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

Chunk 51 of 107
Word Count: 1498
Character Count: 9621

Document Content:

receivables, general intangibles, and substantially all other personal property owned by Enchanted Rock Holdings, LLC, including a pledge of the equity interests in its subsidiaries. Interest under the 2025 Credit Agreement is payable monthly and accrues at a rate equal to (x) in the case of the 2025 Term Loan, the greater of (i) the prime rate plus 2.25% and (ii) 9.50%, and (y) in the case of principal amounts outstanding under the 2025 Revolver, the greater of (i) the prime rate plus 0.25% and (ii) 6.00%. The 2025 Term Loan is subject to a fee, payable upon the maturity or earlier prepayment of the 2025 Term Loan, in the amount of 7.00% of the initial principal amount of the 2025 Term Loan. The 2025 Revolver is also subject to an unused line fee, payable quarterly, in the amount of 0.25% of the average unused commitments under the 2025 Revolver.

The 2025 Credit Agreement includes certain
affirmative and restrictive covenants common in such agreements that apply to Enchanted Rock Holdings, LLC and its subsidiaries, including, among others (i) a minimum current ratio of at least 1.25:1.00 and (ii) minimum unrestricted cash
of $12.5 million, and (iii) subject to certain customary exceptions, restrictions on the ability to incur debt, grant liens, make investments or distributions, engage in new businesses other than those reasonably related to those currently
engaged in by the Enchanted Rock Holdings, LLC and its subsidiaries, or perform mergers and other fundamental corporate changes.

The 2025 Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the lenders
may declare all amounts outstanding under the 2025 Credit Agreement to be immediately due and payable.

The 2025 Credit
Agreement required us to issue a warrant (the “2025 Credit Agreement Warrant”) to the lender thereunder (see Note 13—Equity—Warrant Units, to our consolidated financial statements included in this prospectus). Such lender
could purchase up to 2,525 common units of Enchanted Rock Holdings, LLC under the 2025 Credit Agreement Warrant at an exercise price of $0.01 per unit.

As of December 31, 2025, we had $30.0 million of borrowings related to the 2025 Term Loan and no borrowings related
to the 2025 Revolver under the 2025 Credit Agreement. We believe we were in compliance with the covenants of the 2025 Credit Agreement described above as of that date. For more information on the 2025 Credit Agreement, see Note 19—Subsequent
Events, to our consolidated financial statements included in this prospectus. Upon the consummation of this offering, we expect to repay in full all outstanding principal and accrued interest and associated fees under the 2025 Credit Agreement.

Preferred Units

On July 1, 2018, the principal and accrued unpaid interest of a $10.0 million convertible promissory note issued to
an investor was converted into 25,162 Series A preferred units, each with a stated value of $480 and a liquidation preference totaling $12.6 million. On the same date, we issued an additional 19,167 Series A preferred units with a stated value
of $600 per unit and a liquidation preference of $12.0 million. As of December 31, 2025 and 2024, 163,975 Series A preferred units were authorized, issued, and outstanding.

Each Series A preferred unit automatically converts into common units upon the closing of a qualified public offering (an
“Automatic Conversion”). Upon an Automatic Conversion, each Series A preferred unit

Table of Contents

converts into the number of common units specified in the applicable conversion ratio, without any further action required by the holders.

Upon the occurrence of a redemption event—such as (i) a sale of the Company or an affiliate, (ii) the closing
of a public offering, or (iii) five years following the issuance date of the Series A preferred units—the holders of a majority of the outstanding Series A preferred units may, by written notice to the Company, require the Company to
redeem all outstanding Series A preferred units. The redemption price per unit is calculated to provide the holder with an 8% internal rate of return on the original issue price of the Series A preferred unit.

Cash Flow Year ended December 31, 2025 compared to year ended December 31, 2024

The following table summarizes our cash flows by source (use) for the periods presented:

Years Ended December 31, Change

2025 2024 Amount %

Net cash provided by (used in) operating activities $	116,501 $	(24,210	) $	140,711 (581.2	%)

Net cash used in investing activities (4,667	) (9,000	) 4,333 (48.1	%)

Net cash (used in) provided by financing activities (25,650	) 31,243 (56,893	) (182.1	%)

Subtotal $	86,184 $	(1,967	) $	88,151 (4481.5	%)

Operating Activities

Our operating activities consist of net loss adjusted for certain non-cash items,
together with changes in operating assets and liabilities (working capital).

Changes in working capital totaled $132.1
million, which include the following:

• A $136.8 increase in contract liabilities primarily driven by new customer deposits associated with contracts
entered into during 2025.

• A $36.8 million decrease in inventory primarily due to direct generators sales to customers during 2025.

• A $11.7 million decrease in other liabilities primarily due to the mark-to-market on our warrant unit
liabilities during 2025.

• A $15.5 million decrease in accounts payable due to the timing of various vendor payments.

For the year ended December 31, 2025, net cash provided by operating activities was $116.5
million, an increase of $140.7 million from the prior year primarily driven by changes in working capital. Changes in working capital increases from prior year were primarily driven by the increase of $136.8 million in 2025 compared to the decrease
of $7.7 million in 2024 in contract liabilities as well as the $36.8 million decrease in inventory in 2025 compared to the $30.8 million increase in 2024. These amounts were partially offset by the year over year $35.0 million increase in accounts
receivable and the $18.7 million decrease in other liabilities.

Investing Activities

Historically, our investing activities have primarily consisted of capital expenditures to support the growth and scalability
of our operations. For the years ended December 31, 2025 and 2024, net cash used in investing activities was $4.7 million and $9.0 million, respectively.

For the year ended December 31, 2025, net cash used in investing activities was primarily driven by continued investment
in the concurrent development and expansion of the Granite Software Ecosystem and the ERT500 generators (Thanos Project), representing a significant step forward in the development and deployment of our next-generation energy infrastructure.

Table of Contents

For the year ended December 31, 2024, we continued to make significant
investments in the development of its Granite Software Ecosystem, a proprietary platform that leverages operating data to enhance reliability and reduce costs. We remain focused on evolving the Granite Software Ecosystem to help customers optimize
system performance, lower operating costs, and accelerate project deployment timelines.

Financing Activities

For the year ended December 31, 2025, net cash used in financing activities was $25.7 million. During the year, we made
voluntary payments of all principal and paid-in-kind interest totaling $79.2 million related to the 2024 Credit Agreement. On December 22, 2025, the Company entered
into a Loan and Security Agreement that consisted of a $30.0 million term loan and a $30.0 million revolving credit facility, with a maturity date of November 29, 2030. In addition, during the year, we issued $25.4 million of
convertible promissory notes to an affiliated investor.

For the year ended December 31, 2024, net cash provided by
financing activities was $31.2 million. On February 27, 2024, we entered into a five-year term credit agreement, which included a $75.0 million senior secured initial term loan and a $30.0 million delayed draw term loan, maturing
on February 27, 2029. A portion of the proceeds from the new term loan was used to repay all outstanding borrowings under our 2023 Loan and Security Agreement, totaling approximately $38.0 million.

During 2024, we also issued $10.0 million of convertible promissory notes to an affiliated investor, incurred
$8.1 million in debt issuance costs, and paid distributions to common unit holders totaling $7.7 million.

Contractual Obligations and
Commitments

Our cash requirements within the next twelve months include accounts payable and accrued liabilities,
other current liabilities, and other obligations. We expect the cash required to meet these obligations to be primarily generated through a combination of cash from operations and our borrowing capacity under our 2025 Credit Agreement.

Our long-term cash requirements under our various contractual obligations and commitments include:

• Debt Obligations and Interest Payments—See Note 11—Debt, to our consolidated financial statements
included in this prospectus for further detail of our debt and the timing of expected future principal and interest payments.

• Operating Leases—See Note 9—Leases, in the Notes to our consolidated financial statements included
in this prospectus for further detail of our obligations and the timing of expected future payments.

believe the following sources will be sufficient to meet our anticipated cash requirements for at least the next twelve months while maintaining sufficient liquidity for normal operating purposes: