Exhibit 99.1

TCFII NxEdge LLC

CONSOLIDATED FINANCIAL STATEMENTS

THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

Report of Independent Auditors	3

Financial Statements
Consolidated Statement of Operations	4
Consolidated Statement of Cash Flows	5
Consolidated Balance Sheet	6
Consolidated Statement of Changes in Members’ Equity	7
Notes to Consolidated Financial Statements	8
Note 1. Overview, Basis of Presentation, Significant Accounting Policies , and Recently Issued Authoritative Guidance	8
Note 2. Income Taxes	12
Note 3. Inventories, net	13
Note 4. Goodwill and Other Intangible Assets, net	13
Note 5. Long-Term Debt	14
Note 6. Bank Line of Credit	14
Note 7. Postretirement Benefits	14
Note 8. Members’ Equity	15
Note 9. Leases	15
Note 10. Fair Value Measurements	16
Note 11. Commitments and Contingencies	16
Note 12. Property, Plant, and Equipment	17
Note 13. Management Incentive Plan	17
Note 14. Related Party Transactions	17
Note 15. Subsequent Event	17

REPORT OF INDEPENDENT AUDITORS

To the Management of TCFII NxEdge LLC

We have audited the accompanying consolidated financial statements of TCFII NxEdge LLC and its subsidiaries, which comprise the consolidated balance sheet as of September 30, 2021, and the related consolidated statements of operations, of changes in members’ equity and of cash flows for the nine-month period ended September 30, 2021.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of TCFII NxEdge LLC and its subsidiaries as of September 30, 2021, and the results of their operations and their cash flows for the nine-month period ended September 30, 2021 in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Raleigh, North Carolina

March 4, 2022

TCFII NXEDGE LLC

CONSOLIDATED STATEMENT OF OPERATIONS

Nine Month Period Ended September 30, 2021

(in thousands)

Net sales	$	134,369
Cost of sales		76,105
Gross profit		58,264
Selling, general and administrative expenses		17,806
Operating income		40,458
Interest expense		(2,811	)
Other income		3,050
Income before income taxes		40,697
Income tax expense		(3,330	)
Net income	$	37,367

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Month Period Ended September 30, 2021

(in thousands)

OPERATING ACTIVITIES
Net income	$	37,367
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		6,251
Amortization		3,895
Amortization of loan costs		158
Deferred income taxes		(1,131	)
Stock-based compensation		73
Change in assets and liabilities:
Accounts receivable, net		(14,120	)
Inventories, net		(2,846	)
Accounts payable		1,624
Prepaid expenses and other		(289	)
Right of use assets		1,872
Accrued liabilities		(729	)
Net cash provided by operating activities		32,125
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(2,991	)
Proceeds from sale of property, plant and equipment		1,910
Net cash used in investing activities		(1,081	)
FINANCING ACTIVITIES
Repayments on line of credit		(700	)
Repayments of long-term debt		(29,172	)
Net cash used in financing activities		(29,872	)
Net increase in cash and cash equivalents		1,172
Cash and cash equivalents at beginning of period		4,673
Cash and cash equivalents at end of period	$	5,845

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	2,628
Income taxes	$	3,610
Non-cash investing and financing activities:
Non-cash acquisitions of property, plant, and equipment	$	121

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

CONSOLIDATED BALANCE SHEET

As of September 30, 2021

(in thousands)

ASSETS
Current assets
Cash and cash equivalents	$	5,845
Accounts receivable, net of allowance for doubtful accounts of $268		36,235
Inventories, net		17,878
Prepaid expenses and other current assets		2,738
Assets held for sale		5,066
Total current assets		67,762
Property, plant and equipment, net		52,396
Goodwill		59,257
Other intangible assets, net		64,997
Other assets		336
Operating right of use asset		20,323
Total assets	$	265,071
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	6,893
Accounts payable		8,106
Accrued expenses		7,381
Total current liabilities		22,380
Long-term debt		52,886
Other liabilities		79
Deferred tax liability		7,051
Long-term lease liability		19,566
Total liabilities		101,962

Capital contributions and members’ equity		163,109
Total liabilities and members’ equity	$	265,071

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS’ EQUITY

Nine Month Period Ended September 30, 2021

(in thousands)

	Members’ Equity
Balance, December 31, 2020	$	125,669
Net income		37,367
Stock-based compensation		73
Balance, September 30, 2021	$	163,109

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Overview, Basis of Presentation, Significant Accounting Policies, and Recently Issued Authoritative Guidance

Overview

TCFII NxEdge LLC was incorporated in April 2016 under the laws of the state of Delaware to consolidate certain operating subsidiaries (collectively the “Company”). The Company provides a variety of products, services, and support to manufacturing operations primarily for the semiconductor and display industries. The Company’s operating locations are located in Boise, Idaho; Morgan Hill, California; San Carlos, California; and Santa Clara, California.

Basis of Presentation

The Consolidated Financial Statements reflect the accounts of the Company and include subsidiaries of TCFII NxEdge LLC. All intercompany accounts and transactions between the Company’s consolidated operations have been eliminated.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Summary of Significant Accounting Policies

Revenue Recognition - The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the Company satisfies a performance obligation.

The Company enters into contracts with its customers to provide manufactured products and machining, etching, coating and refurbishing services for existing products, which are generally short-term contracts allowing for the satisfaction of the respective performance obligation in less than one year. A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

The Company’s contracts with customers typically include a single performance obligation to transfer the specific goods and services.

The pricing and payment terms for contracts are based on the Company’s standard terms and conditions or the result of specific negotiations with each customer. Contracts do not contain a significant financing component as the Company’s standard terms and conditions generally require payment between 60 to 90 days from the invoice date depending on the customer.

Revenue is recognized when control of manufactured products, including shipping and handling fees billed to customers where relevant, or services performed have transferred to customers. The Company’s customer arrangements for manufactured products have control transferring to customers at a point in time. For the manufactured products, this occurs as the products are shipped as that is generally when the legal title, physical possession, and the risks and rewards of manufactured products transfers to the customer. For the service contracts, this occurs as the service is completed on the customer products and the items are shipped back to the customer.

The timing of revenue recognition, billings, and cash collections results in trade receivables due from customers. Accounts receivable are recorded when the right to consideration becomes unconditional and are presented separately in the consolidated balance sheet.

Net sales include reductions in revenue for customer returns. These amounts are known and determined in real-time through the customer acceptance of the delivery process; any nonconforming product is identified and the issues are communicated to the Company such that they are able to coordinate the rework or discounts.

Amounts billed to customers related to shipping and handling costs are included in net sales in the consolidated statement of operations. The Company has elected to account for shipping and handling costs as fulfillment costs and are included in cost of sales in the consolidated statement of operations.

The Company disaggregates its revenue from contracts with customers by individual location within its vertically integrated structure. The Morgan Hill, Boise, and AceCo locations design and manufacture semiconductor manufacturing equipment such as lathe machining and horizontal machining, as well as provide coating and post coating cleaning. The Santa Clara and San Carlos locations perform anodizing, plating, and cleaning services. The Company believes it best demonstrates the respective scales of operations and its impact on revenue and cash flows. Revenue by location for the nine-month period ending September 30, 2021, was as follows:

	(in thousands)
Morgan Hill	$	53,305
Boise		31,930
AceCo		36,128
Santa Clara		7,641
San Carlos		5,237
Other		128
Net sales	$	134,369

Sales Tax - Taxes collected from customers and remitted to governmental authorities are presented in the consolidated statement of operations on a net basis.

Cost of Sales - Costs of sales consist primarily of direct and indirect costs associated with the manufacturing and servicing of the Company’s products. Direct costs include material and labor, while indirect costs include, but are not limited to, inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs, depreciation of manufacturing assets, and other distribution costs.

Selling, General, and Administrative Expenses - Operating expenses consist primarily of compensation and related taxes and benefits for sales, finance, engineering, development, and general management and administrative personnel. In addition, amortization of intangible assets (See Note 4 - Goodwill and Intangibles) and lease expenses for the buildings used in operations are included (See Note 9 - Leases).

Cash and Cash Equivalents - The Company considers all highly liquid instruments with a maturity of 90 days or less when purchased to be cash equivalents. The Company’s cash and cash equivalents consist of demand deposits in large financial institutions. At times, balances may exceed federally insured limits.

Accounts Receivable - The Company extends credit to its customers based on their creditworthiness and past transaction history, typically requires no collateral, and does not charge interest. Accounts receivable are recorded at the original invoice amount less an estimate for doubtful accounts based on a regular review of all outstanding amounts. Management determines the allowance for doubtful accounts by identifying troubled accounts and by considering historical experience applied to an aging of accounts.

The Company also considered the measurement of credit losses on financial instruments, which modifies the measurement of expected credit losses of certain financial instruments, including trade receivables, contract assets, and lease receivables. It was determined that the impact of this accounting standard on the Company’s financial instruments was immaterial.

On September 30, 2021, the allowance for doubtful accounts was approximately $0.3 million. Trade receivables are written off when deemed uncollectible, and recoveries of trade receivables previously written off are recorded as income when received.

Inventories - Inventories are valued at the lower of standard cost (which approximates actual costs on a first-in, first-out basis) or net realizable value.

Research and Development Costs - Research and development costs are expensed as incurred and recorded in cost of sales and selling, general, and administrative expenses in the income statement. Research and development costs totaled approximately $2.0 million for the nine-month period ended September 30, 2021.

Construction in Progress - Construction in progress is related to the development of property and equipment that has not yet been placed in service for its intended use and is, therefore, not depreciated. Construction in progress currently includes capitalized costs related to the Company’s production facilities and manufacturing equipment. These projects have anticipated in-service dates throughout 2021 and 2022. The total remaining cost to complete the open projects as of September 30, 2021, is estimated to be approximately $2.0 million.

Property, Plant and Equipment - Property, plant, and equipment are recorded at cost. Depreciation of property, plant, and equipment is calculated using the straight-line method over the following estimated useful lives of the asset: buildings and improvements, 10 to 20 years, machinery and equipment, 7 to 15 years; office equipment, fixtures, and software, 3 to 10 years.

Leasehold improvements are amortized using the straight-line method over the lesser of the related lease terms or the asset’s useful life.

Valuation of Long-Lived Assets - The Company periodically evaluates the carrying value of long-lived assets, including, but not limited to, property, plant, and equipment, goodwill, and other intangible assets. The carrying value of a long-lived asset is considered impaired only if undiscounted cash flows are less than book value. Management does not believe there were any impaired long-lived assets as of September 30, 2021.

Goodwill and Other Intangible Assets - Goodwill represents the excess of the purchase price over the estimated fair value of the net assets of acquired businesses. Goodwill is not amortized but instead is subject to annual impairment testing conducted each year as of November 1. The goodwill asset impairment test involves comparing the fair value of a reporting unit to its carrying amount. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The first step in identifying a reporting unit is to identify operating segments based on how information is organized for the Chief Operating Decision Maker (“CODM”) to assess company performance and make decisions about resource allocation. A reporting unit is an operating segment or a component, that is one level below an operating segment. After identifying the reporting units, the Company performs a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors such as macroeconomic conditions, industry and market considerations, overall financial performance, and any other relevant entity-specific events are considered. If after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount then a quantitative goodwill impairment test would be performed using a discounted cash flow or market value approach to estimate fair value.

Other intangible assets are recorded at cost or, when acquired as a part of a business combination, at estimated fair value. These assets include customer relationships, developed technology, and trade names. Intangible assets that have definite lives are amortized using a method that reflects the pattern in which the economic benefits of the assets are consumed or the straight-line method over estimated useful lives of 10 to 20 years. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value below the carrying value or change the useful life of the asset.

Loan Fees - Loan fees associated with the long-term debt are presented as an offset against the total debt balance. The fees are being amortized using the straight-line method over the life of the loan agreements and recorded to interest expense. Amortization of loan fees recorded for the nine-month period ended September 30, 2021, totaled approximately $0.2 million.

Income Taxes - The Company accounts for income taxes utilizing the asset and liability method, which requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences between the Consolidated Financial Statements and tax basis of assets and liabilities.

Concentrations of Risk - Financial instruments which potentially subject the Company to the concentration of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents in deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

One customer accounted for approximately 57% of accounts receivable on September 30, 2021, and 53% of consolidated revenues for the nine-month period then ended.

Fair Value Measurements – Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

•

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•

Level 3: Unobservable inputs that reflect the Company’s own assumptions.

The fair value of intangible assets associated with acquisitions is determined using an income valuation approach. Projecting discounted future cash flows requires the Company to make significant estimates regarding projected revenues and profit margins, projected capital expenditures, changes in working capital, discount rates, attrition rates, royalty rates, obsolescence rates, and tax rates. This non-recurring fair value measurement would be classified as Level 3 due to the absence of quoted market prices or observable inputs for assets of a similar nature.

The Company reviews the carrying amounts of long-lived assets when certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized when the carrying amount of the asset group is not recoverable and exceeds its fair value. The Company estimates the fair values of assets subject to long-lived asset impairment based on its own judgments about the assumptions that market participants would use in pricing the assets. In doing so, the Company uses a market approach when available or an income approach based upon discounted cash flows. The key assumptions used for the discounted cash flow approach include expected cash flows based on internal business plans, projected growth rates, discount rates, and royalty rates for certain intangible assets. The Company classifies these fair value measurements as Level 3.

Recently Issued Accounting Guidance

The Company has adopted the changes of the new standard that simplified the accounting for income taxes in nine areas that were effective January 1, 2021. The adoption of the new standard did not have a material impact on our consolidated financial statements.

Accounting Standards Not Yet Adopted

In March 2020, a standard was issued related to reference rate reform and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting due to the cessation of the London Interbank Offered Rate (“LIBOR”). The amendments in this update are effective for the Company as of March 12, 2020, through December 31, 2022. Adoption of this guidance and its future impact will depend on the manner in which the Company and its lenders ultimately address the removal of LIBOR as it relates to the Loan Agreement described in Note 5.

2.	Income Taxes

Deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period-end. The tax effects of temporary differences give rise to significant portions of deferred tax assets and deferred tax liabilities at September 30, 2021 as follows:

	(in thousands)
Deferred Tax Assets
Accrued vacation	$	404
Operating leases		5,612
Inventory		162
Other		408
Total Deferred Tax Assets		6,586

Deferred Tax Liabilities
Property and equipment		(1,858	)
Goodwill and other intangibles		(6,167	)
Operating leases		(5,612	)
Total Deferred Tax Liabilities		(13,637	)

Net Deferred Tax Liability	$	(7,051	)

The provision for income tax expense consists of the following for the period ended September 30, 2021:

	(in thousands)
Current
Federal income tax expense	$	3,531
State income tax expense		930
Total Current Income Tax Expense		4,461

Deferred
Federal income tax expense		(873	)
State income tax expense		(258	)
Total Deferred Income Tax Expense		(1,131	)

Total Income Tax Expense	$	3,330

The effective income tax rate from operations varied from the statutory federal income tax rate as follows:

	Percent of Pretax Income
	Period Ended September 30, 2021
Statutory federal income tax rate		21%
State and local taxes		1.3
Non-taxable entities		(14.1)
Research and employment tax credits		(0.1)
Effective income tax rate		8.1%

The effective tax rate for the period was primarily driven by the income of entities which are not subject to U.S. tax which resulted in a net $5.8 million benefit to the rate, partially offset by the impact of state tax resulting in a $0.5 million expense.

As of September 30, 2021, the Company did not realize any unrecognized tax benefits in income tax. The Company also did not have any net operating loss carryforwards in any jurisdiction.

U.S. federal income tax returns and state income tax returns for tax years 2018 and forward remain open to examination, however currently the U.S. Internal Revenue Service (“IRS)” and respective state jurisdictions have not opened any active examinations.

3.	Inventories, net

Inventories consist of the following at September 30, 2021:

	(in thousands)
Finished products	$	1,845
Work in process		10,334
Raw materials and supplies		6,085
		18,264
Less: inventory reserve		(386	)
Total inventories, net	$	17,878

4.	Goodwill and Other Intangible Assets, net

The following table outlines changes in the carrying amount of goodwill for the nine months ended September 30, 2021:

	(in thousands)
Goodwill as of December 31, 2020	$	59,257
Changes in goodwill		—
Goodwill as of September 30, 2021	$	59,257

Identifiable intangible assets are as follows:

	Gross Carrying Amount		Accumulated Amortization
	(in thousands)
Amortized:
Customer relationships	$	50,294	$	(6,998	)
Developed technology		30,963		(11,796	)
Trade names		4,597		(2,063	)
Total	$	85,854	$	(20,857	)

Amortization expense for the nine month period ended September 30, 2021, was $3.9 million.

The estimated amortization expense for definite-lived (amortized) intangible assets for future periods is as follows:

	(in thousands)
October 1, 2021 to December 31, 2021	$	1,297
2022	$	5,186
2023	$	5,186
2024	$	5,186
2025	$	5,186
2026	$	5,003

5.	Long-Term Debt

	(in thousands)
Term loan	$	61,132
Capital equipment financing		121
Total long- term debt		61,253
Less: unamortized issuance costs		(1,474	)
Total long-term debt, net of unamortized issuance costs		59,779
Less: current maturities		(6,893	)
Long-term debt, net	$	52,886

On February 7, 2018, the Company entered into a credit agreement with a group of banks led by Cadence Bank, N.A. (“Lenders”) for a term loan in the amount of $50.0 million. On March 18, 2019, Lenders extended additional credit to the Company in the form of a real estate term loan in the amount of $5.6 million. On September 30, 2019, the Company assumed additional $50.0 million of debt as part of the Stock Purchase Agreement. In November 2020, the Company refinanced the existing indebtedness, resulting in a consolidated term loan in the aggregate original principal amount of $90.1 million. As part of the consolidation of outstanding principal, there were certain lenders that did not participate in the consolidation of the loan and as such the Company treated the event as a partial modification and partial extinguishment of debt. The term loan accrues interest at a variable rate plus a defined margin based on the senior leverage ratio, which was approximately 4.00% as of September 30, 2021, maturing in 2025.

Scheduled principal payments are as follows as of September 30, 2021:

	(in thousands)
2021	$	1,810
2022		6,754
2023		9,006
2024		11,257
2025		32,426
Total	$	61,253

The Cadence Bank, N.A. long-term debt is subject to certain financial covenants. The Company was in compliance of all financial covenants as of September 30, 2021. As noted in Note 15 - Subsequent Events, all indebtedness of the Company was extinguished in connection with the purchase of the Company on December 17, 2021.

6.	Bank Line of Credit

On February 7, 2018, the Company entered into a revolving credit agreement with Cadence Bank, N.A. for total borrowing capacity of $25.0 million. As part of the debt consolidation described in Note 5, the revolving credit agreement was modified to a borrowing capacity of $15.0 million. The agreement defines a variable interest rate plus a predetermined margin based on the senior leverage ratio. The Company did not have any outstanding advances under this revolving credit agreement as of September 30, 2021. Any advances are collateralized by substantially all of the Company’s assets. The borrowing arrangement is subject to certain financial covenants of which the Company is in compliance as of September 30, 2021.

7.	Postretirement Benefits

The Company’s 401K benefit plan allows employees to voluntarily defer a percentage of their salary into the plan up to specified limits as defined in the Internal Revenue Code. The Company maintains a discretionary match up to $500 of each employee’s contributions per fiscal quarter if the Company achieves its profitability goals. Company matching contributions for the benefit plan were approximately $0.6 million for the nine-month period ended September 30, 2021, and are recorded within cost of sales and selling, general and administrative expenses.

8.	Members’ Equity

The equity of the Company is composed of three classes: Class A, Class B, and Class C shares. Class A and B outstanding units total 525,000 each and entitle the members to distributions and allocations along with the right to vote on, consent to, or otherwise participate in any decision of the members. Class C outstanding units total 207,460 and provide the holder the right to distributions subject to certain liquidation preferences defined in the Class C award documents (See Note 13). Class A and B members are entitled to a liquidation preference for return of contributed capital and a preferred return. Following this preferred distribution, Class C members are entitled to distribution according to their percentage interests based on a calculation defined in the agreement. Class A, B, and C members share in any excess distributions in proportion to their percentage interests.

Members are not liable for the debts, liabilities or obligations of the Company beyond their respective capital contributions. Members are not required to contribute to the capital of, or to loan any funds to, the Company.

Leases

The Company leases office and warehouse space for its various locations in California and Idaho and equipment under operating leases with terms ranging from 5 to 15 years, expiring through 2032.

The Company maintains two leases with entities that are owned and managed by a stockholder, officer, and employee of the Company.

For purposes of financial reporting, the total lease expense over the life of the lease term, without consideration of inflation adjustments, is recognized on a straight-line method over the period of benefit of use.

The Company regularly enters into operating leases primarily for real estate and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company have elected an accounting policy to combine lease and non-lease components.

The Company’s real estate leases have remaining terms up to 11 years, some of which contain options to renew up to 5 years. Some leases contain non-lease components, which may include items such as building common area maintenance, building parking, or general service and maintenance provided for leased assets by the lessor.

Right of use assets and liabilities related to operating leases as of September 30, 2021, were as follows:

Right-of-use-assets	Operating right of use asset	$	20,323

Current liability	Accrued expenses		2,350
Long-term liability	Long-term lease liability	$	19,566
Total liability		$	21,916

Substantially all of the Company’s operating lease assets and liabilities arose from real estate as of September 30, 2021.

The Company did not enter into any new leases or renew any existing leases in the nine months ended September 30, 2021.

Most of the Company’s leases do not provide an implicit rate for calculating the right of use assets and corresponding lease liabilities. Accordingly, the Company determined the interest rate that would have to be paid to borrow on a collateralized basis over a similar term and amount equal to the lease payments in similar economic environments.

The Company’s lease costs and cash flows for the nine-month period ended September 30, 2021, were as follows:

Lease costs:
Operating lease costs	$	2,862

Cash flows:
Operating cash flows from operating leases	$	2,675

The Company’s weighted average remaining lease term and discount rates at September 30, 2021, were 9 years and 5.9%, respectively. The Company had insignificant costs related to short-term or variable lease payments for the nine-month period ended September 30, 2021.

Maturity analysis of undiscounted operating lease liabilities as of September 30, 2021, is shown in the table below:

Period Ending December 31,	Operating Lease Payments
Fourth-quarter 2021	$	906
2022		3,525
2023		3,043
2024		2,922
2025		2,649
Thereafter		15,749
Total lease payments		28,794
Less: interest		6,878
Present value of lease liabilities	$	21,916

The operating lease payments listed in the table above include all current leases. The payments also include all renewal periods that the Company is reasonably certain to be exercised.

The Company rarely enter into finance leases. Since finance lease amounts and finance lease-related costs are not significant to our consolidated financial position or results of operations, additional disclosures regarding finance leases are not presented.

10.	Fair Value Measurements

The Company’s cash equivalents include demand deposits with a maturity of 90 days or less than approximate fair value. The carrying value of our debt approximates fair value and is considered Level 2 as interest rates are based on variable rates tied to observable inputs (LIBOR or the prime rate).

11.	Commitments and Contingencies

On September 29, 2021, plaintiff Felis Perez filed a class action and Private Attorney General Act (“PAGA”) lawsuit against NxEdge MH, LLC. (the “Lawsuit”). No formal discovery has been conducted and a trial date has not been set. The Lawsuit alleges individual and putative claims against the Company under California state wage and hour laws. Specifically, the Lawsuit asserts claims for (1) failure to provide meal and rest periods; (2) failure to pay all wages earned for all hours worked at the correct rates of pay; (3) wage statement penalties; (4) waiting time penalties; and (5) unfair competition.

Plaintiff’s proposed class consists of “all hourly, non-exempt workers, including metal detail workers and package handlers, individuals performing work comparable to the aforementioned, and individuals in similar positions at any time during the period beginning four years prior to the filing of this action and ending on the date that final judgment is entered in this action.” The Lawsuit seeks damages for a collection of alleged California Labor Code violations. The Lawsuit also seeks recovery for civil penalties pursuant to PAGA. The PAGA claims rely on the same violations of the Labor Code for the civil penalties. This case is in its very early stages and at this time, management is unable to provide an evaluation of the likelihood of an unfavorable outcome or an estimate as to the range of potential loss, if any. Accordingly, no accrual is reflected in the accompanying Consolidated Balance Sheet at September 30, 2021.

12.	Property, Plant, and Equipment

Property, plant, and equipment consist of the following at September 30, 2021:

	(in thousands)
Land	$	1,279
Buildings		18,005
Machinery and equipment		55,153
Leasehold improvements		2,417
Furniture and fixtures		102
Construction in process		4,417
		81,373
Less accumulated depreciation		(28,977	)
Total	$	52,396

Depreciation expense totaled approximately $6.3 million for the nine-month period ended September 30, 2021.

13.	Management Incentive Plan

Effective February 2, 2020, the Company adopted a management incentive program plan to provide eligible employees and other parties related to the Company the opportunity to receive grants of nonvoting Class C Units as defined the Company’s amended and restated LLC agreement. The grantees would be entitled to Class C liquidating distributions to the extent the distributions exceed a specific threshold upon certain triggering events as defined in the award documents. The awards, which are intended to be classified as profits interests, vest either at a change of control or on a schedule pre-agreed with each grantee. Management has determined the fair value of these awards at the date of grant is insignificant to the Consolidated Financial Statements. These awards grant the Company certain repurchase rights upon death, disability, or termination of employment.

14.	Related Party Transactions

The Company leases two buildings that are owned and managed by a stockholder, officer, and employee of the Company. In the nine months ended September 30, 2021, the Company recorded approximately $1.5 million in rent expense related to these leases. For a further discussion of leases, see Note 9 - Leases.

The Company pays its equity sponsor an annual management fee of approximately $0.5 million and distributions related to its tax liability for certain entities included in the Consolidated Financial Statements.

In September 2021, the Company committed to a plan to sell land and a building and had identified a buyer who is a stockholder, officer, and employee of the Company. The net book value of the building and associated land as of September 30, 2021, was approximately $5.0 million.

The sale of the land was on November 4, 2021, and has been classified as held for sale and recorded within other current assets on the balance sheet.

15.	Subsequent Event

On November 4, 2021, EnPro Holdings, Inc. (“EnPro Holdings”), a direct subsidiary of EnPro Industries, Inc., entered into a Purchase and Sale Agreement (“Purchase Transaction”) dated as of November 4, 2021 with TCFII NxEdge LLC (the “Seller”) and TCFII NxEdge LLC providing for the sale by the Seller to EnPro Holdings of all issued and outstanding membership interests of the Company for $850.0 million in cash, subject to standard working capital and other adjustments. The purchase of the Company on the above agreed terms by EnPro Holdings was completed on December 17, 2021 and in connection the term loan described in Note 5 - Long-Term Debt was extinguished. The purchase has resulted in a new basis of accounting for the Company as the Company has been consolidated with EnPro Industries, Inc. effective on the acquisition date.

The Company evaluated for disclosure any subsequent events through March 4, 2022, the date the consolidated financial statements were issued and determined there were no material subsequent events in addition to the ones disclosed above.

Exhibit 99.2

TCFII NxEdge LLC

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2020

TABLE OF CONTENTS

Report of Independent Auditors	3

Financial Statements
Consolidated Statement of Operations	4
Consolidated Statement of Cash Flows	5
Consolidated Balance Sheet	6
Consolidated Statement of Changes in Members’ Equity	7
Notes to Consolidated Financial Statements	8
Note 1. Overview, Basis of Presentation, Significant Accounting Policies, and Recently Issued Authoritative Guidance	8
Note 2. Income Taxes	12
Note 3. Inventories	13
Note 4. Goodwill and Other Intangible Assets, net	13
Note 5. Long-Term Debt	14
Note 6. Bank Line of Credit	14
Note 7. Postretirement Benefits	14
Note 8. Members’ Equity	15
Note 9. Leases	15
Note 10. Fair Value Measurements	16
Note 11. Commitments and Contingencies	16
Note 12. Property, Plant, and Equipment	17
Note 13. Management Incentive Plan	17
Note 14. Related Party Transactions	17
Note 15. Subsequent Event	17

REPORT OF INDEPENDENT AUDITORS

To the Management of TCFII NxEdge LLC

We have audited the accompanying consolidated financial statements of TCFII NxEdge LLC and its subsidiaries, which comprise the consolidated balance sheet as of December 31, 2020, and the related consolidated statements of operations, of changes in members’ equity and of cash flows for the year then ended.

Management’s Responsibility for the Consolidated Financial Statements

Auditors’ Responsibility

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of TCFII NxEdge LLC and its subsidiaries as of December 31, 2020, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Raleigh, North Carolina

March 4, 2022

TCFII NXEDGE LLC

CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31, 2020

(in thousands)

Net sales	$	176,458
Cost of sales		108,516
Gross profit		67,942
Selling, general and administrative expenses		24,687
Operating income		43,255
Interest expense		(8,366	)
Other expense		(1,202	)
Income before income taxes		33,687
Income tax expense		(4,849	)
Net income	$	28,838

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended December 31, 2020

(in thousands)

OPERATING ACTIVITIES
Net income	$	28,838
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of loan costs		941
Depreciation		7,820
Amortization		5,180
Deferred income taxes		(583	)
Stock-based compensation		330
Change in assets and liabilities:
Accounts receivable, net		(1,333	)
Inventories, net		3,977
Accounts payable		(1,905	)
Prepaid expenses and other		486
Right of use asset		(185	)
Accrued liabilities		613
Other assets		95
Net cash provided by operating activities		44,274
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(14,083	)
Net cash used in investing activities		(14,083	)
FINANCING ACTIVITIES
Proceeds from line of credit		12,500
Repayments of line of credit		(26,506	)
Proceeds from long-term debt		7,988
Repayments of long-term debt		(18,354	)
Cash paid for debt issuance costs		(1,050	)
Member distributions		(10,000	)
Net cash used in financing activities		(35,422	)
Net decrease in cash and cash equivalents		(5,231	)
Cash and cash equivalents at beginning of year		9,904
Cash and cash equivalents at end of year	$	4,673

Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	6,357
Income taxes	$	4,851
Non-cash investing and financing activities:
Non-cash acquisitions of property, plant, and equipment	$	143
Non-cash modification and extinguishment of debt	$	82,070

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

CONSOLIDATED BALANCE SHEET

As of December 31, 2020

(in thousands)

ASSETS
Current assets
Cash and cash equivalents	$	4,673
Accounts receivable, net of allowance for doubtful accounts of $125		22,114
Inventories, net		15,032
Prepaid expenses and other current assets		2,449
Total current assets		44,268
Property, plant and equipment, net		62,511
Goodwill		59,257
Other intangible assets, net		68,892
Other assets		336
Operating right of use asset		22,196
Total assets	$	257,460
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	7,606
Accounts payable		6,481
Accrued expenses		6,144
Total current liabilities		20,231
Long-term debt		81,767
Other liabilities		287
Deferred tax liability		8,181
Long-term lease liability		21,325
Total liabilities		131,791

Capital contributions and members’ equity		125,669
Total liabilities and members’ equity	$	257,460

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS’ EQUITY

Year Ended December 31, 2020

(in thousands)

	Members’ Equity
Balance, December 31, 2019	$	106,501
Net income		28,838
Stock-based compensation		330
Member distributions		(10,000	)
Balance, December 31, 2020	$	125,669

See notes to Consolidated Financial Statements.

TCFII NXEDGE LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Authoritative Guidance

Overview

Basis of Presentation

Summary of Significant Accounting Policies

The Company enters into contracts with its customers to provide manufactured products and machining, etching, coating, and refurbishing services for existing products, which are generally short-term contracts allowing for the satisfaction of the respective performance obligation in less than one year. A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

The Company’s contracts with customers typically include a single performance obligation to transfer the specific goods and services.

Revenue is recognized when control of manufactured products, including shipping and handling fees billed to customers, where relevant, or services performed have transferred to customers. The Company’s customer arrangements for manufactured products has control transferring to customers at a point in time. For the manufactured products, this occurs as the products are shipped as that is generally when legal title, physical possession, and the risks and rewards of manufactured products transfers to the customer. For the service contracts, this occurs as the service is completed on the customer products and the items are shipped back to the customer.

The timing of revenue recognition, billings and cash collections results in trade receivables due from customers. Accounts receivable are recorded when the right to consideration becomes unconditional and are presented separately in the consolidated balance sheet. The opening balance as of January 1, 2020, totaled approximately $20.8 million.

Net sales includes reductions in revenue for customer returns. These amounts are known and determined in real-time through the customer acceptance of the delivery process; any nonconforming product is identified and the issues are communicated to the Company such that they are able to coordinate the rework or discounts.

	(in thousands)
Morgan Hill	$	59,264
Boise		51,160
AceCo		50,991
Santa Clara		8,424
San Carlos		6,504
Other		115
Net sales	$	176,458

Sales Tax - Taxes collected from customers and remitted to governmental authorities are presented in the consolidated statement of operations on a net basis.

Selling, General and Administrative Expenses - Operating expenses consist primarily of compensation and related taxes and benefits for sales, finance, engineering, development, and general management and administrative personnel. In addition, amortization of intangible assets (See Note 4) and lease expense for the buildings used in operations are included (See Note 9).

On December 31, 2020, the allowance for doubtful accounts was approximately $0.1 million. Trade receivables are written off when deemed uncollectible, and recoveries of trade receivables previously written off are recorded as income when received.

Inventories - Inventories are valued at the lower of standard cost (which approximates actual costs on a first-in, first-out basis) or net realizable value.

Construction in Progress - Construction in progress is related to the development of property and equipment that has not yet been placed in service for its intended use and is, therefore, not depreciated. Construction in progress currently includes capitalized costs related to certain of the Company’s production facilities and manufacturing equipment. These projects have anticipated in-service dates throughout 2021. The total remaining cost to complete the open projects as of December 31, 2020, is estimated to be approximately $0.9 million.

Property, Plant, and Equipment - Property, plant, and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the following estimated useful lives of the asset: buildings and improvements, 10 to 20 years, machinery and equipment, 7 to 15 years; office equipment, fixtures, and software, 3 to 10 years.

Leasehold improvements are amortized using the straight-line method over the lesser of the related lease terms or the asset’s useful life.

Valuation of Long-Lived Assets - The Company periodically evaluates the carrying value of long-lived assets at the group level, including, but not limited to, property, plant, and equipment, goodwill and other intangible assets. The carrying value of a long-lived asset is considered impaired only if undiscounted cash flows are less than book value. Management does not believe there were any impaired long-lived assets as of December 31, 2020.

Goodwill and Other Intangible Assets - Goodwill represents the excess of the purchase price over the estimated fair value of the net assets of acquired businesses. Goodwill is not amortized, but instead is subject to annual impairment testing conducted each year as of November 1. The goodwill asset impairment test involves comparing the fair value of a reporting unit to its carrying amount. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The first step in identifying a reporting unit is to identify operating segments based on how information is organized for the Chief Operating Decision Maker (“CODM”) to assess company performance and make decisions about resource allocation. A reporting unit is an operating segment or a component, that is one level below an operating segment. After identifying the reporting units, the Company performs a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors such as macroeconomic conditions, industry and market considerations, overall financial performance, and any other relevant entity-specific events are considered. If after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative goodwill impairment test would be performed using a discounted cash flow or market value approach to estimate fair value.

The Company completed the required annual impairment test of goodwill as of November 1, 2020, by first performing a qualitative assessment. Based on the qualitative assessment and consideration of reporting unit performance, market factors, and other events, the Company concluded that it was likely that the fair value of each of the reporting units exceeded their carrying values. The most recent annual assessment was conducted in the context of information that was reasonably available to us, as well as the consideration of the future potential impacts of COVID-19 on the business. However, because of uncertainties at this time with respect to the severity and duration of the COVID-19 outbreak, the duration and terms of related governmental orders restricting activities, and the timing and pace of any economic recovery as COVID-19 impacts ultimately abate, the Company cannot predict with specificity the extent and duration of any future impact on the business and financial results from COVID-19. In addition, although most of the operations have been treated as “essential” operations under applicable government orders restricting business activities that have been issued to date, and accordingly have been permitted to continue to operate, it is possible that they may not continue to be so treated under future government orders, or, even if so treated, site-specific health and safety concerns might otherwise require certain of the operations to be halted for some period of time. Accordingly, if the impact is more severe or longer in duration than the Company has projected, such impact could potentially result in impairments of assets in future periods.

Loan Fees - Loan fees associated with the long-term debt are presented as an offset against the total debt balance. The fees are being amortized using the straight-line method over the life of the loan agreements and recorded to interest expense. Amortization of loan fees recorded for the year ended December 31, 2020, totaled approximately $0.9 million, which included approximately $0.5 million of unamortized costs that were written off to interest expense due to the extinguishment of debt in November 2020.

One customer accounted for approximately 49% of accounts receivable at December 31, 2020 and 52% of consolidated revenues for the year then ended.

•

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•

Level 3: Unobservable inputs that reflect the Company’s own assumptions.

The fair value of intangible assets associated with acquisitions is determined using an income valuation approach. Projecting discounted future cash flows requires the Company to make significant estimates regarding projected revenues and profit margins, projected capital expenditures, changes in working capital, discount rates, attrition rates, royalty rates, obsolescence rates and tax rates. This non-recurring fair value measurement would be classified as Level 3 due to the absence of quoted market prices or observable inputs for assets of a similar nature.

Accounting Standards Not Yet Adopted

In December 2019, a standard was issued that simplified the accounting for income taxes in nine unrelated areas. The standard is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements.

2.	Income Taxes

Deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. The tax effects of temporary differences give rise to significant portions of deferred tax assets and deferred tax liabilities at December 31, 2020 as follows:

	(in thousands)
Deferred Tax Assets
Accrued vacation	$	164
Operating leases		6,043
Inventory		182
Other		365
Total Deferred Tax Assets		6,754

Deferred Tax Liabilities
Property and equipment		(2,197	)
Goodwill and other intangibles		(6,695	)
Operating leases		(6,043	)
Total Deferred Tax Liabilities		(14,935	)

Net Deferred Tax Liability	$	(8,181	)

The provision for income tax expense consists of the following for the year ended December 31, 2020:

	(in thousands)
Current
Federal income tax expense	$	4,255
State income tax expense		1,177
Total Current Income Tax Expense		5,432

Deferred
Federal income tax expense		(477	)
State income tax expense		(106	)
Total Deferred Income Tax Expense		(583	)

Total Income Tax Expense	$	4,849

The effective income tax rate from operations varied from the statutory federal income tax rate as follows:

	Percent of Pretax Income
	Year Ended December 31, 2020
Statutory federal income tax rate		21%
Non-taxable entities		(8.7)
State and local taxes		2.4
Research and employment tax credits		(0.2)
Nondeductible expenses		(0.1)
Effective income tax rate		14.4%

The effective tax rate for the period was primarily driven by the income of entities which are not subject to U.S. tax which resulted in a net $2.9 million benefit to the rate, partially offset by the impact of state tax resulting in a $0.8 million expense.

As of December 31, 2020, the Company did not realize any unrecognized tax benefits in income tax. The Company also did not have any net operating loss carryforwards in any jurisdiction.

3.	Inventories

Inventories consist of the following at December 31, 2020:

	(in thousands)
Finished products	$	2,256
Work in process		7,970
Raw materials and supplies		5,785
		16,011
Less: inventory reserve		(979	)
Total inventories, net	$	15,032

4.	Goodwill and Other Intangible Assets, net

The following table outlines changes the carrying amount of goodwill for the year ended December 31, 2020:

	(in thousands)
Goodwill as of December 31, 2019	$	59,257
Changes in goodwill		—
Goodwill as of December 31, 2020	$	59,257

There have been no accumulated impairment losses recorded in the goodwill balance above.

Identifiable intangible assets are as follows as of December 31, 2020:

	Gross Carrying Amount		Accumulated Amortization
	(in thousands)
Amortized:
Customer relationships	$	50,294	$	(5,112	)
Developed technology		30,963		(10,137	)
Trade names		4,597		(1,713	)
Total	$	85,854	$	(16,962	)

Amortization expense for the year ended December 31, 2020, was $5.2 million.

The estimated amortization expense for definite-lived (amortized) intangible assets for the next five years is as follows:

	(in thousands)
2021	$	5,186
2022	$	5,186
2023	$	5,186
2024	$	5,186
2025	$	5,186

5.	Long-Term Debt

	(in thousands)
Term loan	$	90,759
Capital equipment financing		258
Total long- term debt		91,017
Less: unamortized issuance costs		(1,644	)
Total long-term debt, net of unamortized issuance costs		89,373
Less: current maturities		(7,606	)
Long-term debt, net	$	81,767

Scheduled principal payments are as follows as of December 31, 2020:

	(in thousands)
2021	$	7,606
2022		6,861
2023		9,006
2024		11,257
2025		56,287
Total	$	91,017

The Cadence Bank, N.A. long-term debt is subject to certain financial covenants. The Company was in compliance of all financial covenants as of December 31, 2020. As noted in Note 15 - Subsequent Events, all indebtedness of the Company was extinguished in connection with the purchase of the Company on December 17, 2021.

6.	Bank Line of Credit

On February 7, 2018, the Company entered into a revolving credit agreement with Cadence Bank, N.A. for total borrowing capacity of $25.0 million. As part of the debt consolidation described in Note 5, the revolving credit agreement was modified to a borrowing capacity of $15.0 million. The agreement defines a variable interest rate plus a predetermined margin based on the senior leverage ratio. The interest rate amounted to 4.00% as of December 31, 2020. The credit agreement was modified during the year ended December 31, 2020 and is scheduled to mature February 2025. Outstanding advances under this revolving credit agreement totaled approximately $0.7 million as of December 31, 2020, and are collateralized by substantially all of the Company’s assets. The borrowing arrangement is subject to certain financial covenants of which the Company is in compliance as of December 31, 2020.

7.	Postretirement Benefits

The Company’s 401K benefit plan allows employees to voluntarily defer a percentage of their salary into the plan up to specified limits as defined in the Internal Revenue Code. The Company maintains a discretionary match up to $500 of each employee’s contributions per fiscal quarter if the Company achieves its profitability goals. Company matching contributions for the benefit plan were approximately $0.3 million for the year ended December 31, 2020, and are recorded within the cost of sales and selling, general and administrative expenses.

8.	Members’ Equity

Members are not liable for the debts, liabilities, or obligations of the Company beyond their respective capital contributions. Members are not required to contribute to the capital of or to loan any funds to, the Company.

Leases

The Company leases office and warehouse space for its various locations in California and Idaho and equipment under operating leases with terms ranging from 5 to 15 years, expiring through 2032.

The Company maintains two leases with entities that are owned and managed by a stockholder, officer, and employee of the Company.

The Company regularly enters into operating leases primarily for real estate and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company has elected an accounting policy to combine lease and non-lease components.

The Company’s real estate leases have remaining terms of up to 11 years, some of which contain options to renew up to 5 years. Some leases contain non-lease components, which may include items such as building common area maintenance, building parking, or general service and maintenance provided for leased assets by the lessor.

Right of use assets and liabilities related to operating leases as of December 31, 2020 were as follows:

	Balance Sheet Classification	December 31, 2020

Right-of-use-assets	Operating right of use asset		$	22,196

Current liability	Accrued expenses			2,276
Long-term liability	Long-term lease liability			21,325
Total liability			$	23,601

Substantially all of the Company’s operating lease assets and liabilities arose from real estate as of December 31, 2020.

The Company renewed existing leases that resulted in new right-of-use assets totaling $2.6 million during the year ended December 31, 2020.

Most of the Company’s leases do not provide an implicit rate for calculating the right of use assets and corresponding lease liabilities. Accordingly, the Company determines the interest rate that would have to be paid to borrow on a collateralized basis over a similar term and amount equal to the lease payments in similar economic environments.

The lease costs and cash flows for the year ended December 31, 2020 were as follows:

Lease costs:
Operating lease costs	$	3,782

Cash flows:
Operating cash flows from operating leases	$	3,459

The weighted average remaining lease term and discount rates at December 31, 2020 were 10 years and 5.9%, respectively. The Company had insignificant costs related to short-term or variable lease payments for the year ended December 31, 2020.

A maturity analysis of undiscounted operating lease liabilities as of December 31, 2020, is shown in the table below:

Year Ending December 31,	Operating Lease Payments
2021	$	3,582
2022		3,525
2023		3,043
2024		2,921
2025		2,649
Thereafter		15,749
Total lease payments		31,469
Less: interest		7,868
Present value of lease liabilities	$	23,601

The operating lease payments listed in the table above include all current leases. The payments also include all renewal periods that are reasonably expected to be exercised.

The Company rarely enters into finance leases. Since finance lease amounts and finance lease related costs are not significant to the Company’s consolidated financial position or results of operations, additional disclosures regarding finance leases are not presented.

10.	Fair Value Measurements

The Company’s cash equivalents include demand deposits with a maturity of 90 days or less that approximate fair value. The carrying value of the Company’s debt approximates fair value and is considered Level 2 as interest rates are based on variable rates tied to observable inputs (LIBOR or the prime rate).

11.	Commitments and Contingencies

12.	Property, Plant, and Equipment

Property, plant and equipment consist of the following at December 31, 2020:

	(in thousands)
Land	$	3,381
Buildings		22,612
Machinery and equipment		50,265
Leasehold improvements		2,810
Furniture and fixtures		638
Construction in process		5,530
		85,236
Less accumulated depreciation		(22,725	)
Total	$	62,511

Depreciation expense totaled approximately $7.8 million for the year ended December 31, 2020.

13.	Management Incentive Plan

Effective February 2, 2020, the Company adopted a management incentive program plan to provide eligible employees and other parties related to the Company the opportunity to receive grants of nonvoting Class C Units as defined the Company’s amended and restated LLC agreement. The grantees would be entitled to Class C liquidating distributions to the extent the distributions exceed a specific threshold upon certain triggering events as defined in the award documents. The awards, which are intended to be classified as profits interests, vest either at change of control or on a schedule pre-agreed with each grantee. Management has determined the fair value of these awards at date of grant is approximately $0.3 million, which was expensed in the year and recorded within selling, general and administrative expenses. These awards grant the Company certain repurchase rights upon death, disability, or termination of employment.

14.	Related Party Transactions

The Company leases two buildings that are owned and managed by a stockholder, officer, and employee of the Company. In 2020, the Company recorded approximately $2.0 million in rent expense related to these leases. For a further discussion of leases, see Note 9 - Leases.

The Company pays its equity sponsor an annual management fee of approximately $0.6 million and distributions related to its tax liability for certain entities included in the Consolidated Financial Statements. Distributions paid during the year ended December 31, 2020, totaled $10.0 million.

15.	Subsequent Event

The consolidated financial statements of TCFII NxEdge LLC are derived from the Consolidated Financial Statements of TCFII NxEdge Holdings LLC, which issued its financial statements for the year ended December 31, 2020 on May 17, 2021. Accordingly, the Company has evaluated transactions or other events for consideration as recognized subsequent events in the annual financial statements through May 17, 2021. Additionally, TCFII NxEdge LLC has evaluated transactions and other events that occurred through March 4, 2022, the date these consolidated financial statements were issued, for purposes of disclosure of unrecognized subsequent events.

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On December 17, 2021, EnPro Holdings, Inc., a direct subsidiary of EnPro Industries, Inc. (“EnPro”), completed the acquisition (the “Acquisition”) of all issued and outstanding membership interests of TCFII NxEdge LLC (“NxEdge”).

In connection with the completion of the Acquisition, EnPro amended its senior credit facilities. The amended credit agreement provides for credit facilities in the initial aggregate principal amount of $1,007.5 million, consisting of a five-year, senior secured revolving credit facility of $400.0 million (the “Revolving Credit Facility”), a $142.5 million senior secured term loan facility in replacement of the existing senior secured term loan facility, maturing September 25, 2024 (the “Term Loan A-1 Facility”), a five-year, senior secured term loan facility of $315.0 million (the “Term Loan A-2 Facility”) and a 364-day, senior secured term loan facility of $150.0 million (the “364-Day Facility” and together with the Revolving Credit Facility, the Term Loan A-1 Facility and the Term Loan A-2 Facility, the “Facilities”). Transactions under the Facilities used to facilitate the Acquisition are referred to herein as the “Financing”.

The accompanying unaudited pro forma condensed combined financial information has been prepared to illustrate the effects of the Acquisition and the Financing. The unaudited pro forma condensed combined balance sheet as of September 30, 2021 gives effect to the Acquisition and the Financing as if they occurred on September 30, 2021. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 and for the nine months ended September 30, 2021 give effect to the Acquisition and the Financing as if they had occurred on January 1, 2020.

The following unaudited pro forma condensed combined financial information is based on the historical audited consolidated financial statements of EnPro, appearing in EnPro’s Annual Report on Form 10-K for the year ended December 31, 2020 and the unaudited consolidated financial statements of EnPro appearing in EnPro’s Form 10-Q for the nine-month period ended September 30, 2021. The unaudited pro forma condensed combined financial information is also based on the historical audited consolidated financial statements of NxEdge as of and for the year ended December 31, 2020 and the historical audited consolidated financial statements of NxEdge as of and for the nine-month period ended September 30, 2021 filed with this Current Report on Form 8-K/A.

The unaudited pro forma adjustments are based upon available information and certain assumptions that EnPro believes are reasonable. The pro forma adjustments and certain assumptions underlying these adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed combined financial information. In addition, the unaudited pro forma condensed combined financial information has been compiled in accordance with the accounting policies of EnPro as set out in the historical financial statements of EnPro included in its Annual Report on Form 10-K for the year ended December 31, 2020 and Form 10-Q for the nine-month period ended September 30, 2021.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 reflects certain material nonrecurring charges that resulted from the Acquisition and the Financing and will be included in EnPro’s net income (loss) within the twelve months following the Acquisition and the Financing. These items include an estimated $12.3 million of increased costs of sales expected to be incurred with the recognition of NxEdge’s inventory at net realizable value, the amortization of a $7.0 million backlog intangible asset and $2.3 million of interest expense associated with the 364-Day Facility incurred by EnPro to partially fund the Acquisition.

The unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of EnPro would have been had the Acquisition and the Financing occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or financial position.

EnPro Industries, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2021

(in millions)

	EnPro Historical			NxEdge Historical Reclassed (Note 2)		Transaction Accounting Adjustments - Acquisition			Transaction Accounting Adjustments - Financing		Pro Forma Condensed Combined			Pro Forma Adjustments Reference
Current assets
Cash and cash equivalents	$	330.0		$	5.8	$	(875.5	)	$	710.2	$	170.5		4(a)
Accounts receivable, net		164.7			36.2		—			—		200.9
Inventories		147.8			17.9		9.5			—		175.2		4(b)
Prepaid expenses and other current assets		67.0			7.8		—			—		74.8
Total current assets		709.5			67.7		(866.0	)		710.2		621.4
Property, plant and equipment, net		182.2			52.4		21.0			—		255.6		4(c)
Goodwill		606.6			59.3		293.7			—		959.6		4(d)
Other intangible assets		521.0			65.0		348.0			—		934.0		4(e)
Other assets		133.4			20.7		4.0			2.0		160.1		4(f)
Total assets	$	2,152.7		$	265.1	$	(199.3	)	$	712.2	$	2,930.7

Current liabilities
Current maturities of long-term debt	$	3.9		$	6.9	$	(6.9	)	$	7.9	$	11.8		4(g)
Short-term debt		—			—		—			149.2		149.2		4(g)
Accounts payable		75.7			8.1		—			—		83.8
Accrued expenses		142.8			7.4		2.5			—		152.7		4(h)
Total current liabilities		222.4			22.4		(4.4	)		157.1		397.5
Long-term debt		485.5			52.9		(52.9	)		555.1		1,040.6		4(g)
Deferred taxes and non-current income taxes payable		125.5			7.1		34.2			—		166.8		4(i)
Other liabilities		128.6			19.6		1.9			—		150.1		4(j)
Total liabilities		962.0			102.0		(21.2	)		712.2		1,755.0

Redeemable non-controlling interests		50.0			—		—			—		50.0

Shareholders’ equity
Common stock		0.2			—		—			—		0.2
Additional paid-in capital		291.2			—		—			—		291.2
Capital contributions and members’ equity		—			163.1		(163.1	)		—		—		4(k)
Retained earnings		852.7			—		(15.0	)		—		837.7		4(l)
Accumulated other comprehensive loss		(2.2	)		—		—			—		(2.2	)
Common stock held in treasury, at cost		(1.2	)		—		—			—		(1.2	)
Total shareholders’ equity		1,140.7			163.1		(178.1	)		—		1,125.7
Total liabilities and equity	$	2,152.7		$	265.1	$	(199.3	)	$	712.2	$	2,930.7

EnPro Industries, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

Nine Months Ended September 30, 2021

(in millions, except per share data)

	EnPro Historical			NxEdge Historical (Note 2)			Transaction Accounting Adjustments - Acquisition			Transaction Accounting Adjustments - Financing			Pro Forma Condensed Combined			Pro Forma Adjustments Reference
Net sales	$	861.0		$	134.4		$	—		$	—		$	995.4
Cost of sales		525.1			76.1			1.7			—			602.9		5(a)
Gross profit		335.9			58.3			(1.7	)		—			392.5
Operating expenses:
Selling, general and administrative		243.0			17.8			18.9			—			279.7		5(b)
Other		5.2			—			—			—			5.2
Total operating expenses		248.2			17.8			18.9			—			284.9
Operating income		87.7			40.5			(20.6	)		—			107.6
Interest expense		(12.0	)		(2.8	)		2.8			(8.7	)		(20.7	)	5(c)
Interest income		1.8			—			—			—			1.8
Other income		18.5			3.0			—			—			21.5
Income from continuing operations before income taxes		96.0			40.7			(17.8	)		(8.7	)		110.2
Income tax expense		(21.1	)		(3.3	)		(2.3	)		2.2			(24.5	)	5(d)
Income from continuing operations		74.9			37.4			(20.1	)		(6.5	)		85.7
Less: net income attributable to redeemable non-controlling interest, net of tax		0.1			—			—			—			0.1
Net income from continuing operations attributable to EnPro Industries, Inc	$	74.8		$	37.4		$	(20.1	)	$	(6.5	)	$	85.6

Basic earnings per share from continuing operations attributable to EnPro Industries, Inc.:	$	3.63			N/A			N/A			N/A		$	4.16
Average common shares outstanding		20.6			N/A			N/A			N/A			20.6

Diluted earnings per share from continuing operations attributable to EnPro Industries, Inc.:	$	3.61			N/A			N/A			N/A		$	4.12
Average common shares outstanding		20.8			N/A			N/A			N/A			20.8

EnPro Industries, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

Year Ended December 31, 2020

(in millions, except per share data)

	EnPro Historical			NxEdge Historical (Note 2)			Transaction Accounting Adjustments - Acquisition			Transaction Accounting Adjustments - Financing			Pro Forma Condensed Combined			Pro Forma Adjustments Reference
Net sales	$	1,074.0		$	176.5		$	—		$	—		$	1,250.5
Cost of sales		698.2			108.5			14.6			—			821.3		5(a)
Gross profit		375.8			68.0			(14.6	)		—			429.2
Operating expenses:
Selling, general and administrative		299.8			24.7			47.1			—			371.6		5(b)
Other		50.1			—			—			—			50.1
Total operating expenses		349.9			24.7			47.1			—			421.7
Operating income		25.9			43.3			(61.7	)		—			7.5
Interest expense		(16.5	)		(8.4	)		6.9			(14.0	)		(32.0	)	5(c)
Interest income		1.6			—			—			—			1.6
Other expense		(37.8	)		(1.2	)		—			—			(39.0	)
Income (loss) from continuing operations before income taxes		(26.8	)		33.7			(54.8	)		(14.0	)		(61.9	)
Income tax benefit (expense)		3.5			(4.9	)		10.5			3.6			12.7		5(d)
Income (loss) from continuing operations		(23.3	)		28.8			(44.3	)		(10.4	)		(49.2	)
Less: net income attributable to redeemable non-controlling interest, net of tax		0.4			—			—			—			0.4
Net income (loss) from continuing operations attributable to EnPro Industries, Inc	$	(23.7	)	$	28.8		$	(44.3	)	$	(10.4	)	$	(49.6	)

Basic loss per share from continuing operations attributable to EnPro Industries, Inc.	$	(1.15	)		N/A			N/A			N/A		$	(2.42	)
Average common shares outstanding		20.5			N/A			N/A			N/A			20.5

Diluted loss per share from continuing operations attributable to EnPro Industries, Inc.	$	(1.15	)		N/A			N/A			N/A		$	(2.42	)
Average common shares outstanding		20.5			N/A			N/A			N/A			20.5

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 1 – Basis of Preparation

The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the Acquisition and the Financing (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). EnPro has elected not to present Management’s Adjustments and is presenting only Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The adjustments presented in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary to assist in understanding the post-combination company.

The unaudited pro forma condensed combined balance sheet has been prepared by combining EnPro’s and NxEdge’s balance sheets as of September 30, 2021 and applying the pro forma adjustments described below.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2021 and year ended December 31, 2020 have been prepared by combining EnPro’s unaudited results for the nine months ended September 30, 2021 and NxEdge’s audited results for the nine months ended September 30, 2021 and the audited results of EnPro and NxEdge for the year ended December 31, 2020 and applying the pro forma adjustments to each period described below.

EnPro and NxEdge’s historical financial statements were prepared in accordance with U.S. GAAP and presented in U.S. dollars.

The unaudited pro forma adjustments have been prepared as if the Acquisition and the Financing occurred on September 30, 2021 in the case of the unaudited pro forma condensed combined balance sheet and on January 1, 2020 in the case of the unaudited pro forma condensed combined statements of operations. The historical consolidated financial information has been adjusted in the unaudited pro forma condensed combined financial statements in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The pro forma adjustments are based on currently available information and certain estimates and assumptions, and therefore the actual effect of the Acquisition and the Financing will differ from the pro forma adjustments.

The accounting policies followed in preparing the unaudited pro forma condensed combined financial information are those used by EnPro as set forth in its historical financial statements. The unaudited pro forma condensed combined financial information reflects any adjustments known at this time to conform NxEdge’s historical financial information to EnPro’s significant accounting policies described in the Transaction Accounting Adjustments for the Acquisition in Note 4 below. A more comprehensive comparison and assessment will occur, which may result in additional differences identified.

EnPro management believes that the assumptions used provide a reasonable basis for presenting the significant effects of the Acquisition and the Financing, and that the pro forma adjustments in the unaudited pro forma condensed combined financial information give appropriate effect to the assumptions.

Note 2 - NxEdge Reclassification Adjustments

During the preparation of the unaudited pro forma condensed combined financial information, management performed a preliminary analysis of NxEdge’s financial information to identify differences in accounting policies as compared to those of EnPro and differences in financial statement presentation as compared to the presentation of EnPro. With the information currently available, EnPro has determined that there are certain accounting policy differences that have been adjusted for on the unaudited pro forma condensed combined financial information and described in the transaction accounting adjustments for the Acquisition in Note 4 below. In addition, certain reclassification adjustments have been made to conform NxEdge’s historical financial statement presentation to EnPro’s financial statement presentation. Subsequent to the Acquisition, the combined company will finalize the review of accounting policies and reclassifications, which could be different from the amounts set forth in the unaudited pro forma condensed combined financial information presented herein.

Refer to the table below for a summary of reclassification adjustments necessary to align the historical NxEdge financial statement presentation with the condensed EnPro financial statement presentation included in the unaudited pro forma condensed combined financial information as of September 30, 2021 (in millions):

	NxEdge Historical		Reclassification				NxEdge Historical Reclassed
Current assets
Cash and cash equivalents	$	5.8	$	—			$	5.8
Accounts receivable, net		36.2		—				36.2
Inventories		17.9		—				17.9
Prepaid expenses and other current assets		2.7		5.1		(i)		7.8
Assets held for sale		5.1		(5.1	)	(i)		—
Total current assets		67.7		—				67.7
Property, plant and equipment, net		52.4		—				52.4
Goodwill		59.3		—				59.3
Other intangible assets		65.0		—				65.0
Other assets		0.4		20.3		(ii)		20.7
Operating right-of-use asset		20.3		(20.3	)	(ii)		—
Total assets	$	265.1	$	—			$	265.1

Current liabilities
Current maturities of long-term debt	$	6.9	$	—			$	6.9
Accounts payable		8.1		—				8.1
Accrued expenses		7.4		—				7.4
Total current liabilities		22.4		—				22.4
Long-term debt		52.9		—				52.9
Other liabilities		—		19.6		(iii)		19.6
Deferred tax liability		7.1		—				7.1
Long-term lease liability		19.6		(19.6	)	(iii)		—
Total liabilities		102.0		—				102.0

Capital contributions and members’ equity		163.1		—				163.1
Total liabilities and equity	$	265.1	$	—			$	265.1

(i)	To reclassify $5.1 million of “Assets held for sale” to “Prepaid expenses and other current assets”.

(ii)	To reclassify $20.3 million of “Operating right-of-use asset” to “Other assets”.

(iii)

To reclassify $19.6 million of “Long-term lease liability” to “Other liabilities”.

B)	There were no reclassification entries required to conform the NxEdge statements of operations to the EnPro presentation.

Note 3 - Purchase Price and Purchase Price Allocation

On December 17, 2021, EnPro completed the Acquisition. The Acquisition was paid for with $856.6 million in cash, net of $5.8 million cash acquired. There is a working capital adjustment included in the cash purchase price which is subject to change based on final agreement between the parties.

The purchase price allocation was prepared using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”), with all assets acquired and liabilities assumed recognized and measured at their assumed acquisition date fair value (as defined in Accounting Standards Codification 820, Fair Value Measurement) and transaction costs expensed as incurred. The excess of purchase price over the fair value of assets acquired and liabilities assumed is allocated to goodwill. The preliminary purchase price was allocated using NxEdge’s September 30, 2021 balance sheet as follows:

	(in millions)
Accounts receivable	$	36.2
Inventories		27.4
Property, plant and equipment		73.4
Goodwill		353.0
Other intangible assets		413.0
Other acquired assets		32.5
Deferred income taxes		(41.3	)
Liabilities assumed		(37.6	)
Preliminary fair value of net assets acquired	$	856.6

The preliminary estimates above are based on the data available to EnPro and may change upon completion of the final purchase price allocation. Any change in the estimated fair value of the assets and liabilities acquired will have a corresponding impact on the amount of the goodwill. A change in the amount of property, plant, and equipment and other identifiable intangible assets will have a direct impact on the amount of amortization and depreciation expense recorded in future periods. The impact of any changes in the purchase price allocation may have a material impact on the amounts presented in this unaudited pro forma condensed combined financial information and in future periods.

There were $15.0 million of EnPro transaction fees that were expensed in accordance with ASC 805 guidance. Of these fees, $13.1 million were paid as of the closing date of the Acquisition and $1.9 million remained unpaid.

Note 4 - Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet

(a)	Reflects the adjustments to cash and cash equivalents, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Cash consideration transferred (see Note 3)	$	(862.4	)
Payment of transaction fees and expenses (i)		(13.1	)
Transaction accounting adjustment - Acquisition		(875.5	)

Funds from borrowing under Revolving Credit Facility		250.0
Funds from borrowing under Term Loan A-2 Facility		315.0
Funds from borrowing under 364-Day Facility		150.0
Payment of debt issue costs		(4.8	)
Transaction accounting adjustment - Financing		710.2
Total transaction accounting adjustments	$	(165.3	)

(i)

These costs consist of legal advisory, financial advisory, accounting and consulting costs.

(b)	Reflects the preliminary purchase accounting adjustment for inventories based on the acquisition method of accounting, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of acquired inventories	$	27.4
Elimination of NxEdge inventories - carrying value		(17.9	)
Transaction accounting adjustment - Acquisition	$	9.5

The $9.5 million transaction accounting adjustment represents the adjustment of acquired inventories to their preliminary estimated fair value and consists of a $12.3 million step-up in fair value reduced by a $2.8 million accounting policy adjustment for obsolescence reserves to conform the NxEdge policy with the EnPro policy. After the closing, the step-up in inventories to fair value will increase the cost of sales as the inventories are sold, which is assumed to occur within the first year after the Acquisition.

(c)	Reflects the preliminary purchase accounting adjustment for property, plant and equipment based on the acquisition method of accounting, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of acquired property, plant and equipment	$	73.4
Elimination of NxEdge property, plant and equipment - carrying value		(52.4	)
Transaction accounting adjustment - Acquisition	$	21.0

(d)

Reflects the recognition of the estimate of goodwill for the purchase price consideration in excess of the fair value of net assets acquired and the elimination of NxEdge’s goodwill. Refer to Note 3 for additional information on the goodwill expected to be recognized as of the acquisition date. This is prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of acquired goodwill	$	353.0
Elimination of NxEdge goodwill - carrying value		(59.3	)
Transaction accounting adjustment - Acquisition	$	293.7

(e)	Reflects the preliminary purchase accounting adjustment for other intangible assets based on the acquisition method of accounting, prepared as if the Acquisition and the Financing had occurred on September 30, 2021:

	Preliminary Fair Value			Estimated Useful Life
	(in millions)			(in years)
Existing technology	$	306.0			13
Customer relationships		72.0			20
Trademarks		28.0			10
Backlog		7.0			1
Fair value of acquired identifiable intangible assets		413.0
Elimination of NxEdge intangible assets - carrying value		(65.0	)
Transaction accounting adjustment - Acquisition	$	348.0

(f)	Reflects the adjustments to other assets, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of the acquired lease right-of-use assets	$	24.3
Elimination of NxEdge lease right-of-use assets - carrying value		(20.3	)
Transaction accounting adjustment - Acquisition		4.0

Debt issuance costs incurred associated with the Revolving Credit Facility		2.0
Transaction accounting adjustment - Financing		2.0
Total transaction accounting adjustments	$	6.0

The $4.0 million lease transaction accounting adjustment represents the remeasurement of the NxEdge right-of-use asset to equal the remeasured lease liability as adjusted to reflect $0.1 million favorable terms of the leases when compared to market terms.

(g)	Reflects the adjustments to the debt balances, prepared as if the Acquisition and the Financing had occurred on September 30, 2021:

	Current Maturities of Long-Term Debt			Short-Term Debt		Long-Term Debt
				(in millions)
Revolving Credit Facility	$	—		$	—	$	250.0		(i)
Term Loan A-2 Facility, net of $2.0 million of debt issuance costs		7.9			—		305.1
364-Day Facility, net of $0.8 million of debt issuance costs		—			149.2		—
Transaction accounting adjustment - Financing		7.9			149.2		555.1

Elimination of NxEdge debt not assumed		(6.9	)		—		(52.9	)
Transaction accounting adjustment - Acquisition		(6.9	)		—		(52.9	)
Total transaction accounting adjustments	$	1.0		$	149.2	$	502.2

(i)

Of the $400.0 million available on the Revolving Credit Facility, $250.0 million was drawn to fund the Acquisition.

(h)	Reflects the adjustments to accrued expenses, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of the acquired current lease liabilities	$	2.9
Elimination of NxEdge current lease liabilities - carrying value		(2.3	)
Unpaid EnPro transaction fees and expenses as of the Acquisition date		1.9
Transaction accounting adjustment - Acquisition	$	2.5

The above adjustment to lease liabilities reflects the remeasurement of the NxEdge lease liabilities at the present value of the remaining lease payments, as if the acquired leases were new leases of EnPro as of the Acquisition date.

(i)	Reflects the change in deferred tax liabilities resulting from adjustments to tangible and intangible assets and is based on management’s preliminary estimates of fair value, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of the acquired deferred tax liabilities	$	41.3
Elimination of NxEdge deferred tax liabilities		(7.1	)
Transaction accounting adjustment - Acquisition	$	34.2

(j)	Reflects the preliminary purchase accounting adjustment for other liabilities based on the acquisition method of accounting, prepared as if the Acquisition and the Financing had occurred on September 30, 2021 (in millions):

Fair value of the acquired noncurrent lease liabilities	$	21.5
Elimination of NxEdge noncurrent lease liabilities - carrying value		(19.6	)
Transaction accounting adjustment - Acquisition	$	1.9

(k)	Reflects the impact of eliminating historical equity balances of NxEdge as of September 30, 2021.

(l)	Reflects the recognition of $15.0 million of transaction costs incurred as of the Acquisition date, but not recorded as of September 30, 2021.

Note 5 - Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations

(a)	Reflects the impact of the following transactions on cost of sales assuming the Acquisition and the Financing occurred on January 1, 2020 (in millions):

	Nine Months Ended September 30, 2021			Year ended December 31, 2020
Depreciation expense on property, plant and equipment	$	7.0		$	8.9
Elimination of historical NxEdge depreciation expense		(5.3	)		(6.6	)
Recognition of Acquisition date step-up in inventory		—			12.3
Transaction accounting adjustment - Acquisition	$	1.7		$	14.6

(b)	Reflects the impact of the following transactions on selling, general and administrative expenses assuming the Acquisition and the Financing occurred on January 1, 2020 (in millions):

	Nine Months Ended September 30, 2021			Year ended December 31, 2020
Depreciation expense on property, plant and equipment	$	1.3		$	1.6
Elimination of historical NxEdge depreciation expense		(1.0	)		(1.2	)
Amortization of acquired identifiable intangible assets		22.5			36.9
Elimination of historical NxEdge amortization of intangible assets		(3.9	)		(5.2	)
Recognition of EnPro transaction fees and expenses associated with the Acquisition		—			15.0
Transaction accounting adjustment - Acquisition	$	18.9		$	47.1

(c)	Reflects the impact of the following transactions on interest expense assuming the Acquisition and the Financing occurred on January 1, 2020 (in millions):

	Nine Months Ended September 30, 2021			Year Ended December 31, 2020
Increased interest on Revolving Credit Facility	$	(3.5	)	$	(4.6	)
Increased interest on Term Loan A-2 Facility		(4.2	)		(5.8	)
Increased interest on 364-Day Facility		—			(2.3	)
Increased amortization of debt issuance costs		(1.0	)		(1.3	)
Transaction accounting adjustment - Financing		(8.7	)		(14.0	)
Elimination of historical NxEdge interest expense		2.8			8.4
Write-off of historical NxEdge unamortized debt issuance costs		—			(1.5	)
Transaction accounting adjustment - Acquisition		2.8			6.9
Total transaction accounting adjustments	$	(5.9	)	$	(7.1	)

A sensitivity analysis on interest expense has been performed to assess the effect of a 12.5 basis point change of the hypothetical interest on the Financing. The following table shows the change in interest expense assuming this change (in millions):

	Nine Months Ended September 30, 2021			Year Ended December 31, 2020
Interest expense assuming increase of 0.125%	$	0.5		$	0.9
Interest expense assuming decrease of 0.125%	$	(0.5	)	$	(0.9	)

(d)	To reflect the income tax effect of pro forma pre-tax adjustments and record incremental estimated income tax expense on NxEdge earnings that were previously not taxed due to their LLC business structure utilizing the estimated statutory tax rate of 25.6%.

North Carolina		001-31225		01-0573945
(State or other jurisdiction of incorporation)		(Commission file number)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value		NPO		New York Stock Exchange

(d)	Exhibits

	Exhibit 2.1	Purchase and Sale Agreement dated as of November 4, 2021 among TCFII NxEdge Holdings, LLC, TCFII NxEdge LLC and EnPro Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8‑K filed by EnPro Industries, Inc. on November 5, 2021 (File No. 001-31225))

	Exhibit 10.1	Third Amended and Restated Credit Agreement dated as of December 17, 2021 among EnPro Industries, Inc. and EnPro Holdings, Inc., as borrowers, certain foreign subsidiaries of EnPro Industries, Inc. from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer(incorporated by reference to Exhibit 10.1 to EnPro’s Current Report on Form 8-K filed December 17, 2021 (File No. 001-31225))

	Exhibit 23.1	Consent of PricewaterhouseCoopers LLP

	Exhibit 99.1	TCFII NxEdge LLC and subsidiaries audited consolidated financial statements at and for the nine months ended September 30, 2021

	Exhibit 99.2	TCFII NxEdge LLC and subsidiaries audited consolidated financial statements at and for the year ended December 31, 2020

	Exhibit 99.3	Unaudited pro forma condensed combined financial information

	Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

Date: March 4, 2022

	ENPRO INDUSTRIES, INC.

	By:	/s/ Robert S. McLean
		Robert S. McLean
		Executive Vice President, General Counsel and Secretary

	ENPRO INDUSTRIES, INC.
(Exact name of Registrant, as specified in its charter)

5605 Carnegie Boulevard, Suite 500
	Charlotte, North Carolina 28209
(Address of principal executive offices, including zip code)

	(704) 731-1500
(Registrant’s telephone number, including area code)

	Not Applicable
(Former name or address, if changed since last report)