

(29,969

)

O

—

Operating lease liabilities, net of current portion

—

26,193

—

26,193

Earnout liabilities

—

—

202,889

H

228,081

25,192

J

Other noncurrent liabilities

—

783

—

783

Deferred underwriting commissions in connection with the

   initial public offering

9,625

—

(9,625

)

C

—

Derivative warrant liabilities

30,885

—

(5,646

)

N

25,239

Total liabilities

44,169

130,418

178,136

352,723

Redeemable convertible preferred stock

—

290,427

(290,427

)

L

—

Caravel Class A Common Stock subject to redemption

226,467

—

(226,467

)

E

—

Stockholders' equity (deficit):

Legacy Rover common stock

—

—

—

—

Caravel preferred stock

—

—

—

—

New Rover Class A Common Stock

—

—

1

B

15

2

E

(1

)

F

1

G

9

L

3

M

Caravel Class A Common Stock

—

—

—

—

Caravel Class B Common Stock

1

—

(1

)

I

—

Additional paid-in capital

25,316

57,542

49,999

B

317,864

(25,587

)

D

226,465

E

(146,777

)

F

89,999

G

(202,889

)

H

(37,777

)

I

37,778

I

(25,192

)

J

(20,317

)

K

290,418

L

(3

)

M

(6,757

)

P

5,646

N

Accumulated other comprehensive income

—

282

—

282

Accumulated deficit

(20,317

)

(269,674

)

20,317

K

(270,082

)

(408

)

O

Total stockholders’ equity (deficit)

5,000

(211,850

)

254,929

48,079

Total liabilities, redeemable convertible preferred stock and stockholders’

   equity (deficit)

$

275,636

$

208,995

(83,829

)

$

400,802

As Restated

For the

period from

September

18, 2020

(inception)

For the

year ended

through

December

31, 2020

Caravel

(Historical)

December

31, 2020

Legacy

Rover

(Historical)

Transaction

Accounting

Adjustments

(Note 2)

Pro Forma

Combined

Revenue

$

—

$

48,800

$

—

$

48,800

Costs and expenses:

Cost of revenue (exclusive of depreciation and

   amortization shown separately below)

—

19,823

—

19,823

Operations and support

—

12,371

—

12,371

Marketing

—

16,332

—

16,332

Product development

—

22,567

—

22,567

General and administrative

114

21,813

—

21,927

Depreciation and amortization

—

8,899

—

8,899

Total costs and expenses

114

101,805

—

101,919

Loss from operations

(114

)

(53,005

)

—

(53,119

)

Other income (expense), net:

Interest income

—

488

—

488

Interest expense

—

(3,154

)

2,203

R

(951

)

Loss from impairment of DogHero investment

—

(2,080

)

—

(2,080

)

Other income (expense), net

—

172

—

172

Financing cost- derivative warrant liabilities

(476

)

—

—

(476

)

Change in fair value of derivative warrant liabilities

(1,122

)

—

260

Q

(862

)

Total other income (expense), net

(1,598

)

(4,574

)

2,463

(3,709

)

Loss before income taxes

(1,712

)

(57,579

)

2,463

(56,828

)

Income tax benefit

—

94

—

94

Net loss

$

(1,712

)

$

(57,485

)

$

2,463

$

(56,734

)

Weighted average shares outstanding of New Rover

   Class A Common Stock - basic and diluted

S

150,968

Basic and diluted net loss per share - New Rover

   Class A Common Stock

$

(0.38

)

Weighted average shares outstanding of Legacy Rover

   common stock - basic and diluted

28,804

Basic and diluted net loss per share - Legacy Rover

$

(2.00

)

Weighted average shares outstanding of Caravel

   Class A Common Stock - basic and diluted

27,500

Basic and diluted net loss per share - Caravel

   Class A Common Stock

$

(0.00

)

Weighted average shares outstanding of Caravel

   Class B Common Stock - basic and diluted

6,375

Basic and diluted net loss per share - Caravel Class

   B Common Stock

$

(0.27

)

For the

six months

For the

six months ended

ended

June

30, 2021

Caravel

(Historical)

June

30, 2021

Legacy Rover

(Historical)

Transaction

Accounting

Adjustments

(Note 2)

Pro Forma

Combined

Revenue

$

—

$

36,678

$

—

$

36,678

Costs and expenses:

Cost of revenue (exclusive of depreciation and

   amortization shown separately below)

—

10,459

—

10,459

Operations and support

—

5,715

—

5,715

Marketing

—

7,128

—

7,128

Product development

—

9,554

—

9,554

General and administrative

4,658

12,368

—

17,026

Depreciation and amortization

—

3,699

—

3,699

Total costs and expenses

4,658

48,923

—

53,581

Loss from operations

(4,658

)

(12,245

)

—

(16,903

)

Other income (expense), net:

Interest income

—

8

—

8

Interest expense

—

(1,400

)

1,400

V

—

Other expense, net

—

(77

)

—

(77

)

Interest earned on investments held in Trust Account

34

—

(34

)

U

—

Change in fair value of derivative warrant liabilities

(13,980

)

—

4,200

T

(9,780

)

Total other income (expense), net

(13,946

)

(1,469

)

5,566

(9,849

)

Loss before income taxes

(18,604

)

(13,714

)

5,566

(26,752

)

Income tax expense

—

317

—

317

Net loss

$

(18,604

)

$

(13,397

)

$

5,566

$

(26,435

)

Weighted average shares outstanding of New Rover

   Class A Common Stock - basic and diluted

W

152,041

Basic and diluted net loss per share - New Rover

   Class A Common Stock

$

(0.17

)

Weighted average shares outstanding of Legacy Rover

   common stock - basic and diluted

29,837

Basic and diluted net loss per share - Legacy Rover

$

(0.45

)

Weighted average shares outstanding of Caravel

   Class A Common Stock - basic and diluted

27,500

Basic and diluted net loss per share - Caravel

   Class A Common Stock

$

—

Weighted average shares outstanding of Caravel

   Class B Common Stock - basic and diluted

6,875

Basic and diluted net loss per share - Caravel Class

   B Common Stock

$

(2.71

)

1.

Basis of Presentation

•

the (a) historical audited financial statements of Caravel as of December 31, 2020 and for the period from September 18, 2020 (inception) through December 31, 2020, as restated, included in Caravel’s amended Annual Report on Form 10-K filed with the SEC on May 7, 2021 and incorporated by reference and (b) historical unaudited condensed financial statements of Caravel as of and for the six months ended June 30, 2021 included in Rover Group, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on August 16, 2021 and incorporated by reference;

•

the (a) historical audited consolidated financial statements of Legacy Rover as of and for the year ended December 31, 2020 included in the Proxy Statement beginning on page F-2 and (b) historical unaudited condensed consolidated financial statements of Legacy Rover as of and for the six months ended June 30, 2021 included as Exhibit 99.1 to this Amendment No.1 to Current Report on Form 8-K/A and are incorporated herein by reference.

•

other information relating to Caravel and Legacy Rover included in the Proxy Statement, including the Business Combination Agreement and the description of certain terms thereof set forth under the section titled “Proposal No. 1—The Business Combination Agreement” beginning on page 112 of the Proxy Statement and incorporated herein by reference.

2.

Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

(A)

Reflects the liquidation and reclassification of $275.0 million of investments held in the Trust Account to cash and cash equivalents that becomes available for general use by New Rover following the Merger, prior to redemptions. See adjustment note (F) for actual redemptions in connection with the Merger closing.

(B)

Reflects the gross proceeds of $50.0 million from the issuance and sale of 5,000,000 shares of New Rover Class A Common Stock at $10.00 per share pursuant to the PIPE Investment entered into with PIPE Investors.

(C)

Reflects the cash payment of $9.6 million of deferred underwriters’ fees incurred during the Caravel IPO due upon completion of the Merger.

(D)

Represents the preliminary estimated direct and incremental transaction costs incurred by Caravel and Legacy Rover related to the Merger of approximately $25.6 million for underwriting/banking, legal, accounting and other fees reflected in the unaudited pro forma condensed combined balance sheet as a direct reduction to New Rover’s additional paid-in capital and are assumed to be cash settled. As of June 30, 2021, Legacy Rover had deferred transaction costs incurred of $4.8 million, of which $3.4 million was unpaid.

(E)

Reflects the reclassification of Caravel Class A Common Stock subject to possible redemption to permanent equity immediately prior to the Merger closing.

(F)

Represents the cash disbursed to redeem 14,677,808 shares of Caravel common stock for $146.8 million allocated to New Rover Class A Common Stock and additional paid-in capital using par value of $0.0001 per share at a redemption price of $10.00 per share.

(G)

Reflects the issuance of 8,000,000 shares of New Rover Class A Common Stock at $10.00 per share for proceeds of $80.0 million pursuant to the Sponsor Backstop Subscription Agreement and the issuance of 1,000,000 shares of New Rover Class A Common Stock at $10.00 per share for proceeds of $10.0 million pursuant to the Assignment Agreement.

(H)

Reflects the preliminary estimated fair value of the Earnout Shares contingently issuable to the Legacy Rover equity holders as of the Merger closing. The preliminary estimated fair values were determined using the most reliable information available. The actual fair values could change materially once the final valuation is determined at the Merger closing. Refer to Note 4 for more information.

(I)

Reflects the vesting of 3,437,500 Founder Shares upon the Merger closing and forfeiture of 975,873 Founder Shares as of the Merger closing. The fair value of the New Rover Class A Common Stock is $10.99 per share as of the Merger closing.

(J)

Reflect the preliminary estimated fair value of the Founder Shares contingently recallable from the Sponsor as of the Merger closing. The preliminary estimated fair values were determined using the most reliable information available. The actual fair values could change materially once the final valuation is determined at the Merger closing. Refer to Note 4 for more information.

(K)

Reflects the elimination of Caravel’s historical retained earnings with a corresponding adjustment to additional paid-in capital for New Rover in connection with the reverse recapitalization upon closing of the Merger.

(L)

Reflects the conversion of Legacy Rover redeemable convertible preferred stock into New Rover Class A Common Stock upon closing of the Merger.

(M)

Reflects the difference in par value between Legacy Rover of $0.00001 per share and Caravel of $0.0001 per share.

(N)

Reflects the preliminary estimated fair value of the Private Placement Warrants and Public Warrants after the forfeiture of 2,592,503 Private Placement Warrants upon the Merger closing.

(O)

Reflects the repayment of the Subordinated Credit Facility of $30.0 million in principal and $0.2 million of accrued interest, derecognition of the unamortized discount of $0.4 million related to the Subordinated Credit Facility, and the repayment of the PPP Loan of $8.1 million in principal and $0.1 million of accrued interest following the closing of the Merger.

(P)

Reflects the fair value of the New Rover Common Stock shares withheld by the Company upon the net exercise of outstanding stock options by the Legacy Rover CEO to cover the tax withholding and remittance obligations of the Company of $6.8 million. The net exercise of Legacy Rover Options by the CEO immediately before the Merger closing was contingent on the Merger closing.

(Q)

Reflects the elimination of the change in fair value of the derivative warrant liability of 2,592,503 Private Placement Warrants due to their forfeiture upon closing of the Merger.

(R)

Reflects an adjustment to eliminate interest expense, amortization of discount and debt issuance cost on the Subordinated Credit Facility and the PPP Loan as a result of repayment and settlement of all amounts outstanding under the Subordinated Credit Facility and PPP Loan following the closing of the Merger.

(S)

The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that Caravel’s IPO occurred as of January 1, 2020. The Merger is being reflected as if it had occurred on this date and the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period (for the year ending December 31, 2020).

(T)

Reflects the elimination of the change in fair value of the derivative warrant liability of 2,592,503 Private Placement Warrants due to their forfeiture upon closing of the Merger.

(U)

Reflects the elimination of investment income related to the investments held in the Caravel Trust Account.

(V)

Reflects an adjustment to eliminate interest expense, amortization of discount and debt issuance costs for the Subordinated Credit Facility and the PPP Loan as a result of repayment and settlement of all amounts outstanding under the Subordinated Credit Facility and PPP Loan following the closing of the Merger.

(W)

The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that Caravel’s IPO occurred as of January 1, 2020. The Merger is being reflected as if it had occurred on this date and the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period (for the six months ending June 30, 2021).

3.

Net Loss per Share

Year Ended

December 31, 2020

Six Months Ended

June 30, 2021

Pro forma net loss

$

(56,734

)

$

(26,425

)

Weighted average shares outstanding, basic and diluted

150,968,185

152,041,439

Pro forma net loss per share, basic and diluted – common stock

$

(0.38

)

$

(0.17

)

Weighted average shares calculation, basic and diluted

Caravel Stockholders

12,822,192

12,822,192

Sponsor and related parties ⁽¹⁾⁽²⁾

11,437,500

11,437,500

Legacy Rover equity holders

120,708,493

121,781,747

Third party investors in PIPE Investment and Assignment

   Agreement ⁽³⁾

6,000,000

6,000,000

150,968,185

152,041,439

(1)

The pro forma basic and diluted shares include 8,000,000 shares of common stock the Sponsor purchased as part of the Sponsor Backstop Subscription Agreement.

(2)

The pro forma basis and diluted shares include 3,437,500 Founder Shares that vested and exclude 975,873 Founder Shares that were forfeited upon Merger closing. The remaining unvested Founder Shares of 2,461,627 are excluded from the pro forma basic and diluted shares outstanding.

(3)

The pro forma basic and diluted shares include 5,000,000 shares of common stock purchased as part of the PIPE Investment and 1,000,000 shares of common stock purchased as part of the Assignment Agreement.

Year Ended

December 31, 2020

Six Months Ended

June 30, 2021

Private Placement Warrants ⁽²⁾

2,574,164

2,574,164

Public Warrants

5,500,000

5,500,000

Legacy Rover Options

20,412,603

20,412,603

Founder Shares ⁽¹⁾

2,461,627

2,461,627

30,948,394

30,948,394

(1)

The Sponsor and related parties hold 6,875,000 Founder Shares that vest upon certain triggering events. Upon the Merger closing, 3,437,500 Founder Shares were vested, 975,873 were forfeited, and 2,461,627 Founder Shares remain outstanding and unvested.

(2)

Prior to the Merger closing, there were 5,166,667 Private Placement Warrants issued and outstanding. Upon the Merger closing, 2,592,503 Private Placement Warrants were forfeited and 2,574,164 Private Placement Warrants remain outstanding.

4.

Earnout Shares and Founder Shares