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

Chunk 105 of 119
Word Count: 1397
Character Count: 9728

Document Content:

preferred unit amounts, unless otherwise stated. Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenue and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. Regulation The Company’s operations, including its wholesale transactions, transmission service, and compliance with state-mandated reliability standards, are subject to the regulatory oversight of various state regulatory authorities including both the Public Utility Commission of Texas and the Electric Reliability Council of Texas as well as California Public Utilities Commission. Failure to comply with laws and regulations established by such regulatory agencies could result in suspension or revocation of license required for the Company to conduct its business. The Company is not aware of any violations or noncompliance with laws and regulations discussed above. Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, which

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December
31, 2025 and 2024

requires revenue to be recognized when or as control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to
in exchange for those goods or services.

Performance Obligations

A performance obligation is a promise in a contract with a customer to transfer a distinct good or service. The Company’s
contracts generally include one or more of the following performance obligations:

Power System Sales Revenues

• Power System Sales Product Revenues (Generators). The Company sells generators to commercial and
industrial customers. The Company generally recognizes product revenue from the sale of generators at a point in time when control is transferred to the customers. In certain
“bill-and-hold” arrangements where the customer requests the Company to warehouse the generator until the site is ready for installation, control transfers
when the generator is ready for physical transfer to the customer, as the Company has a present right to payment, the customer can direct the use of the generators (i.e. requests shipment to its facility), and legal title has passed to the customer.
Furthermore, the generator is identified separately as belonging to the customer, and the Company cannot use the generator or direct it to another customer.

• Power System Sales Installation Services Revenues. The Company provides installation services to
prepare, construct, and install distributed generation power systems designed to provide resiliency power for commercial and industrial customers. These services inherently include the procurement and integration of transformers, switchgear, and
other supporting equipment. These service contracts can occur over several months or a multiyear period. The revenues through service contracts are generated under fixed-price contracts with certain reimbursable variable revenues and costs. The
Company recognizes revenues over time because the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced. The Company measures progress using the cost-to-cost method (percentage of costs incurred to total estimated costs), as this best depicts the transfer of value to the customer.

Ongoing Services Revenues

• Ongoing Services. The Company provides ongoing services to operate and maintain distributed generation
power systems designed to provide resiliency power for commercial and industrial customers. These services primarily consist of operations and maintenance services and asset management services arrangements. The Company’s ongoing services are
generally stand-ready obligations satisfied over time. For fixed-fee arrangements, the Company recognizes revenue either (i) ratably over the contract term or (ii) on an as-invoiced basis, applying the practical expedient to recognize revenue in the amount to which the entity has a right to invoice, if the entity has a right to consideration from a customer in an amount that
corresponds directly with the value to the customer of the entity’s performance completed to date (e.g. usage-based fees).

• Service-Type Warranty. The Company sells separately priced service-type warranties that provide
coverage beyond the standard manufacturer’s warranty. Revenues from these warranties are recognized ratably over the warranty period. For the years ended December 31, 2025 and 2024, there were $1.5 million and $0.9 million,
respectively, of service warranty revenues recognized in the consolidated financial statements.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December
31, 2025 and 2024

Remaining Performance Obligations

Remaining performance obligations represent performance obligations that are unsatisfied or partially satisfied as of the end
of each reporting period. The Company measures remaining performance obligations based on the aggregate transaction price allocated to such performance obligations that have not yet been recognized as revenue as of the reporting date. In determining
termination payment clauses, as such provisions create enforceable rights and obligations that are considered in assessing the transaction price and the duration of the contract. Contracts that do not contain substantive termination payment clauses
are excluded from the remaining performance obligation disclosure.

Contract Combination

The Company may enter into contracts that include Power System Sales Product, Power System Sales Installation Services, Ongoing
Services, and/or Service-Type Warranties negotiated as a package and entered into at or near the same time with the same customer. The Company evaluates whether such contracts should be combined and accounted for as a single contract when the
criteria for contract combination are met. Although these products and services may be negotiated together and combined into a single contract, the Company has determined that they represent distinct performance obligation services that are capable
of being distinct and for which the customer can benefit independently. Accordingly, the Company accounts for these goods and services separately and allocates the transaction price to each based on their relative standalone selling prices.

Transaction Price and Variable Consideration

The Company allocates the transaction price to each distinct performance obligation based on relative stand-alone selling
prices. Stand-alone selling prices are based on observable prices when available; otherwise, the Company estimates stand-alone selling prices using an expected cost plus margin approach, applied consistently in similar circumstances.

Variable consideration amounts, including performance incentives, early pay discounts, and penalties, may also cause changes
in contract estimates. The amount of variable consideration is estimated based on either the expected value method or the most likely amount method, depending on which method the Company expects to better predict the amount of consideration to which
it will be entitled. The estimated amount is constrained such that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur once the uncertainty is resolved.

Certain of the Company’s contracts for Ongoing Services include variable consideration in the form of a profit-sharing
arrangement that entitles the Company to receive a share of monthly positive cash flows. The performance fees related to these arrangements are generally constrained.

Contract Estimates and Modifications

Due to the nature of fixed-price power system sales installation services contracts, costs can vary from estimates due to
factors such as scope changes, unforeseen conditions, or material cost fluctuations that will directly impact revenue recognized each period. Changes in estimates are recognized on a cumulative catch-up basis
in the period in which the revisions are made. The net impact of these changes in estimates

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December
31, 2025 and 2024

was not material on an individual contract or aggregate level for the year ended December 31, 2024. The aggregate favorable change in estimate for 2025 was approximately $8 million, but no
material changes to contract estimates on an individual contract basis.

On occasion, the Company approves change orders
that modify the scope and price of a contract and accounts for those change orders as follows:

• If the change order adds distinct goods or services and those goods and services are priced at standalone
selling prices, it is accounted for as a separate contract.

• If the change order is not distinct (e.g., additional installation work), it is accounted for as part of the
existing contract, and the effect on the transaction price and measure of progress is recognized as a cumulative catch-up adjustment to revenue.

Contract Balances and Payment Terms

Payment Terms: Payment terms vary by contract type but are generally due within 30 days. Power system sales installation
services contracts typically require milestone payments in advance of performance (resulting in contract liabilities), while ongoing services contracts are billed in arrears.