Filing summary
Registrant mismatch: The supplied filing is Apollo Strategic Growth Capital’s Form 10-Q, not a filing by Global Business Travel Group, Inc. It reports results through September 30, 2021, before any initial business combination; Apollo states it had not commenced operations. It therefore provides no operating or financial results for a travel business.
Business context and reporting period
Apollo Strategic Growth Capital was a Cayman Islands SPAC formed to pursue an initial business combination. This unaudited quarterly report covers the three and nine months ended September 30, 2021. Its $817.2 million Trust Account was primarily invested in U.S. government securities and intended to fund a business combination.
Financial results and liquidity
- Revenue: None. The company had not begun operating activities and expected no operating revenue before a business combination.
- Third-quarter 2021: Net income was $11.1 million, versus a $10,000 loss in Q3 2020. The 2021 result included a $15.1 million gain from the change in fair value of warrant liabilities and $65,883 of trust investment income, offset by $4.0 million of expenses.
- Nine months ended September 30, 2021: Net income was $32.7 million, versus an $11,854 loss in the 2020 comparable period. Results included a $42.5 million warrant-liability fair-value gain and $242,069 of trust investment income, offset by $10.0 million of expenses.
- Cash flow: Net cash used in operations was $3.3 million for the first nine months of 2021; sponsor financing provided $3.9 million. Cash outside the Trust Account was $871,517 at quarter-end, up from $257,872 at December 31, 2020.
- Liquidity and liabilities: Current liabilities were $12.4 million, including $5.8 million of sponsor notes and $6.6 million of accounts payable and accrued offering costs. Management reported a working-capital deficit of approximately $10.8 million and said the company lacked sufficient liquidity for anticipated obligations over the next year, while stating sponsor funds were available to support needs through a potential combination or mandatory liquidation.
- Other balance-sheet items: Trust investments were $817.2 million; warrant liabilities were $32.2 million, down from $74.6 million at year-end 2020. Deferred underwriting compensation was $28.6 million, payable only upon a completed business combination. No operating or long-term debt was reported beyond sponsor notes.
- Margins: Not meaningful because the company had no revenue.
Changes, outlook, and risks
- The main year-over-year earnings change reflects the 2021 warrant-liability fair-value gain; the 2020 periods largely reflected minimal formation and operating costs. The gain is non-operating and dependent on warrant valuation, not business revenue.
- Following SEC guidance, the company revised its prior financial-statement presentation to classify all redeemable Class A shares, $816.8 million, as temporary equity rather than retaining $5.0 million in permanent equity. It also revised EPS to allocate income or loss between Class A and Class B shares. The filing describes this as a revision of previously issued statements.
- The company had to complete a business combination within its completion window—by October 6, 2022, or by January 6, 2023 if the specified agreement milestones were met by October 6, 2022. Failure to complete a combination would require winding up and redeeming public shares; warrants could expire worthless.
- Management cited substantial doubt about going concern if the company failed to complete a combination and faced mandatory liquidation. Sponsor support was not an unconditional commitment, and the company warned that additional financing might be needed for a transaction.
- COVID-19 could affect the company’s search for a target, but the specific impact was not determinable. The filing reported no material changes to previously disclosed risk factors and no legal proceedings.
- Management said a previously identified material weakness related to complex financial instruments had been remediated and disclosure controls were effective as of September 30, 2021.
- No business-combination guidance or target-company operating outlook is provided in the supplied filing. The company reported no off-balance-sheet arrangements and no subsequent events requiring disclosure.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for Apollo Strategic Growth Capital, not Global Business Travel Group, Inc.
- Verify the business-combination status and applicable completion deadline, including any qualifying agreement milestones.
- Review the liquidity position, sponsor-note terms and availability of sponsor support, alongside the redemption and liquidation provisions.
- Assess the effects of the revised temporary-equity and EPS presentation and the sensitivity of reported income to warrant fair-value changes.
- Do not interpret the reported net income as operating performance: the company had no revenue, and the principal earnings driver was a non-cash warrant-liability remeasurement.