KDK 10-K & 10-Q changes, risk factors and insider trading
Kodiak AI, Inc. (also KDKRW) · Nasdaq · Services-Computer Integrated Systems Design · CIK 1853138 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “AV technology is an emerging and rapidly evolving technology and involves significant risks and uncertainties, any of which could impede or delay our ability to scale.”
New heading “We have incurred net losses since inception, and we may not achieve or maintain profitability in the future.”
New heading “Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.”
New heading “Our technology may have limited performance, and technology development and commercialization may take us longer to complete than we currently anticipate.”
New heading “The Kodiak Driver may not be accepted and adopted by the market, the public, regulators or other stakeholders at the pace we expect or at all.”
New heading “Any failure to commercialize our solution at scale may have an adverse effect on our business, financial condition, and results of operations.”
New heading “We rely on a limited number of customers for a significant portion of our revenue. The loss of, or a reduction in our commercial relationship with, any of those customers may adversely affect our business, financial condition, and results of operations.”
New heading “We depend heavily on our commercial agreements with Atlas. If we are not able to maintain and expand our relationship with Atlas, our business, financial condition and results of operations may be adversely affected.”
New heading “AV technology presents the risk of significant injury, including fatalities. Any incidents with our technologies could cause us to be subject to product liability claims that may result in significant direct or indirect costs and could adversely affect our brand image in our target markets, all of which may adversely affect our business, financial condition and results of operations.”
New heading “The Kodiak Driver may not function as intended due to flaws or errors in our software, hardware, and systems, product defects, or due to human error, which may adversely affect our business.”
New heading “Any flaws or misuse of AV technology, whether actual or perceived, intended or inadvertent, by us or third parties, may adversely affect our business, financial condition and results of operations.”
New heading “Unauthorized control or manipulation of systems in autonomous vehicles may cause them to operate improperly or not at all, or compromise their safety and cybersecurity, which may result in loss of confidence in us and our solutions and adversely affect our business, financial condition, and results of operations.”
New heading “We have provided, and may in the future provide, certain progress and performance metrics, including the Autonomy Readiness Measure. These metrics are subject to inherent challenges in measurement; real or perceived inaccuracies in such metrics and metrics values that are below expectations could materially and adversely affect our business, prospects, financial condition and results of operations.”
New heading “Our brand and reputation may be harmed by negative publicity or safety and other concerns regarding the Kodiak Driver and our company. Failure to maintain, protect and enhance our brand may limit our ability to expand or retain our customer base, which may adversely affect our business, financial condition and results of operations.”
New heading “We operate in a highly competitive market and some market participants have substantially greater resources. If we are unable to compete effectively, our business, financial condition and results of operations may be adversely affected.”
New heading “We may experience difficulties in managing our growth and expanding our operations.”
New heading “Our success is contingent on our ability to successfully execute our DaaS business model, including by maintaining, managing, executing, retaining, and expanding our existing customer relationships and obtaining new customers.”
New heading “Our inability to plan and manage our costs may adversely affect our business, financial condition, and results of operations.”
New heading “Recent and further changes in the tariff and trade policies of the United States or of other countries could increase manufacturing costs, decrease demand for our solution, disrupt supply chains, or otherwise adversely affect our business and financial condition.”
New heading “We depend on the experience and expertise of our senior management team, engineers, and certain other key employees. The loss of any executive officer or key employee, or the inability to identify, recruit and retain qualified employees in a timely manner, may adversely affect our business, financial condition and results of operations.”
New heading “We rely on our third-party suppliers, OEMs, upfitters, services providers and partners, some of which are single or limited-source suppliers or providers of certain key components for, and services used in connection with, the Kodiak Driver, and are thus susceptible to supply shortages, long lead times for components, supply changes, and limitations or constraints on service provider support availability or capacity.”
New heading “We are subject to cybersecurity risks related to our operational systems, security systems, infrastructure, integrated software and partners’ and customers’ data processed by us or third-party vendors. Any material failure, security breach or other cyber incidents may prevent us from effectively operating our business, and could result in investigations, litigation, or penalties, any of which may adversely affect our business, financial condition, and results of operations.”
New heading “Interruptions, outages, or failures of information technology and communications infrastructure and systems that we rely upon may adversely affect our business, financial condition, and results of operations.”
New heading “Risks Related to the Government Contracts”
New heading “A significant portion of our historical revenue has come from our contracts with the DoW, and our failure to receive and maintain government contracts or changes in the contracting or fiscal policies of the U.S. Government may adversely affect our business, financial condition, and results of operations.”
New heading “Certain of our customer contracts may be terminated by the customer at any time for convenience and/or may contain other provisions permitting the customer to discontinue contract performance, and if terminated contracts are not replaced, our results of operations may differ materially and adversely from those anticipated. In addition, our contracts with government customers often contain provisions with additional rights and remedies favorable to such customers that are not typically found in commercial contracts.”
New heading “Failure to comply with laws, regulations, or contractual provisions applicable to our business could cause us to lose U.S. Government customers or our ability to contract with the United States and other governments.”
New heading “Risks Related to Our Intellectual Property Rights”
New heading “We may not be able to adequately establish, maintain, protect, and enforce our technology and intellectual property rights or prevent others from unauthorized use of our technology and intellectual property rights, which may adversely affect our business, financial condition, and results of operations. Our efforts to protect and enforce our intellectual property rights and prevent third parties from violating our intellectual property rights may be costly and time-consuming, or less effective than anticipated.”
New heading “We rely on licenses from third parties for technology and intellectual property rights that are critical to our business, and we may lose the rights to use such technology or intellectual property rights if those agreements are terminated or not renewed.”
New heading “We may be subject to intellectual property infringement claims, which, whether meritless or not, may be expensive and time-consuming to defend, distract management, require us to pay significant damages and limit our ability to use certain technologies, any of which may adversely affect our business, financial condition and results of operations.”
New heading “Our applications for patents or other intellectual property rights registration may not issue or be registered, which may adversely affect our ability to prevent others from commercially exploiting products and technologies similar to ours.”
New heading “Our patents may expire and may not be extended, our patent applications may not be granted and our patent rights may be contested, circumvented, invalidated, or their scope limited. As a result, we may not be able to prevent others from developing or exploiting competing technologies, which may adversely affect our business, prospects, financial condition and results of operations.”
New heading “Certain of our innovations are embodied in proprietary information that may not be patentable or subject to copyrights, trademark, trade dress or service mark protection.”
New heading “We may be subject to claims that we or our employees have wrongfully used or disclosed trade secrets or other proprietary information of our employees’ former employers, which, whether or not meritless, could be distracting to management, expensive and time-consuming to defend, and result in significant liability and harm our reputation, any of which may adversely affect our business, financial condition, and results of operations.”
New heading “Our software contains third-party open-source software components, which may expose us to information security vulnerabilities, result in failures, errors, and defects, and may not be supported now or in the future. Our failure to comply with the terms of the underlying open-source software licenses may restrict our ability to sell our products, give rise to claims for infringement or breach of contract, or require us to disclose and license certain of our proprietary source code.”
New heading “We may not be able to protect our intellectual property rights globally, and changes in U.S. intellectual property law may diminish the value of our intellectual property rights in general, thereby impairing our ability to protect our products.”
New heading “We are subject to substantial regulations, including regulations governing motor carriers and autonomous vehicles, and unfavorable changes to, whether initiated by regulators or through the pressure of organized labor, or failure by us to comply with, these regulations may adversely affect our business, financial condition and results of operations.”
New heading “Changes in automotive or autonomy safety regulations, enforcement of such regulations, or concerns about AV technologies that result in regulation of the AV ground transportation industry may adversely affect our business.”
New heading “Failures, or perceived failures, to comply with privacy or cybersecurity laws and regulations may adversely impact our business, and such legal requirements are evolving, uncertain and may require changes to our policies and operations, which could increase our costs or prevent us from effectively operating our business.”
New heading “An uncertain and evolving legal and regulatory environment relating to artificial intelligence may adversely affect our business, financial condition, and results of operations.”
New heading “We are subject to economic sanctions and export and import control laws and regulations. Our failure to comply with these laws and regulations may adversely affect our business, financial condition, and results of operations.”
New heading “We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which may adversely affect our business, prospects, financial condition and results of operations and also our reputation.”
New heading “We are subject to, and must remain in compliance with, environmental laws and regulations that may adversely affect our financial condition and results of operations.”
New heading “We are subject to, and must remain in compliance with, numerous laws and governmental regulations concerning the manufacturing, use, distribution, and sale of our technology. Some of our customers or partners may also require that we comply with their own unique requirements relating to these matters.”
New heading “Risks Related to Financial and Tax Matters”
New heading “We require a significant amount of capital to fund our operations and growth. If we cannot obtain sufficient capital on acceptable terms, our business, financial condition, and results of operations may be adversely affected.”
New heading “Our estimates of our cash needs may prove inaccurate in which case we may need to raise capital or change our operating plans and timelines.”
New heading “We have relied upon, and may continue to rely upon, certain assumptions and estimates to calculate certain metrics, including our Cumulative Hours of Paid Driverless Operations, and real or perceived inaccuracies in such metrics may adversely affect our business, financial condition, and results of operations.”
New heading “If our judgments or estimates relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations may fall below expectations of securities analysts and investors, resulting in a decline in our stock price.”
New heading “Our current and future insurance coverage may not be adequate to protect us from all business risks or may be prohibitively expensive.”
New heading “If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and adversely affect our business and operating results.”
New heading “Unanticipated changes in effective tax rates, adverse outcomes resulting from examination of our income, changes in tax laws or regulations, changes in our ability to utilize our net operating loss, or other tax-related changes may adversely affect our business, prospects, financial condition, and results of operations.”
New heading “Recent changes and currently proposed changes in tax laws may have a material adverse effect on our business, cash flow, results of operations or financial conditions.”
New heading “Our ability to utilize our net operating loss carryforwards may be limited.”
New heading “We may incur substantial indebtedness which may adversely affect our business and limit our ability to plan for or respond to changes in our business.”
New heading “Our credit facilities contain restrictive covenants and other terms that may impair our ability to conduct business.”
New heading “We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which may adversely affect our business, financial condition, results of operations, and cash flows.”
New heading “There is substantial doubt about our ability to continue as a “going concern.””
New heading “There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.”
New heading “An active trading market for our securities may not develop, which may limit your ability to sell such securities.”
New heading “Delaware law and our Certificate of Incorporation and Bylaws contain certain provisions, including anti- takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.”
New heading “Our Certificate of Incorporation does not limit the ability of the SPAC Sponsor, certain affiliates or funds associated with the SPAC Sponsor or our non-employee directors to compete with us.”
New heading “Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price.”
New heading “Risks Related to Our Warrants”
New heading “We may amend the terms of the Public Warrants in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then-outstanding Public Warrants. As a result, the exercise price of your Public Warrants could be increased, the exercise period could be shortened and the number of common stock purchasable upon exercise of a Public Warrant could be decreased, all without your approval.”
New heading “The Warrant Agreement designates the courts of the State of New York or the U.S. District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Public Warrants, which could limit the ability of Public Warrant holders to obtain a favorable judicial forum for disputes with us.”
New heading “There is no guarantee that our Public Warrants will ever be in the money, and they may expire worthless.”
New heading “Your Public Warrants may be redeemed prior to their exercise at a time that is disadvantageous to you.”
New heading “You may only be able to exercise your Public Warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of our common stock from such exercise than if you were to exercise such Public Warrants for cash.”
New heading “Risks Related to Our Organizational Structure”
New heading “The future resales of substantial amounts of our common stock in the public markets, or the perception that such sales could occur, may cause the market price of our securities to drop significantly, even if our business is doing well.”
New heading “We have incurred and will continue to incur significant expenses and administrative burdens as a public company, which may adversely affect our business, prospects, financial condition, and results of operations.”
New heading “Our management team has limited experience in operating a public company.”
New heading “Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.”
New heading “We do not intend to pay dividends for the foreseeable future.”
New heading “The market price and trading volume of our common stock may be volatile and may decline significantly.”
New heading “If securities or industry analysts cease publishing research or reports about us, our business, or the market in which we operate, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities may decline.”
New heading “We qualify as an “emerging growth company” within the meaning of the Securities Act. If we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.”
New heading “Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as terrorism. Material disruptions of our business or information systems resulting from these events may adversely affect our business, financial condition, and results of operations.”
New heading “General business and economic conditions, and risks related to the long-haul trucking, industrial trucking, oil and gas and defense ecosystems, may adversely affect our business, financial condition, and results of operations.”
Removed heading “Summary of Risk Factors”
Removed heading “Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.”
Removed heading “Your only opportunity to affect the decision regarding a potential business combination may be limited to the exercise of your right to require us to redeem your shares for cash, unless we seek shareholder approval of such business combination.”
Removed heading “If we seek shareholder approval of our initial business combination, our Sponsor, directors and executive officers have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.”
Removed heading “The redemption rights of our public shareholders may make our financial condition unattractive to potential business combination targets and may make it difficult for us to enter into a business combination with a target.”
Removed heading “The ability of our public shareholders to exercise redemption rights with respect to a significant portion of our shares and the amount of deferred underwriting commissions may not allow us to complete the most desirable business combination or optimize our capital structure, and may substantially dilute your investment in us.”
Removed heading “The ability of our public shareholders to exercise redemption rights with respect to a significant portion of our shares could increase the probability that our initial business combination is unsuccessful and that you would have to wait for liquidation for your shares to be redeemed.”
Removed heading “The requirement that we consummate an initial business combination by the end of the Combination Period (as it may be extended), or such earlier date as our board of directors may approve, may give potential target businesses leverage over us in negotiating a business combination agreement as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.”
Removed heading “We cannot assure you that we will be able to complete an initial business combination by the end of the Combination Period (as it may be extended), in which case we would redeem the Class A ordinary shares and liquidate the Trust Account, and our public shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants may expire worthless.”
Removed heading “While we are currently seeking shareholder approval to extend the term we have to consummate our initial business combination, we may decide to no longer seek such approval, in which case we would redeem our public shares, and the warrants may be worthless.”
Removed heading “If we seek shareholder approval of our initial business combination, our Sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants from public shareholders, which may reduce the public “float” of our Class A ordinary shares or warrants.”
Removed heading “If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.”
Removed heading “If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, you will lose the ability to require us to redeem all such shares in excess of 15% of our Class A ordinary shares held by you and any other person with who is deemed to be acting in concert or as a “group” with you.”
Removed heading “Because of our limited resources and the significant competition for business combination opportunities, we may be unable to complete our initial business combination. If we have not completed our initial business combination by the end of the Combination Period (as it may be extended), or such earlier date as our board of directors may approve, our public shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants may expire worthless.”
Removed heading “If the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient for us to operate until the end of the Combination Period (as it may be extended), or such earlier date as our board of directors may approve, we will depend on loans from our Sponsor or directors and executive officers to fund our search and to complete our initial business combination.”
Removed heading “Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.”
Removed heading “If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share.”
Removed heading “Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.”
Removed heading “We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.”
Removed heading “If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.”
Removed heading “The grant of registration rights to our Sponsor may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.”
Removed heading “Because we are not limited to evaluating a target business in a particular industry sector and have not selected any specific target businesses to pursue in our initial business combination, you will not have the opportunity to assess the merits or risks of any particular target business’s operations.”
Removed heading “We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.”
Removed heading “The loss of a business combination target’s key personnel could adversely impact the operations and profitability of our post-combination business.”
Removed heading “We may seek acquisition opportunities in industries or sectors which may or may not be outside of our directors and executive officers’ area of expertise.”
Removed heading “Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.”
Removed heading “We are not required to obtain an opinion from an independent entity that commonly renders valuation opinions, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.”
Removed heading “We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination or earlier at the option of the holders of the Class B ordinary shares as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.”
Removed heading “Unlike most other similarly structured blank check companies, our Sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.”
Removed heading “We may issue our shares to investors in connection with our initial business combination at a price which is less than the prevailing market price of our shares at that time.”
Removed heading “Resources could be wasted in researching acquisitions that are not completed, which could materially and adversely affect subsequent attempts to identify and acquire or merge with another business.”
Removed heading “Recent fluctuations in inflation and interest rates in the United States and elsewhere could make it more difficult for us to consummate an initial business combination.”
Removed heading “Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by difficult market and geopolitical conditions.”
Removed heading “Ares may choose not to refer certain opportunities to us due to reputational interests, financial interests, confidentiality concerns, legal, regulatory, tax and any other interests or considerations relevant to Ares, its clients and their respective portfolio companies.”
Removed heading “We may engage in a business combination with one or more target businesses that have relationships with entities that are affiliated with our Sponsor, executive officers, directors or existing holders, which may raise potential conflicts of interest.”
Removed heading “Our Sponsor, and executive officers and directors who directly or indirectly own ordinary shares or warrants, may lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire after the Initial Public Offering), and conflicts of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.”
Removed heading “To complete a business combination, we may issue notes or other debt securities or otherwise incur substantial debt, which may adversely affect our leverage and financial condition and negatively impact the value of our shares.”
Removed heading “We may only be able to complete one business combination with the proceeds of the Initial Public Offering, the sale of the Private Placement Warrants and the Overfunding Loans, which will cause us to be dependent on a single business that may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.”
Removed heading “We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.”
Removed heading “We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable or attractive as the limited information may have indicated.”
Removed heading “Our shareholders may collectively own a minority of the post-business combination company and accordingly, our directors and executive officers may not be able to maintain control of a target business after our initial business combination.”
Removed heading “We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.”
Removed heading “To effectuate an initial business combination, blank check companies have amended various provisions of their charters and other governing instruments, including their warrant agreements. We may, from time to time, seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination that some of our shareholders may not support.”
Removed heading “The provisions of our amended and restated memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a shareholder meeting of the company. The support of such proposed amendments by our Sponsor, directors and officers who hold ordinary shares may make it easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.”
Removed heading “We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we have not completed our initial business combination by the end of the Combination Period (as it may be extended), or such earlier date as our board of directors may approve, our public shareholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants may expire worthless.”
Removed heading “Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.”
Removed heading “Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.”
Removed heading “We may not be able to complete an initial business combination since such initial business combination may be subject to regulatory review and approval requirement, including foreign investment regulations and review by government entities such as the Committee on Foreign Investment in the United States (“CFIUS”), or may be ultimately prohibited.”
Removed heading “If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.”
Removed heading “After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.”
Removed heading “If our initial business combination involves a company organized under the laws of a state of the United States, it is possible a 1% U.S. federal excise tax will be imposed on us in connection with redemptions of our ordinary shares after or in connection with such initial business combination.”
Removed heading “In recent years, challenging market conditions have caused an increasing number of special purpose acquisition companies to be unable to complete an initial business combination.”
Removed heading “Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.”
Removed heading “Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.”
Removed heading “There is substantial doubt about our ability to continue as a “going concern.” Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.””
Removed heading “We are dependent upon our executive officers and their loss could adversely affect our ability to operate.”
Removed heading “Our ability to effectuate our initial business combination and to successfully operate thereafter will depend on our key personnel. The loss of, or inability to attract, key personnel could negatively impact the operations and profitability of our post-combination business.”
Removed heading “Our failure to appropriately address conflicts of interest could adversely affect our business and reputation.”
Removed heading “Our executive officers and directors will allocate their time to other businesses, which could have a negative impact on our ability to complete our initial business combination.”
Removed heading “Certain of our officers and directors have or will have direct and indirect economic interests in us and/or our Sponsor and such interests may potentially conflict with those of our public shareholders as we evaluate and decide whether to recommend a potential business combination to our public shareholders.”
Removed heading “Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.”
Removed heading “Compliance with United States securities laws may require additional time and resources.”
Removed heading “Members of our management team and board of directors have significant experience as founders, board members, officers or executives of other companies. As a result, certain of those persons have been, may be, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies with which they were, are, or may in the future be, affiliated. This may have an adverse effect on us, which may impede our ability to consummate an initial business combination.”
Removed heading “You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.”
Removed heading “The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.”
Removed heading “You will not be entitled to protections normally afforded to investors of blank check companies subject to Rule 419 of the Securities Act.”
Removed heading “The value of the Class B ordinary shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our ordinary shares at such time is substantially less than $10.00 per share.”
Removed heading “We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.”
Removed heading “We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.”
Removed heading “Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.”
Removed heading “Because each Unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the Units may be worth less than units of other blank check companies.”
Removed heading “A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.”
Removed heading “Our Sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.”
Removed heading “We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.”
Removed heading “Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.”
Removed heading “Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench our directors.”
Removed heading “Our amended and restated certificate memorandum and articles of association will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or shareholders for breach of fiduciary duty and certain other actions may be brought only in the courts of the Cayman Islands and, if brought outside of The Cayman Islands, the shareholder bringing the suit will, subject to certain exceptions, be deemed to have consented to service of process on such shareholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or shareholders.”
Removed heading “An investment in our securities may result in uncertain or adverse U.S. federal income tax consequences.”
Removed heading “If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding up petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.”
Removed heading “If, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us and is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.”
Removed heading “If we have not consummated an initial business combination by the end of the Combination Period, or such earlier date as our board of directors may approve, our public shareholders may be forced to wait beyond the end of the Combination Period, or such earlier date as our board of directors may approve before redemption from our Trust Account.”
Removed heading “Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.”
Removed heading “We may not hold an annual shareholder meeting until after the consummation of our initial business combination.”
Removed heading “You will not be permitted to exercise your warrants unless we register and qualify the underlying Class A ordinary shares or certain exemptions are available.”
Removed heading “The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and there is no information regarding such other security at this time.”
Removed heading “We may be a passive foreign investment company (“PFIC”), which could result in adverse U.S. federal income tax consequences to U.S. investors.”
Removed heading “We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders or warrant holders.”
Removed heading “After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.”
Removed heading “We may reincorporate in or transfer by way of continuation to another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.”
Removed heading “The securities in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.10 per share.”
Removed heading “We are an early stage company with no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.”
Removed heading “Past performance by Ares or its affiliates or our directors and executive officers, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in us, and we may be unable to provide positive returns to shareholders.”
Removed heading “Security incidents or cyber-attacks could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation, any of which could negatively impact our business, financial condition and operating results.”
Removed heading “We, our Sponsor and its affiliates including Ares are subject to numerous privacy laws, and violation of such laws may subject us, our Sponsor, or its affiliates including Ares, to significant fines or penalties, litigation, or reputational damage, and new privacy laws could impact our and our Sponsor’s business and financial performance.”
Largest changes
“Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies. Sanctions imposed by the U.S. and other countries in connection with hostilities between Russia and Ukraine and tensions between China and Taiwan have caused additional financial market volatility and affected the global economy. …”see in full comparison
“The efficient operation of our business is dependent on information systems and technology, including computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, all of which are potentially vulnerable to security incidents and cyber-attacks, which may include intentional attacks or accidental losses, either of which may result in unauthorized access to, or corruption of, our hardware, software, or data processing systems, or to our confidential, personal, or other sensitive information. …”see in full comparison
“Our solutions are subject to U.S. economic sanctions, export controls and import control laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control. Additionally, U.S. economic sanctions apply to activities to our personnel in the United States as well as our personnel that are U.S. persons wherever located. U.S. …”see in full comparison
“We are subject to cybersecurity risks related to our operational systems, security systems, infrastructure, integrated software and partners’ and customers’ data processed by us or third-party vendors. Any material failure, security breach or other cyber incidents may prevent us from effectively operating our business, and could result in investigations, litigation, or penalties, any of which may adversely affect our business, financial condition, and results of operations.”see in full comparison
“Moreover, there are inherent risks associated with developing, improving, expanding and updating current measures, including the disruption of our data management, procurement, production, finance, supply chain and sales and service processes. These risks may affect our ability to manage our data, procure parts or supplies or produce, sell, deliver and service our solutions, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. …”see in full comparison
“Concern over climate change, including the impact of global warming, has led to legislative and regulatory efforts to limit carbon and other greenhouse gas emissions, and these efforts may continue, particularly at the state and local levels. Emission-related regulatory actions and climate disclosure requirements could result in increased costs that may adversely impact our results of operations. Such regulatory actions may require changes in our operating practices or require additional reporting disclosures. …”see in full comparison
Full comparison: every changed paragraph (692)
An investmentInvesting in our securities involves a high degree of risk. YouBefore deciding to invest in or to maintain an investment in our securities, you should consider carefully all ofconsider the risks and uncertainties described below, together with all of the other information contained in this Annual Report,Report beforeon makingForm a10-K, decisionincluding tothe investsection titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included elsewhere in this Annual Report. Our business, as well as our securities.reputation, Iffinancial condition, results of operations and price of our securities could also be adversely affected any of thethese following events occur, our business, financial conditionrisks and operatingother resultsrisks mayand beuncertainties materiallynot adverselycurrently affected.known to us or that we currently do not believe are material. In that event, the tradingmarket price of our securities could decline, and you could lose allpart or partall of your investment.
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties, including but not limited to:
•we are an early stage company with no revenues, and you have no basis on which to evaluate our ability to achieve our business objective;
•past performance by Ares or its affiliates or our directors and executive officers, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in us, and we may be unable to provide positive returns to shareholders;
•security incidents or cyber-attacks could adversely affect our business, financial condition and operating results;
•our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination;
•your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination;
•if we seek shareholder approval of our initial business combination, our Sponsor, directors and executive officers have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote;
•the redemption rights of our public shareholders may make our financial condition unattractive to potential business combination targets and may make it difficult for us to enter into a business combination with a target;
•the ability of our public shareholders to exercise redemption rights with respect to a significant portion of our shares and the amount of deferred underwriting commissions may not allow us to complete the most desirable business combination or optimize our capital structure, and may substantially dilute your investment in us;
•the ability of our public shareholders to exercise redemption rights with respect to a significant portion of our shares could increase the probability that our initial business combination is unsuccessful and that you would have to wait for liquidation for your shares to be redeemed;
•the requirement that we consummate an initial business combination by the end of the Combination Period (as it may be extended), or such earlier date as our board of directors may approve, may give potential target businesses leverage over us in negotiating a business combination as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders;
•we may not be able to consummate an initial business combination by the end of the Combination Period, or such earlier date as our board of directors may approve, and may not be successful in extending the Combination Period, in which case we would redeem our public shares;
•while we are currently seeking shareholder approval to extend the term we have to consummate our initial business combination, we may decide to no longer seek such approval, in which case we would redeem our public shares, and the warrants may be worthless;
•if we seek shareholder approval of our initial business combination, our Sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants from public shareholders, which may reduce the public “float” of our Class A ordinary shares or warrants;
•if a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed;
•you will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss;
•the NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions;
•you will not be entitled to protections normally afforded to investors of many other blank check companies;
•if we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, you will lose the ability to require us to redeem all such shares in excess of 15% of our Class A ordinary shares held by you and any other person with who is deemed to be acting in concert or as a “group” with you;
•we cannot assure you that we will be able to complete an initial business combination by the end of the Combination Period (as it may be extended), in which case we would redeem the Class A ordinary shares and liquidate the Trust Account, and our public shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants may expire worthless;
•there is substantial doubt about our ability to continue as a “going concern.” Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses a going concern about our ability to continue as a going concern for liquidity;
•if the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient for us to operate until the end of the Combination Period (as it may be extended), or such earlier date as our board of directors may approve, we will depend on loans from our Sponsor or directors and executive officers to fund our search and to complete our initial business combination;
•because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited;
•provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench our directors;
•after our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate;
•if our initial business combination involves a company organized under the laws of a state of the United States, it is possible a 1% U.S. federal excise tax will be imposed on us in connection with redemptions of our ordinary shares after or in connection with such initial business combination;
•in recent years, challenging market conditions have caused an increasing number of special purpose acquisition companies to be unable to complete a business combination; and
•the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Annual Report.
RISKRisk FACTORSFactor Summary
The following summary of risk factors should be carefully considered. These are not the only risks we face. Additional risks that are unknown or currently considered less significant may also affect our business or financial results. If any of these risks occur, our business, financial condition, results of operations, or stock price could be materially and adversely affected. For further details, please see the full discussion of risk factors below.
•AV technology is emerging and rapidly evolving and involves significant risks and uncertainties.
•We have incurred net losses since inception and may not achieve or maintain profitability.
•Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
•Our technology may have limited performance, and technology development and commercialization may take us longer to complete than we currently anticipate.
•Any failure to commercialize our solution at scale may have an adverse effect on our business, financial condition, and results of operations.
•We rely on a limited number of customers for a significant portion of our revenue.
•We depend on our commercial agreements with Atlas.
•AV technology presents the risk of significant injury, including fatalities.
•The Kodiak Driver, our virtual driver system that combines advanced AI-powered software with modular, vehicle-agnostic hardware, may not function as intended due to flaws or errors in our software, hardware, and systems, product defects, or due to human error.
•Any flaws or misuse of AV technology, whether actual or perceived, intended or inadvertent, by us or third parties, may adversely affect our business, financial condition, and results of operations.
•We operate in a highly competitive market, and we may be unable to compete effectively, including against competitors who may have greater resources.
•Our success is contingent on our ability to execute our DaaS business model, including by maintaining, managing, retaining, and expanding our existing customer relationships and obtaining new customers.
•Recent and further changes in the tariff and trade policies of the United States or of other countries could increase manufacturing costs, decrease demand for our solution, disrupt supply chains, or otherwise adversely affect our business and financial condition.
•We depend on the experience and expertise of our senior management team, engineers, and certain other key employees.
•We rely on our third-party suppliers, OEMs, upfitters, service providers and partners, some of which are single or limited-source suppliers or providers of certain key components for, and services used in connection with, the Kodiak Driver.
•We are subject to substantial regulations, including regulations governing motor carriers and autonomous vehicles.
•We may not be able to adequately establish, maintain, protect, and enforce our technology and intellectual property rights or prevent others from unauthorized use of our technology and intellectual property rights.
•We may be subject to intellectual property infringement claims, which, whether meritless or not, may be expensive and time consuming to defend, distract management, require us to pay significant damages and limit our ability to use certain technologies.
•A significant portion of our historical revenue has come from our contracts with the U.S. Department of War (“DoW”) and our failure to receive and maintain government contracts or changes in the contracting or fiscal policies of the U.S. Government may adversely affect our business, financial condition, and results of operations.
•We require significant capital to fund our operations and growth.
•Real or perceived inaccuracies in our assumptions and estimates to calculate certain metrics, including our Cumulative Hours of Paid Driverless Operations.
•General business and economic conditions, and risks related to the long-haul trucking, industrial trucking, oil and gas, and defense industries ecosystems, may adversely affect our business, financial condition, and results of operations.
•The sale of securities registered for resale and future sales of substantial amounts of our common stock in the public markets, or the perception that such sales could occur, may cause the market price of our securities to drop significantly, even if our business is doing well.
•There is no guarantee that the Public Warrants will ever be in the money, and they may expire worthless.
•Your Public Warrants may be redeemed prior to their exercise at a time that is disadvantageous to you.
Risks Related to Our Business and the Initial Business Combination
AV technology is an emerging and rapidly evolving technology and involves significant risks and uncertainties, any of which could impede or delay our ability to scale.
AV technology operates in environments where safety and precision are critical. There are a number of challenges in bringing a new and innovative technology to the market, including public perception of the technology and its performance and safety, long development cycles, specialized skills and expertise requirements of personnel, inconsistent and evolving regulatory frameworks, the potential for novel legal claims, and a need to build public trust in the real-world operations of an emerging technology. If we are delayed in overcoming, or are not able to overcome, these challenges, our commercial prospects, business, financial condition, and results of operations may be adversely affected, and we may not be able to sustain a viable business.
Management's Discussion & Analysis (MD&A)
New heading “On September 24, 2025 (the "Closing Date" or "Closing"), Kodiak Robotics, Inc. (“Legacy Kodiak”) and Ares Acquisition Corporation II (“AACT”) consummated the merger transaction (the “Merger”) as contemplated by a definitive business combination agreement (the “BCA”) and AACT changed its name to Kodiak AI, Inc. (the “Company” or “Kodiak”). As a result, the financial statements of Legacy Kodiak are now the financial statements of Kodiak.”
New heading “Recent Developments”
New heading “Key Factors Affecting our Results”
New heading “Evolution of Business Model”
New heading “Commercialization”
New heading “Economies of Scale, Sales and Marketing, & Competition”
New heading “Regulatory Landscape”
New heading “Global Economic Conditions”
New heading “Key Operating Metrics”
New heading “Cumulative Hours of Paid Driverless Operations”
New heading “Customer-Owned Driverless Vehicles”
New heading “Non-GAAP Financial Measures”
New heading “Non-GAAP Loss from Operations”
New heading “Components of Results of Operations”
New heading “Operating Expenses”
New heading “Research and Development”
New heading “General and Administrative”
New heading “Truck and Freight Operations”
New heading “Sales and Marketing”
New heading “Other (Expenses) Income”
New heading “Year Ended December 31, 2025 compared to Year Ended December 31, 2024”
New heading “Research and Development”
New heading “Truck and Freight Operations”
New heading “Sales and Marketing”
New heading “Other (Expenses) Income”
New heading “Liquidity and Capital Resources”
New heading “Sources of Liquidity”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
New heading “Contractual Obligations and Other Commitments”
New heading “Debt Agreements”
New heading “Other Commitments”
New heading “Emerging Growth Company Status”
New heading “Revenue Recognition”
New heading “Stock-based Compensation”
New heading “Valuation of Financial Instruments”
New heading “One Big Beautiful Bill Act”
Removed heading “Special Note Regarding Forward-Looking Statements”
Removed heading “Going Concern Considerations, Liquidity and Capital Resources”
Removed heading “Trends Affecting Our Business”
Removed heading “Contractual Obligations and Off-Balance Sheet Arrangements”
Removed heading “Underwriting Agreement and Advisory Agreement”
Removed heading “Contingent Fees”
Removed heading “Class A Ordinary Shares Subject to Possible Redemption”
Removed heading “Net Income Per Ordinary Share”
Largest changes
“Unfavorable economic conditions in the United States and globally may adversely impact our business growth and operating results. Macroeconomic factors such as inflation, higher interest rates, tariffs, banking disruptions, geopolitical tensions and conflicts in Ukraine and the Middle East have contributed to increased economic uncertainty and market volatility. Recent policy actions by the U.S. Government, including changes to trade policy, tariffs on key imports and shifts in industrial and environmental regulations, may further impact global supply chains and business investment decisions. …”see in full comparison
“Going Concern Considerations, Liquidity and Capital Resources”see in full comparison
“We define free cash flow as net cash used in operating activities, which is its most directly comparable measure calculated in accordance with GAAP, less purchases of property and equipment. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives. …”see in full comparison
“On September 24, 2025 (the "Closing Date" or "Closing"), Kodiak Robotics, Inc. (“Legacy Kodiak”) and Ares Acquisition Corporation II (“AACT”) consummated the merger transaction (the “Merger”) as contemplated by a definitive business combination agreement (the “BCA”) and AACT changed its name to Kodiak AI, Inc. (the “Company” or “Kodiak”). As a result, the financial statements of Legacy Kodiak are now the financial statements of Kodiak.”see in full comparison
“In connection with our assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” our management has determined that the mandatory liquidation of the Trust Account, should a business combination not occur, raises substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. …”see in full comparison
Full comparison: every changed paragraph (202)
On September 24, 2025 (the "Closing Date" or "Closing"), Kodiak Robotics, Inc. (“Legacy Kodiak”) and Ares Acquisition Corporation II (“AACT”) consummated the merger transaction (the “Merger”) as contemplated by a definitive business combination agreement (the “BCA”) and AACT changed its name to Kodiak AI, Inc. (the “Company” or “Kodiak”). As a result, the financial statements of Legacy Kodiak are now the financial statements of Kodiak.
For discussion related to our results of operations for the year ended December 31, 2024 and year-to-year comparison between the years ended December 31, 2024 and 2023, refer to the section titled “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF LEGACY KODIAK” in our Prospectus filed pursuant to Rule 424(b)(3) with the U.S. Securities and Exchange Commission (the “SEC”) on August 29, 2025, which is hereby incorporated by reference herein. The following discussion and analysis of the financial condition and results of operations should be read together with our consolidated financial statements for the years ended December 31, 2025, 2024, and 2023, and the related notes included elsewhere in this Annual Report on Form 10-K (this “Annual Report”).
References to the “Company,” “our,” “us” or “we” refer to Ares Acquisition Corporation II.
Special Note Regarding Forward-Looking Statements
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report. Certain information contained in thethis discussion and analysis setis forthalso belowincluded elsewhere in this Annual Report, including information regarding our business plans and strategy, and includes forward-looking statements that involve risks and uncertainties. Our actualActual results maycould differ materially from those anticipated in these forward-looking statements as a result of manyvarious factors, including those setdiscussed forthin underthe sections titled “SpecialRisk Factors” and “Cautionary Note Regarding Forward-Looking Statements,Statements” “Item 1A. Risk Factors” and elsewhere in this Annual Report.
Our investor relations website is located at https://investors.kodiak.ai. We use our investor relations website to post important information for investors, including news releases, analyst presentations, and supplemental financial information, and as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website, in addition to following press releases, SEC filings and public conference calls and webcasts. From time to time, we may also post information that could be deemed material on our social media channels, which are listed on our investor relations website, and investors are encouraged to review those sources as well. We have included our investor relations website as an inactive textual reference only. Except as specifically incorporated by reference into this Report, information on such website is not part of this Report.
Kodiak is a leading provider of physical AI, with a focus on AI-powered autonomous vehicle (“AV”) technology, that is designed to help tackle some of the toughest driving jobs. Our driverless solution can help address the critical problem of safely transporting goods in the face of unprecedented supply chain challenges. We believe that driverless trucks can enhance road safety, improve truck utilization, reduce costs, expand margins for fleet owners, alleviate supply chain pressures and create better jobs for truck drivers.
We serve customers in the long-haul trucking, industrial trucking, and defense industries. In December 2024, we launched our driverless solution, which we refer to as the Kodiak Driver. We believe the launch of the Kodiak Driver represents the first customer-owned and -operated driverless trucks in commercial service. In addition, our customers have utilized Kodiak-owned driverless trucks to deliver revenue generating loads across the southern United States. As of December 31, 2025, Kodiak Driver-powered vehicles have logged over 10,700 Cumulative Hours of Paid Driverless Operations and have delivered over 12,600 loads. In the defense industry, we believe the Kodiak Driver can support national security initiatives and critical government applications.
We expect to continue to operate using a Driver-as-a-Service (“DaaS”) business model, which we launched in December 2024 in connection with our partnership with Atlas Energy Solutions (“Atlas”). Under our DaaS model, our customers are provided with access to the Kodiak Driver on customer-owned and -operated vehicles. Under this model, we generate revenue through either a per-vehicle or per-mile license fee. This flexible approach to pricing is designed to align with our customers’ diverse operational models, while generating predictable recurring revenue for us. By integrating the Kodiak Driver into customer-owned fleets, we expect to build an asset-light business that can scale with our customers’ growth.
Recent Developments
The Merger
On the Closing Date, AACT, a Delaware corporation, consummated a series of transactions that resulted in, among other things, the combination of AAC II Merger Sub, Inc., a wholly owned subsidiary of AACT (“Merger Sub”), and Legacy Kodiak pursuant to a definitive business combination agreement dated April 14, 2025 (the “BCA”). Pursuant to the terms of the BCA, Merger Sub merged with and into Legacy Kodiak, with Legacy Kodiak surviving the merger as a wholly owned subsidiary of AACT (the “Merger”). On the Closing Date, AACT changed its name from AACT to “Kodiak AI, Inc.”
The Merger was accounted for as a reverse recapitalization, with Legacy Kodiak being the accounting acquirer and AACT being the acquired company for financial reporting purposes. As a result, Legacy Kodiak's financial statements for historical periods will be included in Kodiak’s future periodic reports filed with the SEC.
We received $171.2 million cash proceeds from the reverse recapitalization and private investment from public equity financing related to the issuance of our Series A cumulative redeemable convertible preferred stock (the “Series A Preferred Stock”), net of transaction costs.
We will use the net proceeds from the Merger primarily to support our growth initiatives. We also expect to incur additional expenses as a public company for, among other things, incremental directors’ and officers’ liability insurance, director compensation and additional internal and external accounting, legal and administrative resources.
Key Factors Affecting our Results
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report titled “Risk Factors.”
Evolution of Business Model
Our business model has evolved and will continue to evolve in parallel with the growth of our business. Initially, our revenue was generated by transporting commercial freight using Kodiak-owned autonomous trucks and from our work with the U.S. Army. This approach allowed us to refine the Kodiak Driver, demonstrate commercial viability, grow our customer base and establish a freight network spanning approximately 24,000 miles across the southern United States and demonstrate the viability of the Kodiak Driver across multiple operating domains.
Under our DaaS model, which we launched in December 2024 with Atlas, our customers own and operate Kodiak Driver-powered trucks, and Kodiak provides the autonomy system, regular software updates, systems integrations, remote monitoring and operational and remote support. Under the DaaS model, revenue is generated on a recurring subscription basis, either through a per-vehicle or a per-mile license fee structure, with mileage minimums, where applicable. The DaaS model is designed to scale efficiently, support diverse customer operations, and establish recurring revenue streams while helping minimize our capital expenditures.
As we expand deployments under the DaaS model, we expect a shift in our cost structure to an asset-light business model. Historically, we primarily used Kodiak-owned trucks in our operations. We expect to continue to own and operate a limited fleet of trucks to support the continued development of the Kodiak Driver and continued business development efforts. In the near term, we expect our costs will continue to reflect the use of Kodiak-owned trucks. Over time, we expect customer-owned vehicles will represent a larger share of the deployed fleet, supporting a leaner, more capital-efficient and increasingly asset-light operating model. We also anticipate a shift in capital allocation, moving from an initial focus on technology development toward scaling operations. Future investments will increasingly focus on deployment growth and operational integration. As we grow, we expect to benefit from economies of scale driven by operational efficiencies and continued platform refinement.
Commercialization
We launched our DaaS business in December 2024 with Atlas, and as of December 31, 2025, have surpassed 10,700 Cumulative Hours of Paid Driverless Operations. We anticipate scaling our deployment with Atlas over the course of 2025 and beyond. We are also exploring opportunities among additional customers that operate in remote, unstructured environments similar to the Permian Basin. Like Atlas, these customers face acute driver recruitment issues and 24/7 operational requirements, presenting attractive growth and profitability opportunities. We additionally see an opportunity to expand our work on unimproved roads internationally, in similarly-well suited markets such as Australia, the Middle East, and Canada.
We also continue to prepare our long-haul trucking and industrial trucking customers for our DaaS business model through our Partner Deployment Program (“PDP”) as we work to expand our safety case to the long-haul trucking vertical. Inclusive of both our operations with Atlas and with our over-the-road customers, as of December 31, 2025, Kodiak Driver-powered vehicles have delivered over 12,600 loads. We see our customer base as a competitive advantage with our existing customer base having an aggregate fleet size of over 125,000 trucks.1 We also see increasing tailwinds in the defense market, as defense modernization programs increasingly focus on upgrading vehicle fleets with advanced technologies. The U.S. Department of War (“DoW”) is increasingly prioritizing adapting commercial, off-the-shelf AI technologies for defense purposes, which creates opportunities for dual-use developers like Kodiak. Additionally, allied European nations are ramping up investment in autonomous ground vehicles in response to instability in the region.
Kodiak’s ability to achieve our scale goals, as well as profitability, depends on our ability to meet both technical and commercial milestones and the need to scale our deployments with existing customers and attract new customers. Delays in our deployment timelines could result in Kodiak failing to achieve revenue and profitability targets. We intend to pursue additional long-haul trucking, industrial trucking, and defense partnerships as we scale our DaaS business model. If our assumptions about our commercial or technical development are overly optimistic, or if we are unable to successfully commercialize the Kodiak Driver, we may fail to generate operating cash flow or achieve profitability. A failure to meet our technical or commercial milestones may lead to unanticipated delays or cost overruns, which could in turn adversely impact margins and cash flows.
Economies of Scale, Sales and Marketing, & Competition
We believe that our DaaS model, where we charge our customers a per-truck or per-mile license fee, will enable us to achieve strong margin profiles at scale. Our future performance will depend on our ability to both deliver these high margins, including both revenue expansion and cost control measures, as well as scale our deployments beyond Atlas to 1 Transport Topics and Federal Motor Carrier Safety Administration Company Snapshot Report. Fleet size includes company-owned, lease-to-own and owner-operator tractors.
higher volumes. Our approach allows us to focus on developing our core Kodiak Driver technologies while leveraging third-party ecosystem partnerships to ensure capital efficiency.
As we scale our DaaS model, we aim to transition our customers away from delivering freight on Kodiak-owned and -operated trucks to customer-owned and -operated trucks. We anticipate achieving additional economies of scale as we grow our deployments. We expect that these economies of scale will come from both increased efficiency and component cost reductions, as both we and our suppliers improve production efficiency. Achievement of this scale depends on our ability to transition our PDP customers to the DaaS model within our expected time frame.
While we expect to achieve and maintain strong margins on the Kodiak Driver, additional competition in AV technologies may negatively impact pricing, margins, and market share. This may lead to pricing pressure and lower margins that negatively impact operating results. However, we believe our capital efficient approach gives us a competitive advantage in terms of ensuring margins and unit economics. If we do not generate the margins we expect upon commercialization of our DaaS model, we may be required to raise additional debt or equity capital, which may not be available on acceptable terms or at all.
Regulatory Landscape
While there is currently no comprehensive federal regulatory framework governing the deployment of driverless trucks, we are able to operate our driverless trucking business today under existing regulation and related guidance. Many states support driverless deployment either through legislation or regulatory guidance, though different states have different requirements, such as first responder interaction protocols and insurance standards, which create compliance complexities.
As the regulatory environment related to driverless technologies advances, our business will need to continue to evolve accordingly. For example, additional state-level requirements or new federal standards could require operational or technical adjustments. We proactively engage with policymakers and regulators to help ensure the regulatory frameworks support safe and scalable driverless deployment.
Global Economic Conditions
Unfavorable economic conditions in the United States and globally may adversely impact our business growth and operating results. Macroeconomic factors such as inflation, higher interest rates, tariffs, banking disruptions, geopolitical tensions and conflicts in Ukraine and the Middle East have contributed to increased economic uncertainty and market volatility. Recent policy actions by the U.S. Government, including changes to trade policy, tariffs on key imports and shifts in industrial and environmental regulations, may further impact global supply chains and business investment decisions. These effects may not be fully reflected in our financial performance until future periods. Additionally, adverse conditions could limit our ability to secure financing on acceptable terms, or at all. Ongoing geopolitical instability and related sanctions may further disrupt global financial markets, including in the United States, potentially resulting in a material impact on our operations.
Key Operating Metrics
We monitor the following key operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections and make strategic decisions.
Cumulative Hours of Paid Driverless Operations
We believe this metric is an important measure of the progress of the commercialization of our technology. We define Cumulative Hours of Paid Driverless Operations as the aggregate number of logged hours when the Kodiak Driver is actively engaged without a safety driver in the vehicle, and we are being paid by our customers.
This metric is critical to assessing the maturity, reliability and scalability of the Kodiak Driver. Growth in Cumulative Hours of Paid Driverless Operations indicates increasing driverless operational performance, customer adoption and commercial readiness.
In December 2024, we commenced tracking Cumulative Hours of Paid Driverless Operations following the initial delivery of the Kodiak Driver-powered trucks to Atlas. As of December 31, 2024, we had logged 17 Cumulative Hours of Paid Driverless Operations. As of December 31, 2025, we have surpassed 10,700 Cumulative Hours of Paid Driverless Operations.
Customer-Owned Driverless Vehicles
We believe that Customer-Owned Driverless Vehicles is an important measure of the unit growth rate of our business. We expect growth in this metric to signal customer adoption of our DaaS model and future revenue expansion. We define Customer-Owned Driverless Vehicles as the number of customer-owned driverless vehicles with a then-current license for the Kodiak Driver during the applicable period.
This metric reflects commercial adoption, operational scaling and our ability to deliver autonomous vehicles capable of operating without a safety driver. As of December 31, 2025, our customers had 20 Customer-Owned Driverless Vehicles.
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we consider certain non-GAAP measures, including the following, which we use to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively with the financial information presented in accordance with GAAP, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.
Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.
Non-GAAP Loss from Operations
We define non-GAAP loss from operations as GAAP loss from operations, excluding stock-based compensation expense. We use non-GAAP loss from operations as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond our control. As a result, management excludes this item from internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure our performance against the performance of other companies without the variability created by stock-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.
The following provides a reconciliation from GAAP loss from operations to non-GAAP loss from operations, the most directly comparable financial measure stated in accordance with GAAP.
Free Cash Flow
We define free cash flow as net cash used in operating activities, which is its most directly comparable measure calculated in accordance with GAAP, less purchases of property and equipment. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives. The following provides a reconciliation from net cash used in operating activities to free cash flow.
Components of Results of Operations
Revenues
We generate revenues from: (i) providing DaaS to customers; (ii) delivering freight via Kodiak-owned autonomous trucks powered by the Kodiak Driver; and (iii) providing ground autonomy solutions to the U.S. military. Defense contracts, and associated revenue, particularly those with the DoW and the U.S. Army, can be episodic in nature and difficult to predict from period-to-period. As we scale our DaaS business model beyond Atlas, we expect revenue under such arrangements to increase relative to our total revenues.
Operating Expenses
Our operating expenses consist of research and development, general and administrative, truck and freight operations and sales and marketing.
Research and Development
Research and development costs are expensed as incurred and consist primarily of personnel costs, hardware and electrical engineering prototyping, cloud computing and storage, third-party software licenses (including simulation), data labeling and third-party design services.
What changed in the latest 10-Q
Risk Factors
Largest changes
There is currently significant uncertainty about the future relationship between the United States and its trading partners with respect to trade policies, tariffs, and similar policies affecting cross-border operations. The U.S. Government has made and continues to make significant additional changes in U.S. trade policy, specifically tariffs, and may continue to take future actions that could negatively impact our business, including escalating tariffs on the import of goods from most U.S. trading partners. For example, between February 2025 and February 2026, the United States imposed additional 10-35% fentanyl-related tariffs on certain goods from China, Canada, and Mexico with exceptions for items qualifying for duty-free treatment under the U.S.-Mexico-Canada Agreement (“USMCA”), and additional reciprocal tariffs on China (currently 10%). Between April 2025 and February 2026, the U.S. Government also imposed additional reciprocal tariffs of between 10%-125% on imports from most U.S. trading partners, with certain products exempt from these reciprocal tariff measures. These additional U.S. tariffs were implemented under authorities asserted in the International Emergency Economic Powers Act (“IEEPA”) and rescinded on February 24, 2026, following a Supreme Court decision invalidating the use of IEEPA to authorize these tariffs. The availability, timing, and amount of any related refunds associated with payments of these duties remain uncertain and subject to further legal, regulatory, and administrative action, though the U.S. government began rolling out a system on April 20, 2026 to begin processing refund requests for certain affected entries.see in full comparisonBeginningBetween February 24, 2026 and July 24, 2026, the U.S. government also implemented anew,global “temporary import surcharge” of 10% on many of the same products affected by the prior reciprocal tariffs, under authorities provided for in Section 122 of the Trade Act of 1974. Upon expiration of the Section 122 temporary import surcharge on July 24, 2026, the U.S. government implemented tariffs of up to 10% or 12.5% on imported commodities from 60 U.S. trading partners, with certain items excepted, under authorities provided under Section 301 of the Trade Act of 1974,supplementingfollowingexistinganon-IEEPAdeterminationmeasures.by the U.S. Trade Representative that these trading partners have insufficiently implemented or enforced forced labor laws. The United States also recently announced an intent to impose 50% tariffs on certain products of Canada effective August 19, 2026, under authorities provided in Section 338 of the Tariff Act of 1930. The U.S. Government has also implemented Section 232 tariffs on various items based on a finding that certain imports threaten to impair U.S. national security, including but not limited to certain articles of steel and aluminum; passenger vehicles, trucks, and automotive components; and articles of copper. The U.S. Government has also imposed, increased, or maintained additional Section 301 tariffs of 7.5%-100% on certain commodities from China. The scope of these tariffs and exclusions is subject to change. Additional trade-related investigations by the U.S. government are in progress and could result in the imposition of additionaltariffs.tariffs,TheincludingU.S.underGovernmentSectionshas232,also301,imposed, increased, or maintained Section 301 tariffs of 7.5%-100% on certain commodities from certain U.S. trading partners, most prominently China122, andBrazil. The scope of these tariffs and exclusions is subject to change.338.
We currently qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we are eligible for and intend to take advantage of certain exemptions or reduced disclosure obligations from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they may deem important. We willsee in full comparisonremaincease to qualify as an emerging growth companyuntil the earliest of (i)on the last day oftheour fiscal yearinendingwhichDecemberthe31,market2026value ofbecause ourcommonnon-affiliatestockpublicthatfloatare held by non-affiliates exceedsexceeded $700 million as ofJune 30 of that fiscal year, (ii)the last business day oftheour second fiscalyearquarter of 2026, at which time we will also become a “large accelerated filer” as defined inwhichRulewe12b-2haveundertotaltheannualExchangegrossAct.revenueAdditionally, under Section 2(a)(19) of$1.235 billion or more during such fiscal year, (iii)thedateSecuritiesonAct,whichemerging growth company status would be lost immediately if wehaveissued more than $1 billion in non-convertible debt inthe priorany three-yearperiod or (iv) December 31, 2028.period. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to opt out of such extended transition period and, therefore, we may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This may make comparison of our financial statements with those of public companies that comply with public company effective dates difficult or impossible because of the potential differences in accounting standards used. Upon our loss of emerging growth company status, we will be required to comply with new or revised accounting standards on the effective dates applicable to public companies that are not emerging growth companies. As a result, we may be required to adopt certain accounting standards on an accelerated basis relative to our prior transition timeline, which could require additional resources and could impact our reported financial results and the comparability of our financial statements across periods. Investors may find our common stock less attractive because we rely on these exemptions or reduced disclosure obligations, which may result in a less active trading market for our common stock and its price may be more volatile.
As ofsee in full comparisonMarchJune31,30, 2026, Atlas is our sole customer with driverless vehicles integrated into their fleet. Until we have scaled our business, we expect the Atlas MSA to account for a significant and growing portion of our revenue. Although we anticipate that the Atlas MSA will generate revenue for us through the initial order of 100 Kodiak Driver-powered, Atlas-owned trucks and beyond, we may fail to satisfy our obligations under the Atlas MSA, Atlas may elect not to enter into additional orders for the Kodiak Driver, and we may not otherwise realize the anticipated benefits at the time or to the degree we anticipate, or at all. The loss of all or a portion of the revenue attributable to the Atlas MSA may adversely affect our business, financial condition and results of operations. Further, while Atlas is contractually obligated to deploy the Kodiak Driver on 100 Atlas-owned trucks at an agreed-upon schedule which may be adjusted by the mutual agreement of Kodiak and Atlas, Atlas is not required to license the Kodiak Driver in any additional trucks beyond this figure. Atlas may also license the Kodiak Driver slower than anticipated or seek a delay or defer delivery of Kodiak Driver-powered trucks, which may be exacerbated by the volatility and swings in productivity that have historically affected oil and gas industry participants. For example, Atlas isevaluatingdeploying the Kodiak Driver on a new truck platform beginning in the third quarter of 2026. As a result of this platform transition and associated procurement timelines, wemayhaveextendextended the deployment schedule for Atlas’s initial 100-truck commitment into the first half of 2027. We may experience unexpected delays in connection with this platform transition in the event that our suppliers, OEMs, or other partners experience supply chain disruptions, capacity constraints, or are otherwise not able to meet agreed upon timelines. Our collaboration with third parties to provide vehicle integration services is subject to risks that are outside of our control.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and Nasdaq listing standards. Among other things, the Sarbanes-Oxley Act and related Exchange Act rules require that we maintain effective disclosure controls and procedures and internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls.see in full comparisonInWeaddition,currentlywe are required to have our independent public accounting firm attest to and report on our internal control over financial reporting when we cease qualifyingqualify as an “emerging growth company”pursuantastodefined in the Jumpstart Our Business Startups Act (the “JOBS Act”).and, as such, have been exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. We expect to cease qualifying as an emerging growth company as of December 31, 2026, and we expect our independent registered public accounting firm to be required to attest to the effectiveness of our internal control over financial reporting beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2026.
“Our current and future effective tax rates may be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or their interpretation. In addition, we may be subject to tax audits by various tax jurisdictions. Although we believe our tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities may have a material impact on the results of our operations.”see in full comparison
Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, may harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting may also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we willsee in full comparisoneventuallybe required to include in our periodic reports beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2026. When our independent registered public accounting firm is first required to attest to the effectiveness of our internal control over financial reporting, it may issue a report thatwillisbeadversefiledin the event that it is not satisfied with theSEC.level at which our internal control over financial reporting is documented, designed, or operating. . Ineffective disclosure controls and procedures and internal control over financial reporting may also cause investors to lose confidence in our reported financial and other information, which would likely adversely affect the market price of our securities. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
Full comparison: every changed paragraph (21)
Investing in our securities involves a high degree of risk. Before deciding to invest in or to maintain an investment in our securities, you should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report. Our business, as well as our reputation, financial condition, results of operations and price of our securities could also be adversely affected by any of these risks and other risks and uncertainties not currently known to us or that we currently do not believe are material. In that event, the market price of our securities could decline, and you could lose part or all of your investment.
We are a relatively new enterprise that is just beginning to commercially scale our business. For instance, in December 2024, we announced the delivery of our first Kodiak Driver-powered, customer-owned driverless trucks to Atlas. Following successful real-world operations and achievement of certain milestones, in March 2025, Atlas committed to deploying the Kodiak Driver on 100 Atlas-owned trucks, subject to the terms of a Master Services Agreement between us and Atlas, effective as of July 17, 2024 (as supplemented,amended and restated, the “Atlas MSA”). Relationships with Atlas and other current customers are important to our existing operations. We also need to both successfully scale driverless operations with Atlas and other customers and attract new customers to commercially scale our business. As part of our scaling efforts, we may encounter considerable challenges in entering new markets and undertaking sales and marketing activities, many of which are beyond our control. The likelihood of our success must be considered in light of these potential risks, expenses, complications, delays, and the competitive environment in which we operate. Consequently, there is substantial uncertainty that our business model will prove successful and sustainable. We may not be able to generate significant revenue or achieve profitability. In addition, any failure to commercialize our solutions within our projected timelines may adversely affect our business, financial condition and results of operations. Any investment in us is therefore highly speculative and may result in the loss of your entire investment.
In 2024, we partnered with Atlas and deployed our first Kodiak Driver-powered, customer-owned trucks. In March 2025 upon the achievement of certain milestones, Atlas committed to deploying the Kodiak Driver on 100 Atlas-owned trucks, subject to the terms of the Atlas MSA. Until we have scaled our commercial operations in on-highway operations and other applications of the Kodiak Driver, we expect our contract with Atlas to account for a growing portion of our revenue as we continue to deploy additional trucks to Atlas. For example, for the three and six months ended MarchJune 31,30, 2026, we recognized revenue from Atlas of $1.5$1.9 million and $3.4 million, which represented 82%56% and 65% of our total revenue.revenue, respectively.
As of MarchJune 31,30, 2026, Atlas is our sole customer with driverless vehicles integrated into their fleet. Until we have scaled our business, we expect the Atlas MSA to account for a significant and growing portion of our revenue. Although we anticipate that the Atlas MSA will generate revenue for us through the initial order of 100 Kodiak Driver-powered, Atlas-owned trucks and beyond, we may fail to satisfy our obligations under the Atlas MSA, Atlas may elect not to enter into additional orders for the Kodiak Driver, and we may not otherwise realize the anticipated benefits at the time or to the degree we anticipate, or at all. The loss of all or a portion of the revenue attributable to the Atlas MSA may adversely affect our business, financial condition and results of operations. Further, while Atlas is contractually obligated to deploy the Kodiak Driver on 100 Atlas-owned trucks at an agreed-upon schedule which may be adjusted by the mutual agreement of Kodiak and Atlas, Atlas is not required to license the Kodiak Driver in any additional trucks beyond this figure. Atlas may also license the Kodiak Driver slower than anticipated or seek a delay or defer delivery of Kodiak Driver-powered trucks, which may be exacerbated by the volatility and swings in productivity that have historically affected oil and gas industry participants. For example, Atlas is evaluating deploying the Kodiak Driver on a new truck platform beginning in the third quarter of 2026. As a result of this platform transition and associated procurement timelines, we mayhave extendextended the deployment schedule for Atlas’s initial 100-truck commitment into the first half of 2027. We may experience unexpected delays in connection with this platform transition in the event that our suppliers, OEMs, or other partners experience supply chain disruptions, capacity constraints, or are otherwise not able to meet agreed upon timelines. Our collaboration with third parties to provide vehicle integration services is subject to risks that are outside of our control.
There is currently significant uncertainty about the future relationship between the United States and its trading partners with respect to trade policies, tariffs, and similar policies affecting cross-border operations. The U.S. Government has made and continues to make significant additional changes in U.S. trade policy, specifically tariffs, and may continue to take future actions that could negatively impact our business, including escalating tariffs on the import of goods from most U.S. trading partners. For example, between February 2025 and February 2026, the United States imposed additional 10-35% fentanyl-related tariffs on certain goods from China, Canada, and Mexico with exceptions for items qualifying for duty-free treatment under the U.S.-Mexico-Canada Agreement (“USMCA”), and additional reciprocal tariffs on China (currently 10%). Between April 2025 and February 2026, the U.S. Government also imposed additional reciprocal tariffs of between 10%-125% on imports from most U.S. trading partners, with certain products exempt from these reciprocal tariff measures. These additional U.S. tariffs were implemented under authorities asserted in the International Emergency Economic Powers Act (“IEEPA”) and rescinded on February 24, 2026, following a Supreme Court decision invalidating the use of IEEPA to authorize these tariffs. The availability, timing, and amount of any related refunds associated with payments of these duties remain uncertain and subject to further legal, regulatory, and administrative action, though the U.S. government began rolling out a system on April 20, 2026 to begin processing refund requests for certain affected entries. BeginningBetween February 24, 2026 and July 24, 2026, the U.S. government also implemented a new, global “temporary import surcharge” of 10% on many of the same products affected by the prior reciprocal tariffs, under authorities provided for in Section 122 of the Trade Act of 1974. Upon expiration of the Section 122 temporary import surcharge on July 24, 2026, the U.S. government implemented tariffs of up to 10% or 12.5% on imported commodities from 60 U.S. trading partners, with certain items excepted, under authorities provided under Section 301 of the Trade Act of 1974, supplementingfollowing existinga non-IEEPAdetermination measures.by the U.S. Trade Representative that these trading partners have insufficiently implemented or enforced forced labor laws. The United States also recently announced an intent to impose 50% tariffs on certain products of Canada effective August 19, 2026, under authorities provided in Section 338 of the Tariff Act of 1930. The U.S. Government has also implemented Section 232 tariffs on various items based on a finding that certain imports threaten to impair U.S. national security, including but not limited to certain articles of steel and aluminum; passenger vehicles, trucks, and automotive components; and articles of copper. The U.S. Government has also imposed, increased, or maintained additional Section 301 tariffs of 7.5%-100% on certain commodities from China. The scope of these tariffs and exclusions is subject to change. Additional trade-related investigations by the U.S. government are in progress and could result in the imposition of additional tariffs.tariffs, Theincluding U.S.under GovernmentSections has232, also301, imposed, increased, or maintained Section 301 tariffs of 7.5%-100% on certain commodities from certain U.S. trading partners, most prominently China122, and Brazil. The scope of these tariffs and exclusions is subject to change.338.
The recent changes in tariff and trade policy underscore the uncertainty regarding the future relationships between the United States and its trading partners. In response to these and other U.S. trade measures, China, Canada, and other affected countries have taken or threatened to take retaliatory actions to respond. Such actions include the imposition of retaliatory tariffs on imports of products of U.S. origin, the imposition of export controls on a wide array of products (including rare earth metals and other critical minerals), as well as other actions. The adoption of retaliatory actions by Chinatargeted countries has prompted and could prompt the United States to further increase its tariff measures, and continued escalation of tariffs and trade measures could result in the outbreak of a trade war. The trade and tariff policies of the United States and other countries are currently fluid and subject to further changes.
Our success depends largely upon the continued services of our executive officers, engineers, and certain other key employees. We rely on our executive officers, engineers, and key employees in the areas of business strategy, research and development, marketing, communications, sales, services, supply chain management, and general and administrative functions. We compete for talent with other companies, including companies that are larger and have greater resources than we do. Competition for talent in the AV and AI industries, especially in the San Francisco Bay Area, is intense and often leads to increased compensation and other personnel costs. In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees. Our continued ability to compete effectively depends on our ability to attract substantial numbers of qualified new employees and to retain and motivate our existing employees. Also, to the extent we hire employees from competitors or other companies, we may be subject to allegations that they have been improperly solicited or divulged proprietary or other confidential information of their former employers. Any material departures of our executive management team, engineers, or key employees, may individually or in the aggregate, adversely affect our business, financial condition, and results of operations.
We rely on our third-party suppliers, OEMs, upfitters, servicesservice providers and partners, some of which are single or limited-source suppliers or providers of certain key components for, and services used in connection with, the Kodiak Driver, and are thus susceptible to supply shortages, long lead times for components, supply changes, and limitations or constraints on service provider support availability or capacity.
We are at risk for breaches or other cyber incidents of operational systems, including business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors or suppliers; facility security systems, owned by us, our customers, or our third-party vendors or suppliers; in-product technology owned by us or our third-party vendors or suppliers; our integrated software or artificial intelligence; and partner, customer, or driver data that we process or our third-party vendors or suppliers process on our behalf. Any such cyber incident may materially disrupt operational systems; result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information; compromise certain information of partners, customers, employees, suppliers, drivers or others; jeopardize the security of our facilities; or affect the performance of the Kodiak Driver. A cyber incident may be caused by disasters, insiders, through inadvertence or with malicious intent, or malicious third parties using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery or other forms of deception. The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time. AI and machine learning may increase cybersecurity risks we face through, for example, being used to increase the prevalenceprevalence, intensity, or intensityimpact of cyber attacks or to detect, and take advantage of, potential vulnerabilities. Although we maintain and continue to develop measures designed to protect us against security breaches and other cyber incidents, such measures require frequent updates and improvements. We cannot guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents. The implementation, maintenance, segregation and improvement of systems and measures designed to prevent cyber incidents requires significant management time, support and cost.
It is also possible that future autonomous regulations are not standardized, and our technology becomes subject to differing regulations across jurisdictions (e.g. federal, state, local, and international). For example, in Europe, certain vehicle safety regulations apply to automated braking and steering systems, and certain treaties also restrict the operations of certain higher levels of automation. As of MarchJune 31,30, 2026, 2526 U.S. states have passed legislation allowing for the deployment of driverless trucks, and most other states allow testing with a safety driver in the vehicle. Many other states are considering legislation and regulations that may adversely affect autonomous and driverless technologies. Despite advances in U.S. state legislation, there is currently no comprehensive U.S. federal framework for autonomous vehicle deployment. This regulatory patchwork, and the ongoing legislative and regulatory efforts at various jurisdictional levels, may hinder the commercial deployment of our technology and adversely affect our business prospects and financial condition.
Further, organized labor, in particular the International Brotherhood of Teamsters, has opposed driverless technology and is increasingly using its political influence to attempt to slow or stop driverless deployment. In 2026, supporters of organized labor in approximately 10 states introduced legislation that would require human drivers to be physically present in all commercial motor vehicles equipped with AV technology. These states included Alaska, Colorado, Delaware, Maryland, and Minnesota. As of MarchJune 31,30, 2026, no such introduced legislation has become law; however, organized labor and other opponents to driverless development may ultimately be successful and, even if unsuccessful, we may spend significant time and resources in opposition to such efforts, any of which may adversely affect our business, prospects, and results of operations.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and Nasdaq listing standards. Among other things, the Sarbanes-Oxley Act and related Exchange Act rules require that we maintain effective disclosure controls and procedures and internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls. InWe addition,currently we are required to have our independent public accounting firm attest to and report on our internal control over financial reporting when we cease qualifyingqualify as an “emerging growth company” pursuantas todefined in the Jumpstart Our Business Startups Act (the “JOBS Act”). and, as such, have been exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. We expect to cease qualifying as an emerging growth company as of December 31, 2026, and we expect our independent registered public accounting firm to be required to attest to the effectiveness of our internal control over financial reporting beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2026.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to assure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. We are also continuing to improve our internal control over financial reporting, including in preparation for our first auditor attestation report on the effectiveness of our internal control over financial reporting. We have expended, and anticipate that we will continue to expend, significant resources to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting.
Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, may harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting may also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2026. When our independent registered public accounting firm is first required to attest to the effectiveness of our internal control over financial reporting, it may issue a report that willis beadverse filedin the event that it is not satisfied with the SEC.level at which our internal control over financial reporting is documented, designed, or operating. . Ineffective disclosure controls and procedures and internal control over financial reporting may also cause investors to lose confidence in our reported financial and other information, which would likely adversely affect the market price of our securities. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
We are subject to income and other taxes in the United States and other jurisdictions, each of which has its own rules. Our current and future effective tax rates may be subject to volatility or adversely affected by a number of factors, including changes in the valuation of our deferred tax assets and liabilities; expected timing and amount of the release of any tax valuation allowances; tax effects of stock-based compensation; changes in tax laws, regulations or interpretations thereof; or lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates. In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. OutcomesAlthough fromwe thesebelieve auditsour tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities may adverselyhave affecta material impact on our business, financial condition, andor results of operations.
Our current and future effective tax rates may be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or their interpretation. In addition, we may be subject to tax audits by various tax jurisdictions. Although we believe our tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities may have a material impact on the results of our operations.
Our future capital requirements will depend on many factors, including the rate of adoption of the Kodiak Driver and our DaaS model and the associated revenue growth, the expenses associated with such growth, and the timing and extent of our research and development efforts. If we are unable to raise sufficient capital when needed, our business, financial condition and results of operations may be adversely affected, and we may need to significantly modify our operational plans to continue as a going concern. We do not anticipate that our cash and cash equivalents as of MarchJune 31,30, 2026 will be sufficient to meet our capital requirements for at least one year under our current operating plan. Inclusive of the expected net proceeds from the PIPE Transaction, weWe expect to be able to fund our business plan into the second quarter of 2027. See Note 1712 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding the PIPE Transaction. We expect to seek additional funding from debt or equity offerings, which may result in substantial dilution or additional restrictive covenants. If we do not generate sufficient cash to fund our operating plan, we may also adjust our operating plan to reduce our research and development initiatives, lower our anticipated growth plans or liquidate our assets, among other things. To the extent any or all of these events were to occur, our business, operating results, financial condition and prospects may be materially and adversely affected. In conjunction with such a liquidation, the values we receive for our assets in liquidation or dissolution may be significantly lower than the values reflected in our financial statements. Our lack of cash resources and our potential inability to continue as a going concern may adversely affect our stock price and our ability to raise new capital or to enter into critical contractual relations with third parties due to concerns about our ability to meet our contractual obligations.
Further, a significant number of shares of our common stock are subject to issuance upon exercise of the Warrants, and the number of shares covered by the Warrants may increase. For example, the 2025 PIPE Warrants and Non-Redemption AgreementNRA Warrants contain anti-dilution adjustments, including with respect to certain issuances or sales of common stock at prices less than the exercise price then in effect. Recently, inIn connection with the consummation of the PIPE Transaction, the exercise price of the 2025 PIPE Warrants and NRA Warrants was adjusted to $6.00 per share. Further, future adjustments to the exercise price of the Warrants may result in substantial additional dilution to existing stockholders and may depress the market price of our common stock. For example, pursuant to the Warrant Agreement, the exercise price per share of the Private Placement Warrants and the Public Warrants were adjusted from $11.50 to $9.28 after trading closed on October 20, 2025. The issuance of the shares of common stock underlying these Warrants or any adjustments to the exercise price of such Warrants will have a dilutive impact on other stockholders and may reduce the market price of our common stock.
In addition, each share of our Series A Preferred Stock is convertible into common stock at any time at the option of the holder at a rate equal to the Accrued Value, divided by the then-applicable conversion price, plus any accrued but unpaid dividends on such share. In the event we elect to pay dividends in kind, the Accrued Value will increase, thereby increasing the number of shares of our common stock into which each share of our Series A Preferred Stock is convertible and the related voting power of the Series A Preferred Stock, which will be dilutive to other stockholders. For example, we have elected to pay the December 2025all accrued dividends on the Series A Preferred Stock since issuance in kind, which resulted in the Accrued Value of the Series A Preferred Stock increasing from $1,200.00 to $1,222.66.$1,283.61.
The conversion price was initially $12.00, but is subject to adjustments for stock dividends, splits, combinations and similar events and customary anti-dilution adjustments, including with respect to certain future issuances or sales of common stock at prices less than the conversion price then in effect, including the potential equity and equity-linked financing we are expecting to complete in the near term.effect. In connection with the consummation of the PIPE Transaction, the conversion price was adjusted to $6.00 per share.
We currently qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we are eligible for and intend to take advantage of certain exemptions or reduced disclosure obligations from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they may deem important. We will remaincease to qualify as an emerging growth company until the earliest of (i)on the last day of theour fiscal year inending whichDecember the31, market2026 value ofbecause our commonnon-affiliate stockpublic thatfloat are held by non-affiliates exceedsexceeded $700 million as of June 30 of that fiscal year, (ii) the last business day of theour second fiscal yearquarter of 2026, at which time we will also become a “large accelerated filer” as defined in whichRule we12b-2 haveunder totalthe annualExchange grossAct. revenueAdditionally, under Section 2(a)(19) of $1.235 billion or more during such fiscal year, (iii) the dateSecurities onAct, whichemerging growth company status would be lost immediately if we have issued more than $1 billion in non-convertible debt in the priorany three-year period or (iv) December 31, 2028.period. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to opt out of such extended transition period and, therefore, we may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This may make comparison of our financial statements with those of public companies that comply with public company effective dates difficult or impossible because of the potential differences in accounting standards used. Upon our loss of emerging growth company status, we will be required to comply with new or revised accounting standards on the effective dates applicable to public companies that are not emerging growth companies. As a result, we may be required to adopt certain accounting standards on an accelerated basis relative to our prior transition timeline, which could require additional resources and could impact our reported financial results and the comparability of our financial statements across periods. Investors may find our common stock less attractive because we rely on these exemptions or reduced disclosure obligations, which may result in a less active trading market for our common stock and its price may be more volatile.
Management's Discussion & Analysis (MD&A)
New heading “Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025”
New heading “Research and Development”
New heading “General and Administrative”
New heading “Truck and Freight Operations”
New heading “Sales and Marketing”
New heading “Other Income (Expenses)”
Largest changes
“Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025”see in full comparison
We expect to remain an emerging growth company until the earlier of (1) the last day of the year (i) following April 4, 2028, which is the fifth anniversary of the effective date of AACT’s IPO registration statement, (ii) in which we have total annual gross revenue of at least $1.235 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates equals or exceeds $700.0 million as of the prior June 30, or (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. On the last business day of our second quarter in fiscal 2026, the aggregate market value of our common stock held by non-affiliates exceeded $700 million. As a result, as of December 31, 2026, the Company will be considered a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934 and the Company will cease to be an emerging growth company. Accordingly, the Company will no longer be exempt from the auditor attestation requirements under Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting. Further, following the loss of emerging growth company status, the Company will be required to comply with any new or revised accounting pronouncements as of public company effective dates.see in full comparison
As of June 30, 2026, we had cash and cash equivalents and marketable securities totaling $151.1 million, and short-term debt obligations totaling $12.7 million consisting of the current portion of debt and second lien loans. We have historically funded our operations primarily through the issuance of equity and debt securities. We do not anticipate our cash and cash equivalents and marketablesee in full comparisonsecurities, together with the proceeds from the PIPE Transaction,securities will be sufficient to meet our capital requirements for at least one year from the filing date of this Quarterly Report under our current operating plan.Inclusive of the expected net proceeds from the PIPE Transaction, weWe expect to be able to fund our business plan into the second quarter of 2027. We expect to seek additional funding through debt or equityofferings,offeringsincludingtoinfund our operating plan, which may include thenearnear-termterm in the formissuance ofissuingequity and equity-linked securitiesandorincurringthe incurrence of additional indebtedness,whichpotentiallymay resultresulting in substantial dilution or restrictivecovenants, to fund our operating plan.covenants. If we do not generate sufficient cash to fund our operating plan, we may also adjust our operating plan to lower our anticipated research and development initiatives, reduce our growth plans or liquidate our assets, among other things. To the extent any or all of these events were to occur, our business, operating results, financial condition and prospects may be materially and adversely affected.
Full comparison: every changed paragraph (47)
We serve customers in the long-haul trucking, industrial trucking, and defense industries. In December 2024, we launched our driverless solution, which we refer to as the Kodiak Driver. We believe the launch of the Kodiak Driver represents the first customer-owned and -operated driverless trucks in commercial service. In addition, our customers have utilized Kodiak-owned driverless trucks to deliver revenue-generating loads across the southern United States. As of MarchJune 31,30, 2026, Kodiak Driver-powered vehicles have logged over 23,50040,000 Cumulative Hours of Paid Driverless Operations and have delivered over 15,60020,000 loads. In the defense industry, we believe the Kodiak Driver can support national security initiatives and critical government applications.
We launched our DaaS business in December 2024 with Atlas, and as of MarchJune 31,30, 2026, have surpassed 23,50040,000 Cumulative Hours of Paid Driverless Operations. We anticipate scaling our deployment with Atlas over the course of 2026 and beyond. We are also exploring opportunities among additional customers that operate in remote, unstructured environments similar to the Permian Basin. Like Atlas, these customers face acute driver recruitment issues and 24/7 operational requirements, presenting attractive growth and profitability opportunities. We additionally see an opportunity to expand our work on unimproved roads internationally, in similarly-well suited markets such as Australia, the Middle East, and Canada.
We also continue to prepare our long-haul trucking and industrial trucking customers for our DaaS business model through our Partner Deployment Program (“PDP”) as we work to expand our safety case to the long-haul trucking vertical. Inclusive of both our operations with Atlas and with our over-the-road customers, as of MarchJune 31,30, 2026, Kodiak Driver-powered vehicles have delivered over 15,60020,000 loads.
In December 2024, we commenced tracking Cumulative Hours of Paid Driverless Operations following the initial delivery of the Kodiak Driver-powered trucks to Atlas. As of MarchJune 31,30, 2026, we have surpassed 23,50040,000 Cumulative Hours of Paid Driverless Operations.
This metric reflects commercial adoption, operational scaling and our ability to deliver autonomous vehicles capable of operating without a safety driver. As of MarchJune 31,30, 2026, our customers had 2835 Customer-Owned Driverless Vehicles.
Three Months Ended MarchJune 31,30, 2026 compared to Three Months Ended MarchJune 31,30, 2025
N/MNM = not meaningful
Revenues increased by $0.4$3.0 million, or 24%,596%, to $1.8$3.5 million for the three months ended MarchJune 31,30, 20262026, from $1.5$0.5 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributed to a $1.3$1.7 million increase in DaaS revenue,revenue partiallyand offset by a $1.0$1.2 million decreasefrom relatedground toautonomy our contract with the U.S. Army.solutions.
Research and development expenses increased by $7.4$10.5 million, or 73%,86%, to $17.6$22.7 million for the three months ended MarchJune 31,30, 2026 from $10.1$12.2 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to $5.1$5.5 million of higher headcount-related expenses, as well as an increased investment of $1.5$3.3 million in software and other tools to support our artificial intelligence and machine learning initiatives.initiatives, and an increased investment of $2.1 million in hardware and development related to our long-haul operations.
General and administrative expenses increased by $7.3$5.3 million, or 142%,74%, to $12.4 million for the three months ended MarchJune 31,30, 2026 from $5.1$7.2 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to $4.6$4.0 million of higher headcount-related expenses, as well as an increase of $2.0$1.2 million in costs incurred for legal, accountingaccounting, and other professional services, primarily associated with becomingoperating as a public company.
Truck and freight operations expenses increased by $4.3$5.2 million, or 107%,95%, to $8.3$10.6 million for the three months ended MarchJune 31,30, 2026 from $4.0$5.5 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to $2.3an increase of $3.0 million ofin infrastructure costs and $2.1 million in higher headcount-related expenses, as well as an increase of $2.0 million in operational infrastructure costs, both ofdriven whichby wereefforts to support DaaS operations and development related to our over-the-roadlong-haul launch.operations.
Sales and marketing expenses increased by $0.6$0.4 million, or 74%,38%, to $1.4 million for the three months ended MarchJune 31,30, 2026 from $0.8$1.0 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to $0.4$0.3 million ofin higher headcount-relatedmarketing expenses,expenses as well as an increase ofand $0.2 million in marketinghigher headcount-related expenses.
Other income (expenses), net increased by $173.9$144.5 million, or 159%164%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to aan $108.4$84.2 million loss on the change in fair value of simple agreements for future equity for the three months ended MarchJune 31,30, 2025 that did not recur in 2026,2026 due to their conversion into shares of common stock in 2025, as well as a $64.7$58.3 million gain on the change in fair value of common stock warrants for the three months ended MarchJune 31,30, 2026. Our common stock warrants had not been issued until and after September 2025.
Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025
Our results of operations for the periods indicated are summarized in the table below (in thousands):
NM = not meaningful
Revenues
Revenues increased by $3.4 million, or 170%, to $5.3 million for the six months ended June 30, 2026, from $2.0 million for the six months ended June 30, 2025. The increase was primarily attributed to a $3.0 million increase in DaaS revenue and $0.3 million from ground autonomy solutions.
Research and Development
Research and development expenses increased by $17.9 million, or 80%, to $40.3 million for the six months ended June 30, 2026 from $22.4 million for the six months ended June 30, 2025. The increase was primarily attributable to $10.5 million of higher headcount-related expenses, an increased investment of $4.7 million in software and other tools to support our artificial intelligence and machine learning initiatives, and an increased investment of $3.0 million in hardware and development related to our long-haul operations.
General and Administrative
General and administrative expenses increased by $12.6 million, or 102%, to $24.9 million for the six months ended June 30, 2026 from $12.3 million for the six months ended June 30, 2025. The increase was primarily attributable to $8.9 million of higher headcount-related expenses, as well as an increase of $3.1 million in costs incurred for legal, accounting, and other services, associated with operating as a public company.
Truck and Freight Operations
Truck and freight operations expenses increased by $9.5 million, or 100%, to $19.0 million for the six months ended June 30, 2026 from $9.5 million for the six months ended June 30, 2025. The increase was primarily attributable to an increase of $4.8 million in infrastructure costs and $4.3 million in higher headcount-related expenses, both driven by efforts to support DaaS operations and development related to our long-haul operations.
Sales and Marketing
Sales and marketing expenses increased by $1.0 million, or 55%, to $2.8 million for the six months ended June 30, 2026 from $1.8 million for the six months ended June 30, 2025. The increase was primarily attributable to $0.7 million of higher headcount-related expenses, as well as an increase of $0.4 million in marketing expenses.
Other Income (Expenses)
Other income (expenses), net increased by $318.5 million, or 161% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to a $192.5 million loss on the change in fair value of simple agreements for future equity for the six months ended June 30, 2025 that did not recur in 2026 due to their conversion into shares of common stock in 2025, as well as a $122.9 million gain on the change in fair value of common stock warrants for six months ended June 30, 2026. Our common stock warrants had not been issued until and after September 2025.
For the threesix months ended MarchJune 31,30, 2026, we incurred a $37.9$81.5 million loss from operations. We expect to incur additional losses and increased expenses in future periods as we continue to scale our business, invest in research and development efforts, increase employee headcount and incur additional expenses associated with being a public company.
As of March 31, 2026, we had cash and cash equivalents and marketable securities totaling $90.2 million, and short-term debt obligations totaling $12.3 million consisting of the current portion of debt and second lien loans. We have historically funded our operations primarily through the issuance of equity and debt securities. On May 8, 2026, we closed a private placement transaction (the “PIPE Transaction”), issuing common stock and warrants (the “PIPE Transaction Warrants”) to certain existing and new investors for aggregate gross proceeds of approximately $100.0 million. In connection with the consummation of the PIPE Transaction, the conversion price of the outstanding Series A Preferred Stock was adjusted to $6.00 per share and the exercise price of the PIPE Warrants and NRA Warrants was adjusted to $6.00 per share. See Note 17 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding the PIPE Transaction.
As of June 30, 2026, we had cash and cash equivalents and marketable securities totaling $151.1 million, and short-term debt obligations totaling $12.7 million consisting of the current portion of debt and second lien loans. We have historically funded our operations primarily through the issuance of equity and debt securities. We do not anticipate our cash and cash equivalents and marketable securities, together with the proceeds from the PIPE Transaction,securities will be sufficient to meet our capital requirements for at least one year from the filing date of this Quarterly Report under our current operating plan. Inclusive of the expected net proceeds from the PIPE Transaction, weWe expect to be able to fund our business plan into the second quarter of 2027. We expect to seek additional funding through debt or equity offerings,offerings includingto infund our operating plan, which may include the nearnear-term term in the formissuance of issuing equity and equity-linked securities andor incurringthe incurrence of additional indebtedness, whichpotentially may resultresulting in substantial dilution or restrictive covenants, to fund our operating plan.covenants. If we do not generate sufficient cash to fund our operating plan, we may also adjust our operating plan to lower our anticipated research and development initiatives, reduce our growth plans or liquidate our assets, among other things. To the extent any or all of these events were to occur, our business, operating results, financial condition and prospects may be materially and adversely affected.
After giving effect to the PIPE Transaction, asAs of MayJune 8,30, 2026, we may receive up to $606.8$603.3 million from the full cash exercise of all of our outstanding warrants. The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon the market price of our common stock. To the extent the market price for our common stock is less than the then-effective exercise price per share of any warrants, holders of such warrants will be unlikely to exercise such warrants.
ThreeSix Months Ended MarchJune 31,30, 2026 compared to ThreeSix Months Ended MarchJune 31,30, 2025 Our cash flows for the periods indicated are summarized in the table below (in thousands):
Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $29.5$63.6 million and consisted of a $56.4$103.9 million change in non-cash adjustments, partially offset by net income of $26.5$39.0 million and a $0.4$1.3 million change in our operating assets and liabilities. Non-cash adjustments primarily consisted of a $64.7$122.9 million change in the fair value of common stock warrants and a $0.4$0.6 million accretion of discount on marketable securities, partially offset by $6.0$12.4 million in stock-based compensation, $1.4$3.1 million in depreciation and amortization, $0.5a $1.2 million in the change in fair value of second lien loans, and $0.5$1.0 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to a $0.6$2.0 million decreaseincrease in our prepaidaccounts payable, accrued expenses and other current assetsliabilities, and other liabilities, as well as a $0.4 million decrease in our accounts receivablereceivable, both driven primarily due toby the timing of payments,payments. These activities were partially offset by a $0.5$1.0 million decrease in operating lease liabilities, and a $0.2 million net decrease in our accounts payable and accrued expenses and other current liabilities due to the timing of payments.liabilities.
Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $16.5$36.9 million and consisted of a net loss of $128.2$241.9 million partially offset by $203.6 million in non-cash adjustments and a $26$1.4 thousandmillion change in our operating assets and liabilities, partially offset by $111.7 million in non-cash adjustments.liabilities. Non-cash adjustments primarily consisted of $108.4$192.5 million increase in the change in fair value of SAFEs, $1.9$4.9 million in stock-based compensation, $0.5$2.2 million in the change in fair value of Second Lien Loans, $1.3 million in the change in fair value of redeemable convertible preferred stock warrant liabilities, $1.2 million in depreciation and amortization,amortization and $0.4$0.9 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to a $0.8$1.3 million net decreaseincrease in our accounts payable and accrued expenses and other current liabilities due to the timing of payments and a $0.4$0.7 million decrease in operatingour leaseaccounts liabilities, partially offset by a $1.1 million decrease in account receivablesreceivable related to our contract with the U.S. Army.Army, partially offset by a $0.9 million decrease in operating lease liabilities.
Net cash providedused byin investing activities for the threesix months ended MarchJune 31,30, 2026 was $39.5$42.7 million and primarily consisted of $45.0$104.2 million in purchases of marketable securities and $9.5 million in purchases of property and equipment. These activities were partially offset by $70.3 million in proceeds from maturities of marketable securities, partially offset by $5.5 million in purchases of property and equipment.securities.
Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was $2.3$5.2 million and related to purchases of property and equipment.
Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $4.2$102.3 million and consisted of $3.6$100.0 million in gross proceeds from the issuance of common stock and warrants in connection with a private placement, $7.2 million in proceeds from the exercise of common stock warrantswarrants, and $1.0$1.5 million in proceeds from the exercise of stock options, partially offset by $0.4$5.2 million in payments of offering costs in connection with the private placement and $1.1 million for the repayment of debt obligations.
Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 was $19.8$45.6 million and primarily consisted of $21.7$29.7 million in proceeds from the issuance of SAFEssecond lien loans, $23.7 million in proceeds from the issuance of SAFEs, and $0.4$0.9 million in proceeds from the exercise of stock options, partially offset by $2.2$6.2 million for the repayment of debt obligations.obligations and $2.5 million in payments of offering costs.
As of MarchJune 31,30, 2026, $10.0 million remainsin principal remained outstanding under our Second Lien Loan and Security Agreement, representing a loan previously exchanged from a SAFE with an affiliate of a lender party thereto prior to the Merger. This borrowing matures on October 1, 2026, and bears interest that is paidcapitalized and included in kindthe andprincipal capitalized.balance due at maturity.
As of MarchJune 31,30, 2026, we had outstanding term loans under our venture loan and security agreement (as amended to date,amended, the “2025 Credit Facility”) in an aggregate principal amount of $30.0 million. Borrowings under the 2025 Credit Facility mature in January 2030 and currently require interest-only payments through July 1, 2028, after which consecutive payments of principal and interest become due.
As of MarchJune 31,30, 2026, we had outstanding debt under our secured equipment line (the “2022 Equipment Facility”) in an aggregate principal amount of $1.6$0.9 million, of which $0.7 million is due within one year. The 2022 Equipment Facility matures in March 2028.
Our other cash requirements as of MarchJune 31,30, 2026 were related to operating leases and certain purchase commitments with our service providers.
Our operating lease arrangements are related to facilities located in Mountain View, California, as well as in Lancaster and Odessa, Texas, under non-cancellable agreements expiring at various dates through 2031. As of MarchJune 31,30, 2026, the total undiscounted future lease payments under our operating leases were $6.4$7.1 million, of which $1.9$2.9 million isare due within one year.
We may enter into purchase commitments with our service providers. As of MarchJune 31,30, 2026, the total purchase commitments under such vendor agreements were $9.1$7.5 million, of which $5.5$5.7 million isare due within one year.
See Note 87 and Note 9 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding our leases and other commitments.
We expect to remain an emerging growth company until the earlier of (1) the last day of the year (i) following April 4, 2028, which is the fifth anniversary of the effective date of AACT’s IPO registration statement, (ii) in which we have total annual gross revenue of at least $1.235 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates equals or exceeds $700.0 million as of the prior June 30, or (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. On the last business day of our second quarter in fiscal 2026, the aggregate market value of our common stock held by non-affiliates exceeded $700 million. As a result, as of December 31, 2026, the Company will be considered a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934 and the Company will cease to be an emerging growth company. Accordingly, the Company will no longer be exempt from the auditor attestation requirements under Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting. Further, following the loss of emerging growth company status, the Company will be required to comply with any new or revised accounting pronouncements as of public company effective dates.
KDK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-01 | Major Zsuzsanna |
Grant/award | 200,333 | — | — |
| 2026-07-01 | Coleman Jordan S. |
Grant/award | 292,153 | — | — |
| 2026-07-01 | Wiesinger Michael |
Grant/award | 417,362 | — | — |
| 2026-07-01 | Datta Surajit |
Grant/award | 563,063 | — | — |
| 2026-07-01 | Datta Surajit |
Grant/award | 417,362 | — | — |
| 2026-07-01 | Wendel Andreas |
Grant/award | 434,056 | — | — |
| 2026-07-01 | Burnette Donald L. |
Grant/award | 1,168,614 | — | — |
| 2026-06-12 | Tobin Scott R |
Grant/award | 31,758 | — | — |
| 2026-06-12 | Sverchek Kristin |
Grant/award | 31,758 | — | — |
| 2026-06-12 | Reed James D |
Grant/award | 31,758 | — | — |
| 2026-06-12 | Goldman Kenneth A |
Grant/award | 31,758 | — | — |
| 2026-06-12 | Elshenawy Mohamed |
Grant/award | 31,758 | — | — |
| 2026-05-08 | Aac Ii Holdings Ii Lp |
Grant/award | 769,230 | — | — |
Well-known investors holding KDK (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Soros Fund Management | 2026-06-30 | 9,767,037 | $49.6M | 0.65% | No change |
| ARK Investment Management (Cathie Wood) | 2026-06-30 | 5,150,227 | $26.2M | 0.17% | Added 35% |
| Millennium Management (Israel Englander) | 2026-06-30 | 731,548 | $3.7M | 0.0% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 190,884 | $969.7K | 0.0% | New position |