OTI Enters French Electronic Parking Market with Acquisition of ID Parking

On Track Innovations Ltd, (OTI) today announced that it has acquired, through its subsidiary PARX Ltd., 100% of the share capital of ID Parking, a Paris based company that provides electronic parking solutions. This acquisition is in accordance with OTIs strategy of focusing on products and projects which generate high margin recurring revenues and supports OTIs global efforts to market the EasyPark TM product. The transaction provides OTI with a platform to readily access the French electronic parking payment market and offer multiple solutions for parking payment, including OTIs patented in-vehicle electronic parking meter- the EasyPark TM product. The EasyPark TM business model is one in which revenues are generated from product sales, transaction fees and customer support.

PARX is OTIs subsidiary responsible for marketing, operating and distributing advanced parking solutions, including the EasyPark TM product, in the international markets. ID Parking, which will operate under the name of PARX France, currently provides electronic parking solutions for approximately 40 municipalities in France. ID Parking was purchased for an aggregate purchase price of 750,000 euro, comprised of 250,000 euro in cash and 500,000 euro in OTI shares. The OTI shares are subject to a lock-up arrangement, under which one third of those shares will be released from lock-up every six months following the closing date (for an aggregate period of 18 months). According to the lock up arrangement, the number of shares will be calculated according to the actual share price at the time of the release; in the case that the share value exceeds 500K Euro, a respective amount of shares will be forfeited, and if the value is less than 500K Euro, OTI will pay the difference in cash. A maximum of up to 300,698 of OTI ordinary shares have been allocated to complete the transaction.

Commenting on the transaction, Oded Bashan, OTI's Chairman and CEO, said "The transaction is in line with OTI's strategy to identify the most cost effective way in which to enter new markets. This acquisition will allow OTI to enter the French parking market while saving time to market and leveraging the existing customer base."

Bashan added: We will continue to maintain and expand PARX Frances customer base, while offering EasyPark TM as a next generation solution.

About OTI

Established in 1990, OTI 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, loyalty programs and secure campuses. 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.