6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2009

ON TRACK INNOVATIONS LTD.
(Name of Registrant)

Z.H.R. Industrial Zone, P.O. Box 32, Rosh-Pina, Israel, 12000
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes o No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes o No x

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

ON TRACK INNOVATIONS LTD.

6-K ITEM
This report on Form 6-K is incorporated by reference into On Track Innovations Ltd.‘s Registration Statement on Form F-3 (Registration No. 333-111770), initially filed with the Securities and Exchange Commission (the “Commission”) on January 8, 2004, its Registration Statement on Form F-3 (Registration No. 333-115953), filed with the Commission on May 27, 2004, its Registration Statement on Form F-3 (Registration No. 333-121316), filed with the Commission on December 16, 2004, its Registration Statement on Form F-3 (Registration No. 333-127615), initially filed with the Commission on August 17, 2005, its Registration Statement on Form S-8 (Registration No. 333-128106), filed with the Commission on September 6, 2005, its Registration Statement on Form F-3 (Registration No. 333-130324), filed with the Commission on December 14, 2005, its Registration Statement on Form F-3 (Registration No. 333-135742), filed with the Commission on July 13, 2006, its Registration Statement on Form S-8 (Registration No. 333-140786) filed with the Commission on February 20, 2007, its Registration Statement on Form F-3 (Registration No. 333-142320), filed with the Commission on April 24, 2007, its Registration Statement on Form S-8 (Registration No. 333-149034) filed with the Commission on February 4, 2008, its Registration Statement on Form S-8 (Registration No. 333-149575), filed with the Commission on March 6, 2008 and its Registration Statement on Form F-3 (Registration No. 333-153667), filed with the Commission on September 25, 2008.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ON TRACK INNOVATIONS LTD.
(Registrant)

By: /s/ Oded Bashan
——————————————
Oded Bashan
Chief Executive Officer and Chairman

Date: August 26, 2009

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Press Release

OTI Reports First Half 2009 Financial Results

  — Revenues of $16.9 million

  — Gross margin increased to 46%

  — GAAP net loss decreased by 29% compared to the first half of 2008

Fort Lee, NJ – August 25, 2009 – On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), 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 first half ended June 30, 2009. Following are various financial measures that compare the first half of 2009 to the first half of 2008.

  — Total revenues were $16.9 million, a 17% decrease from last year.

  — Gross margin increased to 46% vs. 36% last year.

  — Gross profit was $7.7 million, a 6% increase compared to $7.2 million last year.

  — Non-GAAP operating expenses were $13.8 million, a 5% decrease compared to $14.5 million last year. GAAP operating expenses were $16.3 million, a 15% decrease compared to $19.1 million last year.

  — Non-GAAP operating loss was $6.1 million, a 17% decrease compared to $7.3 million last year. GAAP operating loss was $8.6 million, a 28% decrease compared to $11.8 million last year.

  — Non-GAAP net loss was $6.4 million, a 20% decrease compared to $8.0 million last year. GAAP net loss was $8.9 million, a 29% decrease compared to $12.5 million last year.

  — Cash, cash equivalents and short term investments were $21.9 million.

Oded Bashan, Chairman and Chief Executive Officer of OTI, said: “The first six months of 2009 presented challenges resulting from global economic crisis. It has strengthened our commitment to successfully execute our focused and clear strategy. The results show continued improvement in gross margins and further reduction in operating expenses, which have helped us to further reduce our net loss despite the lower than expected revenues.”

Mr. Bashan continued: “Our main and most important goal is to bring OTI to operating breakeven position as quickly as possible. We plan to get there by further reducing our operating expenses, focusing on high margin projects with recurring revenues, continuing to build strong IP portfolio and product line and focusing on successful execution of projects that will contribute to OTI’s growth over the next 12-24 months.”

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“Based on the higher than expected decline in revenues in the first half, which is mainly attributed to the revenue reduction in the OEM and payments business and the delays in customers’ projects timetables, we are updating our target revenues for this year to $34 million.”

With regards to OTI’s share repurchase program, OTI’s Board of Directors has recently approved a detailed plan. Execution of the plan shall be subject to applicable laws.

Conference call and Webcast Information
The Company has scheduled a conference call and simultaneous Web cast for August 25, 2009, at 9:00 AM EDT to discuss operating results and future outlook. To participate, call:

1-888-281-1167 (U.S. toll free), 1-800-270-345 (Israel toll free). To listen to the Web cast, use the following link: http://www.otiglobal.com/content.aspx?id=226

For those unable to participate, the teleconference will be available for replay until midnight September 1st, by calling U.S.: 1-888-326-9310 on the web at: http://www.otiglobal.com/content.aspx?id=226

Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, OTI uses non-GAAP measures of gross profit, net income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges in accordance with SFAS 123(R) and EITF 96-18, and amortization of intangible assets. OTI management believes the non-GAAP financial information provided in this release provides meaningful supplemental information regarding our performance and enhances the understanding of the Company’s on-going economic performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide all this information to investors. Reconciliations between GAAP measures and non-GAAP are provided later in this press release.

About OTI
Established in 1990, OTI (NASDAQ GM: OTIV) 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 and loyalty programs. 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.

For more information on OTI, visit www.otiglobal.com, the content of which is not part of this press release.

OTI Contact: Investor Relations:
Galit Mendelson Miri Segal
Vice President of Corporate Relations MS-IR LLC
201 944 5200 ext. 111 917-607-8654
galit@otiglobal.com msegal@ms-ir.com

(TABLES TO FOLLOW)

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Safe Harbor for Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions, we are making forward-looking statements. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. For example, forward-looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations such as those statements regarding our goal to bring OTI to operating breakeven position, the steps we take or intend to take to achieve operating breakeven position and the timing for achieving it, or our statement regarding our revenues target for 2009. Forward-looking statements could be impacted by the effects of the protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards ,market acceptance of new and existing products and our ability to execute production on orders, as well as the other risks and uncertainties, including those discussed in the “Risk Factors” section and elsewhere in our Annual Report on Form 20-F for the year ended December 31, 2008 and in subsequent filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. Except as otherwise required by law, 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 circumstances or otherwise.

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ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)

Six months ended June 30
 Three months ended June 30
2009
 2008
 2009
 2008
(Unaudited)
 (Unaudited)
 (Unaudited)
 (Unaudited)
 
Revenues                    
Sales   $ 15,687   $ 18,948   $ 6,807   $ 10,202  
Licensing and transaction fees    1,200    1,338    743    763  
   
Total revenues    16,887    20,286    7,550    10,965  
   
Cost of revenues   
Cost of sales    9,197    13,041    4,191    6,703  
   
Total cost of revenues    9,197    13,041    4,191    6,703  
   
Gross profit     7,690    7,245    3,359    4,262  
   
Operating expenses   
Research and development    4,553    5,901    2,337    2,904  
Selling and marketing    6,182    5,175    2,813    2,798  
General and administrative    5,002    7,349    2,456    3,755  
Amortization of intangible assets    515    658    251    329  
   
Total operating expenses     16,252    19,083    7,857    9,786  
   
Operating loss     (8,562 )  (11,838 )  (4,498 )  (5,524 )
Financial expense, net    (378 )  (566 )  (585 )  (90 )
   
Loss before taxes on income     (8,940 )  (12,404 )  (5,083 )  (5,614 )
   
Taxes on income    42    122    19    59  
Equity in loss of affiliate    -    (250 )  -    (127 )
   
Net loss     (8,898 )  (12,532 )  (5,064 )  (5,682 )
Net loss attributable to noncontrolling interest    141    -    97    -  
Net loss attributable to shareholders     (8,757 )  (12,532 )  (4,967 )  (5,682 )
   
Basic and diluted net loss attributable to   
shareholders per ordinary share    $ (0.40 ) $ (0.64 ) $ (0.22 ) $ (0.29 )
   
Weighted average number of ordinary  
 shares used in computing basic  
 and diluted net loss per ordinary share    22,027,070    19,708,825    22,266,869    19,861,051  

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ON TRACK INNOVATIONS LTD.
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITIED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)

GAAP
 Six months ended
June 30, 2009
Adjustments
 Non-GAAP
 
Revenues                
Sales   $ 15,687    -   $ 15,687  
Licensing and transaction fees    1,200    -    1,200  
Total revenues    16,887         16,887  
   
Cost of Revenues   
Cost of sales    9,197    (28 )(a)  9,169  
Total cost of revenues    9,197    (28 )  9,169  
   
Gross profit     7,690    28    7,718  
   
Operating Expenses   
Research and development    4,553    (1,141 )(a)  3,412  
Selling and marketing    6,182    (351 )(a)  5,831  
General and administrative    5,002    (468 )(a)  4,534  
Amortization of intangible assets    515    (515 )(b)  -  
Total operating expenses     16,252    (2,475 )  13,777  
   
Operating loss     (8,562 )  2,503    (6,059 )
Financial expenses, net    (378 )  -    (378 )
Loss before taxes on income     (8,940 )  2,503    (6,437 )
Taxes on income    42    -    42  
Net loss    $ (8,898 ) $ 2,503   $ (6,395 )
Net loss attributable to noncontrolling interest    141    -    141  
Net loss attributable to shareholders    $ (8,757 ) $ 2,503   $ (6,254 )
   
Basic and diluted net loss attributable to   
shareholders per ordinary share    $ (0.40 ) $ 0.12   $ (0.28 )
Weighted average number of ordinary shares used  
in computing basic and diluted net loss per  
ordinary share    22,027,070         22,027,070  

  (a) The effect of stock-based compensation in accordance with SFAS 123(R) and EITF 96-18.

  (b) The effect of amortization of intangible assets.

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ON TRACK INNOVATIONS LTD.
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITIED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)

GAAP
 Three months ended
June 30, 2009
Adjustments
 Non-GAAP
 
Revenues                
Sales   $ 6,807    -   $ 6,807  
Licensing and transaction fees    743    -    743  
Total revenues    7,550         7,550  
   
Cost of Revenues   
Cost of sales    4,191    (13 )(a)  4,178  
Total cost of revenues    4,191    (13 )  4,178  
   
Gross profit     3,359    13    3,372  
   
Operating Expenses   
Research and development    2,337    (558 )(a)  1,779  
Selling and marketing    2,813    (209 )(a)  2,604  
General and administrative    2,456    (254 )(a)  2,202  
Amortization of intangible assets    251    (251 )(b)  -  
Total operating expenses     7,857    (1,272 )  6,585  
   
Operating loss     (4,498 )  1,285    (3,213 )
Financial expenses, net    (585 )  -    (585 )
Loss before taxes on income     (5,083 )  1,285    (3,798 )
Taxes on income    19    -    19  
Net loss    $ (5,064 ) $ 1,285   $ (3,779 )
Net loss attributable to noncontrolling interest    97    -    97  
Net loss attributable to shareholders    $ (4,967 ) $ 1,285   $ (3,682 )
   
Basic and diluted net loss attributable to   
shareholders per ordinary share    $ (0.22 ) $ 0.05   $ (0.17 )
Weighted average number of ordinary shares used  
in computing basic and diluted net loss per  
ordinary share    22,266,869         22,266,869  

  (a) The effect of stock-based compensation in accordance with SFAS 123(R) and EITF 96-18.

  (b) The effect of amortization of intangible assets.

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ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITIED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)

GAAP
 Six months ended
June 30, 2008
Adjustments
 Non-GAAP
 
Revenues                
Sales   $ 18,948    -   $ 18,948  
Licensing and transaction fees    1,338    -    1,338  
Total revenues    20,286         20,286  
   
Cost of Revenues   
Cost of sales    13,041    (30 )(a)  13,011  
Total cost of revenues    13,041    (30 )  13,011  
   
Gross profit     7,245    30    7,275  
   
Operating Expenses   
Research and development    5,901    (1,735 )(a)  4,166  
Selling and marketing    5,175    (925 )(a)  4,250  
General and administrative    7,349    (1,225 )(a)  6,124  
Amortization of intangible assets    658    (658 )(b)  -  
Total operating expenses     19,083    (4,543 )  14,540  
   
Operating loss     (11,838 )  4,573    (7,265 )
Financial expenses, net    (566 )  -    (566 )
Loss before taxes on income and minority interests     (12,404 )  4,573    (7,831 )
Taxes on income    122    -    122  
Equity in loss of affiliate    (250 )  -    (250 )
Net loss    $ (12,532 ) $ 4,573   $ (7,959 )
Net loss attributable to noncontrolling interest    -    -    -  
Net loss attributable to shareholders    $ (12,532 ) $ 4,573   $ (7,959 )
   
Basic and diluted net loss attributable to   
shareholders per ordinary share    $ (0.64 ) $ 0.24   $ (0.40 )
Weighted average number of ordinary shares used  
in computing basic and diluted net loss per  
ordinary share    19,708,825         19,708,825  

  (a) The effect of stock-based compensation in accordance with SFAS 123(R) and EITF 96-18.

  (b) The effect of amortization of intangible assets.

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ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITIED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)

GAAP
 Three months ended
June 30, 2008
Adjustments
 Non-GAAP
 
Revenues                
Sales   $ 10,202    -   $ 10,202  
Licensing and transaction fees    763    -    763  
Total revenues    10,965         10,965  
   
Cost of Revenues   
Cost of sales    6,703    (15 )(a)  6,688  
Total cost of revenues    6,703    (15 )  6,688  
   
Gross profit     4,262    15    4,277  
   
Operating Expenses   
Research and development    2,904    (930 )(a)  1,974  
Selling and marketing    2,798    (635 )(a)  2,163  
General and administrative    3,755    (651 )(a)  3,104  
Amortization of intangible assets    329    (329 )(b)  -  
Total operating expenses     9,786    (2,545 )  7,241  
   
Operating loss     (5,524 )  2,560    (2,964 )
Financial expenses, net    (90 )  -    (90 )
Loss before taxes on income and minority interests     (5,614 )  2,560    (3,054 )
Taxes on income    59    -    59  
Equity in loss of an affiliate    (127 )  -    (127 )
Net loss    $ (5,682 ) $ 2,560   $ (3,122 )
Net loss attributable to noncontrolling interest    -    -    -  
Net loss attributable to shareholders    $ (5,682 ) $ 2,560   $ (3,122 )
   
Basic and diluted net loss   
per ordinary share    $ (0.29 ) $ 0.13   $ (0.16 )
Weighted average number of ordinary shares used  
in computing basic and diluted net loss per  
ordinary share    19,861,051         19,861,051  

  (a) The effect of stock-based compensation in accordance with SFAS 123(R) and EITF 96-18.

  (b) The effect of amortization of intangible assets.

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ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)

June 30
2009
 December 31
2008
(Unaudited)
 (Audited)
 
Assets            
   
Current assets   
Cash and cash equivalents   $ 21,863   $ 27,196  
Short-term investments    46    904  
Trade receivables (net of allowance for doubtful  
 accounts of $3,313 and $3,315 as of June 30, 2009  
 And December 31, 2008, respectively)    4,742    4,567  
Other receivables and prepaid expenses    3,928    2,994  
Inventories    12,771    12,343  
   
Total current assets    43,350    48,004  
   
Severance pay deposits fund     1,166    1,189  
   
Investment in an affiliated company     -    -  
   
Property, plant and equipment, net     18,169    18,613  
   
Intangible assets, net     1,989    2,503  
   
Goodwill     -    -  
   
Total assets    $ 64,674   $ 70,309  

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ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)

June 30
2009
 December 31
2008
(Unaudited)
 (Audited)
 
Liabilities and Shareholders' Equity            
   
Current Liabilities   
Short-term bank credit and current maturities  
of long-term bank loans   $ 5,994   $ 4,984  
Trade payables    7,646    8,071  
Other current liabilities    3,720    3,517  
Total current liabilities    17,360    16,572  
   
Long-Term Liabilities   
Long-term loans, net of current maturities    1,859    1,762  
Accrued severance pay    3,419    3,672  
Deferred tax liability    159    202  
Total long-term liabilities    5,437    5,636  
   
Total liabilities    22,797    22,208  
   
Commitments and Contingencies   
   
Equity   
Shareholders' Equity   
Ordinary shares of NIS 0.1 par value: Authorized -  
 50,000,000 shares as of June 30, 2009 and  
 December 31, 2008; issued 22,874,684 and 21,534,788  
 shares as of June 31, 2009 and December 31, 2008,  
  respectively; outstanding 22,874,684 and 21,495,409 shares  
  as of June 30, 2009 and December 31, 2008, respectively    542    508  
Additional paid-in capital    185,236    182,944  
Accumulated other comprehensive loss    26    (325 )
Accumulated deficit    (144,198 )  (135,441 )
Shareholder's equity     41,606    47,686  
Noncontrolling interest     271    415  
   
Total equity     41,877    48,101  
   
Total liabilities and shareholders' equity    $ 64,674   $ 70,309  

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ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands, except share and per share data)

Six months ended June 30
2009
 2008
(Unaudited)
 (Unaudited)
 
Cash flows from operating activities            
Net loss   $ (8,898 ) $ (12,532 )
Adjustments required to reconcile net loss to net cash used in  
operating activities:  
   
Stock-based compensation related to options and shares issued  
to employees and others    1,988    3,916  
Equity in loss of affiliate    -    250  
Amortization of intangible assets    515    658  
Depreciation    1,293    1,707  
Accrued severance pay, net    (230 )  390  
Decrease in deferred tax liabilities    (43 )  (125 )
Decrease (increase) in trade receivables    (122 )  1,328  
Increase in other receivables and prepaid expenses    (877 )  (248 )
Decrease (increase) in inventories    (257 )  403  
Decrease in trade payables    (553 )  (2,713 )
Increase (decrease) in other current liabilities    206    (206 )
Other, net    (11 )  34  
   
Net cash used in operating activities    (6,989 )  (7,138 )
   
Cash flows from investing activities   
Acquisition of a consolidated subsidiary, net of cash acquired    -    (565 )
Proceeds from maturity of available -for sale securities    1,372    4,290  
Purchase of available-for sale securities    (514 )  (20,097 )
Purchase of property and equipment    (553 )  (643 )
Other, net    -    21  
   
Net cash provided by (used in) investing activities    305    (16,994 )
   
Cash flows from financing activities   
Increase in short-term bank credit, net    936    594  
Proceeds from long-term bank loans    368    -  
Repayment of long-term bank loans    (257 )  (214 )
Exercise of options and warrants    250    388  
Net cash provided by financing activities    1,297    768  
Effect of exchange rate changes on cash    54    25  
   
Decrease in cash and cash equivalents     (5,333 )  (23,339 )
Cash and cash equivalents at the beginning of the period     27,196    35,470  
   
Cash and cash equivalents at the end of the period    $ 21,863   $ 12,131  

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