OTI acquired SoftChip - Deepening its involvement in smart card chip design

Rosh-Pina, Israel (PROTEXT) - On Track Innovations Ltd. (OTI)and SoftChip Israel Ltd. and SoftChip Technologies (3000) Ltd.(SoftChip) have announced today that they had signed an agreementby which OTI acquired full ownership over SoftChip by way ofswapping shares. The swapped shares have been derived from anincrease of OTI's authorized capital by approximately 120,000ordinary shares. The acquisition is another move of OTI to deepen and widen itsinvolvement in designing of innovative chips for smart cards. SoftChip is a chip design house that has developed certainproprietary technology in the field of chip design, smart card'smicroprocessor design, CPU simulators, development of OperatingSystem for Smart Cards, power line modems, Internet security aswell as capabilities in the design of architecture forsemiconductor products. SoftChip has a worldwide reputation and working relationshipwith leading smart card chip manufacturers. Among its clients aresome of the world-leading semiconductor companies as well as theJapanese government. "We have been working with SoftChip for the last 18 months,and we believe that it has a complementary technology and know-how to OTI's, "said Oded Bashan, President & CEO for OTI. "Ourintention is to develop the next generation of smart cardmicroprocessors with both contact & contactless interfaces.SoftChip brings valuable know how and world-class experience thatwill enable OTI to come out with the best chip of its kind in thesmart card market." According to Bashan, "This is in line with OTI's strategy aspresented during the IPO, to acquire complementary technologiesto its own, and to expand its involvement in the contactlesstechnology level. In fact, the meaning of this transaction is toestablish OTI as a fab-less design house for smart cardmicroprocessors." "We are very pleased to join the OTI group," said MickeyCohen, President & CEO for SoftChip. "We are confident this is aperfect match between two experienced companies in the field ofsmart cards that will result in the development of a unique andinnovative new generation of contactless smart card chips andsystems. We believe that the combined capabilities and effortswill result in much more than each is doing on his own." About OTI On Track Innovations Ltd. (OTI) is the world's pioneer inmicroprocessor-based contactless smart card technology. Thecompany has developed a portfolio of patented contactless smartcard technologies, including the microprocessor-basedcontactless/contact EYECON(tm) MultiCard system, which providesoptional DES, Triple-DES, RSA or ECC level data encryptionbetween the card and the reader. The company was awarded theprestigious ESCAT Award for the "Most Innovative Smart CardAccomplishment of the Year 1997". Established in 1990, OTI hasapplied its technologies in a variety of applications worldwide.The implementation of numerous applications such as theelectronic purse, mass transit, parking, gas management systems,loyalty schemes, ID and security as well as other uniquecustomized applications have put OTI and its products at thecutting edge of contactless smart card technology. OTI was listed at the "Neuer Markt" stock exchange inFrankfurt on August 31st, 1999. OTI has front offices and subsidiaries all over the world. Ithas recently established OTI Africa as well as acquired its HongKong system integrator, City Smart Ltd. OTI also controlsEasyPark, which is now implementing the Israeli electronicparking system on a nationwide basis. ots Original Text Service:OTI Internet: http://www.newsaktuell.de For more information,please visit OTI's website, http://www.oti.co.il. Contact: OferTziperman, VP Marketing, OTI Tel: +972-6-693-8884 Fax: +972-6-693-8887 E-mail: ofer-t@inter.net.il Contact: Ohad Bashan,President, OTI America Tel: +1-408-919-5525 Fax:+1-408-919-5101E-mail: ohad.bashan@otiamerica.com OTI On Track InnovationsLtd., Z.H.R. Industrial Zone, P.O. Box 32, Rosh Pina, 12000Israel, Tel. 00972-6-693884, Fax: 00972-6-6938887, Internet:www.oti.co.il

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