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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$3.9 million. During 2024, ROU assets obtained in exchange for the lease obligations for operating leases were $2.2 million. The weighted-average remaining lease term of operating leases is approximately five years. The weighted-average discount rate used to determine the operating lease liabilities as of December 31, 2024 was 4.33%. Table of Contents Enchanted Rock Holdings, LLC Notes to Consolidated Financial Statements December 10. PAYABLES AND ACCRUED LIABILITIES The following is a summary of payables and accrued liabilities as of December 31, 2024: Accounts payable Power system sales payable $ 22,228 Ongoing services payable 4,080 General and administrative payable 2,894 Other payable 2,757 Total accounts payable $ 31,959 Accrued liabilities and other payables Accrued salaries $ 2,741 Accrued operating expenses 11,423 Accrued commissions and fees 694 Accrued sales tax payable 104 Short term insurance financing note payable 1,347 Total accrued liabilities and other payables $ 16,309 11. DEBT 2024 Credit Agreement

On February 27, 2024, the Company entered into a five-year term credit agreement (the “2024 Credit
Agreement”) that consisted of a $75.0 million senior secured initial term loan and a $30.0 million delayed draw term loan with a maturity date of February 27, 2029.

Borrowings under the 2024 Credit Agreement are collateralized by personal security interests on all equipment and fixtures,
all inventory, and all receivables owned by the Company.

Prior to the first anniversary of the closing date, borrowings
under the 2024 Credit Agreement are subject to interest at the sum of (i) the sum of (1) the greater of (A) 8.00% and (B) term Secured Overnight Financing Rate (“SOFR”), plus 4.00%, plus (2) for any period for which a
permitted revolving credit facility is then outstanding, 1.00%, payable in cash, and (ii) term SOFR, plus 10.00%, in each case minus any amounts paid in cash, payable in kind.

On or after the first anniversary of the closing date, borrowings under the 2024 Credit Agreement are subject to interest at
the sum of (i) term SOFR, plus 5.50%, plus for any period for which a permitted revolving credit facility is then outstanding, 1.00%, payable in cash, and (ii) term SOFR, plus 4.50%, payable in kind.

As of December 31, 2024, the 2024 Credit Agreement contained covenants that included, among others:

• Restrictions on transferring and selling of all or any of the Company’s business or property, except for
inventory in its regular course of business, among other permitted exceptions.

• Restrictions on fundamental changes, such as mergers and acquisitions, subject to permitted exceptions.

• A prohibition against engaging in business other than businesses currently engaged in or that are reasonably
related or complementary thereto.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December

• A prohibition against incurring debt, subject to permitted exceptions.

• Restrictions on creating liens on the assets of the Company, subject to permitted exceptions.

• A prohibition against making investments, subject to permitted exceptions.

• A requirement to maintain a minimum fixed-charge coverage ratio of 1.50:1.00 for any four-fiscal quarter
period, starting after the fiscal quarter ending September 30, 2025.

• A requirement to maintain minimum consolidated liquidity of $10.0 million at any time.

The 2024 Credit Agreement contains customary events of default provision. If an event of default occurs
and is continuing, the lender may declare all amounts outstanding under the 2024 Credit Agreement to be immediately due and payable.

In connection with the initial term loan under the 2024 Credit Agreement, the Company issued a warrant to the lender for the
purchase of up to 6,290 common units at an exercise price of $0.01 per unit (see Note 13 — Equity — Warrant Units).

In connection with the delayed draw term loan under the 2024 Credit Agreement, if the Company draws upon the $30 million
of available funds, the Company would be obligated to issue a warrant to the lender. The number of common units that could be purchased under such warrant is determined based on the percentage of the delayed draw term loan funded multiplied by the
total number of common units related to the delayed draw term loan of 2,606, and would have an exercise price of $0.01. Based on the Company’s analysis of the criteria contained in ASC 815, the Company determined the contingently issuable
warrants met the definition of a warrant liability. The contingently issuable warrant liability is included in other current liabilities in the consolidated balance sheet and is recorded at fair value and marked-to-market each reporting period with changes in fair value being reflected in the consolidated statement of operations (see Note 3 — Fair Value). A corresponding loan commitment asset was
recorded and is included in other assets in the consolidated balance sheet. As the Company does not intend to draw upon the delayed draw term loan, the loan commitment asset related to the contingently issuable warrants will be amortized
straight-line over the term of access to the line of credit. As of the issuance date, the fair value of the contingently issuable warrant liability was $1.3 million. The balance of the contingently issuable warrant liability as of
December 31, 2024 was $2.7 million is included in other current liabilities in the consolidated balance sheet. The increase in the fair value of the contingently issuable warrant liability during 2024 of $1.4 million was included in
other income, net. Amortization of the loan commitment asset related to the contingently issuable warrant liability was $0.7 million for the year ended December 31, 2024. The unamortized loan commitment asset related to the contingently
issuable warrant liability as of December 31, 2024 was $0.6 million.

On the issuance date of the 2024 Credit
Agreement, the Company recorded a total debt discount of $5.1 million consisting of the discount paid to the lender and the fair value of the warrants issued. The debt discount will be amortized to interest expense over the term of the
agreement using the effective interest rate method. As of December 31, 2024, the unamortized debt discount related to the 2024 Credit Agreement was $4.7 million.

On the issuance date of the 2024 Credit Agreement, the Company recorded a loan commitment asset of $0.75 million related to
the discount paid to the lender, attributable to the $30 million delayed draw term loan. The loan commitment asset will be amortized to interest expense on a straight-line basis over the term of access to the delayed draw term loan. As of
December 31, 2024, the unamortized loan commitment asset related to the 2024 Credit Agreement was $0.4 million.

Table of Contents

Enchanted Rock Holdings, LLC

Notes to Consolidated Financial Statements

December

In connection with the issuance of the 2024 Credit Agreement, the Company
incurred debt issuance costs of $5.3 million which were recorded as a contra-liability and will be amortized to interest expense over the term of the agreement using the effective interest rate method. As of December 31, 2024, the
unamortized debt issuance costs related to the 2024 Credit Agreement were $4.8 million.

As of December 31,
2024, the Company had $75.0 million of borrowings related to the initial term loan and $0 of borrowings related to the delayed draw term loan under the 2024 Credit Agreement. The Company was in compliance with the financial covenants listed
above of the 2024 Credit Agreement as of December 31, 2024.

2024 Note Purchase Agreement

On December 27, 2024, the Company entered into a note purchase agreement (the “2024 Note Purchase Agreement”)
with an affiliate investor, pursuant to which the lender agreed to purchase a minimum aggregate principal amount of $20.0 million and a maximum aggregate principal amount of $50.0 million of convertible promissory notes, convertible into
equity securities having identical rights, privileges, preferences, and restrictions as equity securities of the Company issued in an equity financing. For each note issued, the Company also agreed to issue a warrant with an exercise price of $0.01,
with the number of common units for which a warrant may be exercisable equal to the aggregate principal amount of the note purchased divided by 1,497.

As of December 31, 2024, the Company had issued the December 2024 Convertible Note worth $10.0 million of the
minimum aggregate amount of $20.0 million. The contingently issuable warrants related to the remaining $10.0 million commitment are deemed issued for accounting purposes, and are recognized as a warrant liability recorded at fair value and
marked-to-market each reporting period with changes in fair value being reflected in the consolidated statement of operations (see Note 3 — Fair Value). A
corresponding loan commitment asset was recorded and included in other assets in the consolidated balance sheet, which will be reclassified as a debt discount upon future issuances of convertible notes and related warrants. As of the issuance date
and as of December 31, 2024, the fair value of the contingently issuable warrant liability was $7.0 million.