Forgent Power Solutions, Inc.

Stakeholder relations · Customer satisfaction and loyalty

Our failure to manage customer relationships and customer contracts could have a material adverse effect on our business, financial condition and results of operations. An important element of our success is our ability to manage our long-standing customer relationships, while delivering against our contractual requirements.

Corporate governance · Board composition and independence

We recently ceased to be a 'controlled company' within the meaning of the NYSE listing rules and accordingly, we are, subject to certain transition periods permitted by the NYSE listing rules, no longer able to rely on exemptions from corporate governance requirements that are available to controlled companies.

Corporate governance · Internal controls and risk management

If we fail to establish and maintain an effective system of integrated internal controls, we may not be able to report our financial results accurately, which could have a material adverse effect on our business, financial condition and results of operations. Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort.

Digital transformation and innovation · Technology implementation and upgrades

Failure to effectively utilize information technology systems or implement new technologies could disrupt our business or reduce our sales or profitability. We rely extensively on various IT systems, including data centers, hardware, software and applications to manage many aspects of our business.

Technology infrastructure · Technology systems and infrastructure failure

Compromises, interruptions or shutdowns of our systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, could have a material adverse effect on our business, financial condition and results of operations.

Cybersecurity and data protection · Third party data security and vendors

Unauthorized disclosure of personal or sensitive data or confidential information, whether through a breach of our computer system or otherwise, could have a material adverse effect on our business, financial condition and results of operations. Despite the security measures we have in place, our campuses and systems, and those of third parties with which we do business, may be vulnerable to security breaches.

Digital transformation and innovation · Digital transformation and modernization

The implementation of new information systems and enhancements to our current systems may be costly and disruptive to our operations. Our implementation of new information systems and enhancements to current systems are costly and have in the past and may in the future be disruptive to our operations.

International and currency · Foreign exchange and currency exposure

Volatility in currency exchange rates could have a material adverse effect on our business, financial condition and results of operations. As a result of our global manufacturing and supply chain, we generate and incur a portion of our expenses in currencies other than the U.S. dollar. Our business is subject to foreign exchange exchange rate fluctuations, particularly with respect to the Mexican peso.

Market and investment · Asset valuation and impairment

Future material impairments in the value of our long-lived assets, including goodwill, could have a material adverse effect on our business, financial condition and results of operations. We review our long-lived assets, including identifiable intangible assets, goodwill and property, plant and equipment for impairment at least annually.

Capital structure and performance · Debt management and refinancing

Our indebtedness requires us to dedicate a substantial portion of our cash flow from operations and could adversely affect our financial flexibility and our competitive position. As of June 30, 2026, no amounts were outstanding under the Revolving Facility, and $598.5 million was outstanding under the Term Loan Facility.

Credit and liquidity · Access to capital and financing

We may not be able to raise additional capital to execute our current or future business strategies on favorable terms, if at all, or without dilution to our stockholders, which could have a material adverse effect on our business, financial condition and results of operations. We expect that we may need to raise additional capital to execute our current or future business strategies.

Credit and liquidity · Debt service and covenant compliance

Our indebtedness may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations. The Senior Credit Agreement contains, and the agreements evidencing or governing any future indebtedness may contain, financial restrictions on us and our restricted subsidiaries.

Capital structure and performance · Financial performance volatility

Our results of operations may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations, resulting in a decline in the price of shares of Class A common stock.

Tax and financial reporting · Tax compliance and changes in tax law

Changes in tax laws or regulations that are applied adversely to us or our customers could materially adversely affect our business, financial condition and results of operations. Changes in corporate tax rates, tax incentives for certain energy projects, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, the deductibility of expenses, and other aspects of tax law under future tax reform legislation or regulatory guidance could have a material impact.

Natural and catastrophic events · Climate change and environmental impact

The physical effects of climate change, including weather disruptions and related effects, could have a material adverse effect on our business, financial condition and results of operations. The physical effects of climate change can include extreme variability in weather patterns such as increased frequency and severity of significant weather events.

Geopolitical and trade · Regulatory and policy uncertainty

Future changes in legislation and regulation in the United States governing or related to information technologies, data privacy laws, domestic manufacturing or the development of new power plants and T&D networks could disrupt our customers' markets resulting in declines in sales volume and prices of our products.

Geopolitical and trade · Political instability and government changes

Our manufacturing presence is also subject to risks associated with potential disruption in Mexico caused by changes in political, monetary, economic and social environments, including civil and political unrest, terrorism, possible expropriation, local labor conditions, changes in laws, regulations and Mexican government policies and trade disputes with the United States.

Strategic execution · Geographic expansion and market entry

International expansion could subject us to additional business, financial, regulatory and competitive risks. Our strategy is to grow our business outside of the United States and expand internationally. Our products to be offered outside the United States may differ from our current products in several ways.

Customer and revenue · Changing customer preferences and behavior

Changes in technology or customer preferences could result in less demand for certain equipment which could have an adverse effect on our business, financial condition and results of operations. Shifts in consumer preferences, which may or may not be long-term, have altered the quantity, type and prices of products demanded by the end-consumer and our customers.

Human capital and workforce · Key personnel dependence and succession

If we fail to motivate, retain or attract key personnel, we may not be able to achieve our anticipated level of growth and could have a material adverse effect on our business, financial condition and results of operations. Our future success and ability to implement our business strategy depends, in part, on our ability to attract, train, compensate, motivate and retain key personnel, and on the continued contributions of members of our senior management team and key technical personnel.