Filing summary
Important identity note: The supplied filing is Apollo Strategic Growth Capital’s Form 10-Q for the quarter ended June 30, 2021—not a filing by Global Business Travel Group, Inc. Apollo was a blank-check company seeking an initial business combination and reported no operating business or revenue.
Business context and reporting period
This unaudited 10-Q covers the three and six months ended June 30, 2021. Apollo had not commenced operations; its activities were limited to public-company costs and searching for a target. The filing was signed August 13, 2021.
Financial results and liquidity
| Metric | Three months ended June 30, 2021 | Six months ended June 30, 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Total expenses | $1.315 million | $5.958 million |
| Net income | $1.318 million | $21.602 million |
| Operating cash flow | Not separately provided | $(2.087) million |
Six-month net income was driven principally by a $27.385 million non-cash gain from the change in fair value of warrant liabilities; trust investment income was $176,186. These results do not represent operating profitability, and operating margins are not meaningful because revenue was zero.
- At June 30, trust investments were $817.162 million, held principally in U.S. government securities; cash outside the trust was $598,768.
- Total liabilities were $84.093 million, including $47.257 million of warrant liabilities, $28.588 million of deferred underwriting compensation, and $4.3 million of Sponsor notes. Shareholders’ equity was $5.0 million; $729.483 million of redeemable Class A shares was classified as temporary equity.
- Sponsor notes outstanding totaled $4.3 million and were payable at the earlier of a business combination or liquidation. The filing reports no long-term debt or off-balance-sheet arrangements.
Changes versus prior comparable periods
For the six months, net income increased from a $1,854 loss in 2020 to $21.602 million in 2021, largely reflecting the warrant-liability fair-value gain. Expenses rose from $1,854 to $5.958 million. There was no revenue in either period. Trust investments increased slightly from $816.986 million at December 31, 2020 to $817.162 million at June 30, 2021; Sponsor notes rose from $1.5 million to $4.3 million.
Outlook, risks, and unusual items
- Management intended to use substantially all trust funds, subject to deferred underwriting commissions and applicable obligations, for a business combination. The filing gives no operating-business guidance or identified target in the supplied text.
- The company was required to complete a business combination by October 6, 2022, potentially extendable to January 6, 2023 if a qualifying agreement was in place by October 6, 2022. Failure to complete one would trigger liquidation and redemption of public shares; warrants could expire worthless.
- Management said available funds supported operations for at least one year from issuance of the statements and that previously disclosed substantial doubt about going concern had been alleviated.
- Disclosure controls were ineffective at quarter-end because of a material weakness related to prior restatement issues and accounting for complex financial instruments. Remediation was underway but not complete.
- COVID-19 could affect the company’s financial position or target search, but the specific impact was not determinable. The filing reported no material changes to previously disclosed risk factors and no legal proceedings.
Important facts for investors to verify
- Confirm issuer identity: this filing is Apollo Strategic Growth Capital’s, not Global Business Travel Group’s.
- Verify business-combination progress, deadline or extension status, and redemption terms.
- Assess the effect of warrant fair-value accounting on reported earnings and the assumptions used for Level 3 warrant valuations.
- Review the Sponsor-note terms, deferred underwriting fee, redeemable-share classification, and potential dilution from a transaction.
- Check whether the material weakness was subsequently remediated and whether disclosure controls improved.