SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: DRS/A
Document Type: DRS/A
Date Filed: 2026-04-01
Accession Number: 0001193125-26-138217
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526138217/filename1.htm

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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. In certain circumstances, ER Holdings will be required to make distributions to us and the Continuing Equity Unitholders, and the distributions that ER Holdings will be required to make may be substantial. ER Holdings is expected to continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to U.S. federal income tax under existing law. Instead, taxable income will be allocated to its members, including us.

Pursuant to the amended and restated limited liability company agreement of ER Holdings (the “A&R LLCA”), ER
Holdings will make pro rata tax distributions to its members, including us, which generally will be pro rata based on the ownership of ER Holdings units, calculated using an assumed tax rate, to enable each of the members to pay taxes on that
member’s allocable share of ER Holdings’ net taxable income. Generally, these tax distributions will be computed based on our estimate of the net taxable income of ER Holdings allocable per unit (based on the member which is allocated
the largest amount of taxable income on a per interest basis) multiplied by an assumed tax rate generally equal to the highest combined U.S. federal and state and local tax rate applicable to any holder of Class B Units (taking into account certain
other assumptions, and subject to adjustment to the extent that state and local taxes are deductible for U.S. federal income tax purposes). Under applicable tax rules, ER Holdings is required to allocate net taxable income disproportionately to its
members in certain circumstances. Because tax distributions will be determined based on assumptions, including an assumed tax rate that is the highest combined U.S. federal and applicable state and local tax rate applicable to a holder of
Class B Units for the taxable year, but generally will be made pro rata based on ownership of ER Holdings units, ER Holdings will be required to make tax distributions that, in the aggregate, will likely exceed the aggregate amount of taxes
payable by its members with respect to the allocation of ER Holdings’ income.

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On an after-tax and after-distribution basis, the Continuing Equity
Unitholders may be in a more favorable economic position than holders of our Class A common stock with respect to the tax benefits generated by exchanges of ER Holdings units. The magnitude of this differential will depend on, among other things,
the amount of TRA payments made over time, the timing of exchanges by the Continuing Equity Unitholders, and the taxable income generated by ER Holdings.

Although we benefit from tax savings attributable to the tax assets within the scope of the TRA (and these tax assets would
not be available to us in an IPO not structured as an UP-C), the TRA is designed to allow the TRA Beneficiaries to receive most of the benefit associated with those savings. Thus, if the TRA is taken into account, there could be an economic
difference between the Continuing Equity Unitholders who are TRA Beneficiaries and the holders of shares of Class A common stock who are not TRA Beneficiaries. Holders of our Class A common stock should be aware that this structural
feature of our organization may result in the Continuing Equity Unitholders receiving disproportionate economic benefits relative to holders of our Class A common stock, particularly during periods of significant TRA payment activity.

As a result of potential differences in the amount of net taxable income allocable to us and to other members of ER Holdings,
as well as the use of an assumed tax rate in calculating ER Holdings’ tax distribution obligations, we may receive distributions significantly in excess of our tax liabilities and obligations to make payments under the Tax Receivable
Agreement. We may choose to manage these excess distributions through a number of different approaches, including through the payment of dividends to holders of our Class A common stock or by reinvesting the proceeds. Funds used by ER Holdings to
satisfy its tax distribution obligations generally will not be available for reinvestment in its business and the tax distributions ER Holdings will be required to make may be substantial.

To the extent we retain or reinvest any proceeds received from ER Holdings, a Continuing Equity Unitholder who exchanges their
Class B Units for Class A common stock could receive a benefit at the expense of the pre-exchange holders of our Class A common stock. Specifically, because any such retained or reinvested proceeds would increase the value of the Class A
common stock but would not correspondingly increase the value of the Class B Units, a Continuing Equity Unitholder who exchanges their Class B Units at a time when we have retained or reinvested proceeds could receive Class A common stock that
is worth more than the exchanged Class B Units. The A&R LLCA will include mechanisms designed to reduce or eliminate any such benefit. Specifically, the A&R LLCA will provide that if we retain or reinvest any such proceeds (other than
immaterial proceeds), ER Holdings may adjust either the number of Class B Units or the exchange ratio between Class B Units and Class A common stock to maintain parity between the Class B Units and the Class A common stock (i.e., to
ensure, to the extent possible, that the value of the Class B Unit exchanged equals the value of the shares of Class A Common Stock received in that exchange). There can be no assurance, however, that these mechanisms will fully prevent in
whole or in part the economic benefit described above. Holders of our Class A common stock should be aware that this structural feature of our organization may result in the Continuing Equity Unitholders receiving disproportionate economic
benefits relative to pre-exchange holders of our Class A common stock, particularly during periods of significant distributions by ER Holdings.

The IRS might challenge the tax basis step-ups and other tax benefits we receive in connection
with the IPO and the related transactions and in connection with future acquisitions of Class B Units.

The
Continuing Equity Unitholders may exchange      Class B Units for shares of our common stock in the future or, at our election and in our sole discretion, for cash. The Blocker Mergers and exchanges by the Continuing
Equity Unitholders in the future may result in increases in the tax basis of the assets of ER Holdings that otherwise would not have been available. These increases in tax basis are expected to increase, or deemed to increase (for U.S. tax purposes)
our depreciation and amortization and, together with other tax benefits, reduce the amount of tax that we would otherwise be required to pay, although it is possible that the Internal Revenue Service (the “IRS”) might challenge all or
part of these tax basis increases or other tax benefits, and a court might sustain such a challenge. Our ability to achieve benefits from any tax basis increases or other tax benefits will

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depend upon a number of factors, as discussed above and below, including the timing and amount of our future income. We will not be reimbursed for any payments previously made under the Tax
Receivable Agreement if the basis increases or other tax benefits described above are successfully challenged by the IRS or another taxing authority (other than by an offset against future payments under the Tax Receivable Agreement). As a result,
in certain circumstances, payments could be made under the Tax Receivable Agreement in excess of our ultimate cash tax savings.

may incur tax and other liabilities attributable to the Blocked Unitholders as a result of certain reorganization transactions.

In connection with the Blocker Mergers, we issued shares of Class A common stock as merger consideration to the Blocked
Unitholders. As the successor to these merged entities, we generally will succeed to and be responsible for any outstanding or historical tax or other liabilities of the Blocker Companies, including any liabilities incurred as a result of the
Blocker Mergers. Any such liabilities for which we are responsible could have an adverse effect on our liquidity and financial condition.

We may be required to pay additional taxes because of the U.S. federal partnership audit rules and potentially also state and local tax
rules.