SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: DRS/A
Document Type: DRS/A
Date Filed: 2026-04-24
Accession Number: 0001193125-26-177695
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526177695/filename1.htm

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Agreement is terminated due to our breach of a material obligation thereunder), in which case we will be required to make the termination payment specified in the Tax Receivable Agreement, as specified below. We expect that all of the intangible assets, including goodwill, of ER Holdings allocable to ER Holdings units acquired or deemed acquired by us from a holder of exchangeable units and in taxable exchanges following the IPO will be amortizable for tax purposes. An estimate of the amount and timing of payments that may be made under the Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors and future events. The actual increase in tax basis and use of tax attributes, as well as the amount and timing of any payments under the agreement, will vary depending upon a number of factors, including (without limitation):

• the timing of purchases or future exchanges—for instance, the increase in any tax deductions will vary
depending on the fair market value, which may fluctuate over time, of the depreciable or amortizable assets of ER Holdings at the time of each purchase of interests from the TRA Beneficiaries in each future exchange;

• the price of shares of our Class A common stock at the time of the purchase or exchange—the tax
basis increase in the assets of ER Holdings is directly related to the price of shares of our Class A common stock at the time of the purchase or exchange;

• the extent to which such purchases or exchanges are taxable—if the redemption or exchange of membership
interests of ER Holdings for shares of our Class A common stock and/or cash is not taxable for any reason, increased tax deductions generally will not be available;

• the amount, timing and character of our income—we expect that the Tax Receivable Agreement will require
us to pay 85% of the net cash tax savings as and when deemed realized. If we do not have taxable income during a taxable year, we generally will not be required (absent a circumstance requiring an early termination payment) to make payments under
the Tax Receivable Agreement for that taxable year because no benefit will have been realized. However, any tax benefits that do not result in net cash tax savings in a given tax year may generate tax attributes that may be used to generate net cash
tax savings in previous or future taxable years. The use of any such tax attributes will generate net cash tax savings that will result in payments under the Tax Receivable Agreement; and

• the applicable tax rates—U.S. federal, state and local tax rates in effect at the time that we are
deemed to realize the relevant tax benefits.

In addition, the amount of certain favorable tax
attributes we will acquire in the Blocker Mergers (such as net operating losses), the amount of each Continuing Equity Unitholder’s tax basis in its ER Holdings units at the time of the exchange, the depreciation and amortization periods that
apply to the increases in tax basis, the timing and amount of any earlier payments that we may have made under the Tax Receivable Agreement, and the portion of our payments under the Tax Receivable Agreement that constitute imputed interest or give
rise to depreciable or amortizable tax basis are also relevant factors.

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The Tax Receivable Agreement further provides that, upon certain mergers,
asset sales, or other forms of business combination or certain other changes of control, our or our successor’s obligations with respect to tax benefits would be based on certain assumptions, including that we or our successor would have
sufficient taxable income to fully use the benefits arising from the increased tax deductions and tax basis and other benefits covered by the Tax Receivable Agreement. As a result, upon a change of control, we could be required to make payments
under the Tax Receivable Agreement that are greater than or less than the specified percentage of our actual cash tax savings, which could negatively impact our liquidity.

In addition, we will have the right to terminate the Tax Receivable Agreement, in whole or in part, at any time. The Tax
Receivable Agreement will provide that if (i) we exercise our right to early termination of the Tax Receivable Agreement in whole (that is, with respect to all benefits due to all TRA Beneficiaries under the Tax Receivable Agreement) or in part
(that is, with respect to some benefits due to all TRA Beneficiaries under the Tax Receivable Agreement), (ii) the Tax Receivable Agreement is rejected in certain bankruptcy proceedings and we do not cure the rejection within 90 days of such
rejection, (iii) we fail (subject to certain exceptions) to make a payment under the Tax Receivable Agreement within 180 days after the due date, or (iv) we materially breach our obligations under the Tax Receivable Agreement and we
do not cure the breach within 90 days of the receipt of notice of such breach from the affected TRA Beneficiaries, we will be obligated to make an early termination payment to the TRA Beneficiaries under the Tax Receivable Agreement equal to the
present value of all payments that would be required to be paid by us under the Tax Receivable Agreement. The amount of such payments will be determined on the basis of certain assumptions in the Tax Receivable Agreement, including (i) the
assumption that we would have enough taxable income to fully use the tax benefit resulting from the tax assets which are the subject of the Tax Receivable Agreement, (ii) the assumption that any item of loss deduction or credit generated by a
basis adjustment or imputed interest arising in a taxable year preceding the taxable year that includes an early termination will be used by us ratably from such taxable year through the earlier of (x) the scheduled expiration of such tax item
or (y) 15 years; (iii) the assumption that any non-amortizable assets are deemed to be disposed of in a fully taxable transaction on the fifteenth anniversary of the earlier of the basis adjustment and
the early termination date; (iv) the assumption that U.S. federal, state and local tax rates will be the same as in effect on the early termination date, unless scheduled to change; and (v) the assumption that any exchangeable membership
interests in ER Holdings (other than those held by us) outstanding on the termination date are deemed to be exchanged for an amount equal to the market value of the corresponding number of shares of Class A common stock on the termination date.
The amount of the early termination payment is determined by discounting the present value of all payments that would be required to be paid by us under the Tax Receivable Agreement at a rate equal to     .

The payments that we will be required to make under the Tax Receivable Agreement are expected to be substantial. If we were to
acquire all of the Class B Units and Class M Units (after the Class M Units have been first converted into Class B Units) held by the Continuing Equity Unitholders and Continuing Profits Interest Unitholders, respectively, the estimated tax benefits
to us subject to the Tax Receivable Agreement would be approximately $     and the related undiscounted payment to the TRA Beneficiaries equal to 85% of the benefit would be approximately $    ,
assuming (i) that the Continuing Equity Unitholders redeemed or exchanged all of their Class B Units immediately after the consummation of the IPO at $     per share of our Class A common stock, (ii) that the
Continuing Profits Interest Unitholders converted all of their Class M Units into Class B Units of equivalent value at the time of the conversion immediately after the IPO, and the resulting Class B Units were redeemed or exchanged in accordance
with clause (i), (iii) no material changes in relevant tax law, (iv) a constant combined effective income tax rate of  % and (v) that we have sufficient taxable income in each year to realize on a current basis the increased
depreciation, amortization and other tax benefits that are the subject of the Tax Receivable Agreement.

The actual
future payments to the TRA Beneficiaries will vary based on the factors discussed above, and estimating the amount of payments that may be made under each Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts
payable depends on a variety of factors and future events. See “Risk Factors—Risks Related to Our Corporate Structure, Our Class A Common Stock and this Offering.”

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