National In-Vehicle Parking Meter System Expected to Reach a Quarter Million Subscribers by the End of the Third Quarter

FORT LEE, NJ–On Track Innovations Ltd., a global leader in contactless microprocessor-based smart card solutions for homeland security and payments, today announced that The Union of Local Authorities in Israel has extended its contract for the successful EasyPark program for an additional five years. EasyPark is expected to reach 250,000 subscribers by the end of the third quarter, and is currently in use in 26 cities across the country.

The EasyPark program offers a constant stream of revenues, from both product sales as well as transaction fees. It has seen considerable growth in both areas:

–Transaction fees for the first six months of 2005 increased by more than 50% compared to the same period last year. –Approximately 7,000 new EasyPark subscribers are now joining the program monthly, an increase of 40% compared to last year. In the First six months of 2005, 41,000 new EasyPark devices were sold, a more than 35% increase compared to the same period last year.

The EasyPark subscriber simply parks his car, turns on the contactless in-vehicle parking meter device displayed in the car window; and when he returns, turns the device off. This eliminates the need for parking meters, and creates a uniquely convenient user experience. The EasyPark system is used for both on-street parking payments and for parking lots, where the device is presented at the gate when entering or exiting the lot. EasyPark is sold in post offices across Israel, with loading stations available in post offices and gas stations.

With EasyPark, OTI implements its business model of generating revenues from product sales as well as transaction fees and customer support. In the first stage of deployment, most revenues are generated from setting up the infrastructure. Once a critical mass of infrastructure is in place, early adopters begin using the product routinely. Currently, EasyPark has reached a level where there is a sufficient user base to provide a constant stream of revenues. This business model of generating on-going licensing and transaction fees has also been successfully implemented by OTI in its petroleum payment product and some SmartID programs.

Oded Bashan, President and CEO of OTI, commented, “We are satisfied with The Union of Local Authorities’ decision to extend EasyPark’s contract and with the steadily growing number of people using the system. This project exemplifies OTI’s business model. Receiving transaction fees together with product sales ensures the continuing growth of the EasyPark project.”

About OTI Established in 1990, OTI (NASDAQ: OTIV) (Prime Standard [Frankfurt]: OT5) 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, micropayments, mass transit ticketing, parking, loyalty programs and secure campuses. OTI has a global network of regional offices to market and support its products. The company was awarded the prestigious ESCAT Award for smart card innovation in both 1998 and 2000. For more information on OTI, visit www.otiglobal.com.