The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and the unaudited condensed consolidated financial statements and related notes included in the Prospectus. Some of the information contained in this discussion and analysis, including information with respect to our planned investments in our research and development, sales and marketing, and general and administrative functions, include forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note Regarding Forward-Looking Statements” of this Quarterly Report and the section titled “Risk Factors” of the Prospectus for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our Predecessor ERock, Inc. was formed in January 2026 and does not have historical financial results. Unless otherwise indicated, the historical financial information presented in this document is that of Enchanted Rock Holdings, LLC. Enchanted Rock Holdings, LLC, together with its subsidiaries, is the predecessor to ERock, Inc. Overview We are a vertically integrated company that designs, deploys, operates and maintains multi-purpose distributed power systems, consisting of our proprietary, low emission, quick-response natural gas generator and embedded software technology, for our customers. Our resilient, cost-effective, modular power systems can be rapidly deployed at a scale of more than 1 gigawatt (“GW”) to meet our customers’ full range of power needs, including bridge, backup and dispatchable power applications, and are supported by our operations and maintenance (“O&M”) and asset management services. “Bridge power” refers to a mode in which our power systems provide temporary generation to meet customer needs during the period before full grid interconnection becomes available, “dispatchable power” or “flexible capacity” refers to a mode in which our power systems are configured as on-demand, fast-response resources and “backup power” or “resiliency” refers to a mode in which our power systems provide continuity for operations during grid disruptions and extreme weather events. We primarily serve data centers, utilities and large commercial and industrial (“C&I”) businesses across nine U.S. states, with our largest operating footprints located in California and Texas, where we anticipate disproportionate growth and market potential driven by high data center demand in the near- and medium-term. With over 15 years of operational experience and approximately 400 operational sites, we believe we are one of the most established, proven providers in the distributed power generation market. Over the last 15 years, we have established deep expertise and a proven track record in the deployment of complex integrated power systems through our ERock Platform. We refer to the delivery and operation of our generators and integrated software technology through our comprehensive, turnkey equipment, supply and installation (“ESI”), O&M and asset management services platform, supported by our deep development, operational and market domain expertise in integrated power systems, as our “ERock Platform.” Most of our sales include the comprehensive design, delivery, installation and long-term services provided by the ERock Platform. We deliver cost-effective, turnkey speed-to-power and resiliency solutions that supplement and maximize traditional grid infrastructure. Our systems are engineered for superior operational stability, offering the capability of 99.999% reliability, diesel-equivalent transient performance, quieter operation, cleaner emissions, rapid deployment and no on-site water required. “Transient performance” refers to our power systems’ ability to respond to sudden changes in electrical load, including how quickly and how stable it can adjust its output and maintain voltage and frequency when the load increases or decreases unexpectedly. Once interconnected, our market operations and dispatch management platform enables customers to utilize our systems for backup power or to strategically dispatch capacity during peak demand or scarcity events. At the core of our power systems is our RockBlock (“RockBlock”), a modular, distributed generator string that incorporates our proprietary natural gas engine, scales in 0.5 megawatt (“MW”) increments from 1.5 MW to 3.5 MW per RockBlock and is assembled in-house. Complementing our generator technology is our Granite Software Ecosystem (“Granite”), a proprietary software that is embedded in our power systems and enables us to use operating data to improve operations for high reliability at a lower cost. We produce our proprietary engines and generators at our Titan facility and are increasing capacity with the development of our Hyperion facility, both located in Houston, Texas. Our assembly process is designed to scale efficiently and rapidly to meet growing customer demand and service our backlog, leveraging a high-volume, largely multi-sourced supply chain and standardized assembly processes. 25 Over the past decade, we have built 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, providing speed-to-power, reliability, flexibility and scale for our customers. We serve customers across the United States, with a geographic footprint spanning nine states and four major regional transmission organizations. 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. C&I customers rely on us for resilient backup power and operational continuity as well as cost savings from grid services. Reorganization Prior to the completion of our initial public offering (the “IPO”) on June 11, 2026, we undertook certain transactions as part of a reorganization (the “Reorganization”) such that ERock is now a holding company, and our sole material assets are equity interests held directly or indirectly through wholly owned subsidiaries in ER Holdings. As the managing member of ER Holdings, we 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 is accounted for in a manner consistent with a reorganization of entities under common control. As a result, ERock’s consolidated financial statements 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 consolidate ER Holdings in our consolidated financial statements and record a noncontrolling interest related to the Class B membership interests in ER Holdings (“Class B Units”) held by certain pre-IPO holders (the “Continuing Equity Unitholders”) on our consolidated balance sheet and statement of income. Prior to the completion of the IPO, the limited liability company agreement of ER Holdings was amended and restated to, among other things, modify its capital structure by reclassifying (1) its outstanding Common and Series A Preferred Units (as defined below) held by the Blocker Companies into Class A membership interests in ER Holdings (“Class A Units”), (2) its outstanding Common and Series A Preferred Units held by the Continuing Equity Unitholders into Class B Units, and (3) its outstanding Compensatory Units held by the Continuing Profits Interest Unitholders (as defined below) into Class M membership interests in ER Holdings (“Class M Units”) (the “Reclassification”). We refer to each entity interposed between a Blocked Unitholder (as defined below) and ER Holdings that holds Class A Units on behalf of such Blocked Unitholder, which entities were formed for the principal purpose of indirectly holding equity interests in ER Holdings, as a “Blocker Company”. We refer to the Reclassification, the amendment and restatement of the ER Holdings limited liability company agreement, the mergers consummated in connection with the IPO pursuant to which each Blocker Company first became a wholly-owned subsidiary of the Company and then merged into the Company (the “Blocker Mergers”), and the entry into the Tax Receivable Agreement described below as the “Reorganization.” 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, with load growth accelerating to its highest levels in 50 years, projected at approximately 5.7% annually for 2025-2030 representing approximately 43x total growth compared to 2015-2020. 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 growth in 2025. 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 buildings. 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 electrical vehicle charging are increasing 26 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 sitting 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 capability to deliver in less than six months, with full project commissioning typically achieved within 12 to 18 months from contract signing, 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 electric 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, Adjusted EBITDA Margin, Adjusted Gross Profit and Adjusted Gross Margin are financial measures that are not prepared in accordance with GAAP. Each of 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 because they highlight trends in our underlying operating performance, facilitate consistent 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 to GAAP Net Loss and Net Loss Margin Reconciliation Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. 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 unit liabilities, professional fees associated with debt and equity transactions, legal settlements). We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues. Adjusted EBITDA and Adjusted EBITDA Margin are utilized by our management and other users of our unaudited condensed consolidated 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. 27 The tables below present a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net loss and net loss margin: Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Net loss $ (67,719 ) $ (7,985 ) $ (59,734 ) 748.1% Interest expense (income) (471 ) (7,708 ) 7,237 (93.9%) Depreciation and amortization expense 1,308 808 500 61.9% Loss on debt extinguishment 48,774 15,244 33,530 220.0% Income tax expense (benefit) (374 ) 11 (385 ) (3500.0%) Stock-based compensation 2,512 1,082 1,430 132.2% Non-recurring professional fees (1) 1,988 2,129 (141 ) (6.6%) Adjusted EBITDA $ (13,982 ) $ 3,581 $ (17,563 ) (490.4%) Total revenues $ 39,878 $ 68,458 $ (28,580 ) (41.7%) Net loss margin (169.8 )% (11.7 )% (158.2%) Adjusted EBITDA Margin (35.1 )% 5.2 % (40.3%) Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Net loss $ (84,931 ) $ (23,922 ) $ (61,009 ) 255.0% Interest expense (income) 487 (5,869 ) 6,356 (108.3%) Depreciation and amortization expense 2,609 1,864 745 40.0% Loss on debt extinguishment 48,774 15,244 33,530 220.0% Income tax expense 187 28 159 567.9% Stock-based compensation 3,738 2,569 1,169 45.5% Non-recurring professional fees (1) 2,245 2,611 (366 ) (14.0%) Adjusted EBITDA $ (26,891 ) $ (7,475 ) $ (19,416 ) 259.7% Total revenues $ 71,614 $ 92,566 $ (20,952 ) (22.6%) Net loss margin (118.6 )% (25.8 )% (92.8%) Adjusted EBITDA Margin (37.5 )% (8.1 )% (29.5%) (1)Professional fees represent (i) consulting, legal, accounting, and other expenses in connection with the evaluation of and/or execution of non-recurring capital markets transactions in 2026 and 2025, (ii) certain consulting, legal, and corporate expenses in connection with debt modifications that occurred in April 2025, and (iii) certain non-recurring placement fees associated with key hires in 2026 and 2025. Adjusted Gross Profit and Adjusted Gross Margin to GAAP Gross Profit and Gross Margin Reconciliation Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures. GAAP gross profit is the GAAP measure most directly comparable to Adjusted Gross Profit, and GAAP Gross Margin is the GAAP measure most directly comparable to Adjusted Gross Margin. We define Adjusted Gross Profit as GAAP gross profit, adjusted to exclude reimbursable variable revenues and costs. We define Adjusted Gross Margin as Adjusted Gross Profit divided by total revenues less reimbursable variable revenues. Reimbursable variable revenues and costs represent certain revenues and expenses where we serve as the principal in transactions and control the use and timing of the products and services that are being utilized. These costs represent our primary obligation and are recovered from customers at cost without markup pursuant to the terms of our contracts. While reimbursable variable costs are excluded because they have immaterial net margin impact, they do represent real cash flows and contractual obligations that affect our working capital and liquidity. We present Adjusted Gross Profit and Adjusted Gross Margin because we believe these measures provide management and investors with a more meaningful view of the underlying economics and profitability of our core operations. Because reimbursable variable 28 revenues and costs are recorded on a gross basis under GAAP and, by design, offset one another with no material contribution to profit, their inclusion in GAAP revenues and cost of revenues can cause reported gross margin percentages to fluctuate significantly depending on the frequency of underlying activities which can be driven by unpredictable changes in market conditions. By excluding these revenues, Adjusted Gross Margin reflects the margin we earn on the goods and services where we bear economic risk, exercise pricing judgment, and generate value for our customers. We use Adjusted Gross Profit and Adjusted Gross Margin internally to evaluate segment-level performance, assess pricing and cost trends, and benchmark our profitability against peers whose revenue recognition practices may differ with respect to reimbursable items. We believe this perspective enhances investors’ understanding of the operating leverage and margin trajectory of our business. Adjusted Gross Profit and Adjusted Gross Margin have limitations as analytical tools. They are not substitutes for GAAP gross profit or GAAP gross margin, and our calculations may not be comparable to similarly titled measures reported by other companies because other entities may not define or calculate these measures in the same manner. Accordingly, these non-GAAP measures should be considered alongside, and not as alternatives to, the GAAP financial measures included in our unaudited condensed consolidated financial statements and consolidated financial statements. The tables below present a reconciliation of Adjusted Gross Profit and Adjusted Gross Margin to gross profit and gross margin: Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Total revenues $ 39,878 $ 68,458 $ (28,580 ) (41.7%) Total cost of revenues 31,138 52,426 (21,288 ) (40.6%) Less: depreciation and amortization expense 1,308 808 500 61.9% Total gross profit $ 7,432 $ 15,224 $ (7,792 ) (51.2%) Less: reimbursable variable revenue (6,380 ) (4,393 ) (1,987 ) 45.2% Add: reimbursable variable cost 6,380 4,269 2,111 49.4% Adjusted Gross Profit $ 7,432 $ 15,100 $ (7,668 ) (50.8%) Gross margin 18.6 % 22.2 % (3.6%) Adjusted Gross Margin 22.2 % 23.6 % (1.4%) Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Total revenues $ 71,614 $ 92,566 $ (20,952 ) (22.6%) Total cost of revenues 56,381 72,839 (16,458 ) (22.6%) Less: depreciation and amortization expense 2,609 1,864 745 40.0% Total gross profit $ 12,624 $ 17,863 $ (5,239 ) (29.3%) Less: reimbursable variable revenue (12,987 ) (8,209 ) (4,778 ) 58.2% Add: reimbursable variable cost 12,987 8,050 4,937 61.3% Adjusted Gross Profit $ 12,624 $ 17,704 $ (5,080 ) (28.7%) Gross margin 17.6 % 19.3 % (1.7%) Adjusted Gross Margin 21.5 % 21.0 % 0.5% 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. 29 We believe Contracted Power System Sales Backlog is an important operating metric because it provides visibility into future revenue from power system sales, reflects underlying demand for our power systems, and helps us plan production, procurement, and workforce requirements. Contracted Power System Sales Backlog as of June 30, 2026 was approximately $1.7 billion, an increase of $1.5 billion, as compared to June 30, 2025. This increase was driven by new contracts with data center customers, partially offset by net reductions in backlog from utility and commercial and industrial customers as revenue recognized during the period exceeded new bookings in those segments. Substantially all backlog growth year-over-year was attributable to contracts with data center customers, reflecting strong demand for speed-to-power solutions to support accelerated data center development timelines and increasing power requirements associated with artificial intelligence (“AI”) and digital infrastructure. Geographically, the backlog growth year-over-year was driven predominantly by projects located in Texas, reflecting customer demand in a market characterized by significant load growth and interconnection constraints. We believe the increase in backlog year-over-year was also supported by our ability to offer near-term deployment timelines, with most new contracts reflecting expected delivery within 12 to 18 months, which we believe is a key differentiator for customers facing multi-year grid interconnection timelines. 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. We believe Annualized Recurring Service Revenue is an important operating metric because it reflects a stable base of recurring revenue which is less dependent on new power system sales and more indicative of ongoing services. As of June 30, Change (dollars in thousands) 2026 2025 Amount % Annualized Recurring Service Revenue $ 23,601 $ 20,047 $ 3,554 17.7% Annualized Recurring Service Revenue increased $3.6 million, or 17.7%, as of June 30, 2026 as compared to June 30, 2025. This increase is primarily due to additional systems we have commissioned with associated services contracts. Installed Base Installed Base represents the total installed megawatt capacity of our power systems that have been deployed and are currently operational. We believe Installed Base is an important operating metric because it reflects the scale of our equipment footprint in the field and is broadly representative of our assets under ongoing services contracts. Most of our deployments include the comprehensive design, delivery, installation and long-term services provided by the ERock Platform. A larger Installed Base expands our potential to generate ongoing service revenue through maintenance agreements, parts sales, monitoring services, and equipment upgrades or replacements. It also provides insight into customer adoption of our products and the long-term demand for our service offerings. As of June 30, Change 2026 2025 Amount % Installed Base in Megawatts 1,104 979 126 12.8% Installed Base increased by 126 megawatts, or 12.8%, as of June 30, 2026 as compared to June 30, 2025. This increase is primarily due to additional systems deployed to customers since the prior period. 30 Key Factors Affecting Our Performance Power and Distributed Generation Demand Our performance depends on demand for distributed energy generation solutions across data centers, utility and commercial and industrial sectors. Market demand is influenced by trends in electricity usage, including electrification of transportation and buildings, reshoring of manufacturing and rapid growth in data center and AI driven load, as well as customers’ capital spending levels and expectations for the availability, pricing and reliability of grid sourced power. Changes in regulatory policies, technological alternatives, macroeconomic conditions or shifts in customer procurement priorities could materially affect demand for our products. Cost and Availability of Components or Materials Our financial performance is affected by the cost, availability and quality of the components and materials used in our power systems. We rely on third-party suppliers, including some that are located overseas, and we are exposed to risks from supply-chain disruptions, commodity price fluctuations, labor and material shortages, geopolitical instability and changes in trade policies or tariffs. Increases in material prices that cannot be passed through to customers, or delays caused by supplier constraints, may lead to installation delays, cancellations or reduced margins. Regulatory Environment The construction, installation, operation and economic value of our power systems are subject to federal, state and local regulations relating to building codes, safety, environmental and climate protection, domestic content requirements and related matters, as well as energy market rules, regulations and tariffs. Changes in regulation may extend development timelines or make the deployment of our power systems less economically attractive. Execution on Pipeline and Expanding Commercial Opportunities Our growth depends on our ability to convert identified pipeline projects into executed contracts and successfully completed installations. The markets we target are rapidly evolving, and the viability of new commercial opportunities is influenced by shifting customer requirements, emerging technologies, regulatory and permitting dynamics and broader macroeconomic conditions. Failure to execute on our existing pipeline or to expand our commercial footprint in the data center, utility and C&I markets could negatively impact our financial performance. Timely Project Delivery Our business depends on our ability to complete generator assembly and power system installations on schedule, as delivery timelines affect both revenue recognition and customer satisfaction. Installation cycles are subject to risks beyond our control, such as required governmental approvals and permits and customer site readiness. Delays in the delivery and installation of our power systems may lead to penalty payments or order cancellations, each of which may adversely affect our financial results. Factors Affecting the Comparability of Our Financial Results Impact of the Reorganization Following the completion of our IPO, we are classified as a corporation for U.S. federal and state income tax purposes. Our predecessor, ER Holdings, is classified as a partnership for U.S. federal income tax purposes and, as such, has generally not been subject to entity-level U.S. federal income tax. Accordingly, unless otherwise specified, the historical results of operations and other financial information set forth in this Quarterly Report do not include any provision for U.S. federal income tax. The Reorganization was accounted for as a reorganization of entities under common control. As a result, our unaudited condensed consolidated financial statements recognize the assets and liabilities received in the Reorganization at their historical carrying amounts, as reflected in the historical unaudited condensed consolidated financial statements of ER Holdings. In addition, in connection with the Reorganization and the IPO, we have entered into the Tax Receivable Agreement pursuant to which we will be required to pay certain Continuing Equity Unitholders, certain current or former employees of ER Holdings who hold Class M Units (the “Continuing Profits Interest Unitholders”) and certain entities interposed between certain pre-IPO owners that received shares of Class A common stock of us pursuant to the Blocker Mergers (including Energy Impact Fund (FT-B) LP) (the “Blocked Unitholders”) (together, the “TRA Beneficiaries”) 85% of the net cash savings, if any, that we 31 are deemed to realize as a result of our use of certain tax benefits described under “Certain Relationships and Related Person Transactions—Proposed Transactions with ERock, Inc.—Tax Receivable Agreement” in the Prospectus. Public Company Expenses We have incurred and expect to incur additional recurring administrative expenses as a result of becoming a publicly traded corporation that we have not previously incurred, including costs of the IPO and costs associated with SEC reporting and compliance requirements, annual and quarterly reports to shareholders, transfer agent fees, audit fees, incremental director and officer liability insurance costs, Sarbanes-Oxley compliance readiness, and director and officer compensation. Components of Results of Operations Revenues We generate revenue from two primary sources: power system sales and ongoing services. Power system sales can be a combination of power system sales product revenues and power system sales installation services revenues. Each of power system sales and ongoing services can also include warranty services. Power System Sales Revenues Power System Sales Product Revenues (Generators): We sell generators to commercial, industrial and utility customers. We generally recognize product revenue from the sale of generators at a point in time when control is transferred to the customers upon completion of factory acceptance testing. In certain “bill-and-hold” arrangements where the customer requests us to warehouse the generator until the site is ready for installation, control transfers when the generator is ready for physical transfer to the customer, as we have a present right to payment, the customer can direct the use of the generators (i.e. requests shipment to its facility), and legal title has passed to the customer. Furthermore, the generator is identified separately as belonging to the customer, and we cannot use the generator or direct it to another customer. Power system sales product revenue is driven by contracting for new power system projects, executing on our Contracted Power System Sales Backlog and the timing of assembly and delivery of our generators to customers pursuant to ESI agreements. In 2025, we transitioned the assembly of our generators in-house at our Titan facility, and we expect to commence operations of our Hyperion facility in the second half of 2026, which we expect to increase power system sales product revenue in 2026 compared to 2025 and 2024 due to higher demand and improved efficiencies in our assembly and delivery capabilities. Power System Sales Installation Services Revenues: We provide services to prepare, construct, and install distributed generation power systems designed to provide bridge, backup and dispatchable power solutions for data centers, C&I, and utility customers. These service contracts can occur over several months or a multi-year period. The revenues through service contracts are generated under fixed-price contracts with certain reimbursable variable costs. We recognize revenue over time because our performance creates or enhances an asset that the customer controls as the asset is created or enhanced. We measure progress using the cost-to-cost method (percentage of costs incurred to total estimated costs), as this best depicts the transfer of value to the customer. Power system sales installation services revenue is driven by contracting for new power system projects, executing on our Contracted Power System Sales Backlog, and the achievement of milestones in the design, construction and installation of our power systems pursuant to ESI agreements. Ongoing Services Revenues Ongoing Services: We provide ongoing services to operate and maintain distributed generation power systems designed to provide bridge, backup and dispatchable power for our customers. These services primarily consist of maintenance services and asset management services arrangements. Our ongoing services are generally stand-ready obligations satisfied over time. For fixed-fee arrangements, we recognize revenue either (i) ratably over the contract term, or (ii) on an as-invoiced basis, related to corrective work completed as needed. We also provide extended warranty services in connection with ongoing services that are identified as a separate performance obligation and are recognized ratably over the extended warranty period. Ongoing services revenue is driven by commissioned power systems and performing our obligations pursuant to O&M and asset management agreements. We expect our ongoing services revenue to increase as we grow our installed base. 32 Service-Type Warranty: We sell separately priced service-type warranties that provide coverage beyond the standard manufacturer’s warranty. Revenues from these warranties are recognized ratably over the warranty period. Cost of Revenues Total cost of revenues consists of cost of power system sales revenues, which includes cost of power system sales product revenues and cost of power system sales installation services revenues, and cost of ongoing services revenues and excludes depreciation and amortization expense. The cost of ongoing services revenues can also include cost of warranty services revenues. Cost of Power System Sales Revenues Cost of Power System Sales Product Revenues (Generators): Cost of power system sales product revenues primarily reflect the direct expenditures associated with the engineering, procurement of the components and materials for, and assembly of, our power systems, including our reciprocating engines. These costs are generally recognized at the point in time when control of the product is transferred to the customer. We expect that the cost of power system sales product revenues to increase as we contract for new power system projects, execute on our Contracted Power System Sales Backlog. Cost of Power System Sales Installation Services Revenues: Cost of power system sales installation services revenues reflect the construction and installation of our power systems at the customer’s site. These costs include the cost of labor to design our power systems, the cost of components and materials to build our power systems, the cost of labor to assemble and deliver our generators and the cost of labor and materials to construct and install our power systems. Costs related to power system sales installation services revenues are recognized over time in a manner consistent with the recognition of the associated revenues, as project milestones are achieved or services are performed and accepted by the customer. Costs of warranties for power system sales are recognized as incurred and include labor, parts and allocated overhead necessary to perform repair services. We do not accrue these costs and recognize the expense in the period the services are performed. Cost of Ongoing Services Revenues Cost of ongoing services revenues primarily consists of the expenses associated with operating, maintaining and managing our power systems pursuant to Ongoing Services agreements. These costs span the term of each Ongoing Services agreement, beginning with the final commissioning and integration phase of installation and continuing with the operation, maintenance and asset management of the applicable power system. These costs include the cost of labor to operate and maintain our power systems, the cost of components and materials to maintain our power systems and the cost of labor to manage electricity and natural gas market participation of our power systems. We expect the cost of ongoing services revenues to increase as we grow our installed base. Costs of warranties for ongoing services are recognized as incurred and include labor, parts and allocated overhead necessary to perform repair services. We do not accrue these costs and recognize the expense in the period the services are performed. Operating Expenses General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of payroll and employee benefits, including health insurance, 401(k) contributions, and annual incentive compensation, for corporate staff, as well as external professional fees, sales and marketing expenses and other miscellaneous expenses including utilities, rent and insurance costs. We expect our G&A expenses to increase in future periods due to additional costs associated with operating as a public company, including increased legal and accounting expenses, as well as incremental headcount necessary to support our continued growth. Depreciation and Amortization Expenses We depreciate our assets on a straight-line basis over their estimated useful lives, which generally range from five to 15 years. We expect depreciation and amortization expenses to increase in future periods as we continue to build out our new facility and expand our overall production capacity. 33 Interest Expense Interest expense for the period primarily reflects charges incurred under our long-term debt facilities and financing obligations. We expect these costs to decrease in future periods as a result of the full retirement of all long-term debt facilities during the quarter. By eliminating this principal and having no outstanding long-term debt, we have lowered our overall cost of capital and improved our net interest margins moving forward. Other Income, Net Other income primarily reflects financial results from activities secondary to our core power systems operations. This primarily includes interest income earned on cash and cash equivalents held in interest-bearing money market accounts, which are maintained to support liquidity for future project deployments. Income Tax Expense Determining income tax expense, deferred tax assets and liabilities, and unrecognized tax benefits requires significant management judgment and involves estimates. Because we operate in multiple tax jurisdictions, uncertain tax positions are evaluated and recognized based on a “more likely than not” threshold and may be subject to examination by tax authorities. Changes in tax laws, interpretations, or the outcomes of tax audits could materially affect our financial position, results of operations, and cash flows in future periods. We expect that the provision for income taxes will increase in future periods due to the forecasted growth in revenues and net income associated with our contract backlog. Results of Operations Comparison of the three and six months ended June 30, 2026 and June 30, 2025 The following tables present selected unaudited condensed consolidated statements of operations data for the periods indicated. This information is derived from, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report. 34 Three Months Ended (dollars in thousands) June 30, Change Condensed Consolidated Statements of Operations 2026 2025 Amount % Power system sales product revenues $ 16,163 $ 43,319 $ (27,156 ) (62.7%) Power system sales installation services revenues 10,351 14,077 (3,726 ) (26.5%) Power system sales revenues 26,514 57,396 (30,882 ) (53.8%) Ongoing services revenues 13,364 11,062 2,302 20.8% Total revenues 39,878 68,458 (28,580 ) (41.7%) Cost of power system sales product revenues, excluding depreciation and amortization 12,112 34,360 (22,248 ) (64.8%) Cost of power system sales installation services revenues, excluding depreciation and amortization 8,058 8,446 (388 ) (4.6%) Cost of power system sales revenues, excluding depreciation and amortization 20,170 42,806 (22,636 ) (52.9%) Cost of ongoing services revenues, excluding depreciation and amortization 10,968 9,620 1,348 14.0% Total cost of revenues, excluding depreciation and amortization 31,138 52,426 (21,288 ) (40.6%) General and administrative expenses 27,280 15,726 11,554 73.5% Depreciation and amortization expense 1,308 808 500 61.9% Loss from operations (19,848 ) (502 ) (19,346 ) 3853.8% Interest (expense) income (2,392 ) 7,681 (10,073 ) (131.1%) Loss on debt extinguishment (48,774 ) (15,244 ) (33,530 ) 220.0% Other income, net 2,921 91 2,830 3109.9% Loss before income taxes (68,093 ) (7,974 ) (60,119 ) 753.9% Income tax (expense) benefit 374 (11 ) 385 (3500.0%) Net loss (67,719 ) (7,985 ) (59,734 ) 748.1% Deemed dividends related to Series A preferred units (657 ) (770 ) 113 (14.7%) Net loss attributable to common units $ (68,376 ) $ (8,755 ) $ (59,621 ) 681.0% Net loss applicable to pre-IPO period (52,836 ) — (52,836 ) N/A Net loss attributable to noncontrolling interest (11,900 ) — (11,900 ) N/A Net loss attributable to ERock, Inc. $ (2,983 ) $ — $ (2,983 ) N/A Other Financial Data: Net loss margin (169.8 )% (11.7 )% (158.2%) Adjusted EBITDA $ (13,982 ) $ 3,581 $ (17,563 ) (490.4%) Adjusted EBITDA margin (35.1 )% 5.2 % (40.3%) 35 Six Months Ended (dollars in thousands) June 30, Change Condensed Consolidated Statements of Operations 2026 2025 Amount % Power system sales product revenues $ 21,320 $ 49,391 $ (28,071 ) (56.8%) Power system sales installation services revenues 21,116 22,037 (921 ) (4.2%) Power system sales revenues 42,436 71,428 (28,992 ) (40.6%) Ongoing services revenues 29,178 21,138 8,040 38.0% Total revenues 71,614 92,566 (20,952 ) (22.6%) Cost of power system sales product revenues, excluding depreciation and amortization 15,892 39,788 (23,896 ) (60.1%) Cost of power system sales installation services revenues, excluding depreciation and amortization 16,288 14,295 1,993 13.9% Cost of power system sales revenues, excluding depreciation and amortization 32,180 54,083 (21,903 ) (40.5%) Cost of ongoing services revenues, excluding depreciation and amortization 24,201 18,756 5,445 29.0% Total cost of revenues, excluding depreciation and amortization 56,381 72,839 (16,458 ) (22.6%) General and administrative expenses 48,223 32,592 15,631 48.0% Depreciation and amortization expense 2,609 1,864 745 40.0% Loss from operations (35,599 ) (14,729 ) (20,870 ) 141.7% Interest (expense) income (3,844 ) 5,703 (9,547 ) (167.4%) Loss on debt extinguishment (48,774 ) (15,244 ) (33,530 ) 220.0% Other income, net 3,473 376 3,097 823.7% Loss before income taxes (84,744 ) (23,894 ) (60,850 ) 254.7% Income tax expense (187 ) (28 ) (159 ) 567.9% Net loss (84,931 ) (23,922 ) (61,009 ) 255.0% Deemed dividends related to Series A preferred units (1,473 ) (1,525 ) 52 (3.4%) Net loss attributable to common units $ (86,404 ) $ (25,447 ) $ (60,957 ) 239.5% Net loss applicable to pre-IPO period (70,048 ) — (70,048 ) N/A Net loss attributable to noncontrolling interest (11,900 ) — (11,900 ) N/A Net loss attributable to ERock, Inc. $ (2,983 ) $ — $ (2,983 ) N/A Other Financial Data: Net loss margin (118.6 )% (25.8 )% (92.8%) Adjusted EBITDA $ (26,891 ) $ (7,475 ) $ (19,416 ) 259.7% Adjusted EBITDA margin (37.5 )% (8.1 )% (29.5%) Net Loss and Net Loss Margin Net loss increased by $59.7 million, or 748.1%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This increase was primarily attributable to a $33.5 million increase in the loss on debt extinguishments related to extinguishments of our convertible notes and term loan, an $11.6 million increase in general and administrative expenses associated with operating as a public company and supporting the Company's growth initiatives, a $10.1 million increase in interest expense due to gains recognized on fair value adjustments on debt instruments in the same prior year period, and a $7.3 million decrease in gross profit (excluding depreciation and amortization) driven by lower power system sales revenue primarily related to lower activity as compared to the same prior year period, partially offset by improved profitability from ongoing services. The increase in general and administrative expenses was primarily driven by a $7.1 million increase in total employee compensation and benefits, including $3.1 million in salaries, $2.0 million in bonus expense based on the 2026 target payout, $1.4 million in stock-based compensation expense primarily associated with new equity awards granted in June 2026, and $0.6 million in employee benefits; a $1.4 million increase in audit and tax consulting fees, primarily related to IPO readiness and public company compliance activities; a $0.9 million increase in office expenses, primarily due 36 to higher utilities, rent, and maintenance costs associated with the ramp-up of the Hyperion manufacturing facility; and a $0.9 million increase in taxes and licenses, primarily attributable to franchise and sales taxes resulting from higher assessed values, increased inventory levels, and updated tax rates across key operating locations, These impacts were partially offset by a $2.8 million increase in other income, net. Net loss increased by $61.0 million, or 255.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily attributable to a $33.5 million increase in the loss on debt extinguishments related to extinguishments of our convertible notes and term loan, a $15.6 million increase in general and administrative expenses associated with operating as a public company and supporting the Company's growth initiatives, a $9.5 million increase in interest expense due to gains recognized on fair value adjustments on debt instruments in the same prior year period, and a $4.5 million decrease in gross profit (excluding depreciation and amortization), driven by lower power system sales revenue primarily related to lower activity as compared to the same prior year period, partially offset by improved profitability from ongoing services. The increase in general and administrative expenses was primarily driven by a $8.3 million increase in total employee compensation and benefits, including $5.1 million in salaries, $1.7 million in bonus expense based on the 2026 target payout, $1.2 million in stock-based compensation expense primarily associated with new equity awards granted in June 2026, and $0.4 million in employee benefits; a $2.5 million increase in audit and tax consulting fees, primarily related to IPO readiness and public company compliance activities; a $1.5 million increase in office expenses, primarily due to higher utilities, rent, and maintenance costs associated with the ramp-up of the Hyperion manufacturing facility; and a $1.5 million increase in taxes and licenses, primarily attributable to franchise and sales taxes resulting from higher assessed values, increased inventory levels, and updated tax rates across key operating locations; These impacts were partially offset by a $3.1 million increase in other income, net. Net loss margin declined by 158.2%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The decline was primarily driven by a $59.7 million increase in net loss, as described above, coupled with a $28.6 million, or 41.7%, decrease in total revenues. Net loss margin declined by 92.8%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decline was primarily driven by a $61.0 million increase in net loss, as described above, coupled with a $21.0 million, or 22.6%, decrease in total revenues. Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA declined to a loss of $14.0 million for the three months ended June 30, 2026, from a gain of $3.6 million for the three months ended June 30, 2025, and a loss of $26.9 million for the six months ended June 30, 2026, from a loss of $7.5 million for the six months ended June 30, 2025. These declines were primarily attributable to lower gross profit resulting from decreases in total revenue of $28.6 million, or 41.7%, and $21.0 million, or 22.6%, for the three- and six-month periods, respectively, compared with the corresponding prior-year periods. The revenue decreases were primarily driven by lower power system sales volumes, as the prior-year periods benefited from a significant delivery of generators from inventory that had been manufactured over multiple quarters, with no comparable delivery during the current-year periods. These declines also reflected increases in general and administrative expenses of $11.6 million and $15.6 million for the three months ended June 30, 2026 and six months ended June 30, 2026 respectively, primarily associated with operating as a public company and supporting the Company’s growth initiatives. These impacts were partially offset by continued growth in ongoing services revenues and improved profitability within the ongoing services business. Adjusted EBITDA Margin declined by 40.3% for the three months ended June 30, 2026, compared to 29.5% for the six months ended June 30, 2026. The decline was primarily attributable to lower gross profit resulting from reduced power system product sales, as the comparable prior-year period benefited from a significant delivery of generators that did not recur in the current period, Adjusted EBITDA margin was also adversely affected by increased general and administrative expenses associated with operating as a public company and supporting growth initiatives. These impacts were partially offset by continued growth in ongoing services revenues and improved margins within the ongoing services business. For more information regarding our non-GAAP measures Adjusted EBITDA and Adjusted EBITDA Margin, and a reconciliation to their most comparable GAAP measures, see “—Non-GAAP Financial Measures.” 37 Total Revenues Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Power system sales product revenues $ 16,163 $ 43,319 $ (27,156 ) (62.7%) Power system sales installation services revenues 10,351 14,077 (3,726 ) (26.5%) Power system sales revenues 26,514 57,396 (30,882 ) (53.8%) Ongoing services revenues 13,364 11,062 2,302 20.8% Total revenues $ 39,878 $ 68,458 $ (28,580 ) (41.7%) Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Power system sales product revenues $ 21,320 $ 49,391 $ (28,071 ) (56.8%) Power system sales installation services revenues 21,116 22,037 (921 ) (4.2%) Power system sales revenues 42,436 71,428 (28,992 ) (40.6%) Ongoing services revenues 29,178 21,138 8,040 38.0% Total revenues $ 71,614 $ 92,566 $ (20,952 ) (22.6%) Total revenues for the three months ended June 30, 2026, were $39.9 million, a decrease of $28.6 million, or 41.7%, compared to $68.5 million for the three months ended June 30, 2025. This decrease was primarily driven by a $27.2 million decrease in power system sales; and a decrease of $3.7 million in installation revenue, which was partially offset by a $2.3 million increase in ongoing services. Total revenues for the six months ended June 30, 2026, were $71.6 million, a decrease of $21.0 million, or 22.6%, compared to $92.6 million for the six months ended June 30, 2025. This decrease was primarily driven by a $28.1 million decrease in power system sales; and a decrease of $0.9 million in installation revenue, which was partially offset by a $8.0 million increase in ongoing services. At June 30, 2026, we have approximately $1.7 billion in Contracted Power System Sales Backlog. Based on our current delivery capacity and production capacity at our Titan facility and the anticipated commencement of operations at our Hyperion facility in the second half of 2026, we expect to execute on this backlog over approximately two years. As a result, we expect to increase our total revenues in these years, primarily relating to power system sales product and installation services revenues, with ongoing services revenues expected to grow as additional systems are commissioned. Our ability to execute on this backlog as anticipated is subject to a number of risks and uncertainties including: (1) the risk that customers fail to meet or seek to modify their contractual commitments, (2) disruptions to our assembly operations or supply chain, and (3) broader macroeconomic conditions that could affect our customers’ ability to finance their purchases. Power system sales product revenues Power system sales product revenues decreased by $27.2 million, or 62.7%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This decrease was driven by lower product sales in the current period of $27.2 million, as the comparable prior-year period benefited from a large delivery of generators out of inventory that had been manufactured over multiple quarters, resulting in the company recognizing significant revenues. Power system sales product revenues decreased by $28.1 million, or 56.8%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This decrease was primarily driven by lower product sales in the current period of $28.1 million, as the comparable prior-year period benefited from a large delivery of generators out of inventory that had been manufactured over multiple quarters, resulting in the Company recognizing significant revenues. Power system sales installation services revenues Power system sales installation services revenues decreased by $3.7 million, or 26.5%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This decrease was driven by lower installation activity and timing of key project milestone achievements on customer sites requiring installation services, with the comparable prior-year period benefiting from the completion of a greater number of installation milestones. 38 Power system sales installation services revenues decreased by $0.9 million, or 4.2%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This decrease was driven by lower installation activity and timing of key project milestone achievements on customer sites requiring installation services, with the comparable prior-year period benefiting from the completion of a greater number of installation milestones. Ongoing services revenues Ongoing services revenues increased by $2.3 million, or 20.8%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by a $2.0 million increase in reimbursable revenue and a $0.5 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 $0.2 million of higher billable and contract service work performed versus the prior period. Ongoing services revenues increased by $8.0 million, or 38.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily driven by a $4.8 million increase in reimbursable revenue and a $1.7 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 $0.6 million of major project upgrade activity, $0.5 million of unplanned billable service work performed during the year, and approximately $0.6 million of miscellaneous work versus the prior period. Total Cost of Revenues Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Cost of power system sales product revenues, excluding depreciation and amortization $ 12,112 $ 34,360 $ (22,248 ) (64.8%) Cost of power system sales installation services revenues, excluding depreciation and amortization 8,058 8,446 (388 ) (4.6%) Cost of power system sales revenues, excluding depreciation and amortization 20,170 42,806 (22,636 ) (52.9%) Cost of ongoing services revenues, excluding depreciation and amortization 10,968 9,620 1,348 14.0% Total cost of revenues, excluding depreciation and amortization $ 31,138 $ 52,426 $ (21,288 ) (40.6%) Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Cost of power system sales product revenues, excluding depreciation and amortization $ 15,892 $ 39,788 $ (23,896 ) (60.1%) Cost of power system sales installation services revenues, excluding depreciation and amortization 16,288 14,295 1,993 13.9% Cost of power system sales revenues, excluding depreciation and amortization 32,180 54,083 (21,903 ) (40.5%) Cost of ongoing services revenues, excluding depreciation and amortization 24,201 18,756 5,445 29.0% Total cost of revenues, excluding depreciation and amortization $ 56,381 $ 72,839 $ (16,458 ) (22.6%) Total cost of revenues decreased by $21.3 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This decrease was primarily attributable to a $22.2 million reduction in power system product cost of revenues. This decrease was partially offset by a $1.3 million increase in ongoing services cost of revenues driven by higher service activity supporting the Company’s growing installed fleet. Total cost of revenues decreased by $16.5 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This decrease was primarily attributable to a $23.9 million reduction in power system product cost of revenues. This decrease was partially offset by a $2.0 million increase in installation services cost of revenues due to sites moving into installation phase and a $5.4 39 million increase in ongoing services cost of revenues, driven by increased installation activity and the continued growth of the Company’s installed fleet. As of June 30, 2026, we have approximately $1.7 billion in Contracted Power System Sales Backlog. As we execute on our Contracted Power System Sales Backlog over the approximately two-year period, we anticipate total cost of revenues to increase commensurate with higher revenue. However, we expect revenues to grow faster than costs, leading to improved margins 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: (1) unforeseen increases in component or raw material costs, (2) supply chain disruptions, (3) labor cost increases, and (4) delays or higher than anticipated startup costs at our Hyperion facility, any of which could adversely affect the margin improvement we currently anticipate. Cost of power system sales product revenues Cost of power system sales product revenues decreased $22.2 million, or 64.8%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This decrease was driven by lower material costs associated with reduced power system product deliveries during the current period. The comparable prior-year period reflected higher product-related cost of revenues due to the delivery of a significant volume of generators out of inventory that had been manufactured over multiple preceding quarters. Cost of power system sales product revenues decreased $23.9 million, or 60.1%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This decrease was driven by lower material costs associated with reduced power system product deliveries during the current period. The comparable prior-year period reflected higher product-related cost of revenues due to the delivery of a significant volume of generators out of inventory that had been manufactured over multiple preceding quarters. Cost of power system sales installation revenues Cost of power system sales installation revenues decreased $0.4 million, or 4.6%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The decrease was primarily driven by lower installation activity costs resulting from fewer power system deployments during the current period. Cost of power system sales installation revenues increased $2.0 million, or 13.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. 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 Cost of ongoing services revenues increased $1.3 million, or 14.0%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. 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. Cost of ongoing services revenues increased $5.4 million, or 29.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. 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 Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % General and administrative expenses $ 27,280 $ 15,726 $ 11,554 73.5% Depreciation and amortization expense 1,308 808 500 61.9% $ 28,588 $ 16,534 $ 12,054 72.9% 40 Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % General and administrative expenses $ 48,223 $ 32,592 $ 15,631 48.0% Depreciation and amortization expense 2,609 1,864 745 40.0% $ 50,832 $ 34,456 $ 16,376 47.5% Total Operating Expenses Total operating expenses for the three months ended June 30, 2026 were $28.6 million, an increase of $12.1 million, or 72.9%, compared to $16.5 million for the three months ended June 30, 2025. The increase was driven by a $11.6 million increase in general and administrative expenses and a $0.5 million increase in depreciation and amortization expenses. Total operating expenses for the six months ended June 30, 2026 were $50.8 million, increase of $16.4 million, or 47.5%, compared to $34.5 million for the six months ended June 30, 2025. The increase was driven by a $15.6 million increase in general and administrative expenses and a $0.7 million increase in depreciation and amortization expenses. General and Administrative General and administrative expenses increased by $11.6 million, or 73.5%, for three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by a $7.1 million increase in total employee compensation and benefits, including $3.1 million in salaries, $2.0 million in bonus expense based on the 2026 target payout, $1.4 million in stock-based compensation expense primarily associated with new equity awards granted in June 2026, and $0.6 million in employee benefits; a $1.4 million increase in audit and tax consulting fees, primarily related to IPO readiness and public company compliance activities; a $0.9 million increase in office expenses, primarily due to higher utilities, rent, and maintenance costs associated with the ramp-up of the Hyperion manufacturing facility; and a $0.9 million increase in taxes and licenses, primarily attributable to franchise and sales taxes resulting from higher assessed values, increased inventory levels, and updated tax rates across key operating locations. General and administrative expenses increased by $15.6 million, or 48.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by a $8.3 million increase in total employee compensation and benefits, including $5.1 million in salaries, $1.7 million in bonus expense based on the 2026 target payout, $1.2 million in stock-based compensation expense primarily associated with new equity awards granted in June 2026, and $0.4 million in employee benefits; a $2.5 million increase in audit and tax consulting fees, primarily related to IPO readiness and public company compliance activities; a $1.5 million increase in office expenses, primarily due to higher utilities, rent, and maintenance costs associated with the ramp-up of the Hyperion manufacturing facility; and a $1.5 million increase in taxes and licenses, primarily attributable to franchise and sales taxes resulting from higher assessed values, increased inventory levels, and updated tax rates across key operating locations. Depreciation and Amortization Depreciation and amortization expense increased by $0.5 million, or 61.9%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by the increase in amortization expenses related to capitalized software and other intangible assets used to support operational and corporate systems along with investments in equipment, infrastructure, and other fixed assets primarily related to our Titan and Hyperion facilities which were placed into service to support our expanding operations and growing installed base of power systems. Depreciation and amortization expense increased by $0.7 million, or 40.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by the increase in amortization expenses related to capitalized software and other intangible assets used to support operational and corporate systems along with investments in equipment, infrastructure, and other fixed assets primarily related to our Titan and Hyperion facilities which were placed into service to support our expanding operations and growing installed base of power systems. 41 Interest Expense Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Interest (expense) income $ (2,392 ) $ (5,552 ) $ 3,160 (56.9%) Interest income - fair value adjustments on debt instruments — 13,233 (13,233 ) (100.0%) Interest (expense) income $ (2,392 ) $ 7,681 $ (10,073 ) (131.1%) Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Interest (expense) income $ (6,203 ) $ (9,729 ) $ 3,526 (36.2%) Interest income - fair value adjustments on debt instruments 2,359 15,432 (13,073 ) (84.7%) Interest (expense) income $ (3,844 ) $ 5,703 $ (9,547 ) (167.4%) Interest expense decreased $3.2 million to $2.4 million for the three months ended June 30, 2026 compared to $5.6 million for the three months ended June 30, 2025. Interest income related to fair value adjustments on debt instruments decreased $13.2 million to $0 for the three months ended June 30, 2026 compared to $13.2 million for the three months ended June 30, 2025. The decreases were due to lower volatility and a lower average debt balance compared to the prior-year period. Interest expense decreased $3.5 million to $6.2 million for the six months ended June 30, 2026, compared to $9.7 million for the six months ended June 30, 2025. Interest income related to fair value adjustments on debt instruments decreased $13.1 million to $2.4 million for the six months ended June 30, 2026 compared to $15.4 million for the six months ended June 30, 2025. The decreases were due to lower volatility and a lower average debt balance compared to the prior-year period. Other Income and Expenses Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Loss on debt extinguishment $ (48,774 ) $ (15,244 ) $ (33,530 ) 220.0% Other income, net 2,921 91 2,830 3109.9% $ (45,853 ) $ (15,153 ) $ (30,700 ) 202.6% Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Loss on debt extinguishment $ (48,774 ) $ (15,244 ) $ (33,530 ) 220.0% Other income, net 3,473 376 3,097 823.7% $ (45,301 ) $ (14,868 ) $ (30,433 ) 204.7% Loss on debt extinguishments increased $33.5 million to $48.8 million for the three months ended June 30, 2026, compared to $15.2 million for the three months ended June 30, 2025. The increase was primarily attributable to extinguishments of our convertible notes and term loan. Loss on debt extinguishments increased $33.5 million to $48.8 million for the six months ended June 30, 2026, compared to $15.2 million for the six months ended June 30, 2025. The increase was primarily attributable to extinguishments of our convertible notes and term loan. 42 Other income, net increased $2.8 million to $2.9 million for the three months ended June 30, 2026, compared to $0.1 million for the three months ended June 30, 2025. This increase is primarily due to an increase in interest income associated with our higher cash balances in 2026 as well as an increase in warranty income from claims. Other income, net increased $3.1 million to $3.5 million for the six months ended June 30, 2026, compared to $0.4 million for the six months ended June 30, 2025. This increase is primarily due to an increase in interest income associated with our higher cash balances in 2026 as well as an increase in warranty income from claims. Provision for Income Taxes Three Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Income tax (expense) benefit $ 374 $ (11 ) $ 385 (3500.0%) Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Income tax (expense) benefit $ (187 ) $ (28 ) $ (159 ) 567.9% Income tax expense decreased by $0.4 million, or 3500.0%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This decrease was primarily attributable to lower projected revenues in Texas for the full year. Income tax expense increased by $0.2 million, or 567.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily attributable to higher projected revenues in Texas for the full year. 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. At June 30, 2026, we had cash and cash equivalents of $626.6 million, with noncurrent restricted cash of $34.2 million. At June 30, 2026, working capital was $261.2 million. Following the completion of our IPO, we used approximately $369.3 million of the proceeds (net of underwriting discounts and commissions) from the IPO to purchase 18,604,652 Class A Units from ER Holdings, which ER Holdings in turn used to repay approximately $30.0 million of the outstanding indebtedness under its 2025 Term Loan (as defined below) and a $3.0 million prepayment fee, with the remainder to be used by ER Holdings for general corporate purposes; approximately $156.9 million to purchase Class B Units from certain pre-IPO holders of units in ER Holdings; and approximately $27.8 million to fund a cash payment to Energy Impact Fund (FT-B) LP in connection with its Blocker Merger. 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. Material changes to our accounts receivable may occur due to the timing associated with the billing and collection of milestone payments. We expect these advance payments to continue to fund a substantial portion of our working capital needs as we execute on our 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. Management believes that our existing cash and cash equivalents, together with amounts available under the 2026 ABL Credit Facility (as defined below), will be sufficient to meet obligations due or anticipated to be due over the short-term (within the next 12 months) and long-term (beyond the next 12 months), 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 titled “Risk Factors” in the Prospectus. 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 43 or capitalize on business opportunities due to insufficient capital, our business, financial condition, and operating results could be materially adversely affected. Future capital requirements will depend on factors such as revenue growth, timing and level of spending on research and development and other business initiatives, growth in system builds and corresponding working capital needs, expansion of sales and marketing activities, additional production facilities, market acceptance of products, our ability to secure financing for customer use of products, the timing of installations and inventory buildup in anticipation of future projects, and overall economic conditions. To support our growth plans, we may need to raise additional funds through equity or debt financing, and failure to secure such financing could affect our future revenues, cash flows, and results of operations. 2024 Credit Agreement On February 27, 2024, we entered into a five-year term credit agreement (the “2024 Credit Agreement”), which provides for a $75.0 million senior secured initial term loan and a $30.0 million delayed draw term loan, each maturing on February 27, 2029. On November 26, 2025, we paid off all outstanding principal, accrued interest, and other fees in order to terminate the 2024 Credit Agreement. 2024 Note Purchase Agreement, A&R Note Purchase Agreement and Convertible Notes On December 27, 2024, we entered into a note purchase agreement with an affiliated investor (the “2024 Note Purchase Agreement”) 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. These notes are convertible into equity securities having rights, privileges, preferences, and restrictions identical to those issued in a future equity financing. In connection with the notes, we agreed to issue a warrant to each lender with an exercise price of $0.01 per common unit. The number of common units exercisable under each warrant is calculated by dividing the aggregate principal amount of the note purchased by 1,497. On April 29, 2025, we entered into an amended and restated note purchase agreement (the “A&R Note Purchase Agreement”) which amended and restated the 2024 Note Purchase Agreement and the notes issued thereunder, and pursuant to which the lenders agreed to purchase convertible promissory notes in an aggregate principal amount not to exceed $65.0 million (the “2025 Convertible Notes”), inclusive of the $20.0 million of notes issued under the 2024 Note Purchase Agreement. The 2025 Convertible Notes are convertible into equity securities having rights, privileges, preferences, and restrictions identical to those issued in a future equity financing. In connection with the A&R Note Purchase Agreement, all warrants previously issued under the 2024 Note Purchase Agreement were cancelled. Rights Offering The A&R Note Purchase Agreement also authorizes a rights offering to existing equity holders (other than current lenders and their affiliates) of up to $4.96 million of 2025 Convertible Notes, provided that the amount of all 2025 Convertible Notes may not exceed $65.0 million. Purchasers participating in the rights offering are entitled to receive additional common units (“RO Units”), the number of which is determined pursuant to a specified formula tied to the purchaser’s principal investment and an aggregate principal reference amount of $35.0 million. December 2024 Convertible Note and Amended and Restated Notes On December 27, 2024, pursuant to the 2024 Note Purchase Agreement, we issued a $10.0 million convertible promissory note (the “December 2024 Convertible Note”) to an investor, with a maturity date of the later of (i) December 27, 2026 and (ii) for so long as the 2024 Credit Agreement remains outstanding, the date that is six months following the stated maturity date of the 2024 Credit Agreement. The December 2024 Convertible Note bears interest at 15% per annum, compounding quarterly, with interest payable in kind (“PIK”), meaning that accrued interest is added to the principal balance. Interest begins accruing on the issue date and continues until the earlier of the note’s maturity or any event that triggers conversion or repayment prior to maturity, at the lender’s election. For more information 44 on the December 2024 Convertible Note, see Note 11 – Debt, to our unaudited condensed consolidated financial statements included in this Quarterly Report. In January and February 2025, pursuant to the 2024 Note Purchase Agreement, we issued a total of $10.0 million in convertible promissory notes across two $5.0 million notes (the “Additional 2024 Convertible Notes” and, together with the 2025 Convertible Notes and the December 2024 Convertible Note, the “Notes”) to the same investor on substantially the same terms and conditions as the December 2024 Convertible Note. In April 2025, in connection with the A&R Note Purchase Agreement, we amended and restated each of the December 2024 Convertible Note and the Additional 2024 Convertible Notes and issued an additional $15.3 million in 2025 Convertible Notes to the same investor. In August and September 2025, we issued an additional $70 thousand of 2025 Convertible Notes under the A&R Note Purchase Agreement. The 2025 Convertible Notes bear interest at 15.0% per annum, compounding quarterly, with interest PIK. Interest begins accruing on the original issue date of the applicable 2025 Convertible Note and continues until the earlier of the note’s maturity or any event that triggers conversion or repayment prior to maturity. Amounts outstanding under the 2025 Convertible Notes will mature on December 27, 2026, with respect to 2025 Convertible Notes originally issued under the 2024 Note Purchase Agreement, or on April 29, 2027, with respect to 2025 Convertible Notes originally issued on or after the effective date of the A&R Note Purchase Agreement. On May 13, 2026, portions of the Notes were converted into common units, and the remaining Notes were redeemed in cash. As a result, the Notes are no longer outstanding as of the date of this Quarterly Report. 2025 Credit Agreement On December 22, 2025, we entered into a loan and security agreement (the “2025 Credit Agreement”), which provides for a senior secured term loan in the initial principal amount of $30.0 million (the “2025 Term Loan”) and a senior secured revolving credit facility with commitments in the aggregate amount of $30.0 million (the “2025 Revolver”). Borrowings under the 2025 Credit Agreement were secured by a lien on all equipment, inventory, receivables, general intangibles, and substantially all other personal property owned by Enchanted Rock Holdings, LLC, including a pledge of the equity interests in its subsidiaries. Upon the consummation of the IPO, we repaid in full all outstanding principal and accrued interest and associated fees under, and terminated, the 2025 Credit Agreement. At June 30, 2026, we had no borrowings related to the 2025 Term Loan and no borrowings related to the 2025 Revolver under the 2025 Credit Agreement. We believe we were in compliance with the financial covenants of the 2025 Credit Agreement described above at that date. 2026 ABL Credit Facility On June 4, 2026, our subsidiary Enchanted Rock Holdings, LLC (the “Borrower”) entered into a credit agreement (the “2026 Credit Agreement”) with certain subsidiaries of the Borrower, as co-borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (the “Lenders”), pursuant to which the Lenders will provide a three-year senior secured asset-based revolving credit facility in an aggregate principal amount of up to $250.0 million (the “2026 ABL Credit Facility”). The full amount of the 2026 ABL Credit Facility is available for the issuance of letters of credit. Availability under the 2026 ABL Credit Facility is subject to a borrowing base equal to the sum of (i) 85% of eligible accounts receivable, (ii) the lesser of 75% of eligible inventory (at the lower of FIFO cost or market) and 85% of the net orderly liquidation value of eligible inventory, and (iii) 100% of unrestricted cash held in a blocked account with the administrative agent, in each case less customary reserves. The Borrower’s ability to borrow loans under the 2026 ABL Credit Facility is subject to completion of an initial field exam which is reasonably satisfactory to a majority of the Lenders. Borrowings under the 2026 ABL Credit Facility will be secured by first-priority liens on substantially all of the assets of the Borrower and its material domestic subsidiaries (subject to customary exclusions), including a pledge of the equity interests in such subsidiaries. The Borrower’s obligations are guaranteed by each of its existing and future material domestic subsidiaries (subject to customary exclusions). ERock, Inc. will not guarantee the 2026 ABL Credit Facility. Borrowings under the 2026 ABL Credit Facility will bear interest, at the Borrower’s option, at a rate per annum equal to either (i) the Term SOFR plus 2.00% or (ii) an alternate base rate plus 1.00%. The 2026 ABL Credit Facility will also be subject to a commitment 45 fee of 0.25% per annum on the daily undrawn portion of the commitments, payable quarterly in arrears, and customary letter of credit fees. The 2026 Credit Agreement includes certain affirmative and negative financial covenants customary for facilities of this type, including, among others, (i) an initial minimum liquidity covenant of $85.0 million (subject to stepdowns), which will apply until our fixed charge coverage ratio has exceeded 1.00 to 1.00 for three consecutive fiscal quarters, and (ii) thereafter, a springing fixed charge coverage ratio covenant of not less than 1.00 to 1.00, which will apply during periods in which excess availability is below the greater of $18,750,000 and 12.5% of the line cap. The 2026 Credit Facility also includes springing cash dominion provisions triggered by similar excess availability thresholds or the occurrence and continuance of an event of default, and customary events of default. We intend to use borrowings under the 2026 ABL Credit Facility for working capital and general corporate purposes. Preferred Units On July 1, 2018, the principal and accrued unpaid interest of a $10.0 million convertible promissory note issued to an investor was converted into 25,162 Series A preferred units, each with a stated value of $480 and a liquidation preference totaling $12.6 million (the “Series A Preferred Units”). On the same date, we issued an additional 19,167 Series A Preferred Units with a stated value of $600 per unit and a liquidation preference of $12.0 million. At June 30, 2026 and December 31, 2025, 0 and 163,975 Series A Preferred Units, respectively, were authorized, issued, and outstanding. Each Series A Preferred Unit automatically converts into common units upon the closing of a qualified public offering (an “Automatic Conversion”). Upon an Automatic Conversion, each Series A Preferred Unit converts into the number of common units specified in the applicable conversion ratio, without any further action required by the holders. Upon the occurrence of a redemption event—such as (i) a sale of the Company or an affiliate, (ii) the closing of a public offering, or (iii) five years following the issuance date of the Series A Preferred Units—the holders of a majority of the outstanding Series A Preferred Units may, by written notice to the Company, require the Company to redeem all outstanding Series A Preferred Units. The redemption price per unit is calculated to provide the holder with an 8% internal rate of return on the original issue price of the Series A Preferred Unit. In connection with the Company’s IPO, all outstanding Series A Preferred Units converted into Class A Units or Class B Units dependent upon the holder of the original units. Cash Flows for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 The following table summarizes our cash flows by source (use) for the periods presented: Six Months Ended June 30, Change (dollars in thousands) 2026 2025 Amount % Net cash provided by operating activities $ 268,939 $ 436 $ 268,503 61654.0% Net cash used in investing activities (8,835 ) (2,411 ) (6,424 ) 266.4% Net cash provided by (used in) financing activities 292,660 (1,191 ) 293,851 (24672.6%) $ 552,764 $ (3,167 ) $ 555,930 (17556.6%) Operating Activities Our operating activities consist of net loss adjusted for certain non-cash items, together with changes in operating assets and liabilities or working capital. Changes in operating assets and liabilities or working capital for the six months ended June 30, 2026 totaled $294.5 million, which include the following: •A $358.4 million increase in contract liabilities primarily driven by new customer deposits associated with contracts entered into during the six months ended June 30, 2026. 46 •A $62.4 million increase in inventory primarily due to build up of inventory related to manufacturing ramp up. •A $13.8 million increase in prepaid expenses primarily driven by prepaid equipment on several large projects. For the six months ended June 30, 2026, net cash provided by operating activities was $268.9 million, an increase of $268.5 million from the six months ended June 30, 2025 primarily driven by changes in operating assets and liabilities or working capital. Changes in operating assets and liabilities or working capital increases from the prior year were primarily driven by an increase of $358.4 million in contract liabilities during the six months ended June 30, 2026 compared to the increase of $7.4 million in contract liabilities in the same prior-year period, an increase of $62.4 million in inventory during the six months ended June 30, 2026 compared to the $27.2 million decrease in inventory in the same prior-year period, and an increase of $13.8 million in prepaid expenses during the six months ended June 30, 2026 compared to the $0.9 million decrease in prepaid expenses in the same prior-year period. Investing Activities Historically, our investing activities have primarily consisted of capital expenditures to support the growth and scalability of our operations. For the six months ended June 30, 2026 and 2025, net cash used in investing activities was $8.8 million and $2.4 million, respectively. For the six months ended June 30, 2026, net cash used in investing activities was primarily driven by investment in our Hyperion and Titan Facilities, representing a significant step forward in the development and deployment of our next-generation production infrastructure. Financing Activities For the six months ended June 30, 2026, net cash provided by financing activities was $292.7 million. During the six months ended June 30, 2026, we received funds from our initial public offering of $369.3 million, net of underwriter fees and offering costs. In addition, we made voluntary debt repayments totaling $74.7 million. For the six months ended June 30, 2025, net cash used in financing activities was $1.2 million. During the six months ended June 30, 2025, we issued $25.0 million of convertible promissory notes to an affiliated investor. In addition, we made voluntary payments of principal totaling $24.0 million, and paid creditor fees, debt issuance costs, and other voluntary payments of short term financing totaling $2.2 million. Contractual Obligations and Commitments Our cash requirements within the next twelve months include accounts payable and accrued liabilities, other current liabilities, and other obligations. We expect the cash required to meet these obligations to be primarily generated through a combination of cash from operations and our borrowing capacity under our 2026 ABL Credit Facility. Our long-term cash requirements under our various contractual obligations and commitments include: •Operating Leases – See Note 9 – Leases, in the Notes to our unaudited condensed consolidated financial statements included in this Quarterly Report for further detail of our obligations and the timing of expected future payments. We believe the following sources will be sufficient to meet our anticipated cash requirements for at least the next twelve months while maintaining sufficient liquidity for normal operating purposes: •our cash flows from operations; and •availability of additional capital under our 2026 ABL Credit Facility. Tax Receivable Agreement As described in Note 16 – Income Taxes to our unaudited condensed consolidated financial statements included in this Quarterly Report, we are a party to the Tax Receivable Agreement (“TRA”) under which we are contractually committed to pay the Continuing Equity Unitholders 85% of the amount of the benefits, if any, that we are deemed to realize, as a result of certain transactions. The payments 47 that we will be required to make under the Tax Receivable Agreement may be substantial. Amounts payable under the TRA are contingent upon, among other things, (i) generation of future taxable income over the term of the TRA and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then we generally would not be required to make the related TRA payments. Therefore, we will only recognize a liability for TRA payments if we determine it is probable that we will generate sufficient future taxable income over the term of the TRA to utilize the related tax benefits. Estimating future taxable income is inherently uncertain and requires judgment. Critical Accounting Estimates Our financial statements, included elsewhere in this Quarterly Report, are prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. These estimates are based on historical experience, current facts, and other assumptions that management considers reasonable under the circumstances. We regularly evaluate these estimates and assumptions, but actual results may differ materially from our estimates. Any such differences could impact our future financial statement presentation, financial condition, results of operations, and cash flows. Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies, to our consolidated financial statements included in this Quarterly Report. The discussion below focuses on our most critical accounting estimates that materially affect our consolidated financial statements and require management to make difficult, subjective, or complex judgments. We believe that understanding these critical accounting estimates is essential to fully appreciating our consolidated financial condition and results of operations. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, which requires revenue to be recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We generate revenue primarily from the design, installation, and operation of distributed generation power systems that provide bridge, backup and dispatchable power for data centers, C&I, and utility customers in the United States. Significant judgment is required in identifying and evaluating performance obligations, estimating standalone selling prices, and determining the timing of revenue recognition. Many of our customer contracts include multiple performance obligations. In such cases, we account for each performance obligation separately if it is distinct. The transaction price is allocated to separate performance obligations based on their relative standalone selling prices (“SSP”). Because determining SSP requires judgment, we generally estimate the SSP for our installation services using an expected cost plus a margin approach. When ongoing maintenance services are included in a contract, their SSP is also estimated using this same approach. The Company provides installation services to prepare, construct, and install distributed generation power systems designed to provide bridge, backup and dispatchable power for our customers. These service contracts can occur over several months or a multi-year period. These fixed-price service contracts contain certain reimbursable variable revenues and costs. The Company recognizes revenues over time because the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced. The Company measures progress using the cost-to-cost method (percentage of costs incurred to total estimated costs), as this best depicts the transfer of value to the customer. Due to the nature of fixed-price installation services contracts, costs can vary from estimates due to factors such as scope changes, unforeseen conditions, or material cost fluctuations that will directly impact revenue recognized each period. In preparing estimates, we draw on our extensive experience with installing distributed generation power systems. We use this experience in conjunction with the project specifications as well as our database of historical information from similar projects to ensure that our estimates are as accurate as possible, given current circumstances. We establish an estimated margin at contract inception and apply that margin to actual costs as they are incurred. We continuously monitor estimated costs at completion relative to the original margin assumptions and recognize the impact of any increases or decreases in estimated margin in the period such changes are identified. When a change in estimate occurs, we record a cumulative catch-up adjustment to reflect the effect on costs incurred to date. The revised estimated margin is then applied prospectively to costs incurred thereafter. Changes in judgments or estimates could materially affect the timing and amount of revenue recognized, which may, in turn, impact our reported financial results. 48 Additional Information For information on our accounting policies and on accounting pronouncements that have impacted or may materially impact our financial condition, results of operations, or cash flows, see Note 2 – Summary of Significant Accounting Policies, to our consolidated financial statements included in the Prospectus. At June 30, 2026, there have been no significant changes to our critical accounting estimates since our audited consolidated financial statements. Recent Accounting Pronouncements For a discussion of our recently adopted accounting pronouncements, as well as recently issued accounting standards not yet adopted, see Note 2—Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.