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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On February 27, 2024, the Company entered into a five-year term credit agreement (the “2024 Credit Agreement”) that consisted of a $75.0 million senior secured initial term loan and a $30.0 million delayed draw term loan with a maturity date of February 27, 2029. Borrowings under the 2024 Credit Agreement are collateralized by personal security interests on all equipment and fixtures, all inventory, and all receivables owned by the Company. Prior to the first anniversary of the closing date, borrowings under the 2024 Credit Agreement are subject to interest at the sum of (i) the sum of (1) the greater of (A) 8.00% and (B) term Secured Overnight Financing Rate (“SOFR”), plus 4.00%, plus (2) for any period for which a permitted revolving credit facility is then outstanding, 1.00%, payable in cash, and (ii) term SOFR, plus 10.00%, in each case minus any amounts paid in cash, payable in kind.

On or after the first anniversary of the closing date, borrowings under the 2024 Credit Agreement are subject to interest at
the sum of (i) term SOFR, plus 5.50%, plus for any period for which a permitted revolving credit facility is then outstanding, 1.00%, payable in cash, and (ii) term SOFR, plus 4.50%, payable in kind.

The 2024 Credit Agreement contains customary events of default provision. If an event of default occurs and is continuing, the
lender may declare all amounts outstanding under the 2024 Credit Agreement to be immediately due and payable.

connection with the initial term loan under the 2024 Credit Agreement, the Company issued a warrant to the lender for the purchase of up to 6,290 common units at an exercise price of $0.01 per unit (see Note 13 — Equity — Warrant Units).

In connection with the delayed draw term loan under the 2024 Credit Agreement, if the Company draws upon the
$30.0 million of available funds, the Company would be obligated to issue a warrant to the lender. The number of common units that could be purchased under such warrant is determined based on the percentage of the delayed draw term loan funded
multiplied by the total number of common units related to the delayed draw term loan of 2,606, and would have an exercise price of $0.01. Based on the Company’s analysis of the criteria contained in ASC 815, the Company determined the
contingently issuable warrants met the definition of a warrant liability. The contingently issuable warrant liability is included in other current liabilities in the consolidated balance sheets and 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
loan commitment asset was recorded and is included in other assets in the consolidated balance sheets. As the Company does not intend to draw upon the delayed draw term loan, the loan commitment asset related to the contingently issuable warrants
will be amortized straight-line over the term of access to the line of credit. As of the issuance date, the fair value of the contingently issuable warrant liability was $1.3 million. The balance of the contingently issuable warrant liability
as of December 31, 2024, was $2.7 million is included in other current liabilities in the consolidated balance sheets. The increase in the fair value of the contingently issuable warrant liability during 2024 of $1.4 million was
included in other income, net. Amortization of the loan commitment asset related to the contingently issuable warrant liability was $0.7 million for the year ended December 31, 2024. The unamortized loan commitment asset related to the
contingently issuable warrant liability as of December 31, 2024, was $0.6 million.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December
31, 2025 and 2024

On the issuance date of the 2024 Credit Agreement, the Company recorded a
total debt discount of $5.1 million consisting of the discount paid to the lender and the fair value of the warrants issued. The debt discount will be amortized to interest expense over the term of the agreement using the effective interest
rate method. As of December 31, 2024, the unamortized debt discount related to the 2024 Credit Agreement was $4.7 million.

On the issuance date of the 2024 Credit Agreement, the Company recorded a loan commitment asset of $0.8 million related
to the discount paid to the lender, attributable to the $30 million delayed draw term loan. The loan commitment asset will be amortized to interest expense on a straight-line basis over the term of access to the delayed draw term loan. As of
December 31, 2024, the unamortized loan commitment asset related to the 2024 Credit Agreement was $0.4 million.

In connection with the issuance of the 2024 Credit Agreement, the Company incurred debt issuance costs of $5.3 million
which were recorded as a contra-liability and will be amortized to interest expense over the term of the agreement using the effective interest rate method. As of December 31, 2024, the unamortized debt issuance costs related to the 2024 Credit
Agreement were $4.8 million.

As of December 31, 2024, the Company had $75.0 million of borrowings related
to the initial term loan and no borrowings related to the delayed draw term loan under the 2024 Credit Agreement. The Company was in compliance with the financial covenants listed above of the 2024 Credit Agreement as of December 31, 2024.

During the year ended December 31, 2025, the Company fully paid down the 2024 Credit Agreement including all principal
payments and PIK. As a result of these prepayments, the Company recognized a loss on extinguishment of debt related to the 2024 Credit Agreement of $12.4 million, inclusive of prepayment penalties incurred of $3.4 million, debt issuance costs write
offs of $4.2 million, and debt 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).