Overview of the Company’s Financial Performance

AACT, a special purpose acquisition company (SPAC), has been focused on finding a suitable business combination target since its initial public offering in 2023. The company has not yet completed an initial business combination and has been operating at a net income, funded by investment income earned on the funds held in its trust account.

For the three months ended March 31, 2025, AACT reported net income of $2,992,795, which consisted of $5,698,441 in investment income offset by $2,705,646 in general and administrative costs. This compares to net income of $6,393,390 for the three months ended March 31, 2024, which included $6,848,902 in investment income and $455,512 in general and administrative costs.

Proposed Business Combination with Kodiak Robotics

On April 14, 2025, AACT entered into a business combination agreement with Kodiak Robotics Inc. The proposed business combination was unanimously approved by the boards of directors of both companies. The transaction is subject to approval by AACT’s shareholders, regulatory approvals, and other customary closing conditions.

If the business combination is completed, Kodiak will become a wholly-owned subsidiary of AACT. AACT will issue new shares to Kodiak shareholders as part of the transaction. Additionally, AACT has secured $60 million in PIPE (private investment in public equity) financing commitments to support the deal.

Extension of Combination Period

AACT’s initial public offering prospectus and governing documents provided that the company had until April 25, 2025 to complete an initial business combination. On April 22, 2025, AACT’s shareholders approved an extension of this “combination period” until January 26, 2026.

In connection with the extension, shareholders had the opportunity to redeem their Class A ordinary shares. A total of 640,288 shares were redeemed for approximately $7.1 million. AACT’s sponsor also agreed to make monthly deposits of $0.02 per outstanding Class A share into the trust account to fund the extension.

Liquidity and Capital Resources

As of March 31, 2025, AACT had $657,314 in cash held outside of the trust account and a working capital deficit of $2,345,233. The company’s liquidity needs to date have been satisfied through a loan from the sponsor and the proceeds from the private placement that were not held in the trust account.

AACT’s management has determined that the mandatory liquidation of the trust account if a business combination is not completed by January 26, 2026 raises substantial doubt about the company’s ability to continue as a going concern. The company plans to complete the Kodiak business combination prior to the extended deadline to address this concern.

Trends Affecting the Business

AACT notes that it continues to evaluate the potential impact of persistent inflation, interest rate fluctuations, financial market instability, and geopolitical events on its ability to complete a business combination. However, the company cannot currently predict the likelihood, duration, or magnitude of these risks and their potential negative effects on its operations.

Key Contractual Obligations

AACT has the following key contractual obligations:

• Deferred underwriting fee of $17,500,000 payable to the IPO underwriters, contingent on completing a business combination
• $3,500,000 deferred advisory fee payable to its affiliate AMCM, also contingent on completing a business combination
• $732,045 in contingent fees payable to a service provider if a business combination is completed
• Up to 4% of PIPE financing proceeds payable to placement agents, contingent on the PIPE investment closing

The company does not have any long-term debt, capital leases, operating leases, or other long-term liabilities.

Critical Accounting Estimates

AACT has identified the following as critical accounting estimates:

• Accounting for Class A ordinary shares subject to possible redemption
• Calculation of net income per ordinary share

The company accounts for the Class A shares that are subject to possible redemption as temporary equity, outside of the permanent shareholders’ equity section. Changes in the redemption value are recognized immediately.

Net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding. The dilutive effect of warrants is excluded as their exercise is contingent on future events.

Outlook and Risks

AACT faces substantial doubt about its ability to continue as a going concern if it is unable to complete the proposed business combination with Kodiak by the extended deadline of January 26, 2026. Failure to close the deal would trigger the mandatory liquidation of the company’s trust account.

Other key risks include the possibility that the closing conditions for the Kodiak transaction are not satisfied or waived, and potential conflicts of interest among AACT’s officers and directors related to their economic interests in the company. The company also continues to monitor macroeconomic trends that could impact its ability to find and complete a suitable business combination.

Overall, AACT’s financial performance has been stable, generating net income from the investment of IPO proceeds. However, the company’s long-term viability is dependent on its ability to successfully execute the proposed Kodiak business combination or another suitable deal before the extended combination period expires. Shareholders will play a key role in determining the company’s future through their vote on the Kodiak transaction.