UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 20-F

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _____________

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br><br> <br><br><br> <br>Date of event requiring this shell company report ...........................

Commission file number: 0-16050

TAT TECHNOLOGIES LTD. (Exact name of Registrant as specified in its charter and translation of Registrant’s name into English)

Israel(Jurisdiction of incorporation or organization)

9335 Harris Corners Pwky Charlotte, NC 28269(Address of principal executive offices)

Ehud Ben-Yair

Chief Financial Officer

Telephone: (704) 910-2215

Email: ehudb@tat-technologies.com

9335 Harris Corners Pkwy Charlotte, NC 28269

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Ordinary Shares, no par value per share	TATT	NASDAQ Global Market

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or Common stock as of the close of the period covered by the annual report:

12,983,137 Ordinary Shares, no par value

(as of December 31, 2025)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☒	Non-accelerated filer ☐<br><br> <br>Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒	International Financial Reporting Standards as issued by the International Accounting Standards Board ☐	Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Page

INTRODUCTION			1
PART I			3
Item 1.	Identity of Directors, Senior Management and Advisers		3
Item 2.	Offer Statistics and Expected Timetable		3
Item 3.	Key Information		3
	A.	Selected Financial Data	3
	B.	Capitalization and Indebtedness	3
	C.	Reasons for the Offer and Use of Proceeds	3
	D.	Risk Factors	3
Item 4.	Information on the Company		22
	A.	History and Development of TAT	22
	B.	Business Overview	25
	C.	Organizational Structure	50
	D.	Property, Plants and Equipment	50
Item 4A.	Unresolved Staff Comments		52
Item 5	Operating and Financial Review and Prospects		52
	A.	Company Overview	52
	B.	Key Indicators	53
	C.	Results of operations	53
	D.	Critical Accounting Policies and Estimates	59
	E.	Conditions in Israel	60
	F.	Trade Relations	61
	G.	Impact of Currency Fluctuation and of Inflation	61
	H.	Corporate Tax Rate	62
	I.	Recently Issued Accounting Standards	62
	J.	Recently adopted accounting pronouncements:	63
	K.	Liquidity and Capital Resources	63
	L.	Research and Development, Patents and Licenses	66
	M.	Trend Information	66
	N.	Off-Balance Sheet Arrangements	66
Item 6.	Directors, Senior Management and Employees		67
	A.	Directors and Senior Management	67
	B.	Compensation of Directors and Executive Officers	71
	C.	Board Practices	73
	D.	Employees	85
	E.	Share Ownership	86
	F.	Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation	88
Item 7.	Major Shareholders and Related Party Transactions		88
	A.	Major Shareholders	88
	B.	Related Party Transactions	91
	C.	Interests of Experts and Counsel	91
Item 8.	Financial Information		91
	A.	Consolidated Statements and Other Financial Information	91
	B.	Significant Changes	92
Item 9.	The Offer and Listing		93
	A.	Offer and Listing Details	93
	B.	Plan of Distribution	93
	C.	Markets	93
	D.	Selling Shareholders	93
	E.	Dilution	93
	F.	Expense of the Issue	93

Item 10.	Additional Information		94
	A.	Share Capital	94
	B.	Memorandum and Articles of Association	94
	C.	Material Contracts	95
	D.	Exchange Controls	95
	E.	Taxation	96
	F.	Dividends and Paying Agents	111
	G.	Statement by Experts	111
	H.	Documents on Display	111
	I.	Subsidiary Information	112
	J.	Annual Report to Security Holders	112
Item 11.	QQuantitative and Qualitative Disclosures about Market Risk	112
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Item 12.	Description of Securities Other than Equity Securities	112
PART II		113
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Item 13.	Defaults, Dividend Arrearages and Delinquencies	113
Item 14.	Material Modifications to the Rights of Security Holders	113
Item 15.	Controls and Procedures	113
Item 16.	Reserved	115
Item 16A.	Audit Committee Financial Expert	115
Item 16B.	Code of Ethics	115
Item 16C.	Principal Accountants Fees and Services	116
Item 16D.	Exemptions from the Listing Standards for Audit Committee	117
Item 16E.	Purchase of Equity Securities By Issuer and Affiliated Purchases	117
Item 16F.	Change in Registrant’s Certifying Accountant.	117
Item 16G.	Corporate Governance.	117
Item 16H.	Mine Safety Disclosure	117
Item 16I.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	117
Item 16J.	Insider Trading Policies	118
Item 16K.	Cybersecurity	118
PART III		119
Item 17.	Financial Statements	119
Item 18.	Financial Statements	119
Item 19.	Exhibits	119

INTRODUCTION

TAT Technologies Ltd. (“TAT”) is a leading provider of solutions and services to the aerospace and defense industries, focused mainly on three product areas and services: Thermal Management, Power and Actuation and Maintenance, Repair and Overhaul.

TAT employed, as of December 31, 2025, 659 employees and operates in three locations: its facility in Kiryat Gat, Israel (TAT Israel and “Turbochrome”); Limco Airepair Inc. (“Limco”) in Tulsa, Oklahoma; and Piedmont Aviation Component Services LLC (“Piedmont”) in Greensboro, North Carolina; the Company is incorporated in the State of Israel and its principal executive offices are located in Charlotte, North Carolina.

The Company operates four operational units: (i) original equipment manufacturing (“OEM”) of heat transfer solutions and aviation accessories through its Kiryat Gat facility (“TAT Israel”); (ii) maintenance repair and overhaul (“MRO”) services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components through its Piedmont subsidiary (mainly APU and LG); and (iv) overhaul and coating of jet engine components through its Turbochrome 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 has a global presence with hundreds of customers worldwide, including OEMs and tier one players in their respective markets such as Boeing, Embraer, Lockheed Martin Corporation (“Lockheed Martin”), Collins, Liebherr, Parker, the U.S. Armed Forces, and airlines such as American Airlines, Lufthansa and others, and cargo carriers such as UPS, FedEx, and DHL among others.

TAT has earned a strong reputation for its quality and service-oriented approach, reflected in its long-standing customer relationships. The Company’s operations are backed by a wide range of certifications from the American, European, British and Chinese civil aviation authorities.

Through TAT Israel, TAT is an OEM of a broad range of heat transfer solutions, air conditioning systems and other cooling systems used in mechanical and electronic systems on board military and commercial aircraft as well as in ground systems. TAT Israel is also an OEM for a wide range of aviation accessories and provides MRO services for military and commercial customers, mainly for aviation accessories. TAT Israel is a repair station certified by the Federal Aviation Administration (“FAA”).

Through its Limco subsidiary, TAT provides MRO services for airlines, air cargo carriers, maintenance service centers and the military, primarily for heat transfer components. Limco is a repair station certified by the FAA and the European Aviation Safety Agency (“EASA”). Limco is also an OEM of heat transfer solutions for some of the largest OEMs in the commercial and military industry.

Through its Piedmont subsidiary, TAT provides MRO services for aviation components in the area of landing gear, Auxiliary Power Units (“APUs”) and Machining and Plating services (“MPG”). Piedmont has a growing Trading and Leasing group that leases APUs (Boeing: 757, 767, 777, 737 and Airbus: A320) and purchases and sells parts for the repair of APUs globally. Piedmont is an FAA-certified repair station and provides its services to airlines, air cargo carriers, maintenance service centers and to the military.

Through its Turbochrome subsidiary, TAT provides MRO services in the area of jet engine overhaul, which includes the overhaul and coating of jet engine components such as turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps. Turbochrome is certified by the FAA, the EASA and the US Military.

In addition, TAT, through its Piedmont subsidiary, holds less than 5% of the equity securities of First Aviation Services Inc. (“FAvS”).

TAT’s ordinary shares are publicly traded on the NASDAQ Global Market (“NASDAQ”) under the symbol “TATT” and on the Tel Aviv Stock Exchange (“TASE”) under the symbol “TAT Tech”. As used in this annual report, the terms “TAT”, the “Company”, “we,” “us,” and “our” mean TAT Technologies Ltd. and its consolidated subsidiaries, unless otherwise indicated.

TAT consolidated financial statements appearing in this annual report are prepared in U.S. dollars and in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). All references in this annual report to “dollars” or “$” are to U.S. dollars and all references in this annual report to “NIS” are to Israeli New Shekels.

Statements made in this annual report concerning the contents of any contract, agreement or other document are summaries of such contracts, agreements or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this annual report or to any previous filing with the Securities and Exchange Commission (“SEC”), you may read the document itself for a complete recitation of its terms.

Except for the historical information contained in this annual report, the statements contained in this annual report may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended, with respect to our business, financial condition and results of operations. Such forward-looking statements reflect our current view with respect to future events and financial results. Statements which use the terms “believe,” “expect,” “plan,” “intend,” “estimate,”, “anticipate”, “predict” and similar expressions are intended to identify forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, our achievements, or industry results, to be materially different from any future results, performance, levels of activity, our achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly release any update or revision to any forward-looking statements to reflect new information, future events or circumstances, or otherwise after the date hereof. We have attempted to identify significant uncertainties and other factors affecting forward-looking statements in the Risk Factors that appear in Item 3D. “Key Information - Risk Factors.”

PART

Item 1. Identity

of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer

Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

A.

Reserved.

B.

Capitalization and Indebtedness

Not applicable.

C.

Reasons for the Offer and Use of Proceeds

Not applicable.

D.

Risk Factors

Investing in our ordinary shares involves certain risks and uncertainties. You should carefully consider the risks and uncertainties described below before investing in our ordinary shares. Our business, prospects, financial condition and results of operations could be adversely affected due to any of the following risks. In that case, the value of our ordinary shares could decline, and you could lose all or part of your investment. This annual report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this annual report.

Risks Related to Our Business and Our Industry

•	The aerospace industry is subject to significant regulation and oversight, and TAT<br> and its subsidiaries may incur significant fines, penalties and costs if TAT and its subsidiaries do not comply with these regulations.
•	TAT competes with a number of established companies in all aspects of TAT’s<br> business, many of which have significantly greater resources or capabilities than TAT.
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•	TAT derives a material share of its revenues from few major customers. If TAT loses<br> any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected.
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•	A part of the revenues of TAT and its subsidiaries are from contracts with the<br> U.S. and Israeli governments and are subject to special risks. A loss of all, or a major portion, of these revenues from government contracts<br> could have a material adverse effect on TAT’s operations.
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•	If TAT and its subsidiaries do not receive the governmental approvals necessary for<br> the export of their products, TAT’s revenues may decrease. Similarly, if TAT’s suppliers and partners do not receive their<br> government approvals necessary to export their products or designs to TAT, TAT’s revenues may decrease.
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•	TAT depends on a limited number of suppliers of components for certain of its products<br> and if TAT or any of its subsidiaries are unable to obtain these components when needed, they would experience delays in manufacturing<br> their products and TAT’s financial results could be adversely affected.
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•	TAT may face increased labor and raw materials costs. TAT may not be able to recoup<br> future increases in the cost of wages and raw materials required for its operations through price increases for its products.
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•	TAT’s future success depends on its ability to develop new offerings and technologies.
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•	TAT may face significant risks in the management of its inventory, while failure to<br> effectively manage its inventory levels may result in supply imbalances that could harm its business.
•	TAT’s backlog of projects under contract is subject to unexpected adjustments,<br> delays in payments and cancellations.
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•	TAT faces special risks from international sales operations which may have a material<br> adverse effect on TAT’s business, operating results and financial condition.
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•	TAT may engage in future acquisitions that could dilute TAT’s shareholders’<br> equity and harm TAT’s business, results of operations and financial condition.
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•	Our strategic partnerships and relationships carry inherent business risks.
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•	Rapid technological changes may adversely affect the market acceptance of TAT’s<br> products.
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•	TAT has fixed-price contracts with some of its customers and TAT bears the risk of<br> costs in excess of its estimates. In addition, TAT may not be able to pass on increased costs to its customers.
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•	TAT depends on its key executives; it may not be able to hire and retain additional<br> key employees or successfully integrate new members of its team; the loss of key employees could have a material adverse effect on TAT’s<br> business.
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•	TAT depends on its manufacturing and MRO facilities and any material damage to these<br> facilities may adversely impact TAT’s operations.
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•	TAT uses equipment that is not easily repaired or replaced, and therefore material<br> equipment failures could cause TAT or its subsidiaries to be unable to meet quality or delivery expectations of its customers.
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•	TAT may fail to maintain effective internal controls in accordance with Section 404<br> of the Sarbanes-Oxley Act of 2002.
•	TAT has potential exposure to liabilities arising under environmental laws and regulations.
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•	TAT is exposed to potential liabilities arising from product liability and warranty<br> claims.cy
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•	Significant disruptions of TAT’s information technology systems or breaches of<br> its data security could adversely affect TAT’s business.
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•	TAT’s activity in Israel may be adversely affected by a change in the exchange<br> rate of the NIS against the U.S Dollars. As exchange rates between the NIS and the dollar fluctuate continuously, exchange rate<br> fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons<br> of TAT’s results.
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Risk Factors Related to Our Ordinary Shares

•	TAT’s share price has been volatile in the past and may decline in the future.

Risks Relating to Our Location in Israel

•	Because TAT has significant operations in Israel, TAT may be subject to political,<br> economic and other conditions affecting Israel that could increase TAT’s operating expenses and disrupt TAT’s business.
•	The war in Israel and other conditions in Israel could materially affect TAT’s<br> business.
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•	TAT’s results of operations may be negatively affected by the obligation of its<br> personnel to perform military service.
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•	Your rights and responsibilities as a shareholder are governed by the Israeli law and<br> may differ in some respects from the rights and responsibilities of shareholders under U.S. law.
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•	Israeli law may delay, prevent or make difficult an acquisition of TAT, which could<br> prevent a change of control and, therefore, depresses the price of TAT’s shares.
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•	Investors and TAT’s shareholders generally may have difficulties enforcing<br> a U.S. judgment against TAT, TAT’s executive officers and directors in Israel or the United States, or asserting U.S. securities<br> laws claims in Israel.
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•	As a foreign private issuer whose shares are listed on the NASDAQ, TAT may follow certain<br> home country corporate governance practices instead of certain NASDAQ requirements.
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Risks Related to Our Business and Our Industry

The aerospace industry is subject to significant regulation and oversight, and TAT and its subsidiaries may incur significant fines, penalties and costs if TAT and its subsidiaries do not comply with these regulations.

The aerospace industry is highly regulated in the United States and internationally. In order to manufacture, sell and service parts used in aircrafts, TAT and its subsidiaries must be certified, accepted by regulatory authorities such as the FAA, the EASA, the United States Department of Defense, comparable agencies in other countries and/or by the original equipment manufacturers (“OEMs”). If any of our material certifications, authorizations, permits or approvals are revoked or suspended, TAT’s or its subsidiaries’ operations could be subjected to significant fines and penalties. Furthermore, new and more demanding government regulations may be adopted in the future, or industry oversight may be increased. TAT and its subsidiaries may need to incur significant additional costs to achieve compliance with new regulations or to reacquire a revoked or suspended license or approval, which could materially reduce profitability.

TAT competes with a number of established companies in all aspects of TAT’s business, many of which have significantly greater resources or capabilities than TAT.

TAT faces competition from several well-established companies, many of which possess greater resources and capabilities than TAT’s major competitors in the area of OEM heat transfer solutions and aviation accessories, are other OEMs who manufacture heat transfer solutions. These include:

(i)	Manufacturers based in the United States, such as the Hughes-Treitler division of Ametek Inc., Boyd Corporation, Collins Aerospace,<br> Honeywell International, and Triumph Thermal Systems;
(ii)	Manufacturers based in Europe such as HS Marston Aerospace Ltd., a subsidiary of Collins Aerospace, Secan and Liebherr-Aerospace<br> Toulouse S.A.; and
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(iii)	Manufacturers based in Asia such as Sumitomo Precision Products from Japan.
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Many of TAT's competitors are larger and possess considerably greater resources, including market recognition. These advantages can allow them to achieve greater economies of scale and make them less susceptible to price competition compared to TAT. Additionally, some of these companies are recognized as tier-one suppliers, offering the customers a broader range of systems and products, alongside heat transfer solutions, as a complete package. TAT may struggle to provide its products as part of integrated systems to the same degree as its competitors. Failing to meet these challenges could negatively impact on TAT's business, financial health, and operational results in the long term.

TAT’s major competitors in the area of MRO services for heat transfer components are the MRO Divisions of OEMs, including Honeywell, Honeywell Secan, Honeywell Singapore, Collins Aerospace Malaysia, Collins Aerospace Maastricht, and Liebherr Aerospace Saline, in addition to the in-house maintenance services of various commercial airlines and other independent service providers, including AAR, Drake Air – Ametek, American Cooler Service – Aviation Technical Services, Lufthansa Technik and Parker Hannifin.

TAT’s major competitors in the area of MRO services for aviation components, landing gear and APUs, are the service divisions of OEMs, the in-house maintenance services of various commercial airlines and other independent service providers, including Standard Aero Group Inc., Aerotech International Inc., Honeywell International, AAR Corp., Safran, Liebherr, Turbine Aero, Hawker Pacific and APRO.

TAT’s major competitors in the area of overhaul and coating of jet engine components are the service divisions of OEMs, the in-house maintenance services of various commercial airlines and other independent service providers, including Safran, General Electric, GKN, PAS MCT Japan and others. With respect to masking materials, TAT's major competitors are APV Coatings, Praxair, Saint-Gobain and others.

Competition in the MRO market is based on turn-around time, price, capacity, quality, engineering solutions, and breadth of services. A number of our competitors have inherent competitive advantages. For example, we compete with the service divisions of large OEMs which are able to derive significant brand recognition from their OEM manufacturing activities. We also compete with the in-house service divisions of large commercial airlines where there is a strong incentive for an airline to fully utilize the services of its maintenance employees and facilities.

Further, TAT’s competitors may have additional competitive advantages, such as:

• The ability to adapt faster to changes in customer requirements and industry conditions or trends;

• Greater access to capital;

• Stronger relationships with customers and suppliers;

• Greater name recognition;

• Access to superior technology and greater marketing resources;

• The ability to offer complete systems in addition to components; and

• The ability to bundle heat transfer components and solutions and other aircraft components.

If TAT is unable to overcome these competitive disadvantages, then TAT’s business, financial condition and results of operations would be adversely affected.

TAT derives a material share of its revenues from few major customers. If TAT loses any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected.

Five customers accounted for approximately 32.6%, 29.9% and 28.46% of TAT’s revenues for the years ended December 31, 2025, 2024 and 2023, respectively. TAT has a single customer of MRO that accounted for approximately 14.5%, 12.8% and 12.6% of TAT’s revenues for the years ended December 31, 2025, 2024 and 2023, respectively. TAT’s major customers may not maintain the same volume of business with TAT in the future. If TAT loses any of these customers or they reduce the amount of business they do with TAT, TAT’s revenues may be seriously affected.

A part of the revenues of TAT and its subsidiaries

are from contracts with the U.S. and Israeli governments and are subject to special risks. A loss of all, or a major portion, of these revenues from government contracts could have a material adverse effect on TAT’s operations.

A portion of the revenues of TAT and its subsidiaries are from contracts with the U.S. and Israeli governments. Sales to the U.S. and Israeli governments accounted for approximately 9.3%, 12.4% and 8.3% of TAT’s revenues on a consolidated basis for the years ended December 31, 2025, 2024 and 2023, respectively.

Business with the U.S. and Israeli governments, as well as with the governments of other countries, is subject to unique risks which do not exist when doing business with other private parties. These risks include the ability of the governmental authorities to unilaterally:

•	Suspend TAT or any of its subsidiaries from receiving new contracts pending resolution of alleged violations of procurement laws<br> or regulations;

• Terminate existing contracts, with or without cause, at any time;

• Condition the receipt of new contracts on conditions which are beyond the control of TAT;

• Reduce the value of existing contracts;

•	Audit the contract-related costs and fees of TAT and its subsidiaries, including allocated<br> indirect costs; and

• Control or prohibit the export of products of TAT and its subsidiaries.

Also, military and defense budget cuts may result in reduced demand for the products and manufacturing services of TAT and its subsidiaries. Smaller budgets could lead to a reduction in the business revenues of TAT and its subsidiaries.

If TAT and its subsidiaries do

not receive the governmental approvals necessary for the export of their products, TAT’s revenues may decrease. Similarly, if TAT’s suppliers and partners do not receive their government approvals necessary to export their products or designs to TAT, TAT’s revenues may decrease.

Under Israeli law, the export of certain products and know-how of TAT and its subsidiaries is subject to approval by the Israeli Ministry of Defense. Prior to initiating sales proposals for the export of these products and know-how and prior to the actual shipment of such products or know-how, TAT and its subsidiaries must obtain permits from the Israeli Ministry of Defense. TAT and its subsidiaries may not be able to receive in a timely manner, or at all, all the required permits for which they may apply in the future.

Similarly, many countries have laws according to which the export of certain military products, technical designs and spare parts require the prior approval of, or an export license from, their governments. This process also applies to our partners and suppliers. If TAT and its subsidiaries or its partners and suppliers are unable to receive all the required permits and/or licenses in a timely manner, or at all, TAT’s revenues may decrease.

TAT depends on a limited number of suppliers of components for certain of its products and if TAT or any of its subsidiaries are unable to obtain these components when needed, they would experience delays in manufacturing their products and TAT’s financial results could be adversely affected.

TAT relies on a limited number of key suppliers for parts for certain of its OEM activities and MRO services. Some of these suppliers are currently the sole source of one or more components upon which TAT is dependent. For example, Honeywell International Inc. is a key supplier to TAT of APU spare parts and of certain other components used by TAT and its subsidiaries for OEM activities and in the provision of MRO services. TAT's subsidiary, Piedmont, is a Honeywell licensed Authorized Repair Center for APUs under two separate agreements, for military and commercial applications. In September 2020, Piedmont entered into a ten-year agreement with Honeywell for commercial application. Under this agreement, Piedmont is designated as an authorized MRO station under Honeywell's license.

Suppliers of some of these components require TAT to place orders with significant lead times to assure supply in accordance with TAT’s requirements. A delay in the supply of these components can significantly delay the delivery of our products and services. If TAT were to engage in a commercial dispute with or be unable to obtain adequate supplies of parts from these suppliers at commercially reasonable prices or within the required lead time, TAT could experience delays in manufacturing, and its financial results could be adversely affected. Increased costs associated with supplied materials or components could increase TAT’s costs and reduce TAT’s profitability if TAT is unable to pass these cost increases on to its customers.

TAT may be affected by changes in government trade policies and international trade disputes that result in tariffs and other protectionist measures, which could adversely affect our business in the future.

The U.S. government and the current administration have made public statements and taken certain actions indicating significant changes in U.S. trade policy, including imposing new or increased tariffs on certain goods imported into the United States from Canada, Mexico and China. In response, a number of other countries have announced an intention to impose additional duties on imports from the United States. To date, our business has not been affected by such actions. However, changes in government trade policies and international trade disputes that result in tariffs and other protectionist measures could adversely affect our business in the future.

TAT may face increased labor and raw materials costs. TAT may not be able to recoup future increases in the cost of wages and raw materials required for its operations through price increases for its products.

We are impacted by inflationary increases in wages and the cost of raw materials. In all countries in which we operate, wage and benefit inflation, whether driven by competition for talent or ordinary course pay increases and other inflationary pressures, may increase our cost of providing services and reduce our profitability. Decreases in the availability of supplies, increases in the cost of supplies, and delivery issues have caused shortages and delays, as well as increased costs for the procurement of raw materials, components, and other supplies required for our performance. TAT may not be able to recoup future increases in the cost of labor and raw materials through price increases for its products and services. Our operating profits and margins under our contracts could be adversely affected by these factors, particularly if the current inflationary pressures are prolonged. If TAT is unable to obtain the raw materials required for its operations, TAT could experience delays or disruptions in the provision of its services, and its financial results could be adversely affected.

TAT’s future success depends on its ability to develop new offerings and technologies.

The markets we serve are characterized by rapid changes in technologies and evolving industry standards. In addition, some of our products are installed on, and some of our services are provided in connection with platforms that may have a limited life or become obsolete. Unless we develop new offerings or enhance our existing offerings, we may be susceptible to loss of market share resulting from the introduction of new or enhanced offerings by competitors.

TAT may face significant risks in the management of its inventory, while failure to effectively manage its inventory levels may result in supply imbalances that could harm its business.

We maintain an inventory of exchangeable units of heat transfer solutions, aviation accessories, aviation components, APUs, landing gear, engine blades and coating materials and other spare parts related to our products and services in various locations, including with third party logistics providers. Due to the long lead time of our suppliers and manufacturing cycles, we need to forecast demand and commit significant resources towards these inventories. As such, we are subject to significant risks in managing the inventory needs of our business, including estimates of the appropriate demand across our products. Should actual market conditions differ from our estimates, our future results of operations could be materially adversely affected. In the future, we may be required to record write-downs of finished products and materials on-hand as a result of future changes in our sales forecasts.

TAT’s backlog of projects under contract is subject to unexpected adjustments, delays in payments and cancellations.

Our backlog includes purchase orders received from our customers for our products or services and our estimation of the maximum potential revenues that are expected to be derived from frame agreements with our customers over the life of the contract or 10 years – the lower of the two. There is no legal obligation from the customer to purchase our products or services under those frame agreements. In addition, we use estimations to evaluate the potential revenue from these agreements. From time to time, for reasons beyond our control, projects are delayed, scaled back, suspended or cancelled, or the customer delays making payments, which may adversely affect the revenue, profit and cash flow that we ultimately receive from contracts reflected in our backlog.

TAT faces special risks from international sales operations which may have a material adverse effect on TAT’s business, operating results and financial condition.

For the years ended December 31, 2025, 2024 and 2023, approximately 92%, 94% and 93% of TAT’s sales, respectively, resulted from TAT’s international sales (i.e., excluding Israel). This revenue concentration is subject to various risks, including:

• Governmental embargoes or foreign trade restrictions;

• Changes in U.S. and foreign governmental regulations;

• Changes in foreign exchange rates;

• Tariffs;

• Other trade barriers;

• Political, economic and social instability; and

• Difficulties collecting accounts receivable.

Accordingly, TAT and its subsidiaries may encounter significant difficulties in connection with the sale of their products in international markets.

TAT may engage in future acquisitions that could dilute TAT’s shareholders’ equity and harm TAT’s business, results of operations and financial condition.

TAT has pursued, and will continue to pursue, growth opportunities through organic growth as well as the acquisition of businesses, products and technologies.

TAT is unable to predict whether or when any prospective acquisition will be completed. TAT may not be able to successfully identify suitable acquisition candidates, complete acquisitions, integrate the acquired businesses into its operations, or expand into new markets. The process of integrating an acquired business may be prolonged due to unforeseen difficulties and may require a disproportionate amount of TAT’s resources, including management attention. Furthermore, once integrated, acquisitions may not achieve comparable levels of revenues, profitability or productivity as TAT’s existing business or otherwise perform as expected. The occurrence of any of these events could harm TAT’s business, financial condition or results of operations. Future acquisitions may require substantial capital resources, which may require TAT to seek additional debt or equity financing.

Future acquisitions by TAT could result in the following, any of which could materially harm TAT’s results of operations or the price of TAT’s ordinary shares:

•	Issuance of equity securities that would dilute TAT’s shareholders’ percentages of ownership;
•	Large one-time write-offs;
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•	The incurrence of debt and contingent liabilities;
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•	Difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the<br> acquired companies;
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•	Diversion of management’s attention from other business activities and concerns;
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•	Contractual disputes;
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•	Risks of entering geographic and business markets in which TAT has no or only limited prior experience; and
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•	Potential loss of key employees of acquired organizations.
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Our strategic partnerships and relationships carry inherent business risks.

We may participate in strategic partnerships and joint ventures in a various countries. For example, we have signed a joint venture agreement with the Russian-based company Engineering (as defined below), to establish a new facility for the provision of MRO services for heat transfer components in Russia and the Commonwealth of Independent States (“CIS”).

Our actions with respect to these affiliated companies may be partially restricted by shareholders agreements entered into with our strategic partners. Our business, financial condition, results of operations and prospects may be materially harmed if disagreements arise with our partners. Additionally, our ability to withdraw funds and dividends from these entities may depend on the consent of such partners. If one of our strategic partners becomes subject to investigation, sanctions or liability, TAT might be adversely affected. Furthermore, strategic partnerships in emerging markets are accompanied by risks inherent to those markets, such as an increased probability of a partner defaulting on obligations or losing a partner with important insights in that region. Strategic partnerships in emerging markets are subject to greater risks than strategic partnerships in more developed markets, including significant political, legal and economic risks and risks related to fluctuations in currencies

Rapid technological changes may adversely affect the market acceptance of TAT's products.

The aerospace and defense markets in which TAT competes are subject to technological changes, introduction of new products, changes in customer demands and evolving industry standards. For example, new materials, new structures and 3D printing – a technology based on the principle of joining thin layers of materials, in horizontal cross-section, to build up a real, three-dimensional object from a digital model – may enable the manufacturing of high-quality and new characterization heat exchangers in serial production with a better return of value. The future success of TAT will depend upon its ability to keep pace with technological developments and to timely address the increasingly sophisticated needs of its customers by supporting existing and new technologies and by developing enhancements to its current products and by introducing new ones.

TAT has fixed-price contracts with some of its customers and bears the risk of costs in excess of its estimates. In addition, TAT may not be able to pass on increased costs to its customers.

TAT has entered into multi-year, fixed-price contracts with some of its MRO and OEM customers. Pursuant to these contracts, TAT realizes all the benefits or costs resulting from any increases or decreases in the cost of providing services and products to these customers. Several of TAT’s contracts do not allow TAT to recover for increases in raw material prices, taxes or labor costs, while other contracts may permit, to a limited extent, periodic price adjustments. Any increase in these costs could increase the cost of operating our business and reduce our profitability. Factors such as inaccurate pricing and increases in the cost of labor, materials or overhead may result in cost over-runs and losses on those agreements. TAT may not succeed in obtaining customer approval to re-price a particular product and may not be able to recoup previous losses resulting from incomplete or inaccurate engineering data. In addition, as costs increase, TAT may not be able to pass on such increased costs to other customers. This could materially impact TAT’s profitability.

TAT depends on its key executives; it may not be able to hire and retain additional key employees or successfully integrate new members into its team; the loss of key employees could have a material adverse effect on TAT’s business.

TAT’s success depends to a large extent on the experience and expertise of its senior management. Any member of TAT’s senior management may choose to end his or her employment with TAT and seek employment with others for any reason. The loss of the expertise of TAT’s senior management through death, disability or an employee’s decision to end his or her employment could have a material and adverse effect on our business, financial condition and results of operations. TAT is not the beneficiary of life or disability insurance covering any of its senior management, key employees or other personnel.

TAT depends on its manufacturing and MRO facilities and any material damage to these facilities may adversely impact TAT’s operations.

TAT’s results of operations depend in large part on its ability to provide prompt and efficient service to its customers upon receipt of orders, either the manufacture and delivery of OEM products or the provision of MRO services. As a result, any material disruption of TAT’s day-to-day operations could have a material adverse effect on its business, customer relations and profitability. TAT relies on its facilities in Kiryat Gat, Israel, Kernersville and Greensboro, North Carolina and Tulsa, Oklahoma for the manufacture of its OEM products and the provision of its MRO services. A war or terrorist act, fire, flood, earthquake or other disaster or condition that significantly damaged or destroyed any of these facilities would have a material adverse effect on the operations of TAT.

TAT uses equipment that is not easily repaired or replaced, and therefore material equipment failures could cause TAT or its subsidiaries to be unable to meet quality or delivery expectations of its customers.

Many of TAT’s service and manufacturing processes are dependent on equipment that is not easily repaired or replaced. As a result, unexpected equipment failures could result in production delays or the manufacture of defective products. TAT’s ability to meet its customers’ expectations with respect to on-time delivery of repaired components or quality OEM products is critical. Failure by TAT to meet the quality or delivery expectations of its customers could lead to the loss of one or more of its significant customers.

TAT may fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act of 2002 (“SOX”) imposes certain duties on TAT and its executives and directors. TAT’s efforts to comply with the requirements of Section 404 of the SOX, governing internal controls and procedures for financial reporting, have led to increased general and administrative expenses and a diversion of management time and attention. TAT expects these compliance efforts will continue to require commitment of significant resources. As part of these efforts, TAT may identify material weaknesses or significant deficiencies in its assessments of its internal controls over financial reporting. Failure to maintain effective internal controls over financial reporting could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on TAT’s operating results, investor confidence in TAT’s reported financial information and the market price of TAT’s ordinary shares.

TAT has potential exposure to liabilities arising under environmental laws and regulations.

TAT’s business operations and facilities are subject to various federal, state, and local laws and regulations related to the environment, including, but not limited to, regulations that govern the discharge of pollutants and hazardous substances into the air and water, as well as the handling, storage and disposal of such materials. Compliance with such laws as they relate to the handling, storage and disposal of hazardous substances is a significant obligation for TAT across all of its facilities. If it fails to comply with these and other environmental-related laws and regulations, TAT would be subject to serious consequences, including fines and other sanctions, and limitations on its operations due to changes to, or revocations of, the environmental permits applicable to its facilities. The adoption of new laws and regulations, stricter enforcement of existing laws and regulations, discovery of previously unknown contamination or the imposition of new cleanup requirements could require TAT to incur costs and become subject to new or increased liabilities that could increase TAT’s operating costs and adversely affect the manner in which we conduct our business.

Under certain environmental laws, liability associated with an investigation or remediation of hazardous substances can arise from a broad range of properties, including properties currently or formerly operated by TAT or any of its predecessors, as well as properties to which TAT sent hazardous substances or wastes for treatment, storage, or disposal. Costs and other obligations can arise from claims for toxic torts, natural resources and other damages, as well as the investigation and clean-up of contamination at such properties. Under certain environmental laws, such liability may be imposed jointly and severally, meaning that TAT could be held responsible for more than its proportionate share of liability, and, in some cases, may even be responsible for the entire liability at issue. The extent of any such liability is often difficult to predict, creating uncertainty regarding the potential financial and operational impacts on TAT.

TAT is exposed to potential liabilities arising from product liability and warranty claims.

TAT is exposed to potential liabilities for personal injury or death as a result of the failure of an aircraft component that was designed, manufactured, serviced or supplied by TAT. TAT believes that, in an effort to improve operating margins, some customers have delayed the replacement of parts beyond their recommended lifetime, which may undermine aircraft safety and increase the risk of liability of TAT and its subsidiaries.

If any of our products are defective, we could be required to redesign or recall those products or pay substantial damages or warranty claims. Such an event could result in significant expenses, disrupt sales, and damage both TAT’s reputation and that of its products and services. There can be no assurance that TAT will not experience material product liability losses in the future or incur significant costs to defend such claims. In addition, although TAT maintains product liability insurance, there can be no assurance that its insurance coverage will be adequate if claims arise or that it would be able to maintain insurance coverage in the future at an acceptable cost. A successful claim brought against TAT or its subsidiaries in excess of its available insurance coverage may have a material adverse effect on TAT’s business.

Furthermore, contractual disputes over warranties can occur during ordinary course of business. TAT may be subject to requests from customers for cost sharing or pricing adjustments as a part of their commercial relationships, even though the customers had previously agreed to bear these risks.

Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.

Our operations depend on the continued and secure functioning of our computer and communications systems and the protection of information stored in computer databases maintained by us, and in certain circumstances, by third parties. Such systems and databases are subject to breach, damage, disruption or failure from, among other things, cyber-attacks and other unauthorized intrusions. In particular, we may be targeted by experienced computer hackers who may attempt to penetrate our computer systems and misappropriate or compromise our confidential information or that of our customers. A significant invasion, interruption, destruction or breakdown of our information technology, or IT, systems and/or infrastructure by persons with authorized or unauthorized access could negatively impact our business and operations. We could also experience business interruption, information theft and/or reputational damage from cyber-attacks, which may compromise our systems and lead to data leakage either internally or at our third-party providers. Both data that has been inputted into our main IT platform, which covers records of transactions, financial data and other data reflected in our results of operations, as well as data related to our proprietary rights (such as research and development, and other intellectual property-related data), are subject to material cyber security risks. To date, we are not aware that we have experienced any loss of, or disruption to, material information as a result of any such malware or cyber-attack.

TAT’s activity in Israel may be adversely affected by a change in the exchange rate of the NIS against the U.S dollar. Because exchange rates between the NIS and the U.S dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period to period comparisons of TAT’s results.

TAT’s financial statements are stated in U.S dollars, while a portion of TAT’s expenses in Israel, primarily labor expenses, are incurred in NIS and a portion of our revenues are quoted in NIS and in Euro. Additionally, certain assets, as well as a portion of TAT’s liabilities, are denominated in NIS. As exchange rates between the NIS and the U.S dollar fluctuate continuously, such fluctuations, particularly larger periodic devaluations, may have an impact on TAT’s profitability and period-to-period comparisons of TAT’s results. TAT’s results may be adversely affected by the devaluation of the NIS in relation to the U.S dollar (or if such devaluation is on a lagging basis), particularly if TAT’s revenues in NIS are higher than TAT’s expenses in NIS and/or if the value of TAT’s assets in NIS is higher than TAT’s liabilities in NIS. Alternatively, TAT’s results may be adversely affected by an appreciation of the NIS in relation to the dollar (or if such appreciation is on a lagging basis), if TAT’s expenses in NIS are higher than TAT’s revenues in NIS and/or TAT’s liabilities in NIS are higher than TAT’s assets in NIS. From time to time, we enter into hedging transactions to attempt to limit the impact of foreign currency fluctuations. However, the protection provided by such hedging transactions may be partial and leave certain exchange rate-related losses and risks uncovered. Therefore, our business and profitability may still be harmed by such exchange rate fluctuations.

Risk Factors Related to Our Ordinary Shares

TAT’s share price has been volatile in the past and may decline in the future.

TAT’s ordinary shares have experienced significant market price and volume fluctuations in the past and may experience significant market price and volume fluctuations in the future, in response to factors such as the following, some of which are beyond TAT’s control:

• Quarterly variations in TAT’s operating results;

• Operating results that vary from the expectations of securities analysts and investors;

•	Changes in expectations as to TAT’s future financial performance, including financial estimates by securities analysts and<br> investors;

• Announcements of technological innovations or new products by TAT or TAT’s competitors;

•	Announcements by TAT or TAT’s competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or<br> capital commitments;

• Announcements by third parties of significant claims or proceedings against us;

• Additions or departures of key personnel;

• Future sales of TAT’s ordinary shares by the Company or others;

• The effects of the war and hostilities in Israel;

• De-listing of TAT’s shares from NASDAQ and/or from the TASE;

• Stock market price and volume fluctuation;

• Legal proceedings against TAT ; and

• Regulatory actions by securities which impacts TAT’s interaction with securities analysts and institutional investors

Equity stock markets can undergo extreme price and volume fluctuations. Market fluctuations, as well as political and economic conditions, such as a recession, interest rate or currency rate fluctuations and political events or hostilities in or surrounding Israel, could adversely affect the market price of TAT’s ordinary shares.

In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of their securities. TAT may be the target of similar litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources both of which could have a material adverse effect on TAT’s business and results of operations.

Risks Relating to Our Location in Israel

Because TAT is incorporated under the laws of the Israel and has significant operations in Israel, TAT may be subject to political, economic and other conditions affecting Israel (including the war and hostilities in Israel) that could materially affect our business.

TAT is incorporated under the laws of the State of Israel and has executive offices and a manufacturing plant that are also located in Israel. As a result, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. Any major hostilities involving Israel, a full or partial mobilization of reserve forces of the Israeli army, the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition of Israel could have a material adverse effect on TAT’s business, financial condition and results of operations.

Since its establishment in 1948, Israel and its Arab neighbors have engaged in a number of armed conflicts. A state of hostility, varying from time to time in intensity and degree, has led to security and economic challenges for Israel. Major hostilities between Israel and its neighbors may hinder Israel’s international trade and lead to economic downturn. This, in turn, could have a material adverse effect on TAT’s operations and business.

In addition, Israel faces threats from more distant neighbors, in particular, Iran which attacked Israel during 2024 and 2025, and may be developing nuclear weapons and has targeted cyber-attacks against Israeli entities, and terrorist groups in Yemen, which attached Israel and limited the movement of marine shipments to Israel through the Red Sea.

Currently TAT’s continues its business and operations but 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.

Furthermore, there are a number of countries, primarily Arab and Muslim countries, that restrict or frown upon business with Israel or Israeli companies, and TAT is precluded from marketing its products to these countries. Restrictive laws or policies directed towards Israel or Israeli companies may have an adverse impact on TAT’s operations, TAT’s financial results or the expansion of TAT’s business. These events may be intertwined with wider macroeconomic indications of a deterioration of Israel’s economic standing, that may involve an additional downgrade in Israel’s credit rating by rating agencies (such as the downgrade of the credit rating of Israel by Moody’s, S&P and Fitch), which may have a material adverse effect on our company and its ability to effectively conduct its operations.

Finally, the current elected government in Israel is pursuing extensive reforms to Israel's judicial system and has recently renewed its efforts to effect such changes. Certain financial, legal and commercial organizations and entities have claimed that such changes, if adopted, could adversely affect the macroeconomic condition in which we operate. At this stage, the proposed legislation has not become effective, and its scope has not been fully determined; we cannot assess the potential impacts of these changes and their likelihood on our business, prospects, financial condition, and results of operation.

TAT’s results of operations may be negatively affected by the obligation of its personnel to perform military service.

Many of TAT’s employees and some of TAT’s directors and senior management based in Israel are obligated to perform annual reserve duty in the Israel Defense Forces (“IDF”) and may be called for active duty under emergency circumstances at any time. If a military conflict or war arises, these individuals could be required to serve in the military for extended periods of time. TAT’s operations could be disrupted by the absence of one or more of its senior management, key employees or a significant number of other employees for a significant period due to military service. Any such disruption in TAT’s operations could adversely affect TAT’s business. During the war and hostilities in Israel, the IDF has called up hundreds of thousands of its reserve forces to serve. A number of our management and non-management employees are currently subject to military service in the IDF and many of them have been called to serve. In addition, the family members of many of our Israeli team members are currently serving in the IDF. Such disruption could materially and adversely affect our business, prospects, financial condition, and results of operations.

Your rights and responsibilities as a shareholder are governed by Israeli law and may differ in some respects from the rights and responsibilities of shareholders under U.S. law.

TAT is incorporated under Israeli law. The rights and responsibilities of holders of TAT’s ordinary shares are governed by TAT’s articles of association and by the Israeli Companies Law (as defined below). These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, each shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters. The Companies Law provides that these duties are applicable in shareholder votes on, among other things, amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and interested party transactions requiring shareholder approval. In addition, a controlling shareholder of an Israeli company, or a shareholder who knows that he or she possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or officer in the company, has a duty of fairness toward the company. However, Israeli law currently does not define the substance of this duty of fairness. Because Israeli corporate law has undergone extensive revision in recent years, there is relatively little case law available to assist in understanding the implications of these provisions that govern shareholder behavior.

Israeli law may delay, prevent or make difficult an acquisition of TAT, which could prevent a change of control and, therefore, depresses the price of TAT’s shares.

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. Furthermore, Israeli tax considerations may make potential transactions unappealing to TAT or to some of TAT’s shareholders. These provisions of Israeli law may delay, prevent or make difficult an acquisition of TAT, which could prevent a change of control and therefore depress the price of TAT’s shares.

Investors and TAT’s shareholders generally may have difficulties enforcing a U.S. judgment against TAT, TAT’s executive officers and directors or asserting U.S. securities laws claims in Israel.

TAT is incorporated in Israel and the majority of TAT’s executive officers and directors reside outside the United States. Service of process upon them may be difficult to effect within the United States. Furthermore, many of TAT’s assets and most of the assets of TAT’s executive officers and directors are located outside the United States. Therefore, a judgment obtained against TAT or certain of its executive officers and directors in the United States, including one based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It also may be difficult for you to assert U.S. securities law claims in original actions instituted in Israel. Moreover, among other reasons, including but not limited to, fraud or absence of due process, or the existence of a judgment which is at variance with another judgment that was given in the same matter or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel, an Israeli court will not enforce a non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases) or if the enforcement is likely to prejudice the sovereignty or security of the State of Israel.

As a foreign private issuer whose shares are listed on NASDAQ, we may follow certain home country corporate governance practices instead of certain NASDAQ requirements which may not afford shareholders with the same protections that shareholders of domestic companies have.

As a foreign private issuer whose shares are listed on the NASDAQ Global Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements of certain provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are applicable to U.S domestic public companies. As a foreign private issuer listed on the NASDAQ Capital Market, we may also follow home country practice with regard to, among other things, the requirement to obtain shareholder approval for certain dilutive events (such as for an issuance that will result in a change of control of the Company, certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions of the stock or assets of another company). A foreign private issuer that elects to follow a home country practice instead of NASDAQ requirements must submit to NASDAQ in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by the home country’s laws. In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ’s corporate governance rules.

Item 4. Information

on the Company

A.

History and Development of TAT

TAT was incorporated under the laws of the State of Israel in April 1985 under the name Galaxy Graphics Ltd. TAT underwent several name changes, becoming Galagraph Ltd. in August 1986 and TAT Technologies Ltd. in May 1992. TAT is a public limited liability company under the Israeli Companies Law 1999-5759, (“Israeli Companies Law”), and operates under this law and associated legislation. TAT’s registered offices in Israel are located at 5 Hamelacha St., Netanya 4250540 Israel, and its telephone number is +972-8-862-8500. TAT’s website is www.tat-technologies.com. The information on TAT’S website, or that can be accessed through the website, is not incorporated by reference into this annual report. The Company’s agent for service of process in the United States is the Company’s subsidiary, Limco-Piedmont, Inc., with offices located at 5304 S. Lawton Avenue, Tulsa, OK 74107 and its principal executive offices are located at 9335 Harris Corners Pkwy, Charlotte, NC 28269.

TAT was founded to develop the computerized systems business of its then parent company, TAT Industries Ltd. (“TAT Industries”), a publicly-held Israeli corporation then engaged in the manufacture and sale of aeronautical equipment. In December 1991, TAT acquired the heat exchange operations of TAT Industries and in 2000, TAT purchased the remaining operations of TAT Industries relating to the manufacture and maintenance of aviation accessories and leased certain of its properties.

In March 1987, TAT completed the initial public offering of its securities in the United States. TAT was listed on the NASDAQ Global Market (then known as the NASDAQ National Market) from its initial public offering until July 1998 when the listing of TAT’s ordinary shares was transferred to the NASDAQ Capital Market. On June 24, 2009, TAT’s ordinary shares resumed trading on the NASDAQ Global Market. Since August 2005 TAT’s shares have been traded also on the TASE.

In 1993, TAT acquired Limco, which is located in Tulsa, Oklahoma. Limco’s FAA-certified repair station provides MRO services for airlines, air cargo carriers, maintenance service centers and the military, especially for heat transfer components. In addition to its MRO services, Limco is an OEM of heat transfer solutions for aircraft and system manufacturers and other selected related products.

In 2005, Limco acquired Piedmont, a company located in Greensboro, North Carolina, and certified by the FAA to perform MRO services of APUs and landing gear. Piedmont’s FAA-certified repair station provides MRO services for airlines, air cargo carriers, maintenance service centers and the military, especially for landing gear and APUs.

In July 2007, Limco-Piedmont completed an initial public offering of its common stock and Limco-Piedmont’s shares were listed on the NASDAQ Global Market (symbol: LIMC) until July 2, 2009, when TAT acquired all of the publicly held shares of Limco-Piedmont in a stock-for-stock merger. As a result of such merger, Limco-Piedmont again became a wholly-owned subsidiary of TAT.

On December 4, 2009, TAT, through its subsidiary Piedmont, signed an investment agreement with FAvS. According to the agreement, Piedmont was issued 288,334 shares of Class B common stock of FAvS, representing 37% of FAvS’ then share capital (total number of shares acquired was subsequently adjusted as result of a 1 for 20 reverse stock split) and $750,000 of FAvS preferred shares (entitled to cash dividends at an annual rate of 12% payable quarterly or to additional preferred shares at an annual rate of 15%) in return for Piedmont's propeller and parts businesses.

On March 11, 2015, Piedmont sold 237,932 shares of Class B common stock of FAvS representing 23.18% of FAvS' share capital and its entire holdings in FAvS’ Series A preferred stock for an insignificant amount. As of December 31, 2025, TAT owns less than 5% of FAvS’ issued and outstanding share capital.

In October 2015, TAT acquired Turbochrome, a company certified by the FAA and EASA to perform overhaul and coating of jet engine components, including turbine vanes and blades and fan blades.

In November 2015, TAT entered into an agreement with Engineering to establish a new MRO facility in Russia. The company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport and provides services of minor repair, overhaul and recore for heat transfer components in Russia and the CIS. According to the joint venture agreement, TAT owns 51% of TAT-Engineering's shares and the remaining 49% are held by Engineering.

In 2020 and 2021, TAT (through Piedmont) signed multiple strategic contracts with the Fortune 100 multinational aerospace company Honeywell. Under these contracts, TAT was awarded a 10-year license for repair and overhaul of APUs for Boeing and Airbus’s key platforms, including B737, B777, B767/757 and A320 aircraft as well as the C17 which is used for military purposes. In addition, during these years, Piedmont has completed its facility upgrades required to commence MRO operations for the GTCP331-500 (B777) and GTCP131-9 (A320/B737). In February 2023, TAT announced a contract expansion with a global air carrier, pursuant to which TAT provides MRO services to the airline’s GTCP331 model APUs.

In May 29, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Fimi Opportunity V, L.P., and Fimi Isarel Opportunity Five, Limited Partnership, as selling shareholders (the “Selling Shareholders”), and Stifel, Nicolas & Company, Incorporated and Truist Securities, Inc., as representatives of several underwrites (collectively, the “Underwriters”), relating to an underwritten public offering (the “Offering”) of 4,150,000 ordinary shares of the Company at a public offering. The Company sold 1,625,000 ordinary shares and the Selling Shareholders sold 2,525,000 ordinary shares.

Recent Developments

Events in Israel

On February 28, 2026, Israel and the United States launched a joint attack on Iran, targeting key officials, military commanders and facilities, resulting in the death of Iran’s Supreme Leader and other key officials and military commanders. In retaliation, Iran launched hundreds of ballistic missiles and drones against civilian targets in Israel and against U.S. military bases, civilian aviation facilities and other civilian targets in several countries in the Persian Gulf, including Jordan, Kuwait, Bahrain Qatar, Iraq, Saudi Arabia and United Arab Emirates. The war has also led to widespread airspace closures in the region. At this time, we do not expect the current conflict to have a material impact on our financial and operational results; however, since these are events beyond our control, their continuation or cessation may affect our expectations. We continue to monitor political and military developments closely and examine the consequences for our operations, assets and financial and operational results.

B. Business

Overview

TAT is a leading provider of solutions and services to the commercial and military aerospace and ground defense industries focused mainly on three product areas and services: Thermal Management, Power and Actuation and Maintenance, Repair and Overhaul. TAT operates under four business unit: (i) OEM of heat transfer solutions and aviation accessories through its Kiryat Gat facility (TAT Israel); (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components through its Piedmont subsidiary (mainly APU and LG); and (iv) overhaul and coating of jet engine components through its Turbochrome subsidiary.

TAT’s activities in the area of OEM of heat transfer solutions and aviation accessories through TAT Israel primarily include the design, development and manufacture of (i) a 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 commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.

TAT’s activities in the area of MRO and OEM of heat transfer solutions include the MRO of heat transfer components and 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.

TAT’s activities in the area of MRO services for aviation components include the MRO of APUs, landing gear and other aircraft components. 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 jet engine overhaul through its Turbochrome facility includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.

OEM of Heat Transfer Solutions and Aviation Accessories (TAT Israel)

TAT is an OEM of heat transfer solutions and aviation accessories to the commercial and military aerospace and ground defense industries, primarily through its TAT Israel. The main OEM activity at TAT Israel is the design and manufacture of a comprehensive line of heat exchangers and cold plates. Heat transfer solutions facilitate removal and dissipation of heat generated during the operation of mechanical and electronic systems. TAT Israel's heat transfer solutions are generally integrated into complete cooling systems. Using proprietary technological expertise, we design each heat transfer product to meet the specific space, power, performance and other needs of our customers. TAT Israel's heat transfer solutions are marketed worldwide for applications in commercial and military aircraft and electronic systems, the primary users of such equipment. TAT Israel's customers include, Liebherr-Aerospace Toulouse S.A. (“Liebherr”), Boeing Aircraft Company (“Boeing”), Israel Aerospace Industries, (“IAI”), Textron Aviation (“Cessna”), Pilatus Aircraft Ltd (“Pilatus”), Embraer Empresa Brasileira de Aeronáutica S.A. (“Embraer”), Eaton Aerospace LLC (“Eaton”), Parker Hannifin Corporation (“Parker”), Bell Helicopter, as well as the U.S. Air Force, U.S. Army, and U.S. Navy and other air forces from around the world. Such supply contracts are generally long-term engagements that may have terms of ten years or more.

As part of its OEM activities, TAT Israel is also engaged in the design, development and manufacture of complete cooling systems. This product line principally includes cooling systems for electronic systems (used in airborne military platforms) and ground cooling systems (used in military facilities, tents, vehicles and other military applications).

In addition, TAT Israel designs, develops and manufactures aviation flow control accessories. These accessories include components, such as valves and pumps. Customers for TAT Israel aviation accessories include Lockheed Martin Corporation, Boeing, Continental Motors , the Israel Air Force (“IAF”), IAI, Elbit Systems (“Elbit”), Rafael Advanced Defense Systems (“Rafael”), as well as the U.S. Air Force and U.S. Navy and other air forces from around the world.

TAT Israel's also provides limited MRO services to military customers, mainly for aviation accessories as well as for certain heat transfer solutions. TAT Israel overhauls emergency power units, hydrazine tanks, jet fuel starters, cooling turbines and various valves for the F-16 fighter aircraft. The customers for TAT Israel MRO services include the IAF, IAI, various NATO countries, as well as the U.S. Air Force, U.S. Army and U.S. Navy.

TAT Israel relies on highly qualified personnel and strong engineering, development and manufacturing capabilities that enable it to support its customers from the early program development phase to prototype delivery.

TAT estimates the size of the markets in which TAT Israel operates to be significant based on the scope of development projects and purchasing processes of its customers. Many of the projects TAT Israel is engaged in are lengthy and complex, which account for its long-term supplier relationships and the customer loyalty it enjoys. TAT plans to expand its TAT Israel operations in the OEM segment, among other things, by increasing the scope of work with its existing strategic customers, establishing relationships with new customers, increasing its capabilities in complete systems/subsystems manufacturing, and by targeting strategic territories with high commercial potential.

MRO Services for Heat Transfer Components and OEM of Heat Transfer Solutions (Limco)

Through its Limco subsidiary TAT provides MRO services and OEM services to the aerospace and ground defense industries in the field of heat transfer. Limco’s FAA-certified repair station provides aircraft component MRO services for airlines, OEMs, air cargo carriers, maintenance service centers and the military. Limco is also certified by the EASA, and the Civil Aviation Administration of China. Limco has NADCAP certification for dye penetrant testing, welding and heat treating. Limco specializes in MRO services for components of aircraft, such as heat transfer components and ozone converters. Generally, manufacturer specifications, government regulations and military maintenance regimens require that aircraft components undergo MRO servicing at regular intervals or as necessary. Aircraft heat transfer components typically require MRO services, including repairs and installation of replacement units, after two to five years of service or sooner if required. Aircraft manufacturers typically provide warranties on new aircraft and their components and subsystems, which may range from one to five years. Warranty claims are generally the responsibility of the OEM during the warranty period. Limco’s business opportunity usually begins upon the conclusion of the warranty period for these components and subsystems. Limco’s customers include major U.S. domestic and international airlines, air cargo carriers, maintenance service centers, OEMs such as commercial and military aircraft manufacturers and defense contractors, and the U.S. Armed Forces (Army, Air Force, Navy and Coast Guard). MRO contracts with these types of customers are generally long-term engagements and may have terms of one to five years or more.

Limco enjoys a strong reputation among customers for its competitive pricing and fast turnaround time. It is recognized by leading OEMs of aerospace products to provide MRO services for their heat transfer solutions. For example, Limco is a well-recognized Collins Aerospace Authorized repair center, providing MRO services for many of its heat transfer solutions.

In addition to its MRO services, Limco also manufactures, on an OEM basis, heat transfer solutions used in commercial, regional, business and military aviation platforms. Customers for Limco’s heat transfer solutions include Boeing, the Defense Supply Center, Parker Hannifin, Raytheon Company (“Raytheon”), BAE Systems, Bell Helicopter, Triumph Aerostructures, Northrop Grumman Corporation and Gulfstream Aerospace Corporation.

TAT estimates the size of the markets in which Limco operates to be significant based on the number of aircraft requiring MRO services provided by Limco along with the customer loyalty Limco enjoys. TAT plans to expand its Limco operations, among other things, by developing OEM and MRO capabilities for additional types of heat transfer products with significant commercial potential.

MRO Services for Aviation Components (Piedmont)

Through its subsidiary Piedmont, TAT provides MRO services for aviation components to the aerospace industry. Piedmont’s FAA- and EASA-certified repair station provides aircraft component MRO services for commercial airlines, business jets, air cargo carriers, maintenance service providers as well as governments and military forces worldwide. Piedmont specializes in MRO services for aircraft components, including APUs, landing gear and MPG. Generally, manufacturer specifications, government regulations and military maintenance regimens require that aircraft components undergo MRO servicing at regular intervals or as necessary. Aircraft components typically require MRO services, including repairs and installation of replacement units, after three to ten years of service or sooner if required. Aircraft manufacturers typically provide warranties on new aircraft and their components and subsystems, which may range from one to five years. Warranty claims are generally the responsibility of the OEM during the warranty period. Piedmont’s business opportunity usually begins upon the conclusion of the warranty period for these components and subsystems. Piedmont’s customers include U.S. domestic and international airlines, air cargo carriers and maintenance service providers. MRO contracts with these types of customers are generally long-term engagements that may have terms of one to ten years or more.

Piedmont is licensed by Honeywell as an authorized repair center to provide MRO services for several types of its APU models. Piedmont has licensing agreements in place with the major landing gear manufacturers Safran Landing Gear Systems and Liebherr Aerospace as well.

TAT estimates the size of the markets in which Piedmont operates to be significant based on the number of aircraft requiring MRO services provided by Piedmont. TAT plans to expand its Piedmont operations in the MRO segment by using Piedmont’s experience and reputation to develop MRO capabilities for additional types of APU and landing gear applications as well as other aircraft systems/components with significant commercial potential and by offering additional supplementary services such as MPG.

In this instance, Piedmont signed several strategic agreements with Honeywell (aerospace division). Under these transactions, Honeywell granted a 10-year license to MRO with respect to the following APU lines: 331-200\250, 331-500 that serves the Boeing 777 platform and 131 that serves the Boeing 737 platform and Airbus 319-320-321 platform. During 2021, Piedmont entered into the APU leasing activity with a purchase of eighteen 331-500APU engines from Honeywell, under which Honeywell is the main customer for leasing these engines (pursuant to this agreement Piedmont is Honeywell's sole source for engines for lease purposes). In 2022 Piedmont increased the lease pool by adding six 131-9A/B APU’s and five 331-200/250 APU’s.

Piedmont’s extensive experience in the repair and overhaul of APUs and landing systems includes a comprehensive involvement in the industry supply chain. In addition to its MRO services, Piedmont is active worldwide in the exchange, lease and individual component parts supply of its APU and landing gear products. Through a network of industry partners and well-known aerospace parts distributors, Piedmont’s activity in the sale of parts is a robust element of its business. Piedmont’s quality systems are AS9110 and NADCAP for non-destructive testing.

Overhaul and Coating of Jet Engine Components (Turbochrome)

Through its subsidiary Turbochrome, TAT provides MRO services for jet engine components to the aerospace industry. Turbochrome’s FAA and EASA-certified repair station provides its services mainly to maintenance service centers, airlines and the military. Turbochrome specializes in MRO services for engine components such as turbine vanes and blades, compressor vanes and blades, fan blades and after burner flaps. Generally, manufacturer specifications, government regulations and military maintenance regimens require that engine components undergo MRO servicing at regular intervals or as necessary. Commercial engine components typically require MRO services after three to five years of service or sooner if required. Engine manufacturers typically provide warranties on new engines and their components and subsystems, which may range from one to five years depending on the bargaining power of the purchaser. Warranty claims are generally the responsibility of the OEM during the warranty period. Turbochrome’s business opportunity usually begins upon the conclusion of the warranty period for these components. Turbochrome’s customers include domestic and international airlines, maintenance service centers and the military.

Turbochrome also specializes in the manufacturing of coating powders (for pack cementation aluminide coatings) and masking materials (for the prevention of coating in defined areas) used in the aviation industry. Turbochrome provides these materials to OEMs and to maintenance service centers.

TAT estimates the size of the markets in which Turbochrome operates to be significant based on the number of jet engines requiring MRO services. Turbochrome plans to expand its operations in the MRO segment by using Turbochrome’s experience and reputation to develop MRO capabilities for additional types of jet engine components with significant commercial potential.

Turbochrome’s quality system complies with ISO 9001 and AS9100, and with EASA part 145 and FAA FAR 145 for the civil parts.

TAT-Engineering LLC

In November 2015, TAT signed an agreement with Russian-based Engineering Holdings Ltd, of Moscow (“Engineering”), to establish a new facility for the provision of MRO services for heat transfer components. The company, TAT-Engineering LLC, is based in Novosibirsk’s Tolmachevo airport. The entity was established in January 2016 and is currently operating under FAA certifications and obtained FAA high-level repair approvals. Current efforts are focused on marketing initiatives targeting the major Russian and CIS airlines and maintenance stations. However, due to sanctions imposed by the United States, EU, Japan and other jurisdictions on certain industry sectors and entities in Russia and certain impacted regions, as well as enhanced export controls on certain products and industries, during the years of 2023, 2024 and 2025, our joint venture in Russia ceased to purchase heat-exchange cores from Limco, our US subsidiary, and therefore the joint venture had to materially limit the extent of the MRO services it provides to its customers.

Business Strategy

TAT aims to be the trusted partner to its strategic customers, delivering differentiated products and services in selected, high barrier-to-entry, markets. This will enable TAT to develop the long-term high-value relationships it strives to have with its customers to effectively complete and continue grow business and improve profitability. Currently, TAT’s focus is on three main markets: thermal management solutions and services and Power and Actuation solutions and services and Repair and Overhaul.

Execution of TAT’s strategy is based on the following principles:

•	Increasing market share - continuing aggressive marketing efforts to win<br> new customers as well as to expand activities with existing customers, partly by focusing on cross selling opportunities between our different<br> businesses. As part of our efforts, we also intend to expand our marketing presence in existing territories, like the United States and<br> Western Europe as well as new territories, where TAT currently has a smaller presence and fewer customers, such as Eastern Europe, Latin<br> America and Asia.
•	Organic growth and M&A - in addition to growing our existing businesses<br> organically as detailed above, we intend to evaluate complementary acquisition opportunities.
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•	Enhancing OEM capabilities - capitalizing on our technical expertise,<br> experience and reputation in the market of heat transfer solutions to expand the scope of our OEM offerings to new aircrafts or to new<br> platforms in the existing aircrafts such as electrification of aircraft and eVTOL.
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•	Expand the scope of MRO services - leveraging<br> our technical expertise, engineering resources and facilities to broaden MRO services to additional types of aircraft and additional aircraft<br> systems, subsystems and components while developing the required technical expertise to provide these additional MRO services.
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Products and Services

OEM of Heat Transfer Solutions and Aviation Accessories

TAT Israel manufactures a wide range of heat transfer solutions used on board aircraft, air conditioning systems, environmental control systems and cooling systems for electronics for military use. These solutions are manufactured in compliance with all of the stringent quality assurance standards that apply to the manufacture of aircraft parts. TAT Israel's quality system complies with ISO 9001, AS9100, Boeing quality systems approval D6-82479 and FAR 21.303 (the FAA standard for Parts Manufacturer Approval) and NADCAP for non-destructive testing and welding.

Heat Transfer Solutions

TAT Israel specializes in the design and manufacture of highly efficient, compact and reliable heat transfer solutions that are designed to meet stringent constraints such as size, weight and environmental conditions. Heat transfer solutions, such as heat exchangers and cold plates, are integral components of a wide variety of environmental control, mechanical and engine systems, as well as a wide range of electronic systems. These systems generate heat during operation that must be removed and dissipated. Heat transfer solutions facilitate the exchange of heat created through the operation of these systems by transmitting the heat from a hot medium (air, oil or other fluids) to a cold medium for disposal.

In the aerospace industry, there is a constant need for improvements in performance, weight, cost and reliability. In addition, as electronic systems become smaller and more densely packed, the need for sophisticated and efficient heat transfer components used to provide the cooling functions becomes more critical. Using TAT Israel's technological expertise, TAT believes it is well positioned to respond to these industry demands through continued new product development and product improvements.

TAT Israel's principal heat transfer solutions include heat exchangers and cold plates. Typically, air-to-air heat exchangers cool a jet engine’s bleed air which, when cooled, is then used in the aircraft’s air conditioning, pressurization and pneumatic systems. The liquid-to-air heat exchangers cool liquids such as engine oil, hydraulic oil and others used in other systems.

TAT Israel provides a one-stop-shop for all types of heat transfer solutions. A significant portion of TAT Israel's heat transfer solutions is sold to customers in connection with the original manufacture or retrofitting of particular aircraft equipment. TAT Israel generally enters into long-term supply contracts with its customers, which require TAT Israel to supply heat transfer products as part of a larger project.

TAT Israel also manufactures other heat transfer solutions, such as cooling chassis, heat sinks and cold plates (which may be air-to-air, liquid-to-air or liquid-to-liquid), to control and dispose heat emitted by the operation of various electronic systems. Such products are currently utilized mainly in radar systems, avionics, electronic warfare systems and various pods for targeting, navigation and night vision.

As a result of the specialized nature of the systems in which TAT Israel's parts are included, spare and replacement parts for the original heat transfer solutions are also usually provided by TAT Israel.

Aviation Flow Control Accessories

TAT Israel is also engaged in the design, development, manufacture and MRO services for aviation flow control accessories. These accessories include components such as valves and pumps.

Cooling and Air Conditioning Systems

TAT Israel is also engaged in the design, development and manufacture of complete environmental control systems and cooling systems. This product line includes ground cooling systems mainly for military applications such as mobile command and control units, command and control vehicles, armored vehicles, mobile broadcast units, mobile hospitals, etc. In addition, TAT Israel designs, develops and manufactures power electronics cooling systems based on customer specifications, while providing a complete engineering solution in compliance with strict civil aviation standards. TAT Israel's systems are used globally and are tested under strict standards.

MRO Services for Heat Transfer Components and OEM of Heat Transfer Solutions

MRO Services for Heat Transfer Components

Through its Limco subsidiary in the U.S., TAT provides MRO services for heat transfer components. The demand for MRO services is driven by the size and age of the aircraft fleet (including new aircrafts entering into service), aircraft utilization and regulations set or promulgated by the FAA and other governmental authorities.

Due to the increased maintenance costs of their aging fleets many carriers are seeking ways to reduce costs, minimize down-time, increase aircraft reliability and extend time between overhauls. One way to accomplish this goal is through the outsourcing of more of their maintenance and support functions to reliable third parties. Furthermore, we believe that commercial carriers making the decision to outsource their MRO requirements are searching for MRO service providers with a wide-range of service capabilities. Such MRO service providers allow the carriers to concentrate their outsourcing of MRO services to a select group of third-party providers. The global military aircraft fleet also presents similar opportunities for MRO service providers. We believe that an aging military fleet and the increased use of upgrade programs aimed at extending the useful life of military aircraft will provide continued MRO growth opportunities.

Limco specializes in the repair and overhaul of heat transfer components. These components include heat exchangers, oil coolers, pre-coolers, reheaters, condensers, water separators, fuel heaters, evaporators and ozone converters.

Limco is continually expanding its MRO capabilities based on market need and/or customer request. Limco’s capabilities include heat transfer components used in aircraft and systems manufactured by Airbus, Boeing, Bombardier, Cessna, Embraer, Lockheed Martin, Fokker, Liebherr-Aerospace, Collins Aerospace, Honeywell Aerospace and others.

Limco performs MRO services at its repair station in Tulsa, Oklahoma which has ISO9001, AS9110 and AS9100 certification, NADCAP certification for dye penetrant testing, welding and heat treating, and is licensed to provide MRO services by the FAA and EASA, as well as by the civil aviation Administration of China.

Limco offers different or various MRO services for heat transfer components. If the damage is significant, Limco will remanufacture the unit, which generally entails replacing the core matrix of the damaged or old heat transfer component in lieu of replacing the entire unit with a new one. Limco designs and develops these customized remanufactured units as a cost-effective alternative to new part replacement. In the event of less severe damage, Limco will either overhaul or repair the unit as necessary. Re-manufactured units carry warranties which are often equal or better than those provided to new units.

OEM Authorizations and Licenses

Limco believes that establishing and maintaining relationships with OEMs of aircraft systems and components is an important factor in achieving sustainable success as an independent MRO service provider. OEMs grant independent MRO service providers authorization to perform repair and overhaul services on their behalf. OEMs generally grant very few authorizations and maintain tight controls over their authorized MRO service providers in order to maintain high quality of service to their customers. Obtaining OEM authorization requires sophisticated technological capabilities, experience-based industry knowledge and substantial capital investment. Furthermore, Limco believes that service providers that have OEM authorization gain a competitive advantage as they typically receive discounts on parts, technical information and OEM warranty support. Limco is an independent MRO service provider that is a well-recognized repair center of Collins Aerospace (Hamilton Sundstrand), one of the largest heat transfer solutions manufacturers in North America or in the United States.

OEM of Heat Transfer Solutions

In addition to its MRO services, Limco also acts as an OEM manufacturer of heat transfer solutions used mainly in military aircraft and other ground applications and to a lesser extent, in commercial, regional and business aircraft. Limco specializes in the design and manufacture of highly efficient heat transfer solutions, which are designed to meet stringent constraints such as size, weight and applicable environmental conditions. These units include heat exchangers, oil coolers, precoolers, reheaters, condensers, fuel heaters and evaporators.

Limco also manufactures demineralizer systems for U.S. Navy vessels, including ships and nuclear submarines. Limco currently offers tens of OEM parts to the aerospace and ground defense industries. These parts are manufactured in compliance with the stringent quality assurance standards that apply to the manufacture of aircraft and military parts.

Limco’s quality systems are ISO9001, AS9110, AS9100 and NADCAP for non-destructive testing, welding and heat treating and FAR 21.303 (the FAA standard for Parts Manufacturer Approval).

MRO Services for Aviation Components

Through its Piedmont subsidiary, TAT provides MRO services for aviation components, including APUs and landing gear. As previously mentioned, the demand for MRO services is driven by the size and age of the aircraft fleet, aircraft utilization and regulations by the FAA and other governmental authorities.

Due to increased maintenance costs of their aging fleets many carriers are seeking ways to reduce costs, minimize down-time, increase aircraft reliability and extend time between overhauls. One way to accomplish this goal is through the outsourcing of more of their maintenance and support functions to reliable third parties. Furthermore, we also believe that commercial carriers making the decision to outsource their MRO requirements are searching for MRO service providers that offer a wide-range of service capabilities. These MRO service providers allow the carriers to concentrate their outsourcing of MRO services to a select group of third-party providers. The global military aircraft fleet also presents similar opportunities for MRO service providers. We believe that an aging military fleet and the increased use of upgrade programs aimed at extending the useful life of aircrafts will provide continued MRO growth opportunities.

Piedmont specializes in the repair and overhaul of APUs and landing gear. APUs are relatively small, self-contained generators used to start jet engines, usually with compressed air, and to provide electricity, hydraulic pressure and air conditioning while an aircraft is on the ground. In many aircraft, an APU can also provide electrical power during in-flight emergency situations. Landing gear is the structure that supports an aircraft on the ground and allows it to taxi, takeoff and land.

Piedmont performs MRO services at its repair station in Greensboro, North Carolina, which is licensed by the FAA and EASA. Piedmont specializes in providing comprehensive repair and overhaul services for APU models manufactured by Honeywell, the leading OEM in the United States. In addition, Piedmont provides full repair, overhaul, machining, plating and grinding services for landing gear systems for commercial and military aircraft. Piedmont has a long history in providing landing gear MRO services for regional airliners, including aircraft manufactured by the French-Italian ATR (42/72), Gulfstream (G4), Lockheed Martin (P3/C130) and the Brazilian Embraer (E170). At the end of 2020 Piedmont signed an exclusive contract with Honeywell as Honeywell's exclusive rental bank provider for the APU 331-500 (used in the Boeing 777 platform). By signing this agreement with Honeywell and purchasing 18 APU331-500 engines Piedmont entered a new segment of APU leasing. Piedmont also signed a contract to be an authorized repair station for the 331-500 APU (serving the Boeing 777 platform) as well as the APU 131 serving the Boeing 737 platform and Airbus 319-320-321 platform.

OEM Authorizations and Licenses

Piedmont believes that establishing and maintaining relationships with OEMs of aircraft systems and components is an important factor in achieving sustainable success as an independent MRO service provider. OEMs grant independent MRO service providers authorizations or licenses to perform repair and overhaul services on the equipment they manufacture. OEMs generally grant few authorizations or licenses and maintain tight controls over their authorized and licensed MRO service providers, in order to maintain high quality of service to their customers. Obtaining OEM authorizations requires sophisticated technological capabilities, experience-based industry knowledge and substantial capital investment. Piedmont believes that service providers that have OEM authorizations and licenses gain a competitive advantage as they typically receive discounts on parts, technical information, OEM warranty support and use of the OEM name in marketing. Piedmont is an authorized repair station licensed by Honeywell, the largest manufacturer of APUs, for several of its APU models.

Machining, Plating and Grinding, or MPG Services

Piedmont has extended its services to include the provision of MPG services, either as supplementary to its traditional MRO services or as stand-alone services. We believe that establishing and maintaining customer relationships with our MPG shop is an important factor in achieving sustainable success as an independent MRO service provider and creates a competitive advantage.

Overhaul and Coating of Jet Engine Components

Through its subsidiary, Turbochrome, TAT provides MRO services for jet engine components to the aerospace industry. Turbochrome’s FAA and EASA-certified repair station provides its services mainly to maintenance service centers, airlines and the military. Turbochrome specializes in MRO services for engine components such as turbine vanes and blades, compressor vanes and blades, fan blades and after burner flaps. Generally, manufacturer specifications, government regulations and military maintenance regimens require that engine components undergo MRO servicing at regular intervals or as necessary. Commercial engine components typically require MRO services after three to five years of service or sooner if required. Engine manufacturers typically provide warranties on new engines and their components and subsystems, which may range from one to five years depending on the bargaining power of the purchaser. Engine manufacturers may also offer extended warranty agreements for 10 to 15 years for the engines. Warranty claims are generally the responsibility of the OEM during the warranty period. Turbochrome’s business opportunity usually begins upon the conclusion of the warranty period for these components. Turbochrome offers its customers DER (Designated Engineering Representatives) and DOA (Design Organization Approval) repairs approved by the FAA and EASA. Turbochrome’s customers include U.S. domestic and international airlines, maintenance service centers and the military.

TAT estimates the size of the markets in which Turbochrome operates to be significant based on the number of jet engines requiring MRO services provided by Turbochrome. Turbochrome plans to expand its operations in the MRO segment by using Turbochrome’s experience and reputation to develop MRO capabilities for additional types of jet engine components with significant commercial potential.

Turbochrome’s quality system complies with ISO 9001 and AS9100, and with EASA part 145, FAA FAR 145 for the civil parts, the Israel Laboratory Accreditation Authority under ISO/IEC 17025:20 and NADCAP for 3 manufacturing procedures.

Manufacturing of masking and coating materials

Through its Turbochrome facility, TAT manufactures a wide range of masking and coating materials for the aviation industry. These products are manufactured in compliance with all of the stringent quality assurance standards that apply to the maintenance of aircraft engine components.

Customers

General

TAT targets a broad range of customers within the commercial and military aerospace and ground defense industries. Our customers include commercial manufacturers of military equipment, commercial airlines, aircraft manufacturers, military forces, the defense industry, and other manufacturers of electronic systems, aviation units and machinery in the United States, Europe, CIS, Asia, Latin America and Israel. During 2025, TAT had revenues generated by more than 500 customers worldwide.

Major Customers

OEM Customers

TAT, primarily through TAT Israel, sells its OEM solutions and systems to commercial and military aircraft manufacturers and defense contractors and to the U.S. and Israeli governments.

Partial lists of OEM customers are set in the following table:

Aircraft manufacturers	Boeing, Textron, Pilatus, Embraer, Lockheed Martin, Honda Aircraft, Cirrus, Gulfstream,
System manufacturers/integrators and defense contractors	Liebherr, Rafael, Elbit, IAI, Parker, Eaton Aerospace, Safran, RTX, Raytheon-Collins.

The development projects and purchasing processes of many of TAT’s OEM customers are lengthy and complex and accordingly, with some customers, TAT enters into frame agreements that determine certain legal conditions, but under which the customer is not obligated to purchase any quantity of products. Typically, customers issue purchase orders with the required supply quantity, price, lead times and other related terms.

MRO Customers

TAT services MRO customers primarily through Limco, Piedmont and Turbochrome, including major U.S. domestic and international airlines, air cargo carriers, maintenance service centers, the U.S. Armed Forces and other air forces from around the world.

TAT’s partial list of MRO customers is set forth in the following table:

U.S. Domestic and international airlines and air cargo carriers	Air France-KLM, Lufthansa, FedEx, UPS, American Airlines, Delta Airlines, United Airlines,<br> Air Canada Jazz, Republic Airways, DHL, Austrian Airlines, TAM, Thai, Korean Air, Air India, Swiftair, Allegiant Air, Empire Airlines,<br> Mountain Air Cargo, Alliance Airlines,
Maintenance service centers	Fokker, Honeywell International, Kellstrom Commercial, Aero Kool, Lufthansa Technik,<br> RTX through Collins, SR Technics, Turkish Technic, Delta Tech Ops, ST Aerospace Engineering, , Gulfstream, IAI, Haeco Americas , Air New-Zeeland,<br> AAR.
Governments and military air forces	U.S. Army, U.S. Air Force and U.S. Navy; Israeli Ministry of Defense, Israeli Air<br> Force; Japan Air Force.

Military Contracts

Direct sales to the U.S. government, our largest government customer, accounted for approximately 7.7% of TAT’s revenues for the year ended December 31, 2025, approximately 9.3% of our revenues for the year ended December 31, 2024 and approximately 6.6% of our revenues for the year ended December 31, 2023.

Many of TAT’s military contracts are awarded on a competitive basis based on technical merit, personnel qualifications, experience and price. TAT also receives some contract awards involving special technical capabilities on a negotiated, noncompetitive basis due to TAT’s technical capabilities.

TAT provides products under government contracts that usually require performance over a period of several months to several years. Long-term contracts for the U.S. military may be conditioned upon continued availability of congressional appropriations. Variances between anticipated budget and congressional appropriations may result in a delay, modification of scope or termination of these contracts.

The vast majority of the governmental contracts to which TAT is party to are fixed-price contracts, some of which contain fixed-price escalation mechanism. Under these contracts, TAT agrees to perform specific work for a fixed price and, accordingly, realizes the benefit or detriment to the extent that the actual cost of performing the work differs from the contract price. The allowable government contract costs and fees of TAT are subject to audit and may result in non-reimbursement of some contract costs and fees. While governments reserve the right to conduct further audits, audits conducted for periods through fiscal year 2024 and 2025 have resulted in no material cost recovery disallowances for TAT.

TAT’s eligibility to perform under its government contracts requires us to maintain adequate security measures. TAT has implemented security procedures that it believes adequately satisfies the requirements of its current government contracts.

Backlog and Long-Term Agreements

Our backlog includes the following: (i) actual purchase orders, and (ii) the estimated sales we expect to generate from long-term agreements during the life of the contract or 10 years the lower of the two, for which we do not have actual purchase orders. It should be noted that under these long-term agreements there is no legal obligation from the customer to purchase our products or services, yet typically our customers would not sign such an agreement unless there is a specific business opportunity. As such, backlog information may not necessarily be indicative of future sales.

As of December 31, 2025, our backlog included: (i) outstanding purchase orders representing an aggregate amount of $86 million, and (ii) sales that we expect to generate from long-term agreements (the longest of which is until 2035) for which we have not yet received actual purchase orders in an aggregate amount of $464 million totaling to a value of $550 million of long-term agreements and orders.

Product and Service Warranties

TAT provides warranties for its products and services ranging from one to three years, depending on the nature of the specific product. To date, TAT’s warranty costs have not been substantial. As of December 31, 2025, the combined warranty reserve for TAT was $0.4 million.

Competitive Environment

OEM of Heat Transfer Solutions and Aviation Accessories

The aerospace and defense OEM industries in general and specifically, the commercial and military aviation markets, are characterized by intense competition and the need to constantly be in the forefront of technological innovations in order to be able to offer technologically-advanced and attractive products. Competition in these OEM markets is also based on price, quality and on time delivery. TAT estimates the market size of heat transfer solutions to be significant based on the scope of development projects and purchasing processes of the potential customers. TAT estimates that there is a small number of competing suppliers in the aerospace and defense OEM markets due to the high barriers to entry to these markets, which include the need for highly qualified and trained personnel, technologically advanced facilities and the need to obtain appropriate governmental approvals. The nature of the projects in the commercial and military aviation OEM industry, which are often time consuming and complex, also require long-term supplier relationships and customer loyalty in order to succeed.

TAT’s competitors in the global OEM aerospace and defense industries can be divided into two main groups:

•	Complete system manufacturers that either independently or through subcontractors, design, develop and manufacture complete systems<br> (such as a manufacturer of aircraft hydraulic systems) directly for the platform manufacturer (i.e., for business jets). These companies<br> will typically compete on bids for complete systems and/or projects where the components/products TAT develops are part of the complete<br> system. In such cases, it is very likely that these companies will subcontract to companies such as TAT the design and manufacturing of<br> one or a few components in the system. Although some of these companies have the capabilities to design and manufacture each standalone<br> component in a complete system (i.e., a heat exchanger integrated in hydraulic systems) they usually do not compete with TAT in projects<br> where there is a specific requirement for a stand-alone component.
•	Component manufacturers, such as TAT, for which the design and manufacture of components (such as heat exchangers or other types<br> of heat transfer solutions) is the main business (and which are normally situated in the “value chain” one tier below the<br> system manufacturers, such as a manufacturer of an aircraft’s hydraulic system and two tiers below the platform manufacturer, such<br> as a manufacturer of a new aircraft). These companies typically compete in projects where there is a specific requirement for a standalone<br> aviation component (such as a heat exchanger or other types of heat transfer solutions) and in tenders by manufacturers of complete systems<br> or products for sub-contractors. Although some of the component manufacturers have the capabilities to design, develop and manufacture<br> a complete system (i.e., environmental control system for a business jet) for a certain platform, these companies usually do not compete<br> on projects for complete systems in which their manufactured component constitutes a small part of the complete system, mainly due to<br> the high barriers to entry and to the difficulty to move up the “value chain” from a component supplier to a whole system<br> manufacturer.
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•

Complete system manufacturers that either independently or through subcontractors, design, develop and manufacture complete systems (such as a manufacturer of aircraft hydraulic systems) directly for the platform manufacturer (i.e., for business jets). These companies will typically compete on bids for complete systems and/or projects where the components/products TAT develops are part of the complete system. In such cases, it is very likely that these companies will subcontract to companies such as TAT the design and manufacturing of one or a few components in the system. Although some of these companies have the capabilities to design and manufacture each standalone component in a complete system (i.e., a heat exchanger integrated in hydraulic systems) they usually do not compete with TAT in projects where there is a specific requirement for a stand-alone component.

•

Component manufacturers, such as TAT, for which the design and manufacture of components (such as heat exchangers or other types of heat transfer solutions) is the main business (and which are normally situated in the “value chain” one tier below the system manufacturers, such as a manufacturer of an aircraft’s hydraulic system and two tiers below the platform manufacturer, such as a manufacturer of a new aircraft). These companies typically compete in projects where there is a specific requirement for a standalone aviation component (such as a heat exchanger or other types of heat transfer solutions) and in tenders by manufacturers of complete systems or products for sub-contractors. Although some of the component manufacturers have the capabilities to design, develop and manufacture a complete system (i.e., environmental control system for a business jet) for a certain platform, these companies usually do not compete on projects for complete systems in which their manufactured component constitutes a small part of the complete system, mainly due to the high barriers to entry and to the difficulty to move up the “value chain” from a component supplier to a whole system manufacturer.

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The major competitors of TAT in the area of OEM of heat transfer solutions and aviation accessories include manufacturers in the United States such as the Hughes-Treitler division of Ametek, Lytron, Niagara Thermal, Collins Aerospace, Honeywell International and AAR Corp; manufacturers based in Europe such as I.M.I. Marston, a subsidiary of Collins Aerospace, Safran and Liebherr; and manufacturers based in Asia such as Sumitomo Precision Products from Japan. These competitors may enjoy competitive advantages over TAT, such as:

•	Ability to adapt faster to changes in customer requirements and industry conditions or trends;
•	Greater access to capital;
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•	Stronger relationships with customers and suppliers;
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•	Greater name recognition;
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•	Access to superior technology and greater marketing resources;
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•	Ability to offer complete systems in addition to components; and
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•	Ability to bundle heat transfer solutions and other aircraft components.
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MRO Services for Heat Transfer Components

The market for MRO services in the field of heat transfer components is highly competitive. Competition in this market is based on price, turnaround time, quality and breadth of services. TAT’s global competitors in the field of servicing heat transfer components can be divided into two main groups:

•	Service divisions of OEMs – generally, each OEM of products in the heat transfer solutions segment has the necessary capabilities<br> to provide MRO services for products it designs and manufactures throughout its lifetime, commencing with the initial warranty period<br> and through the after-market period. Service divisions of OEMs may also acquire capabilities to service products of other OEMs to further<br> expand their MRO services.
•	Service centers – which often provide MRO services for a broad range of components and systems. These service centers can be<br> either the in-house maintenance services of commercial airlines or other independent service providers, such as TAT Israel and Limco.
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•

Service divisions of OEMs – generally, each OEM of products in the heat transfer solutions segment has the necessary capabilities to provide MRO services for products it designs and manufactures throughout its lifetime, commencing with the initial warranty period and through the after-market period. Service divisions of OEMs may also acquire capabilities to service products of other OEMs to further expand their MRO services.

•

Service centers – which often provide MRO services for a broad range of components and systems. These service centers can be either the in-house maintenance services of commercial airlines or other independent service providers, such as TAT Israel and Limco.

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For heat transfer MRO services, TAT’s major competitors are AAR Corp, Honeywell, Drake Air – Ametek, Liebherr-Aerospace, American Cooler Service, Collins Aerospace Malaysia, Lufthansa Technik and Parker Hannifin.

As an independent MRO service provider, Limco’s competitors have inherent competitive advantages. For example, Limco competes with the service divisions of large OEMs which in some cases have design authority with respect to their OEM solutions and are able to derive significant pricing advantages from their OEM manufacturing activities. Limco also competes with the in-house service divisions of large commercial airlines where there is a strong incentive for an airline to fully utilize the services of its maintenance employees and facilities. Further, Limco’s competitors may have additional competitive advantages, such as:

•	Ability to bundle heat transfer and other aircraft components;
•	Access to greater marketing resources;
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•	Access to superior technology; and
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•	Greater resources which allow for better turnaround time.
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MRO Services for Aviation Components

The market for MRO services in which Piedmont operates is highly competitive. Competition in this market is based on quality, price, turnaround time and breadth of services. Piedmont’s primary MRO services competitors are the service divisions of OEMs, the in-house maintenance services of various commercial airlines and other independent service providers, such as TAT or Piedmont. For APU and landing gear MRO services Piedmont’s major competitors are Standard Aero Group., Aerotech International, Honeywell International, Chase Aerospace, Professional Aviation, Messier-Dowty Aerospace (MD), AAR, Hawker Pacific, APRO, TAG Aero and Turbine Aero and others.

A number of Piedmont’s competitors have inherent competitive advantages. For example, Piedmont competes with the service divisions of large OEMs which in some cases have design authority with respect to their OEM products and are able to derive significant brand recognition from their OEM manufacturing activities. Piedmont also competes with the in-house service divisions of large commercial airlines where there is a strong incentive for an airline to fully utilize the services of its maintenance employees and facilities. Further, Piedmont’s competitors may have additional competitive advantages, such as:

•	Better name recognition;
•	Ability to bundle aviation and other aircraft components;
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•	Stronger relationships with customers and suppliers;
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•	Lower cost structure;
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•	Regional support near customers’ location;
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•	Access to greater marketing resources;
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•	Access to superior technology
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•	Greater access to capital; and
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•	Greater resources which allow for better turnaround time.
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Overhaul and Coating of Jet Engine Components

The market for MRO services in which Turbochrome operates is highly competitive. Competition in this market is based on quality, price, level of service and turnaround time. Turbochrome’s primary MRO services competitors are the service divisions of OEMs, the in-house maintenance services of various commercial airlines and other independent service providers, including Safran (Snecma), General Electric, GKN, PAS, Chromalloy Southwest, MCT Japan and others. With respect to coating and masking materials, Turbochrome's competitor is APV Coatings.

A number of Turbochrome’s competitors have inherent competitive advantages. For example, Turbochrome competes with the service divisions of large OEMs which may have design authority with respect to their OEM products and are able to derive significant brand recognition from their OEM manufacturing activities. Turbochrome also competes with the in-house service divisions of large commercial airlines and there is a strong incentive for an airline to fully utilize the services of its maintenance employees and facilities. Further, Turbochrome’s competitors may have additional competitive advantages, such as:

•	Ability to adapt faster to changes in customer requirements and industry conditions or trends;
•	Better name recognition;
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•	Ability to bundle jet engine and other aircraft components;
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•	Stronger relationships with customers, OEMs and suppliers;
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•	Lower cost structure;
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•	Regional support near customers’ location;
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•	Access to greater marketing resources;
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•	Access to superior technology;
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•	Greater access to capital; and
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•	Greater resources which allow for better turnaround time
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Competitive Strengths

We believe that TAT’s success can be attributed to several critical factors, including the following:

•	Engaging in pro-active account management efforts to preserve its customer base in existing projects, while working to broaden and<br> increase its involvement with such clients.
•	Conducting marketing activities aimed at penetrating new geographical markets and winning new customers, while taking advantage of<br> the unique knowledge and expertise that TAT and its subsidiaries have gained in various areas.
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•	Entering into additional related operating segments that will enable TAT and its subsidiaries to fulfill their growth potential.
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•	Providing customers with the best value, including competitive prices, by tailoring comprehensive service packages that combine the<br> design and planning of an OEM component, the manufacture of such component, and the provision of maintenance services.
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•	Extending MRO capabilities in order to establish a ‘one-stop-shop’ center for comprehensive MRO services for the types<br> of aircraft Limco and/or Piedmont and/or Turbochrome target.
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•	Enhancing our engineering capabilities in order to support customer needs related to new projects and in order to certify MRO services<br> that differ from processes previously approved by the FAA, EASA or other regulatory authorities. This allows shortening the long and complex<br> approval process, streamlining the design and certification process and reducing costs.
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•	Leveraging operational efficiencies to achieve shorter delivery times and reduce costs.
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•	Investing in new technologies and manufacturing techniques in the heat transfer solutions product line.
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•	Investing in innovations and improvements aimed at enhancing the quality and performance of our existing solutions and services as<br> well as the development of new products in an effort to strengthen our market position and enter into more advanced platforms.
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Engineering

We believe that our engineering capabilities is a strategic core competency and key competitive advantage, which allows us to effectively compete in the market with companies which, in many cases, have better name recognition and greater resources than we do. Our strong engineering capabilities enable us to meet our customers’ increasingly complex demands to deliver high-quality and cost-effective solutions while maintaining efficient development cycles. These capabilities are based on proprietary technological expertise and know-how developed by highly experienced multi-disciplinary teams over the years. We believe that this proprietary knowledge coupled with our innovative and problem-solving approach allows us to provide our customers with an overall superior solution – in both manufacturing and MRO services – in terms of quality, cost and turnaround time. Our strong engineering capabilities are a key factor in preserving customer loyalty as well as supporting our efforts to expand our services to new areas of growth.

TAT Israel's engineering staff has extensive knowledge and experience in designing heat transfer solutions. In general, TAT Israel has manufacturing capabilities for most heat transfer solutions. TAT Israel manufactures the necessary tools, fixtures, test equipment and special jigs which are required to manufacture, assemble and test these products. TAT Israel developed proprietary design and analysis techniques which assist in the mechanical and thermal design of its products. All of TAT Israel's products are inspected and tested by trained inspectors using highly sophisticated test equipment in accordance with its customer requirements.

Limco’s engineering department enhances its ability to provide its customers with high-end top-quality MRO services, supports the development of MRO services for new products with commercial potential and supports its OEM activity. Limco’s engineering department employs certified mechanical and aerospace engineers. Limco’s multi-disciplinary team of engineers specializes in, among others, heat transfer solutions and components and supports all processes of thermal and structural analysis, mechanical and metallurgical research and development for manufacturing design. Limco’s engineers have direct experience with aerospace component repair and with obtaining supplemental type certificates from the FAA. Limco’s engineering department supports the development of new repairs capabilities that extend beyond the limits of the component maintenance manual and utilizes DER to obtain the necessary FAA approvals.

Piedmont’s engineering department employs experienced mechanical and aerospace engineers with repair station and manufacturing experience in both engineering and quality. Piedmont also has an FAA-certified DER on staff with delegations in Auxiliary Power Units (APUs) & Mechanical Systems and with special delegation to manage and approve repair specifications. In addition to developing quality major repairs, Piedmont’s engineers have experience in obtaining supplemental type certificates and parts manufacturer approvals while working directly with the FAA Aircraft Certification Office.

Turbochrome’s engineering department enhances its ability to provide its customers with high-end top-quality MRO services. Turbochrome’s engineering department employs several certified mechanical and metallurgical engineers. Turbochrome’s multi-disciplinary team of engineers specializes in, among other things, turbine components and supports all processes of thermal and structural analysis and mechanical and metallurgical research and development. Turbochrome’s engineers have substantial experience with aerospace component repair and with obtaining DER and DOA certificates from the FAA and EASA.

Research and Development

State-of-the-Art R&D Testing Lab for Thermal Management Systems

In response to the rapidly evolving technological landscape and the transformative shift driven by electric Vertical Takeoff and Landing (eVTOL) aircraft, TAT recognizes the increasing complexity and demand for advanced thermal management systems. The rise of sophisticated electrical flying vehicles has introduced unprecedented challenges, particularly in cooling performance, weight reduction, and compact design. To address these challenges, during 2025, as part of a strategic plan by TAT’s management, TAT established a new R&D lab, FutureWorks, located in Charlotte, North Carolina which was built to develop the next generation of thermal management systems. TAT’s FutureWorks, is designed to drive cutting-edge advancements in sustainable aviation, focusing on the research, testing, and development of thermal management systems and heat exchangers to support both today’s aircraft and the next generation of all electric, hybrid-electric, and hydrogen platforms.

This advanced facility will serve as a vital enabler of TAT's strategic commitment to research and development, focusing on:

•	Performance Optimization: Achieving superior heat transfer efficiency while meeting stringent cooling requirements for modern aviation<br> systems.
•	Physical Characteristics Enhancement: Reducing system size and weight to align with eVTOL and electric aircraft operational constraints.
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•	Reliability and Durability: Extending product lifespan by leveraging advanced materials, manufacturing techniques, and rigorous testing<br> protocols.
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The laboratory is equipped with cutting-edge testing and simulation infrastructure that allows for comprehensive analysis and validation across a wide spectrum of thermal management applications. Key features include:

•	High-fidelity heat exchanger testing platforms capable of simulating real-world thermal conditions, including dynamic temperature,<br> pressure, and multi-phase flow.
•	Integrated predictive modeling and simulation tools to accelerate the design and validation process.
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•	Real-time data acquisition and performance measurement systems for precise evaluation of thermal efficiency and reliability.
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•	Scalable platforms for testing traditional and advanced technologies, including next-generation 3D-printed heat exchangers and custom<br> thermal solutions.
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Commitment to Innovation through Collaboration

TAT’s strategic approach underscores the dynamic nature of customer requirements and the ever-changing competitive landscape. Recognizing that technological innovation is both imperative and continuous, TAT actively fosters collaborative partnerships with customers and industry stakeholders. These partnerships serve as catalysts for:

•	Identifying emerging market needs and technological challenges.
•	Co-developing tailored solutions that meet specific operational and environmental constraints.
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•	Accelerating product development timelines through iterative testing, feedback, and refinement.
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This collaboration enables TAT to not only enhance its existing product offerings but also pioneer new solutions that deliver unmatched performance, efficiency, and reliability in the thermal management sector.

Strategic Vision and Market Leadership

Through its state-of-the-art R&D lab and unwavering commitment to innovation, TAT positions itself at the forefront of the thermal management industry. By investing in advanced technologies, rigorous testing capabilities, and customer-centric solutions, TAT is well-prepared to meet the increasingly complex demands of modern aviation and eVTOL platforms.

This forward-looking strategy ensures TAT’s ability to:

•	Deliver cutting-edge solutions that set new industry benchmarks.
•	Adapt and respond to market potential with agility and precision.
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•	Exceed customer expectations by providing future-ready thermal management systems.
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By staying ahead of technological advancements and embracing a proactive, collaborative approach, TAT strengthens its leadership in the dynamic aerospace market, delivering superior value and innovation for customers worldwide.

Source and Availability of Raw Materials and Spare Parts

TAT and its subsidiaries acquire most of the components for the manufacture of their products and provision of their services from a limited number of suppliers and subcontractors, the majority located in Israel and the United States. Some of these suppliers are currently the sole source of one or more components upon which TAT and its subsidiaries are dependent. Since many of TAT's and its subsidiaries’ purchases require long lead times, a delay in the supply of an item can significantly delay the delivery of a product. Generally, TAT and its subsidiaries have not experienced significant difficulty in obtaining timely deliveries of necessary components; however, if they are unable to obtain these components when needed, they would experience delays in manufacturing their products and their financial results could be adversely affected.

The raw materials used in manufacturing programs are generally readily available metals and alloys. TAT and its subsidiaries have not had any significant difficulty in obtaining such materials in the past.

TAT and its subsidiaries select their suppliers primarily based on their ability to ensure that their parts are serviceable and traceable to OEM-approved sources, their delivery performance and their ability to help reduce the total cost of procuring those parts. For quality control, cost and efficiency reasons, TAT and its subsidiaries generally purchase supplies only from vendors with who they have ongoing relationships or who their customers have previously approved.

Authorizations from OEMs often require that TAT purchase component parts that are needed for its MRO services from the OEM or its designated distributors.

Wherever possible, TAT and its subsidiaries have made and continue to make an effort to qualify second sources or have identified alternate sources for many of their parts needs.

Proprietary Rights

To date, TAT and its subsidiaries do not own any patents. TAT and its subsidiaries rely, among others, on trade secrets protection laws. However, we believe that our success is less dependent on the ownership of proprietary rights and more reliant on our innovative skills, technical competence, marketing proficiency and engineering abilities. TAT and its subsidiaries do not possess any material registered trademarks.

Regulation

Israeli Export Regulations

Export of military-related products and “dual use” products (items that are typically sold in the commercial market but that may also be used in the defense market) and related technical information is subject to the enhanced Israeli export laws and regulation by the Ministry of Defense and Ministry of Economy. Currently, the Israeli government approves exports to approved customers, provided such exports align with the Israeli policy and do not conflict with national security considerations. TAT Israel is required to obtain a permit prior to initiating a sales proposal, and an export license is ultimately necessary for the completion of the transaction.

While we have been successful in obtaining export permits in the past, there is no insurance that we will be able to obtain the necessary export permits or licenses in the future. The Israeli Ministry of Defense and Ministry of Economy may change the classification of our existing commercial products or may determine that new products we develop are not exempt from Israeli Ministry of Defense or Ministry of Economy export control. This would place such products subject to the Israeli Ministry of Defense or Ministry of Economy export control regulations as military products or “dual use” items, which would impose stringent constraints on our sales process in relation to each sale transaction and limit our markets. If we do not maintain our existing authorizations and exemptions or obtain necessary future authorizations and exemptions under the export control laws and regulations of Israel, including export licenses for the sale of our equipment and the transfer of technical information, we may be unable to export technical information or equipment outside of Israel, we may not be able to realize our market projections and our business could be materially adversely affected.

U.S. Export Regulations

Export of defense products, military technical data and technical services by our U.S. subsidiaries to Israel and other countries is subject to applicable approvals by the U.S. government under the U.S. International Traffic in Arms Regulations (“ITAR”). Such approvals are typically in the form of an export license or a technical assistance agreement (“TAA”). Other U.S. companies wishing to export defense products or military-related services and technology to our Israeli and other non-U.S. entities are also required to obtain such export licenses and TAAs. An application for an export license or a TAA requires disclosure of the intended end user and the use of the technology. Pursuant to recent export control reform initiatives in the United States, a greater part of our U.S. subsidiaries’ and our U.S. suppliers' activities are becoming subject to control under the Export Administration Act "dual use" regulations. The U.S. government may deny an export authorization if it determines that a transaction is counter to U.S. policy or national security.

Aerospace and Safety Regulations

The commercial aerospace industry is subject to extensive regulation by the authorities such as the FAA in the United States, EASA in Europe, and other governmental authorities worldwide. The military aerospace industry is governed by military quality specifications established by the U.S. Department of Defense and ISO-9000 standards. TAT and its subsidiaries are required to obtain certifications from one or more of these entities and, in some cases, by individual OEMs. Additionally, TAT must meet the requirements of its customers, including OEMs and airlines that are subject to FAA regulations and evolving industry standards, by providing these customers with products that comply with the regulatory requirements applicable to commercial flight operations.

TAT believes it currently meets or exceeds FAA maintenance standards in its repair and overhaul activities. Our active or operating repair stations in Israel and the United States are approved by the FAA. TAT also believes it currently complies with all applicable industry standards in its facilities.

TAT’s operations are further subject to a variety of worker and community safety regulations, including the Occupational Safety and Health Act of 1970 (“OSHA”). OSHA mandates general requirements for safe workplaces across the U.S., and provides special procedures and measures for handling certain hazardous and toxic substances. TAT believes that its operations are in compliance with OSHA’s requirements.

TAT also believes that it is in material compliance with applicable U.S., European and other governmental regulations affecting the aerospace and defense industries.

Israeli Regulations

TAT’s operations in Israel are subject to supervision by the Israeli Ministry of Defense and the Civil Aviation Administration of Israel (“CAAI”). TAT Israel is certified by the IAF and the Israeli Ministry of Defense for both manufacturing and maintenance. In addition, TAT Israel is also licensed as a repair station for certain components by the CAAI. Furthermore, the export of certain products and/or know-how by TAT Israel is subject to approval by the Defense Export Controls Agency (“DECA”) of the Israeli Ministry of Defense. DECA permits are required prior to submitting sales proposals involving such exports, as well as for the actual export of such products.

Environmental Matters

TAT’s operations are subject to certain stringent environmental laws and regulations at the federal, state and local levels in the United States and Israel, as well as to requirements established by government agencies, including the U.S. Environmental Protection Agency. These regulatory authorities govern, among other matters, the emission, discharge, generation, management, transportation and disposal of pollutants and hazardous substances. Regulatory authorities may also require TAT to initiate actions to remediate the effects of hazardous substances that are or have been released into the environment, and to obtain and maintain permits in connection with TAT’s operations. This extensive regulatory framework imposes significant compliance burdens and risks.

Although TAT seeks to maintain its operations and facilities in compliance with applicable environmental laws, there can be no assurance that violations do not exist or that future change to such laws, regulations or their interpretations will not require TAT to make significant additional expenditures to ensure compliance.

Legal Proceedings

We are currently not a party to any material legal proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising from the ordinary course of business.

C. Organizational

Structure

The legal name of our company is TAT Technologies Ltd., and we are organized under the laws of the State of Israel. We have two wholly-owned subsidiaries: Limco-Piedmont Inc., which is incorporated under the laws of Delaware, and Turbochrome Ltd., which is incorporated under the laws of the State of Israel. See exhibit 8 for a full list of consolidated subsidiaries.

D. Property,

Plants and Equipment

Facilities owned or leased by the Company

Israel Facilities

During 2022, TAT entered into a lease in Israel for a new manufacturing facility. The facility, located in Kiryat Gat, is approximately 138,000 square feet, and the land on which the facility is located is leased from the ILA. The leasehold rights are for a period ending in 2045 and are recorded in Turbochrome's name. Turbochrome paid the entire lease payments due until 2045 in a one-time payment (discounted to present value).

In August 2025, TAT signed a new lease agreement for an expansion of the facility in Kiryat Gat, Israel (additional 13,000 square feet), with a lease term of 5 years that will expire in August 2030. TAT has an option of extending the terms of the lease for another 5 years, commencing upon expiration of the new lease term.

Executive office lease

TAT’s principal executive office is located in Charlotte, NC. During 2023, TAT signed a lease agreement for approximately 6,505 rentable square feet facility in Harris Corners Parkway, Charlotte, North Carolina, USA, which will expire in April 2029. In 2025 the rental expense for this property was $200,000.

Limco Facilities

Limco owns and operates a 55,000 square feet manufacturing plant in Tulsa, Oklahoma which has historically supported all its business, including its aftermarket heat transfer component repair station. This facility also has housed Limco’s administration, engineering, quality control and support services.

In May 2025, TAT on behalf of Limco signed a new lease agreement for an R&D facility in North Carolina, USA, with a lease term of 10 years that will expire on April 30, 2035. Limco has the right to terminate the lease at the end of the 7th year subject to payment of termination fee of $225 thousand plus other charges.

Limco also leases building #2, building #3, building #4, building #5, and building #6. The lease on building #2 expires on November 30, 2026. The lessee or lessor may terminate the lease by giving lessee or lessor six months advance written notice. The based rent for building #2 is $4,367 per month plus the annual percentage increase in the CPI-W. Building #3 lease expired on January 31, 2014, however, the lease has renewed automatically from year to year since that date. Either party has the right to cancel the lease with 30 days’ advance notice prior to the annual expiration of the term. The based rent for building #3 is $1,505 per month plus the annual percentage increase in the CPI-W. The lease on building #4 expires on March 31, 2030. The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice. The based rent for building #4 is $3,500 per month plus the annual percentage increase in the CPI-W. The lease on building #5 expires on March 31, 2030. The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice. The based rent for building #5 is $4,100 per month plus the annual percentage increase in the CPI-W. The lease on building #6 expires on March 31, 2032. The lessee or lessor may terminate the lease by giving the lessee or lessor 6 months advance written notice. The based rent for building #6 is $9,364 per month plus the annual percentage increase in the CPI-W.

In 2025, 2024 and 2023, the rental expense for these properties was $353 thousand, $247 thousand and $253 thousand, respectively.

Piedmont Facilities

In April 2025, Piedmont signed a renewal of leases for the approximately 82,000 square feet, landing gear component and overhaul repair station as well as the MPG operation facilities in Greensboro, North Carolina. The renewal of lease expires on June 30, 2030. In 2025, the rental expense was $362,000.In December 2023, Piedmont signed an additional lease agreement for a facility in Kernersville, North Carolina, USA. The term of this lease is 3 years and will expire on December 31, 2026. Piedmont has two options to extend the lease for additional successive terms of 1 year each. The rentable facility is approximately 49,203 square feet and the rent expense for 2025 was $180,000.

Item 4A. Unresolved

Staff Comments

There are no unresolved staff comments.

Item 5.

Operating and Financial Review and Prospects

The following discussion of our

results of operations should be read together with our consolidated financial statements and the related notes, which appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our current plans, estimates and beliefs and involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report.

A.

Company Overview

TAT is reliant on the robustness of the commercial and military aerospace and ground defense industries. Any downturn in these industries could weaken demand for its solutions and services and negatively impact its financial results. The commercial airline industry is cyclical and has historically been subject to fluctuations due to general economic and political conditions, such as fuel and labor costs, price competition, downturns in the global economy and national and international events.

TAT’s cost of revenues for OEM operations and MRO services consists of component and material costs, direct labor costs, quality assurance costs, shipping expenses, royalties, overhead related to manufacturing and depreciation of manufacturing equipment. TAT’s gross margin is affected by the proportion of its revenues generated from each of its operational segments.

The principal factors that affect the operating income of TAT’s four segments, in addition to their gross profit, is the expenditure on selling and marketing expenses and general and administrative expenses. While TAT closely monitors its operating expenses to prevent unnecessary spending, we believe that these operating expenses may increase in the future in accordance with our plans to grow the business.

TAT’s research and development expenses are related to new products and technologies or significant improvement of existing products and technologies.

TAT’s selling and marketing expenses are related to commission payments, compensation and related expenses of TAT’s sales teams, participation in trade shows, travel expenses, advertising expenses and related costs for facilities and equipment.

TAT’s general and administrative expenses are related to compensation and related expenses for executive, finance and administrative personnel, professional fees such as legal, audit, SOX, internal audit, insurance premiums and general corporate expenses and related costs for facilities and equipment.

B. Key

Indicators

TAT’s management evaluates its performance by focusing on key performance indicators, which are revenues, sources of revenues, gross profit, operating income and EBITDA. These key performance indicators are primarily affected by the competitive landscape in which TAT operates and its ability to meet the challenges posed.

C. Results

of operations

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements as of December 31, 2025, and for the years ended December 31, 2025 and 2024.

	Year Ended December 31,
	2025						2024
U.S. dollars in thousands	Amount			%			Amount			%
Revenues:
Products	$	50,850			28.6	%	$	47,710			31.4	%
Services		127,165			71.4	%		104,406			68.6	%
		178,015			100.0	%		152,116			100.0	%
Cost of goods:
Products		35,793			20.1	%		33,986			22.3	%
Services		98,124			55.1	%		85,116			56.0	%
		133,917			75.2	%		119,102			78.3	%
Gross profit		44,098			24.8	%		33,014			21.7	%
Operating expenses:
Research and development, net		1,384			0.8	%		1,248			0.8	%
Selling and marketing		8,576			4.8	%		7,746			5.1	%
General and administrative		15,730			8.8	%		11,901			7.8	%
Other income		(404	)		(0.2	)%		(383	)		(0.3	)%
		25,286			14.2	%		20,512			13.5	%
Operating income		18,812			10.6	%		12,502			8.2	%
Interest expenses		(1,010	)		(0.6	)%		(1,472	)		(1.0	)%
Other financial income (expenses), net		(325	)		(0.2	)%		(477	)		(0.3	)%
Income before taxes on income		17,477			9.8	%		10,553			6.9	%
Provision for taxes on income		2,143			1.2	%		195			0.1	%
Profit before share of equity investment		15,334			8.6	%		10,358			6.8	%
Share in profits of equity investment of affiliated companies		1,488			0.8	%		809			0.5	%
Net income	$	16,822			9.4	%	$	11,167			7.3	%

Revenues

TAT, directly and through its subsidiaries, provides a variety of solutions and services to the commercial and military aerospace and ground defense industries, including:

(i)	OEM of heat transfer solutions and aviation components, such as heat exchangers, pre-coolers and oil/fuel hydraulic coolers (through<br> TAT Israel);
(ii)	MRO services for heat transfer components and OEM of heat transfer solutions (through our Limco subsidiary);
---	---
(iii)	MRO services for aviation components (through our Piedmont subsidiary); and
---	---
(iv)	Overhaul and coating of jet engine components (through our Turbochrome subsidiary).
---	---

TAT’s revenues from its four operational segments were as follows:

	Year Ended December 31,
	2025						2024						Change
Revenues	Amount			%			Amount			%			Amount		%
OEM of heat transfer solutions and aviation components	$	41,403			23.3	%	$	36,466			24.0	%	$	4,937		13.5	%
MRO services for heat transfer components and OEM of heat transfer<br> solutions		44,448			25.0	%		43,863			28.8	%		585		1.3	%
MRO services for aviation components		85,234			47.9	%		67,475			44.4	%		17,759		26.3	%
Overhaul and coating of jet engine components		9,101			5.1	%		7,392			4.9	%		1,709		23.1	%
Eliminations		(2,171	)		(1.2	)%		(3,080	)		(2.0	)%		909		(29.5	)%
Total revenues	$	178,015			100.0	%	$	152,116			100.0	%	$	25,899		17.0	%

The following table reflects the geographic breakdown of TAT’s revenues for each of the two years ended December 31, 2025:

	Year Ended December 31,
	2025					2024					Change
Revenues	Amount		%			Amount		%			Amount		%
United States	$	117,718		66.1	%	$	104,326		68.6	%	$	13,392		12.8	%
Israel		14,006		7.9	%		7,868		5.2	%		6,138		78.0	%
Other		46,291		26.0	%		39,922		26.2	%		6,369		16.0	%
Total revenues	$	178,015		100.0	%	$	152,116		100.0	%	$	25,899		17.0	%

Total revenues were $178.0 million for the year ended December 31, 2025, compared to $152.1 million for the year ended December 31, 2024, an increase of 17.0%. This reflects (i) the increase in revenues in the OEM of heat transfer solutions and aviation accessories segment; (ii) the increase in revenues in the MRO services for heat transfer components and OEM of heat transfer solutions segment; (iii) the increase in revenues in the MRO services for aviation components segment; and (iv) the increase in revenue in the overhaul and coating of jet engine components segment.

Costs of Revenues

TAT’s cost of revenues for OEM operations and MRO services consists of component and material costs, direct labor costs, quality assurance costs, royalties, shipping expenses, overhead related to manufacturing and depreciation of manufacturing equipment.

TAT’s gross margin was affected by the proportion of TAT’s revenues generated from OEM operations and MRO services in each of the reported years.

	Year Ended December 31,
	2025						2024						Change
Cost of revenues	Amount			%			Amount			%			Amount			%
OEM of heat transfer solutions and aviation components	$	28,608			21.4	%	$	24,965			21.0	%	$	3,643			14.6	%
MRO services for heat transfer components and OEM of heat transfer solutions		33,174			24.8	%		35,978			30.2	%		(2,804	)		(7.8	)%
MRO services for aviation components		69,628			52.0	%		56,798			47.7	%		12,830			22.6	%
Overhaul and coating of jet engine components		4,828			3.6	%		4,823			4.0	%		5			0.1	%
Eliminations		(2,321	)		(1.7	)%		(3,462	)		(2.9	)%		1,141			(33.0	)%
Total cost of revenues	$	133,917			100.0	%	$	119,102			100.0	%	$	14,815			12.4	%

Cost of revenues was $133.9 million for the year ended December 31, 2025, compared to $119.1 million for the year ended December 31, 2024, an increase of 12.4%. Cost of revenues as a percentage of revenues decreased to 75.2% for the year ended December 31, 2025, from 78.3% for the year ended December 31, 2024.

The increase in cost of revenues is primarily due to the increase in revenue in a higher percentage compared to the increase in our fixed costs.

Operating Expenses

Research and

development expenses, net. Research and development expenses, net are related to new products and technologies or to a significant improvement of products and technologies, net of grants and participations received.

Selling and

marketing expenses. Selling and marketing expenses consist primarily of commission payments, compensation and related expenses of TAT’s sales teams, participation in trade shows, travel expenses, advertising expenses and related costs for facilities and equipment.

General and

administrative expenses. General and administrative expenses consist of compensation and related expenses for executives, finance and administrative personnel, professional fees such as legal, audit, SOX, internal audit, other general corporate expenses and related costs for facilities and equipment.

	Year Ended December 31,
	2025						2024						Change
U.S. dollars in thousands	Amount			%			Amount			%			Amount			%
Operating expenses
Research and development costs, net	$	1,384			5.5	%	$	1,248			6.1	%	$	136			10.9	%
Selling and marketing		8,576			33.9	%		7,746			37.8	%		830			10.7	%
General and administrative		15,730			62.2	%		11,901			58.0	%		3,829			32.2	%
Other expenses (income)		(404	)		(1.6	)%		(383	)		(1.9	)%		(21	)		5.5	%
Total operating expenses	$	25,286			100.00	%	$	20,512			100.00	%	$	4,774			23.27	%

Research and development, net

Research and development expenses slightly increased by 10.9% to $1.4 million for the year ended December 31, 2025, from $1.2 million for the year ended December 31, 2024. Research and development expenses as a percentage of revenues remained at 0.8% for the year ended December 31, 2025, compared to 0.8% for the year ended December 31, 2024. The Company received a $0.1 million grant from the Israeli government in June 2025 which was accounted for a credit to research and development expenses.

Selling and marketing

Selling and marketing expenses were $8.5 million for the year ended December 31, 2025, compared to $7.7 million for the year ended December 31, 2024. Selling and marketing expenses as a percentage of revenues were 4.8% for the year ended December 31, 2025, compared to 5.1% for the year ended December 31, 2024.

General and administrative

General and administrative expenses were $15.7 million for the year ended December 31, 2025, compared to $11.9 million for the year ended December 31, 2024, an increase of 32.2% primarily due to increases in personnel-related expenses mainly from additional headcount, merit increases and stock-based compensation; in legal and professional services fees; in public company related expenses; and recruitment fees for key officers and senior executives. General and administrative expenses as a percentage of revenues were 8.8% for the year ended December 31, 2025, compared to 7.8% for the year ended December 31, 2024.

Other income (expense).

Other income (expense) results from capital gains on sale of property and equipment and one time expenses.

Other income (expense)

Interest expenses, net. Interest expenses, net consist of interest income and expense. Interest income and expenses relate to the interest received from or paid to banks for the outstanding deposits and debts, respectively.

Financial expense,

net. Financial expense, net consists of exchange rate and interest income or expense. Interest income or expense relates to the interest received from or paid to banks and changes in the rate of the NIS or other currencies against the U.S. dollar.

Tax expense.

Tax expense consists of Israeli and U.S. federal and state taxes on the income of TAT’s business and changes in deferred tax assets or liabilities.

	Year Ended December 31,
	2025			2024			Change
U.S. dollars in thousands	Amount			Amount			Amount		%
Interest expenses		(1,010	)		(1,472	)		462		(31.4	)%
Other financial expenses, net		(325	)		(477	)		152		(31.9	)%
Provision for taxes on income taxes		2,143			195			1,948		999.0	%

Interest expenses, net

Interest expense, net for the year ended December 31, 2025 were $1.0 million, compared to $1.5 million of interest expenses for the year ended December 31, 2025. Interest expense as a percentage of revenues was 0.6% for the year ended December 31, 2025, compared to 1.0% for the year ended December 31, 2025.

Other financial expenses, net

Other financial expenses, net was $0.3 million for the year ended December 31, 2025, compared to other financial expenses, net of $0.5 million for the year ended December 31, 2024. The decrease was mainly due to revaluation of long-term loans in Israeli Shekel which were affected by favorable changes in exchange rates of U.S. dollar and NIS during the year. Other financial income (expenses) as a percentage of revenues were 0.2% for the year ended December 31, 2025, compared to 0.3% for the year ended December 31, 2024.

Provision for taxes on income

Taxes on income for the year ended December 31, 2025, amounted to $2.1 million, compared to $0.2 million for the year ended December 31, 2024. Provision for taxes on income as a percentage of revenues was 1.2% for the for the year ended December 31, 2025, compared to 0.1% for the year ended December 31, 2024.

Share in profits of equity investment of affiliated companies

Share in profits of equity investment of affiliated companies for the year ended December 31, 2025, amounted to a gain of $1.5 million compared to $0.8 million for the year ended December 31, 2024. Share in profits of equity investment of affiliated companies as a percentage of revenues was 0.8% for the for the year ended December 31, 2025, compared to 0.5% for the year ended December 31, 2024.

Year ended December 31, 2024 compared with Year ended December 31, 2023

Please see Item 5 on Form 20-F for the Year ended December 31, 2024 filed with the SEC on March 26, 2025 for this comparison.

D. Critical

Accounting Policies and Estimates

TAT’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). These accounting principles require management to make certain estimates, judgments and assumptions based upon information available at the time that they are made, historical experience and various other factors that are believed to be reasonable under the circumstances. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. While all the accounting policies impact the financial statements, certain policies may be viewed to be critical. These policies are those that are both most important to the portrayal of TAT’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments and estimates. Actual results could differ from those estimates.

In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. Management has reviewed these critical accounting policies and related disclosures with TAT’s audit committee.

TAT’s management believes the significant accounting policies which affect management’s more significant judgments and estimates used in the preparation of TAT’s consolidated financial statements and which are the most critical to aid in fully understanding and evaluating the reported financial results include the following:

•	Recoverability of Inventory;
•	Income taxes.
---	---

Inventory Valuation

Inventories are stated at the lower cost and net realizable value. Cost of raw material and parts is determined using the moving average basis. Cost of work in progress and finished products is calculated based on actual costs and the capitalized production costs, mainly labor and overhead and is determined based on the average basis. TAT’s policy for valuation of inventory and commitments to purchase inventory, including the determination of obsolete or excess inventory, requires it to perform a detailed assessment of inventory at each balance sheet date which includes a review of, among other factors, an estimate of future demand for products within specific time frames, recoverability of existing inventory, as well as product lifecycle and product development plans. The business environment in which TAT operates, the wide range of products that TAT offers and the relatively short sales cycles TAT experiences, all contribute to the exercise of judgment relating to maintaining and writing-off of inventory levels. The estimates of future demand that TAT uses in the valuation of inventory are the basis for its revenue forecast, which is also consistent with its short-term manufacturing plan. Inventory reserves are also provided to cover risks arising from slow-moving items. Inventory management remains an area of management focus as TAT balances the need to maintain strategic inventory levels to ensure competitive lead times against the risk of inventory obsolescence due to changing technology and customer requirements. TAT writes down obsolete or slow-moving inventory in an amount equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand, market conditions and sale forecasts. If actual market conditions are less favorable than TAT anticipates, additional inventory write-downs may be required.

Income Taxes

TAT operates within multiple tax jurisdictions and is subject to audits in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. In management’s opinion, adequate provisions for income taxes have been made for all years. Although management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these issues will not be different than those reflected in its historical income tax provisions.

TAT uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax bases of assets and liabilities and net operating loss and credit carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when it is more likely than not that some portion of the deferred tax assets will not be realized. To the extent that TAT’s decisions and assumptions and historical reporting are determined not to be compliant with applicable tax laws, TAT may be subject to adjustments in its reported income for tax purposes as well as interest and penalties.

According to an acceptable interpretation that prescribes a minimum recognition threshold, a tax position is required to meet before being recognized in the financial statements. The interpretation also provides guidance on de-recognition of tax positions, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. In addition, the interpretation requires significant judgment with respect to determining what constitutes an individual tax position as well as assessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently affect our operating results.

E.

Conditions in Israel

TAT is incorporated under the laws of the State of Israel, certain

executive offices and manufacturing and research and development facilities are located in Israel. Please refer to “Item 3D – Risk Factors” for a description of governmental, economic, fiscal, monetary, or political policies or factors that have materially affected or could materially affect TAT’s operations.

F.

Trade Relations

Israel is a member of the United Nations, the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Finance Corporation. Israel is also a member of the World Trade Organization and is a signatory to the General Agreement on Tariffs and Trade. In addition, Israel benefits from preferential trade arrangements under various trade preference programs in a number of jurisdictions, which permit the export of certain eligible products either duty-free or at reduced tariff rates. Israel has entered into a number of bilateral and multilateral free trade agreements. In July 1975, Israel and the European Union Community (now the European Union, or the “EU”) concluded a Free Trade Agreement, granting certain advantages for Israeli exports to EU member states while requiring Israel to gradually reduce tariffs on imports from these countries. In 1985, Israel and the United States entered into an agreement to establish a Free Trade Area, which eliminated all tariff and some non-tariff barriers on most trade between the two countries. In January 1993, Israel entered into a free trade agreement with the European Free Trade Association (“EFTA”) establishing a free-trade zone between Israel and the EFTA member states. In November 1995, Israel entered into a further association agreement with the EU, which, among other things, includes a redefinition of rules of origin and additional benefits, such as allowing Israel to become a member of the Research and Technology programs of the European Union. During the recent years, Israel has expended its commercial and trade relations through additional free trade agreements and trade cooperation frameworks with a number of other countries and regions. In addition, Israel has entered into additional free trade agreements and trade cooperation frameworks with a number of other countries and regions, including certain countries in the Asia-Pacific region and the Americas.

G.

Impact of Currency Fluctuation and of Inflation

TAT reports its financial results in US dollars and receives payment primarily in US dollars or dollar-linked to NIS for all of its sales. However, a portion of its expenses, principally salaries and related personnel expenses in Israel, are denominated in NIS. Additionally, certain assets, as well as a portion of its liabilities, are denominated in NIS. Therefore, the US dollar cost of TAT’s operations is influenced by the extent to which inflation in Israel is offset, either partially or fully, on a lagging basis or is not offset by the devaluation of the NIS in relation to the US dollar. When the rate of inflation in Israel exceeds the rate of devaluation of the NIS against the U.S. dollar, the dollar cost of operations in Israel increases. If the dollar cost of operations in Israel increases, its dollar-measured results of operations will be adversely affected. It is uncertain whether TAT will be materially and adversely affected in the future if inflation in Israel exceeds the devaluation of the NIS against the US dollar or if the timing of the devaluation lags behind inflation in Israel.

In 2025, the U.S. dollar depreciated in relation to the NIS at a rate of 13%, from NIS 3.65 per $1 on December 31, 2024 to NIS 3.19 per $1 on December 31, 2025. The annual rate of inflation in Israel was 2.6% in 2025 and 3.4% in 2024.

Because exchange rates between the NIS and the US dollar fluctuate continuously, exchange rate fluctuations, and especially significant changes in the exchange rate, may have an impact on TAT’s profitability and period-to-period comparisons of its results. The effects of foreign currency re-measurements are reported in TAT’s consolidated financial statements in current operations. Although TAT hedges a portion of its exchange rate risk through the use of forward contracts and other derivative instruments, there is no certainty that future results of operations will not be materially adversely affected by currency fluctuations.

H.

Corporate Tax Rate

Israeli companies are generally subject to corporate tax on their taxable income (including capital gains). The regular corporate tax rate for Israel was 23% for the year ended December 31, 2023, 2024 and 2025.

However, the rate is effectively reduced for income derived from Approved and Beneficiary Enterprises, as defined by the Law for the Encouragement of Capital Investments, 1959, as amended.

For additional information, please see Item 10.E below “Taxation

Israeli Tax Considerations - Tax Benefits under the Law for the Encouragement of Capital Investments, 1959”.

Certain investment income derived by TAT from investments may not be regarded by the Israeli tax authorities as income from TAT’s Preferred Enterprise and consequently may be taxed at the regular statutory rate in Israel.

Certain of TAT’s subsidiaries operate in and are subject to the tax laws of various other jurisdictions, primarily the United States. TAT’s U.S. subsidiaries are taxed based on federal and state tax laws. The U.S. federal statutory flat tax rate for tax years 2025 and 2024 is 21%.

I.

Recently Issued Accounting Standards

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 expenses 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, inter alia, 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

On July 2025, the FASB issued ASU 2025-05, Financial

Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements and disclosures.

In December 2025, the Financial Accounting Standards Board (FASB)

issued Accounting Standard Update (ASU) 2025-10; Accounting for Government Grants Received by Business Entities, which provides guidance on how companies should recognize, measure, and present government grants received. The new standard is effective for annual and interim reporting periods beginning after December 15, 2028. The standard allows for a modified prospective, modified retrospective, or retrospective transition. Early adoption is permitted. We are currently evaluating the impact of adopting this new pronouncement.

J.

Recently adopted accounting pronouncements:

In December 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance income tax reporting disclosures and require disclosure of specific categories in the tabular rate reconciliation. We adopted this standard for the annual period ending December 31, 2025 on a prospective basis. We updated our income tax disclosures to comply with the requirements. See “Note 14: Income Taxes.” The adoption of the standard did not have an impact on our financial position, results of operations, or liquidity.

K.

Liquidity and Capital Resources

On May 2025, TAT entered into an Underwriting Agreement with certain Underwriters, relating to an underwritten public offering of 4,150,000 ordinary shares at a public offering price of $26.00 per share, of which TAT sold 1,625,000 ordinary shares and the Selling Shareholders sold 2,525,000 ordinary shares (collectively, the “Firm Shares”) which was closed on June 3, 2025. The gross proceeds of the offering to the Company were $42.3 million. Pursuant to the Underwriting Agreement, TAT and the Selling Shareholders also granted the Underwriters an option to purchase up to an additional 242,298 and 380,202 ordinary shares from the Company and the Selling Shareholders, respectively (collectively, the “Options Shares”), at a public offering price less the underwriting discount and commissions (the “Underwriters Option”). On June 26, 2025, following the exercise by the Underwriters of the Underwriters Option in full, the sale and issuance of the Option Shares was completed. The total gross proceeds of the sale and issuance of the Option Shares to TAT, were $6.3 million. The net proceeds for the Company from this public offering after issuance costs was $45.4 million.

As of December 31, 2025, TAT had cash and cash equivalents and restricted cash of $51.5 million compared to $ 7.4 million as of December 31, 2024, an increase of $44 million primarily due to the previously mentioned public offering agreement in June 2025 coupled with strong cash flows from operations.

During 2025, TAT decreased its loans and lines of credit from commercial banks by $4.4 million and repaid loans in the amount of $2.1 million.

		Total long term loans and credit line balance amount as of the year ended December 31
		December 31,				Current Interest Rate			Duration (in Years)
		2025		2024
Israel
Government guaranteed loans	a	$	3,833	$	3,990		7.25	%	5-10
Commercial loans	b		1,961		2,171		6.65	%	7
United States
Commercial loans	c		5,480		6,285		3.75% - 4.2	%	7-10
Line of credit	d		-		4,350		7.25% - 8.6	%	Revolving
Machinery finance loans	e		438		575		6.5	%	5
		$	11,712	$	17,371

The maturities of long-term loans are as follows:

Year	Amount
2026	$	2,227
2027		3,427
2028		2,057
2029		1,534
2030 and after		2,467
	$	11,712

In respect of the credit lines and the loans in (a), (c) and (d) above, the Company and its subsidiaries are required to meet certain financial covenants. As of December 31, 2025 the Company and its subsidiaries met all its covenants.

Capital expenditures for the years ended December 31, 2025, 2024 and 2023 were approximately $10.9 million, $3.9 million and $3.6 million, respectively. TAT funded these expenditures mainly from its own cash resources and cash flows from operations.

TAT’s management believes that anticipated cash flow from operations and its current cash balances will be sufficient to meet its cash requirements for at least 12 months from the financial statement issuance date. TAT’s future capital requirements will depend on many factors, including its rate of revenue growth, the expansion of its selling and marketing activities, costs associated with expansion into new markets and the timing of the introduction of new products and services.

Cash Flows

The following table summarizes TAT’s cash flows for the periods presented:

	Year Ended December 31,
	(in thousands)
U.S. dollars in thousands	2025			2024			2023
Net cash provided by (used in) operating activities	$	14,974		$	(5,818	)	$	2,255
Net cash used in investing activities		(10,054	)		(3,851	)		(3,579	)
Net cash provided by financing activities		39,212			161			10,240
Net increase (decrease) in cash and cash equivalents		44,132			(9,508	)		8,916
Cash and cash equivalents at beginning of the year		7,434			16,942			8,026
Cash and cash equivalents at end of the year	$	51,566		$	7,434		$	16,942

Net cash provided by operating activities for the year ended December 31, 2025, amounted to approximately $15.0 million, compared to net cash used by operating activities of $5.8 million for the year ended December 31, 2024 and net cash provided by operating activities of $2.3 million for the year ended December 31, 2023.

Net cash provided by operating activities for the year ended December 31, 2025 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $5.1 million for depreciation and amortization; an upward adjustment of $1.2 million for stock based compensation; an upward adjustment of $1.9 million for the foreign currency loss and inventory valuation; an upward adjustment of $1.9 million for deferred income taxes; an offset adjustment of $7.5 million for inventory; and a downward adjustment of $3.5 million for increase in trade accounts receivable.

Net cash used in operating activities for the year ended December 31, 2024 was impacted by the Company’s growing working capital needs. Net cash used in operating activities for the year ended December 31, 2024 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $5.5 million for depreciation and amortization; an upward adjustment of $4.7 million for an increase in trade accrued expenses other; an offset adjustment of $17.2 million for inventory; and a downward adjustment of $9.7 million for increase in trade accounts receivable.

Net cash provided by operating activities for the year ended December 31, 2023 was principally derived from the following adjustments of non-cash line items: an upward adjustment of $4.7 million for depreciation and amortization; an upward adjustment of $4.1 million for an increase in trade accrued expenses other; an offset adjustment of $5.4 million for inventory; and a downward adjustment of $4.2 million for increase in trade accounts receivable.

In the year ended December 31, 2025, net cash used by investing activities was $10.1 million, out of which approximately $11.0 million was attributed to investment mainly in new machinery and equipment and $0.9 million from sale of machinery and equipment.

In the year ended December 31, 2024, net cash used by investing activities was $3.9 million, out of which approximately $5.1 million was attributed to investment mainly in new machinery and equipment and $1 million from sale of machinery and equipment.

In the year ended December 31, 2023, net cash used by investing activities was $3.6 million, out of which approximately $5.1 million was attributed to investment mainly in new machinery and buildings and $2.0 million from sale of machinery and equipment.

In the year ended December 31, 2025, net cash provided by financing activities was $39.2 million. In the year ended December 31, 2025, net cash provided by financing activities was primarily attributable to a net amount of $45.4 million from issuance of ordinary shares during 2025, net of $6.5 million repayment of short term credit line and repayment of long term loans.

In the year ended December 31, 2024, net cash provided by financing activities was $0.2 million. In the year ended December 31, 2024, net cash provided by financing activities was primarily attributable to an amount of $9.8 million from issuance of ordinary shares during 2024, net of $9.7 million repayment of short term credit line and repayment of long term loans.

In the year ended December 31, 2023, net cash provided by financing activities was primarily attributable to an amount of $10.2 million from issuance of ordinary shares and exercise of options during 2023.

L. Research

and Development, Patents and Licenses

Not applicable.

M. Trend

Information

In recent years, the aerospace industry in which we operate has been impacted by the increase in number of commercial and defense aircraft, increase in commercial passenger traffic and a corresponding increase in airlines’ revenue. Commercial carriers remain committed to their efforts to reduce cost of MRO activities and increase efficiencies.

There is a risk that the political environment in Israel could continue to prevent certain countries from doing business with us, in addition to the increased competition may have an adverse effect on our business. Given the above, we cannot guarantee or predict what our sales will be, what trends will develop, and if any changes in our business and marketing strategy will be implemented.

N. Off-Balance

Sheet Arrangements

We are not a party to any material off-balance sheet arrangements. In addition, we have no unconsolidated special purpose financing or partnership entities that are likely to create material contingent obligations.

Item 6.

Directors, Senior Management and Employees

A. Directors

and Senior Management

Set forth below are the name, age, principal position and a biographical description of each of our directors and executive officers, as of the date hereof:

Name	Age	Position
Amos Malka (4)(5)	73	Chairman of the Board of Directors
Igal Zamir (5)	60	Chief Executive Officer, President and Director
Ehud Ben – Yair	62	Chief Financial Officer
Jason Lewandowski	52	Chief Operational Officer
Matthew Hinkle	39	Chief Accounting Officer
Brian Rea	55	Chief Human Resources Officer
Liron Topaz	45	General Manager of TAT Israel
Bruce Patterson	62	General Manager of Piedmont
Paul Maness	42	General Manager of Limco
Moti Glick (1)(2)(4)	73	Independent Director
Ronnie Meninger (1)(3)	69	Independent Director
Amir Harel (1)(2)(3)(5)	64	Independent Director
Eitan Oppenheim (1)(3)(5)	60	Independent Director
Sagit Manor (1)(2)(4)	53	Independent Director

(1) “Independent Director” under SEC requirements and NASDAQ Marketplace Rules

(2) Member of the Company’s Audit Committee

(3) Member of the Company’s Compensation Committee

(4) Member of the Nominating Governance and Sustainability Committee

(5) Member of Investment and M&A Committee

Management

Mr. Igal Zamir serves

as TAT’s Chief Executive Officer and President in April 2016 and was appointed as a board member on July 2025. Prior to joining TAT, from 2009 until 2013, Mr. Zamir served as President at Mapco Express, a wholly-owned subsidiary of Delek US Holdings Inc., a NYSE-listed company which owns and operates 370 convenient stores and gas stations in the southeastern region of the United States. Prior to Mapco Express, from 2006 until 2009, Mr. Zamir served as CEO of Metrolight, a provider of proprietary energy saving solutions in High Intensity Discharge (HID) lighting systems. From 1998 until 2004, Mr. Zamir served as CEO of Rostam, a leading provider of private label feminine hygiene products. Mr. Zamir holds a B.Sc. in Industrial Engineering from Tel Aviv University and an MBA from Bar-Ilan University.

Mr. Ehud Ben-Yair was

appointed as TAT's Chief Financial Officer in May 2018. Prior to joining TAT, Mr. Ben- Yair served as the Chief Financial Officer of SHL Telemedicine, a public company traded on the Swiss stock exchange (SIX: SHLTN) engaging in the field of digital health. Between 2012-2016, Mr. Ben Yair has served as the Chief Financial Officer of Opgal Optronics, a subsidiary of Elbit Systems (NASDAQ: ESLT), a company developing and manufacturing thermal imaging cameras for military and civilian aerospace markets. Prior to that, Mr. Ben- Yair has served for 8 years as the Chief Financial Officer of Orad Hi-Tech Systems, a public company traded on the AIM and German stock exchange (OHT), a company developing, manufacturing and selling proprietary hardware to TV stations and broadcasters. Mr. Ben Yair is a Certified Public Accountant and holds a B.A. in Economics and Accounting from the Ben-Gurion University in Israel.

Mr. Jason Lewandowski

was appointed as TAT’s COO in December 2022. Mr. Lewandowski began his professional career as a Surface Warfare Officer in the United States Navy in May of 1997. After 7 years of service on 3 different warships, and US commendations for his role in Operation Enduring Freedom, he left the US Navy and began his career in corporate America within Honeywell’s Aerospace business. From 2005 to 2017, he led varying leadership roles within Honeywell Aerospace’s operations and integrated supply chain teams at over 8 different manufacturing locations. In his final position with Honeywell he was a multi-site Sr. Director of Operations overseeing 2 OEM facilities that manufactured brake pads and air foils, and 3 R&O facilities that repaired and tested aircraft engines and APU’s. In 2017 Mr. Lewandowski left Honeywell to help scale operations for North America’s leading transit producer of purpose-built electric buses and batteries, Proterra Inc. Over the next 5 years he served as GM of Proterra’s largest electric bus facility, VP of Supply Chain, and VP of Manufacturing, playing an integral role in helping the company become publicly traded. Mr. Lewandowski holds a Bachelor of Science in Electrical Engineering from Marquette University (1997) and an MBA from Carnegie Mellon’s Tepper School of Business (2005).

Mr. Matthew

Hinkle was appointed as TAT's Chief Accounting Officer in September 2025. Mr. Hinkle began his career at Ernst & Young, spending eight years in the assurance practice providing audit and advisory services where he built a strong foundation in technical accounting, financial reporting, and internal controls. Prior to joining TAT, Mr. Hinkle served as the Senior Director of Accounting for The Anderson’s, Inc,, a Fortune 500 public company traded on the NASDAQ exchange (ANDE). Mr. Hinkle is a Certified Public Accountant and holds a Bachelor’s in Business Administration and a Master of Science in Accountancy degrees from the University of Toledo. He also holds an Executive Education Certificate in Machine Learning in Business from MIT.

Mr. Brian Rea was

appointed to TAT’s Chief Human Resources Officer in September 2025. Before joining TAT Technologies, Brian served as Chief Human Resources Officer at AmesburyTruth. There he led a comprehensive HR and EHS transformation for a workforce of 3,500 employees—advancing talent acquisition, performance management, succession planning, and diversity & inclusion. He played a pivotal role in executive transitions, served as Board Secretary, and supported the Compensation Committee in shaping governance and leadership strategy. Earlier in his career, Brian held senior HR leadership roles with well-known organizations including MasterBrand Cabinets, Land O’Lakes, Post Foods, and PepsiCo’s Quaker Oats Division. His expertise spans labor and employee relations, organizational design, change leadership, and executive coaching, with a consistent record of driving growth through people-centric transformation. Brian holds an MBA in Organizational Leadership from Eastern University and a BA in Psychology from Elmira College.

Mr. Liron Topaz

has been with TAT since 2017 and prior to his current role as General Manager of TAT Israel, he served as TAT’s Sales and Marketing Executive Vice President. Prior to joining TAT, Mr. Topaz served as Vice President at A.L. GROUP and has managed and lead the business development and marketing strategy of the entire group including four manufacturing facilities, five trading companies around the globe and 1500 employees. Mr. Topaz holds a B.A. in Management and Economics from the Open University-Israel, and M.B.A in Business administration from the Peres Academic Center, Israel.

Mr. Bruce Patterson

was appointed as General Manager of Piedmont in 2025. Mr. Patterson brings more than 35 years of experience in the aerospace manufacturing industry, offering deep production expertise to meet the demands of today’s competitive marketplace. He has held senior management and executive leadership roles with tier-one OEM airframe suppliers, including serving as COO at HAECO Cabin Solutions and EVP of Industrials at Albers Aerospace. Throughout his career, Bruce has led the development of first-class interior products for many of the world’s leading airlines, including Emirates, Etihad, British Airways, and Lufthansa, as well as seating programs directly for Airbus and The Boeing Company. Mr. Patterson holds a Bachelor of Engineering in Mechanical & Industrial Engineering from Queen’s University Belfast.

Mr. Paul Maness

was appointed as General Manager of Limco in March 2024. Mr. Manes brings years of experience in operations leadership as well as military leadership as an Army Ranger. Prior to joining Limco, Mr. Manes worked as a Global Health and Safety Leader for Baker Hughes and prior to that, as a Plant Manager for the same company in Claremore, Oklahoma. Before that, Paul served as the Plant Manager in a machine assembly shop and an operations manager in a steel galvanizing facility. Mr. Manes has served in the United States Army for 24 years. Mr. Manes holds a Master's Degree from Webster University and a B.S from Oklahoma State University.

Mr. Lars Hesbjerg

was appointed as Vice President of Sales in April 2021. Prior joining TAT, Mr. Lars served 18 years with the Donaldson Company, Inc. in various leadership roles. From 2019 to 2021 he served as Global Business Unit Director of Aerospace, and between 2016-2019 as the Global Sales Director of Aerospace and Defense. Between 2011- 2016 he led the Off-Road OEM sales organization as the Sales Director which included large OEMs such as Caterpillar, Bobcat. Between 2010 and 2011 he was the Director of Sales, Global On-Road OEM. Between 2006 -2011 he was the Sales Director of the Gas Turbine Group of Donaldson Company. Mr. Hesbjerg holds an economics degree from Niels Brock College, a B.A. degree in International Business and an Executive Management Diploma degree from the University of Minnesota.

Directors

Mr. Amos Malka was elected as Chairman of our Board of Directors in June 2016. Mr. Malka is the founder and chairman of Spire Security Solutions Ltd., a security, intelligence and cyber security provider. From 2018 until 2022, Mr. Malka served as the Chairman of the Board of Directors of Aitech Rugged Group Inc. From 2007 until 2015, Mr. Malka served as the chairman and CEO of Logic Industries Ltd. From 2007 until 2010, he also served as chairman of Plasan Sasa LTD., an armored vehicle manufacturer. From 2005 until 2007, he served as the chairman of Albar, a leading company in the Israeli automobile sector. From 2002 until 2005, Mr. Malka served as the CEO of Elul Technologies Ltd., an aerospace and defense business development and consulting company .Mr. Malka also serves on the boards of directors of Imagesat International and Delek Automotive System. Mr. Malka retired from the IDF in 2002 at the rank of Major General, after 31 years of service. He served as commander of the IDF Ground Forces Command, and later as Head of the Israeli Defense Intelligence, a post he held until his retirement in 2002. Mr. Malka holds B.A. in History from Tel Aviv University, Israel. He also graduated from the IDF Staff & Command College and its National Defense Academy.

Mr. Amir Harel joined

TAT’s Board of Directors in July 2025. Mr. Harel is serving as the Chief Financial Officer of PlaxidityX from August 2025. Prior to that, Mr. Harel served as the Chief Financial Officer of Planck Resolution Ltd. from 2020 to 2025. Prior to joining Planck, Mr. Harel served as the Chief Financial Officer of Tyto Care Ltd. from 2019 to 2020, as the Chief Financial Officer of Natural Intelligence Ltd. from 2016 to 2019, as the Chief Financial Officer of Logic Industries Ltd. from 2015 to 2016, as the Chief Financial Officer of Amiad Water Systems from 2011 to 2015, as the Chief Financial Officer of InSightec Ltd. from 2005 to 2011, as the Chief Financial Officer of TransChip Inc. from 2004 to 2005, as the Chief Financial Officer of Tower Semiconductor Ltd. from 1998 to 2004, and as the Chief Financial Officer of Elbit Vision Systems Ltd. from 1994 to 1998. Mr. Harel holds a B.Sc. in Industrial Engineering and a Master in Industrial Management from the Technion – Israel Institute of Technology.

Mr. Moti Glick

joined TAT’s Board of Directors as an external director in November 2021. From 1991 until 2021 Mr. Glick served as the CEO of Overseas Commerce, a public company traded on the Tel Aviv Stock Exchange. Prior to that Mr. Glick was CFO of Clal Trading, a public company as well. Mr. Glick is a CPA (ISR) and holds a B.A. in Economics from Bar-Elan University.

Ms. Ronnie Meninger joined TAT's Board of Directors as an independent director in November 2021. Ms. Meninger brings vast experience in industrial companies, having served as CEO of Chemada Fine Chemicals Ltd. and Algatechnologies Ltd. among other managerial positions in various companies. Ms. Meninger serves on the boards of Albaad, OSG Group, and Maytronics. For the last 11 years she acts as a business consultant for companies and startups. Mrs. Meninger holds a BSc in Life Sciences and an MBA from the Hebrew University of Jerusalem.

Mr. Eithan Oppenheim joined TAT’s Board of Directors in November 2025. Mr. Oppenheim currently serves as executive chairman of the board of Nova Ltd. (NVMI/NVMI.TA) (“Nova”), a position he has held since March 2023, after previously serving as a member of Nova’s board since October 2019. From July 2013 to March 2023, Mr. Oppenheim served as President and Chief Executive Officer of Nova, and prior to that as Executive Vice President Global Business Group since November 2010. Between 2009 and 2010, he was Vice President and Europe General Manager of Alvarion Ltd., a Nasdaq-listed public company. From 2007 to 2009, Mr. Oppenheim served as Vice President of Sales and Marketing at OptimalTest Ltd. Previously, from 2002 to 2006, he was Vice President – Business Manager of the Flat Panel Displays division at Orbotech Ltd., a Nasdaq-listed public company. From 2001 to 2002, he served as Managing Director of Asia Pacific at TTI Telecom International, a leading provider of assurance, analytics and optimization solutions to communications service providers worldwide. From 1994 to 2001, Mr. Oppenheim held several key executive positions at Comverse Network Systems Ltd., also a Nasdaq-listed public company. Mr. Oppenheim holds a B.A. in Economics from the University of Haifa, Israel, and an M.B.A. from Ben-Gurion University of the Negev, Israel.

Ms. Sagit Manor joined TAT’s Board of Directors in November 2025. Ms. Manor currently serves as the Chief Financial Officer of Nayax Ltd. (NASDAQ/TASE: NYAX) (“Nayax”), a position she has held since 2021. Prior to joining Nayax, she served for four years as Chief Executive Officer and Chief Financial Officer of Nyotron, an information-security company. Earlier, she served as Vice President of Finance and Chief Financial Officer of Verifone, Inc., a financial technology manufacturing company. Ms. Manor also serves as a director of Tigo Energy Inc. (Nasdaq: TYGO). She is a Certified Public Accountant and holds a Bachelor of Arts degree in Business and Accounting from the College of Management Academic Studies in Rishon LeZion, Israel. Ms. Manor holds dual Israeli and American citizenship and resides in the United States.

B. Compensation

of Directors and Executive Officers

The following table sets forth all compensation TAT paid to all of its directors and executive officers as a group for the year ended December 31, 2025.

	Salaries, fees, Commissions and bonuses (Amounts in<br> Thousands US)	Other benefits (Amounts in Thousands US)
All directors and executive officers as a group (15 executives and directors)

All values are in US Dollars.

During the year ended December 31, 2025, TAT paid its directors (except for its active chairman of the Board of Directors, Mr. Amos Malka), the fixed medium amounts permitted by law to an external director (within the meaning of the Israeli Companies Law) which was a per meeting attendance fee of NIS 2,954 (approximately $926), plus an annual fee of NIS 79,347 (approximately $24,874).

Pursuant to its agreement with Mr. Amos Malka, TAT's active chairman of the Board of Directors, TAT paid Mr. Malka a monthly fee of NIS 50,000 plus VAT.

In addition, the Company’s shareholders approved the following compensation terms for each of Mr. Amir Harel, Mr. Eitan Oppenheim, and Ms. Sagit Manor (the “Eligible Directors”): an annual cash retainer of $40,000 per board member, with additional annual fees for committee roles as follows: $16,000 for serving as Chair of the Audit Committee, $12,000 for Chair of the Compensation Committee, $8,000 for Chair of the Nomination/Governance Committee, and $12,000 for Chair of the M&A/Investment Committee. Members of these committees will receive $8,000 for the Audit Committee, $6,000 for the Compensation Committee, $4,000 for the Nomination/Governance Committee, and $6,000 for the M&A/Investment Committee. A “typical director” (serving as Board Member Retainer, Chair of the Compensation Committee, and Member of the Audit Committee) would receive total annual cash compensation of $60,000. For each Eligible Director the cash retainer will be paid in two semi-annual payment. For clarity, an Eligible Director who has served during only a portion of the relevant semi-annual period will receive a prorated payment of the semi-annual payment of the applicable retainer(s), calculated based on the number of days during such Eligible Director has served in the relevant capacities. In addition, the proposed compensation terms will include a grant of Restricted Stock Units (“RSUs”) to each Eligible Director, representing an annual grant value of $80,000 on the first trading day immediately following each annual meeting of the Company’s stockholders (rounded to the nearest whole Share). The number of RSUs to be granted is based on the fair market value of the Company’s shares on the date of grant, in accordance with the Company’s Incentive (as defined below). No Eligible Director may be granted, in any fiscal year, equity awards (including any awards granted under the Plan) with values (based on their grant date fair value determined in accordance with U.S. GAAP), and be provided any other compensation (including without limitation any cash retainers or fees) in amounts that, in any fiscal year, in the aggregate, exceed $168,000.

In addition, the shareholders approved the grant of a one-time special bonus to its Chief Financial Officer, Mr. Ehud Ben-Yair, in an amount equal to four months of his base salary, totaling $110,000. This special bonus exceeds the cap set forth in the Company’s compensation policy, which limits total bonuses to seven months of base salary, and was therefore approved as an exception to that policy. The bonus was intended to recognize Mr. Ben-Yair’s exceptional efforts and significant contribution to the successful completion of an important milestone for the Company. The grant of the special bonus was reviewed and approved by the Company’s compensation committee and Board of Directors and was submitted for shareholder approval in accordance with applicable law.

The table below sets forth the compensation paid to our five most highly compensated senior office holders (as defined in the Israeli Companies Law) during or with respect to the year ended December 31, 2025, in the disclosure format of Regulation 21 of the Israeli Securities Regulations (Periodic and Immediate Reports), 1970. We refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.”

For purposes of the table and the summary below, and in accordance with the above-mentioned securities regulations, “compensation” includes base salary, bonuses, equity-based compensation, retirement or termination payments, benefits and perquisites such as car, phone and social benefits and any undertaking to provide such compensation.

Information Regarding Covered Executives (1)<br> (Amounts in Thousands US)
Name and Principal Position(2)		Benefits and<br> Perquisites^(3)^		Variable Compensation^(4)^		Equity-Based<br> Compensation^(5)^		Total
Igal Zamir, CEO and President	371	$	8	$	257	$	401	$	1,037
Ehud Ben- Yair, CFO	360		11		303		120		794
Jason Lewandowski, COO	299		14		107		15		435
Liron Topaz, General Manager TAT Israel	210		61		95		99		465
Paul Maness, General Manager Limco	221		7		61		60		349

All values are in US Dollars.

(1)	All amounts reported in the table are in terms of cost to TAT,<br> as recorded in our financial statements.
(2)	Cash compensation amounts denominated in currencies other than<br> the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2025.
(3)	Amounts reported in this column include benefits and perquisites,<br> including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments,<br> contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurance and benefits,<br> risk insurance (e.g., life, disability, accident), convalescence pay, payments for social security, tax gross-up payments and other benefits<br> and perquisites consistent with our guidelines.
(4)	Amounts reported in this column refer to variable compensation mainly bonus payments<br> according to the company's incentive plan paid during 2025 in respect of performance related to fiscal year 2024 and special bonus paid<br> in 2025 for private placements/equity financing.
(5)	Amounts reported in this column represent the expense recorded<br> in our financial statements for the year ended December 31, 2025 in connection with equity-based compensation granted to the Covered Executive.

C. Board

Practices

Introduction

Under the Israeli Companies Law and our articles of association, the management of our business is vested in our board of directors. The board of directors may exercise all powers and may take all actions that are not specifically granted to another organ in the Company (including our shareholders). Our executive officers are responsible for our day-to-day management. Our executive officers have individual responsibilities established by our Chief Executive Officer and board of directors.

Election of Directors

Our articles of association provide for a board of directors consisting of such number of directors as may be determined from time to time at a general meeting of shareholders, provided that it shall be no less than two or more than eleven. Our board of directors is currently composed of seven directors.

Pursuant to our articles of association and in accordance with the Israeli Companies Law, our directors are elected at our annual general meeting of shareholders by a vote of the holders of a majority of the voting power represented and voting at such meeting; in addition, directors may be appointed by a vote of a majority of directors then in office. All our directors hold office until the annual general meeting of shareholders succeeding their election (provided that if no directors are elected at the annual general meeting, the directors in office at the time such meeting was convened shall continue to hold their office) or until their earlier death, resignation, removal or other circumstances as set forth in the Israeli law. All the members of our board of directors may be re-elected upon completion of their term of office.

The Israeli Companies Law requires the board of directors of a public company to determine a minimum number of directors with ‘‘accounting and financial expertise’’. Our board of directors determined, accordingly, that at least two directors must have ‘‘accounting and financial expertise’’ as such term is defined by regulations promulgated under the Israeli Companies Law.

External and Independent Directors

External Directors. Under

the Companies Law, companies organized under the laws of the State of Israel that are “public companies,” including companies with shares listed on NASDAQ, are generally required to appoint at least two external directors who meet the independence qualification requirements in the Companies Law.

However, pursuant to Israeli relief regulations adopted in 2016,

an Israeli company traded on NASDAQ that does not have a “controlling shareholder” (as defined in the Companies Law) may elect not to appoint external directors to its board of directors and not to comply with the audit committee and compensation committee composition and chairperson requirements of the Companies Law; provided, the company complies with the applicable NASDAQ independent director requirements and the NASDAQ audit committee and compensation committee composition requirements.

In accordance with the relief regulations, our nominating, governance and environmental committee and board of directors elected, in August 2025, not to appoint external directors to the board of directors and not to comply with the audit committee and compensation committee composition and chairperson requirements of the Companies Law, and to transition our external directors to become “regular” independent directors within the meaning of the NASDAQ Marketplace Rules.

Audit Committee

Under the Israeli Companies Law, the board of directors of any public company must establish an audit committee. In general, the audit committee must consist of at least three directors and a majority of the audit committee members must comply with the director independence requirements prescribed by the Israeli Companies Law. The audit committee may not include (i) the chairman of the board of directors, (ii) any director employed by the Company or by a controlling shareholder of the company (including a company which is controlled by the controlling shareholder), (iii) any director providing services to the company or to a controlling shareholder of the company (including to a company which is controlled by the controlling shareholder) on an ongoing basis, or (iv) a controlling shareholder or any of the controlling shareholder’s relatives.

In addition, the NASDAQ Marketplace Rules require us to establish an audit committee comprised of at least three members, all of whom must be independent directors, each of whom is financially literate and satisfies the respective “independence” requirements of the SEC and NASDAQ and one of whom has accounting or related financial management expertise at senior levels within a company.

Our audit committee acts also as a committee for the review and the approval of our financial statements, and as such, assists our board of directors in overseeing the accounting and financial reporting processes of our company and audits of our financial statements, including the integrity of our financial statements, compliance with legal and regulatory requirements, our independent registered public accountants’ qualifications and independence, the performance of our internal audit function and independent registered public accountants, finding any defects in the business management of our company and proposing to our board of directors ways to correct such defects, approving related-party (officers, directors, controlling shareholder, etc.) transactions with the company as required by Israeli law, examining the scope of work and the payment to our independent auditors and such other duties as may be directed by our board of directors. The audit committee may consult from time to time with our independent auditors and internal auditor with respect to matters involving financial reporting and internal accounting controls.

Our audit committee consists of three members of our board of directors who satisfy the respective “independence” requirements of the SEC, NASDAQ and Israeli law for audit committee members. Our board of directors has determined that each member of our audit committee qualifies as an audit committee financial expert, as defined by rules of the SEC. The audit committee meets at least once each quarter.

Compensation Committee

Under the Israeli Companies Law, the board of directors of any public company must establish a compensation committee. The compensation committee must consist of at least three directors and a majority of the committee members must comply with the director independence requirements prescribed by the Israeli Companies Law. Similar to the rules that apply to the audit committee, the compensation committee may not include the chairman of the board, or any director employed by us, by a controlling shareholder or by any entity controlled by a controlling shareholder, or any director providing services to us, to a controlling shareholder or to any entity controlled by a controlling shareholder on a regular basis, or any director whose primary income is dependent on a controlling shareholder, and may not include a controlling shareholder or any of its relatives. Individuals who are not permitted to be compensation committee members may not participate in the committee’s meetings other than to present a particular issue; provided, however, that an employee that is not a controlling shareholder or relative may participate in the committee’s discussions but not in any vote; other than the company’s legal counsel and corporate secretary who may participate in the committee’s discussions and votes if requested by the committee.

The compensation committee’s duties include recommending to the board of directors a compensation policy for executives and monitor its implementation, approve compensation terms of executive officers, directors and employees affiliated with controlling shareholders, make recommendations to the board of directors regarding the issuance of equity incentive awards under our equity incentive plan and exempt certain compensation arrangements from the requirement to obtain shareholder approval under the Israeli Companies Law. The compensation committee meets at least twice a year, with further meetings to occur, or actions to be taken by unanimous written consent, when deemed necessary or desirable by the committee or its chairperson.

Our compensation committee consists of an independent director under the respective requirements of the SEC and NASDAQ and complies with the Israeli Companies Law criteria for compensation committee members.

Nominating Governance and Sustainability Committee

In November 2025, our board of directors established our Nominating Governance and Sustainability Committee. The committee is responsible for identifying individuals qualified to become board members and recommending that the board of directors consider the director nominees for election at the general meeting of shareholders. Additionally, the committee is responsible for making recommendations to the Board regarding corporate governance matters and policies concerning business conduct and ethics. The committee is also responsible for overseeing the Company’s strategies, policies, and programs related to environmental, social, and governance (ESG) matters.

Investment and M&A Committee

In November 2025, our board of directors established our Investment and M&A Committee. The committee is responsible for providing the board of directors with recommendations, in relation to: (i) the Company’s financing strategy, and (ii) the identification and analysis of acquisition, merger, joint venture, and investment opportunities.

Internal Audit

The Israeli Companies Law requires the board of directors of a public company to appoint an internal auditor following a recommendation by the audit committee. The role of the internal auditor is to examine, among other things, the company’s compliance with applicable law and orderly business practice. The internal auditor must meet certain statutory requirements of independence. Mr. Doron Cohen has served as our internal auditor since December 24, 2008.

Directors’ Service Contracts

There are no arrangements or understandings between us and any of our subsidiaries, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their employment or service as directors of our company or any of our subsidiaries.

Chairman of the Board

Under the Israeli Companies Law, the general manager of a company (or a relative of the general manager) may not serve as the chairman of the board of directors, and the chairman of the board of directors (or a relative of the chairman of the board of directors) may not serve as the general manager, unless approved by the shareholders by a special majority vote prescribed by the Israeli Companies Law. The shareholder vote cannot authorize the appointment for a period of longer than three years, which period may be extended from time to time by the shareholders with a similar special majority vote. The chairman of the board of directors shall not hold any other position with the company (except as general manager if approved in accordance with the above procedure) or in any entity controlled by the company, other than as chairman of the board of directors of a controlled entity, and the company shall not delegate to the chairman duties that, directly or indirectly, make him or her subordinate to the general manager.

Approval of Related Party Transactions under Israeli Law

Fiduciary Duties of Office Holders

The Israeli Companies Law codifies the fiduciary duties that “office holders,” including directors and executive officers, owe to a company. An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act at a level of care that a reasonable office holder in the same position would employ under the same circumstances. This includes the duty to utilize reasonable means to obtain (i) information regarding the business feasibility of a given action brought for his approval or performed by him by virtue of his position and (ii) all other information of importance pertaining to the foregoing actions. The duty of loyalty requires that an office holder acts in good faith and for the benefit of the company, including (i) avoiding any conflict of interest between the office holder’s position in the company and any other position he holds or his personal affairs, (ii) avoiding any competition with the company’s business, (iii) avoiding exploiting any business opportunity of the company in order to receive personal gain for the office holder or others, and (iv) disclosing to the company any information or documents relating to the company’s affairs that the office holder has received by virtue of his position as an office holder.

Disclosure of Personal Interests of an Office Holder; Approval of Transactions with Office Holders

The Israeli Companies Law requires that an office holder promptly, and no later than the first board meeting at which such transaction is considered, disclose any personal interest that he or she may have and all related material information known to him or her and any documents in their position, in connection with any existing or proposed transaction by us. An office holder who did not disclose his or her personal interests will be deemed as breaching his or her fiduciary duties. In addition, if the transaction is an extraordinary transaction, that is, a transaction other than in the ordinary course of business or other than in accordance with market terms, or likely to have a material impact on the company’s profitability, assets or liabilities, the office holder must also disclose any personal interest held by the office holder’s spouse, sibling, parent, grandparent, child as well as sibling or parent of such person's spouse or the spouse of any of the above, or by any corporation in which the office holder or his relative (as defined in the Israeli Companies Law) is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager.

Under the Israeli Companies Law, in general, all arrangements as to compensation of office holders who are not directors (other than the Chief Executive Officer) require the approval of the compensation committee and the board of directors, including exculpation, insurance and indemnification of, or an undertaking to, indemnify an office holder who is not a director. The compensation of office holders who are directors and compensation of the Chief Executive Officer must be approved by the compensation committee, board of directors and the general meeting of shareholders.

Some transactions, actions and arrangements involving an office holder (or a third party in which an office holder has an interest) must be approved by the board of directors or as otherwise provided for in a company’s articles of association. If the transaction is an extraordinary transaction (which is defined as a transaction not in the ordinary course of business and for a material value) such a transaction must be approved by the audit committee and by the board of directors itself, and under certain circumstances shareholder approval may be required. A director who has a personal interest in a transaction that is considered at a meeting of the board of directors or the audit committee may not be present during the board of directors or audit committee discussions and may not vote on the transaction, unless the transaction is not an extraordinary transaction or the majority of the members of the board or the audit committee have a personal interest, as the case may be. In the event the majority of the members of the board of directors or the audit committee have a personal interest, then the approval of the general meeting of shareholders is also required.

Disclosure of Personal Interests of a Controlling Shareholder; Approval of Certain Transactions

Pursuant the Companies Law, the disclosure requirements regarding personal interest that apply to directors and executive officers also apply to a controlling shareholder of a public company. A controlling shareholder is a shareholder who has the ability to direct the activities of a company, including s shareholder who holds 25% or more of the voting rights if no other shareholder holds more than 50% of the voting rights. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated.

In addition, an extraordinary transaction between a public company and a controlling shareholder has a personal interest, and the terms of any compensation arrangement of a controlling shareholder who is an office holder or his relative, require the approval of a company’s audit committee (or compensation committee with respect to compensation arrangements), board of directors and a special majority vote of shareholders without personal interest, in that order.

Compensation of Executive Officers and Directors

In accordance with the Israeli Companies Law, we have adopted a compensation policy for our executive officers and directors. The purpose of the policy is to describe our overall compensation strategy for our executive officers and directors and to provide guidelines for setting their compensation, as prescribed by the Israeli Companies Law. In accordance with the Israeli Companies Law, the policy must be reviewed and readopted at least once every three years. On March 2025, the Company’s annual shareholders meeting, approved the renewal and amendment of the Company’s compensation policy for an additional three years.

Approval of the compensation committee, the board of directors and our shareholders, in that order, is required for the adoption of the compensation policy. The shareholders’ approval must include the majority of shares voted at the meeting. In addition to the majority vote, the shareholder approval must satisfy either of two additional tests:

•	The majority includes at least a majority of the shares voted by shareholders other than our controlling shareholders or shareholders<br> who have a personal interest in the adoption of the compensation policies; or
•	The total number of shares held by non-controlling shareholders and disinterested shareholders that voted against the adoption of<br> the compensation policies does not exceed 2% of the aggregate voting rights of our company.
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Under the Israeli Companies Law, the compensation arrangements for officers (other than the Chief Executive Officer) who are not directors require the approval of the compensation committee and the board of directors; provided, however, that if the compensation arrangement is not in compliance with our executive compensation policy, the arrangement may only be approved by the compensation committee and the board of directors for special reasons to be noted, and the compensation arrangement shall also require a special shareholder approval. If the compensation arrangement is an immaterial amendment to an existing compensation arrangement of an officer who is not a director and is in compliance with our executive compensation policy, the approval of the compensation committee is sufficient.

Arrangements regarding the compensation of the Chief Executive Officer and directors require the approval of the compensation committee, the board of directors and our shareholders, in that order. In certain limited cases, the compensation of a new Chief Executive Officer who is not a director may be the approved without approval of the shareholders.

Variable Cash Incentive

The compensation committee and board of directors may adopt, from time to time, a cash incentive plan, which will set forth for each executive certain targets which form such executives on target cash payment (the “On Target Cash Plan”) and the rules or formula for calculation of the On Target Cash Plan payment once actual achievements are known.

The compensation committee and board of directors may include in the On Target Cash Plan predetermined thresholds and caps to correlate an executive’s On Target Cash Plan payments with actual achievements.

The actual payment of the annual On Target Cash Plan for the active chairman of the board of directors (the “Active Chairman”), the CEO and other executives in a given year shall be capped as determined by our board of directors, but in no event shall exceed the ratio set forth in the table below.

The On Target Cash Plans may be composed based on a mix of (i) the company target; (ii) personal targets (KPIs); and (iii) personal evaluation. The weight to be assigned to each of the components per each of the executives shall be as set forth in the table below.

	Active Chairman	CEO	Other Executives
Company Target	100%	75% - 100%	50%-100%
Personal KPIs	NONE	NONE	0%-30%
Personal Evaluation	NONE	0%-25%	0%-30%

The company target shall be determined in accordance with all or part of pre-determined targets of the sales budget, gross profit, operating profit, EBITDA, net income and net cash from operating activities, all in accordance with TAT’s annual budget. If a company target shall apply to a Chief Executive Officer or a President of a subsidiary, such target may be applied up to 100% with respect to the financial results of the relevant subsidiary, and the remaining cash incentive with respect to the financial results of TAT and its subsidiaries on a consolidated basis.

The board of directors may determine to exclude certain profits or loss items from the company target including, but not limited to, certain expenses related to acquisition of a new company, certain expenses related to distribution of dividend, certain items of revenue or any other items per the board of directors’ sole discretion.

With regard to each one of the measurable targets, reference points shall be determined in terms of numerical values, so that compliance with the precise numerical target as determined in the On Target Cash Plan shall constitute compliance with 100% of the target, and also, numerical values shall be determined which will constitute the lower threshold for compliance with the target. The actual rate of compliance with the targets shall be calculated in accordance with the said reference points. Failure to comply with the minimum threshold of at least 75% of a specific target shall not entitle the executive to an On Target Cash Plan payment in respect of the said target. In the event of compliance at a rate of 75% or more with a specific target, the annual On Target Cash Plan shall be calculated in accordance with a key (i.e. linear, steps, etc.) which shall determine – in relation to the point of compliance with the target – the amount of the payment in terms of a percentage of the executive annual base salary, all as shall be set forth in the On Target Cash Plan. In this respect, the compensation committee and the board of directors shall have the right to determine a higher (but not lower) entitlement threshold.

Indemnification and Insurance of Directors and Officers

Insurance of Office Holders

The Israeli Companies Law provides that a company may, if permitted by its articles of association, enter into a contract to insure an office holder for acts or omissions performed by the office holder in such capacity for:

•	Breach of his or her duty of care to the company or to another person;
•	Breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause<br> to assume that his act would not prejudice the company’s interests;
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•	Monetary liability imposed upon the office holder in favor of another person;
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•	A monetary obligation imposed on the office holder in favor of another person who was injured by a violation, as this term is defined<br> in section 52(54)(a)(1)(a) of the Israeli Securities Law, 1968 (“Israeli Securities Law”); and
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•	Expenses expended by the office holder, including reasonable litigation expenses, and including attorney's fees, in respect of any<br> proceeding under chapters 8-C, 8-D or 9-A of the Israeli Securities Law or in respect to any monetary sanction.
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Indemnification of Office Holders

The Israeli Companies Law provides that a company may, if permitted by its articles of association, indemnify an office holder for acts or omissions performed by the office holder in such capacity for:

•	Monetary liability imposed on the office holder in favor of another person by any judgment, including a settlement or an arbitrator’s<br> award approved by a court;
•	Reasonable litigation expenses, including attorney’s fees, actually incurred by the office holder as a result of an investigation<br> or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding concluded without<br> the filing of an indictment against the office holder or the imposition of any monetary liability in lieu of criminal proceedings, or<br> concluded without the filing of an indictment against the office holder and a monetary liability was imposed on the officer holder in<br> lieu of criminal proceedings with respect to a criminal offense that does not require proof of criminal intent;
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•	A monetary obligation imposed on the office holder in favor of another person who was injured by a violation, as this term is defined<br> in section 52(54)(a)(1)(a) of the Israeli Securities Law;
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•	Expenses expended by the office holder, including reasonable litigation expenses, and including attorney's fees, in respect of any<br> proceeding under chapters 8-C, 8-D or 9-A of the Israeli Securities Law or in respect to any monetary sanction;
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•	Reasonable litigation expenses, including attorneys’ fees, incurred by such office holder or which were imposed on him by a<br> court, in proceedings the company instituted against the office holder or that were instituted on the company’s behalf or by another<br> person, or in a criminal charge from which the office holder was acquitted, or in a criminal proceeding in which the office holder was<br> convicted of a crime which does not require proof of criminal intent; or
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•	Any other liability, payment or expense which the company may indemnify its office holders under the Israeli Company Law, the Israeli<br> Securities Law or other Israeli law.
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In accordance with the Israeli Companies Law, a company’s articles of association may permit the company to:

•	Undertake in advance to indemnify an office holder, except that with respect to a financial liability imposed on the office holder<br> by any judgment, settlement or court-approved arbitration award, the undertaking must be limited to types of occurrences, which, in the<br> opinion of the company’s board of directors, are, at the time of the undertaking, foreseeable due to the company’s activities<br> and to an amount or standard that the board of directors has determined is reasonable under the circumstances; and
•	Undertake in advance to indemnify an office holder for reasonable litigation expenses, including attorney’s fees, actually<br> incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided<br> that such investigation or proceeding concluded without the filing of an indictment against the office holder or the imposition of any<br> monetary liability in lieu of criminal proceedings, or concluded without the filing of an indictment against the office holder and a monetary<br> liability was imposed on the officer holder in lieu of criminal proceedings with respect to a criminal offense that does not require proof<br> of criminal intent.
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•	Undertake in advance to indemnify an office holder for reasonable litigation expenses, including attorneys’ fees, incurred<br> by such office holder or which were imposed on him by a court, in proceedings the company instituted against the office holder or that<br> were instituted on the company’s behalf or by another person, or in a criminal charge from which the office holder was acquitted,<br> or in a criminal proceeding in which the office holder was convicted of a crime which does not require proof of criminal intent.
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•	Retroactively indemnify an office holder of the company.
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Limitations on Exculpation, Insurance and Indemnification

The Israeli Companies Law provides that neither a provision of the articles of association permitting the company to enter into a contract to insure the liability of an office holder, nor a provision in the articles of association or a resolution of the board of directors permitting the indemnification of an office holder, nor a provision in the articles of association exempting an office holder from duty to the company shall be valid, where such insurance, indemnification or exemption relates to any of the following:

•	Breach by the office holder of his duty of loyalty, except with respect to insurance coverage or indemnification if the office holder<br> acted in good faith and had reasonable grounds to assume that the act would not prejudice the company;
•	Breach by the office holder of his duty of care if such breach was committed intentionally or recklessly, unless the breach was committed<br> only negligently;
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•	Any act or omission committed with intent to derive an unlawful personal gain; and
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•	Any fine or forfeiture imposed on the office holder.
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Pursuant to our articles of association, the total amount of indemnification that we will pay (in addition to amounts received from an insurance company, if any) to all officers of the company, in aggregate, shall not exceed, in all circumstances, more than 25% of the company's shareholders equity as set forth in the company's recent consolidated financial statements prior to the date that the indemnity is paid. Our articles of association include provisions which allow us to insure, indemnify and exempt our office holders, subject to the provisions of the Israeli Companies Law.

We maintain a directors’ and officers’ liability insurance policy with a-per claim and aggregate coverage limit of $10 million, including legal costs incurred in Israel. In addition, our audit committee, board of directors and shareholders resolved to indemnify our office holders, pursuant to a standard indemnification agreement that provides for indemnification of an office holder in an aggregate amount not to exceed 25% of our equity capital (net worth). To date, we have provided letters of indemnification to all of our officers and directors.

Clawback Policy

In 2023, we adopted a Clawback Policy in compliance with the SEC rules and NASDAQ listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement.

D. Employees

As of December 31, 2025, TAT and its subsidiaries employed 659 employees, of whom 427 were employed in manufacturing and quality control, 150 were employed in engineering and research and development and 82 were employed in general & administration, sales and marketing. Of such employees, 209 were located in Israel and 450 were employed by Limco and Piedmont located in the United States.

Employees in Israel are employed under collective or individual employment agreements. Senior employees in special positions and members of management are employed under individual agreements. Collective bargaining agreements are signed for specified terms and are renewed from time to time. During 2022, TAT's management and the union of TAT Israel agreed to enter into a collective bargaining agreement with respect to employees of TAT Israel. On February 20, 2025, a new collective bargaining agreement was signed that will be in effect until March 31, 2028.

In Turbochrome, a new collective bargaining agreement was also signed with Turbochrome’s union on February 25, 2025, that will be in effect until March 31, 2028.

Certain provisions of the collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordinating Bureau of Economic Organizations (including the Manufacturers Association of Israel) are applicable to our Israeli employees by order of the Israeli Ministry of Economy and Industry. These provisions concern mainly the length of the workday, minimum daily wages for professional workers, pension contributions, insurance for work-related accidents, procedures for terminating employees, determination of severance pay and other employment terms. We generally provide our employees with benefits and working conditions exceeding the required minimums. Furthermore, under the collective bargaining agreements, the wages of most of our employees are linked to the CPI in Israel, although the extent of the linkage is limited.

In addition, Israeli law generally requires severance pay upon the retirement or death of an employee or termination of employment without due cause. Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute which is similar to the United States Social Security Administration. These payments amount to approximately 12% of wages, with the employee contributing approximately 43% and the employer approximately 56%.

We generally grant senior employees based in Israel participation in a particular insurance product called “management insurance”. Management insurance provides a combination of savings plan, insurance and severance pay benefits to the employee, giving the employee a lump sum payment upon retirement (rather than receiving annuity payments) and securing their rights to receive severance pay, if legally entitled, upon termination of employment. In general, the employee contributes an amount equal to approximately 5% to 6% of their wage and the employer contributes an additional amount of approximately 13-1/3% to 16% of such wage. Management insurance is not a legally mandated by Israeli law.

Limco-Piedmont sponsors a 401(K) QACA safe harbor profit sharing plan covering substantially all of its employees in the United States. The plan requires the employer to contribute a match which is currently done on a payroll period basis, matching 100% of the first 2% and 50% of the next 3%. In addition, the plan allows for a discretionary qualified non-elective contribution for the plan year.

E. Share

Ownership

Beneficial Ownership of Executive Officers and Directors

Except as set forth under ‘Stock Option Plans’ and in Item 7A below, none of our directors and executive officers beneficially owns more than 1% of our outstanding shares.

Stock Option Plans

In November 2011, our audit committee and board of directors approved a stock option plan (the “2012 Plan”), which was subsequently approved by TAT’s shareholders, on June 28, 2012. According to the 2012 Plan an aggregate of 980,000 options exercisable into up to 980,000 ordinary shares, of TAT may be granted to certain members of our board of directors and certain senior executives at an exercise price not less than the fair market value of the shares covered by the option on the date of grant.

On August 30, 2018, the Company's compensation committee, followed by the Board of Directors, approved the amended and restated company's 2012 Plan (the “2012 Plan”). On October 4, 2018, the Company's amended and restated 2012 Plan was approved at the annual general meeting of shareholders. As part of the Company's 2012 Plan’s amendments it was determined that if the Company declares a cash dividend to its shareholders, and the distribution date of such dividend will precede the exercise date of an option, including for the avoidance of doubt, options that have yet to become vested and options which have been granted prior to the adoption of such amendment to the 2012 Plan, the exercise price of the option shall be reduced in the amount equal to the cash dividend per share distributed by the Company.

Following the approval of TAT's audit committee and board of directors, on November 8, 2022, the Company’s shareholders approved the Company’s 2022 stock option plan (the “2022 Plan”, and together with the 2012 Plan, and the Amended and Restated Company’s 2022 Stock Option Plan (as defined below), “Plans”). According to the 2022 Plan an aggregate of 550,000 options exercisable into up to 550,000 ordinary shares, of TAT may be granted to certain members of our board of directors and certain senior executives at an exercise price not less than the fair market value of the shares covered by the option on the date of grant.

In March 2025, following the approval of TAT's audit committee and board of directors, the Company’s shareholders annual meeting, approved the amended and restated Company’s 2022 Stock Plan (the “Amended and Restated Company’s 2022 Stock Option Plan”). The main amendment in the Amended and Restated Company's 2022 Stock Option Plan is the increase in the maximum number of ordinary shares of the Company that may be issued under the Amended and Restated Company's 2022 Stock Option Plan by an additional 200,000 ordinary shares, such that after the increase, the original option pool after the additional ordinary shares will equal a total of 750,000 ordinary shares. A copy of the Amended and Restated Company’s 2022 Stock Option Plan is attached as an exhibit to this Annual Report.

In November 2025, following the approval of TAT's audit committee and board of directors, the Company’s shareholders annual meeting, approved amendments to the 2012 Plan and the 2022 Plan. Each of these plans has been updated and expanded to reflect the broadened scope of equity-based awards that may now be granted under the plans. Accordingly, the plans, previously known as the 2012 Stock Option Plan and the 2022 Stock Option Plan, have been renamed the 2012 Incentive Plan and the 2022 Incentive Plan, respectively, to reflect this broader scope. These amendments are intended to provide the Company with greater flexibility in structuring equity-based compensation, to better align the plans with current market practices and the evolving needs of the Company, and to support the Company’s ability to attract, retain and incentivize key employees, officers, directors and consultants.

In general, the options under the Plans vest over a period of 4 years as follows: 25% of the options vest upon the lapse of 12 months following the date of grant and the remaining 75% vest on a quarterly basis over the remaining 3-year period. Pursuant to the Plans, any options that are cancelled or not exercised within the option period determined in the relevant option agreement will become available for future grants.

The grant of options to Israeli employees under the Plans is subject to the terms stipulated by Sections 102 and 102A of the Israeli Income Tax Ordinance. Each option grant is subject to the track chosen by the Company, either Section 102 or Section 102A of the Israeli Income Tax Ordinance, and pursuant to the terms thereof, the Company is not allowed to claim as an expense for tax purposes the amounts credited to employees as benefits, including amounts recorded as salary benefits in the Company’s accounts, in respect of options granted to employees under the Plans, with the exception of the work income benefit component, if any, determined on grant date. For nonemployees and for non-Israeli employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance.

As of December 31, 2025, under the 2012 Plan there are 980,000 shares in the pool (of which 113,750 options are outstanding and 425,000 options are unallocated), and under the 2022 Plan there are 750,000 shares in pool (of which 580,250 options and 5,934 restricted stock units are outstanding and 65,628 are unallocated).

In November 2025, following the approval of TAT's compensation committee and board of directors, the Company’s shareholders annual meeting approved the grant of RSUs to each of Mr. Amir Harel, Mr. Eitan Oppenhaim, and Ms. Sagit Manor, members of the Company’s board of directors, with a grant date fair value of $80,000 (1,987 RSUs per each director). These RSUs vest in full on the date of TAT’s next annual meeting of shareholders, subject to the director’s continued service through such date.

F. Disclosure

of a Registrant’s Action to Recover Erroneously Awarded Compensation

Not applicable.

Item 7.

Major Shareholders and Related Party Transactions

A. Major

Shareholders

The following table sets forth certain information as of December 31, 2025, regarding the beneficial ownership by all shareholders known to us to own beneficially 5% or more of our ordinary shares:

Name	Number of<br><br> <br>Ordinary Shares<br><br> <br>Beneficially Owned(1)
Meitav Investment House Ltd. (3)		1,915,885	14.8	%
Phoenix Financial Ltd (4)		949,438	7.3	%
Y.D. More Investments Ltd. (5)		900,147	6.9	%
Wasatch Advisor LP (6)		781,216	6.0	%
Migdal Insurance & Financial Holdings Ltd.		678,353	5.1	%
(1)	Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with<br> respect to securities. Ordinary shares relating to options and warrants currently exercisable or exercisable within 60 days of the date<br> of this table are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding<br> for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable,<br> the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them.
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(2)	The percentages shown are based on 12,983,137 ordinary shares issued and outstanding as of December 31, 2025 (net of 274,473 dormant<br> shares).
(3)	Based on a Schedule 13G/A filed on January 22, 2026, Meitav Portfolio Management Ltd and Meitav Provident Funds & Pension Ltd.<br> share voting and dispositive power with respect to the 1,915,885 ordinary shares held by Meitav Investment House Ltd. The principal business<br> address of each of the above entities and persons is 1 Jabotinsky St, Bnie Brak, Israel.
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(4)	Based on a Schedule 13G/A filed on January 6, 2026, Phoenix Financial Ltd. share voting and dispositive power with respect to<br> the 949,438 ordinary shares held by Phoenix Financial Ltd. The principal business address of each of the above entities and persons<br> is Derech Hashalom 53, Israel.
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(5)	Based on a Schedule 13G/A filed on January 8, 2026, Y.D. More Investments Ltd, More Provident Funds & Pension Ltd., More<br> Mutual Funds Management (2013) Ltd., More Investment House Portfolio Management Ltd., BYM More Investments Ltd., Eli Levy, Yosef Levy,<br> Benjamin Meirov, Yosef Meirov, Michael Meirov, and Dotan Meirov share voting and dispositive power with respect to the 900,147 ordinary<br> shares held by Y.D. More Investments Ltd. The principal business address of each to the above entities and persons is 2 Ben-Gurion<br> Street, Ramat Gan, Israel. The securities reported herein are held by More Provident for the benefit of beneficiaries of various provident<br> and pension funds, More Mutual for the benefit of various mutual funds, and More Investment for the benefit of various portfolio management<br> clients.
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(6)	Based on a Schedule 13G/A filed on August 14, 2025, Wasatch Advisor LP share voting and dispositive power with respect to the<br> 781,216 ordinary shares held by Wasatch Advisor LP. The principal business address is 505 Wakara Way, 3rd Floor, Salt Lake City,<br> 84108, United States.
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(7)	Based on a Schedule 13G/A filed on February 17, 2026, Migdal Insurance & Financial Holdings Ltd share voting and dispositive<br> power with respect to the 678,353 ordinary shares held by Migdal Insurance & Financial Holdings Ltd. The principal business address<br> is 4 Efal Street; P.O. Box 3063; Petach Tikva 49512, Israel.
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Significant Changes in the Ownership of Major Shareholders

On December 21, 2023, TAT completed a private placement of 1,158,600 ordinary shares to Israeli institutional and accredited investors at NIS 31.70 per share, generating net proceeds of approximately NIS 36.2 million, representing about 11.5% of its outstanding shares post-issuance; subsequently, in September 2024, TAT accepted commitments and on September 6, 2024 completed a further private placement of 673,340 ordinary shares at NIS 54.95 per share, yielding net proceeds of approximately NIS 36.5 million, while its largest shareholder, the FIMI Funds, concurrently sold 2,349,706 ordinary shares to Israeli institutional and accredited investors for an aggregate NIS 129.1 million (with no proceeds to TAT), resulting in the FIMI Funds beneficially owning approximately 26.6% of the Company’s outstanding shares, with all such transactions conducted solely in Israel pursuant to Regulation S under the U.S. Securities Act and subject to transfer restrictions.

On May 29, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Fimi Opportunity V, L.P., and Fimi Isarel Opportunity Five, Limited Partnership, as selling shareholders (the “Selling Shareholders”), and Stifel, Nicolas & Company, Incorporated and Truist Securities, Inc., as representatives of several underwrites (collectively, the “Underwriters”), relating to an underwritten public offering (the “Offering”) of 4,150,000 ordinary shares of the Company at a public offering. The Company sold 1,625,000 ordinary shares and the Selling Shareholders sold 2,525,000 ordinary shares. Pursuant to the Underwriting Agreement, TAT and the Selling Shareholders also granted the Underwriters an option to purchase up to an additional 242,298 and 380,202 ordinary shares from the Company and the Selling Shareholders, respectively (collectively, the “Options Shares”), at a public offering price less the underwriting discount and commissions (the “Underwriters Option”). On June 26, 2025, following the exercise by the Underwriters of the Underwriters Option in full, the sale and issuance of the Option Shares was completed.

Major Shareholders Voting Rights

Our major shareholders do not have different voting rights.

Based on a review of the information provided to us by our transfer agent, as of December 31, 2025, there were 20 holders of record of our ordinary shares, of which 19 record holders holding less than 1.0% of our ordinary shares had registered addresses in the United States. These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside since many of these ordinary shares were held by brokers or other nominees including CEDE & Co., the nominee for the Depositary Trust Company (the central depositary for the U.S. brokerage community), which held approximately 98.02 % of our outstanding ordinary shares as of such date.

B. Related

Party Transactions

In March 2025, the Company's annual shareholders meeting approved the grant of 50,000 options to purchase 50,000 of the Company's ordinary shares to Mr. Malka (replacing his previous option grant on 2016). Additionally, the shareholders meeting approved the amendment to the compensation terms of Mr. Igal Zamir, the Company's Chief Executive Officer, as follows: Mr. Zamir's base salary, has changed to fixed compensation of $470,000 per year, due to his relocation to the United States. It was also approved to grant Mr. Zamir 200,000 options to purchase ordinary shares of the Company, and the grant of and a one-time special bonus equivalent to two monthly salaries to both Mr. Zamir and Mr. Ehud Ben Yair, the Company's Chief Financial Officer.

In November 2025, Company's annual shareholders meeting approved revised compensation terms for certain members of its Board of Directors, including Mr. Amir Harel, Mr. Eitan Oppenheim and Ms. Sagit Manor (the “Eligible Directors”), in each case as an exception to the Company’s compensation policy. The revised terms include an annual cash retainer, additional fees for service as a chair or member of Board committees, and annual equity-based compensation in the form of restricted stock units, subject to shareholder approval and vesting conditions. In addition, the shareholders approved the grant of a one-time special bonus to its Chief Financial Officer, Mr. Ehud Ben-Yair, in an amount equal to four months of his base salary, totaling $110,000. This special bonus exceeds the cap set forth in the Company’s compensation policy, which limits total bonuses to seven months of base salary, and was therefore approved as an exception to that policy.

C. Interests

of Experts and Counsel

Not applicable.

Item 8.

Financial Information

A. Consolidated

Statements and Other Financial Information

See the consolidated financial statements, including the notes thereto, included in Item 18.

Legal Proceedings

We are party to ongoing litigation in the ordinary course of business and other legal proceedings. For a discussion of these matters, see Note 11 to our consolidated financial statements included elsewhere in this annual report.

Dividend Distribution Policy

We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Israeli Companies Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. Our Articles do not require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors.

Pursuant to the Israeli Companies Law, the distribution amount is limited to the greater of retained earnings or earnings generated over the previous two years, according to our then last reviewed or audited financial statements (less the amount of previously distributed dividends, if not reduced from the earnings), provided that the end of the period to which the financial statements relate is not more than six months prior to the date of the distribution. If we do not meet such criteria, then we may distribute dividends only with court approval. In each case, we are only permitted to distribute a dividend if our board of directors and, if applicable, the court determines that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due. In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary shares in proportion to their shareholdings.

B. Significant

Changes

None

Item 9.

The Offer and Listing

A. Offer

and Listing Details

Our ordinary shares are traded on NASDAQ under the symbol “TATT”. On August 16, 2005, we listed our shares for trade on the TASE as a dual listed company.

B. Plan of Distribution

Not applicable.

C. Markets

Our ordinary shares are traded on NASDAQ under the symbol “TATT”. On August 16, 2005, we listed our shares for trade on the TASE as a dual listed company.

D. Selling

Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expense

of the Issue

Not applicable.

Item 10.

Additional Information

A. Share

Capital

In November 2025, the Company’s shareholders annual meeting approved to increase the authorized share capital by an additional 4,000,000 ordinary shares, bringing the total authorized share capital to 19,000,000 ordinary shares.

B. Memorandum and Articles of Association

Set out below is a description of certain provisions of our memorandum of association, articles of association and of the Israeli Companies Law related to such provisions. This description is only a summary and does not purport to be complete and is qualified by reference to the full text of the memorandum of association and articles of association, which are incorporated by reference as exhibits to this annual report, and to Israeli law. In November 2025, the Company’s articles of association were amended. A copy of our amended articles of association is filed as an exhibit to this Annual Report.

Purposes and Objects of the Company

We are a public company registered with the Israeli Companies Registry and have been assigned company number 52-0035791. Section 2 of our articles of association provides that we were established for the purpose of engaging in the business of providing services of planning, development, consultation and instruction in the electronics field. In addition, the purpose of our company is to perform various corporate activities permissible under Israeli law.

Powers of the Directors

Under the provisions of the Israeli Companies Law which prevails

over our articles of association in certain issues, a director cannot participate in a meeting nor vote on a proposal, arrangement or contract in which he or she is materially interested except in cases where a majority of the directors are materially interested in the same transaction. In addition, our directors cannot vote on compensation to themselves without the approval of our compensation committee and our shareholders at a general meeting, except for certain cases in which there is no need for the approval of the general meeting in accordance with the regulations promulgated under the Israeli Companies Law. See Item 6. “Directors, Senior Management and Employees – Board Practices – Approval of Related Party Transactions under Israeli Law.”

The authority of our directors to enter into borrowing arrangements on our behalf is not limited, except in the same manner as any other transaction by us.

Our articles of association do not impose any mandatory retirement or age-limit requirements on our directors, and our directors are not required to own shares in our company in order to qualify to serve as directors.

Rights Attached to Shares

Our authorized share capital consists of 19,000,000 ordinary shares with no par value. All outstanding ordinary shares are validly issued, fully paid and non-assessable.

Please refer to Exhibit 2.1 for Items 10.B.3, B.4, B.5, B.6, B.7, B.8, B.9 and B.10.

C. Material

Contracts

Summaries of the following material contracts and amendments to these contracts are included in this annual report in the places indicated.

Material<br> Contract	Location<br> in This Annual Report
Amended 2012 Incentive<br> Plan	“ITEM<br> 6.D Directors, Senior Management and Employees – Share Ownership – 2012 Stock Option Plan.”
Amended and Restated<br> 2022 Stock Incentive Plan	“ITEM<br> 6.D Directors, Senior Management and Employees – Share Ownership – 2022 Stock Option Plan.”
Amended Compensation<br> Policy for Directors and Executives	“ITEM<br> 6.C Directors, Senior Management and Employees – Board Practices – Compensation of Executive Officers and Directors.”
Indemnification Agreement<br> of Directors and Officers	“ITEM<br> 6.C – Directors, Senior Management and Employees – Board Practices – Indemnification and Insurance of Directors and<br> Officers.”

D. Exchange Controls

Israeli law and regulations do not impose any material foreign exchange restrictions on non-Israeli holders of our ordinary shares. In May 1998, a new “general permit” was issued under the Israeli Currency Control Law, 1978, which removed most of the restrictions that previously existed under such law, and enabled Israeli citizens to freely invest outside of Israel and freely convert Israeli currency into non-Israeli currencies.

Non-residents of Israel who purchase our ordinary shares will be able to convert dividends, if any, thereon, and any amounts payable upon our dissolution, liquidation or winding up, as well as the proceeds of any sale in Israel of our ordinary shares to an Israeli resident, into freely-repatriable dollars, at the exchange rate prevailing at the time of conversion, provided that the Israeli income tax has been withheld (or paid) with respect to such amounts or an exemption has been obtained.

E. Taxation

The following is a discussion of Israeli and United States tax consequences material to our shareholders. To the extent that the discussion is based on new tax legislation which has not been subject to judicial or administrative interpretation, the views expressed in the discussion might not be accepted by the tax authorities in question. The discussion is not intended, and should not be construed, as legal or professional tax advice and does not exhaust all possible tax considerations.

You are urged to consult your own tax advisor as to the Israeli, United States and other tax consequences of the purchase, ownership and disposition of our ordinary shares, including, in particular, the effect of any non-Israeli, state or local taxes.

Israeli Tax Considerations

The following is a summary of the principal Israeli tax laws applicable to us, and certain Israeli Government programs from which we benefit. This section also contains a discussion of material Israeli tax consequences to our shareholders who are not residents or citizens of Israel. This summary does not discuss all aspects of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances, or to some types of investors subject to special treatment under Israeli law. Examples of investors subject to special treatment under Israeli law include residents of Israel, traders in securities, or persons who own, directly or indirectly, 10% or more of our outstanding voting capital, all of whom are subject to special tax regimes not covered in this discussion. Some parts of this discussion are based on new tax legislation that has not been subject to judicial or administrative interpretation. The discussion should not be construed as legal or professional tax advice and does not cover all possible tax consequences.

General Corporate Tax Structure in Israel

Israeli companies are generally subject to corporate tax on their taxable income at the rate of 23% in 2018 and thereafter. However, the effective tax rate payable by a company that derives income from an Approved Enterprise, a Benefited Enterprise, a Preferred Enterprise or a Technology Enterprise may be considerably less. Capital Gain derived by an Israeli resident company and / or royalties for which no tax clearance has been obtained from the ITA are subject to tax at the regular corporate tax rate (23% in 2018 and thereafter).

Tax Benefits under the Law for the Encouragement of Capital Investments, 1959

The Law for the Encouragement of Capital Investments, 5719-1959 (the “Investment Law”) provides certain incentives for capital investments in production facilities (or other eligible assets). The Investment Law was significantly amended effective as of April 1, 2005 (the “2005 Amendment”), as of January 1, 2011 (the “2011 Amendment”) and as of January 1, 2017 (the “2017 Amendment”).

As to date, we have one capital investment program that has been granted “Approved Enterprise” status under the Investment Law, and one program that qualify as a “Benefited Enterprise” pursuant to the 2005 amendment. These programs were waived as part of the "Preferred Enterprise" which is part of the 2011 Amendment.

Prior to the 2005 Amendment, the Investment Law provided that capital investments in a production facility (or other eligible assets), may be designated as an Approved Enterprise upon prior approval from the Investment Center of the Israel Ministry of Industry, Trade and Labor (the “Investment Center”).

The 2005 Amendment revised the criteria for investments qualified to receive tax benefits. An eligible investment program under the 2005 Amendment provided for benefits as a Benefited Enterprise (rather than the previous terminology of Approved Enterprise). Among other things, the 2005 Amendment provided tax benefits to both local and foreign investors. Companies that meet the specified criteria received the tax benefits without need for prior approval and instead, a company was to claim the tax benefits offered by the Investment Law directly in its tax.

The period of tax benefits for the then new beneficiary enterprise commences in the year that is the later of: (i) the year in which taxable income is first generated by a company, or (ii) a year selected by the company for commencement, on the condition that the company meets certain provisions provided by the Investment Law.

The amendment does not apply to investment programs approved prior to December 31, 2004 and applies only to new investment programs. We began to generate income under the provision of the 2005 Amendment as of the beginning of 2006.

After expiration of the initial tax exemption period, the company is eligible for what was considered then a reduced corporate tax rate of 10% to 25%, depending on the extent of foreign investment in the company, for the following five to eight years, depending on the geographic location of the Benefited Enterprise within Israel. The benefits period was limited to 12 years from completion of the investment under the approved plan or 14 years from the date of the approval, whichever is earlier. A company in which more than 25% of the shareholders are non-residents of Israel, defined under the Investment Law as a Foreign Investors Company, may be eligible for benefits for an extended period of up to ten years.

In addition, pursuant to an amendment of the Investment Law, any distribution of dividend as of August 15, 2021 will be prorated between exempt income and taxable income. As such, upon dividend distribution, in case the company has accumulated exempt income, the company will be obligated to pay the corporate income tax it was exempted from with respect to the exempt profits portion. Distribution of dividends derived from Approved Enterprise and Benefited Enterprise income that was taxed at reduced rates, but not tax exempt, does not result in additional tax consequences to the company. Shareholders who receive dividends derived from approved enterprise and Benefited Enterprise income were generally taxed at a rate of 15% which was withheld and paid by the company paying the dividend if the dividend was distributed during the benefits period or within the following 12 years.

The benefits available to an Approved Enterprise and Benefited Enterprise were conditioned upon terms stipulated in the Investment Law and the related regulations (which include making specified investments in property and equipment, and financing a percentage of these investments with share capital), and, for an Approved Enterprise, the conditions contained in the certificate of approval from the Investment Center. If we do not fulfill these conditions, in whole or in part, the benefits can be cancelled and we may be required to refund the amount of the benefits, linked to the CPI in Israel plus interest. We believe that our Approved Enterprise and Benefited Enterprise programs were operated in compliance with all applicable conditions and criteria.

We have derived a material portion of our operating income from our Approved Enterprise and Benefited Enterprise facilities. We were therefore eligible for a tax exemption for a limited period on undistributed Approved Enterprise and Benefited Enterprise income.

Pursuant to the Investment Law, the income derived from those enterprises was exempted from Israeli corporate tax for a specified benefit period (except to the extent that dividends are distributed during the tax-exemption period other than upon liquidation) and subject to reduced corporate tax rates for an additional period.

Tax Benefits under the 2011 Amendment

Under the transitional provisions of the 2011 Amendment, TAT elected to irrevocably implement the 2011 Amendment with respect to its existing Approved and Beneficiary Enterprises while waiving benefits provided under the legislation prior to the 2011 Amendment.

Dividends paid out of income attributed to a Preferred Enterprise will be subject to a withholding tax at the source at the rate of 20%, or such lower rate as may be provided in an applicable tax treaty. However, if such dividends are paid to an Israeli company, no tax is required to be withheld (although, if the funds are subsequently distributed to individuals or to non-Israeli residents (individuals and corporations), the withholding tax would apply).

As of January 1, 2014, a Preferred Company is entitled to a reduced corporate tax rate of 16% with respect to its income derived from its Preferred Enterprise, unless the Preferred Enterprise is located in development area A, in which case the tax rate as of January 1, 2017 was 7.5% (our operations are currently not located in development area A). Income which is not derived from Preferred Enterprise is subject to the regular corporate tax rate (23% in tax year 2018 and thereafter).

Until 2021 TAT was located in an area in Israel that is designated as elsewhere and as such is entitled to reduce tax rates of 16%. Starting 2022 TAT facilities moved to an area in Israel that is designated as Zone A and as such entitled to reduce tax rates of 7.5%

Turbochrome is located in an area in Israel that is designated as Zone A and as such entitled to reduce tax rates of 7.5% (as of 2017).

Tax Benefits under the 2017 Amendment

An amendment to the Investment Law, which became effective as of January 1, 2017, provides new tax benefit to preferred companies for two types of “Technology Enterprise”, as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.

The new incentives regime will apply to "Preferred Technological Enterprises" that meet certain conditions, as detailed in the 2017 Amendment. Preferred Technological Enterprises will be subject to a corporate tax rate of 12% unless the Preferred Technological Enterprise is located in development zone A, in which case the rate will be 7.5% with respect to the portion of income derived from intellectual property developed in Israel. The withholding tax on dividends from income derived from intellectual property of the Preferred Technological Enterprises will be 4% for dividends paid to a foreign parent company holding at least 90% of the shares of the distributing company. For other dividend distributions, the withholding tax rate will be 20% (or a lower rate under a tax treaty, if applicable).

We cannot assure you that we will continue to qualify as an Industrial Company or that the benefits described above will be available to us in the future.

Tax Benefits and Grants for Research and Development

Israeli tax law allows, under specific conditions, a tax deduction in the year incurred for expenditures, including capital expenditures, relating to scientific research and development projects, if the expenditures are approved by the relevant Israeli government ministry, determined by the field of research, and the research and development is for the promotion of the company and is carried out by or on behalf of the company seeking such deduction. Expenditures not so approved are deductible over a three-year period. However, expenditures from proceeds made available to us through government grants are not deductible according to Israeli law.

Tax Benefits under the Law for the Encouragement of Industry (Taxes), 1969

According to the Law for the Encouragement of Industry (Taxes), 1969 (the “Industry Encouragement Law”), an ‘Industrial Company’ is an Israeli resident company, with at least 90% of the income of which, in a given tax year, (exclusive of income from some government loans) is derived from an Industrial Enterprise owned by it and located in Israel or in the “Area”, in accordance with the definition in the section 3a of the Ordinance. An ‘Industrial Companies” defined as an enterprise whose major activity in a given tax year is industrial production activity.

Under the Industry Encouragement Law, Industrial Companies are entitled to the following tax benefits:

•	Amortization of purchases of acquired technology and patents over an eight-year period for tax purposes;
•	Amortization of specified expenses incurred in connection with a public issuance of securities over a three-year period for tax purposes;
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•	Right to elect, under specified conditions, to file a consolidated tax return with additional related Israeli Industrial Companies;<br> and
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•	Accelerated depreciation rates on equipment and buildings.
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Eligibility for benefits under the Industry Encouragement Law is not subject to receipt of prior approval from any governmental authority.

Special Provisions Relating to Taxation under Inflationary Conditions

The Income Tax Law (Inflationary Adjustments), 1985, referred to as the Inflationary Adjustments Law, attempts to overcome the problems presented to a traditional tax system by an economy undergoing rapid inflation. The Inflationary Adjustments Law is highly complex.

On February 26, 2008, the Israeli Parliament (the Knesset) enacted the Income Tax Law (Inflationary Adjustments) (Amendment No. 20) (Restriction of Effective Period), 2008 (the “Inflationary Adjustments Amendment”). In accordance with the Inflationary Adjustments Amendment, as of the 2008 tax year the provisions of the law are no longer apply, other than the transitional provisions intended at preventing distortions in the tax calculations. In accordance with the Inflationary Adjustments Amendment, commencing the 2008 tax year, income for tax purposes is no longer be adjusted to a real (net of inflation) measurement basis. Furthermore, the depreciation of inflation immune assets and carried forward tax losses are no longer linked to the CPI in Israel.

100

Taxation of Dividends Paid on our Ordinary Shares

Taxation of Israeli Shareholders

A distribution of dividends from income, which is not attributed to an Approved Enterprise/ Benefited Enterprise/ Preferred Enterprise to an Israeli resident individual, will generally be subject to Israeli income tax, at the rate of 25%, or 30% for a recipient that is a “Controlling Shareholder” (within the meaning of the Israeli Income Tax Ordinance) at the time of distribution or at any time during the 12-month period preceding such distribution.

However, dividends distributed from taxable income accrued during the benefits period of a Benefited Enterprise, subject to certain time limitations, are generally subject to Israeli income tax at the reduced rate of 15%. Dividends paid out of income attributed to a Preferred Enterprise are generally subject to Israeli income tax at the source at the rate of 20%.

Generally, Israeli resident corporations are exempt from Israeli corporate tax on the receipt of dividends paid on shares of Israeli resident corporations and that the dividends were fully taxed at the corporate tax rate in Israel, unless the dividends are distributed from taxable income that has accrued during the benefits period of Approved Enterprise of Benefited Enterprise, in which case they are taxable at the rate of 15%.

It should be noted that we cannot assure you that we will designate the profits that are being distributed in a way that will reduce shareholders’ tax liability to those tax rates.

Taxation of Non-Israeli Shareholders

The Ordinance generally provides that a non-Israeli resident (either individual or corporation) is subject to, an Israeli income tax at the rate of 25%, or 30% if the recipient is a ”Controlling Shareholder” at the time of distribution or at any time during the 12-month period preceding such distribution, unless a different rate is provided in a treaty between Israel and the shareholder’s country of residence.

As aforesaid, dividends derived from any of our income generated by an Approved Enterprise or Benefited Enterprise, are subject to withholding tax at a rate of 15% (or less based on applicable tax treaty), and dividends derived from any of our income generated by a Preferred Enterprise are subject to withholding tax at a rate of 20% (or less based on applicable tax treaty).

101

Subject to the provisions of an applicable tax treaty, individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to an additional tax at a rate of 3% on annual income (including, but not limited to, dividends, interest, and capital gain) exceeding ILS 721,000 for 2024, which amount is linked to the annual change in the Israeli consumer price index. Additionally, effective from January 1, 2025, a further surtax of 2% will apply exclusively to capital income exceeding ILS 721,560.

Under the United States-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our ordinary shares who is a U.S. resident (for purposes of the United States-Israel Tax Treaty) is 25%. However, generally the maximum rate of withholding tax on dividends, not generated by Approved / Benefited / Preferred Enterprises, that are paid to a U.S. corporation holding at least 10% or more of our outstanding voting capital from the start of the tax year preceding the distribution of the dividend through (and including) the distribution of the dividends, is 12.5%, provided that no more than 25% of our gross income of such preceding year consists of certain types of dividends and interest if a certificate for a reduced withholding tax rate is obtained in advance from the Israeli Tax Authority. Notwithstanding the foregoing, dividends distributed from income attributed to an Approved Enterprise, Benefited Enterprise or a Preferred Enterprise are subject to withholding tax rate of 15% for such a U.S. corporation shareholder, provided that the condition related to our gross income for the previous year (as set forth in the previous sentence) is met.

The aforementioned rates under the United States-Israel Tax Treaty will not apply if the dividend income was derived through a permanent establishment of the U.S. resident in Israel.

When the amount of tax due is not fully withheld at source, such non-Israeli resident is obligated to file a tax return, report his or her Israeli income and pay the balance of the amount of tax due.

Capital gains taxes applicable to non-Israeli shareholders

Capital gains from the sale of our ordinary shares by non-Israeli shareholders are exempt from Israeli taxation, provided that the capital gain is not derived from a permanent establishment in Israel according to section 97(b2) to the Israeli income tax ordinance. In addition, the U.S.-Israel Tax Treaty exempts U.S. residents who hold less than 10% of our voting rights, and who held less than 10% of our voting rights during the 12 months prior to a sale of their shares, from Israeli capital gains tax in connection with such sale.

102

United States Federal Income Tax Consequences

The following discussion summarizes the material U.S. federal income tax considerations generally applicable to the purchase, ownership and disposition of our ordinary shares. Unless otherwise stated, this summary deals only with shareholders that are U.S. Holders (as defined below) who hold their ordinary shares as capital assets.

As used in this section, the term “U.S. Holder” means a beneficial owner of an ordinary share who is:

•	An individual citizen or resident of the United States or an individual treated as a U.S. citizen or resident for U.S. federal income<br> tax purposes;
•	A corporation or other entity taxable as a corporation for U.S. federal income tax purposes created or organized in or under the<br> laws of the United States, any State or the District of Columbia;
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•	An estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
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•	Any trust if (A)(i) a court within the United States is able to exercise primary supervision over the administration of the trust<br> and (ii) one or more United States persons have the authority to control all substantial decisions of the trust, or (B) such trust validly<br> elects to be treated as a United States person.
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The term “Non-U.S. Holder” means a beneficial owner of an ordinary share that is an individual, corporation, estate or trust and is not a U.S. Holder. The tax consequences to a Non-U.S. Holder may differ substantially from the tax consequences to a U.S. Holder. Certain aspects of U.S. federal income tax relevant to a Non-U.S. Holder are discussed below.

103

This description is based on provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed U.S. Treasury regulations promulgated thereunder, administrative and judicial interpretations thereof, and the U.S.-Israel Tax Treaty, each as in effect as of the date of this annual report. In addition, this description also relates to the Tax Cuts and Jobs Act (“TCJA”) signed into law on December 22, 2017, and the One Big Beautiful Bill Act (“OBBBA”) signed into law on July 4, 2025. The OBBBA permanently extended most key individual and international tax provisions of the TCJA that were previously scheduled to sunset at the end of 2025. These sources may change, possibly with retroactive effect, and are open to differing interpretations. This description does not discuss all aspects of U.S. federal income taxation that may be applicable to investors in light of their particular circumstances or to investors who are subject to special treatment under U.S. federal income tax law, including:

•	Insurance companies;
•	Dealers in stocks, securities or currencies;
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•	Financial institutions and financial services entities;
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•	Real estate investment trusts;
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•	Regulated investment companies;
---	---
•	Persons that receive ordinary shares in connection with the performance of services;
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•	Tax-exempt organizations;
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•	Persons that hold ordinary shares as part of a straddle or appreciated financial position or as part of a hedging, conversion or<br> other integrated instrument;
---	---
•	Persons who hold the ordinary shares through partnerships or other pass-through entities;
---	---
•	Individual retirement and other tax-deferred accounts;
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104

•	Expatriates of the United States and certain former long-term residents of the United States;
•	Persons liable for the alternative minimum tax;
---	---
•	Persons having a “functional currency” other than the U.S. dollar; and
---	---
•	Direct, indirect or constructive owners of 10% or more, by voting power or value, of our company.
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If a partnership or an entity treated as a partnership for U.S. federal income tax purposes owns ordinary shares, the U.S. federal income tax treatment of a partner in such a partnership will generally depend upon the status of the partner and the activities of the partnership. A partnership that owns ordinary shares and the partners in such partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of ordinary shares.

This discussion does not consider the possible application of U.S. federal gift or estate tax or alternative minimum tax.

All investors are urged to consult their own tax advisors as to the particular tax consequences to them of an investment in our ordinary shares, including the effect and applicability of United States federal, state, local and foreign income and other tax laws (including estate and gift tax laws) and tax treaties.

105

Distributions Paid on the Ordinary Shares

Subject to the discussion below under “Passive Foreign Investment Company Considerations,” a U.S. Holder generally will be required to include in his or her gross income as ordinary dividend income the amount of any distributions paid on the ordinary shares, including the amount of any Israeli taxes withheld, to the extent that those distributions are paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” distributions in excess of our earnings and profits will be applied against and will reduce the U.S. Holder’s tax basis in its ordinary shares and, to the extent they exceed that tax basis, will be treated as gain from a sale or exchange of those ordinary shares. In some cases, our dividends will not qualify for the dividends-received deduction applicable to U.S. corporations.

Dividends that we pay in NIS, including the amount of any Israeli taxes withheld therefrom, will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day such dividends are received, regardless of whether the payment is in fact converted into U.S. dollars. A U.S. Holder who receives payment in NIS and converts NIS into U.S. dollars at an exchange rate other than the rate in effect on such day will have a foreign currency exchange gain or loss that would be treated as ordinary income or loss. U.S. Holders should consult their own tax advisors concerning the U.S. tax consequences of acquiring, holding and disposing of NIS.

Subject to certain limitations, “qualified dividend income” received by a non-corporate U.S. Holder will generally be subject to taxation in the U.S at a lower rate than ordinary income. Distributions taxable as dividends paid on the ordinary shares should qualify for lower tax rate provided that we are not a passive foreign investment company (as described below) for U.S. tax purposes and that either: (i) we are entitled to benefits under the “U.S.-Israel Tax Treaty” or (ii) the ordinary shares are readily tradable on an established securities market in the United States and certain other requirements are met. We believe that we are entitled to benefits under the U.S.-Israel Tax Treaty and that the ordinary shares currently will be readily tradable on an established securities market in the United States. However, no assurance can be given that the ordinary shares will remain readily tradable. The rate reduction does not apply unless certain holding period requirements are satisfied. With respect to the ordinary shares, the U.S. Holder must have held such shares for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date. The rate reduction also does not apply to dividends received from passive foreign investment companies, see discussion below, or in respect of certain hedged positions or in certain other situations. The legislation enacting the reduced tax rate contains special rules for computing the foreign tax credit limitation of a taxpayer who receives dividends subject to the reduced tax rate. U.S. Holders of ordinary shares should consult their own tax advisors regarding the effect of these rules in their particular circumstances.

Subject to the discussion below under “Information Reporting and Back-up Withholding,” a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on dividends received on ordinary shares unless that income is effectively connected with the conduct by that Non-U.S. Holder of a trade or business in the United States, in which case a corporate Non-U.S. Holder may also be subject to the U.S. branch profits tax.

106

Foreign Tax Credit

Any dividend income resulting from distributions we pay to a U.S. Holder with respect to the ordinary shares generally may be treated as foreign source income for U.S. foreign tax credit limitation purposes. For all taxable years ended until December 31, 2017, and subject to certain conditions and limitations, Israeli tax withheld on dividends may be deducted from taxable income or credited against a U.S. Holder’s U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, in general, any dividend that we distribute should constitute “passive category income,” or, in the case of certain U.S. Holders, “general category income.”

With respect to our corporate U.S. holders, the TCJA, as made permanent by the OBBBA, provides a 100% deduction for the foreign-source h provides a 100% deduction for the foreign-source t provides a 100% deduction for the foreign-source i provides a 100% deduction for the foreign-source portion of dividends received after January 1, 2018 from “specified 10-percent owned foreign corporations” by U.S. corporate holders, subject to a one-year holding period. No foreign tax credit, including Israeli withholding tax (or deduction for foreign taxes paid with respect to qualifying dividends) would be permitted for foreign taxes paid or accrued with respect to a qualifying dividend. Deduction would be unavailable for “hybrid dividends.” The dividend received deduction enacted under the TCJA may not apply to dividends from a passive foreign investment company. This Section 245A dividends received deduction was permanently extended by the OBBBA, with no substantive change to the relevant mechanics.

The rules relating to the determination of foreign source income and the foreign tax credit are complex, and the availability of a foreign tax credit depends on numerous factors. Each investor who is a U.S. Holder should consult with its own tax advisor to determine whether its income with respect to the ordinary shares would be foreign source income and whether and to what extent that investor would be entitled to a foreign tax credit.

Disposition of Ordinary Shares

Upon the sale or other disposition of ordinary shares, subject to the discussion below under “Passive Foreign Investment Company Considerations”, a U.S. Holder generally should recognize capital gain or loss equal to the difference between the amount realized on the disposition and the holder’s adjusted tax basis in the ordinary shares. U.S. Holders should consult their own tax advisors with respect to the tax consequences of the receipt of a currency other than U.S. dollars upon such sale or other disposition.

Gain or loss upon the disposition of the ordinary shares will be treated as long-term if, at the time of the sale or disposition, the ordinary shares were held for more than one year. The deductibility of capital losses by a U.S. Holder is subject to limitations. In general, any gain or loss recognized by a U.S. Holder on the sale or other disposition of ordinary shares will be U.S. source income or loss for U.S. foreign tax credit purposes. U.S. Holders should consult their own tax advisors concerning the source of income for U.S. foreign tax credit purposes and the effect of the U.S.-Israel Tax Treaty on the source of income.

107

•	that gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States, and, if a<br> tax treaty applies, is attributable to a permanent establishment or fixed base of the Non-U.S. Holder in the United States; or
•	in the case of any gain realized by an individual Non-U.S. Holder, that holder is present in the United States for 183 days or more<br> in the taxable year of the sale or exchange, and other conditions are met.
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Passive Foreign Investment Company Considerations

Special U.S. federal income tax rules apply to U.S. Holders owning shares of a passive foreign investment company. A non-U.S. corporation will be considered a passive foreign investment company for any taxable year in which, after applying certain look-through rules, 75% or more of its gross income consists of specified types of passive income, or 50% or more of the average value of its assets consists of assets that produce, or are held for the production of, passive income. For this purpose, passive income may include dividends, interest, royalties, rents, annuities and the excess of gains over losses from the disposition of assets which produce passive income.

If we were classified as a passive foreign investment company, a U.S. Holder could be subject to increased tax liability upon the sale or other disposition of ordinary shares or upon the receipt of amounts treated as “excess distributions”. Under these rules, the excess distribution and any gain would be allocated ratably over the U.S. Holder’s holding period for the ordinary shares, and the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we were a passive foreign investment company would be taxed as ordinary income. The amount allocated to each of the other taxable years would be subject to tax at the highest marginal tax rate in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed on the resulting tax allocated to such other taxable years. The tax liability with respect to the amount allocated to years prior to the year of the disposition, or “excess distribution”, cannot be offset by any net operating losses. In addition, holders of shares in a passive foreign investment company may not receive a “step-up” in basis on shares acquired from a decedent. If we are a passive foreign investment company in any year, a U.S. Holder would be required to file an annual return on IRS Form 8621 regarding distributions received with respect to ordinary shares and any gain realized on the disposition of ordinary shares.

108

Based on our current and projected income, assets and activities, we do not believe that we will be a passive foreign investment company for our current taxable year. However, because the determination of whether we are a passive foreign investment company is based upon the composition of our income and assets from time to time, we cannot be certain that we will not be considered a passive foreign investment company for the current taxable year or any future taxable year.

The passive foreign investment company tax consequences described above will not apply to a U.S. Holder if the U.S. Holder makes a timely election to treat us as a qualified electing fund (“QEF”). If a U.S. Holder makes a timely QEF election, the U.S. Holder would be required to include in income for each taxable year its pro rata share of our ordinary earnings as ordinary income and its pro rata share of our net capital gain as long-term capital gain, whether or not such amounts are actually distributed to the U.S. Holder. However, a U.S. Holder would not be eligible to make a QEF election unless we comply with certain applicable information reporting requirements. We will provide U.S. Holders with the information needed to report income and gain under a QEF election should we become a passive foreign investment company.

As an alternative to making a QEF election, a U.S. Holder of passive foreign investment company stock which is publicly traded may in certain circumstances avoid certain of the tax consequences generally applicable to holders of a passive foreign investment company by electing to mark the stock to market annually and recognizing as ordinary income or loss each year an amount equal to the difference as of the close of the taxable year between the fair market value of the passive foreign investment company stock and the U.S. Holder’s adjusted tax basis in the passive foreign investment company stock. Losses would be allowed only to the extent of net mark-to-market gain previously included by the U.S. Holder under the election for prior taxable years. Income recognized and deductions allowed under the mark-to-market provisions, as well as any gain or loss on the disposition of ordinary shares with respect to which the mark-to-market election is made, are generally treated as ordinary income or loss (except that loss is treated as capital loss to the extent the loss exceeds the net mark-to-market gains, if any, that a U.S. Holder included in its income with respect to such ordinary shares in prior years). However, gain or loss from the disposition of ordinary shares (as to which a “mark-to-market” election was made) in a year in which we are no longer a passive foreign investment company, will be capital gain or loss. The mark-to-market election is available for so long as our ordinary shares constitute “marketable stock,” which includes stock of a passive foreign investment company that is “regularly traded” on a “qualified exchange or other market.” Generally, a “qualified exchange or other market” includes a national securities exchange that is registered with the SEC or the national market system established pursuant to Section 11A of the Securities Exchange Act of 1934. A class of stock that is traded on one or more qualified exchanges or other markets is “regularly traded” on an exchange or market for any calendar year during which that class of stock is traded, other than in the minimized quantities, on at least 15 days during each calendar quarter. We believe that NASDAQ will constitute a qualified exchange or other market for this purpose. However, we cannot be certain that our ordinary shares will continue to trade on NASDAQ or that the ordinary shares will be regularly traded for this purpose.

The rules applicable to owning shares of a passive foreign investment company are complex, and each holder who is a U.S. Holder should consult with its own tax advisor regarding the consequences of investing in a passive foreign investment company.

109

Medicare Tax

Certain U.S. Holders that are individuals, estates or trusts may be subject to a 3.8% Net Investment Income tax on all or a portion of their “net investment income”, which may include all or a portion of their dividend income and net gains from the disposition of ordinary shares and warrants. Each U.S. Holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability of the Net Investment Income tax to its income and gains in respect of its investment in our ordinary shares and warrants, including with respect to the eligibility to claim foreign tax credit against such tax.

Information Reporting and Backup Withholding

Payments in respect of ordinary shares may be subject to information reporting to the U.S. Internal Revenue Service (the “IRS”) and to U.S. backup withholding tax at a rate equal to the fourth lowest income tax rate applicable to individuals (which, under current law, is 24%). Backup withholding will not apply, however, if you (i) are a corporation or come within certain exempt categories, and demonstrate the fact when so required, or (ii) furnish a correct taxpayer identification number and make any other required certification. U.S. Holders who are required to establish their exempt status generally must provide such certification on IRS Form W-9.

Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a U.S. Holder’s U.S. tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS.

Any U.S. holder who holds 10% or more in vote or value of our ordinary shares will be subject to certain additional United States information reporting requirements.

U.S. Gift and Estate Tax

An individual U.S. Holder of ordinary shares will generally be subject to U.S. gift and estate taxes with respect to ordinary shares in the same manner and to the same extent as with respect to other types of personal property.

110 F. Dividends

and Paying Agents

Not applicable.

G. Statement

by Experts

Not applicable.

H. Documents

on Display

We are subject to the reporting requirements of the United States Securities Exchange Act of 1934, as amended, as applicable to “foreign private issuers” as defined in Rule 3b-4 under the Exchange Act, and in accordance therewith, we file annual and interim reports and other information with the SEC.

As a foreign private issuer, we are exempt from certain provisions of the Exchange Act. Accordingly, our proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act and transactions in our equity securities by our officers and directors are exempt from reporting and the “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. However, we make available on our website www.tat-technologies.com, our annual audited financial statements, which have been examined and reported on, with an opinion expressed by an independent public accounting firm, and we intend to file reports with the SEC on Form 6-K containing unaudited financial information for the first three quarters of each fiscal year.

This annual report on Form 20-F and the exhibits thereto and any other document we file pursuant to the Exchange Act may be inspected without charge and copied at prescribed rates at the following SEC public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549; and on the SEC website (http://www.sec.gov) and on our website www.tat-technologies.com. You may obtain information on the operation of the SEC’s public reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330. The Exchange Act file number for our SEC filings is 0-16050.

In addition, since August 16, 2005, we are also listed on the TASE. From such date we submit copies of all our filings with the SEC to the ISA and TASE. Such copies can be retrieved electronically through the TASE internet messaging system (www.maya.tase.co.il) and, in addition, through the MAGNA distribution site of the ISA (www.magna.isa.gov.il).

The documents concerning our company which are referred to in this annual report may also be inspected at our offices located at 9335 Harris Corners Pkwy, Charlotte, NC.

111 I. Subsidiary

Information

Not applicable.

J. Annual

Report to Security Holders

Not applicable.

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

We do not own and have not issued any market risk sensitive instruments about which disclosure is required to be provided pursuant to this Item.

Effects of Currency Exchange Fluctuations

Our financial statements are stated in dollars, while a portion of our expenses, primarily labor expenses, is incurred in NIS and a part of our revenues are quoted in NIS. Additionally, certain assets, as well as a portion of our liabilities, are denominated in NIS. As a result, our operations may be affected by fluctuations of the U.S. dollar/NIS exchange rate. We are hedging a portion of our exchange rate risk through forward transactions and the use of other derivative instruments.

Item 12. Description

of Securities Other than Equity Securities

Not Applicable.

112 PART

Item 13. Defaults,

Dividend Arrearages and Delinquencies

None.

Item 14. Material

Modifications to the Rights of Security Holders

None.

Item 15. Controls

and Procedures

(a)	Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our chief executive officer and chief financial officer to allow timely decisions regarding required disclosure. Our management, including our chief executive officer and chief financial officer, conducted an evaluation of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e), as of the end of the period covered by this annual report on Form 20-F. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of such date, our disclosure controls and procedures were effective.

113

(b)	Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of<br> the assets of the company;
•	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance<br> with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with<br> authorizations of management and directors of the company; and
---	---
•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the company’s<br> assets that could have a material effect on the financial statements.
---	---

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment, our management concluded that as of December 31, 2025, our internal control over financial reporting is effective.

114

(c)	Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(d)	Attestation Report of the Registered Public Accounting Firm

Our internal control over financial reporting as of December 31, 2025 has been audited by Kesselman & Kesselman, an independent registered public accounting firm in Israel and a member of PricewaterhouseCoopers International Limited, as stated in their report which is included under “Item 18—Financial Statements.”

Item 16.

Reserved

Item 16A. Audit

Committee Financial Expert

Our board of directors has determined that each member of our audit

committee qualifies as an audit committee financial expert, as defined by rules of the SEC. For a brief listing of the relevant experience of the member of our audit committee, see Item 6.A. “Directors, Senior Management and Employees — Directors and Senior Management.”

Item 16B. Code

of Ethics

We have adopted a code of ethics that applies to our chief executive officer and all senior financial officers of our company, including the chief financial officer, chief accounting officer or controller, or persons performing similar functions. The code of ethics is publicly available on our website at www.tat-technologies.com. Written copies are available upon request. If we make any substantive amendment to the code of ethics or grant any waivers, including any implicit waiver, from a provision of the codes of ethics, we will disclose the nature of such amendment or waiver on our website.

115 Item 16C.

Principal Accountant Fees and Services

Fees Paid to Independent Public Accountant

The following table sets forth, for each of the years indicated, the fees paid to our principal independent registered public accounting firm. All of such fees were pre-approved by our audit committee.

	Year Ended December 31,
Services Rendered	2025		2024
Audit (1)	$	515,717	$	323,321
Tax (2)		11,367		16,000
Total	$	527,084	$	339,321
(1)	Audit fees are for audit services for each of the years shown in the table, including fees associated with the annual audit and reviews<br> of our quarterly financial results, consultations on various accounting issues and audit services provided in connection with other statutory<br> or regulatory filings.
---	---
(2)	Tax fees relate to professional services rendered for tax compliance and tax advice. These services include assistance regarding<br> international and Israeli taxation.
---	---

Pre-Approval Policies and Procedures

Our audit committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm Kesselman & Kesselman, a member of PricewaterhouseCoopers International Ltd. Pre-approval of an audit or non-audit service may be given as a general pre-approval, as part of the audit committee’s approval of the scope of the engagement of our independent auditor, or on an individual basis. Any proposed services exceeding general pre-approved levels also require specific pre-approval by our audit committee. The policy prohibits retention of the independent public accountants to perform the prohibited non-audit functions defined in Section 201 of the Sarbanes-Oxley Act or the rules of the SEC, and also requires the audit committee to consider whether proposed services are compatible with the independence of the public accountants.

116 Item 16D.

Exemptions from the Listing Standards for Audit Committee

Not Applicable.

Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers

Not Applicable.

Item 16F. Change in Registrant’s Certifying Accountant.

Not Applicable.

Item 16G. Corporate

Governance

The following are the significant ways in which our corporate governance practices differ from those followed by United States companies under NASDAQ rules:

Shareholder Approval. Although

NASDAQ rules generally require shareholder approval of equity compensation plans and material amendments thereto, we follow Israeli Companies Law, which is to have such plans and amendments approved only by the board of directors, unless such arrangements are for the compensation of directors, Chief Executive Officer or a transaction with the controlling shareholder, in which case they also require the approval of the compensation committee and the shareholders.

In addition, rather than follow NASDAQ rules requiring shareholder approval for the issuance of securities in certain circumstances, we follow Israeli law, under which a private placement of securities requires approval by our board of directors and shareholders if it will cause a person to become a controlling shareholder (generally presumed at 25% ownership) or if:

o	The securities issued amount to 20% or more of our outstanding voting rights before the issuance;
o	Some or all of the consideration is other than cash or listed securities or the transaction is not in accordance with market terms;<br> and
---	---
o	The transaction will increase the relative holdings of a shareholder that holds 5% or more of our outstanding share capital or voting<br> rights or that it will cause any person to become, as a result of the issuance, a holder of more than 5% of our outstanding share capital<br> or voting rights.
---	---

Annual Reports. While

NASDAQ rules generally require that companies send an annual report to shareholders prior to the annual general meeting, we follow the generally accepted business practice for companies in Israel. Specifically, we file annual reports on Form 20-F, which contain financial statements audited by an independent registered public accounting firm, electronically with the SEC and post a copy on our website.

Item 16H.

Mine Safety Disclosure

Not applicable.

Item 16I. Disclosure

Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

117 ITEM 16J. Insider Trading Policies

We have adopted a written insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of the Insider Trading Policy is filed as an exhibit to this Annual Report.

Item 16K. Cybersecurity

The Board recognizes the critical importance of maintaining the availability and completion of our data and systems, the trust and confidence of our business partners and employees. The Audit Committee is responsible for reviewing our policies with respect to cybersecurity risks and relevant contingent liabilities and risks that may be material to the Company, including risks from third parties and business partners.

We generally seek to address cybersecurity risks by implementing security measures on our internal computer systems. These security measures include firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated by our IT managers and improved through vulnerability assessments and cybersecurity threat intelligence.

Our Chief Operating Officer is responsible for implementing protection measures for our information systems from cybersecurity threats and promptly responding to any cybersecurity incidents.

To date, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

118

PART III

Item 17. Financial Statements

We have elected to furnish financial statements and related information specified in Item 18.

Item 18. Financial Statements

Consolidated Financial Statements of the Company

Item 19. Exhibits

The following exhibits are filed as a part of this Annual Report:

1.1	Memorandum of Association of the Registrant
1.2	Amended and Restated Articles of Association of the Registrant
---	---
2.1	Description of the rights of each class of securities registered under Section 12 of the Securities Exchange Act of 1934 (1)
---	---	4.1	Amended 2012 Incentive Plan
---	---
4.2	Amended 2022 Stock Incentive Plan
---	---
4.3	Amended Executive and Directors Compensation Policy
---	---
4.4	Form of Officers Indemnification Undertaking
---	---
4.5	Insider Trading Policy
---	---
8.	List of Consolidated Subsidiaries of the Registrant
---	---
12.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
---	---
12.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
---	---
13.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
---	---
13.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
---	---
14.1	Consent of independent registered public accounting firm
---	---
97	NASDAQ Clawback Policy
---	---

119

101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

_________________

(1)	Filed as Exhibit 2.1 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2022, and incorporated herein by reference.

120

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	TAT TECHNOLOGIES LTD.
	By:	/s/ Ehud Ben-Yair
		Ehud Ben-Yair
		Chief Financial Officer<br><br>(Principal Financial and Accounting Officer)
Date: March 18, 2026

121

TAT TECHNOLOGIES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2025

TAT TECHNOLOGIES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2025

INDEX

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 1309)	F-2 - F-3
Consolidated Balance Sheets	F-4 - F-5
Consolidated Statements of Operations	F-6 - F-7
Consolidated Statements of Comprehensive Income (Loss)	F-8
Consolidated Statements of Changes in Shareholders' Equity	F-9
Consolidated Statements of Cash Flows	F-10 - F-11
Notes to Consolidated Financial Statements	F-12 - F-45

Report of Independent Registered Public Accounting Firm

To the board of directors and shareholders of TAT Technologies Ltd.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of TAT Technologies Ltd. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of changes in shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15B. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Kesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,

P.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il

F - 2

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Recoverability assessment of inventory

As described in Notes 2 and 3 to the consolidated financial statements, the Company's consolidated inventory balance was $75,549 thousand as of December 31, 2025. The Company writes down its inventory for estimated obsolescence and unmarketable inventory equal to the difference between the cost of inventory and net realizable value based upon assumptions of future demand and market conditions. Changes in these assumptions could have a significant impact on the inventory's valuation.

The principal considerations for our determination that performing procedures relating to recoverability assesment of inventory is a critical audit matter are the significant judgement used by management when determining the assumptions relating to future demand and market conditions. This in turn led to a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating management's significant assumptions related to future demand and market conditions

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s inventory process, including controls over write down of obsolete and unmarketable inventory. These procedures also included, among others, (i) evaluating and testing management’s process for determining the write-down of obsolete and unmarketable inventory; (ii) Compared management’s assumptions related to future demand and market conditions to available external market data for a sample of inventory items; (iii) evaluated management’s ability to accurately estimate future demand by comparing actual inventory usage to estimates made in prior years.

Tel-Aviv, Israel	Kesselman & Kesselman
March 18, 2026	Certified Public Accountants (Isr.)
	A member firm of PricewaterhouseCoopers International Limited

We have served as the Company’s auditor since 2009.

F - 3

TAT TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS

U.S dollars in thousands


		2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	51,259	$	7,129
Accounts receivable, net of allowance for credit losses of 172 and 400 thousands as of December 31, 2025 and 2024, respectively	33,420		29,697
Inventory	75,549		68,540
Prepaid expenses and other current assets	6,071		7,848
Total current assets	166,299		113,214
NON-CURRENT ASSETS:
Property, plant and equipment, net	46,922		41,576
Operating lease right of use assets	5,807		2,282
Intangible assets, net	1,452		1,553
Investment in affiliates	4,905		2,901
Restricted deposit	307		305
Funds in respect of employee rights upon retirement	398		654
Deferred tax assets	639		877
Total non-current assets	60,430		50,148
Total assets	226,729	$	163,362

All values are in US Dollars.

The accompanying notes are an integral part of the consolidated financial statements.

F - 4

TAT TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS

U.S dollars in thousands

	December 31,
	2025			2024
LIABILITIES AND SHAREHOLDERS 'EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans	$	2,227		$	2,083
Short term loans		-			4,350
Accounts payable		12,986			12,158
Accrued expenses and other		17,296			18,594
Current maturities of operating lease liabilities		1,474			939
Total current liabilities		33,983			38,124
NON-CURRENT LIABILITIES:
Long-term loans		9,485			10,938
Operating lease liabilities		4,448			1,345
Liability in respect of employee rights upon retirement		770			986
Deferred tax liabilities		1,652			-
Total non-current liabilities		16,355			13,269
COMMITMENTS AND CONTINGENCIES (NOTE 11)
Total liabilities		50,338			51,393
SHAREHOLDERS 'EQUITY:
Ordinary shares of NIS 0 par value. Authorized: 19,000,000 shares at December 31, 2025 and 13,000,000 shares at December 31, 2024<br><br> <br>Issued:13,257,610 and 11,214,831 shares at December 31, 2025 and 2024, respectively<br><br> <br>Outstanding: 12,983,137 and 10,940,358 shares at December 31, 2025 and 2024, respectively		-			-
Additional paid-in capital		136,578			89,697
Treasury shares, at cost, 274,473 shares at December 31, 2025 and 2024		(2,088	)		(2,088	)
Accumulated other comprehensive income (loss)		643			(76	)
Retained earnings		41,258			24,436
Total shareholders' equity		176,391			111,969
Total liabilities and shareholders' equity	$	226,729		$	163,362

The accompanying notes are an integral part of the consolidated financial statements.

F - 5

TAT TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S dollars in thousands

	Year ended December 31,
	2025			2024			2023
Revenue:
Products	$	50,850		$	47,710		$	35,241
Services		127,165			104,406			78,553
		178,015			152,116			113,794
Cost of revenue:
Products		35,793			33,986			30,517
Services		98,124			85,116			60,809
		133,917			119,102			91,326
Gross profit		44,098			33,014			22,468
Operating expenses:
Research and development, net		1,384			1,248			715
Selling and marketing		8,576			7,746			5,523
General and administrative		15,730			11,901			10,588
Other income		(404	)		(383	)		(433	)
		25,286			20,512			16,393
Operating income		18,812			12,502			6,075
Interest expense		1,010			1,472			1,683
Other financial (expenses) income, net		(325	)		(477	)		353
Income before taxes on income		17,477			10,553			4,745
Provision for income taxes		2,143			195			576
Income before share of equity investment		15,334			10,358			4,169
Share in profit of equity investment of affiliated companies		1,488			809			503
Net income	$	16,822		$	11,167		$	4,672

The accompanying notes are an integral part of the consolidated financial statements.

F - 6

TAT TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S dollars in thousands, except share and per share data

	Year ended December 31,
	2025		2024		2023
Net income	$	16,822	$	11,167	$	4,672
Earnings per share
Basic	$	1.39	$	1.08	$	0.52
Diluted	$	1.37	$	1.00	$	0.51
Weighted average number of shares outstanding
Basic		12,075,678		10,363,978		8,961,689
Diluted		12,283,312		11,215,827		9,084,022

The accompanying notes are an integral part of the consolidated financial statements.

F - 7

TAT TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

U.S dollars in thousands

	Year ended December 31,
	2025		2024			2023
Net income	$	16,822	$	11,167		$	4,672
Other comprehensive income (loss), net
Net unrealized gains (losses) from derivatives		-		(27	)		53
Change in foreign currency translation adjustments		719		(76	)		-
Total other comprehensive income (loss)		719		(103	)		53
Total comprehensive income	$	17,541	$	11,064		$	4,725

The accompanying notes are an integral part of the consolidated financial statements.

F - 8

TAT TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S dollars in thousands, except share data

					Additional paid-in capital			Accumulated<br><br> <br>other comprehensive income (loss)			Treasury shares			Retained earnings		Total shareholders’ equity
		Amount
BALANCE AT DECEMBER 31, 2022	9,186,019	$	2,842		$	66,245		$	(26	)	$	(2,088	)	$	8,597	$	75,570
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2023:
Comprehensive income	-		-			-			53			-			4,672		4,725
Exercise of options	32,466		8			157			-			-			-		165
Issuance of common shares net of issuance costs of 141 thousands	1,158,600		290			9,774			-			-			-		10,064
Share based compensation	-		-			159			-			-			-		159
BALANCE AT DECEMBER 31, 2023	10,377,085		3,140			76,335			27			(2,088	)		13,269		90,683
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2024:
Comprehensive income (loss)	-		-			-			(103	)		-			11,167		11,064
Exercise of options	164,406		12			(12	)		-			-			-		-
Cancel of shares par value	-		(3,152	)		3,152			-			-			-		-
Issuance of common shares net of issuance costs of 162 thousands	673,340		-			9,827			-			-			-		9,827
Share based compensation	-		-			395			-			-			-		395
BALANCE AT DECEMBER 31, 2024	11,214,831		-			89,697			(76	)		(2,088	)		24,436		111,969
CHANGES DURING THE YEAR ENDED DECEMBER 31, 2025:
Comprehensive income	-		-			-			719			-			16,822		17,541
Exercise of options	175,481		-			282			-			-			-		282
Issuance of common shares on public offering, net of issuance costs of 2,769 thousands	1,625,000		-			39,415			-			-			-		39,415
Exercise of the underwriters' option on public offering, net of issuance costs of 413 thousands	242,298		-			5,953			-			-			-		5,953
Share based compensation	-		-			1,231			-			-			-		1,231
BALANCE AT DECEMBER 31, 2025	13,257,610	$	-		$	136,578		$	643		$	(2,088	)	$	41,258	$	176,391

All values are in US Dollars.

The accompanying notes are an integral part of the consolidated financial statements.

F - 9

TAT TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Year ended December 31,
	2025			2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	16,822		$	11,167		$	4,672
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		5,101			5,455			4,710
Loss (gain) from change in fair value of derivatives		-			22			(9	)
Net change in operating right of use asset and operating lease liability		112			18			22
Noncash financial expenses (income)		1,881			(187	)		(172	)
Decrease in restructuring plan provision		-			(63	)		(126	)
Change in allowance for credit losses		(228	)		55			(182	)
Share in results of affiliated companies		(1,488	)		(809	)		(503	)
Share based compensation		1,231			395			159
Capital gains from sale of property, plant and equipment		(401	)		(478	)		(530	)
Deferred income taxes, net		1,890			117			235
Changes in operating assets and liabilities:
Increase in trade accounts receivable		(3,495	)		(9,743	)		(4,205	)
Decrease (increase) in other current assets and prepaid expenses		2,235			(1,463	)		(225	)
Increase in inventory		(7,532	)		(17,165	)		(5,400	)
Increase (decrease) in trade accounts payable		359			2,170			(245	)
Increase (decrease) in accrued expenses and other		(1,513	)		4,691			4,054
Net cash provided by (used in) operating activities		14,974			(5,818	)		2,255
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, plant and equipment		900			1,275			2,002
Purchase of property, plant and equipment		(10,954	)		(5,126	)		(5,102	)
Purchase of intangible assets		-			-			(479	)
Net cash used in investing activities		(10,054	)		(3,851	)		(3,579	)

The accompanying notes are an integral part of the consolidated financial statements.

F - 10

TAT TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Year ended December 31,
	2025			2024			2023
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term loans	$	(2,088	)	$	(2,016	)	$	(1,701	)
Net change in short term loans		(4,350	)		(7,650	)		1,000
Proceeds from long-term loans received		-			-			712
Proceeds from issuance of ordinary shares and exercise of underwriters’ option		48,550			9,827			10,064
Issuance costs of ordinary shares and exercise of the underwriters' option		(3,182	)		-			-
Proceeds from exercise of options		282			-			165
Net cash provided by financing activities		39,212			161			10,240
Net increase (decrease) in cash and cash equivalents and restricted cash		44,132			(9,508	)		8,916
Cash and cash equivalents and restricted cash at beginning of period		7,434			16,942			8,026
Cash and cash equivalents and restricted cash at end of period	$	51,566		$	7,434		$	16,942
Supplementary information on investing and financing activities not involving cash flows:
Additions of operating lease right-of-use assets and operating lease liabilities		3,859			983			1,345
Reclassification of inventory to property, plant and equipment		579			155			68
Supplemental disclosure of cash flow information:
Interest paid		1,001			1,400			1,438

The accompanying notes are an integral part of the consolidated financial statements.

F - 11

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

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. TAT has the following wholly owned subsidiaries, hereinafter collectively referred to as the “Group”: Limco-Piedmont Inc. (“Limco-Piedmont”), Limco Airepair Inc. (“Limco”), a wholly owned Delaware subsidiary of Limco-Piedmont, Piedmont Aviation Component Services LLC (“Piedmont”), 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 (“TAT-Engineering”), which was established in January 2016 as a joint venture. The accounting treatment of the joint venture is based on the equity method due to participating rights granted to the other stockholder.

TAT operations is focused on the following four segments: (i) original equipment manufacturing (“OEM”) of heat transfer solutions and aviation accessories mainly through its Kiryat Gat facility; (ii) MRO (“Maintenance Repair and Overhaul”) services for heat transfer components and OEM of heat transfer solutions through Limco; (iii) MRO services for aviation components (mainly Auxiliary Power Unit “APU” and Landing Gear “LG”) through Piedmont; and (iv) overhaul and coating of jet engine components through Turbochrome. 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 (under the symbol TATT) and Tel-Aviv Stock Exchange (under the symbol TAT Tech).

Currently, TAT continues its business and operations but the intensity and duration of Israel’s current war is difficult to predict, as are such wars’ economic implications on our business and operations and on Israel's economy in general. To date, the Company’s operations and financial results have not been materially affected by these events.

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 years ended December 31, 2025, 2024 and 2023, the Group’s activity in Israel contributed $49.5, $43.8 and $33.9 million out of total revenue of $178.0, $152.1 and $113.8 million, 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.

F - 12

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (CONT)

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, the Company expects that tariff related costs will be substantially passed to customers. As such, the Company is expecting minimal to no impact from the changes above.

Basis of Presentation

The Group's financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").

Use of estimates in the preparation of financial statement

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 and income taxes.

Functional currency

The majority revenues of the company and subsidiaries are generated in U.S. dollars ("dollars") and a substantial portion of the costs of the company and each subsidiary in the Group are incurred in dollars. Accordingly, the dollar is the currency of the primary economic environment in which the Group operates and accordingly its functional and reporting currency is the dollar.

Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in currencies other than the U.S. dollar are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions – exchange rates at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) – historical exchange rates. Currency transaction gains and losses are carried to other financial income (expenses), net, as appropriate.

The financial statements of TAT-Engineering are included in the consolidated financial statements, based on translation into U.S. dollars. Balance of the Investment is translated at year-end exchange rates, while share in profit is translated at average exchange rates during the year. The remeasurement adjustments of foreign currencies translation are included in the Company’s shareholders’ equity as a component of accumulated other comprehensive income (loss).

F - 13

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of TAT and its subsidiaries.

Intercompany balances and transactions, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation.

Cash and Cash equivalents

All highly liquid investments, which include short-term bank deposits, that are not restricted as to withdrawal or use. The period to maturity of which does not exceed three months at the time of investment, are considered to be cash equivalents.

Restricted Deposits

Restricted deposit consists primarily of bank deposits to secure obligations under our state loan and a letter of credit to a supplier. Restricted deposit is presented at cost, including accrued interest, and is classified based on the duration of the restriction. The following table provides a reconciliation of cash and cash equivalents and restricted deposit reported on the balance sheets that sum to the total of the same amounts shown on the statement of cash flows:

	December 31,
	2025		2024
Cash and cash equivalents	$	51,259	$	7,129
Restricted deposit long term		307		305
Total cash and cash equivalents and restricted cash equivalents	$	51,566	$	7,434

Accounts receivable, net

The Group’s accounts receivable balances are due from customers primarily in the airline and defense industries. Credit is extended based on evaluation of a customer’s financial condition credit insurance limits and generally, collateral is not required. Trade accounts receivable from sales of services and products are typically due from customers within 30 to 90 days. Trade accounts receivable balances are stated at amounts due from customers net of a provision for current expected losses.

The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. Write-off activity and recoveries for the periods presented were not material.

F - 14

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

Inventory

Inventory is measured at the lower of cost and net realizable value.

Inventories include raw materials and components, work in progress and finished products. Cost of raw material and components is determined using the “moving average” basis. Cost of work in progress and finished products is calculated based on actual costs. Capitalized production costs components, mainly labor and overhead, are determined on average basis over the production period.

Since the Group sells products and services related to airplane accessories for airplanes that can be in service for 20 to 50 years, the Group must keep a supply of such products and parts on hand while the airplanes are in use. The Group writes down its inventory for estimated obsolescence and unmarketable inventory equal to the difference between the cost of inventory and net realizable value, which includes costs to sell based upon assumptions of future demand and market conditions.

If actual market prices are less favorable than those projected by management, inventory write-downs may be required. When inventory is written down, a new lower cost basis for that inventory is established.

Property, plant and equipment

Property, plant and equipment are stated at cost, after deduction of the related investment grants, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows:

	Years
Buildings	25 - 39
Leasehold improvements	3 - 5
Machinery and equipment	3 - 20
Motor vehicles	7
Office furniture and equipment	3 - 5
Internal use software	7-15

Leasehold improvements are amortized using the straight-line method over the period of the lease contract, or the estimated useful life of the asset, whichever is shorter.

Capitalized Software Costs

The Company accounts for its costs to develop software for internal use accordance with Accounting Standards (“ASC”) 350-40, Internal use Software. These costs are directly attributable to the development and implementation of a new ERP and supply chain software. The Company capitalizes the costs incurred during the development stage. Capitalized costs include software design, configuration, interfaces, coding, installation and testing, payroll, payroll-related expenses and external direct costs, which are directly associated with creating and enhancing internal use software. Capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially complete and is ready for its intended purpose.

Capitalized software costs are amortized on a straight-line basis over their estimated useful life. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized software costs are included in property, plant and equipment, net in the consolidated balance sheet.

F - 15

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

Government grants

Grants received from the Israel Invitation Authority (“IIA”) for approved research and development projects are recognized at the time the Company is reasonably assured that it will be entitled to such grants, on the basis of the costs incurred and included as a deduction from research and development expenses.

Government grants relating to the purchase of property, plant and equipment are presented in the consolidated balance sheet as a deduction to the carrying amount of the asset and they are credited to profit or loss on a straight-line basis over the estimated useful lives of the related assets.

Grants received according to the European Research Council (“ERC”) and Paycheck Protection Program (PPP) plan launched by the US government are recognized at the time the Company is reasonably assured that it will be entitled to such grants, on the basis of the costs incurred and included as a deduction from cost of revenues and operational expenses, as applicable.

Investment in affiliates and share in results of equity investment of affiliated companies

Investment in which the Group exercises significant influence and which is not considered a subsidiary ("affiliate") is accounted for using the equity method, whereby the Group recognizes its proportionate share of the affiliated Company's net income or loss after the date of investment.

The Group reviews those investments for impairment whenever events indicate the carrying amount may not be recoverable.

On consolidation, transactions between the Group and the affiliate are eliminated in the amount which related to the Group's proportionate share of the affiliate.

Leases

The Company as a lessee

Under ASC 842, Leases, the Company determines if an arrangement is a lease at inception. Upon initial recognition, the Company recognized a liability at the present value of the lease payments to be made over the lease term and concurrently recognized a right of use (“ROU”) asset at the same amount of the liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in respect of the lease.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets are recognized as the lease liability, adjusted for lease incentives received and prepayments made. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. On the commencement date, lease payments that include variable lease payments dependent on an index or a rate (such as the Consumer Price Index or a market interest rate), are initially measured using the index or rate at the commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined. As the Company’s leases do not provide an implicit rate, the Company’s uses its estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term.

F - 16

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

Income from leasing transactions

The Company accounts for certain leasing revenues in accordance with ASC 842, which qualify for operating lease treatment. For operating leases in which the Company is the lessor, lease payments are recognized as leasing revenue over the lease term on a straight-line basis. APUs engines under operating leases are classified as property, plant, and equipment and depreciated over the useful life, based on the lesser of 1,000 leasing days or 5,000 LLP (Life Limited Parts).

Identified intangible assets

Identifiable intangible assets are comprised of definite lived intangible assets – commercial license which are amortized over 10 years respectively, using the straight-line method over their estimated period of useful life as determined by identifying the period in which substantially all of the cash flows are expected to be generated. The amortization of the commercial license is recorded in the cost of sales.

Impairment of long-lived assets

Long-lived assets, including property, plant and equipment, operating lease right of use assets and definite life intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets (or asset group) may not be recoverable. In the event that the sum of the expected future cash flows (undiscounted and without interest charges) of the long-lived assets (or asset group) is less than the carrying amount of such assets, an impairment charge would be recognized and the assets (or asset group) would be written down to their estimated fair values.

Treasury Shares

Ordinary shares held by the Company are presented as a reduction of equity at their cost to the Company. The treasury shares have no rights.

Revenue Recognition

The Group generates its revenues from the sale of OEM products and systems, providing MRO services (remanufacture, maintenance, repair and overhaul services and long - term service contracts) and parts sales.

A contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties such as VAT and sales taxes.

F - 17

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, Revenue from Contracts with Customers, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied.

The Company has also adopted the following exemptions and accounting policies:

•	The Company accounts for shipping as fulfillment costs, in cases in which the shipping occurs after the customer has obtained control of a good.
•	The Company adjusts the promised amount of consideration for the effects of a significant financing component, in cases in which the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less.
---	---
•	Revenues from the sale of OEM products are recognized at a point in time when the customer obtains control of the product, typically upon shipment. Invoices are issued based on the customer's approved purchase order and payments are due from customers within 30 to 90 days from invoice date.
---	---
•	Revenues from the sale of MRO services is recognized at a point in time, which involve receiving customers' purchase orders, completing the service, and fulfilling inspection quality assurance obligations at the company's production site. Payments are due from customers within 30 to 90 days from invoice date.
---	---

Contract costs

The Company capitalizes certain costs, which are considered incremental costs, to obtain long-term contracts with customers that will be used in satisfying related performance obligations in the future; and are expected to be recovered. Such costs are amortized over the life of the expected contract period. Such contract costs are amortized and included in sales and marketing and general and administrative in the consolidated statements of operations.

Contract liabilities

Contract liabilities are mainly comprised of deferred revenues which are included under accrued expenses and other in the consolidated balance sheet.

Warranty costs

The Group provides warranties for its products and services ranging from one to three years, which vary with respect to each contract and in accordance with the nature of each specific product. According to Company's experience, most of the warranty costs are incurred during the first year of the contract.

The Group estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time revenue is recognized under accrued expenses and other in the consolidated balance sheet. The Group periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Research and development

Research and development costs, net of grants, are charged to expenses as incurred and consist primarily of personnel and related expenses for research and development activities.

F - 18

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

Fair value measurement

The Company’s financial instruments consist mainly of cash and cash equivalents, restricted deposits, accounts receivable, accounts payable, accrued expenses and other liabilities. The carrying values of these financial instruments approximate their fair values due to their short maturities. 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: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted 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.

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.

Concentrations of credit risk

Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, restricted deposits 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 United States. Accordingly, minimal credit risk exists with respect to these financial instruments.

The Group's accounts receivable are derived mainly from sales to customers in the United States, Israel and Europe. The Group generally does not require collateral; however, in certain circumstances the Group may require letters of credit. Management believes that credit risks relating to accounts receivable are minimal since the majority of the Group's customers are world-leading manufacturers of aviation systems and aircrafts, international airlines, governments and air forces, and world-leading manufacturers and integrators of defense and ground systems. In addition, the Group has large number of customers with wide geographic spread 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 December 31, 2025 and 2024, the Company has a single customer which represents 13% and 24% of the Company's accounts receivable, respectively.

Income taxes

Income taxes are accounted for in accordance with ASC 740, Income Taxes. This statement prescribes the use of the asset and liability method; whereby deferred tax assets and liabilities account balances are determined based on temporary differences between financial reporting and tax basis of assets and liabilities and for tax loss carryforwards. Deferred taxes are measured using the enacted laws and tax rates that will be in effect when the differences are expected to be reversed. The Group provides a valuation allowance, if it is more likely than not that a portion of the deferred income tax assets will not be realized.

F - 19

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

Taxes which would apply in the event of disposal of investments in domestic and foreign subsidiaries have not been taken into account in computing the deferred taxes, when the Group’s intention is to hold, and not to realize the investments.

The Group did not provide for deferred taxes attributable to dividend distribution out of retained tax-exempt earnings from "Approved/Benefited Enterprise" plans, since it intends to permanently reinvest them and has no intention to declare dividends out of such tax-exempt income in the foreseeable future. Management considers such retained earnings to be essentially permanent in duration.

The results for tax purposes for TAT’s Israeli subsidiaries are measured and reflected in NIS. As explained previously, the consolidated financial statements are measured and presented in U.S. dollars. In accordance with ASC 740, TAT has not provided deferred income taxes on the differences resulting from changes in exchange rate and indexation.

The Group follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate resolution. The Group’s policy is to include interest and penalties related to unrecognized tax benefits within other financial income (expense). Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance sheet date.

Earnings per share

Basic earnings per share are computed by dividing net income by the weighted average shares outstanding of the Company's ordinary shares, for each period, net of treasury shares.

Diluted earnings per share are calculated by dividing the net income by the fully diluted weighted average share outstanding of ordinary shares outstanding during each period. Potentially dilutive shares include outstanding options and unvested RSUs granted to officers, directors and employees, using the treasury stock method.

Share-based compensation

The Group applies ASC 718 - Stock Based Compensation with respect to officers, directors and employees options and Restricted Stock Units (“RSUs”), which requires awards classified as equity awards to be accounted for using the grant-date fair value method. The fair value of option is estimated using the Black-Scholes valuation model, the compensation costs is recognized as expense over the requisite service period. The fair value of RSUs is equal to the market value of the Company's common shares on the date of grant.

The Group recognizes compensation cost for an award with only service conditions that has a graded vesting schedule using the accelerated method over the requisite service period.

F - 20

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

Comprehensive income (loss)

Comprehensive income includes, in addition to net income, gains and losses of derivatives designated for cash flow hedge accounting and translation adjustments (net of related taxes where applicable).

Reclassification adjustments for gain or loss of derivatives are included in the relevant line item in the statement of income.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Group, but which will only be resolved when one or more future events occur or fail to occur. The Group’s management assesses such contingent liabilities and estimated legal fees. Such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Group or unasserted claims that may result in such proceedings, the Group’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

Management applies the guidance in ASC 450-20-25 – Contingencies, when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Group’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material are disclosed.

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

Recently Issued Accounting Principles

Recently adopted accounting pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amended guidance enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information. This guidance requires disclosure of specific categories in the effective tax rate reconciliation and further information on reconciling items meeting a quantitative threshold. In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amended guidance is effective for fiscal years beginning after December 15, 2024. The Company adopted this standard in the current period retrospectively to all prior periods presented in the entity’s financial statements. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

New accounting pronouncements effective in future periods

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, inter alia, 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 - 21

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT)

On July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements and disclosures.

NOTE 3 - INVENTORY

Inventory is composed of the following:

	December 31,
	2025		2024
Raw materials and components	$	59,585	$	50,197
Work in progress		15,478		17,382
Finished goods		486		961
Total inventory	$	75,549	$	68,540

Inventory write-down expense due to slow-moving inventory amounted to $1,180, $547 and $187 for the years ended December 31, 2025, 2024 and 2023, 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 of exchangeable units and other spare parts that are no longer relevant.

NOTE 4 - INVESTMENT IN AFFILIATES

On November 25, 2015, the Company signed an agreement with a Russia-based Engineering Holding of Moscow (“Engineering”), to establish a new facility for the provision of services for heat transfer products. The new Company, TAT-Engineering LLC, established in January 2016, is based in Novosibirsk’s Tolmachevo airport and provides services for heat transfer products. TAT held 51% of TAT-Engineering LLC's shares and the remaining 49% are held by Engineering. The accounting treatment of the joint venture is based on the equity method due to participating rights granted to the other stockholder. The functional currency of TAT-Engineering is their local currency.

F - 22

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 4 - INVESTMENT IN AFFILIATES (CONT)

The summarized financial information of TAT-Engineering LLC as follows:

	December 31,
	2025		2024
Balance sheets:
Current assets	$	7,425	$	3,512
Non-current assets		706		1,093
Current liabilities		2,319		1,721
	Year ended December 31,
---	---	---	---	---	---	---
	2025		2024		2023
Statements of operation:
Revenues	$	5,126	$	3,366	$	2,702
Gross profit		3,282		2,095		1,739
Net income		2,969		1,414		987
Net income attributable to the Company		1,488		809		503

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT, NET

Composition of assets, grouped by major classifications, is as follows:

	December 31,
	2025		2024
Cost:
Land and buildings	$	10,993	$	10,879
Leasehold improvements		9,471		9,408
Machinery and equipment		85,570		79,512
Motor vehicles		259		259
Office furniture and equipment		2,822		1,628
Internal use software		4,630		4,204
		113,745		105,890
Less: Accumulated depreciation and amortization		66,823		64,314
Depreciated cost	$	46,922	$	41,576

Depreciation and amortization expenses amounted to $4,839, $5,187 and $4,430 for the years ended December 31, 2025, 2024 and 2023, respectively.

F - 23

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 6 - LEASES

The Company provides its customers with leasing services of APU engines. The results are reported as part of the Company's activity in MRO services for aviation components. The net revenues from the lease services amounted to $6.9, $5.1 and $5.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company leases its operating and office facilities for various terms under long-term, non-cancellable operating lease agreements. The leases expire at various dates through 2035, certain leases contain options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments.

In 2023, TAT signed a lease agreement for a facility in Charlotte, North Carolina, U.S., which will expire on April 30, 2029. TAT recognized an operating ROU assets and related operating lease liability of approximately $1.0 million.

In January 2024, Piedmont entered into a lease agreement for a building which generated a ROU asset and related lease liability of approximately $0.5 million, which will last until December 2026.

In April 2025, Piedmont signed a renewal of lease agreement for a facility in Greensboro, North Carolina, U.S., for 5 years, with a lease term commencing on July 1, 2025, and that will expire on June 30, 2030. Piedmont has an option of extending the terms of the lease for another 5 years, commencing upon expiration of the extended term. This option was not considered in the calculation of the ROU assets and lease liability. As a result, Piedmont recognized a ROU assets and related operating lease liability of approximately $1.6 million.

In May 2025, TAT on behalf of Limco signed a new lease agreement for an R&D facility in North Carolina, U.S., with a lease term of 10 years that will expire on April 30, 2035. TAT has the right to terminate the lease at the end of the 7th year subject to payment of termination fee of $225 thousand plus other charges. As a result, Limco recognized ROU assets and related operating lease liability of approximately $1.0 million.

In August 2025, TAT signed a new lease agreement for a facility in Kiryat Gat, Israel, with a lease term of 5 years that will expire in August 2030. TAT has an option of extending the terms of the lease for another 5 years, commencing upon expiration of the new lease term. This option was not considered in the calculation of the ROU assets and lease liability. As a result, TAT recognized an ROU assets and related operating lease liability of approximately $0.9 million.

During 2025 and 2024, TAT entered into lease agreements for 6 and 15 vehicles, respectively, for a term of 3 years, totaling approximately $0.6 million of ROU assets and related lease liabilities.

The lease expense was as follows:

	Year ended December 31,
	2025		2024
Operating lease expenses	$	1,613	$	1,329

Supplemental cash flow information related to leases was as follows:

	Year ended December 31,
	2025		2024
Operating cash flows used for operating leases	$	1,660	$	1,447
Right-of-use assets obtained in exchange for lease obligations (non-cash)	$	3,859	$	983

F - 24

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 6 - LEASES (CONT)

Supplemental balance sheet information related to operating leases is as follows:

	December 31,
	2025			2024
Operating Leases
Operating lease right-of-use assets	$	5,807		$	2,282
Current operating lease liabilities	$	1,474		$	939
Non-current operating lease liabilities		4,448			1,345
Total operating lease liabilities	$	5,922		$	2,284
Weighted Average Remaining Lease Term
Operating leases - Israel		4.39			3.47
Operating leases – United States		5.93			2.44
Weighted Average discount rate
Operating leases - Israel		4.7	%		4.52	%
Operating leases – United States		6.41	%		6.27	%

As of December 31, 2025, the maturities of lease liabilities were as follows:

Year	Amount
2026	$	1,805
2027		1,423
2028		1,212
2029		1,038
2029 and after		1,526
Total lease payments		7,004
Less imputed interest		(1,082	)
Total	$	5,922

NOTE 7 - INTANGIBLE ASSETS

Intangible assets are composed of the following:

	December 31,
	2025			2024
Commercial licenses
Cost	$	2,670		$	2,509
Accumulated amortization		(1,218	)		(956	)
Amortized cost	$	1,452		$	1,553

In September 2020, Piedmont signed a 10-year agreement for the commercial MRO services for aviation components. Under this contract, Honeywell licensed Piedmont as an authorized MRO station of APU 331-20X.

Estimated amortization expenses for the five succeeding years are $279 thousand per year.

F - 25

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 8 - LONG-TERM LOANS AND CREDIT LINES

Long-term loans and lines of credit composed of the following:

		December 31,				Current<br><br> <br>Interest Rate	Duration<br><br> <br>(in Years)
		2025		2024
Israel
Government guaranteed loans	a	$	3,833	$	3,990	7.25%	5-10
Commercial loans	b		1,961		2,171	6.65%	7
United States
Commercial loans	c		5,480		6,285	3.75% - 4.4%	7-10
Line of credit	d		-		4,350	7.25% - 8.6%	Revolving
Machinery finance loans	e		438		575	6.5%	5
		$	11,712	$	17,371
a.	In 2020 and 2021, TAT obtained several loans from the Israeli banks (with a guaranty from the Israeli government) in an aggregate amount of $6.3 million. The loans bear annual interest at Prime Rate +1.5% which are repaid in equal monthly installments starting from April 2021 through February 2031. The loans were received and are payable in NIS.
---	---
b.	In March 2022, TAT obtained a loan from a commercial bank in the amount of $3.7 million. The loan bears annual interest at Prime Rate +0.9% and is repaid in equal monthly installment starting from April 2022 through March 2029.
---	---
c.	In May 2022, Piedmont obtained a loan from a commercial bank in the US in the amount of $3.0 million. The loan is secured with a first-degree lien on Piedmont’s equipment. The loan bears an annual interest which is repaid in equal monthly installments until 2029. In August 2022, Limco obtained a long-term loan of $5.0 million from a commercial bank in the US. The loan bears an annual interest which is repaid in equal monthly installments until August 2032. The loan is secured with a first-degree lien on Limco’s equipment.
---	---
d.	In February 2022, Piedmont obtained a credit line from a US commercial bank in the amount of $7.0 million with a maturity date of February 2024. In February 2024, Piedmont signed a new loan contract extending the existing line of credit by 2 years and securing an additional credit in the amount of $7 million, bringing the total line of credit to $14.0 million. As of December 31, 2024, $2.85 million of this credit line was utilized. As of December 31, 2025, Piedmont has no outstanding drawdown on this line of credit.
---	---

In March 2022, Limco obtained a line of credit for $5.0 million from a commercial bank in the US. Further, April 2024, Limco signed a contract extending the existing line of credit by 2 years. This line of credit bears annual fixed interest of 7.25%. As of December 31, 2024, $1.5 million of this credit line was utilized. As of December 31, 2025, Limco has no outstanding drawdown on this line of credit.

e.	In 2023 Piedmont obtained loans from Machinery Finance totaling $0.7 million. The loans bear annual interest of 6.5% which are repaid in equal monthly installments until 2028.

F - 26

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 8 - LONG-TERM LOANS AND CREDIT LINES (CONT)
f.	In June 2023, TAT secured another short-term line of credit from an Israeli bank for $4.5 million. The company’s building and land in Kiryat Gat serve as collateral for this loan. As of December 31, 2025, the Company has not utilized this credit line.
---	---

In respect of the line of credits and the commercial loans, the Company and its subsidiaries are required to meet certain financial covenants. As of December 31, 2025, the Company and its subsidiaries met all its covenants

Maturities of long-term loans are as follows:

Year	Amount
2026	$	2,227
2027		3,427
2028		2,057
2029		1,534
2030 and after		2,467
	$	11,712

The carrying value of the Company’s long-term debt approximates its fair value, except for the following:

	Fair value				Carrying Amount
	2025		2024		2025		2024
The TAT subsidiary loan at c above	$	1,803	$	1,953	$	1,868	$	2,224
The other TAT subsidiary loan at c above	$	3,158	$	3,566	$	3,612	$	4,061

NOTE 9 - ACCRUED EXPENSES AND OTHER

Accrued expenses and other is composed of the following:

	December 31,
	2025		2024
Accrued payroll and employees’ benefits	$	5,969	$	6,292
Contract liabilities*		5,900		6,928
Accrued royalties		3,151		3,097
Accrued expenses		948		1,288
Warranty provision		378		353
Other		950		636
	$	17,296	$	18,594

* Contract liabilities primarily included advance payments from customers expected to be recognized within a year. For the years ended December 31, 2025 and 2024, $3,153 and $4,209, respectively, of the recognized revenue was included in deferred revenue at the beginning of the periods.

F - 27

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 10 - LONG-TERM EMPLOYEE-RELATED OBLIGATIONS

With regards to Israeli employees, the Company is required to make severance payments upon dismissal of an employee or upon termination of employment in certain circumstances. The severance payment liability due to the employees is based upon length of service and the latest monthly salary, (equivalent to one month’s salary for each year employed) is recorded on the Company’s balance sheet under “Liability in respect of employees rights upon retirement.” The liability is recorded as if it were payable at each balance sheet date on an undiscounted basis.

According to Section 14 of the Israeli Severance Pay Law, the Israeli Company’s liability for certain employees, according to their employment agreements, make regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s retirement benefit obligation. The Company and its Israeli subsidiary are fully relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected in the Company balance sheet, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies (the “Contribution Plan”).

With regard to employees that are not under the Contribution Plan, the liability is funded in part from the purchase of insurance policies or by the establishment of pension funds with dedicated deposits in the funds. The amounts used to fund these liabilities are included in the balance sheets under “Funds in respect of employee rights upon retirement.” These funds are Company’s assets.

In the years ended December 31, 2025, 2024 and 2023, the Company expense $760, $582, and $610, respectively, with pension funds and insurance companies in connection with its severance payment obligations.

The amounts of severance payments, actually paid to retired employees, by TAT were $15, $31 and $116 for the years ended December 31, 2025, 2024 and 2023.

TAT expects to pay $674 in future benefits to their employees during 2026 through 2035 upon their normal retirement age. The amount was determined based on the employee’s current salary rates and the number of service years that will be accumulated upon the retirement date.

These amounts do not include amounts that might be paid to employees that will cease working for the Israeli Company before their normal retirement age.

Year	Amount
2026	$	185
2027		166
2028		75
2029		4
2030		46
Thereafter (through 2035)		198
Total	$	674

Limco-Piedmont sponsors a 401(k) safe harbor profit sharing plan covering substantially all of its employees. The plan requires the employer to contribute a match which is currently done on a payroll period basis, matching 100% of the first 2% and 50% of all salary deferrals made up to the next 3%. In addition, the plan allows for a discretionary qualified non-elective contribution for the plan year. Contributions to the plan by Limco-Piedmont were $957, $645, and $569 for the years ended December 31, 2025, 2024 and 2023, respectively.

The Group expects to contribute approximately $1,804 in 2026 as it relates to the pension funds and insurance companies in respect of their severance and pension pay obligations in Israel as well as 401(k) contribution in the U.S.

F - 28

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Commission arrangements

The Group is contracted to pay sales commission ranging from 1% to 10% to sale agents and employees based on the total sales and profits from contracts. Commission expenses were $895, $778, and $361 for the years ended December 31, 2025, 2024 and 2023, respectively.

Royalty commitments

The Company is committed to paying royalties as percentage of revenue or as a percentage of purchase in the amount ranging from 5% to 25% to certain OEM as part of the Company’s license agreements. Royalties expense were $5,727, $4,983, and $3,298 for the years 2025, 2024 and 2023, respectively.

Guarantees

(1)	In order to secure TAT's liability to the Israeli customs, the Company provided bank guarantees in amounts of 100 thousand NIS (approximately $31.3). The guarantees are linked to the consumer price index and will expire from May 2025 through May 2026.
(2)	TAT has provided bank guarantee to Ministry of Economy in amounts of 495 thousand NIS (approximately $155).
---	---
(3)	Turbochrome has provided a bank guarantee to the local planning and building committee in amounts of $33).
---	---
(4)	TAT has provided a bank guarantee for a building lease in the amount of 212 thousand NIS (approximately $67).
---	---
(5)	Gedera has provided a guarantee to a customer in the amount of $800 for advanced funds on a long-term contract.
---	---

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. The evidentiary hearings concluded on June 29, 2025, and the parties completed their closing arguments by November 23, 2025. TAT intends to vigorously defend the counterclaim by TAT Industries Ltd. and TAT estimates that is not probable that TAT Industries Ltd.’s claim against TAT will be approved.

F - 29

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 12 - SHAREHOLDERS' EQUITY

Ordinary Share

TAT's ordinary shares confer upon their holders' voting rights, the right to receive dividends, if declared, and any amounts payable upon the dissolution, liquidation or winding up of the affairs of TAT. TAT's treasury shares have no rights.

On September 1, 2024, TAT completed the issuance and sale of 673,340 ordinary shares in a private placement to Israeli institutional and accredited investors (as defined under Israel’s Securities Law, 5728-1968), for a purchase price of NIS 54.95 per share (which equaled $15.03 per share based on the exchange rate published by the Bank of Israel at such time), resulting in net proceeds to the Company, after a deduction of offering expenses, of approximately NIS 36.5 million (or approximately $10.0 million). The newly issued shares represent approximately 6.2% of the Company’s issued and outstanding ordinary shares after the consummation of such sale. The private offering expenses totaled $163 thousand.

Pursuant to the resolution of the shareholders' meeting held on August 15, 2024, the Company’s articles of association were amended. This amendment cancels the par value of the Company’s Ordinary Shares. As a result of this change, $3,152 par value was reclassified from ordinary shares to additional paid-in capital.

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 ordinary shares.

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 proceeds for the Company from this public offering after issuance costs is $45.4 million.

On November 4, 2025, at the Annual and Special General Meeting of the shareholders a resolution was approved to increase the authorized capital stock of the Company from 15,000,000 to 19,000,000 ordinary shares.

F - 30

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 12 - SHAREHOLDERS' EQUITY (CONT)

Stock option plans

In November 2011, the Company’s compensation committee and board of directors approved a stock option plan (the “2012 Plan”), which was subsequently approved by TAT’s shareholders, on June 28, 2012. According to the 2012 Plan, an aggregate of 980,000 options exercisable into up to 980,000 ordinary shares of TAT may be granted to certain members of our board of directors and certain senior executives at an exercise price not less than the fair market value of the shares covered by the option on the date of grant.

On August 30, 2018, the Company's compensation committee, followed by the Board of Directors, approved the amended and restated Company's 2012 Plan. On October 4, 2018, the Company's amended and restated 2012 Plan was approved at the annual general meeting of shareholders. As part of the Company's 2012 Plan’s amendments it was determined that if the Company declares a cash dividend to its shareholders, and the distribution date of such dividend will precede the exercise date of an Option, including for the avoidance of doubt, Options that have yet to become vested and Options which have been granted prior to the adoption of such amendment to the Plan, the exercise price of the option shall be reduced in the amount equal to the cash dividend per share distributed by the Company.

Following the approval of TAT's compensation committee and board of directors, on November 8, 2022, the Company’s shareholders approved the 2022 stock option plan with the same terms and condition as the 2012 plan (the “2022 Plan”, and together with the 2012 Plan, the “Plans”). According to the 2022 Plan, an aggregate of 550,000 options exercisable into up to 550,000 ordinary shares of TAT may be granted to certain members of our board of directors and certain senior executives at an exercise price not less than the fair market value of the shares covered by the option on the date of grant

In March 2025, following the approval of TAT's audit committee and board of directors, the Company’s shareholders annual meeting, approved the amended and restated Company’s 2022 Stock Plan (the “Amended and Restated Company’s 2022 Stock Option Plan”). The main amendment in the Amended and Restated Company's 2022 Stock Option Plan is the increase in the maximum number of ordinary shares of the Company that may be issued under the Amended and Restated Company's 2022 Stock Option Plan by an additional 200,000 ordinary shares, such that after the increase, the original option pool after the additional ordinary shares will equal a total of 750,000 ordinary shares.

Following the approval of TAT's compensation committee and board of directors, on November 4, 2025, the Company’s shareholders approved the amended and restated version of both the 2012 Stock Option Plan and the 2022 Stock Option Plan (together, the "Amended and Restated Incentive Plans"). Each of these plans has been updated and expanded to reflect the broadened scope of equity-based awards that may now be granted under the plans. Accordingly, the plans, previously known as the 2012 Stock Option Plan and the 2022 Stock Option Plan, have been renamed the 2012 Incentive Plan and the 2022 Incentive Plan, respectively, to reflect this broader scope. These amendments are intended to provide the Company with greater flexibility in structuring equity-based compensation, to better align the plans with current market practices and the evolving needs of the Company, and to support the Company’s ability to attract, retain and incentivize key employees, officers, directors and consultants. The amendments do not increase the total number of Ordinary Shares available for issuance under either plan. Additionally, under the amendments to the 2012 and 2022 Incentive Plans, the approval mechanism for changes to the plan was revised so that shareholder approval will no longer be required, instead, approvals will be made in accordance with the Israeli Companies Law.

F - 31

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 12 - SHAREHOLDERS' EQUITY (CONT)

The total aggregate shares in the pool under the Plans is 1,730,000 ordinary shares of the Company. At December 31, 2025, shares available for grant amounted to 490,628 ordinary shares.

In general, the options under the Plans vest over a period of 4 years as follows: 25% of the options vest upon the lapse of 12 months following the date of grant and the remaining 75% vest on a quarterly basis over the remaining 3-year period. The options expired within 7 years from the date of grant. Pursuant to the Plans, any options that are cancelled or not exercised within the option period determined in the relevant option agreement will become available for future grants.

The following table is a summary of the activity of TAT's Stock Incentive Plans:

	Year ended December 31,
	2025					2024					2023
	Number<br><br> <br>of<br><br> <br>options (in thousands)			Weighted<br><br> <br>average<br><br> <br>exercise<br><br> <br>price		Number<br><br> <br>of<br><br> <br>options (in thousands)			Weighted<br><br> <br>average<br><br> <br>exercise<br><br> <br>price		Number<br><br> <br>of<br><br> <br>options (in thousands)			Weighted<br><br> <br>average<br><br> <br>exercise<br><br> <br>price
Outstanding at the beginning of the year		486		$	9.43		625		$	7.31		675		$	7.17
Granted		490			33.82		175			14.16		190			6.63
Forfeited		(57	)		9.37		-			-		(197	)		6.52
Exercised*		(225	)		7.96		(314	)		7.85		(43	)		5.68
Outstanding at the end of the year		694		$	27.14		486		$	9.43		625		$	7.31
Exercisable at the end of the year		85		$	10.16		172		$	7.05		373		$	7.91

The weighted-average grant-date fair value of options granted was $14.08 in 2025, $6.00 in 2024, and $2.45 in 2023. The aggregate intrinsic value for the options outstanding as of December 31, 2025, 2024 and 2023 was $12.16 million, $7.89 million and $1.78 million, respectively.

* Until September 2025, the Company allowed its employees to exercise stock options either by paying cash or through the cashless exercise mechanism. Starting September 2025, the Company stopped the cashless exercise mechanism.

F - 32

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 12 - SHAREHOLDERS' EQUITY (CONT)

The following table summarizes information concerning outstanding and exercisable awards as of December 31, 2025:

Awards outstanding				Awards exercisable
Exercise price		Number of awards outstanding at the end of the year<br><br> <br>(in thousands)		Weighted<br><br> <br>average<br><br> <br>remaining contractual life (years)		Number of awards exercisable at the end of year		Weighted<br><br> <br>average<br><br> <br>remaining contractual life (years)
	5.91		9		2.24		9		2.24
	6.23		35		4.11		24		4.11
	6.42		13		3.33		10		3.33
	6.45		11		4.41		-		-
	6.59		13		3.92		-		-
	14.16		123		5.18		42		5.18
	29.93		280		6.27		-		-
	38.27		110		6.71		-		-
	38.91		50		6.65		-		-
	40.74		50		6.73		-		-
			694				85

The fair value of the Company’s stock options granted under the 2012 and 2022 plan for the years ended December 31, 2025, 2024 and 2023 was estimated using the following assumptions:

	2025	2024	2023
Expected stock price volatility	50.0%	49.10%	48% – 54.8%
Expected option life (in years)	4.6	4.6	4.6
Risk free interest rate	3.67% - 4.30%	4.18%	3.71% - 4.54%
Dividend yield	0%	0%	0%

The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options. The volatility factor used in the Black-Scholes option pricing model is based on historical stock price fluctuations. The expected term of options is based on the simplified method and forfeitures are recognized as they incur. The Company is able to use the simplified method as the options qualify as “plain vanilla” options as defined by ASC 718-10-S99 and since the Company does not have sufficient historical exercise data to provide a reasonable basis to estimate expected term. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the stock options granted. Following the Company's amended and restated 2012 stock plan and 2022 stock plan related to the adjustment of the exercise price in respect of dividend distribution, the dividend yield was amended to 0%.

F - 33

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 12 - SHAREHOLDERS' EQUITY (CONT)

Share-based compensation expenses:

	Year ended December 31,
	2025		2024		2023
Cost of revenue	$	265	$	144	$	-
Research and development		23		22		-
Sales and marketing		45		36		-
General and administrative		898		193		190
Total stock-based compensation	$	1,231	$	395	$	190

As of December 31, 2025, total unrecognized compensation cost was $6,570 and is expected to be recognized over a weighted-average period of 1.7 years.

NOTE 13 - 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.

	Year ended December 31,
	2025		2024		2023
Numerator for EPS:
Net Income	$	16,822	$	11,167	$	4,672
Denominator for EPS:
Weighted average shares outstanding – basic		12,075,678		10,363,978		8,961,689
Dilutive shares		207,634		851,849		122,333
Weighted average shares outstanding – diluted		12,283,312		11,215,827		9,084,022
EPS:
Basic	$	1.39	$	1.08	$	0.52
Diluted	$	1.37	$	1.00	$	0.51

NOTE 14 - TAXES ON INCOME

Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 ("the Law")

TAT and Turbochrome has elected to participate in the alternative package of tax benefits for its approved and benefited enterprise under the law.

Pursuant to such Law, the income derived from those enterprises will be exempt from Israeli corporate tax for a specified benefit period (except to the extent that dividends are distributed during the tax-exemption period other than upon liquidation) and subject to reduced corporate tax rates for an additional period.

In addition, pursuant to a recent amendment of the Law, any distribution of dividends as of August 15, 2021, will be prorated between exempt income and taxable income. As such, upon dividend distribution, in case the Company has accumulated exempt income, the Company will be obligated to pay corporate income tax it was exempted from with respect to the exempt profits portion.

F - 34

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 14 - TAXES ON INCOME (CONT)

Preferred Enterprises

In January 2011, additional amendments to the Law became effective (the “2011 Amendment”). Under the 2011 Amendment, income derived by ‘Preferred Companies’ from “Preferred Enterprises” (both as defined in the 2011 Amendment) would be subject to a uniform rate of corporate tax as opposed to the incentives that are limited to income from Approved or Benefiting Enterprises during their benefits period. According to the 2011 Amendment, the uniform tax rate on such income, referred to as “Preferred Income”, would be 6% in areas in Israel that are designated as Development Zone A and 12% elsewhere in Israel. Dividends distributed from taxable income derived from Preferred Enterprise would be subject to a 15% tax (or lower, if so provided under an applicable tax treaty), which would generally be withheld by the distributing Company .While the Company may incur additional tax liability in the event of distribution of dividends from tax exempt income generated from its Approved and Benefiting Enterprises, no additional tax liability will be incurred by the Company in the event of distribution of dividends from income taxed in accordance with the 2011 Amendment.

Under the transitional provisions of the 2011 Amendment, the Company elected to irrevocably implement the 2011 Amendment, commencing 2011 and thereafter, and be regarded as a "Preferred Enterprise" with respect to its existing Approved and Benefited Enterprises while waiving benefits provided under the legislation prior to the 2011 Amendment.

Under a recent amendment, announced in August 2013, beginning in 2014, dividends paid out of income attributed to a Preferred Enterprise will be subject to a withholding tax rate of 20% (instead of 15%). In addition, tax rates under the Preferred Enterprise were also raised effective January 1, 2014, to 9% in Zone A and 16%. The uniform tax rate for Development Zone A, as of January 1, 2017, is 7.5% (as part of changes enacted in Amendment 73).

TAT and Turbochrome are located in an area in Israel that is designated as Zone A and as such entitled to reduce tax rates of 7.5%.

Israel corporate tax rate

The taxable income of TAT, not subject to benefits as detailed above, is taxed at corporate tax rate, which was 23% for all years included in these financial statements.

Capital gain is subject to capital gain tax according to corporate tax rate in the year which the assets are sold.

As of December 31, 2025 and 2024, the Company has an accumulated tax loss carryforward in Israel of approximately $7,635 and $8,217, respectively. Such carryforward loss has no expiration date.

U.S. subsidiaries tax rates

The U.S. subsidiaries are taxed based on federal and state tax laws. The federal statutory tax rate for 2025, 2024 and 2023 was 21% plus 2.5% to 4% for state taxes.

On July 4, 2025, the U.S. enacted H.R. 1 "A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14", commonly referred to as the One Big Beautiful Bill Act ("OBBBA", or "OB3"). OB3 contains a broad range of provisions affecting businesses, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, including provisions related to bonus depreciation and immediately expensing of domestic research and development, as well as modifications to foreign derived intangible income and the restoration of other favorable tax provisions. The legislation has multiple effective dates, with certain provisions, including elective 100% bonus depreciation for assets placed in service after January 19, 2025, with many others generally not effective until 2026 through 2027. The Company’s provision for income tax reflects the impact of the enactment of the Act.

As of December 31, 2025 and 2024, the Company has a federal accumulated tax loss carryforward of approximately $6,826 and $7,860, respectively. Under U.S. tax laws, subject to certain limitations, carryforward tax losses originating in tax years beginning after January 1, 2018, have no expiration date, but are limited as a deduction to 80% of taxable income in any given year.

F - 35

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 14 - TAXES ON INCOME (CONT)

Tax assessments

TAT’s income tax assessments are considered final through 2018. Turbochrome income tax assessments are considered final through 2018. Limco-Piedmont income tax assessments are considered final through 2019.

Income before taxes on income is comprised as follows:

	Year ended December 31,
	2025		2024		2023
Domestic (Israel)	$	9,400	$	7,761	$	4,639
Foreign (United States)		8,077		2,792		106
	$	17,477	$	10,553	$	4,745

Taxes on income included in the statements of income:

	Year ended December 31,
	2025			2024			2023
Current:
Domestic (Israel)	$	191		$	-		$	-
Foreign (United States)		58			86			49
		249			86			49
Deferred:
Domestic (Israel)		(8	)		(426	)		358
Foreign (United States)		1,902			535			169
		1,894			109			527
	$	2,143		$	195		$	576

F - 36

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 14 - TAXES ON INCOME (CONT)

Income taxes paid
	Year ended December 31,
	2025		2024		2023
Federal taxes
Domestic (Israel)	$	71	$	39	$	-
Foreign (United States)		186		-		-
	$	257	$	39	$	-

Income tax reconciliation

A reconciliation of the reported tax expense assuming all income is taxed at the statutory rate to taxes on income as reported in the statements of income:

	Year ended December 31,
	2025						2024						2023
	Amount			Percent			Amount			Percent			Amount			Percent
Israel statutory tax rate	$	4,020			23	%	$	2,427			23	%	$	1,091			23	%
Foreign tax effects
United States
Statutory tax rate difference between Israel and United States		(162	)		(1	)		(56	)		(1	)		(2	)		-
Non-taxable or non-deductible items		23			-			10			-			6			-
Foreign country state/local taxes		139			1			31			-			(133	)		(3	)
Other adjustments		102			1			(6	)		-			325			7
Israel preferred enterprise regime		(1,457	)		(8	)		(121	)		(1	)		(476	)		(10	)
Changes in valuation allowance		126			(1	)		(2,338	)		(22	)		(231	)		(5	)
Non-taxable or non-deductible items		(34	)		-			21			-			-			-
Foreign exchange difference		(558	)		(3	)		170			2			-			-
Other adjustments		(56	)		-			57			1			(4	)		-
Effective tax rate	$	2,143			12	%	$	195			2	%	$	576			12	%

F - 37

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 14 - TAXES ON INCOME (CONT)

Deferred income taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of TAT's deferred tax liabilities and assets are as follows:

	December 31,
	2025			2024
Deferred tax assets:
Net operating losses carryforward	$	2,137		$	2,519
Inventory reserves		1,530			1,362
Interest limitation		602			236
Provisions for employee benefits		340			355
R&D expenses		147			222
Capital tax losses carryforward		1,002			876
Others		565			892
Deferred tax assets, before valuation allowance		6,323			6,462
Valuation allowance (VA)		(1,002	)		(876	)
Deferred tax assets, net		5,321			5,586
Deferred tax liabilities:
Property, plant and equipment		(6,203	)		(4,526	)
Intangible assets		(108	)		(150	)
Other temporary differences deferred tax liabilities		(23	)		(33	)
Deferred tax liabilities		(6,334	)		(4,709	)
Net	$	(1,013	)	$	877

The following table summarizes the changes in the valuation allowance for deferred tax assets:

Balance, December 31, 2022	$	5,202
Deductions during the year		(1,988	)
Balance, December 31, 2023		3,214
VA release during the year		(1,114	)
Deductions during the year		(1,224	)
Balance, December 31, 2024		876
VA increase during the year		126
Balance, December 31, 2025	$	1,002

Valuation allowance

In assessing the likelihood of realizing deferred tax assets, management considers factors such as prior earnings history, expected future earnings and the reversal of existing taxable temporary differences. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Deferred taxes are determined by utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the determination of the appropriate valuation allowances, the Company has considered the most recent projections of future business results and taxable income by jurisdiction. Actual results may vary in comparison to current projections. After consideration of the evidence described above, management believes it is more likely than not that deferred tax assets will not be realized. Therefore, during the year ended December 31, 2025, the Company recorded an additional $126 in respect of the valuation allowance applied on deferred tax assets recorded in Israel. As at December 31, 2025, the Company maintained a full valuation allowance relating to carry forward capital losses in Israel since management believes it is more likely than not that the deferred tax assets will not be realized.

F - 38

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 15 - SEGMENT INFORMATION

Segment Activities

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

•	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 - 39

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 15 - SEGMENT INFORMATION (CONT)

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:

	Year ended December 31, 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	$	40,906	$	42,774	$	85,234		$	9,101	$	-		$	178,015
Revenues internal		497		1,674		-			-		(2,171	)		-
Cost of revenues		28,608		33,174		69,628			4,828		(2,321	)		133,917
Gross profit		12,795		11,274		15,606			4,273		150			44,098
Research and development		673		663		-			48		-			1,384
Selling and marketing		2,361		2,112		3,520			583		-			8,576
General and administrative		4,845		3,557		6,460			868		-			15,730
Other segment expenses (income)*		-		-		(404	)		-		-			(404	)
Operating income	$	4,916	$	4,942	$	6,030		$	2,774	$	150			18,812
Financial expenses, net														(1,335	)
Income before provision for income taxes													$	17,477

F - 40

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 15 - SEGMENT INFORMATION (CONT)

Segments statement operations disclosure (cont.)

	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			Elimination of inter-Company sales			Consolidated
Revenues external	$	36,466	$	40,783	$	67,475		$	7,392		$	-		$	152,116
Revenues internal		-		3,080		-			-			(3,080	)		-
Cost of revenues		24,965		35,978		56,798			4,823			(3,462	)		119,102
Gross profit		11,501		7,885		10,677			2,569			382			33,014
Research and development		481		582		-			185			-			1,248
Selling and marketing		2,300		2,039		2,968			439			-			7,746
General and administrative		3,291		3,271		4,880			459			-			11,901
Other segment expenses (income)*		-		5		* (388	)		(415	)		415			(383	)
Operating income	$	5,429	$	1,988	$	3,217		$	1,901		$	(33	)		12,502
Financial expenses, net															(1,949	)
Income before provision for income taxes														$	10,553

*Gain profit from fixed asset sales

F - 41

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 15 - SEGMENT INFORMATION (CONT)

Segments statement operations disclosure (cont.)

	Year ended December 31, 2023
	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	$	27,555	$	28,625		$	50,760		$	6,854		$	-		$	113,794
Revenues internal		-		4,370			-			-			(4,370	)		-
Cost of revenues		20,193		30,176			41,788			4,110			(4,941	)		91,326
Gross profit		7,362		2,819			8,972			2,744			571			22,468
Research and development		159		177			268			111			-			715
Selling and marketing		1,618		1,539			2,040			326			-			5,523
General and administrative		2,772		3,436			3,555			825			-			10,588
Other segment expenses (income)		9		(3	)		*(439	)		(423	)		423			(433	)
Operating income	$	2,804	$	(2,330	)	$	3,548		$	1,905		$	148			6,075
Financial expenses, net																(1,330	)
Income before provision for income taxes															$	4,745

*Gain profit from fixed asset sales

F - 42

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 15 - SEGMENT INFORMATION (CONT)

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

	Year ended December 31, 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	$	78,541	$	45,305	$	93,473	$	10,321	$	(911	)	$	226,729
Depreciation and amortization		905		1,107		2,894		356		(161	)		5,101
Expenditure for segment assets		3,179		839		7,180		225		-			11,423
	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 - 43

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 16 - ENTITY-WIDE DISCLOSURE

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

	Year ended December 31,
	2025		2024		2023
Sale of products
United States	$	30,758	$	29,678	$	23,937
Israel		7,935		3,146		3,527
Europe		3,708		3,658		1,802
Other		8,449		11,228		5,975
	$	50,850	$	47,710	$	35,241
	Year ended December 31,
---	---	---	---	---	---	---
	2025		2024		2023
Sale of Services
United States	$	86,960	$	74,648	$	58,062
Israel		6,071		4,722		4,170
Europe		16,975		12,294		6,656
Other		17,159		12,742		9,665
	$	127,165	$	104,406	$	78,553

Total long-lived assets - by geographical location were as follows:

	December 31,
	2025		2024		2023
United States	$	37,790	$	34,822	$	35,002
Israel		14,939		13,773		11,569
Total	$	52,729	$	48,595	$	46,571

Major Customers

The Company has a single customer in MRO services for Aviation Components and lease which has annual sales in 2025 constitute 14.48% from the total group sales. The Company has a single customer which has annual sales in 2024 constitute 12.8% from the total group sales. The Company has a single customer which has annual sales in 2023 constitute 12.6% from the total group sales.

F - 44

TAT TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 17- SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS INFORMATION

	Warranty<br><br> <br>provision			Provision for current expected credit losses
Balance, as of December 31, 2022	$	243		$	527
Additions		82			90
Deductions		-			(272	)
Balance, as of December 31, 2023		325			345
Additions		28			150
Deductions		-			(95	)
Balance as of December 31, 2024		353			400
Additions		136			-
Deductions		(111	)		(228	)
Balance as of December 31, 2025	$	378		$	172

F - 45

Exhibit 1.1

THE COMPANIES ORDINANCE

COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

TAT TECHNOLOGIES LTD

(These Articles of Association have been adopted by a Special Resolution on

  November 4, 2025 and they replace the former Articles of Association\).

INTERPRETATION

1.	[Amended 1998, 2013] In these Articles the words standing in the first column of the table next hereinafter contained shall bear the meanings set opposite them respectively in the second column<br> thereof, if not inconsistent with the subject or context:
Words	Meanings
---	---
The Company	The above-named Company.
Companies Ordinance	The Companies Ordinance (new version) 1983 ("The Companies Ordinance ") as amended and as amended from time to time including any law or statute replacing it.
The Companies Law or The Israeli Companies Law	The Israeli Companies Law 5759-1999 ("The Companies Law") as amended and as amended from time to time including any law or statute replacing it.
The Statutes	The Companies Ordinance and/or The Companies Law and/or The Securities Law and/or every other Law for the time being in force and affecting the Company.
These Articles	These Articles of Association or as shall be altered from time to time by the General Meeting of the shareholders of the Company.
The Office	The registered office for the time being of the Company.
The Seal	The rubber stamp of the Company.
The Securities Law	The Israeli Securities Law 5728-1968 ("The Securities Law") as amended from time to time including any law or statute replacing it.
Month	Gregorian month.
The Record Date	The record date as determined pursuant to the provision of Article 55(a) of these Articles
Writing	Printing, lithography, photography, and any other mode or modes of representing or reproducing words in a visible form.
Special Resolution	In accordance with the Companies Ordinance, decision of 75% of the General Meeting of the shareholders of the Company.

Words importing the singular only shall include the plural, and vice versa.

Words importing the masculine gender shall include the feminine gender; and words importing person shall include corporations.

Subject as aforesaid, any words or expressions defined in the Statutes shall, except where the subject or context forbids, bear the same meanings in these Articles.

The Regulations in Table "A" in Schedule II to the Companies Ordinance shall not apply to the Company

THE PURPUSE OF THE COMPANY

2.	[Amended 2013] The Company may engage in any lawful occupation.

THE LIABILTY OF SHAREHOLDERS

[Amended 2013] The liability of the shareholders is limited, as determined in the Companies Law. For this purpose, each shareholder is responsible for repayment of the nominal value of shares. In the event that the Company issued shares in exchange for lower nominal value, the responsibility of each shareholder will be limited to the repayment of the amortized amount of the consideration for each share assigned to him as aforesaid.

NON-PRIVATE COMPANY

4.	The Company is a non-private company; consequently:
(a)	No limitations will apply to the transfer of its shares;
---	---
(b)	The number of shareholders is unlimited;
---	---
(c)	The company may issue to the public shares, debentures or any other securities.
---	---
5.	[Amended 1993, 1998, 2005, 2018, 2024, 2025, Nov 2025] The share capital of the company shall consist of 19,000,000 (Nineteen Million) Ordinary Shares of no<br> per value of each, all ranking pari-passu.
---	---

6.	Subject to these Articles or to the terms of any resolution creating new shares, the unissued shares from time to time shall be under the control of the Board of Directors, who shall have the power to allot shares or otherwise dispose of<br> them to such persons, on such terms and conditions, and either at par or at a premium, or, subject to the provisions of the Statues, at a discount, and at such times, as the Board of Directors may think fit, and the power to give to any<br> person the option to acquire from the Company any shares, either at par or at a premium, or, subject as aforesaid, at a discount, during such time and for such consideration as the Board of Directors may think fit.
7.	If two or more persons are registered as joint holders of any share, any one of such persons may give effectual receipts for any dividends or other moneys in respect of such share.
---	---
8.	No person shall be recognized by the Company as holding any share upon any trust, and the Company shall not be bound by or required to recognize any equitable, contingent, future, or partial interest in any share or any right whatsoever in<br> respect of any share other than an absolute right to the entirety thereof in the registered holder.
---	---
9.	[Amended 2013] Every member shall be entitled without payment to receive after allotment or registration of transfer (unless the conditions of issue provide for a longer interval) one certificate<br> under the Seal for all the shares registered in his name, specifying the number and denoting numbers of the shares in respect of which it is issued and the amount paid up thereon. Provided that in the case of joint holders the Company shall<br> not be bound to issue more than one certificate to all the joint holders, and delivery of such certificate to one of them shall be sufficient delivery to all. Every certificate shall be signed by one Director and countersigned by the<br> Secretary or some other person nominated by the Directors for the purpose.
---	---

10.	If any share certificate shall be defaced, worn out, destroyed or lost, it may be renewed on such evidence being produced, and such indemnity (if any) being given as the Directors shall require and (in case of defacement or wearing out) on<br> delivery up of the old certificate, and in any case on payment of such sum not exceeding NIS 5 (Five New Israeli Shekels) as the Directors may from time to time require.
11.	[Deleted 2013]
---	---
12.	[Deleted 2013]
---	---
13.	[Deleted 2013]
---	---

CALLS ON SHARES

14.

[Amended 2013] No member shall be entitled to receive any dividend or to exercise any privileges as a member until he shall have paid all calls for the time being due and payable on every share held by him, whether alone or jointly with any other person, together with interest and expenses (if any). The shareholders who are entitled to a dividend shall be the holders of shares on the date of the resolution regarding the dividend or on a later date if a later date is prescribed in such resolution.

15.

(a)	If under the conditions of the issuance of shares there is no fixed date for the payments due therefor, the Directors may from time to time make such calls upon the members in respect of all moneys then unpaid on shares possessed by them<br> and every member will pay the sum demanded of him at the place and time appointed by the Directors, provided that fourteen days notice as to the place and date of payment was served on him. The Directors may revoke or postpone any call.
(b)	A call shall be deemed to have been made at the time when the Resolution of the Directors authorizing such call was passed.
---	---
(c)	The joint holders of a share shall be jointly and severally liable for the payment of all calls and installments in respect thereof.
---	---
(d)	If before or on the day appointed for payment thereof, a call or installment payable in respect of a share is not paid, the holder or allottee of the share shall pay interest on the amount of the call or Installment at such rate not<br> exceeding the debitory rate prevailing at the largest Israeli commercial bank on the day appointed for the payment referred to, as the Directors shall fix, from the day appointed for payment thereof to the time of actual payment, but the<br> Directors may waive payment of such interest wholly or in part.
---	---

16.

(a)	Any sum which by the terms of allotment of a share is made payable upon allotment or at any fixed date, whether on account of the amount of the share or by way of premium, shall for all purposes of these Articles be deemed to be a call<br> duly made, and payable on the date fixed for payment, and in case of non-payment the provisions of these Articles as to payment of interest and expenses, forfeiture and the like, and all other relevant provisions of these Articles shall apply<br> as if such sum were a call duly made and notified as hereby provided;
(b)	The Directors may at the time of allotment of shares make arrangements on the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and in the time of payment of such call.
---	---
17.	The Directors may, if they think fit, receive from any member willing to advance the same, all or any part of the monies due upon his shares beyond the sums actually called up thereon; and upon the moneys so paid in advance, or so much<br> thereof as exceeds the amount for the time being called up on the shares in respect of which such advance has been made, the Directors may pay or allow such interest as may be agreed by them and the Company.
---	---

TRANSFER OF SHARES

18.

No transfer of shares shall be registered unless a proper writing or instrument of transfer (in any customary form or any other form satisfactory to the Board of Directors) has been submitted to the Company (or its transfer agent), together with the share certificate(s) and such other evidence of title as the Board of Directors may reasonably require. Until the transferee has been registered in the Register of Members in respect of the shares so transferred, the Company may continue to regard the transferor as the owner thereof.

19.

The Directors may refuse, without giving any reasons therefor, to register any transfer of shares where the Company has a lien on the share, constituting the subject matter of the transfer, but fully paid-up shares may be transferred freely and such transfers do not require the approval of the Directors.

---

All instruments of transfer shall remain in the custody of the Company but any such instrument which the Directors refused to register shall be returned to the person from whom it was received, if such request be made by him.

20.

[Amended 1998] The Transfer Records and the Register of Members and Debenture Holders (if any) and Debenture Stock Holders (if any) and other securities (if any) of the Company may be closed during such time as the Directors may deem fit, not exceeding in the aggregate, thirty days in each year. To avoid any doubts, the determination of a Record Date shall not constitute nor be deemed as a closing of the above records or registers.

TRANSMISSION OF SHARES

21.	In the case of the death of a member, or a holder of a debenture, the survivor or survivors, where the deceased was a joint holder, and the executors and/or administrators and/or the legal heirs of the deceased where he was a sole or only<br> surviving holder, shall be the only persons recognized by the Company as having any title to his shares or his debentures, but nothing herein contained shall release the estate of a deceased joint holder form any liability in respect of any<br> share or any debenture jointly held by him.
22.	Any person who becomes entitled to a share or a debenture in consequence of the death or bankruptcy of any member, may, upon producing such evidence of title as the Directors shall require, with the consent of the Directors, be registered<br> himself as holder of the share or the debenture or, subject to the provisions as to transfers herein contained, transfer the same to some other person.
---	---
23.	A person entitled to a share or a debenture by transmission shall be entitled to receive, and may give a discharge for, any dividends or interest or other moneys payable in respect of the share or debenture, but he shall not be entitled in<br> respect of it to receive notices of, or to attend or vote at meetings of the Company, or, save as aforesaid, to exercise any of the rights or privileges of a member or a holder of a debenture unless and until he shall become a member in<br> respect of the share or a holder of the debenture.
---	---

FORFEITURE OF SHARES

24.

If any member fails to pay the whole or any part of any call or installment of a call on or before the day appointed for the payment thereof, the Directors may at any time thereafter, during such time as the call or installment or any part thereof remains unpaid, serve a notice on him, or on the person entitled to the share by transmission requiring him to pay such call or installment, or such part thereof as remains unpaid, together with any expenses incurred by the company by reason of such non-payment.

25.

The notice shall name a further day (not earlier than the expiration of thirty days from the date of the notice) on or before which such call or installment, or such part as aforesaid, and all interest and expenses that have accrued by reason of such non-payment, is to be made, and shall state that In the event of non-payment at or before the time and at the place appointed, the shares in respect of which such call was made will be liable to be forfeited.

---

26.	If the requisitions of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a<br> resolution of the Directors to that effect. A forfeiture of shares shall include all dividends in respect of the shares not actually paid before the forfeiture, notwithstanding that they shall have been declared.
27.	Notwithstanding any such forfeiture as aforesaid, the Directors may, at any time before the forfeited share has been otherwise disposed of, annul the forfeiture upon the terms of payment of all call and interest due upon and expenses<br> incurred in respect of the shares and upon such further terms (if any) as they shall see fit.
---	---
28.	Every share which shall be forfeited shall thereupon become the property of the Company and may be either cancelled or sold or re-allotted or otherwise disposed of either to the person who was before forfeiture the holder thereof, or<br> entitled thereto, or to any other person, upon such terms and in such manner as the Directors shall think fit. [Amended 2013] Each Forfeited share that hasn’t been sold or canceled, will become<br> dormant Share, as defined in the Israeli Companies law, and will not confer any rights, so long that such shares is owned by the Company.
---	---
29.	A member whose shares have been forfeited shall, notwithstanding, be liable to pay to the Company all calls made and not paid on such shares at the time of forfeiture, and interest thereon to the date of payment, in the same manner in all<br> respects as if the shares had not been forfeited and to satisfy all (if any) the claims and demands which the Company might have enforced in respect of the shares at the time of forfeiture, without any deduction or allowance for the value of<br> the shares at the time of forfeiture.
---	---
30.	The forfeiture of a share shall involve the extinction at the time of forfeiture of all interest in and all claims and demands against the Company in respect of the share, and all other rights and liabilities incidental to the share as<br> between the member whose share is forfeited and the Company, except only such of those rights and liabilities as are by these Articles expressly saved, or as are by the Statutes given or imposed in the case of past members.
---	---
31.	A sworn declaration in writing that the declarant is a Director of the Company, and that a share has been duly forfeited in pursuance of these Articles and stating the date upon which it was forfeited, shall, as against all persons<br> claiming to be entitled to the share adversely to the forfeiture thereof, be conclusive evidence of the facts therein stated, and such declaration, together with the receipt of the Company for the consideration (if any) given for the share on<br> the sale or disposition thereof, and a certificate of proprietorship of the share under the Seal delivered to the person to whom the same is sold or disposed of, shall constitute a good title to the share, and such person shall be registered<br> as the holder of the share and shall be discharged from all calls made prior to such sale or disposition, and shall not be bound to see to the application of the purchase money (if any) nor shall his title to the share be affected by any act,<br> omission or irregularity relating to or connected with the proceedings in reference to the forfeiture, sale, re-allotment or disposal of the share.
---	---

LIEN

32.

The Company shall have a first and paramount lien upon all shares (which are not fully paid up) registered in the name of any member, either alone or jointly with any other person, for his debts, liabilities and engagements, whether solely or jointly with any other person, to or with the Company, whether the period for the payment, fulfillment or discharge thereof shall have actually arrived or not, and such lien shall extend to all dividends from time to time declared in respect of such shares; but the Directors may at any time declare any share to be exempt wholly or partially from the provisions of this Article.

33.

The Directors may sell the shares subject to any such lien at such time or times and in such manner as they shall think fit, but no sale shall be made until such time as the moneys in respect of which such lien exists, or some part thereof, are or is presently payable, or the liability or engagement in respect of which such lien exists is liable to be presently fulfilled or discharged, and until a demand and notice in writing stating the amount due or specifying the liability or engagement and demanding payment or fulfillment or discharge thereof and giving notice of intention to sell in default shall have been served on such member, or the persons (if any) entitled by transmission to the shares, and default in payment, fulfillment or discharge shall have been made by him or them for fourteen days after such notice.

---

34.

The net proceeds of such sale shall be applied in or towards satisfaction of the amount due to the Company, or of the liability or engagement, as the case may be, and the balance (if any) shall be paid to the member or the person (if any) entitled by transmission to the shares so sold.

35.

Upon any such sale (i.e., following forfeiture or foreclosing on a lien for and the bona fide use of the powers granted with respect thereto) the Directors may enter the purchaser's name in the Register as holder of the shares and the purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

---

SHARE WARRANTS TO BEARER

36.

(a)	The Company may, subject to the provisions of the Statutes, with respect to fully paid up shares, issue warrants (hereinafter called "share warrants"), stating that the bearer is entitled to the shares therein specified and may provide by<br> coupons or otherwise for the payment of dividends on the shares included in such warrants. The Directors may determine and from time to time vary, the conditions upon which share warrants shall be issued, and in particular the conditions upon<br> which a new share warrant or coupon will be issued in the place of one worn out, defaced, lost or destroyed, or upon which a share warrant may be surrendered, and the name of the bearer entered in the Register in respect of the shares therein<br> specified. The bearer of a share warrant shall be subject to the conditions for the time being in force, whether made before or after the issue of such share warrant.<br><br> <br><br><br> <br>No new share warrant or coupon shall be issued in the place of one which has been lost or destroyed unless it shall have been established to the satisfaction of the Directors that the same has been lost or<br> destroyed.
(b)	A share warrant shall entitle the bearer to the shares included in it, and such shares shall be transferred by the delivery of the share warrant and the provisions of these Articles with respect to transfer and transmission of shares shall<br> not apply thereto.
---	---
(c)	The bearer of a share warrant may at any time deposit the warrant at the Office or at any other place, if any, indicated by the Directors, and after the expiration of two clear days from the time of deposit, and so long as the warrant<br> remains so deposited, the depositor shall have the same right of signing a requisition for calling a meeting of the Company, and of attending and voting and exercising the other privileges of a member at any meeting held, as if his name was<br> inserted in the Register as the Holder of the shares included in the deposited warrant. Not more than one person shall be recognized as depositor of a share warrant.<br><br> <br><br><br> <br>Upon prior notice in writing of two days the Company shall return to the depositor the share warrant deposited by him.
---	---
(d)	Subject as otherwise expressly provided herein, no person shall, as bearer of a share warrant, sign a requisition for calling a Meeting of the Company, or attend, or vote, or exercise any other privilege of a member at a Meeting of the<br> Company and said person shall not be entitled to receive any notices from the Company.<br><br> <br><br><br> <br>But the bearer of a share warrant shall be a member of the Company and entitled in all other respects to the same privileges and advantages as if he were named in the Register as the holder of the shares<br> included in the warrant.<br><br> <br><br><br> <br>[Deleted 2013]
---	---

ALTERATIONS OF CAPITAL

37.	The General Meeting of the shareholders of the Company may from time to time:
(a)	Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; or
---	---
(b)	Cancel any shares not taken or agreed to be taken by any person; or
---	---
(c)	Divide its share capital or any part thereof into shares of smaller amount than is fixed by its Articles of Association by sub-division of its existing shares or any of them, subject, nevertheless, to the provisions of the Statutes, and so<br> that as between the resulting shares, one or more of such shares may by the Resolution by which such sub-division is effected be given any preference or advantage as regards dividend, capital, voting or otherwise over the others or any other<br> shares; or
---	---
(d)	Reduce its share capital and any capital redemption reserve fund in any way that may be considered expedient and, in particular exercise all or any of the powers conferred by Section 151 of the<br> Companies Ordinance, or any statutory modification thereof.
---	---
38.	The Company may, subject to applicable law, issue redeemable shares and redeem the same
---	---

INCREASE OF CAPITAL

39.

The General Meeting of the shareholders of the Company may from time to time , whether all the shares for the time being authorized shall have been issued or all the shares for the time being issued shall have been fully called up or not, increase its share capital by the creation of new shares; such new capital to be of such amount and to be divided into shares of such respective amounts and (subject to any special rights for the time being attached to any existing class of shares) to carry such preferential, deferred or other special rights (if any) or to be subject to such conditions or restrictions (if any) in regard to dividend, return of capital, voting or otherwise as the General Meeting deciding upon such increase directs.

40.

[Amended 2013] Except so far as otherwise provided by or pursuant to these Articles or by the conditions of issue, any new share capital shall be considered as part of the original ordinary share capital of the Company, and shall be subject to the same provisions of these Articles with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as the original share capital. [Deleted 2013]

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BORROWING POWERS

41.

The Board of Directors may from time to time, in its discretion, cause the Company to borrow or secure the payment of any sum or sums of money for the purposes of the Company, and may secure or provide for the repayment of such sum or sums in such manner, at such times and upon such terms and conditions in all respects as it thinks fit, and, in particular, by the issuance of bonds, perpetual or redeemable debentures, debenture stock, or any mortgages, charges, or other securities on the undertaking, or, the whole or any part of the property of the Company, both present and future, including units uncalled or called but unpaid capital for the time being.

GENERAL MEETINGS

42.

[Amended 2013] An Annual General Meetings shall be held at least once in every calendar year at such time, not being more than fifteen months after the holding of the last preceding Annual General Meeting and at such place as may be determined by the Directors. Such Annual General Meetings shall be called "Ordinary Meetings" and all other General Meetings of the Company shall be called "Extraordinary Meetings". The Annual General Meeting shall receive and consider the Directors' Report, the Profit and Loss Account and Balance Sheet, shall elect Directors, appoint Auditors and transact any other business which under these Articles or by the Statutes are to be transacted at a General Meeting of the Company.

43.

[Amended 1998. 2013]In accordance with the Israeli Companies Law and subject to the provisions of the Statutes, as may be from time to time in effect, the Directors may, whenever they think fit, and upon a demand of two directors or one quarter of the directors in office at that time or upon demand of one or more shareholders, holding at least five percent (5%) of the issued shares and one percent (1%) of the voting rights or holding five percent (5%) of the voting rights in the Company (hereinafter: "the Requisitionists") , shall convene an Extraordinary Meeting, in the manner hereinafter mentioned, to such members as are, under the provisions of these Articles, and particularly under the provisions of article 53(a), entitled to receive notice from the company. Any such requisition must state the objects for which the meeting is to be called, be signed by the Requisitionists, and must be deposited at the office. Such requisition may consist of several documents in like form, each signed by one or more requisitionists. If the Directors do not, within twenty-one days from the date of the deposit of such requisition, proceed to convene a Meeting, the the party demanding the convening of the meeting, and, in the case of shareholders, that portion of them that has more than half of their voting rights, may convene the meeting themselves, provided that the meeting shall not take place more than three months after the said demand is submitted, and in accordance with the Companies Law.

[Amended 2013] Subject to the provisions of the Statutes as may be from time to time in effect, the agenda of the General Meeting will be determined by the Board and it will include also topics which are required to be converted at an Extraordinary Meetings as mentioned above. Also, one or more shareholder, holding one percent (1%) of the voting rights in a General Meeting, may request that the Board include topics on the agenda of a General Meeting, provided that such topics are suitable to be discussed at a General Meeting.

44.

(a)	[Amended 1998, 2001. 2013] Subject to the provisions of the Statutes as may be from time to time in effect, and the provisions herein, the Company will publish a notice regarding the General<br> Meeting specifying the place, the day and the hour of meeting and in the case of special business the general nature of such business, shall be given in the manner hereinafter mentioned, to such members as are, under the provisions of these<br> Articles, entitled to receive notices from the Company.
(b)	Subject to the provisions of the Statutes as may be from time to time in effect, whenever the Board of Directors is required to convene an Extraordinary Meeting it shall convene such meeting within twenty-one days' on the date designated<br> in the notice provided that the meeting date will be no later than thirty-five days from the date of publication of the notice. Notices shall be given by post or by personal delivery to every registered shareholder of the Company, entitled to<br> receive notice from the Company under the provisions of these Articles, and particularly under the provisions of article 53(a), to his address as described in the Register of Members of the Company or such other address as designated by him<br> in writing for this purpose. Provided that the accidental omission to give such notice to or the non-receipt of such notice by any such member shall not invalidate any resolution passed or proceeding had at any such meeting. And, with the<br> consent of all the members for the time being entitled to receive notices of meetings, a meeting may be convened upon a shorter notice or without notice and generally in such manner as such members may approve. Such consent may be given at<br> the meeting or retrospectively after the meeting.
---	---
(c)	Notice with respect to any General Meeting shall be regarded proper and sufficient if it specifies in a general manner the general nature of the matter to be transacted at the General Meeting, or, without making the procedure hereinafter<br> set forth mandatory, if it specifies that the draft of the resolution to be proposed to the General Meeting is available for inspection at a designated place during a designated time period.
---	---

PROCEEDINGS AT GENERAL MEETINGS

45.

[Amended 1998, 2013] No business shall be transacted at any General Meeting unless a quorum is present when the meeting proceeds to business. The quorum at any shareholders Meeting shall be two members present in person or by proxy, holding or representing at least one third of the total voting rights in the Company on the Record Date.

46.

If within half an hour from the time appointed for the holding of a General Meeting a quorum is not present, the meeting, shall stand adjourned to the same day in the next week at the same time and place or any time and hour as the Directors shall designate and state in a notice to the members, and if, at such adjourned meeting, a quorum is not present within half an hour from the time appointed for holding the meeting, two members present in person or by proxy shall be a quorum.

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47.

The Chairman (if any), chosen as such among the Directors, shall preside at every General Meeting, but if there shall be no such Chairman or if at any meeting he shall not be present within fifteen minutes after the time appointed for holding the same, or shall be unwilling to act as Chairman, the members present shall choose a Director, or, If no Director be present, or if all the Directors present decline to take the Chair, they shall choose a member present to be Chairman of the meeting.

48.

[Amended 1998] The Chairman may, with the consent of any meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn any meeting from time to time and from place to place as the meeting shall determine. Whenever a meeting is adjourned pursuant to the provisions of this Article for seven days or more, notice of the adjourned meeting shall be given to the members entitled to receive notice from the Company under the provisions of these Articles, and particularly under the provisions of article 55(a), in the same manner as in the case of an original meeting. Save as aforesaid, no member shall be entitled to any notice of an adjournment or of the business to be transacted at an adjourned meeting. No business shall be transacted at any adjourned meeting other than the business which might have been transacted at the meeting from which the adjournment took place.

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VOTES OF MEMBERS

49.	[Amended 1998, replaced 2004, amended 2013] Subject to the provisions of Statutes as may be from time to time in effect, all resolution by any General Meeting of the company, , including but not<br> limited to amendment of the Memorandum of Association of the Company or these Articles, shall be deemed adopted if approved by the holders (in aggregate) of the majority votes represented at such general meeting and participating in the vote<br> (excluding any abstaining votes) in person or by proxy.
50.	[Amended 1998, 2013] At all General Meetings, a resolution put to a vote at the meeting shall be decided on a show of hands, and a declaration by the Chairman of the meeting that a resolution has<br> been carried, or has been carried unanimously or by a particular majority, or lost, or not carried by a particular majority, shall be conclusive, and an entry to that effect in the Minute Book of the Company shall be conclusive evidence<br> thereof, without proof of the number or proportion of the votes recorded in favor of or against such resolution. As mentioned below, votes may be given also by proxy.
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51.	[Deleted 2013]
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52.	[Deleted 2013].
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53.	[Replaced 1998, Amended 2013] Subject to the provisions of the Statutes, as may be from time to time in effect:
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(a)	The Board of Directors may fix a Record Date to determine the shareholders entitled to notice of and/or to vote at any meeting of shareholders or any adjournment thereof (the "Meeting"), which Record<br> Date shall not precede the date upon which the resolution fixing the Record Date is adopted by the Board of Directors, and which Record Date shall not be more than twenty one (21) nor less than four (4) days before the date of the Meeting.<br> Notwithstanding the above, in a Meeting that the agenda includes also topics listed in Section 87(a) to the Israeli Companies Law, the Record Date shall not be more than forty days (40) nor less than twenty eight (28) days before the Meeting<br> unless allowed otherwise by the Statutes.. The Record Date for determining shareholders entitled to notice of or to vote at the meeting shall be at the close of business on the day next preceding the day on which such board meeting is held. A<br> determination of shareholders of record entitled to notice or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; providing, however that the Board of Directors may fix a new Record Date to the adjournment<br> meeting.
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(b)	Every member shall have one vote for each share of which he is the holder.
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54.	If any member be a lunatic, idiot, or non compos mentis, he may vote by his committee, receiver, curator bonis or other legal curator and such last mentioned persons may give their votes either personally or by proxy.
55.	If two or more persons are jointly entitled to a share, then in voting upon any question the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other registered<br> holders of the share, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.
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56.	[Amended 2013] Votes may be given either personally or by proxy. A proxy does not need to be a member of the Company.
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57.

(a)	The instrument appointing a proxy shall be in writing in the usual common form, or such form as may be approved by the Directors, and shall be signed by the appointor or by his attorney duly authorized in writing, or, if the appointor is a<br> corporation, the corporation shall vote by its representative, appointed by an instrument duly signed by the corporation.
(b)	[Deleted 2013]
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58.	A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or transfer of the share in respect of which the vote is given<br> unless an intimation in writing of the death, revocation or transfer shall have been received at the Office before the commencement of the meeting or adjourned meeting at which the proxy is used.
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59.	The instrument appointing a proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power of attorney, shall be deposited at the Office or at such<br> other place or places, whether in Israel or elsewhere, as the Directors may from time to time either generally or in a particular case or class of cases prescribe, at least forty-eight hours before the time appointed for holding the meeting<br> or adjourned meeting at which the person named in such instrument proposes to vote; otherwise the person so named shall not be entitled to vote in respect thereof; but no instrument appointing a proxy shall be valid after the expiration of<br> twelve months from the date of its execution.
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60.	Subject to the provisions of the Statutes, a resolution in writing signed by all the members, in person or by proxy, for the time being entitled to vote at General Meeting of the Company shall be as valid and as effectual as a resolution<br> adopted by a General Meeting duly convened, held and constituted for the purpose of passing such resolution.
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61.	A member will be entitled to vote at the Meetings of the Company by several proxies appointed by him, provided that each proxy shall be appointed with respect to different shares held by the appointing member. Every proxy so appointed on<br> behalf of the same member shall be entitled to vote as he sees fit.
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62.	No person shall be entitled to vote at any General Meeting (or be counted as a part of the quorum thereof) unless all calls then payable by him in respect of his shares in the Company shall have been paid.
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DIRECTORS

63.

[Amended 2013, Nov 2025] The Board of Directors of the Company shall consist of such number of Directors as may be fixed from time to time by an Ordinary Resolution of a General Meeting, provided it shall not be less than two, including, if required, external directors, or more than eleven. As long that the Company is a public company, corporation cannot be nominated as a director in the Company.

64.

The Directors shall be elected at the Annual General Meeting of the Company and shall hold office until the close of the succeeding Annual General Meeting. Should no Directors be elected at the Annual General Meeting, the Directors holding office at the time such meeting was convened shall continue to hold their office. Directors whose term of office expired may be re-elected.

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10 -

65.	[Deleted 2013]
66.	[Amended 2013] Director's term will begin on the date of his appointment - as stated by the General Meeting, but the General Meeting may set a date later than the date of the General Meeting as the<br> start date for appointment as a Director of the Company.
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67.	[Amended 2013] Subject to the provisions of the Companies Law, the Directors in their capacity as such, shall be entitled to receive remuneration and reimbursement of expenses incurred by them in<br> the course of carrying out their duties as Directors.
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68.	[Amended 2013] The office of a Director shall be vacated, ipso facto, under the circumstances set forth in the Statures.
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69.	[Amended 2013] Subject to the provisions of the Statutes, no Director shall be disqualified by virtue of his office from holding any office, or, deriving any profit from any other office in the<br> Company or from any company in which the Company shall be a shareholder or otherwise interested, or from contracting with the Company as vendor, purchaser or otherwise, nor shall any such contract, or any contract or arrangement entered Into<br> by or on behalf of the Company in which the Director shall in any way be interested, be avoided, nor shall any Director be liable to account to the Company for any profit arising from any such office or realized by any such contract or<br> arrangement by reason only of such Director's holding that office or of the fiduciary relations thereby established, but the nature of his interest must be disclosed by him at the meeting of the Board of Directors at which the contract or<br> arrangement is first considered, if his interest then exists, or, in any other case, at the first meeting of the Board of Directors after the acquisition of his Interest.
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After such disclosure of personal interest, the Director shall not be entitled to participate and vote as a Director in the set Board of Directors meeting regarding any contract or arrangement in which he is interested as aforesaid except for contracts or arrangements according to Article 271 of the Israeli Companies Law. The Director who has a personal interest, may be present to explain the contract or arrangement, if the Chairman of the Board, determines that he is required to do so. However, if a majority of the Directors have personal interest, all the members of the Board of Directors shall be entitle to participate and vote in the aforementioned Board of Directors meeting and such transaction will have to be further subject to the approval of the shareholders of the Company. A general notice that a Director is a member of any firm or company and is to be regarded as interested in all transactions with that firm or company shall not be a sufficient disclosure under this Article and every Director shall give a special notice relating to any particular transaction with such firm or company.

70.	[Amended 2013] The Company may from time to time at a General Meeting, increase or decrease the number of Directors subject always to Article 63.
71.	[Amended 2013] In the event of one or more vacancies in the board of Directors, the continuing Directors may continue to act as long as the Board of<br> Directors consists of at least more than three Directors. However, in the event that the remaining Directors are less than three Directors, the remaining Director or Directors may not be permitted to act only for convening a General Meeting<br> for the purpose of the election of new Directors
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72.	[Amended 2013] Subject to the provisions of the Statutes, the Directors may at any time and from time to time appoint any other person as a Director, whether to fill a casual vacancy or to add to<br> their number. Any Director so appointed shall hold office until the first General Meeting convened after such appointment and may be re-elected.
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73.	[Amended 2013] Subject to the provisions of the Statutes, the Company may at a General Meeting remove any Director from office before the expiration of his term of office and appoint another<br> Director in his stead, provided that the removed Director shall be given a reasonable opportunity to present his case to the General Meeting. The person so appointed shall hold office only for such period as the person in whose stead he was<br> appointed would have held office had he not been removed.
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74.	[Amended 2013, Nov 2025] As long that the Company is a public company according to the Israeli Companies Law, the Company shall, as required, have at least two external directors, as defined in the<br> Israeli Companies Law, at least one of whom must be a director with accounting and financial expertise, and the rest have professional qualifications, as defined in the regulations promulgated under Section 240 of the Israeli Companies Law.
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PRESIDENTS

75.	The Board of Directors may from time to time appoint one or more persons as President or Presidents of the Company whether for a fixed term or without any limitation of time and the Board of Directors may from time to time remove or<br> discharge him or them from office (subject to the provisions of any agreement between any such person and the Company) and appoint another or others in his or their place or places.
76.	The Directors may from time to time appoint one or more Vice Presidents for certain functions, to carry out duties delegated to him (them) by the President.
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77.	[Amended 2013] Subject to the provisions of the Statutes, the Directors may from time to time confer upon and delegate to a President then holding office such authorities and duties of the Board of<br> Directors as they may deem fit, and they may delegate such authorities for such period and for such purposes and subject to such conditions and restrictions which they consider advantageous, and they may delegate such authorities with or<br> without waiving the authorities of the Directors with respect thereto and their being in lieu of their authorities, in whole, or in part, and they may from time to time revoke, cancel and alter such authorities in whole or in part.
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78.	[Amended 2013] Subject to the provisions of the Statutes, as may be from time to time in effect, the remuneration of a President shall be approved by the Company's compensation committee, the<br> Directors and the shareholders meeting in a special majority, as defined and required according to the Israeli Companies law, taking into consideration any agreement between him and the Company, and it may be in whole or in part, in the form<br> of wages or commissions or profit sharing or a combination thereof.
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79.	[Deleted 2013]
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80.	[Amended 2013] Subject to the provisions of the Statutes, the Company may elect the same person as its President and its Board of Directors chairman.
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DIRECTOR'S ACTS AND AUTHORITIES

81.	[Amended 2013] The powers and the duties of the Board of Directors shall be as prescribed by the Companies Law, subject to the provisions of these Articles and any regulation or resolution<br> consistent with these Articles adopted from time to time by the Company in General Meeting, provided, however, that no such regulation or resolution shall invalidate any prior act done by or pursuant to a decision of the Board of Directors<br> which would have been valid if such regulation or resolution had not been adopted.
82.	[Amended 2013] Subject to the provisions of the Statutes, the Directors may meet together for the dispatch of the business of the Company and they may postpone their meetings and otherwise regulate<br> them as they shall deem fit. A Director may call a meeting of the Board of Directors at any time. The quorum for the dispatch of business by the Board of Directors shall be determined by the Directors and if not so determined shall be the<br> majority of the Directors.
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83.	[Amended 2013] A resolution in writing signed or otherwise approved by all the Directors then in office shall be as valid and as effectual as a resolution adopted by the Board of Directors at a<br> meeting of the Board of Directors duly convened and held, provided that all the directors who are entitled to participate in such resolution and to vote on it, agreed not to convene the same matter.
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84.	[Amended 2013] Subject to the provisions of the Statutes, every Director shall be entitled to be represented and to vote at any meeting of the Board of Directors by another Director or by another<br> person appointed by him (not a corporation), who shall act as his alternate for one meeting or for another specified period or until notice be given of the cancellation of the appointment. In order to be nominated, the alternate Director must<br> be eligible to be appointed as a Director according to the Israeli Companies law. Each alternate Director shall have the number of votes equivalent to the number of Directors who appointed him as alternate and if he himself is a Director he<br> shall have such number of votes in addition to his own vote. The appointment of an alternate shall be made in writing. A Director may appoint two alternates. However, if the two alternates of the same Director shall be present at the Board of<br> Directors' meeting, only one of them shall have the right to vote thereat. It shall be noted that the appointment of an alternate Director to the Board, does not relieve the nominating Director from his responsibility as a Director.
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85.	[Amended 2013] A Director being at any time absent from Israel shall be entitled during such time to a seven day notice of any Meetings of the Board of Directors, provided he notified the Company of<br> an address to which such notice should be sent. Such notice should be sent by fax, e-mail, telex, cable or telecopier.

86.

(a)	[Amended 2013] The Board of Directors will elect a Chairman for their meeting and fix the term of his office, and unless otherwise decided, the Chairman shall be elected annually. In the event that<br> a Chairman was not elected and if the Chairman should fail to be present at a meeting 15 minutes after the time set for its convening, the remaining Directors shall elect one of those present to be<br> Chairman of the meeting.
(b)	All questions that arise at meetings of the Board of Directors shall be decided by a majority of votes. In the case of an equality bf votes, the Chairman of the meeting shall have a further or casting vote.
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87.	Any meeting of the Board of Directors, at which a quorum is present, shall have the authority to exercise all or part of the authorities, powers of attorney and discretion invested at such time in the Directors or regularly exercised by<br> them,
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88.	[Amended 2013] Subject to the provisions of the Statutes, the Board of Directors may delegate their authorities in whole or in part to committees as they shall deem fit and they may from time to<br> time revoke such delegation. Any committee so created, must, in exercising the authorities granted to it, adhere to all the instructions of the Board of Directors given from time to time.
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The meetings and proceedings of any such committee comprised of two or more members shall be governed by the provisions of these Articles regulating the meetings of the Board of Directors in so far as appropriate thereto unless the provisions of the Companies Law or the Board of Directors shall otherwise regulate the meetings of such a committee (hereinafter: "Committee of the Board of Directors").

89.	All acts done bona fide at any meeting of the Board of Directors, or of a Committee of the Board of Directors or by any person(s) acting as Director(s), shall, notwithstanding that it may afterwards be discovered that there was some defect<br> in the appointment of the participants in such meeting or any of them or any person(s) acting as aforesaid, or that they or any of them or any person(s) acting as aforesaid, or that they or any of them were disqualified, be as valid as if<br> there were no such defect or disqualification.
90.	[Amended 2013] The Board of Directors and each Committee of the Board of Directors shall cause proper Minutes to be kept of the following:
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(a)	The names of all the Directors present at any meeting of the Board of Directors and at any meeting of a Committee of the Board of Directors;
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(b)	All resolutions and proceedings of General Meetings of the Company, Board of Directors' meetings and Committee of the Board of Directors' meetings.
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Any Minutes as aforesaid, if purporting to be signed by the Chairman of the meeting or by the Chairman of the next succeeding meeting, shall constitute prima facie evidence of the matters recorded therein. The minutes shall be kept for a period of seven (7) years from the date of the relevant meeting.

91.	[Amended 2012] Subject to the provisions of the Statutes, all bona fide acts carried out at any meeting of the Board of Directors held in Israel or thereafter as a result therefrom shall be valid<br> notwithstanding the fact that a Director who was absent from Israel at the time of the meeting did not receive a notice with respect to its convening.

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BRANCH REGISTERS

92.

[Amended 2013] Subject to and in accordance with the provisions of the Statutes and to all orders and regulations issued thereunder, the Company may cause branch registers to be kept in any place outside Israel as the Board of Directors may think fit, and, subject to all applicable legal requirements, the Board of Directors may from time to time adopt such rules and procedures as it may think fit in connection with the keeping of such branch registers.

SECRETARY

93.	The Board of Directors may from time to time appoint a Secretary to the Company as it deems fit and may appoint a temporary Assistant-Secretary who shall act as Secretary for the term of his appointment.

RIGHTS OF SIGNATURE - STAMP AND SEAL

94.

(a)	Authorization to sign on behalf of the Company and thereby bind it shall be made and granted from time to time by the Board of Directors. The Company shall have at least one rubber stamp. The Company shall be bound by the signature of the<br> aforesaid appointees if appearing together after its stamp or imprinted name (e.g. cheques).
(b)	The Board of Directors may provide for a seal. If the Board of Directors so provide, it shall also provide for the safe custody thereof. Such seal shall not be used except by the authority of the Board of Directors and in the presence of<br> the person(s) authorized to sign on behalf of the Company, who shall sign every instrument to which such seal is affixed.
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DIVIDENDS

95.	[Amended 2013]Subject to the provisions of the Statutes, and subject to any preferential, deferred, qualified or other rights, privileges or conditions attached to any special class of shares, with<br> regard to dividends, the profits of the Company available for dividend and resolved to be distributed, shall be applied in payment of dividends upon the shares of the Company in proportion to the amount paid up or credited as paid up per the<br> nominal value thereon respectively, otherwise than in advance of calls. Unless not otherwise specified in the conditions of issuing of the shares, all dividends with respect to shares which were not fully paid up within a certain period, for<br> which dividends were paid, shall be paid proportionally to the amounts paid or credited as paid on the nominal value of the shares during any portion of the abovementioned period (Pro-Rata Temporis).
96.	[Replaced 2002, amended 2013] The Company's Board of Directors, subject to any restrictions contained in the Statutes, may declare and pay dividend, either in the form of cash or stock, to its<br> shareholders according to their rights and interests in the profit and may fix the time for payment.
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97.	[Deleted 2013]
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98.	A transfer of shares shall not pass the right to any dividend declared thereon after such transfer and before the registration of the transfer.
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99.	Notice of the declaration of any dividend, shall be given to the holders of registered shares in manner hereinafter provided.
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100.	[Amended 2012] Subject to the provisions of the Statutes, unless otherwise directed, any dividend may be paid by cheque or warrant, sent through the post to the registered address of the member or<br> person entitled, or in the case of joint registered holders to that one of them first named in the register in respect of the joint holding. Every such cheque shall be made payable to the order of the person to whom it is sent. The receipt of<br> the person whose name, at the date of the declaration of the dividend, appears on the register of members as the owner of any share, or in the case of joint holders, of any one of such joint holders, shall be a good discharge to the Company<br> of all payments made in respect of such share. All dividends unclaimed for one year after having been declared may be invested or otherwise used by the Directors for the benefit of the Company until claimed. No unpaid dividend or interest<br> shall bear interest as against the Company
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PAYMENT IN SPECIE AND CAPITALIZATION OF PROFITS

101.	[Replaced 2002, amended 2013] Subject to the provisions of the Statutes, upon declaration by the Board of Directors a dividend may be paid, wholly or partly, by the distribution of specific assets<br> of the Company or by distribution of paid up shares, debentures, debenture stock or any other securities of the Company or of any other companies or in any one or more of such ways.
102.	[Amended 2013] Subject to the provisions of the Statutes, upon the recommendation of the Board of Directors, approved by Ordinary Resolution of the Company, the Company -
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i.	may cause any moneys, investments, or other assets forming part of the undivided profits of the Company, standing to the credit of a reserve fund, or to the credit of a reserve fund for the redemption of capital, or in the hands of the<br> Company and available for dividends, or representing premiums received on the issuance of shares and standing to the credit of the share premium account, to be capitalized and distributed among such of the shareholders as would be entitled to<br> receive the same if distributed by way of dividend and in the same proportion, or to be distributed only to a certain part of the shareholders, while not distributed to other shareholders as will be decided by the General Meeting on the<br> footing that they become entitled thereto as capital, or may cause any part of such capitalized fund to be applied on behalf of such shareholders in paying up in full, either at par or at such premium as the resolution may provide, any<br> unissued shares or debentures or debenture stock or any other securities of the Company which shall be distributed accordingly, or in payment, in full or in part, of the uncalled liability on any issued shares or debentures or debenture<br> stock; and –
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ii.	may cause such distribution or payment to be accepted by such shareholders in full satisfaction of their interest in the said capitalized sum. When distributing shares for capitalized profits all members shall receive shares of one class -<br> whether such class existed prior thereto or was created therefor; or, every shareholder shall receive shares of the same class which conferred upon him the right to receive shares from the capitalization of profits, or of any other class or a<br> combination of several classes of shares - in accordance with the approval of the General Meeting.
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103.	[Deleted 2013]
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104.	[Amended 2013] For the purpose of giving full effect to any resolution under Articles 100 and 101 the Board of<br> Directors may settle any difficulty which may arise in regard to the distribution as it thinks expedient, and, in particular may fix the value for distribution to any members upon the footing of the value so fixed or determine that fractions<br> of less nominal value than one New Israeli Shekel may be disregarded in order to adjust the rights of all parties, and may vest any such cash, shares, debentures, debenture stock or specific assets with trustees upon such trusts for the<br> persons entitled to the dividend or capitalized fund as may seem expedient to the Board of Directors.
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ACCOUNTS

105.

[Amended 2013] The Board of Directors shall cause accurate books of account to be kept in accordance with the provisions of the Statutes and of any other applicable law. Such books of account shall be, kept at the Registered Office of the Company, or at such other place or places as the Board of Directors may think fit, and they shall always be open to inspection by all Directors. Subject to the provisions of the Statutes no member, not being a Director, shall have any right to inspect any account or book or other similar document of the Company, except as conferred by law or authorised by the Board of Directors or by Ordinary Resolution of the Company.

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106.	At least once in every fiscal year the accounts of the Company shall be audited and the correctness of the profit and loss account and balance sheet certified by one or more duly qualified auditors.
107.	The appointment, authorities, rights and duties of the auditor(s) of the Company, shall be regulated by the applicable law.
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NOTICES

108.	[Amended 2013] Subject to the provisions of the Statutes:
(a)	Any notice or other document may be served by the Company upon any member either personally or by sending it by prepaid registered mail (air mail if sent to a place outside Israel) addressed to such member at his address as described in<br> the Register of Members or such other addresses as he may have designated in writing for the receipt of notices and other documents together with publication in two daily newspapers published in Israel. Any written notice or other document<br> shall be deemed to have been served forty-eight (48) hours after it has been posted (seven (7) days if sent to a place, or posted at a place outside Israel), or when actually received by the addressee if sooner than forty-eight (48) hours or<br> seven days, as the case may be, after it has been posted, or when actually tendered in person, to such member (or to the Secretary or the President), provided, however, that such notice or other document as mentioned above may be sent by<br> cablegram or telex and confirmed by registered mail as aforesaid, and such notice shall be deemed to have been given twenty-four (24) hours after such cablegram or telex has been sent or when actually<br> received by such member (or by the Company), whichever is earlier. If a notice is, in fact, received by the addressee, it shall be deemed to have been duly served when received, notwithstanding that it was defectively addressed or failed, in<br> some respect, to comply with the provisions of this Article.
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(b)	Unless otherwise specified in bearer share warrants, the holders of such warrants shall not be entitled to receive notice of any General Meeting of the Company, and the Company is under no obligation to give notice of General Meetings to a<br> person entitled to a share by virtue of Its delivery to him, unless he is duly registered as a member.
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(c)	All notices to be given to the members shall, with respect to any share to which persons are jointly entitled, be given to whichever of such persons is named first in the Register of Members, and any notice so given shall be sufficient<br> notice to the holders of such share.
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(d)	Any member whose address is not described in the Register of Members, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company.
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(e)	Any notice or other document served upon or sent to any member by publication in accordance with these Articles shall, notwithstanding that he be then deceased or bankrupt, and whether the Company has notice of his death or bankruptcy or<br> not, be deemed to be duly served or sent in respect of any shares held by him (either alone or jointly with others) until some other person is registered in his stead as the holder or joint holder of such shares, and such service or sending<br> shall be a sufficient service on or sending to his heirs, executors, administrators or assigns and all other persons (if any) interested in such share.
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(f)	Where a given number of days notice or notice extending over any period is required to be given, the day of service shall be counted in such number of days or other period.
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(g)	[Added 1998] To avoid any doubts, the entitlement of a member to receive any notice relating to convening meeting of shareholders under these Articles shall be as determined in article 53(a).
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RECONSTRUCTION

109.

Subject to the provisions of the Statutes, on any sale of the undertaking of the Company, the Directors, or the liquidators on a winding-up, may, if authorized by, accept fully paid or partly paid up shares, debentures or securities of any other company, whether Israeli or foreign, either then existing or to be formed, for the purchase in whole or in part of the property of the Company, and the Directors (if the profits of the Company permit), or the liquidators (on a winding-up), may distribute such shares, or securities, or any other property of the Company, amongst the members, without realization, or vest the same In trustees for them, and any may provide for the distribution or appropriation of the cash, shares, or other securities, benefits, or property, otherwise than in accordance with the strict legal rights of the members as contributories of the Company, and for valuation of any such securities or property at such price and in such manner as the meeting may approve, and all holders of shares shall be bound to accept and shall be bound by any valuation or distribution so authorized, and waive all rights in relation thereto, save only In the event that the Company is proposed to be or is in the course of being wound up, such statutory rights (if any) under the provisions of the Statutes as are incapable of being varied or excluded by these presents.

INDEMNITY AND INSURANCE

110.	[Replaced 2004, amended 2013]
(a)	Subject to the provisions of the Statutes, the Company is authorized to indemnify its Directors and other Office Holders (collectively "the Officers"), as this term is defined under section 1 of the<br> Companies Law, to the fullest extent permitted by the Companies Law, for any liability, payment or expense as detailed below, imposed on the Officers or expended by them due to an action (or omission) preformed by the Officers in their<br> capacity as Officers of the Company.
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(b)	The Company may indemnify Officers retrospectively for debts or expenses imposed on such Officer due to an act done by virtue of his being an Officer in the Company:
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(1)	A monetary liability imposed on an Officer in favor of another person by a judgment, including a compromise judgment or an arbitration decision that was approved by a court;
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(2)	Reasonable legal expenses, including attorney's fees, (i) expended by the Officer as a result of an investigation or proceeding instituted against the Officer<br> by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against the Officer and either (A) concluded without the imposition of any monetary liability in lieu of criminal<br> proceedings or (B) concluded with the imposition of a monetary liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent, or (ii) expended by the Officer in respect of any<br> monetary sanction;
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(3)	A monetary obligation imposed on the Officer in favor of another person who was injured by a violation, as this term is defined in section 52(54)(a)(1)(a) of the Securities Law.
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(4)	Expenses expended by the Officer, including reasonable litigation expenses, and including attorney's fees, in respect of any proceeding under chapters 8-C, 8-D or 9-A of the Securities Law or in respect to any monetary sanction.
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(5)	Reasonable legal expenses, including attorneys fees, which the Officer incurred or with which he was charged by the Court, in a proceeding brought against him<br> by the Company, in its name or by another person, or in a criminal prosecution in which he was found innocent, or in a criminal prosecution in which he was convicted of an offense that does not require proof of criminal intent;
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(6)	Any other liability, payment or expense which the Company may indemnify its Officers under the Statues.

The Company may undertake in advance to indemnify its Officers in any one of the following situations:

(1)

A monetary liability imposed on an Officer in favor of another person by a judgment, including a compromise judgment or an arbitration decision that was approved by a court provided that such undertaking be limited to types of events that in the opinion of the Board of Directors can be foreseen at the time of granting the undertaking to indemnify, and to a sum determined by the Board of Directors as reasonable in the circumstances of the case.

(2)

A provision permitting the company to indemnify its Officer for debts or expenses stated in articles 110(b)(2)-(6) above.

---

In any event, the total amount of indemnification that the Company will pay (in addition to amounts received from an insurance company, if any) to all officers of the Company, in aggregate, shall not exceed, in all circumstances, more than 25% the company's shareholders' equity, according to the Company's latest consolidated financial statements, prior to the date that the indemnity is paid.

(c)	Subject to the provisions of the Companies Law, the Company may enter into an agreement for the insurance of Officers responsibility for any liability that will be imposed on the officers due to an action (or omission) preformed by the<br> Officers in their capacity as Officers of the Company, in each of the following:
(1)	A breach of duty of care to the Company or to any other person;
---	---
(2)	Breach of fiduciary duty to the Company, on condition that the Officer acted in good faith and had reasonable grounds to assume that the act would not cause the Company any harm;
---	---
(3)	A monetary obligation that will be imposed on the Officer to the benefit of another person.
---	---
(4)	A monetary obligation imposed on the Officer in favor of another person who was injured by a violation, as this term is defined in section 52(54)(a)(1)(a) of the Securities Law.
---	---
(5)	Expenses expended by the Officer, including reasonable litigation expenses, and including attorney's fees, in respect of any proceeding under chapters H-3, H-4 or I-1 of the Securities Law or in respect any monetary sanction.
---	---
(d)	Subject to the provisions of the Companies Law, the Company is authorized to procure insurance for or indemnify any person whom is not an Officer, including, without limitations, any employee, agent, consultant or contractor of the<br> Company.<br><br> <br><br><br> <br>[Deleted 2013]
---	---

WINDING ־ UP

111.

If the Company shall be wound up, whether voluntarily or otherwise, the liquidators may with the sanction of an Extraordinary Resolution divide among the members in specie any part of the assets of the Company, and may, with like sanction, vest any part of the assets of the Company in trustees upon such trusts, for the benefit of the members, as the liquidators with like sanction shall think fit. The resolution sanctioning any such division may also sanction a division otherwise than in accordance with the legal rights of the members and may confer special rights on any class of member, but in case any resolution shall be passed sanctioning any division otherwise than in accordance with the legal rights of the members, any member who would be prejudiced thereby shall have a right to dissent, and, ancillary rights, as if such resolution were a Special Resolution passed pursuant to Section 334 of the Companies Ordinance.

112.

[Added 2013] The Company may donate reasonable sums to worthy causes, even if such donations are not within the scope of business consideration, as the Board or the President of the Company shall deem fit from time to time.

---

18 -

Exhibit 4.1

TAT TECHNOLOGIES LTD.

__________________________

2012 INCENTIVE PLAN

__________________________

ARTICLE I

  PURPOSE; TYPES OF AWARDS; CONSTRUCTION

1.1 Purpose. The purpose of this Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer Eligible Employees, Consultants and Non‑Employee Directors incentive awards to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders.

1.2 Types of Awards. This Plan is intended to enable the Company to issue Awards under varying tax regimes, including, without limitation:

(a) Awards to be granted to Participants who are deemed to be residents of the State of Israel for purposes of taxation, pursuant and subject to the provisions of Section 102 of the Ordinance, including without limitation the Israeli Income Tax Rules (Tax Benefits in Stock Issuance to Employees) 5763-2003 (the “Rules”) or such other rules published by ITA (such Awards, “102 Stock Options”). 102 Stock Options may either be granted to a Trustee or without a trustee;

(b) “Incentive Stock Options” within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted United States federal tax statute, as amended from time to time, to be granted to Participants who are deemed to be residents of the United States for purposes of taxation;

(d) Restricted Share Awards and Restricted Share Unit Awards.

1.3 Construction. To the extent any provision herein conflicts with the conditions of any relevant tax law or regulation which are relied upon for tax relief in respect of a particular Award to a Participant, the provisions of such law or regulation shall prevail over those of the Plan and the Committee is empowered hereunder to interpret and enforce the said prevailing provisions.

ARTICLE II

  DEFINITIONS

For purposes of this Plan, the following terms shall have the following meanings:

2.1 “102 Award” means any Award granted pursuant to Section 102 and other rulings, procedures and clarifications promulgated thereunder or issued by the ITA.

2.2 “102 Stock Options” has the meaning set forth for such term in Section 1.2(a).

2.3 “Acquisition Event” means a merger, reorganization, consolidation or a similar event in which the Company is not the surviving entity, any transaction that results in the acquisition of all or substantially all of the Company’s outstanding Ordinary Shares by a single person or entity or by a group of persons and/or entities acting in concert, or the sale or transfer of all or substantially all of the Company’s assets.

2.4 “Affiliate” means each of the following: (a) any Subsidiary; (b) any Parent; (c) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its Affiliates; (d) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which directly or indirectly controls 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) of the Company; (e) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee; and (f) for the purpose of 102 Stock Options, also an “Employing Company” within the meaning of section 102(a) of the Ordinance.

2.5 “Award” means any award under this Plan. All Awards shall be granted by, confirmed by, and subject to the terms of an Award Agreement.

2.6 “Award Agreement” means the written agreement executed by the Company and the Participant setting forth terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

2.7 “Board” means the Board of Directors of the Company.

2.8 “Cause” means, unless otherwise defined by the Participant’s Award Agreement, with respect to a Participant’s Termination of Employment or Termination of Consultancy, the following: (a) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import)), termination due to: (i) a Participant’s conviction of, or plea of guilty or nolo contendere to, a felony, or any other criminal act which impairs the Participant’s ability to perform his or her duties; (ii) perpetration by a Participant of an illegal act, dishonesty, or fraud; (iii) a Participant’s insubordination, or refusal to perform his or her duties or responsibilities for any reason other than (to the extend due to) illness, unlawful instructions or incapacity; (iv) continuing willful and deliberate failure by the Participant to perform the Participant’s duties in any material respect, provided that the Participant is given notice and an opportunity to effectuate a cure as determined by the Committee; or (v) a Participant’s willful misconduct with regard to the Company that could have a material adverse effect on the Company; or (b) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter. With respect to a Participant’s Termination of Directorship, “cause” means an act or failure to act that constitutes cause for removal of a director under applicable Israeli law.

2.9 “Change in Control” has the meaning set forth in Section 7.2.

2.10 “Change in Control Price” has the meaning set forth in Section 7.1.

2.11 “Code” means the United States Internal Revenue Code of 1986, as amended. Any reference to any section of the Code shall also be a reference to any successor provision and any Treasury Regulation promulgated thereunder.

2.12 “Committee” means a committee or subcommittee of the Board appointed from time to time by the Board, provided that the composition of the Committee shall at all times be in compliance with any mandatory requirements of the applicable law. Subject to the aforesaid, such committee or subcommittee shall consist of two or more non-employee directors, each of whom is intended to be, (i) to the extent required by Rule 16b-3 promulgated under Section 16(b) of the Exchange Act, a “non-employee director” as defined in Rule 16b-3; (ii) to the extent required by Section 162(m) of the Code, an “outside director” as defined in Section 162(m) of the Code; and (iii) an “independent director” as defined under applicable stock exchange rules. To the extent that no Committee exists that has the authority to administer this Plan, the functions of the Committee shall be exercised by the Board. If for any reason the appointed Committee does not meet the requirements of Rule 16b-3 or Section 162(m) of the Code or any other regulation set by the applicable law, such noncompliance shall not affect the validity of Awards, grants, interpretations or other actions of the Committee.

2.13 “Company” means TAT Technologies Ltd., an Israeli corporation, and its successors by operation of law.

2.14 “Companies Law” means the Israel Companies Law, 5799-1999 and the regulations promulgated thereunder, all as amended from time to time.

2.15 “Consultant” means any natural person who provides bona fide consulting or advisory services to the Company or its Affiliates pursuant to a written agreement, which are not in connection with the offer and sale of securities in a capital-raising transaction, and do not, directly or indirectly, promote or maintain a market for the Company’s or its Affiliates’ securities.

2.16 “Detrimental Activity” means: (a) the disclosure to anyone outside the Company or its Affiliates, or the use in any manner other than in the furtherance of the Company’s or its Affiliate’s business, without written authorization from the Chief Executive Officer of the Company, of any confidential information or proprietary information, relating to the business of the Company or its Affiliates that is acquired by a Participant prior to the Participant’s Termination; (b) any activity while employed or performing services that results, or if known could result, in the Participant’s Termination that is classified by the Company as a termination for Cause; (c) the Participant’s Disparagement, or inducement of others to do so, of the Company or its Affiliates or their past and present officers, directors, employees or products; or (d) breach of any agreement between the Participant and the Company or an Affiliate (including, without limitation, any employment agreement or noncompetition or nonsolicitation agreement). If it is determined by a court of competent jurisdiction that any provision in this Plan in respect of Detrimental Activities is excessive in duration or scope or otherwise is unenforceable, then such provision may be modified or supplemented by the court to render it enforceable to the maximum extent permitted by law.

iii

2.17 “Disability” means: (i) the inability of a Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than (a) 12 months with respect to Incentive Stock Options and (b) 3 months with respect to Non-Qualified Stock Options, as determined by a medical doctor satisfactory to the Committee; or, if applicable, (ii) a permanent and total disability as defined in Section 22(e)(3) of the Code. A Disability shall only be deemed to occur at the time of the determination by the Committee of the Disability. Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) of the Code.

2.18 “Disparagement” means making comments or statements to the press, the Company’s or its Affiliates’ employees, consultants or any individual or entity with whom the Company or its Affiliates has a business relationship which could reasonably be expected to adversely affect in any manner: (a) the conduct of the business of the Company or its Affiliates (including, without limitation, any products or business plans or prospects); or (b) the business reputation of the Company or its Affiliates, or any of their products, or their past or present officers, directors or employees

2.19 “Disqualifying Disposition” has the meaning set forth for such term in Section 6.3 (m) .

2.20 “Eligible Employee” means any person, including an officer or director, who (i) is in the employ of the Company or any Affiliate. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, hereunder as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination. The payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company; (ii) is included in the term “employee” under rule 701 of the Securities Act of 1933 and for the purposes of Section 422 of the Code, and (iii) when related to the award of 102 Stock Options, is included in the term “employee” as such term is defined in Section 102 of the Ordinance, including an Office Holder (as such term is defined in the Companies Law) of the Company or any Subsidiary, except for such persons that are deemed to be a “Controlling Shareholder” under Section 32(9) of the Ordinance.

2.21 “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any references to any section of the Exchange Act shall also be a reference to any successor provision.

2.22 “Exercise Period” shall mean the period, commencing on the date of grant of an Award, during which an Award shall be exercisable, subject to any vesting provisions thereof and the termination provisions hereof.

2.23 “Exercise Price” shall mean the exercise price for each Share covered by an Award, which shall (notwithstanding Section 4.2(b)) not be lower than the nominal value of the Share at the time of exercise.

2.24 “Fair Market Value” means, unless otherwise required by any applicable provision of the Code (or any regulations issued thereunder) or the Ordinance, as may be applicable, as of any date and except as provided below, the closing price reported for the Ordinary Shares on the applicable date: (a) as reported on the principal national securities exchange in the United States on which it is then traded; or (b) if not traded on any such national securities exchange, as quoted on an automated quotation system sponsored by the Financial Industry Regulatory Authority (or such other source the Committee deems reliable) or if the Ordinary Shares shall not have been reported or quoted on such date, on the first day prior thereto on which the Ordinary Shares were reported or quoted. If the Ordinary Shares are not traded, listed or otherwise reported or quoted, then Fair Market Value means the fair market value of the Ordinary Shares as determined by the Committee in good faith in whatever manner it considers appropriate taking into account the requirements of Section 422 of the Code or Section 409A of the Code, as applicable as of the date of grant ,provided that, (i) for Awards that are ISOs, the Board shall make such determination in accordance with Section 422 of the Code and all applicable U.S. Tax Regulations and other applicable guidance promulgated pursuant thereto; (ii) for Awards that are not ISOs, the value that is determined by the Board as of the day of determination to be the Fair Market Value pursuant to applicable U.S. Tax Regulations and other applicable guidance promulgated pursuant to Section 409A of the Code. For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Committee or, if not a day on which the applicable market is open, the next day that it is open.

2.25 “Family Member” means “family member” as defined in Section A.1.(5) of the general instructions of Form S-8, as may be amended from time to time, or by the Ordinance and/or the Companies Law, all as may be applicable.

2.26 “Incentive Stock Option” or “ISO” means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parent (if any) under this Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

2.27 “ITA” means the Israel Tax Authority.

2.28 “Non-Employee Director” means a director of the Company who is not an employee of the Company or an Affiliate.

2.29 “Non-Qualified Stock Option” or “NQSO” means any Stock Option awarded under this Plan that is not an Incentive Stock Option.

2.30 “Ordinance” means the Israel Income Tax Ordinance (New Version) 1961, and the regulations promulgated thereunder, all as amended from time to time.

2.31 “Ordinary Shares” or “Shares” means the Ordinary Shares, no par value (or any other value, as amended).

2.32 “Parent” means any parent corporation of the Company within the meaning of Section 424(e) of the Code, or by the Ordinance and/or the Companies Law, all as may be applicable.

2.33 “Participant” means an Eligible Employee, Non-Employee Director or Consultant to whom an Award has been granted pursuant to this Plan.

2.34 “Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, incorporated organization, governmental or regulatory or other entity.

2.35 “Plan” means this TAT Technologies Ltd 2012 Stock Option Plan, as amended from time to time.

2.36 “Retirement” means a voluntary Termination of Employment or Termination of Consultancy at or after age 65 or such earlier date after age 50 as may be approved by the Committee, in its sole discretion, with respect to such Participant at the time of grant, or thereafter provided that the exercise of such discretion does not make the applicable Award subject to Section 409A of the Code, except that Retirement shall not include any involuntary Termination of Employment or Termination of Consultancy by the Company or an Affiliate for any reason with or without Cause. With respect to a Participant’s Termination of Directorship, Retirement means the failure to stand for reelection or the failure to be reelected on or after a Participant has attained age 65 or, with the consent of the Board, provided that the exercise of such discretion does not make the applicable Award subject to Section 409A of the Code, before age 65 but after age 50.

2.37 “Rules” has the meaning set forth for such term in Section 1.2(a). “Rule 16b-3” means Rule 16b‑3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.“Securities Act” means the Securities Act of 1933, as amended and all rules and regulations promulgated thereunder. Any reference to any section of the Securities Act shall also be a reference to any successor provision.

2.38 “Section 102” means section 102 of the Ordinance.

2.39 “Section 162(m) of the Code” means the exception for performance-based compensation under Section 162(m) of the Code and any applicable Treasury regulations thereunder.

2.40 “Section 409A of the Code” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable Treasury regulations thereunder.

2.41 “Stock Option” or “Option” means any option to purchase Ordinary Shares granted to Eligible Employees, Non-Employee Directors or Consultants pursuant to Article VI.

2.42 “Subsidiary” means any subsidiary corporation of the Company which now exists or is hereafter organized or acquired by the Company within the meaning of Section 424(f) of the Code, or by the Ordinance and/or the Companies Law, all as may be applicable.

2.43 “Ten Percent Stockholder” means a Participant owning, at the time the Option is granted to the Participant, more than 10% of the total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent within the meaning of Section 422(b)(6) of the Code.

2.44 “Termination” means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.

2.45 “Termination of Consultancy” means: (a) that the Consultant is no longer acting as a consultant to the Company or an Affiliate; or (b) when an entity which is retaining a Participant as a Consultant ceases to be an Affiliate unless the Participant otherwise is, or thereupon becomes, a Consultant to the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that a Consultant becomes an Eligible Employee or a Non‑Employee Director upon the termination of his or her consultancy, unless otherwise determined by the Committee, in its sole discretion, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant, an Eligible Employee or a Non‑Employee Director. Notwithstanding the foregoing, the Committee may, in its sole discretion, otherwise define Termination of Consultancy in the Award agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Consultancy thereafter.

2.46 “Termination of Directorship” means that the Non‑Employee Director has ceased to be a director of the Company; except that if a Non‑Employee Director becomes an Eligible Employee or a Consultant upon the termination of his or her directorship, his or her ceasing to be a director of the Company shall not be treated as a Termination of Directorship unless and until the Participant has a Termination of Employment or Termination of Consultancy, as the case may be.

2.47 “Termination of Employment” means: (a) a termination of employment (for reasons other than a personal leave of absence granted by the Company) of a Participant from the Company and its Affiliates; or (b) when an entity which is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that an Eligible Employee becomes a Consultant or a Non‑Employee Director upon the termination of his or her employment, unless otherwise determined by the Committee, in its sole discretion, no Termination of Employment shall be deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee, a Consultant or a Non‑Employee Director. Notwithstanding the foregoing, the Committee may, in its sole discretion, otherwise define Termination of Employment in the Award agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter.

2.48 “Transfer” means: (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in a Person), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in a Person) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law). “Transferred” and “Transferable” shall have a correlative meaning.

2.49 “Trustee” shall mean the trustee appointed by the Committee or the Board, as the case may be, to hold the respective Options and/or Shares (and, in relation with 102 Stock Options, approved by ITA), if so appointed.

ARTICLE III

  ADMINISTRATION

3.1 The Committee. This Plan shall be administered and interpreted by the Committee. In the event that the Board does not create a committee to administer the Plan, the Plan shall be administered by the Board in its entirety. In the event that an action necessary for the administration of the Plan is required under law to be taken by the Board, then such action shall be so taken by the Board. In any such event, all references herein to the Committee shall be construed as references to the Board.

3.2 Grants of Awards. The Committee shall have full authority to grant Awards, pursuant to the terms of this Plan, to Eligible Employees, Consultants and Non-Employee Directors. In particular, the Committee shall have the authority:

(a) to select the Eligible Employees, Consultants and Non-Employee Directors to whom Awards may from time to time be granted hereunder;

(b) to determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Employees, Consultants or Non-Employee Directors;

vii

(d) to determine the terms and conditions, not inconsistent with the terms of this Plan, of any Award granted hereunder (including, but not limited to, the exercise price, any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the Ordinary Shares relating thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);

(e) to determine whether and under what circumstances an Award may be settled in cash, and/or Ordinary Shares;

(f) to determine whether a Stock Option is an Incentive Stock Option or Non‑Qualified Stock Option;

(g) to determine whether to require a Participant, as a condition of the granting of any Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of an Award for a period of time as determined by the Committee, in its sole discretion, following the date of the acquisition of such Award;

(h) to set the performance criteria with respect to any Award for which the grant, vesting or payment of such Award is conditioned upon the attainment of specified performance criteria and to certify the attainment of any such performance criteria; and

(i) generally, to exercise such powers and to perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company that are not in conflict with the provisions of this Plan.

3.3 Guidelines. Subject to Article VIII hereof, the Committee shall, in its sole discretion, have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing this Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of this Plan and any Award issued under this Plan (and any agreements relating thereto); and to otherwise supervise the administration of this Plan. The Committee may, in its sole discretion, correct any defect, supply any omission or reconcile any inconsistency in this Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of this Plan; provided, that with regard to any provision of this Plan or any agreement relating thereto that is intended to comply with Section 162(m) of the Code or Section 102 of the Ordinance as may be applicable, any such action by the Committee shall be permitted only to the extent such action would be permitted under Section 162(m) of the Code or Section 102 of the Ordinance, as may be applicable. The Committee may, in its sole discretion, adopt special guidelines and provisions for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with applicable tax and securities laws of such domestic or foreign jurisdictions. This Plan is intended to comply with the applicable requirements of Section 102 of the Ordinance and/or Rule 16b-3 and with respect to Awards intended to be “performance-based,” the applicable provisions of Section 162(m) of the Code and this Plan shall be limited, construed and interpreted in a manner so as to comply therewith.

3.4 Decisions Final. Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company, the Board or the Committee (or any of its members) arising out of or in connection with this Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.

viii

3.5 Procedures. If the Committee is appointed, the Board shall designate one of the members of the Committee as chairman and the Committee shall hold meetings at such times and places as it shall deem advisable, including, without limitation, by telephone conference or by written consent to the extent permitted by the Companies Law or any other applicable law. A majority of the Committee members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all the Committee members, shall be fully effective as if it had been made by a vote at a meeting duly called and held. The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

3.6 Designation of Consultants/Liability.

(a) The Committee may, in its sole discretion, designate employees of the Company and professional advisors to assist the Committee in the administration of this Plan.

(b) The Committee may, in its sole discretion, employ such legal counsel, consultants and agents as it may deem desirable for the administration of this Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Committee or the Board in the engagement of any such counsel, consultant or agent shall be paid by the Company. The Committee, its members and any person designated pursuant to subsection (a) above shall not be liable for any action or determination made in good faith with respect to this Plan. To the maximum extent permitted by applicable law, no officer of the Company or member or former member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to this Plan or any Award granted under it.

3.7 Indemnification. To the maximum extent permitted by applicable law and the Articles of Association of the Company and to the extent not covered by insurance directly insuring such person, each officer or employee of the Company or any Affiliate and member or former member of the Committee or the Board shall be indemnified and held harmless by the Company against any cost or expense (including reasonable fees of counsel reasonably acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of this Plan, except to the extent arising out of such officer’s, employee’s, member’s or former member’s fraud. Such indemnification shall be in addition to any rights of indemnification the officers, employees, directors or members or former officers, employees, directors or members may have under applicable law, under the Articles of Association of the Company or any Affiliate. Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual with regard to Awards granted to him or her under this Plan.

ARTICLE IV

  SHARE LIMITATION

4.1 Shares

(a) The initial aggregate number of Ordinary Shares with respect to which Awards may be granted under this Plan shall not exceed 980,000 shares (subject to any increase or decrease pursuant to Section 4.2), which may be either authorized and unissued Ordinary Shares or Ordinary Shares held in or acquired for the treasury of the Company, or both. If any Award granted under this Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of Ordinary Shares underlying any such unexercised and expired or terminated Award shall again be available for the purpose of Awards under this Plan. The number of Ordinary Shares available for the purpose of Awards under this Plan shall be reduced by (i) the total number of Awards exercised, regardless of whether any of the Ordinary Shares underlying such Awards are not actually issued to the Participant as the result of a net settlement, and (ii) any Ordinary Shares used to pay any exercise price or tax withholding obligation with respect to any Award. In addition, the Company may not use the cash proceeds it receives from Stock Option exercises to repurchase Ordinary Shares on the open market for reuse under this Plan.

4.2 Changes.

(a) The existence of this Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any Affiliate, (iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Ordinary Shares, (iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of all or part of the assets or business of the Company or any Affiliate or (vi) any other corporate act or proceeding.

(b) Subject to the provisions of Section 4.2(g), in the event of any such change in the capital structure or business of the Company by reason of any stock split, reverse stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, consolidation, spin‑off, reorganization, partial or complete liquidation, issuance of rights or warrants to purchase any Ordinary Shares or securities convertible into Ordinary Shares, any sale or transfer of all or part of the Company’s assets or business, or any other corporate transaction or event having an effect similar to any of the foregoing and effected without receipt of consideration by the Company, then the Committee shall, subject to applicable law and stock exchange regulations, make such adjustments consistent with such change in such manner as the Committee deems equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants under this Plan, to the aggregate number and kind of shares that thereafter may be issued under this Plan, and the number and kind of shares or other property (including cash) to be issued upon exercise of an outstanding Award and the purchase price thereof and the numerical Share limits in Section 4.1 of the Plan. Any such adjustment determined by the Committee shall be final, binding and conclusive on the Company and all Participants and employees and their respective heirs, executors, administrators, successors and assigns. Except as provided in this Section 4.2 or in the applicable Award Agreement, a Participant shall have no rights by reason of any issuance by the Company of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend, any other increase or decrease in the number of shares of stock of any class, any sale or transfer of all or part of the Company’s assets or business or any other change affecting the Company’s capital structure or business.

(c) Fractional Ordinary Shares resulting from any adjustment in Awards pursuant to Section 4.2(a) or (b) shall be aggregated until, and eliminated at, the time of exercise by rounding-down for fractions less than one-half and rounding-up for fractions equal to or greater than one-half, unless and to the extent another rounding method is required by applicable law or stock exchange regulations. No cash settlements shall be made with respect to fractional shares eliminated by rounding. Notice of any adjustment shall be given by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of this Plan.

(d) Should the Company declare a cash dividend to its shareholders, and the distribution date of such dividend will precede the exercise date of an Option, including for the avoidance of doubt, Options that have yet to become vested and Options which have been granted prior to the adoption of the amendment to this Plan, unless the Committee otherwise determines, subject to applicable law and stock exchange regulations, the Exercise Price shall be reduced in the amount equal to the cash dividend per Share distributed by the Company.

(e) To the extent required by applicable stock exchange regulations, no Award shall be exercised on the record date, or the ex-date if earlier in time to such record date, of stock dividend, other distribution of dividends, rights offering, stock split, reverse stock split or reduction of authorized share capital.

(f) In the event of issuance of rights made by the Company to the shareholders during the existence of the right to exercise the Award, the number of shares resulting from exercising the Award shall be adjusted to the beneficial component of the rights, as expressed in the ratio between the Stock Market closing exchange rate on the last trading day before the "X day" and, the base rate of the "X rights.

(g) In the event of an Acquisition Event, the Committee may, in its sole discretion, terminate all outstanding and unexercised Awards effective as of the date of the Acquisition Event, by delivering notice of termination to each Participant at least 20 days prior to the date of consummation of the Acquisition Event, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Acquisition Event, each such Participant shall have the right to exercise in full all of his or her Awards that are then outstanding (subject to any limitations on exercisability otherwise contained in the Award Agreements), but any such exercise shall be contingent on the occurrence of the Acquisition Event, and, provided that, if the Acquisition Event does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise pursuant thereto shall be null and void.

If an Acquisition Event occurs but the Committee does not terminate the outstanding Awards pursuant to this Section 4.2(g), then the provisions of Section 4.2(b) and Article VII shall apply.

(h) Notwithstanding the foregoing, Sections 4.2(d) and 4.2(f) shall not apply to any grants of ISOs to Optionees under the Plan.

4.3 Minimum Purchase Price. Notwithstanding any provision of this Plan to the contrary, if authorized but previously unissued Ordinary Shares are issued under this Plan, such shares shall not be issued for a consideration that is less than as permitted under applicable law.

ARTICLE V

  ELIGIBILITY

5.1 General Eligibility. All Eligible Employees, prospective employees and Consultants of the Company and its Affiliates, and Non-Employee Directors of the Company, are eligible to be granted Awards. Eligibility for the grant of Awards and actual participation in this Plan shall be determined by the Committee in its sole discretion. Notwithstanding anything herein to the contrary, no Award under which a Participant may receive Ordinary Shares may be granted under this Plan to an Eligible Employee, Consultant or Non-Employee Director of any Affiliate if such Ordinary Shares do not constitute “service recipient stock” for purposes of Section 409A of the Code, when applicable, with respect to such Eligible Employee, Consultant or Non-Employee Director.

5.2 102 Awards. Subject to Applicable Law, 102 Awards may not be granted to “controlling shareholders” as defined under the Ordinance and may only be granted to Employees, including Office Holders (as such term is defined in the Companies Law), of the Company or any Affiliate thereof, who are Israeli residents for tax purposes (“Eligible 102 Participants”). 102 Awards may either be grants to a Trustee or grants under Section 102 without a trustee. Unless otherwise permitted by the Ordinance and the Rules, no 102 Awards to a Trustee may be granted until the expiration of thirty (30) days after the requisite filings under the Ordinance and the Rules have been appropriately made with the ITA.

5.3 Incentive Stock Options. Notwithstanding anything herein to the contrary, and subject to the provisions of Section 5.1 above, only Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock Options under this Plan. Eligibility for the grant of an Incentive Stock Option and actual participation in this Plan shall be determined by the Committee in its sole discretion.

5.4 General Requirement. The vesting and exercise of Awards granted to a prospective employee or consultant are conditioned upon such individual actually becoming an Eligible Employee or Consultant.

ARTICLE VI

  AWARDS;

6.1 Options. Each Stock Option granted under this Plan shall be of one of three types: (a) an Incentive Stock Option (b) a 102 Stock Option or (b) a Non-Qualified Stock Option.

6.2 Grants. The Committee shall, in its sole discretion, have the authority to grant to any Eligible Employee (subject to Sections 5.2, 5.3 above and Section 6.3 below) Incentive Stock Options, 102 Stock Options and/or Non-Qualified Stock Options, according to the applying tax regime and the provisions of this Plan. The Committee shall, in its sole discretion, have the authority to grant Non-Qualified Stock Options to any Eligible Employee, Consultant or Non-Employee Director. To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof which does not qualify shall constitute a separate Non-Qualified Stock Option.

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6.3 Terms of Options. Options granted under this Plan shall be evidenced by an Award Agreement between the Company and the Participant which Award Agreement shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee, in its sole discretion, shall deem desirable from time to time. The Award Agreement shall contain the following information:

(a) Number of Shares. Each Award Agreement shall state the number of Shares covered by the Option.

(b) Type of Option. Each Award Agreement shall specifically state the type of Option granted thereunder and whether it constitutes an Incentive Stock Option, Non-Qualified Stock Option, 102 Stock Option and the relevant track, or otherwise.

(c) Exercise Price. Each Award Agreement shall state the Exercise Price, which, in the case of an Incentive Stock Option, shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares covered by the Option on the date of grant or such other amount as may be required pursuant to the Code. In the case of any other Option, the per share Exercise Price shall be equal to the amount determined by the Committee. In the case of an Incentive Stock Option granted to any Ten-Percent Shareholder, the Exercise Price shall be no less than 110% of the Fair Market Value of the Shares covered by the Option on the date of grant. In no event shall the Exercise Price of an Option be less than the par value of the shares for which such Option is exercisable. Subject to Article III and to the foregoing, the Committee may reduce the Exercise Price of any outstanding Option. The Exercise Price shall also be subject to adjustment as provided in Article VII hereof.

(d) Exercise Period. Each Option Agreement shall state the Exercise Period, as fixed by the Committee, subject to the vesting provisions set by the Committee as mentioned below, the early termination provisions set forth in Sub-Sections (h) through (k) hereof and provided that no Stock Option shall be exercisable more than (a) five years after the date the Stock Option is granted, in case of Incentive Stock Options granted to Ten-Percent Shareholders; and (b) seven (7) years after the date the Option is granted, in any other case. At the expiration of the Exercise Period, all unexercised Options shall become null and void.

(e) Exercisability and Vesting Terms. Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at grant and each Option Agreement shall provide the vesting schedule for the Stock Options as determined by the Committee. If the Committee provides, in its discretion, that any Stock Option is exercisable subject to certain limitations and/or vesting schedule (including, without limitation, that such Stock Option is exercisable only in installments and/or within certain time periods and/or subject to performance goals and/or measurements,), the Committee may waive such limitations on the exercisability at any time at or after grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such Stock Option may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion and the provisions with respect to any Stock Option need not be the same as the provisions with respect to any other Stock Option. Unless otherwise determined by the Committee at grant, the Stock Option agreement shall provide that (i) in the event the Participant engages in Detrimental Activity prior to any exercise of the Stock Option, all Stock Options held by the Participant shall thereupon terminate and expire, (ii) as a condition of the exercise of a Stock Option, the Participant shall be required to certify (or shall be deemed to have certified) at the time of exercise in a manner acceptable to the Company that the Participant is in compliance with the terms and conditions of this Plan and that the Participant has not engaged in, and does not intend to engage in, any Detrimental Activity, and (iii) in the event the Participant engages in Detrimental Activity during the one year period commencing on the later of the date the Stock Option is exercised or becomes vested, the Company shall be entitled to recover from the Participant at any time within one year after such exercise or vesting, and the Participant shall pay over to the Company, an amount equal to any gain realized as a result of the exercise (whether at the time of exercise or thereafter).

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(f) Method of Exercise. Subject to whatever installment exercise and waiting period provisions apply under subsection (e) above, to the extent vested, Stock Options may be exercised in whole or in part at any time during the Stock Option term, by giving written notice of exercise to the Company specifying the number of Ordinary Shares to be purchased. Such notice shall be in a form acceptable to the Company and shall be accompanied by payment in full of the Exercise Price as follows: (i) in cash or by check, bank draft or money order payable to the order of the Company; (ii) solely to the extent permitted by applicable law, if the Ordinary Shares are traded on a national securities exchange or quoted on a national quotation system sponsored by the Financial Industry Regulatory Authority, and the Committee authorizes, through a procedure whereby the Participant delivers irrevocable instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to the Exercise Price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, the relinquishment of Stock Options or by payment in full or in part in the form of Ordinary Shares (for which the Participant has good title free and clear of any liens and encumbrances) based on the Fair Market Value of the Ordinary Shares on the payment date as determined by the Committee, in its sole discretion). No Ordinary Shares shall be issued until payment therefor, as provided herein, has been made or provided for.

(g) Non-Transferability of Options. No Stock Option shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Participant’s lifetime, only by the Participant. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, at the time of grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant to this Section is Transferable to a Family Member in whole or in part and in such circumstances, and under such conditions, as determined by the Committee, in its sole discretion. A Non-Qualified Stock Option that is Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently Transferred otherwise than by will or by the laws of descent and distribution and (ii) remains subject to the terms of this Plan and the applicable Award agreement. Any Ordinary Shares acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a Non-Qualified Stock Option or a permissible transferee pursuant to a Transfer after the exercise of the Non-Qualified Stock Option shall be subject to the terms of this Plan and the applicable Award agreement.

(h) Termination by Death, Disability or Retirement. Unless otherwise determined by the Committee at grant and specifically stated in the Option Agreement, or if no rights of the Participant are reduced, thereafter, if Participant’s Termination is by reason of death, Disability or Retirement, all Stock Options that are held by such Participant (or, if relevant, by a Trustee under Section 102 of the Ordinance) that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant (or, in the case of death, by the legal representative of the Participant’s estate) at any time within a period of one year from the date of such Termination, but in no event beyond the expiration of the Exercise Period of such Stock Options; provided, however, that in the case of Retirement, if the Participant dies within such Exercise Period, all unexercised Stock Options held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one year from the date of such death, but in no event beyond the expiration of the Exercise Period of such Stock Options.

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(i) Involuntary Termination Without Cause. Unless otherwise determined by the Committee at grant and specifically stated in the Option Agreement, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by involuntary termination without Cause or Participant’s Termination is voluntary (other than a voluntary termination described in subsection (k)(y) below), all Stock Options that are held by such Participant (or, if relevant, by a Trustee under Section 102 of the Ordinance) that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of 90 days from the date of such Termination, but in no event beyond the expiration of the Exercise Period of such Stock Options.

(j) Omitted.

(k) Termination for Cause. Unless otherwise determined by the Committee at grant and specifically stated in the Option Agreement, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as provided in sub‑section (j) above) after the occurrence of an event that would be grounds for a Termination for Cause, all Stock Options, whether vested or not vested, that are held by such Participant (or, if relevant, by a Trustee under Section 102 of the Ordinance) shall thereupon terminate and expire as of the date of such Termination.

(l) Unvested Stock Options. Unless otherwise determined by the Committee at grant and specifically stated in the Award Agreement, or if no rights of the Participant are reduced, thereafter, Stock Options that are not vested as of the date of a Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.

(m) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Ordinary Shares with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under this Plan and/or any other stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non‑Qualified Stock Options. If the Code is amended to provide for a different limitation from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an ISO in part and as a NQSO in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the ISO portion of the Option first. Separate certificates representing each such portion may be issued upon the exercise of the Option. Should any provision of this Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may, in its sole discretion, amend this Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.

The Committee, at the written request of any Participant, may in its discretion after verifying the implications of applicable tax law including the provisions of Section 409A of the Code and the regulations promulgated thereunder as now in effect or as hereafter amended, take such actions as may be necessary to convert such Participant’s ISOs (or any portions thereof) that have not been exercised on the date of conversion into NQSOs at any time prior to the expiration of such ISOs, regardless of whether the Participant is an Employee of the Company or a Parent or a Subsidiary at the time of such conversion. Such actions may include, but not be limited to, extending the exercise period. At the time of such conversion, the Committee (with the consent of the Participant) may impose such conditions on the exercise of the resulting NQSOs as the Committee in its discretion may determine, provided that such conditions shall not be inconsistent with the Plan. Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s ISOs converted into NQSOs, and no such conversion shall occur unless and until the Committee takes appropriate action. The Committee, with the consent of the Participant, may also terminate any portion of any ISO that has not been exercised at the time of such conversion.

Each Employee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares acquired upon the exercise of an Incentive Stock Option. A “Disqualifying Disposition” is any disposition (including any sale) of such Shares before the later of (a) two (2) years after the date the Employee was granted the Incentive Stock Option, and (b) one (1) year after the date the Employee acquired Shares by exercising the Incentive Stock Option. If the Employee has died before such Share is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

(n) Form, Modification, Extension and Renewal of Stock Options. Subject to the terms and conditions and within the limitations of this Plan, Stock Options shall be evidenced by such an Award Agreement, and the Committee may, in its sole discretion (i) subject to Section 8.1(d) and the applicable law, modify, extend or renew outstanding Stock Options granted under this Plan (provided that the rights of a Participant are not materially and adversely affected without his or her consent), and (ii) accept the surrender of outstanding Stock Options (up to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution therefor (to the extent not theretofore exercised); provided that, notwithstanding anything herein to the contrary, to the extent required by applicable law or stock exchange regulation, an outstanding Option may not be modified to reduce the exercise price thereof or to extend the Stock Option beyond its stated term nor may a new Option at a lower price be substituted for a surrendered Option (other than adjustments or substitutions in accordance with Section 4.2), unless such action is approved by the stockholders of the Company.

(o) Other Terms and Conditions. Stock Options may contain such other provisions, which shall not be inconsistent with any of the terms of this Plan, as the Committee shall, in its sole discretion, deem appropriate.

6.4 102 Awards.

(a) Awards granted pursuant to this Section 6.4 are intended to be granted under Section 102 of the Ordinance pursuant to either (i) Section 102(b)(2) thereof as capital gains track awards (“102 Capital Gains Track Awards”), or (ii) Section 102(b)(1) thereof as ordinary income track awards (“102 Ordinary Income Track Awards”;

  together with 102 Capital Gains Track Awards, “102 Trustee Awards”\). 102 Trustee Awards shall be granted subject to the following special terms and conditions contained in this Section 6.4, the general terms
  and conditions specified in Section 6.3 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Stock Options under different tax laws or regulations.

(b) The Company may grant only one type of 102 Trustee Awards at any given time to all Participants who are to be granted 102 Trustee Awards pursuant to this Plan, and shall file an election with the ITA regarding the type of 102 Trustee Awardsit elects to grant before the date of grant of any 102 Trustee Awards (the “Election”). Such Election shall also apply to any bonus shares received by any Participant as a result of holding the 102 Trustee Awards. The Company may change the type of 102 Trustee Awards that it elects to grant only after the passage of at least 12 months from the end of the year in which the first grant was made in accordance with the previous Election, or as otherwise provided by applicable law. Any Election shall not prevent the Company from granting Awards, pursuant to Section 102(c) of the Ordinance without a Trustee (“102 Non-Trustee Awards”).

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(c) Each 102 Trustee Award will be deemed granted on the date stated in a written notice to be provided by the Company, provided that on or before such date (i) the Company has provided such notice to the Trustee and (ii) the Participant has signed all documents required pursuant to applicable law and under the Plan.

(d) Each 102 Trustee Award, each Share issued pursuant to the exercise of any 102 Trustee Award, and any rights granted thereunder, including, without limitation, bonus shares, shall be allotted and issued to and registered in the name of the Trustee and shall be held in trust for the benefit of the Participant for a period of not less than the requisite period prescribed by the Ordinance and the Rules or such longer period as set by the Committee (the “Required Holding Period”). In the event that the requirements under Section 102 to qualify an Awardas a 102 Trustee Award are not met, then the Award may be treated as a 102 Non-Trustee Award, all in accordance with the provisions of Section 102 and the Rules. After termination of the Required Holding Period, the Trustee may release such 102 Trustee Award and any such Shares, provided that (i) the Trustee has received an acknowledgment from the ITA that the Grantee has paid any applicable taxes due pursuant to the Ordinance or (ii) the Trustee and/or the Company and/or its Affiliate withholds any applicable taxes due pursuant to the Ordinance arising from the 102 Trustee Awards and/or any Shares allotted or issued upon exercise of such 102 Trustee Awards. The Trustee shall not release any 102 Trustee Awards or Shares issued upon exercise thereof prior to the payment in full of the Participant’s tax liabilities arising from such 102 Trustee Awards and/or Shares or the withholding referred to in (ii) above.

(e) Each 102 Trustee Award shall be subject to the relevant terms of the Ordinance and the Rules, which shall be deemed an integral part of the 102 Trustee Award and shall prevail over any term contained in the Plan or an Award which is not consistent therewith. Any provision of the Ordinance, the Rules and any approvals by the Income Tax Commissioner not expressly specified in this Plan or an Award Agreement which, as determined by the Committee, are necessary to receive or maintain any tax benefit pursuant to Section 102 shall be binding on the Participant. The Participant granted a 102 Trustee Award shall comply with the Ordinance and the terms and conditions of the Trust Agreement entered into between the Company and the Trustee. The Participant agrees to execute any and all documents, which the Company and/or its Affiliates and/or the Trustee may reasonably determine to be necessary in order to comply with the Ordinance and the Rules.

(f) During the Required Holding Period, the Participants shall not release from trust or sell, assign, transfer or give as collateral, the Shares issuable upon the exercise of a 102 Trustee Award and/or any securities issued or distributed with respect thereto, until the expiration of the Required Holding Period. Notwithstanding the above, if any such sale or release occurs during the Required Holding Period it will result in adverse tax consequences to the Participant under Section 102 of the Ordinance and the Rules, which shall apply to and shall be borne solely by such Participant. Subject to the foregoing, the Trustee may, pursuant to a written request from the Participant, release and transfer such Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes required to be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, the Plan, the Option Agreement and any applicable law.

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(g) If a 102 Trustee Award is exercised during the Required Holding Period, the Shares issued upon such exercise shall be issued in the name of the Trustee for the benefit of the Participant. If such 102 Trustee Award is exercised after the expiration of the Required Holding Period, the Shares issued upon such exercise shall, at the election of the Participant, either (i) be issued in the name of the Trustee, or (ii) be issued to the Participant, provided that the Participant first complies with all applicable provisions of the Plan and all taxes with respect thereto shall have been fully paid to the ITA.

(h) The foregoing provisions of this Section 6.4 relating to 102 Trustee Awards shall not apply with respect to 102 Non-Trustee Options, which shall, however, be subject to the relevant provisions of Section 102 and the Rules.

(i) Upon receipt of a 102 Trustee Award, the Participant will sign an undertaking to release the Trustee from any liability with respect to any action or decision duly taken and executed in good faith by the Trustee in relation to the Plan, or any 102 Trustee Award or Share granted to such Participant thereunder.

6.5 Performance Share Unit Awards. The Committee may grant performance share units (each, a “Performance Share Unit,” and any award of Performance Share Units is hereafter referred to as a “Performance Share Unit Award”) to Participants. Each Performance Share Unit is a notional unit representing the right to receive one Ordinary Share as provided in Section 6.5(c). Each Performance Share Unit Award shall be subject to the following terms and conditions and such other terms and conditions not inconsistent with the terms of the Plan as the Committee may prescribe:

(a)	Award Agreement. The terms of any Performance Share Unit Award granted under the Plan shall be set forth in an Award Agreement, which shall contain provisions determined by the Committee and not inconsistent with the Plan.
(b)	Award Period and Performance Goals. The Committee shall determine and include in a Performance Unit Share Award grant the period of time for which a Performance Share Award is made (“Award Period”).<br><br><br><br> The Committee also shall establish performance objectives (“Performance Goals”) to be met by the Company or any subsidiary, division or Affiliate of the Company or any employees thereof during the Award<br> Period as a condition to payment of the Performance Share Award. The Performance Goals may include share price, pre-tax profits, earnings per share, return on shareholders’ equity, return on assets, sales, net income or any combination of the<br> foregoing or any other financial or other measurement established by the Committee.
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(c)	Payment of Performance Share Unit Awards. The Committee shall establish the method of calculating the amount of payment to be made under a Performance Share Unit Award if the Performance Goals are met. After the completion<br> of an Award Period, the performance of the Company or subsidiary, division or Affiliate of the Company, as applicable, shall be measured against the Performance Goals, and the Committee or the Board shall determine, in accordance with the<br> terms of such Performance Share Unit Award, whether all, none or any portion of a Performance Share Unit Award shall be paid.
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(d)	Revision of Performance Goals. At any time prior to the end of an Award Period, the Committee may revise the Performance Goals and the computation of payment if unforeseen events occur that have a substantial effect on the performance<br> of the Company or any subsidiary, division or Affiliate of the Company and which, in the judgment of the Committee, makes the application of the Performance Goals unfair unless a revision is made.
(e)	Requirement of Employment/Provision of Services. A grantee of a Performance Share Unit Award must remain in the employ of, or provide services as a Consultant to, the Company or any subsidiary or Affiliate until the completion of<br> the Award Period in order to be entitled to payment under the Performance Share Unit Award; provided, that the Committee may, in its discretion, provide for a full or partial payment where such an exception is deemed equitable.
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(f)	Escrow Agreement. The Committee may require a Participant who receives a Performance Share Unit Award to enter into an escrow or trustee agreement providing that the Ordinary Shares to be distributed in connection with the<br> settlement of a Performance Share Unit Award will remain in the physical custody of an escrow holder or trustee, as necessary to satisfy applicable local law.
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(g)	Creditors’ Rights. A Participant who has been granted a Performance Share Unit Award shall have no rights other than those of a general creditor of the Company. A Performance Share Unit represents an unfunded and unsecured<br> obligation of the Company, subject to the terms and conditions of the applicable Incentive award agreement.
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(h)	Dividends. The Committee may, in its discretion, at the time of the granting of a Performance Share Unit Award, provide that the cash equivalent of any dividends declared on the Ordinary Shares during the Award Period, and which<br> would have been paid with respect to Performance Unit Shares had they been owned by a grantee, shall be paid to the Participant at the time the Performance Unit Shares become payable to the Participant.
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6.6 Restricted Share Awards. The Committee may grant Ordinary Shares to a Participant, which shall be subject to the following terms and conditions and such other terms and conditions not inconsistent with the terms of the Plan as the Committee may prescribe (“Restricted

    Share Award”\):

(a)

Award Agreement. The terms of any Restricted Share Award granted under the Plan shall be set forth in an Award Agreement, which shall contain provisions determined by the Committee and not inconsistent with the Plan. The Committee shall have absolute discretion to determine whether any consideration (other than services) is to be received by the Company as a condition precedent to the issuance of the Ordinary Shares.

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(b)	Requirement of Employment/Provision of Services. A grantee of a Restricted Share Award must remain in the employment of, or provide services as a Consultant to, the Company, subsidiary or Affiliate during a period designated by the<br> Committee in order to retain the Ordinary Shares under the Restricted Share Award; provided that the Restricted Share Award shall be subject to vesting as determined by the Committee (“Restricted Share<br> Restriction Period”). If the grantee leaves the employment of, or ceases to provide services as Consultant to, the Company, subsidiary or Affiliate prior to the end of the Restricted Share Restriction Period, or fails to meet or<br> satisfy any vesting terms or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement, the Restricted Share Award shall terminate and the Ordinary Shares shall be forfeited and revert immediately to<br> the Company, or cancelled, provided that each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain Shares of Restricted Share Award, then subject to the Restricted Share<br> Restriction Period, following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued<br> pursuant to the Plan, and may reflect distinctions based on the reasons for, or circumstances of, such Termination.
(c)	Rights of Holders of Restricted Share Awards. Beginning on the date of grant of the Restricted Share Award and subject to the execution of an Award Agreement, the Participant shall become a shareholder of the Company with respect to any<br> Ordinary Shares subject to the Restricted Share Award and shall have all the rights of a shareholder.
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(d)	Restrictions on Transfer and Legend on Ordinary Share Certificates. During the Restricted Share Restriction Period, the grantee may not sell, assign, transfer, pledge or otherwise dispose of Ordinary Shares. Each certificate for<br> Ordinary Shares issued hereunder shall contain a legend giving appropriate notice of the restrictions in the grant.
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(e)	Lapse of Restrictions. All restrictions imposed under the Restricted Share Award shall lapse upon the expiration of the Restricted Share Restriction Period if the conditions as to employment or provision of services set forth above have<br> been met. The grantee shall then be entitled to have the legend removed from the certificates.
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(f)	Escrow Agreement. The Committee may require a Participant who receives a Restricted Share Award to enter into an escrow or trustee agreement providing that the Ordinary Shares to be distributed in connection with the settlement of the<br> Restricted Share Award will remain in the physical custody of an escrow holder or trustee, as necessary to satisfy applicable local law. To the extent deemed appropriate by the Committee, such escrow or trustee agreements may include a<br> request to transfer the record ownership of such Ordinary Shares into the name of the escrow agent.
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(g)	Dividends. The Committee may, in its discretion, at the time of the Restricted Share Award, provide that any dividends declared on the Ordinary Shares during the Restricted Share Restriction Period shall be (i) paid to the grantee, or<br> (ii) accumulated for the benefit of the grantee and paid to the grantee only after the expiration of the Restricted Share Restriction Period.
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6.7 Restricted Share Unit Awards. The Committee may grant restricted share units (each, a “Restricted Share Unit,” and any award of Restricted Share Units is hereafter referred to as a “Restricted Share Unit Award”) to Participants. Each Restricted Share Unit is a notional unit representing the right to receive one Ordinary Share on the Settlement Date (as defined below). Each Restricted Share Unit Award shall be subject to the following terms and conditions and such other terms and conditions not inconsistent with the terms of the Plan as the Committee may prescribe:

(a)	Award Agreement. The terms of any Restricted Share Unit Award granted under the Plan shall be set forth in an Award Agreement, which shall contain provisions determined by the Committee and not inconsistent with the Plan. The<br> Committee shall have absolute discretion to determine whether any consideration (other than services) is to be received by the Company as a condition precedent to the issuance of the Ordinary Shares.
(b)	Requirement of Employment/Provision of Services. A grantee of a Restricted Share Unit Award must remain in the employment of, or provide services as a Consultant to, the Company, subsidiary or Affiliate during a period designated by<br> the Committee in order to receive Ordinary Shares under the terms of the Award Agreement; provided that the Restricted Share Unit Award shall be subject to vesting as determined by the Committee (“Restricted<br> Unit Restriction Period”). If the grantee leaves the employment of, or ceases to provide services as a Consultant to, the Company, subsidiary or Affiliate prior to the end of the Restricted Unit Restriction Period, or fails to meet<br> or satisfy any vesting terms or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement, the Restricted Share Unit Award shall terminate and all rights of the grantee to such Award shall terminate,<br> provided that each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain the Restricted Share Unit Award then subject to the Restricted Share Restriction Period, following such<br> Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may<br> reflect distinctions based on the reasons for, or circumstances of, such Termination.
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(c)	Settlement of Restricted Share Units. Upon a date or dates on or following the expiration of the Restricted Unit Restriction Period, unless earlier forfeited, the Company shall settle the Restricted Share Unit Award by delivering a<br> number of Ordinary Shares equal to the number of Restricted Share Units subject to the Restricted Share Unit Award then vested and not otherwise forfeited. No Ordinary Shares shall be issued to Participants at the time a Restricted Share Unit<br> Award is granted.
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(d)	Escrow Agreement. The Committee may require a Participant who receives a Restricted Share Unit Award to enter into an escrow or trustee agreement providing that the Ordinary Shares to be distributed in connection with the settlement<br> of the Restricted Share Unit Award will remain in the physical custody of an escrow holder or trustee, as necessary to satisfy applicable local law.
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(e)	Dividends. The Committee may, in its discretion, at the time of the Restricted Share Unit Award, provide that any dividends declared on the Ordinary Shares during the Restricted Share Restriction Period shall be accumulated for the<br> benefit of the grantee and paid to the grantee only after the expiration of the Restricted Share Restriction Period.
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ARTICLE VII

  CHANGE IN CONTROL PROVISIONS

7.1 Benefits. In the event of a Change in Control of the Company, and except as otherwise provided by the Committee in an Award Agreement, a Participant’s unvested Award shall not vest and a Participant’s Award shall be treated in accordance with one of the following methods as determined by the Committee in its sole discretion:

(a) Awards, whether or not then vested, shall be continued, assumed, have new rights substituted therefor or be treated in accordance with Section 4.2(d) hereof, as determined by the Committee in its sole discretion. Notwithstanding anything to the contrary herein, for purposes of Incentive Stock Options, any assumed or substituted Stock Option shall comply with the requirements of Treasury Regulation § 1.424-1 (and any amendments thereto).

(b) The Committee, in its sole discretion, may provide for the purchase of any Awards by the Company or an Affiliate for an amount of cash equal to the excess of the Change in Control Price (as defined below) of the Ordinary Shares covered by such Awards, over the aggregate exercise price of such Awards. For purposes of this Section 7.1, Change in Control Price shall mean the highest price paid per Ordinary Shares in any transaction related to a Change in Control of the Company; provided, however, that such price shall not exceed the fair market value of the Common Stock at the time of purchase as determined in accordance Section 409A of the Code.

(c) The Committee may, in its sole discretion, provide for the cancellation of any Awards without payment, if the Change in Control Price is less than the exercise price of such Award.

(d) Notwithstanding anything else herein, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.

7.2 Change in Control. Unless otherwise determined by the Committee in the applicable Award agreement or other written agreement approved by the Committee, a “Change in Control” shall be deemed to occur following any transaction if: (i) any “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Ordinary Shares of the Company), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the combined voting power of the then outstanding securities of the Company (or its successor corporation); provided, however, that a merger or consolidation effected solely to implement a recapitalization of the Company or for the primary purpose of change of domicile shall not constitute a Change in Control of the Company; (ii) the stockholders of the Company approve a plan of complete liquidation of the Company; provided, that this subsection (ii) shall not constitute a Change in Control with respect to the amount of any payment pursuant to an Award under this Plan, or any portion thereof, that is triggered upon a Change in Control and that is intended to constitute “non-qualified deferred compensation” pursuant to Section 409A of the Code; or (iii) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets other than (x) the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own, directly or indirectly, at least 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale or (y) pursuant to a spinoff type transaction, directly or indirectly, of such assets to the stockholders of the Company.

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ARTICLE VIII

  TERMINATION OR AMENDMENT OF PLAN

8.1 Termination or Amendment. Notwithstanding any other provision of this Plan, the Board may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of this Plan (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement referred to in Article X), or suspend or terminate it entirely, retroactively or otherwise; provided, that without the approval of the holders of the Company’s Ordinary Shares entitled to vote in accordance with applicable law and the exchange or system on which the Company’s securities are then listed or traded, if so required by applicable law or stock exchange regulation, no amendment may be made that would:

(a) increase the aggregate number of Ordinary Shares that may be issued under this Plan pursuant to Section 4.1 (except by operation of Section 4.2);

(b) change the classification of individuals eligible to receive Awards under this Plan;

(c) other than adjustments or substitutions in accordance with Section 4.2, amend the terms of outstanding Awards to reduce the exercise price of outstanding Stock Options or to cancel outstanding Stock Options (where prior to the reduction or cancellation the exercise price equals or exceeds the fair market value of the Ordinary Shares underlying such Awards) in exchange for cash, or Stock Options with an exercise price that is less than the exercise price of the original Stock Options;

(d) extend the maximum Exercise Period under Section 6.3;

(e) award any Stock Option in replacement of a canceled Stock Option with a higher exercise price, except in accordance with Section 6.3(l); or

(f) require stockholder approval in order for this Plan to comply with the applicable rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company, the applicable provisions of Section 162(m) of the Code or, to the extent applicable to Incentive Stock Options, Section 422 of the Code.

ARTICLE IX

  UNFUNDED PLAN

9.1 Unfunded Status of Plan. This Plan is an “unfunded” plan for incentive and deferred compensation. With respect to any payments as to which a Participant has a fixed and vested interest but that are not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general unsecured creditor of the Company.

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ARTICLE X

  GENERAL PROVISIONS

10.1 RIGHTS AS A STOCKHOLDER; VOTING AND DIVIDENDS.

(a) A Participant shall have no rights as a shareholder of the Company with respect to any Ordinary Shares covered by the Award until the date of the lawful issuance of such Shares to the Participant. In the case of 102 Option Awards (if such Options are being held by a Trustee), the Trustee shall have no rights as a shareholder of the Company with respect to any Shares covered by such Award until the date of the lawful issuance of such Shares for the Participant’s benefit, and the Participant shall have no rights as a shareholder of the Company with respect to any Shares covered by the Award until the date of the release of such Shares from the Trustee to the Participant and the issuance of such Shares.

(b) With respect to all Ordinary Shares issued in the form of Awards hereunder or upon the exercise of Awards hereunder, any and all voting rights attached to such Shares and the Participant's entitlement to receive dividends distributed with respect to such Shares, shall be subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any applicable law.

(c) Regarding Shares issued pursuant to the exercise of any 102 Trustee Award any rights distributed to the Participants shall be deposited with and/or issued to the Trustee for the benefit of the Participants. All said rights, excluding dividends, shall be held by the Trustee for the applicable Required Holding Period. In the case that the Company distributes dividends, then the amount of dividends with respect of Shares held in trust shall be paid to the Participants that are the beneficial holders of such Shares, subject to deduction at source of the applicable tax.

(d) The Company may, but shall not be obligated to, register or qualify the sale of Shares under any applicable securities law or any other applicable law.

10.2 Legend. The Committee may require each person receiving Ordinary Shares pursuant to an Award under this Plan to represent to and agree with the Company in writing that the Participant is acquiring the shares without a view to distribution thereof. In addition to any legend required by this Plan, the certificates for such shares may include any legend that the Committee, in its sole discretion, deems appropriate to reflect any restrictions on Transfer.

All certificates for Ordinary Shares delivered under this Plan shall be subject to such stop transfer orders and other restrictions as the Committee may, in its sole discretion, deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Ordinary Shares are then listed or any national securities exchange system upon whose system the Ordinary Shares are then quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

10.3 Other Plans. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

10.4 No Right to Employment/Directorship/Consultancy. Neither this Plan nor the grant of any Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any Affiliate, nor shall they be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate his or her employment, consultancy or directorship at any time.

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10.5 Withholding of Taxes. The Company shall have the right to deduct from any payment to be made pursuant to this Plan, or to otherwise require, prior to the issuance or delivery of any Ordinary Shares or the payment of any cash hereunder, payment by the Participant of, any federal, state or local taxes required by law to be withheld. Any statutorily required withholding obligation with regard to any Participant may be satisfied, subject to the consent of the Committee, by reducing the number of Ordinary Shares otherwise deliverable or by delivering Ordinary Shares already owned Any fraction of a share of Ordinary Shares required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.

10.6 No Assignment of Benefits. No Award or other benefit payable under this Plan shall, except as otherwise specifically provided by law or permitted by the Committee, be Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled to such benefit, nor shall it be subject to attachment or legal process for or against such person.

10.7 Listing and Other Conditions.

(a) Unless otherwise determined by the Committee, as long as the Ordinary Shares are listed on a national securities exchange or system sponsored by a national securities association, the issue of any Ordinary Shares pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system. The Company shall have no obligation to issue such shares unless and until such shares are so listed, and the right to exercise any Award with respect to such shares shall be suspended until such listing has been effected.

(b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of Ordinary Shares pursuant to an Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise, with respect to Ordinary Shares or Awards, and the right to exercise any Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company.

(c) Upon termination of any period of suspension under this Section 10.7, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares which would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.

(d) A Participant shall be required to supply the Company with any certificates, representations and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent or approval the Company deems necessary or appropriate.

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10.8 Governing Law. This Plan and actions taken in connection herewith shall be governed and construed in accordance with the laws of Israel (regardless of the law that might otherwise govern under applicable Israeli principles of conflict of laws).

10.9 Construction. Wherever any words are used in this Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.

10.10 Other Benefits. No Award granted or paid out under this Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.

10.11 Costs. The Company shall bear all expenses associated with administering this Plan, including expenses of issuing Ordinary Shares pursuant to any Awards hereunder.

10.12 No Right to Same Benefits. The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.

10.13 Death/Disability. The Committee may in its sole discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award. The Committee may, in its discretion, also require that the agreement of the transferee to be bound by all of the terms and conditions of this Plan.

10.14 Section 16(b) of the Exchange Act. All elections and transactions under this Plan by persons subject to Section 16 of the Exchange Act involving shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3. The Committee may, in its sole discretion, establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and operation of this Plan and the transaction of business thereunder.

10.15 Section 409A of the Code / Section 102 of the Ordinance. Although the Company does not guarantee the particular tax treatment of an Award granted under this Plan, 102 Awards and Incentive Stock Options made under this Plan are intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code and/or Section 102 of the Ordinance, as may be applicable, and this Plan and any Award agreement hereunder shall be limited, construed and interpreted in accordance with such intent. In no event whatsoever shall the Company or any of its Affiliates be liable for any additional tax, interest or penalties that may be imposed on a Participant by Section 409A of the Code and/or Section 102 of the Ordinance, as may be applicable, or any damages for failing to comply with Section 409A of the Code and/or Section 102 of the Ordinance, as may be applicable.

10.16 Successor and Assigns. This Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate.

10.17 Severability of Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and such provision shall be construed in a manner which is closest to expressing the original intention of such provision while making it valid or enforceable, as the case may be.

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10.18 Payments to Minors, Etc. Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipt thereof shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.

10.19 Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan.

ARTICLE XI

  EFFECTIVE DATE OF PLAN

The Plan was adopted by the Board on November 24, 2011 and amended by the Board on December 13, 2011, on March 22, 2012, on June 28, 2016, on December 24, 2017,on August 30, 2018, on August 30, 2022 and on September 2025 subject to, and to be effective upon, the approval of the stockholders of the Company. Without derogating from the above and in addition thereto, and solely with respect to grants of ISO, the Plan shall be approved by the shareholders of the Company, which approval shall be received within twelve (12) months following the relevant Board resolution (the “Effective Date”). All and any grants of ISOs to Optionees under the Plan as of the Effective Date shall be subject to the said shareholders’ approval. Failure to obtain such approval by the shareholders within such period shall not in any way derogate from the valid and binding effect of any grant of an Option, except that any Options previously granted under this Plan as Incentive Stock Option may not qualify as an Incentive Stock Option but, rather, shall constitute NQSO. Upon approval of this Plan by the shareholders of the Company as set forth above, all ISOs granted under this Plan on or after the Effective Date shall be fully effective as if the shareholders of the Company had approved this Plan on the Effective Date.

ARTICLE XII

  TERM OF PLAN

No Award regarding "ISOs Options" shall be granted pursuant to this Plan on or after March 22, 2022, but Awards granted prior to such date may extend beyond that date. Award of "102 Awards" on this plan are not limited in time.

ARTICLE XIII

  NAME OF PLAN

This Plan shall be known as “The TAT Technologies Ltd 2012 Incentive Plan.”

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TABLE OF CONTENTS

ARTICLE I PURPOSE; TYPES OF AWARDS; CONSTRUCTION	i
ARTICLE II DEFINITIONS	ii
ARTICLE III ADMINISTRATION	vii
ARTICLE IV SHARE LIMITATION	x
ARTICLE V ELIGIBILITY	xii
ARTICLE VI STOCK OPTIONS	xii
ARTICLE VII CHANGE IN CONTROL PROVISIONS	xxii
ARTICLE VIII TERMINATION OR AMENDMENT OF PLAN	xxiii
ARTICLE IX UNFUNDED PLAN	xxiii
ARTICLE X GENERAL PROVISIONS	xxiv
ARTICLE XI EFFECTIVE DATE OF PLAN	xxvii
ARTICLE XII TERM OF PLAN	xxvii
ARTICLE XIII NAME OF PLAN	xxvii

xxviii

Exhibit 4.2

TAT TECHNOLOGIES LTD.

__________________________

2022 INCENTIVE PLAN

__________________________

ARTICLE I

  PURPOSE; TYPES OF AWARDS; CONSTRUCTION

1.2 Types of Awards. This Plan is intended to enable the Company to issue Awards under varying tax regimes, including, without limitation:

(d) Restricted Share Awards and Restricted Share Unit Awards.

ARTICLE II

  DEFINITIONS

For purposes of this Plan, the following terms shall have the following meanings:

2.1 “102 Award” means any Award granted pursuant to Section 102 and other rulings, procedures and clarifications promulgated thereunder or issued by the ITA.

2.2 “102 Stock Options” has the meaning set forth for such term in Section 1.2(a).

2.5 “Award” means any award under this Plan. All Awards shall be granted by, confirmed by, and subject to the terms of an Award Agreement.

2.7 “Board” means the Board of Directors of the Company.

2.9 “Change in Control” has the meaning set forth in Section 7.2.

2.10 “Change in Control Price” has the meaning set forth in Section 7.1.

2.13 “Company” means TAT Technologies Ltd., an Israeli corporation, and its successors by operation of law.

2.14 “Companies Law” means the Israel Companies Law, 5799-1999 and the regulations promulgated thereunder, all as amended from time to time.

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2.19 “Disqualifying Disposition” has the meaning set forth for such term in Section 6.3 (m) .

2.21 “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any references to any section of the Exchange Act shall also be a reference to any successor provision.

2.27 “ITA” means the Israel Tax Authority.

2.28 “Non-Employee Director” means a director of the Company who is not an employee of the Company or an Affiliate.

2.29 “Non-Qualified Stock Option” or “NQSO” means any Stock Option awarded under this Plan that is not an Incentive Stock Option.

2.30 “Ordinance” means the Israel Income Tax Ordinance (New Version) 1961, and the regulations promulgated thereunder, all as amended from time to time.

2.31 “Ordinary Shares” or “Shares” means the Ordinary Shares, no par value (or any other value, as amended).

2.32 “Parent” means any parent corporation of the Company within the meaning of Section 424(e) of the Code, or by the Ordinance and/or the Companies Law, all as may be applicable.

2.33 “Participant” means an Eligible Employee, Non-Employee Director or Consultant to whom an Award has been granted pursuant to this Plan.

2.35 “Plan” means this TAT Technologies Ltd 2022 Stock Option Plan, as amended from time to time.

2.38 “Section 102” means section 102 of the Ordinance.

2.39 “Section 162(m) of the Code” means the exception for performance-based compensation under Section 162(m) of the Code and any applicable Treasury regulations thereunder.

2.40 “Section 409A of the Code” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable Treasury regulations thereunder.

2.41 “Stock Option” or “Option” means any option to purchase Ordinary Shares granted to Eligible Employees, Non-Employee Directors or Consultants pursuant to Article VI.

2.44 “Termination” means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.

2.50 “Transfer” means: (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in a Person), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in a Person) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law). “Transferred” and “Transferable” shall have a correlative meaning.

2.51 “Trustee” shall mean the trustee appointed by the Committee or the Board, as the case may be, to hold the respective Options and/or Shares (and, in relation with 102 Stock Options, approved by ITA), if so appointed.

ARTICLE III

  ADMINISTRATION

(a) to select the Eligible Employees, Consultants and Non-Employee Directors to whom Awards may from time to time be granted hereunder;

(b) to determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Employees, Consultants or Non-Employee Directors;

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(e) to determine whether and under what circumstances an Award may be settled in cash, and/or Ordinary Shares;

(f) to determine whether a Stock Option is an Incentive Stock Option or Non‑Qualified Stock Option;

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3.6 Designation of Consultants/Liability.

(a) The Committee may, in its sole discretion, designate employees of the Company and professional advisors to assist the Committee in the administration of this Plan.

ARTICLE IV

  SHARE LIMITATION

4.1 Shares

(a) The initial aggregate number of Ordinary Shares with respect to which Awards may be granted under this Plan shall not exceed 750,000 shares (subject to any increase or decrease pursuant to Section 4.2), which may be either authorized and unissued Ordinary Shares or Ordinary Shares held in or acquired for the treasury of the Company, or both. If any Award granted under this Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of Ordinary Shares underlying any such unexercised and expired or terminated Award shall again be available for the purpose of Awards under this Plan. The number of Ordinary Shares available for the purpose of Awards under this Plan shall be reduced by (i) the total number of Awards exercised, regardless of whether any of the Ordinary Shares underlying such Awards are not actually issued to the Participant as the result of a net settlement, and (ii) any Ordinary Shares used to pay any exercise price or tax withholding obligation with respect to any Award. In addition, the Company may not use the cash proceeds it receives from Stock Option exercises to repurchase Ordinary Shares on the open market for reuse under this Plan.

4.2 Changes.

If an Acquisition Event occurs but the Committee does not terminate the outstanding Awards pursuant to this Section 4.2(g), then the provisions of Section 4.2(b) and Article VII shall apply.

(h) Notwithstanding the foregoing, Sections 4.2(d) and 4.2(f) shall not apply to any grants of ISOs to Optionees under the Plan.

ARTICLE V

  ELIGIBILITY

5.2 102 Awards. Subject to Applicable Law, 102 Awards may not be granted to “controlling shareholders” as defined under the Ordinance and may only be granted to Employees, including Office Holders (as such term is defined in the Companies Law), of the Company or any Affiliate thereof, who are Israeli residents for tax purposes (“Eligible 102 Participants”). 102 Awards may either be grants to a Trustee or grants under Section 102 without a trustee. Unless otherwise permitted by the Ordinance and the Rules, no 102 Award to a Trustee may be granted until the expiration of thirty (30) days after the requisite filings under the Ordinance and the Rules have been appropriately made with the ITA.

5.4 General Requirement. The vesting and exercise of Awards granted to a prospective employee or consultant are conditioned upon such individual actually becoming an Eligible Employee or Consultant.

ARTICLE VI

  AWARDS;

6.1 Options. Each Stock Option granted under this Plan shall be of one of three types: (a) an Incentive Stock Option (b) a 102 Stock Option or (b) a Non-Qualified Stock Option.

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(a) Number of Shares. Each Award Agreement shall state the number of Shares covered by the Option.

xiii

xiv

(j) Omitted.

6.4 102 Awards.

  together with 102 Capital Gains Track Awards, “102 Trustee Awards”\). 102 Trustee Awards shall be granted subject to the following special terms and conditions contained in this Section 6.4, the general terms
  and conditions specified in Section 6.3 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Stock Options under different tax laws or regulations.

(b) The Company may grant only one type of 102 Trustee Award at any given time to all Participants who are to be granted 102 Trustee Awards pursuant to this Plan, and shall file an election with the ITA regarding the type of 102 Trustee Award it elects to grant before the date of grant of any 102 Trustee Awards (the “Election”). Such Election shall also apply to any bonus shares received by any Participant as a result of holding the 102 Trustee Awards. The Company may change the type of 102 Trustee Award that it elects to grant only after the passage of at least 12 months from the end of the year in which the first grant was made in accordance with the previous Election, or as otherwise provided by applicable law. Any Election shall not prevent the Company from granting Awards, pursuant to Section 102(c) of the Ordinance without a Trustee (“102 Non-Trustee Awards”).

xvi

(d) Each 102 Trustee Award, each Share issued pursuant to the exercise of any 102 Trustee Award, and any rights granted thereunder, including, without limitation, bonus shares, shall be allotted and issued to and registered in the name of the Trustee and shall be held in trust for the benefit of the Participant for a period of not less than the requisite period prescribed by the Ordinance and the Rules or such longer period as set by the Committee (the “Required Holding Period”). In the event that the requirements under Section 102 to qualify an Award as a 102 Trustee Award are not met, then the Award may be treated as a 102 Non-Trustee Award, all in accordance with the provisions of Section 102 and the Rules. After termination of the Required Holding Period, the Trustee may release such 102 Trustee Award and any such Shares, provided that (i) the Trustee has received an acknowledgment from the ITA that the Grantee has paid any applicable taxes due pursuant to the Ordinance or (ii) the Trustee and/or the Company and/or its Affiliate withholds any applicable taxes due pursuant to the Ordinance arising from the 102 Trustee Options and/or any Shares allotted or issued upon exercise of such 102 Trustee Awards. The Trustee shall not release any 102 Trustee Awards or Shares issued upon exercise thereof prior to the payment in full of the Participant’s tax liabilities arising from such 102 Trustee Awards and/or Shares or the withholding referred to in (ii) above.

(e) Each 102 Trustee Award shall be subject to the relevant terms of the Ordinance and the Rules, which shall be deemed an integral part of the 102 Trustee Award and shall prevail over any term contained in the Plan or an Award Agreement which is not consistent therewith. Any provision of the Ordinance, the Rules and any approvals by the Income Tax Commissioner not expressly specified in this Plan or an Award Agreement which, as determined by the Committee, are necessary to receive or maintain any tax benefit pursuant to Section 102 shall be binding on the Participant. The Participant granted a 102 Trustee Award shall comply with the Ordinance and the terms and conditions of the Trust Agreement entered into between the Company and the Trustee. The Participant agrees to execute any and all documents, which the Company and/or its Affiliates and/or the Trustee may reasonably determine to be necessary in order to comply with the Ordinance and the Rules.

xvii

(a)	Award Agreement. The terms of any Performance Share Unit Award granted under the Plan shall be set forth in an Award Agreement, which shall contain provisions determined by the Committee and not inconsistent with the Plan.
(b)	Award Period and Performance Goals. The Committee shall determine and include in a Performance Unit Share Award grant the period of time for which a Performance Share Award is made (“Award Period”).<br><br><br><br><br> The Committee also shall establish performance objectives (“Performance Goals”) to be met by the Company or any subsidiary, division or Affiliate of the Company or any employees thereof during the Award<br> Period as a condition to payment of the Performance Share Award. The Performance Goals may include share price, pre-tax profits, earnings per share, return on shareholders’ equity, return on assets, sales, net income or any combination of the<br> foregoing or any other financial or other measurement established by the Committee.
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(c)	Payment of Performance Share Unit Awards. The Committee shall establish the method of calculating the amount of payment to be made under a Performance Share Unit Award if the Performance Goals are met. After the completion<br> of an Award Period, the performance of the Company or subsidiary, division or Affiliate of the Company, as applicable, shall be measured against the Performance Goals, and the Committee or the Board shall determine, in accordance with the<br> terms of such Performance Share Unit Award, whether all, none or any portion of a Performance Share Unit Award shall be paid.
---	---

xviii

(d)	Revision of Performance Goals. At any time prior to the end of an Award Period, the Committee may revise the Performance Goals and the computation of payment if unforeseen events occur that have a substantial effect on the performance<br> of the Company or any subsidiary, division or Affiliate of the Company and which, in the judgment of the Committee, makes the application of the Performance Goals unfair unless a revision is made.
(e)	Requirement of Employment/Provision of Services. A grantee of a Performance Share Unit Award must remain in the employ of, or provide services as a Consultant to, the Company or any subsidiary or Affiliate until the completion of<br> the Award Period in order to be entitled to payment under the Performance Share Unit Award; provided, that the Committee may, in its discretion, provide for a full or partial payment where such an exception is deemed equitable.
---	---
(f)	Escrow Agreement. The Committee may require a Participant who receives a Performance Share Unit Award to enter into an escrow or trustee agreement providing that the Ordinary Shares to be distributed in connection with the<br> settlement of a Performance Share Unit Award will remain in the physical custody of an escrow holder or trustee, as necessary to satisfy applicable local law.
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(g)	Creditors’ Rights. A Participant who has been granted a Performance Share Unit Award shall have no rights other than those of a general creditor of the Company. A Performance Share Unit represents an unfunded and unsecured<br> obligation of the Company, subject to the terms and conditions of the applicable Incentive award agreement.
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(h)	Dividends. The Committee may, in its discretion, at the time of the granting of a Performance Share Unit Award, provide that the cash equivalent of any dividends declared on the Ordinary Shares during the Award Period, and which<br> would have been paid with respect to Performance Unit Shares had they been owned by a grantee, shall be paid to the Participant at the time the Performance Unit Shares become payable to the Participant.
---	---

    Share Award”\):

(a)

xix

(b)	Requirement of Employment/Provision of Services. A grantee of a Restricted Share Award must remain in the employment of, or provide services as a Consultant to, the Company, subsidiary or Affiliate during a period designated by the<br> Committee in order to retain the Ordinary Shares under the Restricted Share Award; provided that the Restricted Share Award shall be subject to vesting as determined by the Committee (“Restricted Share<br> Restriction Period”). If the grantee leaves the employment of, or ceases to provide services as Consultant to, the Company, subsidiary or Affiliate prior to the end of the Restricted Share Restriction Period, or fails to meet or<br> satisfy any vesting terms or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement, the Restricted Share Award shall terminate and the Ordinary Shares shall be forfeited and revert immediately to<br> the Company, or cancelled, provided that each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain Shares of Restricted Share Award, then subject to the Restricted Share<br> Restriction Period, following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued<br> pursuant to the Plan, and may reflect distinctions based on the reasons for, or circumstances of, such Termination.
(c)	Rights of Holders of Restricted Share Awards. Beginning on the date of grant of the Restricted Share Award and subject to the execution of an Award Agreement, the Participant shall become a shareholder of the Company with respect to any<br> Ordinary Shares subject to the Restricted Share Award and shall have all the rights of a shareholder.
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(d)	Restrictions on Transfer and Legend on Ordinary Share Certificates. During the Restricted Share Restriction Period, the grantee may not sell, assign, transfer, pledge or otherwise dispose of Ordinary Shares. Each certificate for Ordinary<br> Shares issued hereunder shall contain a legend giving appropriate notice of the restrictions in the grant.
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(e)	Lapse of Restrictions. All restrictions imposed under the Restricted Share Award shall lapse upon the expiration of the Restricted Share Restriction Period if the conditions as to employment or provision of services set forth above have<br> been met. The grantee shall then be entitled to have the legend removed from the certificates.
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(f)	Escrow Agreement. The Committee may require a Participant who receives a Restricted Share Award to enter into an escrow or trustee agreement providing that the Ordinary Shares to be distributed in connection with the settlement of the<br> Restricted Share Award will remain in the physical custody of an escrow holder or trustee, as necessary to satisfy applicable local law. To the extent deemed appropriate by the Committee, such escrow or trustee agreements may include a<br> request to transfer the record ownership of such Ordinary Shares into the name of the escrow agent.
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(g)	Dividends. The Committee may, in its discretion, at the time of the Restricted Share Award, provide that any dividends declared on the Ordinary Shares during the Restricted Share Restriction Period shall be (i) paid to the grantee, or<br> (ii) accumulated for the benefit of the grantee and paid to the grantee only after the expiration of the Restricted Share Restriction Period.
---	---

(a)	Award Agreement. The terms of any Restricted Share Unit Award granted under the Plan shall be set forth in an Award Agreement, which shall contain provisions determined by the Committee and not inconsistent with the Plan. The<br> Committee shall have absolute discretion to determine whether any consideration (other than services) is to be received by the Company as a condition precedent to the issuance of the Ordinary Shares.
(b)	Requirement of Employment/Provision of Services. A grantee of a Restricted Share Unit Award must remain in the employment of, or provide services as a Consultant to, the Company, subsidiary or Affiliate during a period designated by<br> the Committee in order to receive Ordinary Shares under the terms of the Award Agreement; provided that the Restricted Share Unit Award shall be subject to vesting as determined by the Committee (“Restricted<br> Unit Restriction Period”). If the grantee leaves the employment of, or ceases to provide services as a Consultant to, the Company, subsidiary or Affiliate prior to the end of the Restricted Unit Restriction Period, or fails to meet<br> or satisfy any vesting terms or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement, the Restricted Share Unit Award shall terminate and all rights of the grantee to such Award shall terminate,<br> provided that each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain the Restricted Share Unit Award then subject to the Restricted Share Restriction Period, following such<br> Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may<br> reflect distinctions based on the reasons for, or circumstances of, such Termination.
---	---
(c)	Settlement of Restricted Share Units. Upon a date or dates on or following the expiration of the Restricted Unit Restriction Period, unless earlier forfeited, the Company shall settle the Restricted Share Unit Award by delivering a<br> number of Ordinary Shares equal to the number of Restricted Share Units subject to the Restricted Share Unit Award then vested and not otherwise forfeited. No Ordinary Shares shall be issued to Participants at the time a Restricted Share Unit<br> Award is granted.
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(d)	Escrow Agreement. The Committee may require a Participant who receives a Restricted Share Unit Award to enter into an escrow or trustee agreement providing that the Ordinary Shares to be distributed in connection with the settlement<br> of the Restricted Share Unit Award will remain in the physical custody of an escrow holder or trustee, as necessary to satisfy applicable local law.
---	---
(e)	Dividends. The Committee may, in its discretion, at the time of the Restricted Share Unit Award, provide that any dividends declared on the Ordinary Shares during the Restricted Share Restriction Period shall be accumulated for the<br> benefit of the grantee and paid to the grantee only after the expiration of the Restricted Share Restriction Period.
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xxi

ARTICLE VII

  CHANGE IN CONTROL PROVISIONS

(c) The Committee may, in its sole discretion, provide for the cancellation of any Awards without payment, if the Change in Control Price is less than the exercise price of such Award.

(d) Notwithstanding anything else herein, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.

xxii

ARTICLE VIII

  TERMINATION OR AMENDMENT OF PLAN

(a) increase the aggregate number of Ordinary Shares that may be issued under this Plan pursuant to Section 4.1 (except by operation of Section 4.2);

(b) change the classification of individuals eligible to receive Awards under this Plan;

(d) extend the maximum Exercise Period under Section 6.3;

(e) award any Stock Option in replacement of a canceled Stock Option with a higher exercise price, except in accordance with Section 6.3(l); or

ARTICLE IX

  UNFUNDED PLAN

xxiii

ARTICLE X

  GENERAL PROVISIONS

10.1 RIGHTS AS A STOCKHOLDER; VOTING AND DIVIDENDS.

(a) A Participant shall have no rights as a shareholder of the Company with respect to any Ordinary Shares covered by the Award until the date of the lawful issuance of such Shares to the Participant. In the case of 102 Awards (if such Awards are being held by a Trustee), the Trustee shall have no rights as a shareholder of the Company with respect to any Shares covered by such Award until the date of the lawful issuance of such Shares for the Participant’s benefit, and the Participant shall have no rights as a shareholder of the Company with respect to any Shares covered by the Award until the date of the release of such Shares from the Trustee to the Participant and the issuance of such Shares.

(d) The Company may, but shall not be obligated to, register or qualify the sale of Shares under any applicable securities law or any other applicable law.

xxiv

10.7 Listing and Other Conditions.

xxv

10.11 Costs. The Company shall bear all expenses associated with administering this Plan, including expenses of issuing Ordinary Shares pursuant to any Awards hereunder.

10.12 No Right to Same Benefits. The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.

xxvi

ARTICLE XI

  EFFECTIVE DATE OF PLAN

The Plan was adopted by the Board on August 30, 2022 subject to, and to be effective upon, the approval of the stockholders of the Company in accordance with the requirements of the laws of Israel. Without derogating from the above and in addition thereto, and solely with respect to grants of ISO, the Plan shall be approved by the shareholders of the Company, which approval shall be received within twelve (12) months following the relevant Board resolution (the “Effective Date”). All and any grants of ISOs to Optionees under the Plan as of the Effective Date shall be subject to the said shareholders’ approval. Failure to obtain such approval by the shareholders within such period shall not in any way derogate from the valid and binding effect of any grant of an Award, except that any Options previously granted under this Plan as Incentive Stock Option may not qualify as an Incentive Stock Option but, rather, shall constitute NQSO. Upon approval of this Plan by the shareholders of the Company as set forth above, all ISOs granted under this Plan on or after the Effective Date shall be fully effective as if the shareholders of the Company had approved this Plan on the Effective Date.

ARTICLE XII

  TERM OF PLAN

No Award regarding "ISOs Options" shall be granted pursuant to this Plan on or after March 22, 2032, but Awards granted prior to such date may extend beyond that date. Grant of other Awards pursuant to this plan are not limited in time.

ARTICLE XIII

  NAME OF PLAN

This Plan shall be known as “The TAT Technologies Ltd 2022 Incentive Plan.”

xxvii

TABLE OF CONTENTS

ARTICLE I PURPOSE; TYPES OF AWARDS; CONSTRUCTION	i
ARTICLE II DEFINITIONS	ii
ARTICLE III ADMINISTRATION	vii
ARTICLE IV SHARE LIMITATION	x
ARTICLE V ELIGIBILITY	xii
ARTICLE VI STOCK OPTIONS	xii
ARTICLE VII CHANGE IN CONTROL PROVISIONS	xxii
ARTICLE VIII TERMINATION OR AMENDMENT OF PLAN	xxiii
ARTICLE IX UNFUNDED PLAN	xxiii
ARTICLE X GENERAL PROVISIONS	xxiv
ARTICLE XI EFFECTIVE DATE OF PLAN	xxvii
ARTICLE XII TERM OF PLAN	xxvii
ARTICLE XIII NAME OF PLAN	xxvii

xxviii

Exhibit 8

List of Consolidated Subsidiaries of the Registrant

We own the following significant subsidiaries:

1. Limco-Piedmont Inc., a 100%-owned Delaware subsidiary.

2. Limco Airepair Inc., a wholly-owned Delaware subsidiary of Limco-Piedmont Inc.

Piedmont Aviation Component Services LLC, a North Carolina limited liability company, wholly-owned subsidiary of Limco-Piedmont Inc.
Turbochrome Ltd., a wholly-owned Israel subsidiary.

Exhibit 12.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Rule 13a-14(a) and 15d-14(a)

Under the Securities Exchange Act of 1934, as Amended

I, Igal Zamir, certify that:

1.	I have reviewed this annual report on Form 20-F of TAT Technologies Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made,<br> not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and<br> for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15d-15(e)) and internal control over financial reporting<br> (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated<br> Subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting<br> and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
---	---
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this<br> report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the<br> company’s internal control over financial reporting; and
---	---
5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or<br> persons performing the equivalent functions):
---	---
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report<br> financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
---	---

Date: March 18, 2026

/s/ Igal Zamir
Igal Zamir
Chief Executive Officer
* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

Exhibit 12.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Rule 13a-14(a) and 15d-14(a)

Under the Securities Exchange Act of 1934, as Amended

I, Ehud Ben-Yair, certify that:

1.	I have reviewed this annual report on Form 20-F of TAT Technologies Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made,<br> not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and<br> for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15d-15(e)) and internal control over financial reporting<br> (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated<br> Subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting<br> and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
---	---
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this<br> report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the<br> company’s internal control over financial reporting; and
---	---
5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or<br> persons performing the equivalent function):
---	---
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report<br> financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
---	---

Date: March 18, 2026

/s/ Ehud Ben-Yair
Ehud Ben-Yair
Chief Financial Officer (Principal Financial and Accounting Officer)
* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

Exhibit 13.1

CERTIFICATION PURSUANT TO

      18 U.S.C. SECTION 1350

      AS ADOPTED PURSUANT TO

      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of TAT Technologies Ltd. (the “Company”) on Form 20-F for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Igal Zamir, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Igal Zamir
Igal Zamir
Chief Executive Officer
Date: March 18, 2026

* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

Exhibit 13.2

CERTIFICATION PURSUANT TO

      18 U.S.C. SECTION 1350

      AS ADOPTED PURSUANT TO

      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of TAT Technologies Ltd. (the “Company”) on Form 20-F for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ehud Ben- Yair, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Ehud Ben-Yair
Ehud Ben-Yair
Chief Financial Officer (Principal Financial and Accounting Officer)
Date: March 18, 2026
*	The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.
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Exhibit 14.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (No. 333-286699) Form S-8 (Nos. 333-268906, 333-219031, 333-228345, 333-208990, 333-189758 and 333-286702) of TAT Technologies Ltd. of our report dated March 18, 2026 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.

/s/ Kesselman & Kesselman	Tel-Aviv, Israel
Certified Public Accountants (Isr.)	March 18, 2026
A member firm of PricewaterhouseCoopers International Limited
Kesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,
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P.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il