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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Holdings are not sufficient to permit us to make payments under the Tax Receivable Agreement. For the sake of illustration, assuming all outstanding membership interests in ER Holdings held by TRA Beneficiaries are exchanged for shares of Class A Common Stock, 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) exchanges occurred on the same day, (ii) a share price of $ per share of Class A common stock, (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 use on a current basis the increased depreciation, amortization and other tax benefits that are the subject of the Tax Receivable Agreement.

Our organizational structure, including the Tax Receivable
Agreement, confers certain benefits upon the TRA Beneficiaries that will not benefit certain holders of our Class A common stock to the same extent that they will benefit the TRA Beneficiaries.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the TRA Beneficiaries that
will not benefit certain holders of our Class A common stock to the same extent that they will benefit the TRA Beneficiaries. Additionally, we are a holding company and have no material assets other than our ownership equity interests in ER
Holdings. As a consequence, our ability to declare and pay dividends to the holders of our Class A common stock is subject to ER Holdings providing distributions to us and the restrictions in our other organizational documents. If ER Holdings makes
such distributions, the holders of Class B Units and Class M Units generally will be entitled to receive equivalent distributions from ER Holdings on a pro rata basis. However, because we must pay taxes, make payments under the Tax Receivable
Agreement, and pay our expenses, any amounts ultimately paid as dividends to holders of our Class A common stock are expected to be less on a per share basis than the amounts distributed by ER Holdings to holders of Class B Units and Class M Units
on a per unit basis. This feature and other aspects of our organizational structure may adversely impact the future trading market for our Class A common stock.

As a result of the Tax Receivable Agreement, interests of the Continuing Equity Unitholders and Continuing Profits Interest Unitholders
may conflict with those of other holders of our Class A common stock including connection with certain potential future transactions.

As discussed above, our organizational “UP-C” structure, including the Tax
Receivable Agreement, confers certain benefits upon certain of the Continuing Equity Unitholders and Continuing Profits Interest Unitholders that will not benefit the holders of our Class A common stock. Certain of the Continuing Equity Unitholders
and Continuing Profits Interest Unitholders may receive payments from us under the Tax Receivable Agreement upon any redemption or exchange of their ER Holdings units, including in connection with a voluntary termination of the Tax Receivable
Agreement or following a change of control transaction. Furthermore, so long as the Tax Receivable Agreement is outstanding and in effect, any distributions we receive from ER Holdings must first be used by us to meet our obligations under the Tax
Receivable Agreement and to pay our taxes and other legal compliance obligations. As a result, the interests of such Continuing Equity Unitholders and Continuing Profits Interest Unitholders may conflict with the interests of holders of our
Class A common stock.

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For example, in connection with a change of control transaction, certain
valuation assumptions in the Tax Receivable Agreement would apply, potentially increasing the amount of or accelerating the timing of, payments that otherwise would be made to the TRA Beneficiaries pursuant to the Tax Receivable Agreement. The
prospect of receiving enhanced Tax Receivable Agreement payments could impact the Continuing Equity Unitholders’ and Continuing Profits Interest Unitholders’ support for a change of control transaction and/or their view of the
appropriateness of the consideration received for our Class A common stock, even though such transactions might involve risks or may not prove beneficial to holders of our Class A common stock. Similarly, the cost associated with such enhanced
payments may influence a prospective buyer’s valuation of our shares. In addition, the structuring of future transactions may take into consideration tax or other considerations of such Continuing Equity Unitholders and Continuing Profits
Interest Unitholders even in situations where no similar considerations are relevant to us or beneficial to our public stockholders. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement” for a
discussion of the Tax Receivable Agreement and the related likely benefits to be realized by us and certain Continuing Equity Unitholders and Continuing Profits Interest Unitholders.

The application of certain valuation assumptions under the Tax Receivable Agreement in the case of certain changes of control or other
events may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A common stock.

In the event of certain changes of control, certain material breaches of the Tax Receivable Agreement by us, or an insolvency
event, the calculation of certain future payments made under the Tax Receivable Agreement will use certain valuation assumptions, including that (i) in the case of a change of control, any exchangeable membership interests of ER Holdings (other
than those held by us) outstanding on the date the change of control becomes effective are deemed to be exchanged for an amount equal to the market value of the corresponding number of shares of common stock on the date the change of control becomes
effective and (ii) we will have sufficient taxable income to fully use (A) the tax attributes covered by the Tax Receivable Agreement and (B) any remaining net operating losses subject to the Tax Receivable Agreement on a straight
line basis over the shorter of the statutory expiration period for such net operating losses or the 15-year period after the change of control or other relevant event. Such payments may significantly exceed the actual benefits we realize in respect
of the tax attributes subject to the Tax Receivable Agreement. We expect that the payments that we may make under the Tax Receivable Agreement following a change of control may be substantial and may be in excess of 85% of our actual cash tax
benefits. As a result, the assumptions adopted under the Tax Receivable Agreement in the case of a change of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our
Class A common stock in a change of control transaction.

In certain cases, payments under the Tax Receivable Agreement to
the TRA Beneficiaries may be accelerated or significantly exceed any actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement.

Under the Tax Receivable Agreement, if we exercise our right to terminate the Tax Receivable Agreement early, or we breach any
of our material obligations under the Tax Receivable Agreement, our obligations under the Tax Receivable Agreement to make payments would be accelerated and based on certain assumptions, including an assumption that we would have sufficient taxable
income to fully use all potential future tax benefits that are subject to the Tax Receivable Agreement. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

As a result, the amount we are required to pay under the Tax Receivable Agreement may significantly exceed 85% of the actual
cash tax benefits that we realize in respect of the tax attributes subject to the Tax Receivable Agreement or that are prior to the actual realization, if any, of such future tax benefits.

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In certain circumstances, cash and other assets retained by ERock may
disproportionately benefit the Continuing Equity Unitholders and Continuing Profits Interest Unitholders relative to holders of our Class A common stock.

We expect that ER Holdings is and will continue to be classified as a partnership for U.S. federal income tax purposes. As
such, ER Holdings generally is not subject to U.S. federal income tax under existing law. Instead, taxable income will be allocated to its members, including us.