OTI Closes Sale of InterCard Kartensysteme GmbH Subsidiary

On Track Innovations Ltd. (OTI) (Nasdaq: OTIV; Prime Standard (Frankfurt): OT5), a global leader in contactless microprocessor-based smart card solutions for homeland security,
micropayments, petroleum payments and other applications, announced today that
it has finalized the sale of its wholly-owned German subsidiary, InterCard
Kartensysteme GmbH for approximately $2.5 million. OTI will retain its
profitable InterCard Systemelectronic GmbH subsidiary, which provides OEM and
electronics manufacturing services.

The subsidiary sold is engaged in the sale and support of closed campus
systems, which is considered to be a highly competitive market with relatively
low margins and high operating expenses. This follows OTI's acquisition of
ASEC S.A. of Poland that has since received some orders valued at
approximately $1.5 million for 2500 contactless reader equipped terminals.

The transactions are expected to improve the Company's long-term
profitability, with some decrease in revenues in the short term, by adding a
profitable company with higher margins and recurring revenue businesses and by
selling an existing division with high operating expenses.

Mr. Oded Bashan, President & CEO of OTI noted, "The sale of InterCard
Kartensysteme GmbH is reducing operating expenses and debt and saving
significant resources, while the acquisition of ASEC is introducing OTI to new
and growing clients within the emerging European countries market. These
actions are in accordance with OTI's strategy to focus on three vertical
markets - Payment, Petroleum and SmartID - where we provide complete solutions
that adhere to our higher margin and recurring revenues business model."

This press release contains forward-looking statements, including
statements that utilize the terms "contemplates," "will," "expect," "believe,"
"promising" and "potentially." Such statements are subject to certain risks
and uncertainties, such as market acceptance of new products and our ability
to execute production on orders, which could cause actual results to differ
materially from those in the statements included in this press release and the
risk that neither of the transactions described herein may be consummated upon
the terms described herein or at all. Although OTI believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
achieved. 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 otherwise. Results could differ
materially from expected results. OTI undertakes no obligation to update
forward-looking statements to reflect subsequently occurring events or
circumstances.

This press release and other releases are available on
http://www.otiglobal.com and http://www.portfoliopr.com .

OTI Contact:
Galit Mendelson
Director of Corporate
Communication
201 944 5200 ext. 111
galit@otiglobal.com

IR Contact:
Paul Holm
PortfolioPR
212 736 9224
pholm@portfoliopr.com

Media Relations:
Adam Handelsman
5W Public Relations
212 999 5585
ahandelsman@5wpr.com

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