Ares Acquisition Corp II

Item 1A. Risk Factors

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, except for the below additional risks which could result in a significant or maand the Quarterial 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.

There is substantial doubt about AACTs abilitly Report on Form 10-Q for the quarter ended March 31, 2025 filed by to continue as a going concern.

Under the Amended and Restated Memorandum and Articles of Association, AACT must consummate an initial business combination by January 26Company with the SEC on May 15, 2026, or such earlier date as AACTs board of directors (5 except for the AACT Board) may approve, or such later date as AACTs shareholders may approve, in accordance with the AACTs Amended and Restated Memorandum and Articles of Associabelow addition. Although AACT intends to complete an initial business combination within the Combination Period, there can be no assurance that AACT will be able to consummate an initial business combination by this time. If an initial business combination is not consummated by the end of AACTs Combination Period, there will be a mandatory liquidation of the Trust Account. Accordingly, AACTs management has determined that the mandatory liquidation of the Trust Account, should an initial business combination not occur, raises substantial doubt about AACTs ability to continue as a going concern. The unaudited condensed al risks which could result in a significant or material adverse effect on our results of operations or financial statements contained elsewhere in this report do not include any adjustments that might result from AACTs inability to continue as a going concern.

Rdition. Additional risks Related to the Proposed Business Combination

The consummation of the Proposed Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, any definitive agreement relating to the Proposed Business Combination may be terminated in accordance with its terms and the Proposed Business Combination may not be completed.

Even if the Business Combination Agreement is approved by the shareholders of AACT, specified conditions must be satisfied or waived before the parties to the Business Combination Agr factors not presently known to us or that we currently deement are obligated to complete the Proposed Business Combination. AACT does not control the satisfaction of all such conditions. AACT and Kodiak  immaterial may not satisfy all of the closing conditions in the Business Combination Agreement. If the closing conditions are not satisfied or waived, the Proposed Balso impair our business Combination will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause AACT and Kodiak to each lose some or all of the intended benefits of the Proposed Business Combinor results of operations.

Some of AACTs 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 AACTs initial business combination.

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 pPrivate pPlacement that closed simultaneously with the closing of the Initial Public Offering. Pursuant

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to the Sponsor Support Agreement, 50% of the Sponsors 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 AACTs 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.

The Sponsor, members of the board of directors of AACT (the AACT Board) and AACTs executive officers, and their respective affiliates have incurred out-of-pocket expenses in connection with performing due diligence on suitable targets

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for business combinations and the negotiation of the Proposed Business Combination. At the Ctime of the closing of the Proposed Business Combination, the Sponsor, members of the AACT Board and AACTs officers, and their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on AACTs 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 AACTs 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. The Contributions will be repaid in full by Kodiak at the time of Closing. In the event that the Proposed Business Combination does not close, 50% of the Contributions will be an obligation of Kodiak and 50% will be an obligatiAACT pursuant to the Extension of AACTNote. AACT may use a portion of proceeds held outside the Trust Account to repay this loane Extension Note, but no proceeds held in the Trust Account would be used to repay the Contributions. In addition, our Kodiak has agreed to reimburse the Sponsor has efor 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 Sponsors discretion, either be repaid upon the closing of an initial business combination or converted into warrants of the post-bBusiness cCombination entity at a price of $1.00 per warrant (or any combination of repayment or conversion), at the Sponsors discretion, which. 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.

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.

Further, the Sponsor has agreed to vote its Converted Class A Ordinary Shares, and the Sponsor, members of the AACT Board and AACTs 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.

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.

During the pendency of the Proposed Business Combination, AACT will not be able to solicit, initiate or take any action to facilitate or encourage any inquiries into the making, submission or announcement of, or enter into a business combination with another party because of restrictions in the Business Combination Agreement. Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement.

Covenants in the Business Combination Agreement impede the ability of AACT to make or consider other acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Proposed Business

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Combination. As a result, AACT may be at a disadvantage to its competitors during that period. While the Proposed Business Combination Agreement is in effect, neither AACT nor Kodiak may solicit, assist, initiate, engage or facilitate the making, submission or announcement of or encourage any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination, with any third party, even though any such alternative acquisition could be more favorable to AACTs shareholders than the Proposed Business Combination. If the Proposed Business Combination is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Business Combination Agreement due to the passage of time during which these provisions have remained in effect.

The exercise of AACT Board members and executive officers discretion in agreeing to changes or waivers in the terms of the Proposed Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Proposed Business Combination or waivers of conditions are appropriate and in AACTs shareholders best interests.

In the period leading up to the closing of the Proposed Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require AACT to consider agreeing to amend the Business Combination Agreement, to consent to certain actions taken by Kodiak or to waive rights to which AACT is entitled under the Business Combination Agreement. Such events could arise because of changes in the course of Kodiaks business, a request by Kodiak to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Kodiaks business and would entitle AACT to terminate the Business Combination Agreement. In any such circumstances, it would be at AACTs discretion, acting through the AACT Board and the special committee of the AACT Board, to grant its consent or waive those rights. The existence of financial and personal interests of one or more members of the AACT Board described in the Proxy Statement/Prospectus may result in a conflict of interest on the part of such director(s) between what such director may believe is best for AACT and its shareholders and what such director may believe is best for themselves in determining whether or not to take the requested action. As of the date of this Quarterly Report, AACT does not believe there will be any changes or waivers that members of the AACT Board and AACTs executive officers would be likely to make after shareholder approval of the Business Combination Proposal (as defined in the Proxy Statement/Prospectus) has been obtained. While certain changes could be made without further shareholder approval, AACT will circulate a new or amended proxy statement/prospectus and resolicit AACTs shareholders if changes are required with respect to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

AACTs executive officers and directors and their affiliates may enter into agreements concerning AACTs securities prior to the shareholder meeting in connection with the Proposed Business Combination, which may have the effect of increasing the likelihood of completion of the Proposed Business Combination or decreasing the value of the AACT securities.

At any time prior to the shareholder meeting in connection with the Proposed Business Combination, during a period when they are not then aware of any material non-public information regarding AACT or its securities, AACTs executive officers and directors and their affiliates may enter into a written plan to purchase AACTs securities pursuant to Rule 10b5-1 of the Exchange Act, and may engage in other public market purchases, as well as private purchases, of securities. Further, at any time prior to the shareholder meeting in connection with the Proposed Business Combination, during a period when they are not then aware of any material non-public information regarding AACT or its securities, AACTs executive officers and directors and their respective affiliates may: (i) purchase shares from institutional and other holders who vote, or indicate an intention to vote, against the Business Combination Proposal or the other shareholder proposals as described in the Proxy Statement/Prospectus (the Shareholder Proposals), or who elect to redeem, or indicate an intention to redeem, public shares; (ii) execute agreements to purchase such shares from such holders in the future; and (iii) enter into transactions with such holders to provide such holders with incentives to acquire public shares, vote their public shares in favor of the Business Combination Proposal or the other Shareholder Proposals or not redeem their public shares. Such an agreement may include a contractual acknowledgement that such shareholder, although still the record holder of Class A ordinary shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that AACTs executive officers and directors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their public shares. While the exact nature of any such incentives has not been determined, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their public shares, including the granting of put options and the transfer of shares or Private Placement Warrants owned by the Sponsor for nominal value to such investors or holders.

The purpose of such share purchases and other transactions by AACTs executive officers and directors and their respective affiliates would be to increase the likelihood of satisfaction of the requirements that the holders of the requisite number of Class A ordinary shares present and voting at the shareholder meeting in connection with the Proposed Business

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Combination vote in favor of the Business Combination Proposal and the other Shareholder Proposals when it appears that such requirement would otherwise not be met.

Any such arrangements may have a depressive effect on the price of the Class A ordinary shares. For example, as a result of these arrangements, an investor may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares it owns, either prior to or immediately after the shareholder meeting in connection with the Proposed Business Combination.

As of the date of this Quarterly Report, AACTs directors and officers and their affiliates have not entered into any such agreements. AACT will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.