Business Context and Reporting Period
This Form 8-K is filed by Altus Midstream Company (not Kinetik Holdings Inc.) on December 14, 2021. The report addresses an accounting correction regarding the classification of public and private warrants issued during the company's 2018 business combination. The filing corrects the Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. It focuses exclusively on the reclassification of warrants from equity to a derivative liability under ASC 815. Consequently, no quantitative financial metrics are disclosed in this text.
Material Changes Versus Prior Period
- Accounting Policy Change: The company previously accounted for warrants as equity. Following an April 12, 2021, SEC Staff Statement, the company determined these warrants must be recorded as a derivative liability.
- Impact on Statements: Changes in the fair value of these warrants will now be recorded as a gain or loss in the Statement of Consolidated Operations, whereas previously no fair value changes were recorded.
- Correction Status: The company classified the previous accounting treatment as an immaterial error.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management outlook, or discussion of operational risks. The primary contingency addressed is the regulatory requirement to restate the 2020 10-K to reflect the correct liability classification of warrants. The company notes that, except for the corrections detailed in Exhibit 99.1, the previously filed 2020 10-K remains unchanged.
Investor Verification Checklist
- Verify the specific financial impact of reclassifying warrants as a derivative liability in the restated 2020 10-K (Exhibit 99.1).
- Confirm the fair value of the outstanding public and private warrants as of the reporting date.
- Review the updated Statement of Consolidated Operations for any recognized gains or losses related to warrant fair value changes.
- Note that the registrant is Altus Midstream Company (Ticker: ALTM), not Kinetik Holdings Inc.