• Revenues of $26.3 million
• Gross margin increased to 44%

Iselin, NJ – November 30, 2009 – On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), a global leader in contactless microprocessor-based smart card solutions for homeland security, payments, petroleum payments and other applications, today announced its consolidated financial results for the nine months ended September 30, 2009. Following are various financial measures that compare the first nine months of 2009 to the first nine months of 2008.

• Total revenues were $26.3 million, a 16% decrease from last year.

• Gross margin increased to 44% vs. 39% last year.

• Non-GAAP operating expenses were $21.1 million, a 6% decrease compared to $22.5 million last year. GAAP operating expenses were $24.7 million, a 13% decrease compared to $28.6 million last year.

• Non-GAAP operating loss was $9.6 million, a 7% decrease compared to $10.4 million last year. GAAP operating loss was $13.3 million, a 20% decrease compared to $16.5 million last year.

• Non-GAAP net loss was $10.4 million, a 7% decrease compared to $11.2 million last year. GAAP net loss was $14.1 million, a 19% decrease compared to $17.4 million last year.

• Cash and cash equivalents were $18.4 million.

Oded Bashan, Chairman and Chief Executive Officer of OTI, said: “the first nine months results demonstrate OTI’s strategy which focuses on improving margins, reduction in operating expenses, specifically in R&D and G&A, and continuous focus on marketing efforts -- all resulting in further decrease of the operating and net loss.”

Mr. Bashan continued: “The recent sale of the assets of MCT is in line with our focus to offer end-to-end solutions which ultimately yield high margin product sale and recurring revenues. The sale will reduce OTI’s operating expenses and improve our cash flow position.”

“In the last weeks some of the achievements and the efforts that the company is putting in order to bring OTI to an operating breakeven have become evident” said Mr. Bashan. “We expect Q4 2009 to be cash flow positive. We are building a strong and solid pipeline of projects. We are introducing new products in existing markets that will contribute to OTI’s growth and profitability and we took measures that we expect will reduce significantly our operating expenses level. All with a view of bringing OTI to profitability in 2010.”

Conference call and Webcast Information
The Company has scheduled a conference call and simultaneous Web cast for November 30, 2009, at 9:30 AM ET to discuss operating results and future outlook. To participate, call:
1-866-860-9642 (U.S. toll free), 1-800-270-345 (Israel toll free). To listen to the Web cast, use the following link: http://www.otiglobal.com/content.aspx?id=226
For those unable to participate, the teleconference will be available for replay until midnight December 7th, by calling U.S.: 1-888-326-9310 on the web at: http://www.otiglobal.com/content.aspx?id=226

Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, OTI uses non-GAAP measures of gross profit, net income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges in accordance with SFAS 123(R) and EITF 96-18, and amortization of intangible assets. OTI management believes the non-GAAP financial information provided in this release provides meaningful supplemental information regarding our performance and enhances the understanding of the Company’s on-going economic performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide all this information to investors. Reconciliations between GAAP measures and non-GAAP are provided later in this press release.

About OTI
Established in 1990, OTI (NASDAQ GM: OTIV) designs, develops and markets secure contactless microprocessor-based smart card technology to address the needs of a wide variety of markets. Applications developed by OTI include product solutions for petroleum payment systems, homeland security solutions, electronic passports and IDs, payments, mass transit ticketing, parking and loyalty programs. OTI has a global network of regional offices to market and support its products. The company was awarded the Frost & Sullivan 2005 and 2006 Company of the Year Award in the field of smart cards.

For more information on OTI, visit www.otiglobal.com, the content of which is not part of this press release.



Safe Harbor for Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions, we are making forward-looking statements. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Forward-looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations. For example, when we say that the first nine months results demonstrate OTI’s strategy which focuses on improving margins, reduction in operating expenses, specifically in R&D and G&A, and continuous focus on marketing efforts -- all resulting in further decrease of the operating and net loss, or when we say that the recent sale of the assets of MCT is in line with our focus to offer end-to-end solutions which ultimately yield high margin product sale and recurring revenues, or when we say that the sale will reduce OTI’s operating expenses and improve our cash flow position, or when we say that in the last weeks some of the achievements and the efforts that the company is putting in order to bring OTI to an operating breakeven has become evident, or when we say that we believe that we are on the right track to bring OTI to profitability next year and that we expect Q4 2009 to be cash flow positive, or when we say that we are building a strong and solid pipeline of projects and that we are introducing new products in existing markets that will contribute to OTI’s growth and profitability and that we continue to monitor and control our operating expenses level, all with a view of bringing OTI to profitability in 2010, we are using forward looking statements. Forward-looking statements could be impacted by the effects of the protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards ,market acceptance of new and existing products and our ability to execute production on orders, as well as the other risks and uncertainties, including those discussed in the “Risk Factors” section and elsewhere in our Annual Report on Form 20-F for the year ended December 31, 2008 and in subsequent filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. Except as otherwise required by law, OTI disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise.