Filing identity and business context
Important identity discrepancy: The supplied filing is Apollo Strategic Growth Capital’s Form 10-Q for the quarter ended September 30, 2020—not a filing by Global Business Travel Group, Inc. It describes a Cayman Islands blank-check company (SPAC) formed to pursue a business combination; it had not begun operating by quarter-end. The summary below reflects the filing provided.
Financial results and position
- Revenue: None for the three or nine months ended September 30, 2020 or 2019. The company expected no operating revenue before a business combination.
- Net loss: $10,000 for Q3 2020 versus zero in Q3 2019; $11,854 for the first nine months of 2020 versus $1,853 in the comparable 2019 period. Losses consisted of formation and operating costs. No meaningful operating margin is reported.
- Cash flow: Net cash used in operating activities was zero for the first nine months of both 2020 and 2019; the company reported no cash at September 30, 2020. Related parties paid certain expenses on its behalf.
- Balance sheet at September 30, 2020: Assets were $971,749, comprising deferred offering costs. Current and total liabilities were $981,749, including $625,839 of accounts payable and accrued expenses and $355,910 due to related parties. Shareholders’ deficit was $10,000.
- Liquidity: Working capital deficit was $981,749. Management said existing liquidity was insufficient for anticipated obligations over the next year, but expected sponsor funding to cover working-capital needs. No long-term debt was reported at quarter-end; the related-party advances were non-interest-bearing and payable on demand.
Changes and subsequent financing
The nine-month net loss increased from $1,853 in 2019 to $11,854 in 2020. After quarter-end, the company completed its IPO on October 6, 2020, selling 75 million units for $750 million gross proceeds and placing $750 million in the trust account. It also sold $17 million of private-placement warrants. On November 10, 2020, it sold a further 6.681 million over-allotment units for $66.81 million and additional private-placement warrants for $1.336 million; the trust account then held $816.81 million, including deferred underwriting discount amounts. These are subsequent events, not September 30 balances.
Outlook, risks and unusual items
- The company intended to use substantially all trust funds toward a business combination. It had until October 6, 2022 to complete one; otherwise it would wind up and redeem public shares, subject to the filing’s terms.
- On October 20, 2020, the sponsor lent the company $1.5 million under a note bearing 0.14% annual interest, due at a business combination or liquidation.
- Underwriting discounts included $26.25 million deferred until a business combination; underwriters agreed to waive the deferred fee if no business combination is completed, subject to the agreement.
- Management said COVID-19 could adversely affect the company’s financial position, operations or target search, but the specific impact was not determinable.
- Risks include inability to complete a business combination, potential dilution or debt burdens from transaction financing, creditor claims against trust assets, and warrants potentially expiring worthless. The filing reported no material changes to previously disclosed risk factors and no legal proceedings.
- Disclosure controls were assessed as effective at a reasonable-assurance level; no material change in internal control over financial reporting was reported.
Investor facts to verify
- Confirm the issuer: this document is Apollo Strategic Growth Capital, not Global Business Travel Group, Inc.
- Verify post-quarter IPO and over-allotment proceeds, trust balance and deferred underwriting fees against subsequent filings.
- Review the sponsor note terms, related-party balances and the company’s stated reliance on sponsor funding for liquidity.
- Assess the business-combination deadline, redemption provisions, dilution terms and warrant conditions.
- Consider the COVID-19 uncertainty and the possibility that the company may fail to complete a business combination.