KDK

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2025, for Ares Acquisition Corporation II (AACT), a Cayman Islands exempted company and special purpose acquisition company (SPAC). The Company was formed to effect a business combination with one or more target businesses. As of the reporting date, the Company had not commenced any operations; all activity relates to its formation, initial public offering (IPO), and the search for a prospective business combination. The Company is classified as an emerging growth company and a shell company.

Key Financial Metrics

Liquidity and Debt: The Company holds $657,314 in cash outside the Trust Account. It has a working capital deficit of $2,345,233. Outstanding liabilities include $5,000,000 in Overfunding Loans from the Sponsor and $17,500,000 in deferred underwriting and advisory fees (subject to adjustment, see below). There were no outstanding Working Capital Loans as of March 31, 2025.

Material Changes vs. Prior Period

• Expense Surge: General and administrative expenses increased significantly to $2.71 million in Q1 2025 from $0.46 million in Q1 2024, driven by increased operational costs associated with the search for a business combination and public company compliance.
• Net Income Decline: Net income decreased to $2.99 million from $6.39 million year-over-year, primarily due to the spike in operating expenses and a slight decrease in investment income earned on the Trust Account.
• Cash Burn: Cash held outside the Trust Account decreased by approximately $318,000 during the quarter, resulting in a net cash outflow from operating activities.
• Accrued Expenses: Accrued expenses rose sharply to $3.03 million from $0.69 million at the end of 2024, reflecting the accumulation of costs not yet paid.

Guidance, Outlook, and Material Events

Proposed Business Combination: On April 14, 2025 (subsequent to the reporting period), the Company entered into a Business Combination Agreement with Kodiak Robotics Inc.. The transaction is subject to shareholder approval and other customary closing conditions.

Extension of Combination Period: On April 22, 2025, shareholders approved an extension of the deadline to complete a business combination from April 25, 2025, to January 26, 2026. In connection with this extension:

• Shareholders redeemed 640,288 Class A ordinary shares for approximately $7.1 million.
• The Sponsor converted 12,500,000 Class B ordinary shares into Class A ordinary shares.
• The Sponsor agreed to make monthly deposits of $0.02 per outstanding Class A share into the Trust Account to fund the extension.

Financing (PIPE): Concurrent with the business combination agreement, the Company secured subscription agreements for approximately $60 million in PIPE investments.

Fee Adjustments: Prior to the business combination agreement, the Company, the Sponsor's affiliate (AMCM), and underwriters agreed to reduce the aggregate deferred underwriting and advisory fees from $21 million to $8,359,410.

Going Concern: Management has determined that the mandatory liquidation date of January 26, 2026, raises substantial doubt about the Company's ability to continue as a going concern if a business combination is not consummated. The financial statements do not include adjustments that might result from this uncertainty.

Investor Verification Checklist

• Business Combination Approval: Verify the status of shareholder votes and regulatory approvals required to close the merger with Kodiak Robotics Inc.
• Redemption Risk: Monitor the number of shares redeemed prior to the final closing, as this impacts the cash available for the combined entity.
• Fee Reduction Confirmation: Confirm the final settlement of the reduced deferred underwriting and advisory fees ($8.36 million) versus the original amounts.
• Extension Funding: Verify that the Sponsor is making the required monthly contributions to the Trust Account to maintain the extension.
• Going Concern Status: Assess the likelihood of closing the transaction before the January 26, 2026, deadline to avoid mandatory liquidation.