SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: DRS/A
Document Type: DRS/A
Date Filed: 2026-04-01
Accession Number: 0001193125-26-138217
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526138217/filename1.htm

Chunk 13 of 104
Word Count: 1483
Character Count: 10163

Document Content:

this prospectus. The summary historical consolidated financial data and operational measures presented below is not indicative of the results to be expected for any future period. The following information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and related notes thereto included elsewhere in this prospectus. The summary historical consolidated financial data included in this section is not intended to replace the financial statements and is qualified in its entirety by our financial statements and the related notes included elsewhere in this prospectus. Years Ended December 31, Consolidated Statements of Operations Power system sales product revenues $ 90,138 $ 53,976 Power system sales installation services revenues 47,810 38,363 Power system sales revenues 137,948 92,339 Ongoing services revenues 45,197 36,151 Total revenues 183,145 128,490 Cost of power system sales product revenues, excluding depreciation and amortization 75,754 50,748

Cost of power system sales installation services revenues, excluding depreciation and amortization 32,083 29,742

Cost of power system sales revenues, excluding depreciation and amortization 107,837 80,490

Cost of ongoing services revenues, excluding depreciation and amortization 37,314 30,790

Total cost of revenues, excluding depreciation and amortization 145,151 111,280

General and administrative expenses 68,741 57,887

Depreciation and amortization expense 3,993 1,859

Loss from operations (34,740	) (42,536	)

Interest expense (755	) (14,331	)

Loss on debt extinguishment (24,182	) —

Other income, net 1,067 99

Loss before income taxes (58,610	) (56,768	)

Income tax expense (420	) (158	)

Net loss (59,030	) (56,926	)

Deemed dividends related to Series A preferred units (3,110	) (2,880	)

Net loss attributable to common units $	(62,140	) $	(59,806	)

Other Financial Data:

Net loss margin (32.2	)% (44.3	)%

Adjusted EBITDA $	(22,646	) $	(34,912	)

Adjusted EBITDA margin (12.4	)% (27.2	)%

Table of Contents

December 31,

(in thousands)

Balance Sheets Data:

Property and equipment, net $	27,545 $	26,781

Total assets $	257,896 $	207,684

Notes payable (includes current portion) $	60,028 $	70,772

Total liabilities $	323,323 $	224,421

Years Ended December 31,

(in thousands)

Statements of Cash Flow Data:

Net cash provided by (used in):

Operating activities $	116,501 $	(24,210	)

Investing activities (4,667	) (9,000	)

Financing activities (25,650	) 31,243

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit and Adjusted Gross Margin are financial measures that are not
prepared in accordance with GAAP. These non-GAAP financial measures should be read in conjunction with the most directly comparable financial measure calculated and presented in accordance with GAAP.

We believe presenting these non-GAAP financial measures provides useful information to
investors because they highlight trends in our underlying operating performance, facilitate comparisons of our core results over time and across peers, and reflect how our management evaluates our business. We also use these non-GAAP financial measures internally for strategic planning, budgeting, forecasting, performance measurement, and resource allocation. We believe that providing investors with access to these measures allows for
greater transparency and facilitates comparisons to our historical operating results.

These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the most directly comparable financial measure prepared in accordance with GAAP. In addition, other companies,
including companies in our industry, may define these non-GAAP financial measures differently, which may limit their usefulness as comparative measures.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are utilized by our management and other users of our financial statements such as
investors, commercial banks, research analysts and others, to assess our operating performance. Management believes these measures are useful because they each allow us to compare our
operating performance on a consistent basis across periods. Management also believes Adjusted EBITDA is a useful indicator of our operating performance and Adjusted EBITDA Margin is useful because it provides insight on profitability.

Net loss is the GAAP measure most directly comparable to Adjusted EBITDA, and net loss margin is the GAAP measure most
directly comparable to Adjusted EBITDA Margin. We define Adjusted EBITDA as net loss

Table of Contents

before net interest expense; depreciation and amortization expense; income tax expense; stock-based compensation; and other items management deems non-operational or not reflective of ongoing
core operations (e.g. changes in fair value of unit liabilities, professional fees associated with debt and equity transactions, legal settlements). We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.

The table below presents a reconciliation of net loss and net loss margin to Adjusted EBITDA and Adjusted EBITDA Margin:

For the Year Ended

(in thousands)

Net loss $	(59,030	) $	(56,926	)

Interest expense 755 14,331

Depreciation and amortization expense 3,993 1,859

Loss on debt extinguishment 24,182 —

Income tax expense 420 158

Stock-based compensation 4,610 2,662

Change in fair value of warrants (1) (1,752	) 1,398

Non-recurring professional fees (2) 4,176 1,606

Adjusted EBITDA $	(22,646	) $	(34,912	)

Net loss margin (32.2	)% (44.3	)%

Adjusted EBITDA Margin (12.4	)% (27.2	)%

(1)	Non-cash change in fair value of our warrant liability at
December 31, 2024. See Note 13—Equity—Warrant Units, to our consolidated financial statements included in this prospectus for more details.

(2)	Professional fees represent (i) consulting, legal, accounting, and other expenses in connection with the
evaluation of potential non-recurring capital markets transactions in 2025 and 2024, (ii) certain consulting, legal, and corporate expenses in connection with debt modifications that occurred in April 2025, and (iii) certain non-recurring placement
fees associated with key hires in 2025.

Adjusted Gross Profit and Adjusted Gross Margin

Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures. We define Adjusted Gross Profit as GAAP gross
profit, adjusted to exclude reimbursable variable revenues and costs. We define Adjusted Gross Margin as Gross Margin less reimbursable revenue and cost. Reimbursable variable revenues and costs represents certain revenues and expenses where we
serve as the principal in transactions and control the use and timing of the products and services that are being utilized. We reimburse customers for revenues earned on their behalf and are reimbursed for the expenses we incur without a mark-up.

We present Adjusted Gross Profit and Adjusted Gross Margin because we believe these measures provide management and
investors with a more meaningful view of the underlying economics and profitability of our core operations. Because reimbursable variable revenues and costs are recorded on a gross basis under U.S. GAAP and, by design, offset one another with no
material contribution to profit, their inclusion in GAAP revenues and cost of revenues can cause reported gross margin percentages to fluctuate significantly depending on the frequency of underlying activities which can be driven by unpredictable
changes in market conditions. By excluding these revenues, Adjusted Gross Margin reflects the margin we earn on the goods and services where we bear economic risk, exercise pricing judgment, and generate value for our customers.

We use Adjusted Gross Profit and Adjusted Gross Margin internally to evaluate segment-level performance, assess pricing and
cost trends, and benchmark our profitability against peers whose revenue recognition practices may differ with respect to reimbursable items. We believe this perspective enhances investors’ understanding of the operating leverage and margin
trajectory of our business.

Table of Contents

Adjusted Gross Profit and Adjusted Gross Margin have limitations as
analytical tools. They are not substitutes for GAAP gross profit or GAAP gross margin, and our calculations may not be comparable to similarly titled measures reported by other companies because other entities may not define or calculate these
measures in the same manner. In addition, while reimbursable variable costs are excluded because they have immaterial net margin impact, they do represent real cash flows and contractual obligations that affect our working capital and liquidity.
Accordingly, these non-GAAP measures should be considered alongside, and not as alternatives to, the GAAP financial measures included in our consolidated financial statements.

For the Year Ended

Total Revenues $	183,145 $	128,490

Total Cost of Revenues 145,151 111,280

Less: Depreciation and amortization expense 3,993 1,859

Total Gross Profit $	34,001 $	15,351

Less: Reimbursable revenue (16,336	) (13,903	)

Add: Reimbursable cost 16,156 14,042

Adjusted Gross Profit $	33,821 $	15,490

Gross margin 18.6	% 11.9	%

Adjusted Gross Margin 20.3	% 13.5	%

Operational Measures

Contracted Power System Sales Backlog

Contracted Power System Sales Backlog represents the actual contracted value for purchases of power systems and ESI services,
whether invoiced or not, to be invoiced and recognized as revenue as a result of performing our obligations over the term of the contract, assuming no exceptions or contingencies are exercised.

We believe contracted power system sales backlog is an important operating metric because it provides visibility into future
revenue from power system sales, reflects underlying demand for our power systems, and helps us plan production, procurement, and workforce requirements.

As of December 31,

Contracted Power System Sales Backlog $	1,183,072 $	227,656

Annualized Recurring Service Revenue