Filing Summary
Business Context and Reporting Period
This Form 8-K was filed on November 23, 2021 by Apollo Strategic Growth Capital, a Cayman Islands special purpose acquisition company (SPAC), not by Global Business Travel Group, Inc. The filing concerns accounting for the company’s redeemable Class A ordinary shares and previously issued financial statements.
Key Financial and Accounting Matters
- The company previously classified a portion of its redeemable Public Shares in permanent equity while maintaining at least $5,000,001 of shareholders’ equity.
- Management determined that the full amount of redeemable Public Shares should instead be classified as temporary equity under ASC 480, “Distinguishing Liabilities from Equity.”
- Earnings per share must also be restated to allocate net income or loss evenly across the Public Shares and Class B ordinary shares.
- The filing does not provide updated revenue, profit, cash flow, margin, debt, or liquidity figures.
- The company stated that the accounting changes are not expected to affect its cash position or cash held in the trust account established for its initial public offering.
Material Changes Versus Prior Periods
Management and the audit committee concluded that previously issued financial statements and related balance sheets for the affected periods should no longer be relied upon. The affected periods include the October 6, 2020 post-IPO balance sheet; fiscal year 2020; the quarters ended March 31, June 30, and September 30, 2021; and the six months ended June 30, 2021.
The company intends to restate these periods through an amended Form 10-K and an amended Form 10-Q. The restatements will primarily revise the classification of redeemable Public Shares and earnings per share presentation.
Guidance, Risks, and Unusual Items
- Management concluded that a material weakness exists in internal control over financial reporting.
- Disclosure controls and procedures were determined to be ineffective.
- A remediation plan was expected to be described in greater detail in the amended third-quarter Form 10-Q.
- The company discussed the matter with its independent registered public accounting firm, WithumSmith+Brown, PC.
- The filing does not provide transaction-closing guidance, operating forecasts, or quantitative estimates of the impact of the restatement.
Investor Verification Checklist
- Confirm that the filing registrant is Apollo Strategic Growth Capital and determine its relationship to Global Business Travel Group, Inc.
- Review the subsequent amended Form 10-K and Form 10-Q for the corrected temporary-equity classification and revised earnings per share.
- Assess the disclosed material weakness and the effectiveness of the remediation plan.
- Verify that cash, trust-account balances, and redemption-related disclosures were unchanged after the restatement.
- Check whether any additional accounting or disclosure issues were identified in the amended filings.