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

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a foundation of deep trust and relationships with leading data center and artificial intelligence ecosystem companies, such as Microsoft, Wistron and Foxconn, electric and gas utilities, such as Entergy and ComEd, and C&I customers, such as H-E-B and Walmart, with approximately 50 customers in those end markets, establishing ourselves as a critical link where speed-to-power, reliability, flexibility and scale converge in our customer’s power ecosystem. We serve customers across the United States, with a geographic footprint spanning eight states and four major RTOs. Data centers partner with us to accelerate site commissioning and meet stringent reliability, sound and emissions requirements while supporting AI-driven load growth, utilities leverage our systems to address rate pressure, grid stability, reliability and emergency backup, and capacity constraints and demand response, and C&I customers rely on us for resilient backup power and operational continuity as well as cost savings from grid services. Recent Trends and Outlook

We believe the United States is entering a historic upswing in electricity demand, primarily driven by a generational surge in
demand for artificial intelligence, digital infrastructure, and broader electrification. This expansion is creating a widening gap between required power capacity and the speed at which traditional utility-scale infrastructure can be developed. As
the “Age of Electricity” progresses, the structural mismatch between demand growth and supply addition has intensified, particularly as data center construction timelines (typically two to three years) continue to outpace the four-to-eight-year requirement for new grid and generation infrastructure.

Data centers have emerged as the single largest source of new load growth in the United States, accounting for nearly half of
all global data center electricity demand in 2024. Through 2030, this sector is projected to represent half of all U.S. electricity demand growth, a rate of expansion unparalleled in any other global region. Beyond data centers, demand is further
bolstered by industrial reshoring, the electrification of transportation, and building electrification. We expect this environment to require up to 170 GW of incremental firm and flexible capacity by 2030 to meet rising peak demand–a shortfall
that we believe cannot be met by variable renewables and storage alone under current build-out timelines.

Traditional energy solutions are currently insufficient to meet the magnitude of this demand. Existing infrastructure is under
significant strain, with grid congestion and long interconnection queues posing critical barriers to new capacity. In major markets like Northern Virginia, connection timelines for new data center capacity now extend to approximately seven years.
Furthermore, global supply chains for essential components, such as transformers and turbines, face multi-year backlogs and lead times ranging from 15 to 24 months. These constraints have led to intensifying reliability risks. Approximately 20% of
new data center projects globally are at risk of delay due to grid limitations. Simultaneously, extreme weather events and surging peak loads from EV charging are increasing outage exposure across the U.S. grid. Given that data centers require
uninterrupted, firm power with extremely low tolerance for outages, the demand for resilient, “always-on” power solutions has never been higher.

To mitigate grid constraints and ensure operational continuity, there is an increasing trend toward co-locating large loads with onsite or near-site distributed generation. We believe that strategically siting data centers in areas with available grid headroom and utilizing onsite flexible backup systems are vital
for maintaining reliability. In this context, natural gas remains a critical firm resource. We anticipate natural gas-fired generation will expand significantly to meet data center loads through 2035,
particularly in the United States, where it serves as a leading dispatchable source to support renewable integration. We are well positioned to deliver on the significant market demand for dispatchable, resilient and cost-effective power
solutions that can be quickly deployed and commissioned. Through delivering 99.999% reliability and the

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capability to deliver in less than six months, we provide one of the few scalable solutions capable of addressing near-term capacity needs, particularly in high-growth regions like Texas and
California. As natural gas remains a critical firm resource supporting renewable integration, our modular, low-emission solutions enable hyperscale data centers, industrial facilities and utilities to procure reliable, firm power at substantial
scale, often reaching several hundred megawatts or over a gigawatt, without the prolonged lead times inherent in traditional transmission expansion. This combination of speed, reliability and flexibility positions us to capture significant share in
an increasingly capacity-constrained U.S. power market.

How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to evaluate and analyze the performance of our business.
These metrics help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. The key metrics we use to evaluate our business are provided below.

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin are financial measures that are not prepared in accordance with GAAP. These non-GAAP financial measures should be read in conjunction with the most directly comparable financial measure calculated and presented in accordance with GAAP.

We believe presenting these non-GAAP financial measures provides useful information to
investors because they highlight trends in our underlying operating performance, facilitate comparisons of our core results over time and across peers, and reflect how our management evaluates our business. We also use these non-GAAP financial measures internally for strategic planning, budgeting, forecasting, performance measurement, and resource allocation. We believe that providing investors with access to these measures allows for
greater transparency and facilitates comparisons to our historical operating results.

These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the most directly comparable financial measure prepared in accordance with GAAP. In addition, other companies,
including companies in our industry, may define these non-GAAP financial measures differently, which may limit their usefulness as comparative measures.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are utilized by our management and other users of our financial statements such as
investors, commercial banks, research analysts and others, to assess our operating performance. Management believes these measures are useful because they each allow us to compare our operating performance on a
consistent basis across periods. Management also believes Adjusted EBITDA is a useful indicator of our operating performance and Adjusted EBITDA Margin is useful because it provides insight on profitability.

Net loss is the GAAP measure most directly comparable to Adjusted EBITDA, and net loss margin is the GAAP measure most
directly comparable to Adjusted EBITDA Margin. We define Adjusted EBITDA as net loss before net interest expense; depreciation and amortization expense; income tax expense; stock-based compensation; and other items management deems non-operational or not reflective of ongoing core operations (e.g. changes in fair value of warrant liability, professional fees associated with debt and equity transactions, legal settlements). We define Adjusted
EBITDA Margin as Adjusted EBITDA divided by total revenues.

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The table below presents a reconciliation of net loss and net loss margin to
Adjusted EBITDA and Adjusted EBITDA Margin:

For the Year Ended December 31,

(in thousands)

Net loss $ $	(56,926	)

Interest expense 14,331

Depreciation and amortization expense 1,859

Income tax expense 158

Stock-based compensation 2,662

Change in fair value of warrants (1) 1,398

Non-recurring professional fees (2) 1,606

Adjusted EBITDA $ $	(34,912	)

Total revenues $ $	128,490

Net loss margin % (44.3	)%

Adjusted EBITDA margin % (27.2	)%

(1)	Non-cash change in fair value of our warrant liability at
December 31, 2024. See Note 13—Equity —Warrant Units, to our consolidated financial statements included in this prospectus for more details.

(2)	Professional fees associated with our evaluation of potential capital market transactions in 2024.

Operational Measures

Contracted Power System Sales Backlog

Contracted Power System Sales Backlog represents the actual contracted value for purchases of power systems and ESI services,
whether invoiced or not, to be invoiced and recognized as revenue as a result of performing our obligations over the term of the contract, assuming no exceptions or contingencies are exercised, and includes adjustments for contract modifications
entered into after period-end and prior to the issuance of the related financial disclosures.

As of December 31,

(in thousands)

Contracted power system sales backlog $	1,219,121 $	227,656

Annualized Recurring Service Revenue

Annualized Recurring Service Revenue represents the annualized value of recurring revenue under contracted operations and
maintenance service and asset management agreements as of the measurement date, including both fixed contractual payments and variable payments based on typical utilization of such services.

As of December 31,

(in thousands)

Annualized recurring service revenue $	22,370 $	19,636

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Installed Base

Installed Base represents the total installed megawatt capacity of our power systems that have been deployed and are currently
operational.

As of December 31,

Installed base in megawatts 997 931

Key Factors Affecting Our Performance

Power and Distributed Generation Demand