Kodiak AI, Inc.

Current report

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 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.

Current report

Risk Factor Summary

Current report

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.

Current report

•AV technology is emerging and rapidly evolving and involves significant risks and uncertainties.

Current report

•We have incurred net losses since inception and may not achieve or maintain profitability.

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•Our technology may have limited performance, and technology development and commercialization may take us longer to complete than we currently anticipate.

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•Any failure to commercialize our solution at scale may have an adverse effect on our business, financial condition, and results of operations.

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•We rely on a limited number of customers for a significant portion of our revenue.

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•We depend on our commercial agreements with Atlas Energy Solutions (“Atlas”).

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•AV technology presents the risk of significant injury, including fatalities.

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•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.

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•Any flaws or misuse of autonomous vehicle (“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.

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•We operate in a highly competitive market, and we may be unable to compete effectively, including against competitors who may have greater resources.

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•Our success is contingent on our ability to execute our Driver-as-a-Service (“DaaS”) business model, including by maintaining, managing, retaining, and expanding our existing customer relationships and obtaining new customers.

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•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.

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•We depend on the experience and expertise of our senior management team, engineers, and certain other key employees.

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•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.

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•We are subject to substantial regulations, including regulations governing motor carriers and autonomous vehicles.

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•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.

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•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.

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•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.

Current report

•We require significant capital to fund our operations and growth.

Current report

•Real or perceived inaccuracies in our assumptions and estimates to calculate certain metrics, including our Cumulative Hours of Paid Driverless Operations.

Current report

•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.

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•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.

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•There is no guarantee that the Public Warrants will ever be in the money, and they may expire worthless.

Current report

•Your Public Warrants may be redeemed prior to their exercise at a time that is disadvantageous to you.

Current report

Risks Related to Our Business

Current report

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.

Current report

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.

Current report

We may not succeed at commercial scale, or at all. The successful commercialization of the Kodiak Driver at scale involves many challenges and uncertainties, including:

Current report

• achieving acceptably safe autonomous performance as determined by us, our customers, government and regulatory agencies, our partners and the general public;

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• continued development of the Kodiak Driver, including system design, product features, vehicle integrations and operating domain and geographical expansion, based on the needs of our customers;

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• successfully completing system testing, validation, and to the extent required, safety approvals, including with respect to government and regulatory agencies and customer- or partner-specific requirements;

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• maintaining relationships with third parties, including OEMs, third-party suppliers of the component parts of the Kodiak Driver, upfitters, large language model providers, and other technology providers that support our product development and service providers and other third parties who support our commercialization strategy;

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• preserving our core intellectual property rights and obtaining rights from third parties for intellectual property that may be critical to our current and future research and development activities;

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• continuing to fund and maintain our technology development activities while scaling our commercial operations; and

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• obtaining or maintaining approvals, licenses, or certifications from regulatory agencies, if required.

Current report

We have incurred net losses since inception, and we may not achieve or maintain profitability in the future.

Current report

We have incurred net losses since our inception. During the year ended December 31, 2024 and 2023 and the nine months ended September 30, 2025, we incurred net losses of $69.5 million, $57.0 million, and $511.8 million, respectively. We intend to continue making investments in our business, particularly with respect to scaling driverless commercial operations of the Kodiak Driver, which may take longer than we currently expect or may never occur. We expect such investments will include continued investments in sales and marketing, development of new product features, infrastructure, expansion of our operations, and general and administrative functions, including legal, regulatory, compliance, security, and accounting expenses related to our business. These investments may not result in increased revenue or growth in our business and may contribute to future losses. We have incurred, and expect to incur in the future, losses for a number of reasons, including further investments in scaling our commercial operations, unexpected expenditures or costs, and the other risks describedin this “Risk Factors” section. If we are unable to successfully address these risks as we encounter them, our business, financial condition, and results of operations may be adversely affected.

Previous report

Item 1A. Risk Factors

Previous report

As of the date of this Quarterly Report, there have been no material changes with respect to those risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 filed by the Company with the SEC on March 12, 2025, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 filed by the Company with the SEC on May 15, 2025 except for the below additional risks which could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Previous report

Some of AACT’s officers and directors may have conflicts of interest that may influence or have influenced them to support or approve the Proposed Business Combination or other proposals described in the Proxy Statement/Prospectus without regard to your interests or in determining whether Kodiak is an appropriate target for AACT’s initial business combination.

Previous report

On March 19, 2021, the Sponsor paid $25,000 to cover certain of the offering costs of the Initial Public Offering in consideration of Class B ordinary shares. Prior to the initial investment of $25,000 by the Sponsor, AACT had no assets. As a result of various transactions, including the Conversion, the Sponsor (together with its permitted transferees) currently holds an aggregate of 12,500,000 shares of Class A ordinary shares that were converted from Class B ordinary shares (the “Converted Class A Ordinary Shares”). The Converted Class A Ordinary Shares may become worthless if we do not complete an initial business combination. In addition, the Sponsor purchased an aggregate of 14,300,000 Private Placement Warrants for an aggregate purchase price of $14,300,000, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, in a Private Placement that closed simultaneously with the closing of the Initial Public Offering. Pursuant to the Sponsor Support Agreement, 50% of the Sponsor’s Converted Class A Ordinary Shares are subject to vesting during the Earn Out Period (as defined in the Proxy Statement/Prospectus). If we do not consummate an initial business combination within the period ending on January 26, 2026, or such earlier date as our board of directors may approve or such later date as the shareholders may approve in accordance with the Amended and Restated Memorandum and Articles of Association, the Private Placement Warrants may expire worthless. Additionally, AMCM, an affiliate of the Sponsor, acted as an advisor to AACT in connection with the Initial Public Offering and will receive a deferred Initial Public Offering advisory fee of $2,777,777 in connection with the closing of the Proposed Business Combination. The personal and financial interests of certain of AACT’s officers and directors may influence or have influenced them in identifying and selecting a target for our initial business combination, completing the Proposed Business Combination and the operation of AACT following the Proposed Business Combination.

Previous report

The Sponsor, members of the board of directors of AACT (the “AACT Board”) and AACT’s executive officers, and their respective affiliates have incurred out-of-pocket expenses in connection with performing due diligence on suitable targets for business combinations and the negotiation of the Proposed Business Combination. At the time of the closing of the Proposed Business Combination, the Sponsor, members of the AACT Board and AACT’s officers, and their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on AACT’s behalf, such as identifying potential target businesses and performing due diligence on suitable targets for business combinations. If a business combination is not completed within the Combination Period the Sponsor, members of the AACT Board and AACT’s officers, and any of their respective affiliates will not be eligible for any such reimbursement. On April 22, 2025, AACT extended the Combination Period from April 25, 2025 to January 26, 2026. In connection with the Extension, on April 16, 2025, the Sponsor agreed to make monthly deposits directly to the Trust Account of $0.02 for each outstanding Class A ordinary share, other than the Converted Class A Ordinary Shares. Beginning April 25, 2025, the Sponsor commenced making monthly contributions. The Sponsor shall make a Contribution on the 25th day of each month (or if such day is not a business day, on the business day immediately preceding such day) until the Maturity Date. 50% of the Contributions will be an obligation of AACT pursuant to the Extension Note. AACT may use a portion of proceeds held outside the Trust Account to repay the Extension Note, but no proceeds held in the Trust Account would be used to repay the Contributions. In addition, Kodiak has agreed to reimburse the Sponsor for 50% of the aggregate Contributions. If the Proposed Business Combination closes, the aggregate amount of Contributions will be repaid in full by the post-Business Combination entity at the time of closing of the Proposed Business Combination. In addition, our Sponsor has extended to us Overfunding Loans of $5,000,000 and a Working Capital Loan of $1,232,707, which will, in the Sponsor’s discretion, either be repaid upon the closing of an initial business combination or converted into warrants of the post-Business Combination entity at a price of $1.00 per warrant (or any combination of repayment or conversion). Any such warrants will be identical to the Private Placement Warrants. If we do not complete an initial business combination, we will not repay the Overfunding Loans or the Working Capital Loan from the Trust Account, and we would likely not have other available funds to repay the Overfunding Loans or the Working Capital Loan. The Contributions and the Working Capital Loan will be reimbursed by the post-Business Combination entity upon the consummation of the Proposed Business Combination.

Previous report

Certain officers and members of the AACT Board also participate in arrangements that may provide them with other interests in the Proposed Business Combination that are different from yours, including arrangements for their continued service as directors of AACT after the consummation of the Proposed Business Combination.

Previous report

Further, the Sponsor has agreed to vote its Converted Class A Ordinary Shares, and the Sponsor, members of the AACT Board and AACT’s officers have agreed (and their permitted transferees will agree) to vote any public shares acquired in or after the Initial Public Offering in favor of our initial business combination. The Sponsor and each of the members of the AACT Board and its executive officers have also agreed to waive their redemption rights with respect to any Converted Class A Ordinary Shares and any public shares in connection with the redemption of Class A ordinary shares or Class B ordinary shares upon the completion of an initial business combination.

Previous report

Among others, these interests may influence or have influenced the Sponsor and the executive officers and members of the AACT Board to support or approve the Proposed Business Combination and the other proposals described in the Proxy Statement/Prospectus. The personal and financial interests of our officers and certain members of the AACT Board may have influenced their motivation in identifying and selecting Kodiak and seeking to complete a business combination with Kodiak, and may influence their operation of AACT following the Proposed Business Combination. This risk may become more acute as the end of the Proposed Business Combination nears.