SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: S-1
Document Type: S-1
Date Filed: 2026-05-15
Accession Number: 0001193125-26-227199
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526227199/d12401ds1.htm

Chunk 99 of 119
Word Count: 1493
Character Count: 10216

Document Content:

approximately 37%, 13%, and 12% of the Company’s total revenue. For the three months ended March 31, 2025, sales to four counterparties accounted for approximately 16%, 14%, 14%, and 11% of the Company’s total revenue. This concentration of customers may impact the Company’s overall credit risk, either positively or negatively, in that these entities may be similarly affected by changes in economic or other conditions, including uncertainties and challenges in the energy market. These uncertainties and challenges could expose the Company to increased risk related to collectability of billed and unbilled receivables and contract assets for services the Company has performed. Substantially all of the Company’s accounts receivable result from product and installation revenues. One customer accounted for approximately 69% of the total accounts receivable balance at March 31, 2026. Four customers accounted for approximately 17%, 14%, 14%, and 13% of the total accounts receivable balance at December 31, 2025.

For the three months ended March 31, 2026, expenditures to four vendors accounted for
approximately 39% of the Company’s total purchases. As of March 31, 2026, the total balance due for three vendors accounted for approximately 27%, 10%, and 9% of total accounts payable. For the year ended December 31, 2025,
expenditures to three vendors accounted for approximately 25% of the Company’s total purchases. At December 31, 2025, the total balance due for three vendors accounted for approximately 46%, 7%, and 6% of total accounts payable.

Recently Issued Pronouncements

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments require, among other things, expanded rate reconciliation disclosures with specific categories and greater
disaggregation of income taxes paid by jurisdiction.

For public business entities, the amendments are effective for annual
periods beginning after December 15, 2024 (i.e., the Company’s fiscal year beginning January 1, 2025). We adopted this guidance prospectively effective January 1, 2025, resulting in expanded disclosures that improve transparency
into our tax positions and payments across jurisdictions.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Condensed Consolidated Financial Statements (Unaudited)

Financial Instruments—Credit Losses

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses
(Subtopic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient for all entities when measuring expected credit losses for current accounts receivable and contract
assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The Company adopted ASU 2025-05 on a prospective basis effective January 1, 2026. The adoption of this
guidance did not have a material impact on the Company’s condensed consolidated financial position, results of operations, or cash flows.

Recently Issued Pronouncements Not Yet Adopted

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which
modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development. ASU
2025-06, which can be applied prospectively, retrospectively, or with a modified transition approach, will be effective for annual and interim periods within fiscal years beginning after December 15,
2027, with early adoption permitted. The Company is currently evaluating the effects that the adoption of this standard will have on its condensed consolidated financial statements and disclosures.

Income Statement Presentation

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting
Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which increases the transparency of expense information presented in the statements
of operations through disclosures of expanded disaggregation of relevant expense captions. This guidance will be effective for annual periods beginning after December 15, 2026, and interim periods thereafter, with early adoption permitted. The
Company is currently evaluating the impact of this guidance, however, it does not anticipate that this adoption will have a significant impact on its condensed consolidated financial statements and disclosures.

3. FAIR VALUE

The
Company’s financial instruments consist primarily of accounts receivable, notes payable, warrants and derivative liabilities.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company records its financial assets and liabilities at fair value, in accordance with the framework for measuring fair
value in GAAP.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company’s derivative liability related to the December 2024
Convertible Notes, the Additional 2024 Convertible Notes, and the 2025 Convertible Notes (collectively, the “Notes”) (see Note 11 — Debt — 2024 Note Purchase Agreement, A&R Note Purchase Agreement and Convertible Notes),
measured at fair value on a recurring basis is as follows:

March 31, 2026

Level 1 Level 2 Level 3

Noncurrent Liabilities

Derivative liabilities $	— $	— $	1,014

Total $	— $	— $	1,014

December 31, 2025

Level 1 Level 2 Level 3

Current Liabilities

Derivative liabilities $	— $	— $	10

Total $	— $	— $	10

Noncurrent Liabilities

Derivative liabilities — — $	3,363

Total $	— $	— $	3,363

The estimated fair value of the derivative liability included in other noncurrent liabilities
in the condensed consolidated balance sheets was determined using the with and without method, taking the fair value of the Notes with the conversion option, less the fair value without the conversion option. The estimated fair value of the Notes
was determined using the discounted cash flow method, assuming a discount rate of 17.50%.

Changes in Level 3
liabilities measured at fair value on a recurring basis is as follows:

Contingent warrant liability Warrant liability Derivative liability

Balance at December 31, 2025 $	— $	— $	3,373

Issuances — — —

Changes in fair value included in earnings — — (2,359	)

Balance at March 31, 2026 $	— $	— $	1,014

Contingent warrant liability Warrant liability Derivative liability

Balance at December 31, 2024 $	2,727 $	13,979 $	1,492

Issuances — — 9,049

Changes in fair value included in earnings (1,752	) (12,939	) (3,390	)

Extinguishment (975	) (1,040	) (3,778	)

Balance at March 31, 2025 $	0 $	0 $	3,373

Changes in fair value are included in Interest expense on the condensed consolidated
statements of operations for the three months ended March 31, 2026 and 2025.

At March 31, 2026, there are no
equity-classified warrants included in common units in the condensed consolidated balance sheets.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Condensed Consolidated Financial Statements (Unaudited)

Financial Assets and Liabilities Not Measured at Fair Value on a
Recurring Basis

Debt Instruments — The term loans and convertible notes are based on rates currently offered
for instruments with similar maturities and terms (Level 2).

The following table presents the estimated fair values and
carrying values of debt instruments (see Note 11 — Debt):

March 31, 2026 December 31, 2025

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

2025 Credit Agreement 29,123 $	28,151 28,944 $	30,000

December 2024 Convertible Note 10,051 23,103 9,132 14,758

Additional 2024 Convertible Notes 9,878 22,718 8,974 14,560

2025 Convertible Notes 14,098 33,585 12,934 21,769

Rights offering convertible notes 52 148 44 44

Total Outstanding Debt $	63,202 $	107,705 $	60,028 $	81,131

4. REVENUE RECOGNITION

Disaggregation of Revenues

The Company disaggregates revenue from contracts with customers on the basis of the types of power system sales and ongoing
services provided:

Three Months Ended March 31,

Power system sales product revenues $	5,157 $	6,072

Power system sales installation services revenues 10,765 7,960

Power system sales revenues 15,922 14,032

Ongoing services revenues (1) 15,814 10,077

Total revenues $	31,736 $	24,109

(1) Includes service-type warranty revenue.

Remaining Performance Obligations

The following table presents estimated revenue allocated to remaining performance obligations for contracted revenues that are
unsatisfied (or partially satisfied) at March 31, 2026:

Remainder of 2026 $	335,800

Thereafter 119,452

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Condensed Consolidated Financial Statements (Unaudited)

The amount above represents the Company’s estimate of total revenues
that are expected to be realized from the remaining portion of executed and legally enforceable contracts related to Power System Sales Installation Services and the Ongoing Services. For purposes of calculating remaining performance obligations
from Power System Sales and Ongoing Services revenues, the Company includes estimated revenues from change orders and claims to the extent they are legally enforceable and it is probable that a significant reversal in the amount of cumulative
revenue recognized will not occur. Excluded from remaining performance obligations were variable consideration from ongoing service contracts that the Company has a right to invoice (e.g., usage-based fees) in accordance with performance.
Accordingly, the table above includes only the fixed consideration component of such agreements. Additionally, the Company excludes contracts with an original expected duration of one year or less.

Accounts Receivable and Allowance for Credit Losses

The following is a summary of accounts receivable, net:

March 31, 2026 December 31, 2025