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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impact revenue recognized each period. Changes in estimates are recognized on a cumulative catch-up basis in the period in which the revisions are made. For the period presented, the amount of revenue recognized in the current period from performance obligations satisfied (or partially satisfied) in prior periods was not material. On occasion, the Company approves change orders that modify the scope and price of a contract and accounts for those change orders as follows: • If the change order adds distinct goods or services and those goods and services are priced at standalone selling prices, it is accounted for as a separate contract. • If the change order is not distinct (e.g., additional installation work), it is accounted for as part of the existing contract, and the effect on the transaction price and measure of progress is recognized as a cumulative catch-up adjustment to revenue. Contract Balances & Payment Terms

Payment Terms: Payment terms vary by contract type but are generally due within 30 days. Installation Services contracts
typically require milestone payments in advance of performance (resulting in contract liabilities), while Ongoing Services contracts are billed in arrears.

Significant Financing Component: The Company has elected the practical expedient to not adjust the promised amount of
consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between the transfer of a promised good or service and when the customer pays for that good or service will be one year
or less. Occasionally in a long-term contract, the Company experiences a difference between payment and performance of greater than one year. The Company would not consider such cases to give rise to a significant financing component, as payments in

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Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December

advance of services performed (i.e., resulting in contract liabilities) are primarily structured to secure the contract, offset the initial cost of procuring materials and protect the Company
from customer nonperformance.

Contract Assets and Liabilities: With respect to the Company’s Installation
Services contracts, interim payments are typically received as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. As a result, under fixed-price contracts, the timing of revenue recognition and contract billings result in contract assets and contract liabilities.

• Contract assets represent revenues recognized in excess of amounts billed for fixed-price contracts and are
current assets that are transferred to accounts receivable when billed or the billing rights become unconditional.

• Contract liabilities represent billings in excess of revenues recognized for fixed-price contracts. These
arise under certain contracts that allow for upfront payments from the customer or contain contractual billing milestones, which result in billings that exceed the amount of revenues recognized for certain periods.

• Contract assets and liabilities are recorded on a net basis at the individual contract level at the end of
each reporting period.

Contract Costs

The Company capitalizes incremental costs of obtaining a contract, such as sales commissions, if the Company expects to recover
those costs. For the year ended December 31, 2024, there was $0.2 million contract costs incurred that are recorded as deferred contract costs within other assets in the consolidated balance sheet and are amortized on a straight-line basis over
the expected period of benefit, which is generally the contract term. The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the
entity otherwise would have recognized is one year or less.

Other Revenue Policies

Sales Taxes: Amounts collected on behalf of their parties (such as sales and similar taxes) are excluded from revenue.

Shipping and Handling: The Company’s shipping and handling activities, which primarily relate to the
delivery of generators under Product Sales and the transport of equipment for Installation Services, are treated as fulfillment activities rather than separate performance obligations. Shipping and handling costs are included in cost of revenues and
are recognized as incurred.

Cash and Cash Equivalents

The Company considers cash on hand, cash in banks, and other highly liquid debt instruments purchased with an original maturity
of three months or less to be cash and cash equivalents.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded when invoices are issued and are presented in the consolidated balance sheet at amortized
cost, net of an allowance for credit losses. The Company routinely assesses the

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Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December

collectability of its accounts receivable. The Company monitors the credit quality of its counterparties through review of collections, credit ratings, and other analyses. The Company develops
its estimated allowance for credit losses primarily using an aging method and analyses of historical loss rates, as well as consideration of current and future conditions that could impact its counterparties’ credit quality and liquidity.
Balances confirmed to be uncollectible are then written off against the allowance for credit losses.

The following is a
summary of accounts receivable as of December 31, 2024:

Accounts receivable, net

Power system sales accounts receivable $	10,462

Ongoing services accounts receivable 14,140

Other accounts receivable 4,031

Allowance for credit losses —

Total accounts receivable, net $	28,633

Property and Equipment

Property and equipment are presented at cost, less accumulated depreciation, which is provided using the straight-line method
over the estimated useful lives of the individual assets (see Note 8—Property and Equipment). Expenditures for major renewals and improvements are capitalized if they extend the useful life of the asset, while expenditures for
maintenance and repairs are expensed as incurred. Leasehold improvements are amortized over the shorter of their estimated useful lives or the life of the lease, plus renewal options the Company is reasonably certain to exercise. Sales and disposals
of property and equipment are removed at carrying cost, less accumulated depreciation with any resulting gain or loss reflected in earnings.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment if events or changes in circumstances indicate that the carrying value
of such assets may not be recoverable, as required by ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset or asset group
are compared to the asset or asset group’s carrying amount to determine if an impairment is necessary. If the carrying amount of an asset may not be recoverable, a write-down to fair value is recorded.

Fair values are determined based on the discounted cash flows or external appraisals, if applicable. Long-lived assets are
reviewed for impairment at the individual asset or the asset group level for which the lowest level of independent cash flows can be identified. No impairment of long-lived assets was recognized in 2024.

Deferred Financing Costs

The Company defers financing costs, including debt discounts and debt issuance costs, and amortizes the costs over the terms of
the related debt using the effective interest method for term debt and straight-line method for revolving lines of credit, in accordance with ASC 470, Debt. Upon repayment of or in

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Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December

conjunction with a debt modification or exchange that qualifies as an extinguishment under GAAP of the underlying debt agreement, the unamortized costs are charged to earnings as a component of
interest expense.

Warrants

The Company determines the accounting classification of warrants it issues as either liability or equity classified by first
assessing whether the warrants meet liability classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), then in accordance with ASC 815, Derivatives and Hedging (“ASC 815”).
After all relevant assessments, the Company concludes whether the warrants are classified as liability or equity. Liability-classified warrants are recorded at fair value at issuance and are marked-to-market each reporting period with changes in fair value recognized in the consolidated statement of operations. These are included within other current liabilities and other noncurrent liabilities
in the consolidated balance sheet. Equity-classified warrants are recorded at fair value at issuance with no changes recognized subsequent to the issuance date. These are included within common units in the consolidated balance sheet.

Embedded Derivative Liabilities