SEC Filing Document

Company: ERock, Inc.
Ticker: 
CIK: 2110029
Filing Type: DRS
Document Type: DRS
Date Filed: 2026-02-17
Accession Number: 0001193125-26-054926
Exchange: 
SIC Code: 3620
SIC Description: Electrical Industrial Apparatus
URL: https://www.sec.gov/Archives/edgar/data/2110029/000119312526054926/filename1.htm

Chunk 36 of 96
Word Count: 1460
Character Count: 9899

Document Content:

of ER Holdings (including us) could economically bear the burden of the underpayment. If ER Holdings were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we and ER Holdings might be subject to potentially significant tax inefficiencies, and we would not be able to recover payments previously made by us under the Tax Receivable Agreement, even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status. We intend to operate such that ER Holdings does not become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. A “publicly traded partnership” is an entity that otherwise would be treated as a partnership for U.S. federal income tax purposes, the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof.

If ER Holdings were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes,
significant tax inefficiencies might result for us and ER Holdings, including as a result of our inability to file a consolidated U.S. federal income tax return with ER Holdings. In addition, we may not be able to realize tax benefits covered under
the Tax Receivable Agreement and would not be able to recover any payments previously made by us under the Tax Receivable Agreement, even if the corresponding tax benefits (including any claimed increase in the tax basis of ER Holdings’
assets) were subsequently determined to have been unavailable.

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements about us and our industry that involve substantial risks and
uncertainties. Forward-looking statements include those that express a belief, expectation or intention, as well as those that are not statements of historical fact. Forward-looking statements include information regarding our future plans and
goals, as well as our expectations with respect to:

• our business strategy and future growth prospects;

• our industry;

• integration of acquired businesses;

• our future profitability, cash flows and liquidity;

• our financial strategy, budget, projections and operating results;

• the amount, nature and timing of our capital expenditures and the impact of such expenditures on our
performance;

• the availability and terms of capital;

• the market for distributed power generation;

• competition and government regulations; and

• general economic conditions.

These forward-looking statements may be accompanied by words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “should,”
“could,” “would,” “likely,” “future,” “budget,” “pursue,” “target,” “seek,” “objective” or similar expressions that are predictions of or
indicate future events or trends that do not relate to historical matters.

The forward-looking statements in this
prospectus speak only as of the date of this prospectus, or such other date as specified herein. We disclaim any obligation to update these statements unless required by law, and we caution you not to place undue reliance on them. Forward-looking
statements are not assurances of future performance and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these
expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are
beyond our control. These risks, contingencies and uncertainties include, but are not limited to, the following:

• expectations regarding demand for distributed energy generation and acceptance of our power system solutions
across end markets;

• estimates and assumptions regarding market opportunity, growth forecasts and revenue expectations;

• our history of losses and ability to achieve and sustain profitability;

• the realization of revenue from contracted backlog and services arrangements, including customer payment risk;

• risks associated with project development, construction, installation, utility interconnection, fuel supply,
cost overruns and delays;

• reliance on a limited number of customers and the loss of, or adverse developments affecting, major customers;

• competition from larger competitors and alternative technologies;

Table of Contents

• operational and safety risks, including the adequacy of insurance and indemnification arrangements;

• geographic concentration of operations, including regulatory, market and weather-related risks in Texas and
California;

• customer financing constraints and the significant upfront cost of our power systems;

• our ability to scale manufacturing and assembly capacity in a timely and cost-effective manner;

• disruptions at assembly facilities and dependence on third-party suppliers and supply chains;

• the impact of tariffs, trade restrictions and other cost pressures;

• compliance with applicable laws, regulations and permitting requirements;

• protection of intellectual property, including risks of infringement claims;

• internal control, financial reporting and public company compliance risks;

• cybersecurity, IT and data security risks;

• conflicts of interest and risks related to our Sponsor;

• risks related to our corporate structure; and

• other risks and uncertainties inherent in our business.

These and other important factors that could affect our operating results and performance are described in “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this prospectus and elsewhere within this prospectus. Should one or more of the risks or uncertainties described in the
documents above or in this prospectus occur, or should underlying assumptions prove incorrect, our actual results, performance, achievements or plans could differ materially from those expressed or implied in any forward-looking statements. All such
forward-looking statements in this prospectus are expressly qualified in their entirety by the cautionary statements in this section.

Table of Contents

ORGANIZATIONAL STRUCTURE

Organizational Structure Prior to the IPO

The diagram below depicts the current organizational structure of ER Holdings.

Organizational Structure Following the Reorganization

Immediately after the transactions associated with the IPO, we will be a holding company, and our sole material assets will be
equity interests held directly or indirectly through wholly owned subsidiaries in ER Holdings. As the managing member of ER Holdings, we will operate and control all of the business and affairs of ER Holdings and, through ER Holdings and its
subsidiaries, conduct our business. The Reorganization lacks economic substance and therefore will be accounted for in a manner consistent with a reorganization of entities under common control. As a result, our consolidated financial statements
will recognize the assets and liabilities received in the Reorganization at their historical carrying amounts, as reflected in the historical consolidated financial statements of ER Holdings, our predecessor. We will consolidate ER Holdings in our
consolidated financial statements and record a non-controlling interest related to the Units held by the Continuing Equity Unitholders on our consolidated balance sheet and statement of income. As further
described herein, prior to the completion of this offering,

(1) the limited liability company agreement of ER Holdings will be amended and restated to, among other things,
modify its capital structure by reclassifying its interests as follows (as further described under “ Organizational Structure—Reclassification and Amendment and Restatement of the Limited Liability Company Agreement of ER
Holdings ” and “ Executive Compensation ”):

• Common and Preferred Units held by the Blocker Companies will be converted into Class A Units; and

• Common and Preferred Units held by the Continuing Equity Unitholders will be converted into Class B
Units;

• the Continuing Equity Unitholders will receive the number of shares of our Class B common stock
equivalent to the number of Class B Units held by each such Continuing Equity Unitholders; and

Table of Contents

• the Blocked Unitholders will receive shares of our Class A common stock pursuant to the Blocker Mergers
as defined and described in “ Organizational Structure—Blocker Mergers .”

The
Continuing Equity Unitholders will hold all of the initially outstanding shares of our Class B common stock. The shares of Class B common stock will have no economic rights but will entitle each holder to one vote for each share held of
record on all matters to be voted on by our stockholders generally, with the number of shares of Class B common stock held by each Continuing Equity Unitholder being equivalent to the number of Class B Units held by each such Continuing
Equity Unitholder. If at any time the ratio at which Class B Units are exchangeable for shares of our Class A common stock changes from one-for-one as
described under “Certain Relationships and Related Person Transactions—Proposed Transactions with Enchanted Rock, Inc.—Limited Liability Company Agreement,” the number of votes to which Class B common stockholders
are entitled will be adjusted accordingly. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholders are entitled to vote generally,
except as otherwise required by law.