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

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to the other members of ER Holdings pro rata in accordance with their assumed tax liabilities. To the extent that we need funds, and ER Holdings is restricted from making such distributions under applicable laws or regulations, or is otherwise unable to provide such funds, it could materially and adversely affect our ability to pay taxes and other expenses, including payments under the Tax Receivable Agreement, and affect our liquidity and financial condition. Although we do not currently expect to pay dividends, such restrictions could also affect our ability to pay any dividends (if declared) in the future. We are required to pay to the TRA Beneficiaries 85% of the tax benefits we receive from tax basis step-ups (and certain other tax assets) attributable to our acquisition membership interests in ER Holdings in connection with the IPO and in the future, and the amount of those payments may be substantial.

In connection with the Reorganization, we will enter into the Tax Receivable Agreement with the TRA Beneficiaries.
The Tax Receivable Agreement provides for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we realize (or, under certain circumstances, are deemed to realize) as a result of (i) increases in
tax basis (and use of certain other tax benefits) resulting from our acquisition of membership interests in ER Holdings in connection with the IPO and in future exchanges, (ii) certain favorable tax attributes (such as net operating losses
attributable to pre-merger tax periods) we acquired in the Blocker Mergers and (iii) increases in tax basis resulting from the payments we make to the TRA Beneficiaries under the Tax Receivable Agreement
(as well as tax benefits related to imputed interest). We will retain the benefit of the remaining 15% of these net cash tax savings. Generally, payments under the Tax Receivable Agreement will be made to the TRA Beneficiaries based on the tax
assets, including basis step-ups and certain other tax assets, delivered by those TRA Beneficiaries in connection with the IPO and in the future. Such payments will reduce the cash provided by the tax savings generated from the previously described
transactions with the members of ER Holdings and the TRA Beneficiaries that would otherwise have been available to ERock, Inc. for other uses, including reinvestment or dividends to holders of our Class A common stock.

The term of the Tax Receivable Agreement will commence upon the completion of the IPO and will continue until all tax benefits
that are subject to the Tax Receivable Agreement have been used or have expired, or the Tax Receivable Agreement is terminated in accordance with its terms. The payments under the Tax Receivable Agreement are not conditioned upon continued ownership
of us by the TRA Beneficiaries. In addition, payments we make under the Tax Receivable Agreement will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return.

The actual tax benefit, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary
depending upon a number of factors, including the price of our common stock at the time of the exchange; the timing of future exchanges; the extent to which exchanges are taxable; the amount and timing of the use of tax attributes; the amount,
timing and character of our income; the U.S. federal, state, local and non-U.S. tax rates then applicable; the depreciation and amortization periods that apply to the increases in tax basis; the timing and amount of any earlier payments that we may
have made under the Tax Receivable Agreement; and the portion of our payments under the Tax Receivable Agreement that constitute imputed interest or give rise to depreciable or amortizable tax basis. Because of these factors, estimating the amount
and timing of payments that may be made under the Tax Receivable Agreement is by its nature imprecise.

We expect to
receive distributions from ER Holdings in order to make any required payments under the Tax Receivable Agreement. However, we may need to incur debt to finance payments under the Tax Receivable

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Agreement to the extent such distributions or our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.
There may be a material negative effect on our financial condition and liquidity if, as described below, the payments under the Tax Receivable Agreement exceed the actual benefits we receive in respect of the tax attributes subject to the Tax
Receivable Agreement and/or distributions to us by ER Holdings are not sufficient to permit us to make payments under the Tax Receivable Agreement.

The amount payable under the Tax Receivable Agreement generally will be based on an annual calculation of the reduction in our
U.S. federal, state, local and non-U.S. taxes resulting from the use of certain pre-IPO tax attributes and tax benefits resulting from sales and exchanges by continuing members of ER Holdings. We expect that the payments that we may be required to
make under the Tax Receivable Agreement may be substantial. For the sake of illustration, assuming all outstanding membership interests in ER Holdings held by TRA Beneficiaries are exchanged for shares of Class A common stock immediately after
this offering, the estimated tax benefits would be approximately $    and the related undiscounted payment to the TRA Beneficiaries equal to 85% of the benefit would be approximately $    , assuming
(i) exchanges occurred on the same day, (ii) a share price of $     per share of Class A common stock, (iii) no material changes in relevant tax law, (iv) a constant combined effective income tax rate
of  % and (v) that we have sufficient taxable income in each year to use on a current basis the increased depreciation, amortization and other tax benefits that are the subject of the Tax Receivable Agreement. Additionally, if we were to
elect to terminate the Tax Receivable Agreement immediately after this offering, based on an initial public offering price of $     per share of our Class A common stock, we estimate that we would be required to pay
approximately $     million in the aggregate under the Tax Receivable Agreement. This early termination payment is equal to the present value of all payments that would be required to be paid by ERock under the Tax Receivable
Agreement, and is determined by taking into account certain assumptions and using a discount rate equal to the lesser of (a) 6.5% and (b) the Secured Overnight Financing Rate, as reported by the Wall Street Journal (SOFR) plus 400 basis points. See
“Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

Our organizational
structure, including the Tax Receivable Agreement, confers certain benefits upon the TRA Beneficiaries that will not benefit certain holders of our Class A common stock to the same extent that they will benefit the TRA Beneficiaries.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the TRA Beneficiaries that
will not benefit certain holders of our Class A common stock to the same extent that they will benefit the TRA Beneficiaries. Additionally, we are a holding company and have no material assets other than our ownership equity interests in ER
Holdings. As a consequence, our ability to declare and pay dividends to the holders of our Class A common stock is subject to ER Holdings providing distributions to us and the restrictions in our other organizational documents. If ER Holdings makes
such distributions, the holders of Class B Units and Class M Units generally will be entitled to receive equivalent distributions from ER Holdings on a pro rata basis. However, because we must pay taxes, make payments under the Tax Receivable
Agreement, and pay our expenses, any amounts ultimately paid as dividends to holders of our Class A common stock are expected to be less on a per share basis than the amounts distributed by ER Holdings to holders of Class B Units and Class M Units
on a per unit basis. This feature and other aspects of our organizational structure may adversely impact the future trading market for our Class A common stock.

As a result of the Tax Receivable Agreement, interests of the Continuing Equity Unitholders and Continuing Profits Interest Unitholders
may conflict with those of other holders of our Class A common stock, including in connection with certain potential future transactions.

As discussed above, our organizational “UP-C” structure, including the Tax
Receivable Agreement, confers certain benefits upon certain of the Continuing Equity Unitholders and Continuing Profits Interest Unitholders that will not benefit the holders of our Class A common stock. Certain of the Continuing Equity Unitholders
and Continuing Profits Interest Unitholders may receive payments from us under the Tax Receivable Agreement

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