On Track Innovations Ltd.
OTI REPORTS FY 2005 NINE MONTHS AND THIRD QUARTER FINANCIAL RESULTS

Ad hoc announcement processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Fort Lee, NJ – November 28, 2005 – On Track Innovations Ltd. (OTI) (NASDAQ: OTIV; Prime Standard (Frankfurt): OT5), 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, 2005. Revenues for the first nine months increased by 72% to $26.4 million from $15.4 million for the same period of last year. Revenues for the third quarter increased by 120% to $12.1 million from $5.5 million for the same period of last year. Strong balance sheet with cash, cash equivalents and short term investments of more than $30 million excluding more than $20 million raised earlier this month through a private placement. The Company incurred in the nine months ended September 30, 2005 expenses of $1.8 million related to the Company’s extraordinary activity in the Far-East. Cash used in operating activities amounted to $1.1 M for the nine months ended September 30, 2005. Net loss for the first nine months of 2005 decreased by 4% to $(6.8) million, from $(7.1) million for the same period in 2004. Licensing and transaction fees for the first nine months were up 107% to $2.2 million from $1.1 million for the same period in 2004. Gross margin for nine months decreased to 35% from 42% for the same period in 2004. The decrease in our overall gross margin is mainly due to the execution of the initial stages of projects which are characterized by lower margins in their early stages. The Company has scheduled a conference call and simultaneous Web cast for Monday, November 28, 2005, which will be hosted by Oded Bashan, President and CEO, Guy Shafran, CFO, and Ohad Bashan, Chief Marketing Officer and President OTI America, for 10:00 AM EST to discuss operating results and future outlook. To participate, call: 1-800-963-8290 (U.S. toll free), 1-800-931-5196 (Israel toll free), 0-800-182-1463 (Germany toll free), or 1-973-409-9260 (standard international) ID Code: OTI. To attend the Web cast, use the following links: 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: 877-519-4471 or International; 973-341-3080 and entering the PIN number # 6725998, or on the web at: http://www.otiglobal.com/content.aspx?id=226. On Track Innovations Ltd. Z.H.R. Industrial Zone 12000 P.O. Box 32 Rosh Pina Israel ISIN: IL0010834682 WKN: 924895 Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hannover, München und Stuttgart End of ad hoc announcement (c)DGAP 28.11.2005 Issuer’s information/explanatory remarks concerning this ad hoc announcement: OTI REPORTS FY 2005 NINE MONTHS AND THIRD QUARTER FINANCIAL RESULTS · Revenues Up 72% Compared to First Nine Months of 2004 · Revenues Up 120% Compared to Third Quarter of 2004 · Growth Related Mainly to Contactless Payments Market in the US Fort Lee, NJ – November 28, 2005 – On Track Innovations Ltd. (OTI) (NASDAQ: OTIV; Prime Standard (Frankfurt): OT5), 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, 2005. Oded Bashan, President & CEO of OTI, commented: “We are pleased with our results. We are starting to see the results of our strategy, we are well positioned with strong and important contracts in hand. The increase in revenues represents the rapid advancements in the contactless market around the world, and mainly, the contactless payments market in the US. Our financial position at the end of nine month remains strong with more than $30 million in cash and cash equivalents and short term investments.” “The private placement for more then $20M we completed at the beginning of fourth quarter will further assist us in continuing with the restructuring and executing large contracts and opportunities for the company. The investors in this transaction were institutional investors from the US, Switzerland and United Kingdom” “While revenues were up 72% for the nine months, compared to the same period last year, our gross margin decreased to 35%, mainly due to the execution of initial stages of projects which are characterized by lower margins in their early stages.” Mr. Bashan continued, “The completion of a series of strategic acquisitions in China that we announced earlier this year will assist us in increasing these margins, we continue to implement our strategy of capturing a leading position in the contactless market.” Financial Results Revenues for the first nine months increased to $26.4 million from $15.4 million for the same period of last year. Revenues for the third quarter of 2005 were up to $12.1 million from $5.5 million in the third quarter of 2005. The increase is mainly due to sales in the payments market. Gross margin for the first nine months of 2005 decreased to 35% from 42% for the same period in 2004. The decrease in our overall gross margin is mainly due to the execution of the initial stages of projects which are characterized by lower margins in their early stages. Operating loss for the nine months ended September 30, 2005 increased by 12% to $(7.6) million from $(6.8) million in the same period in 2004. Net loss for the nine months ended September 30, 2005 decreased by 4% to $(6.8) million, from $(7.1) million for the same period in 2004. Cash and cash equivalents and short term investments were at $30.8 million compared to $27.7 million on September 30, 2004, and $28.5 million on December 31, 2004. This press release contains forward-looking statements. These statements can be identified by their use of the words “will”, “anticipates” and “expects” and other similar expressions, as well as by such phrases as “starting to see” and “we believe”. Each of these statements is 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. 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 Contact: Media Relations IR Contact: Galit Mendelson Adam Handelsman David Pasquale/Denise Roche Director of Corporate 5W Public Relations The Ruth Group Communications 201 944 5200 ext. 111 212 999 5585 646 536 7006/8 galit@otiglobal.com ahandelsman@5wpr.com dpasquale@theruthgroup.com droche@theruthgroup.com End of message (c)DGAP