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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power systems. We design and engineer these components and we have relationships with suppliers that will manufacture these components for us. The design, engineering, manufacturing setup, and quality control activities are time and capital intensive. Some of our suppliers use proprietary processes to manufacture components. We may be unable to obtain comparable components from alternative suppliers without considerable delay, expense or at all, as replacing these suppliers could require us either to make significant investments to bring the capability in house or to invest in a new supplier partner. Some of our suppliers are smaller, private companies, heavily dependent on us as a customer. If our suppliers face difficulties obtaining the credit or capital necessary to expand their operations when needed, they could be unable to supply necessary components or materials needed to support our planned sales and services operations, which would negatively impact our sales volumes and cash flows.

We may experience unanticipated
disruptions to operations or other difficulties with our supply chain or internalized supply processes for a variety of factors, including, but not limited to, lack of capacity at our suppliers, availability of credit, logistical challenges, labor
or material shortages, trade restrictions, exchange rate fluctuations, volatility in regional markets from where materials are obtained, particularly China and Taiwan, changes in the general macroeconomic outlook, political instability,
expropriation or nationalization of property, civil unrest, strikes, insurrections, acts of terrorism, geopolitical conflicts (such as conflicts in the Ukraine or the Middle East), public health emergencies, natural disasters or weather events. The
failure by us to obtain components or materials in a timely manner, or to obtain components or materials that meet our quantity and cost requirements, could impair our ability to produce our power systems or increase their costs or service our
existing portfolio of power systems under O&M service contracts.

If we cannot obtain substitute components or
materials on a timely basis or on acceptable terms, we could be prevented from delivering our power systems to our customers within required timeframes or service or existing fleet of power systems, which could result in sales and installation
delays, cancellations, penalty payments, or damage to our reputation, any of which could have a material adverse effect on our business and

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results of operations. In addition, we rely on our suppliers to meet quality standards, and the failure of our suppliers to meet or exceed those quality standards could cause delays in the
delivery of our power systems, unanticipated servicing costs and damage to our reputation.

We have, in some instances, entered into
long-term supply agreements that could result in excess or, if one or more suppliers do not produce for any reason, insufficient inventory, above market pricing or higher costs, and negatively affect our results of operations.

We have and may in the future enter into long-term supply agreements with certain suppliers. Some of these supply agreements
provide for fixed or inflation-adjusted pricing, substantial prepayment obligations and, in a few cases, supplier purchase commitments. These arrangements could mean that we end up paying for inventory that we do not need or that is at a higher
price than the market. Further, we face significant specific counterparty risk under long-term supply agreements when dealing with suppliers without a long, stable production and financial history. In the event any such supplier experiences
financial difficulties, it may be difficult or impossible, or may require substantial time and expense, for us to recover any or all of our prepayments. We do not know whether we will be able to maintain long-term supply relationships with our
critical suppliers or whether we may secure new long-term supply agreements. Additionally, many of our parts and materials are procured from foreign suppliers, which exposes us to risks including unforeseen increases in costs or interruptions in
supply arising from changes in applicable international trade regulations such as taxes, tariffs or quotas. Any of the foregoing could materially harm our financial condition and results of operations.

Certain of our important purchased components are produced in foreign countries, exposing us to additional risks that may not exist in
the United States.

Certain of our important purchased components are produced overseas, primarily in Asia and
South America. Our international sourcing subjects us to a number of potential risks in addition to the risks associated with third-party sourcing generally. Such risks include:

• inflation or changes in political and economic conditions;

• logistical challenges, including extended container port congestion, and higher logistics costs;

• unstable regulatory environments;

• changes in import and export duties;

• domestic and foreign customs and tariffs;

• currency rate fluctuations;

• trade restrictions;

• labor or civil unrest;

• geopolitical conflict such as that experienced in Ukraine or the Middle East;

• disputes in our relationships with certain suppliers;

• communications challenges; and

• other trade restraints and burdensome taxes.

These factors have occurred in the past and are currently having an adverse effect on our ability to efficiently and cost
effectively source our purchased components overseas. Additionally, we purchase our components from foreign suppliers in U.S. dollars. If the U.S. dollar were to depreciate significantly against the currencies of our foreign suppliers, the prices at
which we purchase our components and therefore our cost of revenues could increase materially, which would adversely affect our results of operations.

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Possible new trade tariffs could have a material adverse effect on our business.

The United States has recently enacted and proposed to enact significant new tariffs, as well as changes to
existing tariffs. Additionally, various federal agencies have been directed to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion, commentary, and action regarding potential significant changes to U.S. trade
policies, treaties, and tariffs. As of the date of this prospectus, discussions remain ongoing in respect of certain trade restrictions and tariffs on imports from Canada, China, Mexico, and other countries, as well as retaliatory tariffs enacted in
response to such actions. In light of these events, there is significant uncertainty about the future relationship between the United States and other countries with respect to such trade policies, treaties, and tariffs. These developments, or the
perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations
and the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would
negatively impact us.

Disruptions caused by labor disputes could harm our business.

As of the date of this prospectus, we have approximately 350 employees and intend to significantly increase our employee
headcount in the near-term. There can be no assurance that any future issues or disputes with our employees will be resolved favorably or that we will not encounter future strikes, work stoppages or other disputes with our employees. A work stoppage
or other limitations on assembly at our facilities for any reason could have a material adverse effect on our business, financial condition and results of operations. In addition, our customers or suppliers may have unionized work forces. Strikes or
work stoppages experienced by our customers or suppliers could have a material adverse effect on our business, results of operations and financial condition.

Commodity price changes, material price increases, fluctuations in demand for our power systems and services, significant disruptions to
our supply chains or significant shortages of labor and material may materially and adversely affect our financial results or our ability to meet commitments to customers.

We establish prices with our customers in accordance with contractual time frames; however, the timing of material and
commodity market price increases may prevent us from passing these additional costs on to our customers through timely pricing actions. While we enter into contractual pricing adjustment provisions with our customers from time to time that attempt
to address some of these risks, there can be no assurance that commodity price fluctuations will not adversely affect our financial condition and results of operations.

Risks Related to Laws, Regulations and Other Legal Matters

We are subject to laws and regulations that could impose substantial costs upon us and cause delays in the delivery and installation of
our power systems.