Note 15: Related Party Transactions

Related-party transactions

Performance Technologies occasionally provides services to other Modine businesses. The nature of services provided is similar to the services that Performance Technologies provides to its third party customers.

All significant intercompany transactions between Performance Technologies and Modine have been included in the condensed combined financial statements and are considered to have been effectively settled at the time the transactions were recorded or are expected to be settled for cash. Sales to Modine and cost of sale for purchases from Modine during the three months ended June 30, 2026 and 2025 were each not significant. Selling, general and administrative expenses for services received from Modine were not significant during the three months ended June 30, 2026, and were $0.4 million during the three months ended June 30, 2025. Receivables and payables, between the Company and Parent are cash settled and have been presented on the combined balance sheets as due from related party and due to related party, respectively. In the combined statement of cash flows, this related party activity is reported within cash flows from operating activities. During the three months ended June 30, 2026, the Company transferred $9.5 million of net assets to the Parent in a non-cash transaction as part of an internal reorganization associated with the Spin-Off.

Cash pooling arrangements

Modine utilizes a centralized approach by region for the purposes of cash management and financing its operations. The Company participates in and manages certain of these cash pooling arrangements. Cash is swept daily to the cash pool owner who funds the businesses’ operating and investing activities as needed. This mechanism optimizes cash management and is used to ensure all of the Parent’s businesses have the working capital needed to run their day-to-day activities.

Amounts due from or to Modine under this arrangement are presented as related party notes receivable or related party notes payable, respectively, on the combined balance sheets. Interest income and interest expense associated with these balances are reflected within the combined statements of operations. As of June 30, 2026 and March 31, 2026, related party notes receivable included $3.8 million and $46.4 million, respectively, classified as current assets because the related amounts are either due on demand or within one year of the balance sheet date. As of March 31, 2026, related party notes receivable of $69.4 million was classified as noncurrent assets. There were no related party notes receivable classified as noncurrent as of June 30, 2026. Related party notes payable totaled $10.5 million and $91.1 million as of June 30, 2026 and March 31, 2026, respectively. The $112.0 million decrease in related party notes receivable and the $80.6 million decrease in related party notes payable were primarily due to the settlement of intercompany financing arrangements between the Company and Modine, which have been recorded within net parent investment. The settlements were the result of pre-separation activities associated with the Spin-Off. For the combined statements of cash flows, related party notes receivable activity is presented within cash flows from investing activities and related party notes payable activity is presented within cash flows from financing activities.

For each of the three months ended June 30, 2026 and 2025, the Company incurred interest expense of $0.8 million on borrowings from the Parent’s centralized cash management and financing function. For the three months ended June 30,

2026 and 2025, the Company earned interest income of $1.6 million and $1.2 million, respectively, on amounts contributed to the cash pooling program.

Allocation of corporate expenses

Performance Technologies has historically operated as part of Modine and not as a standalone company. Accordingly, Modine has allocated certain shared costs to Performance Technologies that are reflected as expenses in these condensed combined financial statements including, but not limited to, general corporate expenses such as senior management, legal, human resources, finance, accounting, treasury, tax and IT support and services. It is not practicable to estimate actual costs that would have been incurred had Performance Technologies been an independent, standalone company during the periods presented. Actual costs that the Company may have incurred, had it been a standalone company, would depend on a number of factors, including the chosen organizational structure and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Management considers the allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, it. These allocations are made on a direct usage basis when identifiable, with the remainder allocated using a reasonable methodology based on revenue, headcount or other relevant measures. These allocated costs are reflected primarily within selling, general and administrative expenses in the combined statements of operations. Allocations for management costs and corporate support services provided by the Parent to Performance Technologies totaled $8.0 million and $5.9 million during the three months ended June 30, 2026, and 2025, respectively.

The financial information in these condensed combined financial statements does not necessarily include actual costs that would have been incurred by Performance Technologies had it operated as a separate, standalone entity. Such actual costs would depend on a number of factors, including the chosen organizational structure and strategic decisions made in various areas, including information technology infrastructure and corporate functions outsourced or performed by employees.