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Debt
 9 Months Ended 12 Months Ended
Sep. 30, 2025
Dec. 31, 2024
Debt Disclosure [Abstract]    
Debt
6. Debt
Second Lien Loans
Concurrent with the execution of the BCA in April 2025, the Company entered into a Second Lien Loan and Security Agreement, which was subsequently amended to extend the deadline to fund the delayed draw second lien loans and to include additional investors. Under the Second Lien Loan and Security Agreement, certain institutional and accredited investors committed to providing bridge financing in the form of secured convertible notes. Prior to the Closing, $53.9 million had been funded, including $20.0 million from an affiliate of AACT, an aggregate of $12.4 million from a vehicle controlled by a board member of the Company and a vehicle owned by certain Ares employees in which a former officer and former director of AACT was invested, $10.0 million from the exchange of a SAFE from an affiliate of AACT (the “Exchanged SAFE”) (see Note 7), and $5.0 million from an affiliate of one of the Company’s board members. Following the Closing, a former officer of AACT became a board member of the Company.
At the Closing, second lien loans in an aggregate principal amount of $43.9 million and with a fair value of $67.4 million (see Note 4), automatically converted into 7,700,557 shares of Kodiak common stock based on the agreed upon conversion price of $6.00 per share. The $10.0 million in principal from the Exchanged SAFE remained outstanding as of September 30, 2025, with a fair value of $10.4 million and a maturity date of October 1, 2026.
The second lien loans bear interest at an interest rate per annum equal to the prime rate plus 9.00%, subject to a minimum rate of 13.75%. Interest accrues on the first business day of each month, and is capitalized and included in the principal balance due at maturity. The interest rate was 16.25% as of September 30, 2025.
Promissory Notes
The Company was obligated to reimburse 50% of the monthly contributions made by the Sponsor to AACT’s trust account as well as certain transaction costs incurred by AACT pursuant to the BCA. From April through August 2025, the Company issued secured promissory notes with respect to its reimbursement obligations to AACT and the Sponsor, which were secured under the Second Lien Loan and Security Agreement. The promissory notes did not bear any interest (other than the default rate in accordance with the Second Lien Loan and Security Agreement).
At the Closing, the aggregate outstanding principal amount of the promissory notes was $4.9 million, which was paid in full. No promissory notes remained outstanding as of September 30, 2025.
2022 Credit Facility
In September 2022, the Company entered into a venture loan and security agreement (the “2022 Credit Facility”) with a financial institution to borrow secured term loans of up to an aggregate principal amount of $30.0 million. The Company drew the full amount available under the 2022 Credit Facility upon execution. The proceeds were primarily used to settle outstanding obligations with another lender. Borrowings under the 2022 Credit Facility were initially secured by substantially all of the assets of the Company, excluding the Company’s intellectual property and certain of the Company’s other assets. The 2022 Credit Facility contains customary representations and
warranties, non-financial covenants
and customary events of default. The Company was in compliance with its covenants as of September 30, 2025. The 2022 Credit Facility was amended in June 2024 to revise the repayment schedule, delay principal payments from November 1, 2024 to April 1, 2025, which was accounted for as a modification, and include certain of the Company’s intellectual property as collateral. The 2022 Credit
 
 
Facility was further amended in February 2025 to permit the transaction as contemplated by the BCA (see Note 1). On September 24, 2025, the 2022 Credit Facility was further amended to (i) make certain conforming changes to account for the closing of the Merger and (ii) provide for a post-closing period for the joinder of the Company as a
co-borrower
under the 2022 Credit Facility.
Borrowings under the 2022 Credit Facility mature in April 2026 and provide for interest-only payments up to and including March 1, 2025. Consecutive payments of principal and interest are due beginning on April 1, 2025 once the interest-only period elapses. As of September 30, 2025, the aggregate principal amount outstanding was $20.0 million. The 2022 Credit Facility bears an annual rate of interest that is payable monthly at 5.50% plus the greater of (i) 4.75% and (ii) the prime rate then in effect. The interest rate was 11.75% at inception and 12.75% as of September 30, 2025. In addition, a final aggregate payment fee of $1.2 million is due upon the earlier of prepayment or maturity of the debt. The Company has the option to prepay the entire outstanding balance of the debt subject to a prepayment fee ranging from 1.0% to 3.0% depending on the timing and circumstances of such prepayment.
Total debt issuance costs related to the 2022 Credit Facility of $1.1 million were recorded as a debt discount, which included $0.7 million related to the fair value of warrants to purchase shares of Legacy Kodiak’s redeemable convertible preferred stock issued concurrently with the execution of the 2022 Credit Facility, a commitment fee of $0.3 million and other issuance costs of $0.1 million. The debt discount, together with the final payment fee, is recognized as interest expense using the effective interest method.
2022 Equipment Facility
In July 2022, the Company entered into a financing agreement with a lender to borrow up to $10.0 million as equipment line advances (the “2022 Equipment Facility”) pursuant to which it borrowed at various dates an aggregate principal amount of $8.5 million. Borrowings under the 2022 Equipment Facility are secured by the specific assets that were financed. The 2022 Equipment Facility contains customary representations and
warranties, non-financial covenants
and customary events of default. The Company was in compliance with its covenants as of September 30, 2025.
Borrowings under the 2022 Equipment Facility mature in March 2028 and repayments of principal and interest are due monthly commencing in the month following each draw. As of September 30, 2025, and December 31, 2024, the aggregate principal amount outstanding was $2.3 million and $4.1 million, respectively. The 2022 Equipment Facility bears an annual interest rate equivalent to a five-year swap plus 3.38% or ranging from approximately 6.0% to 7.0%.
Total debt issuance costs related to the 2022 Equipment Facility of $0.1 million were recorded as a debt discount, which included immaterial amounts related to the fair value of warrants to purchase shares of the Company’s common stock issued concurrently with the execution of the 2022 Equipment Facility and other issuance costs. The debt discount is recognized as interest expense using the effective interest method.
 
 
As of September 30, 2025, the Company’s future minimum principal payments under its debt arrangements are as follows (in thousands):
 
Year Ended December 31,
   
Second

Lien
Loans
     
Other

Debt
     
Total
  
2025 (remaining three months)
   
$
— 
     
$
5,405
     
$
5,405
  
2026
     
10,000
       
17,267
       
27,267
  
2027
     
— 
       
808
       
808
  
2028
     
— 
       
44
       
44
  
  
 
 
     
 
 
     
 
 
  
Total principal debt payments and final payment fee
     
10,000
       
23,524
       
33,524
  
Less: unamortized debt discount
     
— 
       
(141
) 
     
(141
) 
Less: unamortized final payment fee
     
— 
       
(152
) 
     
(152
) 
Less: Debt, current portion
     
— 
       
(22,148
) 
     
(22,148
) 
  
 
 
     
 
 
     
 
 
  
Debt, net of current portion
   
$
10,000
     
$
1,083
     
$
11,083
  
  
 
 
     
 
 
     
 
 
  
7.
Debt
2022 Credit Facility
In September 2022, the Company entered into a venture loan and security agreement (“2022 Credit Facility”) with a financial institution to borrow secured term loans of up to an aggregate principal amount of $30.0 million.
 
 
The Company drew the full amount available under the 2022 Credit Facility upon execution. The proceeds were primarily used to settle outstanding obligations with another lender. Borrowings under 2022 Credit Facility are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property. The 2022 Credit Facility contains customary representations and warranties,
non-financial
covenants and customary events of default. The Company was in compliance with its covenants as of December 31, 2024 and 2023. The 2022 Credit Facility was amended in June 2024 to revise the repayment schedule, delay principal payments from November 1, 2024 to April 1, 2025, which was accounted for as a modification, and included our intellectual property as part of the collateral securing the 2022 Credit Facility.
Borrowings under the 2022 Credit Facility mature in April 2026 and provide for interest-only payments to March 1, 2025. Consecutive payments of principal and interest are due beginning on April 1, 2025 once the interest-only period elapses. The 2022 Credit Facility bears an annual rate of interest that is payable monthly at 5.5% plus the greater of (i) 4.75% and (ii) the prime rate. The interest rate was 11.75% at inception and 13.0% as of December 31, 2024. In addition, a final payment fee of $1.2 million is due upon the earlier of prepayment or maturity of the debt. The Company has the option to prepay the entire outstanding balance of the debt subject to a prepayment fee ranging from 1.0% to 3.0% depending on the timing and circumstances of such prepayment.
Total debt issuance costs related to the 2022 Credit Facility of $1.1 million were recorded as a debt discount, which included $0.7 million related to the fair value of warrants to purchase shares of the Company’s redeemable convertible preferred stock issued concurrently with the execution of the 2022 Credit Facility (see Note 10), a commitment fee of $0.3 million and other issuance costs of $0.1 million. The debt discount, together with the final payment fee, is recognized as interest expense using the effective interest method.
2022 Equipment Facility
In July 2022, the Company entered into a financing agreement with a lender to borrow up to $10.0 million as equipment line advances (“2022 Equipment Facility”). As of December 31, 2024 and 2023, the Company had borrowed an aggregate principal amount of $8.5 million. Borrowings under 2022 Equipment Facility are secured by the specific assets that were financed. The 2022 Equipment Facility contains customary representations and warranties,
non-financial
covenants and customary events of default. The Company was in compliance with its covenants as of December 31, 2024 and 2023.
Borrowings under the 2022 Equipment Facility mature in March 2028 and repayments of principal and interest are due monthly commencing in the month following each draw. Accordingly, an aggregate principal amount of $4.1 million was outstanding as of December 31, 2024. The 2022 Equipment Facility bears an annual interest rate of equivalent to a five-year swap plus 3.38% or ranging from approximately 6.0% to 7.0%.
Total debt issuance costs related to the 2022 Equipment Facility of $0.1 million were recorded as a debt discount, which included immaterial amounts related to the fair value of warrants to purchase shares of the Company’s common stock issued concurrently with the execution of the 2022 Equipment Facility (see Note 12) and other issuance costs. The debt discount is recognized as interest expense using the effective interest method.
 
 
As of December 31, 2024, the Company’s future minimum principal payments under its debt arrangements are as follows (in thousands):
 
Year Ended December 31,
   
Amount
  
2025
    $ 17,181  
2026
      17,267  
2027
      808  
2028
      45  
  
 
 
  
Total principal debt payments and final payment fee
      35,301  
Less: unamortized debt discount
      (449 ) 
Less: unamortized final payment fee
      (486 ) 
Less: Debt, current portion
      (16,792 ) 
  
 
 
  
Debt, net of current portion
    $ 17,574