Kodiak Gas Services Inc

Current report

The failure to successfully combine the businesses of Kodiak and CSI Compressco may adversely affect Kodiak’s future results, which may adversely affect the value of the shares of common stock and OpCo Units.

Current report

If Kodiak’s and CSI Compressco’s businesses are not successfully integrated, the anticipated benefits of the CSI Acquisition may not be realized fully or at all or may take longer to realize than expected. In addition, the actual integration may result in additional and unforeseen expenses, which could reduce the anticipated benefits of the CSI Acquisition.

Current report

Kodiak and CSI Compressco, including their respective subsidiaries, operated independently until the completion of the CSI Acquisition. It is possible that the integration process could result in the loss of key employees, as well as the disruption of each company’s ongoing businesses or inconsistencies in their standards, controls, procedures and policies. Any or all of those occurrences could adversely affect Kodiak’s ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the CSI Acquisition. Integration efforts between the two companies will also continue to divert management attention and resources. These integration matters could have an adverse effect on Kodiak.

Current report

The U.S. federal income tax treatment of distributions on common stock to a U.S. holder will depend upon Kodiak’s tax attributes and the U.S. holder’s tax basis in the common stock, which are not necessarily predictable and can change over time.

Current report

Distributions of cash or other property on common stock, if any, will constitute dividends for U.S. federal income tax purposes to the extent paid from Kodiak’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed Kodiak’s current and accumulated earnings and profits, the distributions will be treated as a non-taxable return of capital to the extent of the U.S. holder’s tax basis in its shares of common stock and thereafter as capital gain from the sale or exchange of such shares. Also, if any U.S. holder sells shares of common stock, the U.S. holder will recognize a gain or loss equal to the difference between the amount realized and the U.S. holder’s tax basis in such shares.

Current report

To the extent that the amount of Kodiak’s distributions is treated as a non-taxable return of capital as described above, such distribution will reduce the U.S. holder’s tax basis in its shares of common stock. Consequently, such excess distributions will result in a corresponding increase in the amount of gain, or a corresponding decrease in the amount of loss, recognized by the U.S. holder upon the sale of shares of common stock or subsequent distributions with respect to such shares. Additionally, with regard to U.S. corporate holders of common stock, to the extent that a distribution on common stock exceeds both Kodiak’s current and accumulated earnings and profits and such U.S. holder’s tax basis in such shares, such U.S. holders would be unable to utilize the corporate dividends-received deduction (to the extent it would otherwise be applicable to such U.S. holder) with respect to the gain resulting from such excess distribution.

Current report

The redemption of OpCo Units held by Electing Unitholders is expected to be a taxable transaction for U.S. federal income tax purposes, and the amount of gain, if any, recognized upon a subsequent redemption of OpCo Units could be greater than expected and/or greater than the gain that an Electing Unitholder would have recognized if such Electing Unitholder had instead received common stock pursuant to the CSI Acquisition.

Current report

Unitholders who received OpCo Units in the CSI Acquisition have a redemption right with respect to such units, subject to Kodiak’s call right. Exchanges or redemptions of OpCo Units pursuant to the redemption right or call right are expected to be treated for U.S. federal income tax purposes as a sale of such units to Kodiak in a taxable transaction in exchange for the shares of common stock or cash received with respect to such exchanges or redemptions. If such treatment applies, an Electing Unitholder who receives common stock (or cash) in exchange for OpCo Units will recognize gain or loss for U.S.

Current report

federal income tax purposes equal to the difference between such unitholder’s amount realized and adjusted tax basis in the OpCo Units redeemed. The amount of any such gain or loss recognized by such an Electing Unitholder as a result of a redemption will vary depending on each Electing Unitholder’s particular situation at the time of such redemption, including the value of the common stock (or the amount of cash) received by such Electing Unitholder in the redemption, the adjusted tax basis of the OpCo Units immediately prior to the redemption exceeds such Electing Unitholder’s adjusted tax basis in its OpCo Units redeemed (i.e., such Electing Unitholder’s negative tax basis capital account, if any), and the amount of any suspended passive losses that may be available to a particular unitholder to offset a portion of the gain recognized by the Electing Unitholder. The amount of such gain could be substantial and could be materially different than the gain, if any, that would be recognized by an Electing Unitholder had such Electing Unitholder not elected to receive OpCo Units in the CSI Acquisition and received common stock instead.