SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: S-1
Document Type: S-1
Date Filed: 2026-05-15
Accession Number: 0001193125-26-227199
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526227199/d12401ds1.htm

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discount write offs of $6.4 million, reduced by warrant liability write offs of $1.0 million and derivative liability write offs of $0.6 million. 2024 Note Purchase Agreement and Amended and Restated Note Purchase Agreement On December 27, 2024, the Company entered into a note purchase agreement (the “2024 Note Purchase Agreement”) with an affiliate investor, pursuant to which the lender agreed to purchase a minimum aggregate principal amount of $20.0 million and a maximum aggregate principal amount of $50.0 million of convertible promissory notes, convertible into equity securities having identical rights, privileges, preferences, and restrictions as equity securities of the Company issued in an equity financing. For each note issued, the Company also agreed to issue a warrant with an exercise price of $0.01, with the number of common units for which a warrant may be exercisable equal to the aggregate principal amount of the note purchased divided by 1,497.

As of December 31, 2024, the Company had issued the December 2024 Convertible Note worth $10.0 million of the minimum
aggregate amount of $20.0 million. The contingently issuable warrants related to the remaining $10.0 million commitment are deemed issued for accounting purposes, and are recognized as a warrant liability recorded at fair value and marked-to-market
each reporting period with changes in fair value being reflected in the consolidated statement of operations (see Note 3 — Fair Value). A corresponding loan commitment asset was recorded and included in other assets in the
consolidated balance sheet, which will be reclassified as a debt discount upon future issuances of convertible notes and related warrants. As of the issuance date and as of December 31, 2024, the fair value of the contingently issuable warrant
liability was $7.0 million.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December
31, 2025 and 2024

The Company reviewed the terms of the 2024 Note Purchase Agreement to
determine whether there are embedded derivative instruments which are required to be bifurcated and accounted for separately. The Company determined the 2024 Note Purchase Agreement contained several embedded derivative instruments that are required
to be bifurcated, and accounted for these as a single, compound derivative instrument. The embedded derivative instruments in the 2024 Note Purchase Agreement the Company determined were required to be bifurcated included the conversion upon
consummation of an equity financing, redemption upon consummation of an equity financing, redemption upon a liquidity event, conversion upon maturity of the loan, and redemption upon event of default. The Company recorded the single, compound
derivative instrument at fair value and marked-to-market each reporting period with changes in fair value being reflected in the consolidated statements of operations
(see Note 3 — Fair Value).

On April 29, 2025, the Company entered into an amended and restated note purchase
agreement (the “A&R Note Purchase Agreement”) which amended and restated the 2024 Note Purchase Agreement and the notes issued thereunder, and pursuant to which the lenders agreed to purchase convertible promissory notes in an
aggregate principal amount not to exceed $65.0 million (the “2025 Convertible Notes”), inclusive of the $20 million of notes issued under the 2024 Note Purchase Agreement. The 2025 Convertible Notes are convertible into equity
securities having rights, privileges, preferences, and restrictions identical to those issued in a future equity financing. In connection with the A&R Note Purchase Agreement, all warrants previously issued under the 2024 Note Purchase Agreement
were marked-to-market and written off with initial changes in fair value reflected in the consolidated statements of operations (see Note 3 — Fair Value).

Rights Offering

The A&R Note Purchase Agreement authorized a rights offering to existing equity holders (other than current lenders and
their affiliates) of up to $4.96 million of 2025 Convertible Notes, provided that the amount of all 2025 Convertible Notes may not exceed $65.0 million. Purchasers participating in the rights offering were entitled to receive additional common
units, the number of which is determined pursuant to a specified formula tied to the purchaser’s principal investment and an aggregate principal reference amount of $35.0 million. During the year ended December 31, 2025, the Company issued
$69 thousand worth of 2025 Convertible Notes associated with the rights offering and were included in accrued liabilities and other payables on the consolidated balance sheets. As of December 31, 2025, the rights offering election period has
expired, and the Company has no remaining obligations to issue any additional rights offering units.

December 2024
Convertible Note and Amended Restated Notes

Pursuant to the 2024 Note Purchase Agreement, on December 27,
2024, the Company issued a $10.0 million convertible promissory note (the “December 2024 Convertible Note”) to an investor with a maturity date of December 27, 2026, provided that, for so long as the 2024 Credit Agreement
remains outstanding, the maturity date of the December 2024 Convertible Note will be the date that is six months following the stated maturity date of the 2024 Credit Agreement. The December 2024 Convertible Note bears an interest rate of 15% per
annum, compounding quarterly and payable in kind (“PIK interest”) by adding accrued interest to the outstanding principal amount. Interest accrual commences on the issue date and concludes either on maturity of the note or upon any event
that triggers conversion or repayment prior to maturity.

The Company recorded the bifurcated embedded derivative features
related to the issuance of the December 2024 Convertible Note at fair value in accordance with ASC 815. As of the issuance date and as of

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December
31, 2025 and 2024

December 31, 2024, the fair value of the derivative liability was $1.5 million and is included within other noncurrent liabilities in the consolidated balance sheets with changes in
fair value recognized in the consolidated statements of operations.

Per the terms of the 2024 Note Purchase Agreement, a
warrant was issued to the investor in conjunction with the December 2024 Convertible Note, which can be exercised in whole or in part up to an aggregate of 6,680 common units with an exercise price of $0.01 and has a maturity date of
December 27, 2034. If the holder has not exercised the warrant by the expiration date, the warrant will automatically be exercised. Based on the Company’s analysis of the criteria contained in ASC 815, the Company determined that the
warrant issued in conjunction with the December 2024 Convertible Note met the definition of a warrant liability. The warrant liability is recorded at fair value and
marked-to-market each reporting period with changes in fair value being reflected in the consolidated statements of operations (see Note 3 — Fair Value). A
corresponding debt discount contra-liability was recorded and will be amortized to interest expense over the term of the agreement using the effective interest rate method. As of the issuance date and as of December 31, 2024, the fair value of
the warrant liability was $7.0 million. As of the issuance date and as of December 31, 2024, the fair value of both the legally issued warrants and the contingently issuable warrants related to the 2024 Note Purchase Agreement and the
December 2024 Convertible Note was $14 million, and is included in warrant unit liabilities in the consolidated balance sheets.

On the issuance date of the December 2024 Convertible Note, the Company recorded a total debt discount of $8.5 million
consisting of the fair value of the derivative liability and the fair value of the warrant liability. The discount will be amortized to interest expense over the term of the December 2024 Convertible Note using the effective interest rate method. As
of December 31, 2024, the unamortized debt discount related to the December 2024 Convertible Note was $8.5 million.

In connection with the issuance of the December 2024 Convertible Note, the Company incurred debt issuance costs of
$0.2 million which were recorded as a contra-liability and will be amortized to interest expense over the term of the December 2024 Convertible Note using the effective interest rate method.

During the year ended December 31, 2024, the effective interest rate on the December 2024 Convertible Note was 126%.
During the year ended December 31, 2024, interest expense recognized related to the December 2024 Convertible Note was $18 thousand, which includes $16 thousand attributable to PIK interest and $2 thousand attributable to
amortization of the issuance costs and debt discount.

The December 2024 Convertible Note is measured at amortized cost
and has a net carrying value of $9.1 million as of December 31, 2025.

In January and February 2025, pursuant to
the 2024 Note Purchase Agreement, the Company issued a total of $10.0 million in convertible promissory notes across two $5.0 million notes (the “Additional 2024 Convertible Notes”), inclusive of paid-in-kind interest, to the
same investor on substantially the same terms and conditions as the December 2024 Convertible Note.

The Additional 2024
Convertible Notes is measured at amortized cost and has a net carrying value of $9.0 million as of December 31, 2025.