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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obtain or maintain licenses from third parties or fail to comply with open source licenses, we may be subject to costly third-party claims of intellectual property infringement or ownership of our proprietary source code. There is little legal precedent in this area and any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and prospects and could help third parties, including our competitors, develop products and services that are similar to or better than ours. Any of the above could have an adverse effect on our business, financial condition and results of operations and harm our competitive position. may be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed proprietary information or know-how of their current or former employers or claims asserting ownership of what we regard as our own intellectual property rights.

Many of our employees, consultants and advisors are
currently or were previously employed or engaged at other companies in our field, including our competitors or potential competitors. We may be subject to claims that we or these individuals have used or disclosed intellectual property rights,
including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary
damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

Further, our ability to protect our own trade secrets and other proprietary information depends in part on the effectiveness
of our technical and administrative controls, including access controls, safeguards around code repositories, segregation-of-duties practices and other confidentiality
and security measures. These controls may not always be consistently implemented, monitored or periodically reviewed across all teams or systems. Any lapses, gaps or inconsistencies in such controls could increase the risk of inadvertent disclosure,
unauthorized access or misappropriation of our proprietary information by employees, contractors or other third parties.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or
development of intellectual property rights to execute agreements assigning such intellectual property rights to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property
rights that we regard as our own. Additionally, the assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that
they may bring against us, to determine the ownership of what we regard as our intellectual property rights. Any of the foregoing could harm our competitive position, business, financial condition, results of operations and prospects.

Risks Related to Our Financial Condition and Results of Operations

Our financial condition, results of operations and other key operating metrics may fluctuate from period to period, which could cause our
results for a particular period to fall below expectations, resulting in a decline in the price of our Class A common stock.

Our financial condition, results of operations and other key operating metrics have fluctuated significantly in the past and
may continue to fluctuate in the future due to a variety of factors, many of which are beyond our control. For example, the amount of revenue we recognize in a given period is materially dependent on the volume of power system sales, the achievement
of milestones in the design, construction and installation of our power systems and the delivery of services to maintain and operate our power systems pursuant to O&M service contracts. In addition to the other risks described herein, the
following factors subject us to period-to-period fluctuations in our financial condition, results of operations and key operating metrics: (i) the timing of the

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design, construction and installations of our power systems, which may depend on many factors such as availability of inventory, product quality or performance issues, site conditions, such as
weather, local permitting requirements, utility requirements, environmental, health and safety requirements, availability of labor, health emergencies and customer facility construction schedules, (ii) the size of particular power systems to be
designed, constructed and installed and the number of sites involved in any particular quarter, (iii) the geographical mix of customer sales, (iv) the rates of return required by financing parties, (v) disruptions in our supply chain,
(vi) whether we are able to structure our sales agreements in a manner that would allow for the power system and installation revenue to be recognized upfront, (vii) delays or cancellations of power system installations,
(viii) fluctuations in our service costs, particularly due to unexpected costs and rising labor costs, (ix) fluctuations in our research and development expense, including periodic increases associated with the pre-production qualification of additional tools as we expand our assembly capacity, (x) the length of the sales and installation cycle for a particular customer, (xi) the timing and level of additional
purchases by new and existing customers, which may be impacted by macroeconomic factors including inflation, interest rates, the recessionary environment and availability of capital, (xii) the timing of the development of the market for our new
features and technologies, (xiii) unanticipated expenses or installation delays associated with changes in governmental regulations, permitting requirements, utility requirements and environmental, health and safety requirements,
(xiv) disruptions in our sales, assembly, service or other business activities resulting from disagreements with our labor force or our inability to attract and retain qualified personnel and (xv) unanticipated changes in government
incentive programs available for us, our customers and financing parties. In addition, our revenue, key operating metrics and other results of operations in future periods may fall short of our projections or the expectations of investors and
financial analysts, which could have a material adverse effect on the price of our Class A common stock.

If we fail to manage
our growth effectively, our business, results of operations and prospects may suffer.

Our business has experienced
periods of rapid growth, and in the future, we may continue to grow our business rapidly. Growth in our business could place significant demands on our management, operations, systems, accounting, internal controls and financial resources, and it
may also negatively impact our ability to retain key personnel. If we experience difficulties in any of these or other areas of our business, we may not be able to expand our business successfully or effectively manage our growth. In particular, if
we experience a significant growth in power systems sales and services without effectively managing growth in our ERock Platform services and assembly capabilities to deliver on such orders or otherwise enhancing our service and assembly
capabilities to satisfy customers’ expectations, we may not be able to meet demand for our power systems in a timely manner, which could lead to customer cancellations or reduced orders. We may also need additional assembly capacity, and we
and some of our suppliers may need additional capital-intensive equipment. Any growth in our assembly capabilities must include scaling quality control as the increase in assembly increases the possible risk of defects or lower quality assembly. In
addition, any growth in the volume of sales of our power systems may outpace our ability to engage sufficient and experienced personnel to manage and complete the higher number of installations on a timely basis and in accordance with our
expectations and standards. Any failure to manage our growth effectively could materially and adversely affect our business, financial condition, results of operations and prospects. Our future operating results depend to a large extent on our
ability to manage this growth successfully.

We identified material weaknesses in our internal control over financial reporting,
and, if not remediated effectively, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired, which could result in loss of investor confidence in the accuracy and completeness
of our financial reports and materially adversely affect our results of operations and stock price.

The accuracy
of our financial reporting is dependent on the effectiveness of our internal controls. As a public company, we will be required to provide a report from management to our stockholders on our internal control over financial reporting that includes an
assessment of the effectiveness of these controls. As disclosed elsewhere in this prospectus, management concluded that our internal control over financial reporting was not

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