SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: DRS
Document Type: DRS
Date Filed: 2026-02-17
Accession Number: 0001193125-26-054926
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526054926/filename1.htm

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our power systems and services, significant disruptions to our supply chains or significant shortages of labor and material may materially and adversely affect our financial results or our ability to meet commitments to customers. We establish prices with our customers in accordance with contractual time frames; however, the timing of material and commodity market price increases may prevent us from passing these additional costs on to our customers through timely pricing actions. While we enter into contractual pricing adjustment provisions with our customers from time to time that attempt to address some of these risks, there can be no assurance that commodity price fluctuations will not adversely affect our financial condition and results of operations. Risks Related to Laws, Regulations and Other Legal Matters We are subject to laws and regulations that could impose substantial costs upon us and cause delays in the delivery and installation of our power systems.

The construction, installation and operation of our power systems are generally subject to
oversight and regulation in accordance with laws and ordinances relating to building codes, safety, environmental and climate protection, domestic content requirements and related matters, as well as utility and energy market rules, regulations and
tariffs, and typically require governmental approvals and permits, including environmental approvals and permits, that vary by jurisdiction. In some cases, these approvals and permits change or require periodic renewal. These laws and regulations
can affect the markets for our power systems and the costs and time required for their installation and may give rise to liability for administrative oversight costs, compliance costs, clean-up costs, property
damage, bodily injury, fines and penalties. Capital and operating expenses needed to comply with these laws and regulations can be significant, and violations may result in substantial fines and penalties or third-party damages.

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It is difficult and costly to track the requirements of every individual
authority having jurisdiction over our installations, to design our power systems to comply with these varying standards and to obtain all applicable approvals and permits. We cannot predict whether or when all approvals or permits required for a
given project will be granted or whether the conditions associated with the approvals or permits will be achievable. The denial of a permit essential to a project or the imposition of impractical conditions or excessive transmission or distribution
facility upgrade costs as a condition of interconnection, would impair our ability to develop a project. In addition, we cannot predict whether the approval or permitting process will be lengthened due to complexities and appeals. The
interconnection study process likewise can be a lengthy process. A delay in the review and approval of permits for a project and any interconnection studies, if required, can impair or delay our and our customers’ abilities to develop that
project or may increase the cost so substantially that the project is no longer attractive to us or our customers. Furthermore, unforeseen delays in the review and permitting process could delay the timing of the installation of our power systems
and could therefore adversely affect the timing of the recognition of revenue related to the installation, which could harm our results of operations in a particular period. In many cases we contractually commit to performing all necessary
installation work on a fixed-price basis, and unanticipated costs associated with approval, permitting or compliance expenses may cause the cost of performing such work to exceed our revenue. In addition, emerging federal and state emissions
disclosure requirements may pose a burden to existing or potential customers. The costs of complying with all the various laws, regulations and customer requirements, and any claims concerning non-compliance,
could have a material adverse effect on our financial condition, results of operations and reputation.

The installation and
operation of our power systems are subject to environmental laws and regulations in various jurisdictions, and there has been in the past and could continue to be in the future uncertainty with respect to how these laws and regulations may change
over time and also how they apply to our power systems.

We are committed to compliance with applicable
environmental laws and regulations including health and safety standards, and we review the operation of our power systems for health, safety and environmental compliance. Environmental laws and regulations in the United States, such as the
Comprehensive Environmental Response and Compensation and Liability Act (“CERCLA”), impose liability on several grounds including for the investigation and clean-up of contaminated soil and ground
water, impacts to human health and damages to natural resources. If contamination is discovered at properties currently or formerly owned or operated by us, or properties to which hazardous substances were sent by us, it could result in our
liability under environmental laws and regulations. Many of our customers who purchase our power systems have high sustainability standards, and any environmental non-compliance by us could harm our reputation
and impact customers’ buying decisions.

In addition to CERCLA, among other federal statutory schemes, the Resource
Conservation and Recovery Act (“RCRA”) regulates the generation, transportation, treatment, storage, disposal, and cleanup of hazardous and non-hazardous wastes; the federal Clean Air Act
(“CAA”) regulates emissions of various air pollutants through air emissions permitting programs and the imposition of other requirements, such as requirements for emission reduction, capture and control; the federal Water Pollution
Control Act (“Clean Water Act”) imposes restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States and waters of the applicable
states; and FERC has jurisdiction over the transportation and sale for resale of gas in interstate commerce.

Maintaining
environmental compliance can be challenging given the changing patchwork of environmental laws and regulations that prevail at the U.S. federal, state, regional and local level. Most existing environmental laws and regulations preceded the
introduction of our innovative power systems and were adopted to apply to technologies existing at the time (i.e., large coal, oil or gas-fired power plants). Guidance from the applicable agencies on how
certain environmental laws and regulations may or may not be applied to our technology can be inconsistent. In most jurisdictions where air permits and various land use permits are required for installation of larger power system installations, the
length of time to obtain these permits has increased. Moreover, the level of

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certainty around the issuance of such permits has decreased and where issued, the cost of compliance has been and can be prohibitive.

Furthermore, the U.S. federal and state regulatory framework is often changing. For example, while President Biden signed into
law the Inflation Reduction Act (“IRA”) in August 2022, which contained tax inducements and other provisions that incentivize investment, development, and deployment of alternative energy sources and technology. The Trump Administration
has diverged from the Biden Administration’s positions, and the passage of the One Big Beautiful Bill Act rescinded many IRA initiatives. The Trump administration will likely continue to withdraw from or otherwise roll back certain
environmental commitments. Notably, on March 12, 2025, EPA Administrator Lee Zeldin announced initiatives to reconsider regulations addressing power plants, oil and gas, air pollution standards, GHG reporting, wastewater, endangerment findings,
environmental justice, and other initiatives. While it is not possible at this time to predict how any such actions may impact our business, such actions, if undertaken, may prompt more activity from state, and local legislative bodies and
administrative agencies to pass stricter GHG laws, regulations, and other binding commitments.

As discussed, the
combination of federal and state environmental laws lead to a costly and time-consuming patchwork of reporting and permitting processes. Our technology outpaces the regulatory process and there are inconsistencies between how we are regulated in
different jurisdictions. It is possible that regulators could delay or prevent us from conducting our business in some way pending agreement on, and compliance with, shifting regulatory requirements. Such actions could delay the installation of our
power systems, could result in penalties, could require modification or replacement or could trigger claims of performance warranties and defaults under customer contracts that could require us to repurchase equipment, any of which could materially
and adversely affect our business, financial condition, results of operations and reputation. In addition, new energy or environmental laws or regulations or new interpretations of existing laws or regulations could present marketing, political or
regulatory challenges and could require us to upgrade or retrofit existing equipment, which could result in materially increased capital and operating expenses.

Existing regulations and changes to such regulations may create technical, regulatory and economic barriers, as well as increase
compliance complexity and costs associated with legal and compliance matters, which could significantly reduce demand for our power systems or affect the financial performance of current sites.