SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: DRS/A
Document Type: DRS/A
Date Filed: 2026-04-24
Accession Number: 0001193125-26-177695
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526177695/filename1.htm

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was primarily driven by a $2.3 million increase in service activity related to our expanding installed base of power systems and increased demand for maintenance and support services. Also contributing to the increase was approximately $2.2 million of unplanned billable service work performed during the year, as well as approximately $0.6 million of warranty-related service activity. Total Cost of Revenue Years Ended December 31, Change 2025 2024 Amount % Cost of power system sales product revenues, excluding depreciation and amortization $ 75,754 $ 50,748 $ 25,006 49.3 % Cost of power system sales installation services revenues, excluding depreciation and amortization 32,083 29,742 2,341 7.9 % Cost of power system sales revenues, excluding depreciation and amortization 107,837 80,490 27,347 34.0 % Cost of ongoing services revenues, excluding depreciation and amortization 37,314 30,790 6,524 21.2 % Total cost of revenues, excluding depreciation and amortization $ 145,151 $ 111,280 $ 33,871 30.4 %

Total cost of revenue increased by $33.9 million for the year ended December 31,
2025, compared to 2024. This increase was primarily driven by higher cost of power system sales of $27.3 million corresponding to higher power system sales and a $6.5 million increase in ongoing service costs related to servicing our
growing installed base of power systems. At December 31, 2025, we have $1.2 billion in Contracted Power System Sales Backlog. As we execute on our Contracted Power System Sales Backlog over the expected three-year period, we anticipate
total cost of revenues to increase commensurate with higher revenue. However, we expect the overall relationship between costs and revenues to improve compared to 2025 levels, driven by operational efficiencies from our Titan and Hyperion
facilities, installation cost improvements from the standardization and pre-configuration of our RockBlock systems, and the largely fixed-cost nature of our O&M infrastructure relative to our growing installed base. This expected improvement is
subject to risks including unforeseen increases in component or raw material costs, supply chain disruptions, labor cost increases, and higher than anticipated startup costs at our Hyperion facility, any of which could adversely affect the
cost-to-revenue relationship we currently anticipate.

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Cost of power system sales product revenues increased
$25.0 million, or 49.3%, for the year ended December 31, 2025, compared to the prior year. This increase was driven by higher generator sales volumes, reflecting increased demand for standalone power system products and overall growth in
product revenues.

Cost of power system sales installation revenues increased $2.3 million, or 7.9%,
for the year ended December 31, 2025, compared to the prior year. The increase was driven by higher installation activity associated with the progression of customer projects and the achievement of key project milestones requiring installation
and commissioning services.

Cost of ongoing services revenues increased $6.5 million, or 21.2%, for
the year ended December 31, 2025, compared to the prior year. This increase was driven by higher service activity associated with the growth of our installed base of power systems, including increased maintenance services, and additional
billable service work performed during the period.

Operating Expenses

Years Ended December 31, Change

2025 2024 Amount %

General and administrative expenses $	68,741 $	57,887 $	10,854 18.8	%

Depreciation and amortization expense 3,993 1,859 2,134 114.8	%

Total Operating Expenses

Total operating expenses for the year ended December 31, 2025 were $72.7 million, an increase of $13.0 million,
or 21.7%, compared to $59.7 million for the year ended December 31, 2024. The increase was driven by a $10.9 million increase in general and administrative expenses and a $2.1 million increase in depreciation and amortization
expenses.

General and Administrative

General and administrative expenses increased by $10.9 million, or 18.8%, for the year ended December 31, 2025,
compared to 2024. The increase was driven by a $3.4 million increase in professional fees, a $1.3 million increase in employee compensation and benefits related to additional corporate headcount, as well as an increase in our annual
incentive compensation (increase in bonus percent and increase in stock-based compensation issued in late 2025), a $2.6 million increase in professional fees primarily due to legal costs associated with our various capital markets transactions in
2025, a $2.1 million increase in miscellaneous corporate expenses, a $1.3 million increase in research and development spending, a $0.9 increase on corporate insurance spending, and a $0.6 million increase in hardware and corporate information
technology systems and support spending.

Depreciation and Amortization

Depreciation and amortization expense increased by $2.1 million, or 114.8%, for the year ended December 31, 2025,
compared to 2024. The increase was primarily driven by higher capital investments in equipment, infrastructure, and other fixed assets primarily related to our Titan facility, which was placed into service to support our expanding operations and
growing installed base of power systems. Also contributing to the increase was the additional amortization expense related to capitalized software and other intangible assets used to support operational and corporate systems.

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Other Income and Expenses

Years Ended December 31, Change

2025 2024 Amount %

Interest expense $	(755	) $	(14,331	) $	13,576 (94.7	)%

Loss on debt extinguishment (24,182	) — (24,182	) N/A

Other income, net 1,067 99 968 977.8	%

Interest expense decreased $13.6 million to $0.8 million for the year ended
December 31, 2025, compared to $14.3 million for the year ended December 31, 2024. The decrease was primarily attributable to our gain on mark to market adjustments of $18.6 million on our warrant unit liabilities associated with
our 2024 Convertible Notes. These gains were partially offset by an increase in interest expense due to higher outstanding debt balances during 2025.

Loss on debt extinguishment increased to $24.2 million for the year ended December 31, 2025, compared to zero in
2024. This increase was due to the loss associated with the extinguishment of $16.0 million and a prepayment penalty of $12.8 million on the 2024 Convertible Notes.

Other income, net increased to $1.1 million for the year ended December 31, 2025, compared to $0.1 million in
2024. This increase is primarily due to an increase in interest income associated with our higher cash balances in 2025 as well as an increase in warranty income from claims and miscellaneous rental income.

Provision for Income Taxes

Years Ended December 31, Change

2025 2024 Amount %

Income tax expense $	(420	) $	(158	) $	(262	) 165.8	%

Income tax expense increased by $0.3 million, or 165.8%, for the year ended
December 31, 2025, compared to 2024. This increase was primarily attributable to changes in the mix of earnings across jurisdictions.

Liquidity and Capital Resources

Our working capital is substantially influenced by the factors discussed above and fluctuates based on the timing and amount
of borrowings and repayments of notes payable, as well as the timing of cash collections from customers and payments to vendors. As of December 31, 2025, we had unrestricted cash and cash equivalents of $108.1 million, consisting of highly
liquid investments with maturities of three months or less, including money market funds. At December 31, 2025 and 2024, working capital was ($24.2) million and $32.4 million, respectively. The $56.6 million decrease was primarily due
to the increase in contract liabilities of $136.8 million and the $36.8 million decrease in inventory due to timing of projects year over year. These were partially offset by the $86.2 million increase in cash.

The execution of our backlog is expected to have a favorable impact on operating cash flows, as customers are contractually
required to make milestone payments in advance of performance. We expect these advance payments to continue to fund a substantial portion of our working capital needs as we execute on backlog, reducing our reliance on external financing for
near-term operations. Capital expenditure requirements related to backlog execution are expected to be modest given our asset-light model, with the primary capital investment being the completion of our Hyperion facility.

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Management believes that our existing cash and cash equivalents, together
with amounts available under the 2025 Credit Agreement, will be sufficient to meet obligations due or anticipated to be due within one year, including operating expenses, working capital needs, and current commitments for capital expenditures.
However, our future capital requirements may vary depending on a number of factors, including those described in the section entitled “Risk Factors.” Additional equity or debt financing may be required, and there can be no assurance that
such financing will be available on acceptable terms or at all. If additional financing is unavailable, or if we cannot expand operations or capitalize on business opportunities due to insufficient capital, its business, financial condition, and
operating results could be materially adversely affected.