Kodiak AI, a leading provider of AI-powered autonomous driving technology, announced the completion of the establishment of a new debt facility with Horizon Technology Finance Corporation (the “Lender”) as noted in a Form 8-K that was filed with the SEC. Compared to Kodiak’s previous debt facility, the terms of the new facility provide additional capital, lower interest rates by 200 basis points, extend maturity, and reduce cash outflow and will provide Kodiak with improved liquidity and increased flexibility to operate and scale its business.
"The favorable terms of our debt facility will allow us to achieve several key objectives for our company and our shareholders,” said Don Burnette, Founder and CEO, Kodiak. “This strengthens the Company’s financial position by increasing debt capacity, lowering the interest rate, eliminating near-term principal payments, and extending the debt maturity. Overall, these changes result in reduced near-term cash outflows, improved liquidity, and enhanced ability to execute on strategic priorities. The transaction also reflects Horizon’s continued confidence in Kodiak's business model and performance.”
The venture loan and security agreement (the “Loan Agreement”) provides for a senior secured term loan facility in an aggregate principal amount of up to $30.0 million (collectively, the “Term Loans”), all of which was drawn at the closing.
Borrowings under the Loan Agreement accrue interest at a rate equal to the prime rate plus 3.50% with the prime rate having a floor of 6.50%. The Term Loans are repayable in monthly interest-only payments from February 1, 2026 until July 1, 2028 (the “Interest-Only Payment Period”). After the expiration of the Interest-Only Payment Period, beginning on August 1, 2028, the Term Loans will be repayable in 18 equal monthly payments of principal and accrued interest until maturity. The Term Loans will mature on January 1, 2030 (the “Maturity Date”).
At the Borrowers’ option, the Borrowers may prepay all of the outstanding Term Loans, subject to a prepayment premium equal to (a) 2.0% of the Term Loans being prepaid if the prepayment occurs during the 24 months following the Closing Date; and (b) 1.0% of the Term Loans being prepaid if the prepayment occurs after the 24 month anniversary of the Closing Date.