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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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 in 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 Table of Contents

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.

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.”

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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 the amounts may need to be paid prior to the actual realization, if any, of such
future tax benefits.

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.

Pursuant to the sixth amended and restated limited liability company agreement of ER Holdings (the “A&R
LLCA”), ER Holdings will make 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 marginal income tax rate applicable to an individual resident in the
United States (taking into account certain other assumptions, including the deductibility of state and local taxes for U.S. federal income tax purposes, and calculated without regard to certain tax benefits particular to a member, including many of
the benefits that are taken into account under the Tax Receivable Agreement). Under applicable tax rules, ER Holdings is required to allocate net taxable income disproportionately to its members in certain circumstances.

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.