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Exhibit 99.1
TAT TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Period Ended June 30, 2025
TABLE OF CONTENTS

| Page
Financial statements |
Unaudited Condensed Consolidated Balance Sheets | F - 2
Unaudited Condensed Consolidated Statements of Income | F - 3
Unaudited Condensed Consolidated Statements of Comprehensive Income | F - 4
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity | F - 5
Unaudited Condensed Consolidated Statements of Cash Flows | F - 7
Unaudited Condensed Notes to Financial Statements | F - 8

TAT TECHNOLOGIES LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

U.S dollars in thousands

|  | June 30, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
ASSETS |  |  |  |  |  |
CURRENT ASSETS: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 43,126 |  |  | $ | 7,129 |
Short-term bank deposits |  |  | 57 |  |  |  | - |
Accounts receivable, net of allowance for credit losses of $425 and $400 as of June 30, 2025, and December 31, 2024, respectively |  |  | 32,266 |  |  |  | 29,697 |
Inventory |  |  | 76,414 |  |  |  | 68,540 |
Prepaid expenses and other current assets |  |  | 6,610 |  |  |  | 7,848 |
Total current assets |  |  | 158,473 |  |  |  | 113,214 |
NON-CURRENT ASSETS: |  |  |  |  |  |  |  |
Property, plant and equipment, net |  |  | 44,646 |  |  |  | 41,576 |
Operating lease right of use assets |  |  | 3,475 |  |  |  | 2,282 |
Intangible assets, net |  |  | 1,558 |  |  |  | 1,553 |
Investment in affiliates |  |  | 4,188 |  |  |  | 2,901 |
Funds in respect of employee rights upon retirement |  |  | 709 |  |  |  | 654 |
Deferred income taxes |  |  | 295 |  |  |  | 877 |
Restricted deposit |  |  | 291 |  |  |  | 305 |
Total non-current assets |  |  | 55,162 |  |  |  | 50,148 |
Total assets |  | $ | 213,635 |  |  | $ | 163,362 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
CURRENT LIABILITIES: |  |  |  |  |  |  |  |
Current maturities of long-term loans |  | $ | 2,088 |  |  | $ | 2,083 |
Short-term loans |  |  | - |  |  |  | 4,350 |
Accounts payable |  |  | 15,564 |  |  |  | 12,158 |
Accrued expenses and other |  |  | 15,273 |  |  |  | 18,594 |
Current maturities of operating lease liabilities |  |  | 993 |  |  |  | 939 |
Total current liabilities |  |  | 33,918 |  |  |  | 38,124 |
NON-CURRENT LIABILITIES: |  |  |  |  |  |  |  |
Long-term loans |  |  | 10,310 |  |  |  | 10,938 |
Liability in respect of employee rights upon retirement |  |  | 1,098 |  |  |  | 986 |
Operating lease liabilities |  |  | 2,528 |  |  |  | 1,345 |
Total non-current liabilities |  |  | 13,936 |  |  |  | 13,269 |
COMMITMENTS AND CONTINGENCIES (NOTE 4) |  |  | - |  |  |  | - |
Total liabilities |  |  | 47,854 |  |  |  | 51,393 |

SHAREHOLDERS’ EQUITY: |  |  |  |  |  |
Ordinary shares of NIS 0 par value at June 30, 2025 and at December 31, 2024 respectively Authorized: 15,000,000 shares at June 30, 2025 and 13,000,000 at December 31, 2024; Issued: 13,161,762 and 11,214,831 shares at June 30, 2025 and at December 31, 2024, respectively; Outstanding: 12,887,289 and 10,940,358 shares at June 30, 2025 and at December 31, 2024, respectively |  |  | - |  |  |  | - |
Additional paid-in capital |  |  | 135,578 |  |  |  | 89,697 |
Treasury stock at cost |  |  | (2,088 | ) |  |  | (2,088 | )
Accumulated other comprehensive income (loss) |  |  | 600 |  |  |  | (76 | )
Retained earnings |  |  | 31,691 |  |  |  | 24,436 |
Total shareholders' equity |  |  | 165,781 |  |  |  | 111,969 |
Total liabilities and shareholders' equity |  | $ | 213,635 |  |  | $ | 163,362 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F - 2

TAT TECHNOLOGIES LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

U.S dollars in thousands

|  | Three Months ended |  |  | Six Months ended |
|  | June 30, |  |  | June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Products |  | $ | 12,463 |  |  | $ | 11,732 |  |  | $ | 25,187 |  |  | $ | 23,667 |
Services |  |  | 30,641 |  |  |  | 24,793 |  |  |  | 60,059 |  |  |  | 46,946 |
|  |  | 43,104 |  |  |  | 36,525 |  |  |  | 85,246 |  |  |  | 70,613 |
Cost of goods: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Products |  |  | 9,112 |  |  |  | 7,673 |  |  |  | 17,443 |  |  |  | 16,659 |
Services |  |  | 23,167 |  |  |  | 20,868 |  |  |  | 47,024 |  |  |  | 38,904 |
|  |  | 32,279 |  |  |  | 28,541 |  |  |  | 64,467 |  |  |  | 55,563 |
Gross profit |  |  | 10,825 |  |  |  | 7,984 |  |  |  | 20,779 |  |  |  | 15,050 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development, net |  |  | 240 |  |  |  | 343 |  |  |  | 564 |  |  |  | 620 |
Selling and marketing |  |  | 2,185 |  |  |  | 1,993 |  |  |  | 4,113 |  |  |  | 3,653 |
General and administrative |  |  | 3,965 |  |  |  | 2,916 |  |  |  | 7,497 |  |  |  | 6,225 |
Other income |  |  | - |  |  |  | (2 | ) |  |  | - |  |  |  | (390 | )
|  |  | 6,390 |  |  |  | 5,250 |  |  |  | 12,174 |  |  |  | 10,108 |
Operating income |  |  | 4,435 |  |  |  | 2,734 |  |  |  | 8,605 |  |  |  | 4,942 |
Interest expenses |  |  | (324 | ) |  |  | (413 | ) |  |  | (659 | ) |  |  | (763 | )
Other financial income (expenses), net |  |  | (776 | ) |  |  | 106 |  |  |  | (499 | ) |  |  | 7 |
Income before taxes on income (taxes benefit) |  |  | 3,335 |  |  |  | 2,427 |  |  |  | 7,447 |  |  |  | 4,186 |
Provision for taxes on income (taxes benefit) |  |  | 211 |  |  |  | 44 |  |  |  | 803 |  |  |  | (109 | )
Profit before share of equity investment |  |  | 3,124 |  |  |  | 2,383 |  |  |  | 6,644 |  |  |  | 4,295 |
Share in profits of equity investment of affiliated companies |  |  | 318 |  |  |  | 234 |  |  |  | 611 |  |  |  | 432 |
Net income |  | $ | 3,442 |  |  | $ | 2,617 |  |  | $ | 7,255 |  |  | $ | 4,727 |

Earnings per share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.30 |  |  | $ | 0.26 |  |  | $ | 0.65 |  |  | $ | 0.46 |
Diluted |  | $ | 0.30 |  |  | $ | 0.25 |  |  | $ | 0.64 |  |  | $ | 0.44 |
Weighted average number of shares outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 11,447,986 |  |  |  | 10,394,654 |  |  |  | 11,196,992 |  |  |  | 10,386,859 |
Diluted |  |  | 11,666,309 |  |  |  | 10,561,420 |  |  |  | 11,409,488 |  |  |  | 10,722,153 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F - 3

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

U.S dollars in thousands

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Net income |  | $ | 3,442 |  |  | $ | 2,617 |  |  | $ | 7,255 |  |  | $ | 4,727 |
Other comprehensive income (loss), net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net unrealized losses from derivatives |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (27 | )
Change in foreign currency translation adjustments |  |  | 148 |  |  |  | 164 |  |  |  | 676 |  |  |  | 164 |
Total comprehensive income |  | $ | 3,590 |  |  | $ | 2,781 |  |  | $ | 7,931 |  |  | $ | 4,864 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F - 4

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

U.S dollars in thousands, except share data

|  | Share capital |  |  | Additional paid-in capital |  |  | Accumulated other comprehensive income (loss) |  |  | Treasury shares |  |  | Retained earnings |  |  | Total equity |
|  | Number of shares issued |  |  | Amount |  |  |  |  |  |  |  |  |  |  |
BALANCE AT DECEMBER 31, 2023 |  |  | 10,377,085 |  |  | $ | 3,140 |  |  | $ | 76,335 |  |  | $ | 27 |  |  | $ | (2,088 | ) |  | $ | 13,269 |  |  | $ | 90,683 |
CHANGES DURING THE 6 MONTHS ENDED JUNE 30, 2024: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 137 |  |  |  | - |  |  |  | 4,727 |  |  |  | 4,864 |
Exercise of option |  |  | 49,109 |  |  |  | 12 |  |  |  | (12 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Share based compensation |  |  | - |  |  |  | - |  |  |  | 189 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 189 |
BALANCE AT JUNE 30, 2024 |  |  | 10,426,194 |  |  |  | 3,152 |  |  |  | 76,512 |  |  |  | 164 |  |  |  | (2,088 | ) |  |  | 17,996 |  |  |  | 95,736 |
BALANCE AT DECEMBER 31, 2024 |  |  | 11,214,831 |  |  |  | - |  |  |  | 89,697 |  |  |  | (76 | ) |  |  | (2,088 | ) |  |  | 24,436 |  |  |  | 111,969 |
CHANGES DURING THE 6 MONTHS ENDED JUNE 30, 2025: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 676 |  |  |  | - |  |  |  | 7,255 |  |  |  | 7,931 |
Exercise of option |  |  | 79,633 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Issuance of common shares on public offering, net of issuance costs of $2,769 |  |  | 1,625,000 |  |  |  | - |  |  |  | 39,415 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 39,415 |
Exercise of the underwriters' option on public offering, net of issuance costs of $413 |  |  | 242,298 |  |  |  | - |  |  |  | 5,953 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,953 |
Share based compensation |  |  | - |  |  |  | - |  |  |  | 513 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 513 |
BALANCE AT JUNE 30, 2025 |  |  | 13,161,762 |  |  | $ | - |  |  | $ | 135,578 |  |  | $ | 600 |  |  | $ | (2,088 | ) |  | $ | 31,691 |  |  | $ | 165,781 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F - 5

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

U.S dollars in thousands, except share data

|  | Share capital |  |  | Additional paid-in capital |  |  | Accumulated other comprehensive income |  |  | Treasury shares |  |  | Retained earnings |  |  | Total equity |
|  | Number of shares issued |  |  | Amount |  |  |  |  |  |  |  |  |  |  |
BALANCE AT MARCH 31, 2024 |  |  | 10,382,637 |  |  | $ | 3,141 |  |  | $ | 76,376 |  |  | $ | - |  |  | $ | (2,088 | ) |  | $ | 15,379 |  |  | $ | 92,808 |
CHANGES DURING THE 3 MONTHS ENDED JUNE 30, 2024: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 164 |  |  |  | - |  |  |  | 2,617 |  |  |  | 2,781 |
Exercise of option |  |  | 43,557 |  |  |  | 11 |  |  |  | (12 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1 | )
Share based compensation |  |  | - |  |  |  | - |  |  |  | 148 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 148 |
BALANCE AT JUNE 30, 2024 |  |  | 10,426,194 |  |  |  | 3,152 |  |  |  | 76,512 |  |  |  | 164 |  |  |  | (2,088 | ) |  |  | 17,996 |  |  |  | 95,736 |
BALANCE AT MARCH 31, 2025 |  |  | 11,214,831 |  |  |  | - |  |  |  | 89,919 |  |  |  | 452 |  |  |  | (2,088 | ) |  |  | 28,249 |  |  |  | 116,532 |
CHANGES DURING THE 3 MONTHS ENDED JUNE 30, 2025: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 148 |  |  |  | - |  |  |  | 3,442 |  |  |  | 3,590 |
Exercise of stock option |  |  | 79,633 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Issuance of common shares on public offering, net of issuance costs of $2,769 |  |  | 1,625,000 |  |  |  | - |  |  |  | 39,415 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 39,415 |
Exercise of the underwriters' option on public offering, net of issuance costs of $413 |  |  | 242,298 |  |  |  | - |  |  |  | 5,953 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,953 |
Share based compensation |  |  | - |  |  |  | - |  |  |  | 291 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 291 |
BALANCE AT JUNE 30, 2025 |  |  | 13,161,762 |  |  | $ | - |  |  | $ | 135,578 |  |  | $ | 600 |  |  | $ | (2,088 | ) |  | $ | 31,691 |  |  | $ | 165,781 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F - 6

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 3,442 |  |  | $ | 2,617 |  |  | $ | 7,255 |  |  | $ | 4,727 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 1,208 |  |  |  | 1,431 |  |  |  | 2,513 |  |  |  | 2,805 |
Non-cash financial (income) expenses |  |  | 600 |  |  |  | (276 | ) |  |  | 508 |  |  |  | (486 | )
Change in allowance for credit losses |  |  | 75 |  |  |  | 40 |  |  |  | 25 |  |  |  | 40 |
Share in profits of equity investment of affiliated companies |  |  | (318 | ) |  |  | (234 | ) |  |  | (611 | ) |  |  | (432 | )
Share based compensation |  |  | 291 |  |  |  | 148 |  |  |  | 513 |  |  |  | 189 |
Gain on disposal of property, plant and equipment |  |  | - |  |  |  | (1 | ) |  |  | - |  |  |  | (355 | )
Deferred income taxes, net |  |  | 63 |  |  |  | 306 |  |  |  | 582 |  |  |  | (103 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Decrease (increase) in trade accounts receivable |  |  | 882 |  |  |  | (5,430 | ) |  |  | (2,594 | ) |  |  | (6,250 | )
Decrease (increase) in prepaid expenses and other current assets |  |  | 1,697 |  |  |  | (129 | ) |  |  | 1,183 |  |  |  | (283 | )
Increase in inventory |  |  | (3,434 | ) |  |  | (2,906 | ) |  |  | (7,295 | ) |  |  | (5,543 | )
Increase (decrease) in trade accounts payable |  |  | 2,972 |  |  |  | (209 | ) |  |  | 3,406 |  |  |  | (909 | )
Decrease (increase) in accrued expenses and other |  |  | (529 | ) |  |  | 543 |  |  |  | (3,571 | ) |  |  | (1,047 | )
Net cash provided by (used in) operating activities |  |  | 6,949 |  |  |  | (4,100 | ) |  |  | 1,914 |  |  |  | (7,647 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sale of property and equipment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,306 |
Purchase of property and equipment |  |  | (3,305 | ) |  |  | (978 | ) |  |  | (6,167 | ) |  |  | (1,967 | )
Net cash used in investing activities |  |  | (3,305 | ) |  |  | (978 | ) |  |  | (6,167 | ) |  |  | (661 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Repayments of long-term loans |  |  | (516 | ) |  |  | (510 | ) |  |  | (1,087 | ) |  |  | (950 | )
Proceeds from issuance of ordinary shares and exercise of the underwriters' option |  |  | 48,550 |  |  |  | (1 | ) |  |  | 48,550 |  |  |  | - |
Issuance costs of ordinary shares and exercise of the underwriters' option |  |  | (2,820 | ) |  |  | - |  |  |  | (2,820 | ) |  |  | - |
Net change in short term loans from banks |  |  | (10,719 | ) |  |  | 4,668 |  |  |  | (4,350 | ) |  |  | 668 |
Net cash provided by (used in) financing activities |  |  | 34,495 |  |  |  | 4,157 |  |  |  | 40,293 |  |  |  | (282 | )
Net increase (decrease) in cash and cash equivalents and restricted cash |  |  | 38,139 |  |  |  | (921 | ) |  |  | 36,040 |  |  |  | (8,590 | )
Cash and cash equivalents and restricted cash at beginning of period |  |  | 5,335 |  |  |  | 9,273 |  |  |  | 7,434 |  |  |  | 16,942 |
Cash and cash equivalents and restricted cash at the end of period |  | $ | 43,474 |  |  | $ | 8,352 |  |  | $ | 43,474 |  |  | $ | 8,352 |
Supplementary information on investing and financing activities not involving cash flows: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Additions of operating lease right-of-use assets and operating lease liabilities |  | $ | 1,688 |  |  | $ | 245 |  |  | $ | 1,835 |  |  | $ | 590 |
Reclassification between inventory and property, plant and equipment |  |  | - |  |  |  | - |  |  |  | 579 |  |  |  | 60 |
Unpaid issuance costs of ordinary shares and exercise of the underwriters' option |  |  | 362 |  |  |  | - |  |  |  | 362 |  |  |  | - |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest paid |  |  | 249 |  |  |  | 410 |  |  |  | 516 |  |  |  | 852 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F - 7

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 1 - GENERAL
TAT Technologies Ltd., (“TAT” or the “Company”) an Israeli corporation, incorporated in 1985, is a leading provider of solutions and services to the aerospace and defense industries, focused on the following four segments: (i) Original Equipment Manufacturing (“OEM”) of heat transfer solutions and aviation accessories mainly through our Kiryat Gat facility ; (ii) Maintenance Repair and Overhaul (“MRO”) services for heat transfer components and OEM of heat transfer solutions through Limco Airepair Inc.; a wholly owned Delaware subsidiary of Limco-Piedmont Inc.; (iii) MRO services for aviation components (mainly Auxiliary Power Unit (“APU”) and Landing Gear (“LG”)) through Piedmont Aviation Component Services ., a wholly owned Delaware subsidiary of Limco-Piedmont Inc.; and (iv) overhaul and coating of jet engine components through Turbochrome LTD our wholly-owned subsidiary. TAT targets the commercial aerospace (serving a wide range of types and sizes of commercial and business jets), military aerospace and ground defense sectors. TAT’s shares are listed on both the NASDAQ (TATT) and Tel-Aviv Stock Exchange (“TAT Tech”).
TAT has the following wholly owned subsidiaries: Limco-Piedmont Inc. (“Limco-Piedmont”), Limco Airepair Inc., a wholly owned Delaware subsidiary of Limco-Piedmont, Piedmont Aviation Component Services LLC, a North Carolina limited liability company, wholly owned subsidiary of Limco-Piedmont Inc., and Turbochrome Ltd. (“Turbochrome”). Additionally, the Company holds 51% of TAT-Engineering LLC, which was established in January 2016 (“TAT-Engineering”) as a joint venture, hereinafter collectively referred to as the “Group”. The accounting treatment of the joint venture is based on the equity method due to variable participating rights granted to TAT Engineering.
In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon has also launched missile, rocket, and shooting attacks against Israeli military sites, troops, and Israeli towns in Northern Israel. Following the attacks, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. In addition, Israel faces threats from more distant neighbors such as terrorist groups in Yemen, which attached Israel and limited the movement of marine shipments to Israel through the Red Sea. Further, in June 2025, the Israel’s security cabinet declared a military operation against Iran, while Iran, in retaliation, launched hundreds of ballistic missiles toward Israel, some of which reached central areas. While most were intercepted by Israel’s multi-layered air defense systems, injuries were reported, and several casualties occurred. To date, the Company’s operations and financial results have not been materially affected. The Company expects that the current conflict in the Gaza Strip will not have a material impact on its business results in the short term. However, the intensity and duration of Israel’s current war is difficult to predict, as are such war’s economic implications on our business and operations and on Israel's economy in general.
Also, since this is an event beyond the Company’s control and may impact our Israeli activity, its continuation or cessation may affect our expectations. The Company continues to monitor its ongoing activities and will make any needed adjustments to ensure continuity of its business, while supporting the safety and well-being of its employees. For the three and six months ended on June 30, 2025, the Group’s activity in Israel contributed $11,860 and $24,132 out of total revenue of $43,104 and $85,246, respectively.
Furthermore, during 2025, global conflicts continue to create volatility in global financial and energy markets and contribute to supply chain shortages adding to the inflationary pressures in the global economy. These lead to higher material and labor costs, and as a result the Company decided to retain higher inventory levels. The Company actively collaborates with its suppliers to minimize the impacts of supply shortages on manufacturing and MRO services.
International operations are subject to a number of other risks, including import and export laws and the impact of tariffs. Changes in global tariff regimes, whether recently implemented or anticipated, may have broader implications for the Company’s operations. These may include increased volatility in purchasing prices due to shifting import costs, particularly with respect to raw materials and components sourced internationally. Furthermore, elevated tariffs can affect the pricing structure and profitability of cross-border transactions, potentially requiring adjustments to existing contracts with customers and suppliers located outside of the United States. While the full impact of these tariffs remains uncertain, since the Company serves its U.S. customers from production facilities in the U.S., the Company has ability to negotiate, and the tariffs will be substantially pass to customers. The Company is expecting minimal to no impact from the changes above.

F - 8

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

| a. | Basis of Presentation

The accompanying interim consolidated balance sheet as of June 30, 2025, the interim consolidated statements of income, interim statements of cash flows and the interim consolidated statements of shareholders’ equity for the three and six months ended June 30, 2025 and 2024 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting.
In management’s opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair statement of the Company’s financial position as of June 30, 2025, as well as its results of operations and cash flows for the three and six months ended June 30, 2025 and 2024.
The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for other interim periods or for future years.
The accompanying unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2024 (the “2024 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2025.

| b. | Fair value measurement

The Group measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

| ◾ | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

| ◾ | Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data or active market data for similar but not identical assets or liabilities.

| ◾ | Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

F - 9

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - | SIGNIFICANT ACCOUNTING POLICIES (CONT)

In determining fair value, the Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers credit risk in its assessment of fair value. During 2024, the Company ceased its hedging activity. Currently, the Company does not hold financial instruments measured at fair value on a recurring basis. The Company’s financial instruments consist mainly of cash and cash equivalents, restricted deposits, accounts receivable, accounts payable, accrued expenses and other liabilities. The fair value of these financial instruments approximates their carrying value.

| c. | Significant Accounting Policies

There have been no changes to the significant accounting policies described in the 2024 Annual Report that have had a material impact on the unaudited interim consolidated financial statements and related notes.

| d. | Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose the nature of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates.
As applicable to these financial statements, the most significant estimates and assumptions relate to recoverability of inventory, provision for current expected credit loss, and income taxes.

| e. | Concentrations of Credit Risk

Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents and deposits, derivatives and accounts receivable.
Cash and cash equivalents are deposited with several major banks in Israel and the United States. Such deposits in the United States and Israel may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Group's cash and cash equivalents are financially sound, and that the Group has not been affected by certain banking institutions in the U.S. Accordingly, minimal credit risk exists with respect to these financial instruments.
The Group has a relatively large number of customers with established private and public companies, and governmental institutions which mitigates the credit risk. The Group performs ongoing credit evaluation of its customers' financial condition. As part of the risk management, the Company purchased a credit insurance policy from a well-known insurance Company. As of June 30, 2025 and December 31, 2024 the Company has a single customer which represents 12.5% and 24% of the Company's accounts receivable, respectively.

| f. | Recently issued accounting pronouncements, not yet adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The ASU will be effective for fiscal years beginning after December 15, 2025, and allows adoption on a prospective basis, with a retrospective option. The Company is in the process of assessing the impact and method of adoption.
In November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entity’s expense and provides more detailed information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expense caption (such as cost of sales, SG&A and research and development). The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

F - 10

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 3 - INVENTORY
Inventory is composed of the following:

|  | June 30, 2025 |  |  | December 31, 2024 |
Raw materials and components |  | $ | 59,755 |  |  | $ | 50,197 |
Work in progress |  |  | 15,488 |  |  |  | 17,382 |
Finished goods |  |  | 1,171 |  |  |  | 961 |
Total inventory |  | $ | 76,414 |  |  | $ | 68,540 |

Inventories write down expenses due to slow inventory amounted to $590 and $240 for the periods ended June 30, 2025 and 2024, respectively.
The Company maintains a wide range of exchangeable units and other spare parts related to its products and services in various locations. Due to the long lead time of its suppliers and manufacturing cycles, the Company needs to forecast demand and commit significant resources towards these inventories. As such, the Company is subject to risks including excess inventory no longer relevant.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

| a. | Royalty commitments

The Group is committed to paying royalties as percentage of revenue or as a percentage of purchase in the amount range from 5% to 25% to certain OEM as part of the Company’s licenses agreements. Royalties expense was $1,090 and $1,168 for the three months ended June 30, 2025 and 2024, respectively. Royalties expense was $2,462 and $2,214 for the six months ended June 30, 2025 and 2024, respectively.

| b. | Litigation

On July 12, 2022, TAT filed a suit against TAT Industries Ltd. in the District Court of Tel Aviv. TAT had leased the Gedera facility from TAT Industries Ltd. until the termination of the lease agreement in 2022. TAT asserts that TAT Industries Ltd. has unlawfully forfeited a bank guarantee that was granted for the benefit TAT Industries Ltd. in connection with the lease in Gedera in the amount of $750 thousands. On December 28, 2022, TAT Industries Ltd. filed a counterclaim against TAT asserting damages caused by TAT in connection with the lease in Gedera. TAT intends to vigorously defend the counterclaim by TAT Industries Ltd. which is in a preliminary stage, and TAT cannot estimate at this stage what impact, if any, the litigation may have on its results of operations, financial condition, or cash flows.

| c. | Leases

During 2025, Piedmont signed a renewal of lease agreement for a facility in Greensboro, North Carolina, U.S., with a lease term that will expire on June 30, 2030. As a result, the Company recognized an operating ROU assets and related operating lease liability of approximately $1.6 million.

F - 11

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 5 - EARNINGS PER SHARE (“EPS”)
Basic earnings per share are based on the weighted average number of ordinary shares outstanding, net of treasury shares. Diluted EPS is based on those shares used in basic EPS plus shares that would have been outstanding assuming issuance of ordinary shares for all dilutive potential ordinary shares outstanding.

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Numerator for EPS: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 3,442 |  |  | $ | 2,617 |  |  | $ | 7,255 |  |  | $ | 4,727 |
Denominator for EPS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average shares outstanding – basic |  |  | 11,447,986 |  |  |  | 10,394,654 |  |  |  | 11,196,992 |  |  |  | 10,386,859 |
Dilutive shares |  |  | 218,323 |  |  |  | 166,766 |  |  |  | 212,496 |  |  |  | 335,294 |
Weighted average shares outstanding – diluted |  |  | 11,666,309 |  |  |  | 10,561,420 |  |  |  | 11,409,488 |  |  |  | 10,722,153 |
EPS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.30 |  |  | $ | 0.26 |  |  | $ | 0.65 |  |  | $ | 0.46 |
Diluted |  | $ | 0.30 |  |  | $ | 0.25 |  |  | $ | 0.64 |  |  | $ | 0.44 |

NOTE 6 - EQUITY TRANSACTION

| a. | Stock options

In February 2025, the Board of Directors approved the grant of 230 thousand options to officers and senior executives of the Company under the terms and conditions of the 2012 and 2022 Stock Option Plans. The grants have an exercise price of $29.93 per share, a grant date fair value of $3,257 thousand, and will vest over four years of which 25% shall vest after 12 months of the date of grant; and 6.25% shall vest at the end of each 3 months after the first anniversary of the date of grant. The fair value of share-based awards is estimated using the Black-Scholes valuation model and is recognized as stock base compensation expense over the requisite service period, net of estimated forfeitures. The fair value of the share-based awards for the six months ended June 30, 2025 was estimated using the following assumptions: (1) expected volatility of 50.0%, (2) expected option life of 4.6 years, (3) risk free interest rate of 4.5% and (4) dividend yield of 0%.

| b. | Increase authorized shares

At a special shareholder meeting in March 2025, TAT’s shareholders approved the increase of its authorized share capital from 13,000,000 to 15,000,000.

| c. | Public offering

On June 3, 2025, the Company completed a public offering of 1,625,000 of its ordinary shares, no par value per share, at a public offering price of $26.00 per share for gross proceeds of $42.3 million. The issuance costs incurred were $2.8 million, hence, generating net proceeds of $39.4 million.
In addition, 2,525,000 ordinary shares were sold by existing shareholders as part of the same offering.
On June 26, 2025, the underwriters exercised in full their option to purchase an additional 242,298 ordinary shares from the Company and 380,202 ordinary shares from selling stockholders at offering price of $26.00. The issuance costs incurred were $0.4 million. This resulted in additional net proceeds of approximately $6.0 million to the Company.
The net proceed for the Company from this public offering after issuance costs is $45.4 million.

F - 12

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 7 - SEGMENT INFORMATION

| a. | Segment Activities Disclosure:

TAT operates under four segments: (i) OEM of heat transfer solutions and aviation accessories mainly through its Kiryat Gat facility; (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components (mainly APU and LG) through its Piedmont subsidiary; and (iv) Overhaul and coating of jet engine components through its Turbochrome subsidiary.

| ◾ | OEM of heat transfer solutions and aviation accessories primarily include the design, development and manufacture of (i) broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board of commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft in and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.

| ◾ | MRO Services for heat transfer components and OEM of heat transfer solutions primarily include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT’s Limco subsidiary operates an FAA-certified repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers and the military.

| ◾ | MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components, as well as APU lease activity. TAT’s Piedmont subsidiary operates an FAA-certified repair station, which provides aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.

| ◾ | TAT’s activities in the area of overhaul and coating of jet engine components includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.

The Group’s chief operating decision-maker ("CODM") is the CEO of the Company. The CODM evaluate segment performance and allocate the Company’s resources, the CODM uses segment measures of revenue, gross profit, operating income and total assets. The CODM reviews budget-to-actual variances of both profit measures on a monthly basis when making decisions about allocation of the Company’s resources to the segments.

F - 13

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 7 - SEGMENT INFORMATION (CONT)

| b. | Segments statement operations disclosure:

The following financial information is the information that CODM uses for analyzing the segment results. The following financial information is a summary of the operating income of each operational segment:

|  | Six Months Ended June 30, 2025 |
|  | OEM of Heat Transfer Solutions and Aviation Accessories |  |  | MRO Services for heat transfer components and OEM of heat transfer solutions |  |  | MRO services for Aviation Components and Lease |  |  | Overhaul and coating of jet engine components |  |  | Elimination of inter-Company sales |  |  | Consolidated |
Revenues - external |  | $ | 19,694 |  |  | $ | 22,820 |  |  | $ | 38,294 |  |  | $ | 4,438 |  |  | $ | - |  |  | $ | 85,246 |
Revenues - internal |  |  | 390 |  |  |  | 845 |  |  |  | - |  |  |  | - |  |  |  | (1,235 | ) |  |  | - |
Cost of revenues |  |  | 13,887 |  |  |  | 16,962 |  |  |  | 32,745 |  |  |  | 2,191 |  |  |  | (1,318 | ) |  |  | 64,467 |
Gross profit |  |  | 6,197 |  |  |  | 6,703 |  |  |  | 5,549 |  |  |  | 2,247 |  |  |  | 83 |  |  |  | 20,779 |
Research and development |  |  | 320 |  |  |  | 312 |  |  |  | - |  |  |  | (68 | ) |  |  | - |  |  |  | 564 |
Selling and marketing |  |  | 903 |  |  |  | 1,136 |  |  |  | 1,797 |  |  |  | 277 |  |  |  | - |  |  |  | 4,113 |
General and administrative |  |  | 2,480 |  |  |  | 1,739 |  |  |  | 2,958 |  |  |  | 320 |  |  |  | - |  |  |  | 7,497 |
Operating income |  | $ | 2,494 |  |  | $ | 3,516 |  |  | $ | 794 |  |  | $ | 1,718 |  |  | $ | 83 |  |  |  | 8,605 |
Financial expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,158 | )
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 7,447 |

F - 14

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 7 - SEGMENT INFORMATION (CONT)

| b. | Segments statement operations disclosure (cont.)

|  | Six Months Ended June 30, 2024 |
|  | OEM of Heat Transfer Solutions and Aviation Accessories |  |  | MRO Services for heat transfer components and OEM of heat transfer solutions |  |  | MRO services for Aviation Components and Lease |  |  | Overhaul and coating of jet engine components |  |  | Elimination of inter-Company sales |  |  | Consolidated |
Revenues - external |  | $ | 18,382 |  |  | $ | 19,459 |  |  | $ | 29,163 |  |  | $ | 3,609 |  |  | $ | - |  |  | $ | 70,613 |
Revenues - internal |  |  | 507 |  |  |  | 1,499 |  |  |  | - |  |  |  | - |  |  |  | (2,006 | ) |  |  | - |
Cost of revenues |  |  | 12,275 |  |  |  | 17,632 |  |  |  | 25,396 |  |  |  | 2,186 |  |  |  | (1,926 | ) |  |  | 55,563 |
Gross profit |  |  | 6,614 |  |  |  | 3,326 |  |  |  | 3,767 |  |  |  | 1,423 |  |  |  | (80 | ) |  |  | 15,050 |
Research and development |  |  | 206 |  |  |  | 155 |  |  |  | 227 |  |  |  | 32 |  |  |  | - |  |  |  | 620 |
Selling and marketing |  |  | 1,124 |  |  |  | 964 |  |  |  | 1,377 |  |  |  | 188 |  |  |  | - |  |  |  | 3,653 |
General and administrative |  |  | 2,004 |  |  |  | 1,673 |  |  |  | 2,289 |  |  |  | 259 |  |  |  | - |  |  |  | 6,225 |
Other segment expenses (income) |  |  | - |  |  |  | (2 | ) |  |  | (388 | ) |  |  | - |  |  |  |  |  |  |  | (390 | )
Operating income |  | $ | 3,280 |  |  | $ | 536 |  |  | $ | 262 |  |  | $ | 944 |  |  | $ | (80 | ) |  |  | 4,942 |
Financial expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (756 | )
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,186 |

F - 15

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 7 - SEGMENT INFORMATION (CONT)

| b. | Segments statement operations disclosure (cont.)

The following financial information is the information that CODM uses for analyzing the segment results. The following financial information is a summary of the operating income of each operational segment:

|  | Three Months Ended June 30, 2025 |
|  | OEM of Heat Transfer Solutions and Aviation Accessories |  |  | MRO Services for heat transfer components and OEM of heat transfer solutions |  |  | MRO services for Aviation Components and Lease |  |  | Overhaul and coating of jet engine components |  |  | Elimination of inter-Company sales |  |  | Consolidated |
Revenues - external |  | $ | 9,608 |  |  | $ | 11,248 |  |  | $ | 19,996 |  |  | $ | 2,252 |  |  | $ | - |  |  | $ | 43,104 |
Revenues - internal |  |  | 53 |  |  |  | 277 |  |  |  | - |  |  |  | - |  |  |  | (330 | ) |  |  | - |
Cost of revenues |  |  | 6,714 |  |  |  | 8,139 |  |  |  | 16,700 |  |  |  | 1,083 |  |  |  | (357 | ) |  |  | 32,279 |
Gross profit |  |  | 2,947 |  |  |  | 3,386 |  |  |  | 3,296 |  |  |  | 1,169 |  |  |  | 27 |  |  |  | 10,825 |
Research and development |  |  | 171 |  |  |  | 172 |  |  |  | - |  |  |  | (103 | ) |  |  | - |  |  |  | 240 |
Selling and marketing |  |  | 452 |  |  |  | 582 |  |  |  | 1,009 |  |  |  | 142 |  |  |  | - |  |  |  | 2,185 |
General and administrative |  |  | 1,403 |  |  |  | 944 |  |  |  | 1,455 |  |  |  | 163 |  |  |  | - |  |  |  | 3,965 |
Operating income |  | $ | 921 |  |  | $ | 1,688 |  |  | $ | 832 |  |  | $ | 967 |  |  | $ | 27 |  |  |  | 4,435 |
Financial expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,100 | )
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 3,335 |

F - 16

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 7 - SEGMENT INFORMATION (CONT)

| b. | Segments statement operations disclosure (cont.)

|  | Three Months Ended June 30, 2024 |
|  | OEM of Heat Transfer Solutions and Aviation Accessories |  |  | MRO Services for heat transfer components and OEM of heat transfer solutions |  |  | MRO services for Aviation Components and Lease |  |  | Overhaul and coating of jet engine components |  |  | Elimination of inter-Company sales |  |  | Consolidated |
Revenues - external |  | $ | 9,367 |  |  | $ | 10,220 |  |  | $ | 15,191 |  |  | $ | 1,747 |  |  | $ | - |  |  | $ | 36,525 |
Revenues - internal |  |  | 222 |  |  |  | 728 |  |  |  |  |  |  |  |  |  |  |  | (950 | ) |  |  |  |
Cost of revenues |  |  | 5,936 |  |  |  | 9,497 |  |  |  | 12,832 |  |  |  | 1,101 |  |  |  | (825 | ) |  |  | 28,541 |
Gross profit |  |  | 3,653 |  |  |  | 1,451 |  |  |  | 2,359 |  |  |  | 646 |  |  |  | (125 | ) |  |  | 7,984 |
Research and development |  |  | 96 |  |  |  | 91 |  |  |  | 128 |  |  |  | 28 |  |  |  | - |  |  |  | 343 |
Selling and marketing |  |  | 470 |  |  |  | 590 |  |  |  | 813 |  |  |  | 120 |  |  |  | - |  |  |  | 1993 |
General and administrative |  |  | 968 |  |  |  | 757 |  |  |  | 1,127 |  |  |  | 64 |  |  |  | - |  |  |  | 2,916 |
Other segment expenses (income) |  |  | (2 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |  |  |  | (2 | )
Operating income |  | $ | 2,121 |  |  | $ | 13 |  |  | $ | 291 |  |  | $ | 434 |  |  | $ | (125 | ) |  |  | 2,734 |
Financial expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (307 | )
Income before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,427 |

F - 17

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 7 - SEGMENT INFORMATION (CONT)

| c. | The following financial information identifies the assets, depreciation and amortization, and capital expenditures to segments:

|  | Six Months Ended June 30, 2025 |
|  | OEM of Heat Transfer Solutions and Aviation Accessories |  |  | MRO Services for heat transfer components and OEM of heat transfer solutions |  |  | MRO services for Aviation Components and Lease |  |  | Overhaul and coating of jet engine components |  |  | Amounts not allocated to segments |  |  | Consolidated |
Total assets |  | $ | 73,499 |  |  | $ | 43,516 |  |  | $ | 87,423 |  |  | $ | 11,033 |  |  | $ | (1,836 | ) |  | $ | 213,635 |
Depreciation and amortization |  |  | 408 |  |  |  | 543 |  |  |  | 1,466 |  |  |  | 175 |  |  |  | (79 | ) |  |  | 2,513 |
Expenditure for segment assets |  |  | 1,502 |  |  |  | 332 |  |  |  | 4,167 |  |  |  | 164 |  |  |  | - |  |  |  | 6,165 |

|  | Year Ended December 31, 2024 |
|  | OEM of Heat Transfer Solutions and Aviation Accessories |  |  | MRO Services for heat transfer components and OEM of heat transfer solutions |  |  | MRO services for Aviation Components and Lease |  |  | Overhaul and coating of jet engine components |  |  | Amounts not allocated to segments |  |  | Consolidated |
Total assets |  | $ | 33,726 |  |  | $ | 40,698 |  |  | $ | 80,014 |  |  | $ | 10,182 |  |  | $ | (1,258 | ) |  | $ | 163,362 |
Depreciation and amortization |  |  | 642 |  |  |  | 1,040 |  |  |  | 3,412 |  |  |  | 388 |  |  |  | (27 | ) |  |  | 5,455 |
Expenditure for segment assets |  |  | 1,972 |  |  |  | 1,124 |  |  |  | 1,347 |  |  |  | 683 |  |  |  | - |  |  |  | 5,126 |

F - 18

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 8 - REVENUES

| a. | Total revenues - by geographical location were attributed according to customer residential country as follows:

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Sale of Products |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 6,695 |  |  | $ | 6,959 |  |  | $ | 14,676 |  |  | $ | 14,134 |
Europe |  |  | 1,344 |  |  |  | 886 |  |  |  | 2,487 |  |  |  | 1,585 |
Israel |  |  | 2,523 |  |  |  | 908 |  |  |  | 4,294 |  |  |  | 1,808 |
Other |  |  | 1,901 |  |  |  | 2,979 |  |  |  | 3,730 |  |  |  | 6,140 |
|  | $ | 12,463 |  |  | $ | 11,732 |  |  | $ | 25,187 |  |  | $ | 23,667 |

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Sale of Services |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 20,680 |  |  | $ | 18,646 |  |  | $ | 41,401 |  |  | $ | 34,643 |
Europe |  |  | 4,507 |  |  |  | 1,936 |  |  |  | 7,985 |  |  |  | 4,438 |
Israel |  |  | 1,670 |  |  |  | 1,283 |  |  |  | 3,273 |  |  |  | 2,494 |
Other |  |  | 3,784 |  |  |  | 2,928 |  |  |  | 7,400 |  |  |  | 5,371 |
|  | $ | 30,641 |  |  | $ | 24,793 |  |  | $ | 60,059 |  |  | $ | 46,946 |

| b. | Contract liabilities:

|  | June 30, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Opening balance |  | $ | 6,928 |  |  | $ | 5,239 |
Revenue deferrals |  |  | 1,578 |  |  |  | 7,012 |
Revenue recognized |  |  | (2,555 | ) |  |  | (5,323 | )
Closing balance |  | $ | 5,951 |  |  | $ | 6,928 |

F - 19

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 9 – SUBSEQUENT EVENTS
On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act, which changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. The Company is still in the process of evaluating the impact of this new legislation to provision for income taxes, deferred tax assets, deferred tax liabilities, and to income taxes payable in the period of enactment and will continue to assess the impact the new legislation will have on the consolidated financial statements.

F - 20