Important Notice RegardingOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL AND ADOPTION OF THE MERGER PROPOSAL, VOTE “FOR” THE APPROVAL OF THE ADVISORY PROPOSAL AND VOTE “FOR” THE APPROVAL OF THE AJOURNMENT PROPOSAL. OUR BOARD MADE ITS DETERMINATION AFTER EVALUATING THE MERGER IN CONSULTATION WITH OTI’S MANAGEMENT AND LEGAL ADVISORS AND CONSIDERING A NUMBER OF FACTORS. IN CONSIDERING THE RECOMMENDATION OF OUR BOARD, YOU SHOULD BE AWARE THAT THE EXECUTIVE OFFICERS OF OTI HAVE CERTAIN INTERESTS IN THE MERGER THAT MAY BE DIFFERENT FROM OR IN ADDITION TO THE INTERESTS OF OTI SHAREHOLDERS GENERALLY. SEE “NON-BINDING ADVISORY VOTE ON TRANSACTION-RELATED COMPENSATION FOR OTI’S EXECUTIVE OFFICERS” BEGINNING ON PAGE 62 OF THE ACCOMPANYING PROXY STATEMENT FOR A MORE DETAILED DESCRIPTION OF THESE INTERESTS.

Provided that a quorum is present, the Availabilityadoption and approval of Proxy Materialsthe Merger Proposal at the shareholder meeting requires the affirmative vote of the holders of 75% of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), excluding abstentions and broker non-votes and excluding any votes of our ordinary shares held by the Parent, Merger Sub or by any person holding at least 25% of the means of control of the Parent or Merger Sub, or any person or entity acting on behalf of the Parent, Merger Sub or any family member of, or entity controlled by any of the foregoing (any such person or entity - a “Merger Sub Affiliate”).

In order for your vote to be counted, you must affirm on the proxy card or voting instruction form that you are not a Merger Sub Affiliate. If you do not so affirm, your vote will not count towards the tally for the Annual Meetingmerger proposal.

Your ordinary shares can be voted at the shareholder meeting only if you are present or represented by a valid proxy or proxy card. Only holders of record of the OTI’s ordinary shares at the close of business on April 4, 2022, which the Board has set as the record date for the shareholder meeting, are entitled to attend and vote at the shareholder meeting or any adjournment or postponement thereof. Even if you plan to attend the shareholder meeting, we encourage you to submit your proxy prior to the shareholder meeting. Shares held through a bank, broker or other nominee that is a shareholder of record of OTI or that appears in the participant list of a securities depository, may also be held on December 2, 2021:

The proxy statement,voted via a proxy card and Annual Report to shareholders forin accordance with the year ended December 31, 2020 are also available at http://www.otiglobal.com/agm and on ourinstructions provided with the proxy agent’s website at www.proxyvote.com.card you received from the bank, broker or other nominee.

Thank you for your cooperation and continued support.

On Track Innovations Ltd.,

5 Hatnufa St., Yokneam Industrial Zone

Yokneam, Israel, 2069200 attention: CFO.

NOTICE AND PROXY STATEMENT OF EXTRAORDINARY GENERAL MEETING OF
SHAREHOLDERS

TO BE HELD ON MAY 10, 2022

Dear On Track Innovations Ltd. Shareholders:

We cordially invite you to attend the extraordinary general meeting of shareholders of On Track Innovations Ltd. (“OTI”, the “Company” or “we”) to be held at the principal business office of Gornitzky & Co., located at Vitania Tel Aviv Tower, 20 Haharash St., Tel Aviv, Israel 6761310, on May 10, 2022 at 10:00 AM (Israel time) (the “shareholder meeting” or “meeting”). As previously announced on March 17, 2022, on March 17, 2022 we entered into the Merger Agreement (defined below) under which we will be acquired, by way of a merger, by Nayax Ltd., a company incorporated under the Laws of the State of Israel, whose shares are traded on the Tel Aviv Stock Exchange (the “Parent”).

At the meeting you will be asked to consider and vote upon the following proposals:

OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE MERGER PROPOSAL, THE ADVISORY PROPOSAL AND THE ADJOURNMENT PROPOSAL. OUR BOARD MADE ITS DETERMINATION AFTER EVALUATING THE MERGER IN CONSULTATION WITH OTI’S MANAGEMENT AND LEGAL ADVISORS AND CONSIDERING A NUMBER OF FACTORS. IN CONSIDERING THE RECOMMENDATION OF OUR BOARD, YOU SHOULD BE AWARE THAT THE EXECUTIVE OFFICERS OF OTI HAVE CERTAIN INTERESTS IN THE MERGER THAT MAY BE DIFFERENT FROM OR IN ADDITION TO THE INTERESTS OF OTI SHAREHOLDERS GENERALLY. SEE “NON-BINDING, ADVISORY VOTE ON TRANSACTION-RELATED COMPENSATION FOR OTI’S EXECUTIVE OFFICERS” BEGINNING ON PAGE 62 OF THE ACCOMPANYING PROXY STATEMENT FOR A MORE DETAILED DESCRIPTION OF THESE INTERESTS.

Your voteFurther information regarding the Merger Proposal is important regardlessincluded in the Proxy Statement, which is being mailed to the Company’s shareholders beginning on April 13, 2022. A copy of the number of shares you own. You may vote by telephone or overMerger Agreement was attached as Exhibit 2.1 to OTI’s Current Report on Form 8-K that was filed with the InternetU.S. Securities and Exchange Commission (the “SEC”) on our proxy agent’sMarch 17, 2022, and is attached as Annex A to the Proxy Statement. The Proxy Statement has been furnished to the SEC on Schedule 14A and is available to the public on the SEC’s website at www.proxyvote.com until the Cut-Off Date (as defined below) by following the instructions includedhttp://www.sec.gov, on the enclosed proxy card. If you are not voting by phone or Internet,Company’s website at www.otiglobal.com, and at the Company requests that you complete, sign, date and return the enclosed proxy card without delay and no later than the Cut-Off Date described below in the enclosed postage-paid return envelope, even if you now plan to attend the Meeting. You may revoke your proxy at any time prior to its exercise by delivering written notice or another duly executed proxy bearing a later date to the Secretary of the Company, or by attending the Meeting and voting in person. We will not be able to count a proxy card unless we receive it at our principal executive officesCompany’s registered office at 5 Hatnufa St., Yokneam Industrial Zone, Yokneam, Israel, 2069200,upon prior notice and during regular working hours until the date of the meeting. A form of proxy card is enclosed with the Proxy Statement.

Provided that a quorum is present (as further detailed below), the adoption and approval of the Merger Proposal requires the affirmative vote of the holders of 75% of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), and the adoption of the Advisory Proposal and the Adjournment Proposal at the shareholder meeting require each the affirmative vote of the holders of a majority of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), for all proposals, excluding abstentions and broker non-votes and, in the case of the Merger Proposal excluding any votes of our ordinary shares held by the Parent, Merger Sub or by any person holding at least 25% of the means of control of the Parent or Merger Sub, or any person or entity acting on behalf of the Parent, Merger Sub or any family member of, or entity controlled by any of the foregoing (any such person or entity - a “Merger Sub Affiliate”).

Quorum

The presence (in person or by proxy) of any two or more shareholders holding, in the aggregate, at least 33 1/3% of the voting rights in the Company constitutes a quorum for purposes of the meeting. In the absence of the requisite quorum of shareholders at the meeting, the meeting will be adjourned to the same day in the immediately following week and will be held at the same time and place, unless otherwise determined at the meeting in accordance with the Company’s amended and restated articles of association. At such adjourned meeting the presence of at least two shareholders, in person or by proxy (regardless of the voting power represented by their shares) will constitute a quorum.

Your ordinary shares can be voted at the shareholder meeting only if you are present or represented by a valid proxy or proxy card. Only holders of record of the Company’s ordinary shares at the close of business on April 4, 2022, which is the record date for the shareholders meeting (the “Record Date”), are entitled to attend and vote at the shareholder meeting or any adjournment or postponement thereof. As of that date, there were 75,775,393 ordinary shares outstanding and entitled to vote. Each ordinary share outstanding on the Record Date will entitle its holder to one vote upon each of the proposals to be presented at the meeting.

Proxies

Shareholders may elect to vote their shares once, by telephone, over the internet on our proxy agent’s website at www.proxyvote.com, by attending the shareholder meeting in person, or by executing and delivering to OTI a proxy as detailed below. Even if you plan to attend the shareholder meeting, we encourage you to submit your proxy prior to the shareholder meeting. Shares held through a bank, broker or other nominee that is a shareholder of record of OTI or that appears in the participant list of a securities depository, may also be voted via a proxy card in accordance with the instructions provided with the proxy card you received from the bank, broker or other nominee. In the alternative, you may obtain a legal proxy from such bank, broker or other nominee to vote your ordinary shares in person at the meeting. The proxy card must be received by the Company at the office of our proxy agent, Broadridge Financial Solutions Inc. at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or at the Company’s registered office no later than 10:00 a.m. (Israel time) on May 7, 2022, which is 3:00 a.m. (Eastern time) on May 7, 2022, to be validly included in the tally of ordinary shares voted at the meeting.

IT IS IMPORTANT THAT YOUR ORDINARY SHARES BE REPRESENTED AT THE MEETING.

Proxies are being solicited by our Board and proxy cards are being mailed together with this Proxy Statement. Certain of our officers, directors, employees and agents may solicit proxies by telephone, facsimile, electronic mail or other personal contact. However, such parties will not receive additional compensation for those activities. We will bear the cost of the solicitation of proxies, including the cost of preparing, assembling and mailing the proxy materials, and will reimburse the reasonable expenses of brokerage firms and others for forwarding such proxy materials to the beneficial owners of our ordinary shares. In addition, we have engaged Alliance Advisors, LLC. to assist in the solicitation of proxies and to provide related informational support, for a fee of $10,000 plus reimbursement for reasonable expenses.

All ordinary shares represented by properly executed proxies received by the Company at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or at the Company’s registered office no later than 10:00 a.m. (Israel time) on May 7, 2022, which is 3:00 a.m. (Eastern time) on May 7, 2022, will, unless such proxies have been revoked prior to the shareholder meeting or superseded, be voted at the meeting in accordance with the directions on the proxies. No postage will be required if your proxy card is mailed in the United States in the envelope provided.

A shareholder returning a proxy may revoke it by communicating such revocation in writing to us or by executing and delivering a later-dated proxy. Shares represented by any proxy in the enclosed envelope,form (including a proxy serving as revocation of an earlier proxy), or shares that are subject to a written revocation, if the proxy or revocation is properly executed and received by Monday, November 29, 2021the Company at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or at its registered office by 10:00 A.M. Israel time, which is November 29, 2021 at 03:a.m. (Israel time) on May 7, 2022, or 3:00 A.M. Eastern Time (the “Cut-Off Date”).a.m. (Eastern time) on May 7, 2022, will be voted (or not voted, as appropriate) as indicated therein with respect to the Merger Proposal, Advisory Proposal and as determined by OTI Board of Directors concerning any other matter that may be presented to the shareholder meeting, as described above.

IMPORTANT: If your shares are held in the nameSubmission of a brokerage firm, bank, nominee or other institution, you should provide instructions to your broker, bank, nominee or other institution on how to vote your shares, otherwise your broker, nominee or other institution may have the right to vote on the matters contained in the proxy pursuant to its sole discretion. Please contact the person responsible for your account and give instructions for a proxy to be completed for your shares.

[●], 2021Position Notices

IMPORTANT: In orderA shareholder may address the other shareholders in writing through the Company in an attempt to secure a quorum andinfluence the manner in which the shareholders will vote with regard to avoidany proposal. Position notices must be submitted to the expense of additional proxy solicitation, please sign, date and return your proxy promptly andCompany no later than the Cut-Off Date,close of the business in Israel on April 29, 2022. Any position notice submitted to the Company at a later date will be ignored.

Request to Include Item on Agenda

A shareholder holding, or shareholders holding together, at least one percent of the voting rights represented at the meeting are entitled to request that the Board of Directors include an item on the agenda, provided the item is suitable to be dealt with at the meeting. Such request must have been submitted to the Company within 7 days after the publication of the notice of the meeting.

Required Vote

Provided that a quorum is present, the adoption and approval at the shareholders meeting of the Merger Proposal requires the affirmative vote of the holders of 75% of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), and the approval of the Advisory Proposal and the Adjournment Proposal require each the affirmative vote of the holders of a majority of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), excluding abstentions and broker non-votes and in the enclosed envelope evencase of the Merger Proposal also excluding votes of any Merger Sub Affiliate (as defined above).

If a shareholder of record signs, dates and returns the proxy card without indicating how the shareholder intends to vote with respect to a proposal, then the ordinary shares will be voted in favor of such proposal.

Pursuant to Section 320(c) and Section 327 to the Israeli Companies Law (the “Companies Law”), the approval of the Merger Proposal requires the affirmative vote of the holders of 75% of the ordinary shares present, in person or by proxy, at the meeting where a quorum is present and voting on the proposal, not including abstentions and broker non-votes and excluding any votes of our ordinary shares held by the Parent, Merger Sub or by any person holding at least 25% of the means of control of the Parent or Merger Sub, or any “Merger Sub Affiliate”.

In order for your vote to be counted, you must affirm on the proxy card or voting instruction form that you are not a Merger Sub Affiliate. If you do not so affirm, your vote will not count towards the tally for the Merger Proposal.

Voting through Agent

A shareholder may appoint a voting agent to vote in his or her place by way of signing a writ of appointment in accordance with OTI’s Articles of Association.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE SHAREHOLDER MEETING AND THE MERGER

The following are some of the questions regarding the Merger Agreement, the Merger and the shareholder meeting that you, as a shareholder of OTI, may have, and answers to those questions. These questions and answers, as well as the summary following the questions and answers, may not address all questions that are important to you, are not meant to be a substitute for the information contained in the remainder of this Proxy Statement, its annexes and the additional documents referred to herein, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this document, its annexes and the additional documents referred to herein. We encourage you to read carefully the more detailed information contained elsewhere in this Proxy Statement, the annexes to this Proxy Statement and the documents we refer to in this Proxy Statement.

Except as otherwise specifically noted in this Proxy Statement, “we,” “our,” “us” and similar words in this Proxy Statement refer to On Track Innovations Ltd. and “shares” and “ordinary shares” refer to the ordinary shares of On Track Innovations Ltd. In addition, we refer to On Track Innovations Ltd. as “OTI” or the “Company,” to Nayax Ltd. as the “Parent” and to OTI Merger Sub Ltd. as “Merger Sub”. All references to the “Merger” refer to the Merger of Merger Sub with and into OTI, with OTI continuing as the surviving company and becoming a wholly-owned subsidiary of the Parent, and all references to the “Merger Agreement” refer to the Agreement and Plan of Merger, dated as of March 17, 2022, as it may be amended from time to time, by and among OTI, the Parent and Merger Sub, a copy of which is included as Annex A to this Proxy Statement. OTI, following the completion of the Merger, is sometimes referred to in this Proxy Statement as the “Surviving Corporation”. All references to “dollars” or “$” refer to United States dollars.

Even if you plan to attend the shareholder meeting personally.in person, to ensure that your shares will be represented at the shareholder meeting we encourage you to sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope. If you attend the shareholder meeting and vote in person by ballot, your vote will revoke any proxy previously submitted.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your cooperation is greatly appreciated.broker or other agent cannot vote on any of the proposals, including the Merger Proposal, without your instructions. If you hold your shares in “street name,” you may not vote your shares in person at the shareholder meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

Alliance Advisors, LLC

200 Broadacres Drive, 3rd Floor

Bloomfield, New Jersey 07003

Shareholders Call Toll Free: 844-557-9028

or

Assaf Cohen, CFO
5 Hatnufa St., Yokneam Industrial Zone,

Yokneam, Israel, 2069200

assaf@otiglobal.com

RISK FACTORS

In addition to the other information included in this Proxy Statement, including the matters addressed under “Cautionary Statements Regarding Forward-Looking Statements” beginning on page 19 of this Proxy Statement, you should consider carefully the following risk factors in determining how to vote at the shareholder meeting. The following is not intended to be an exhaustive list of the risks related to the Merger and you should read and consider the risk factors described under Part 1, Item 1A. “Risk Factors” of OTI’s Annual Report on Form 10-K for the year ended December 31, 2020, which OTI filed with the SEC on March 31, 2021.

Failure to complete the Merger could results in our bankruptcy.

As further detailed under “The Merger-Background of the Merger” starting on page 26 in this Proxy Statement, prior to entering into a term sheet with the Parent on January 19, 2022, attached as Annex C to this Proxy Statement (the “Term Sheet”), the Company filed a petition with the Israeli court due to its inability to pay its debts. Considering the Company’s state of insolvency prior to the signing of the Term Sheet, and further considering the Company’s debts to the Parent (created, among other things, by the provision of the Loan), failure to complete the Merger is likely to lead to the Company’s inability to pay off its debts in which case the Company may be forced to file a bankruptcy or winding-up petition with the Israeli court, or an involuntary bankruptcy petition will be filed against the Company by a creditor, in accordance with the Israeli Insolvency and Economic Rehabilitation Law-2018. In the event such petition is not dismissed, such petition may have an adverse effect on various aspects including, but not limited to, the Company’s ability to continue operating is business, the value of the Company’s ordinary shares and the shareholder’s ability to sell their holdings in the Company. It should be noted, that as part of the Loan Agreement and the Merger Agreement, until the termination of the Merger Agreement in accordance with the terms set forth therein, the Company is unable to incur debt or sell its securities without the prior written consent of the Parent, which will also impair the Company’s ability to raise funds if needed.

Failure to complete the Merger could negatively impact our share price, business, financial condition, results of operations or prospects.

The Merger is subject to the satisfaction or waiver of certain closing conditions described under “The Merger Agreement-Conditions to the Merger” beginning on page 16 of this Proxy Statement, including, among others, the following:

No assurance can be given that each of the conditions will be satisfied. In addition, the Merger Agreement may be terminated under the circumstances described under “The Merger Agreement-Termination of the Merger Agreement” beginning on page 59 of this Proxy Statement. If the conditions are not satisfied or waived in a timely manner and the Merger is delayed, payment of the Merger Consideration will also be delayed. Due to the Company’s inability to pay its debts, which led to the Board’s determination of its insolvency and its petitioning to the Israeli court prior to entering into the Term Sheet, such delay may cause the Company to return to court and re-file a petition in accordance with the Israeli Insolvency and Economic Rehabilitation Law-2018 (“Insolvency Law”). If the Merger is not completed (including in the case the Merger Agreement is terminated), our ongoing business may be adversely affected.

We also could be subject to litigation related to any failure to complete the Merger. If the Merger is not completed, these risks may materialize and may adversely affect the price of our ordinary shares, our business, financial condition, results of operations or prospects.

Some of our directors and officers have interests that may be perceived as different from the interests of our shareholders, and these persons may be deemed to have conflicts of interest in recommending to our shareholders to approve the Merger.

Some of the members of the management and our Board may have interests that may be perceived as different from, or in addition to, their interests as shareholders, which are described under “The Merger-Interests of Certain of OTI’s Executive Officers and Directors in the Merger” beginning on page 38 of this Proxy Statement. These interests could cause members of our Board or our management to be perceived as having a conflict of interest in recommending approval of the Merger. The Board was aware of these interests and considered them, among other things, in evaluating and approving the Merger Agreement and the Merger and in recommending that the OTI shareholders adopt the merger agreement. See “Non-Binding, Advisory Vote on Transaction-Related Compensation for OTI’s Named Executive Officers” beginning on page 62 of this Proxy Statement.

The fact that there is a Merger pending could harm our business and results of operations.

While the Merger is pending, we are subject to a number of risks that may harm our business and results of operations, including:

Our current employees may be uncertain about their future roles and relationships with OTI following completion of the Merger. This uncertainty may adversely affect our ability to attract and retain key personnel.

Our Board and committees do not currently meet the requirements mandated under the Israeli Companies Law.

Due to the resignation of three members of the Board during December of 2021, including the resignation of an external director on December 26, 2021, the resignation of the Board’s chairperson on December 28, 2021 and the resignation of an additional director on December 30, 2021, the Board’s composition does not meet the Companies Law’s requirements for a public company’s composition of the board of directors. Section 114 of the Companies Law mandates that a public company is required to appoint an audit committee, while Section 115 of the Companies Law provides that the audit committee should be comprised of a minimum of three members, including all acting external directors of the board and at least a majority of independent directors. Furthermore, Section 115 also mandates that the chairman of the board will not be a member of the audit committee. Section 118A of the Companies Law further mandates a requirement for public companies to appoint a compensation committee, while applying the same requirements as to the composition thereof. Following the resignation of three members of the Board, there are only three members remaining on the Company’s Board, one of which was appointed chairman in accordance with the requirements of Section 94(a) of the Companies Law. Due to the fact that a chairman may not serve as a member of the audit or compensation committees, and that such committees must include two members who are external directors, while the Company has one external director only, the Board cannot meet the Companies Law’s requirements with respect to the structure of such committees.

In addition, the external director that provided his resignation from the Board on December 26, 2021, was appointed by the Company’s shareholders on the 2021 annual meeting conducted on December 2, 2021. Section 239(b) of the Companies Law determines that an external directors of a public company shall be appointed at a general meeting of shareholders. Due to this requirement of Section 239(b), the Company is currently unable to appoint an alternate external director in order to bring itself to be in compliance with the requirements of the Companies Law. An additional factor which prevents the Company from being able to comply with requirements of the Companies Law is the fact that due to the financial state of the Company, the acting directors receive minimal compensation while they deal with a greater exposure to complaints relating to their fiduciary duties, which are duties of directors set under the Companies Law and the Israeli case law. Although the Companies Law does not require audit committee approval for the Merger, if the Company is required to obtain such committee approval, the Company may not be able to do so.

In addition, the Company’s Articles of Association (“Articles”) provide under Article 4.2 that the number of the directors on the Board shall not be fewer than five. Article 4.2.11 provides that if the number of directors falls below the minimum number, the remaining directors shall be entitled to act solely in order to (i) fill in the vacant position, (ii) in order to convene a general meeting of the Company’s shareholders or (iii) act to manage the Company’s affairs solely in matters that cannot be delayed.

Failure to complete the Merger will require us to repay the loan provided by the Parent and the loan provided to us by U-Back, supported by a guarantee provided by the Parent.

As contemplated by the Senior Secured Convertible Loan Agreement entered into between the Parent and the Company on January 27, 2022 (“Loan Agreement”), attached as Annex B to this Proxy Statement, and described in the Company’s Current Report on Form 8-K filed on January 31, 2022, the Parent extended a loan to the Company in the amount of $5,500,000 (the “Loan”). The Loan is subject to 10% interest per year, and the accumulated interest and value added tax, if any, is payable quarterly commencing on April 1, 2022. The Loan matures on the second anniversary of the closing of the Loan Agreement and may not be prepaid by the Company. At any time after the earlier of (i) an Event of Default (as defined under the Loan Agreement) or (ii) the completion of the Merger Agreement, and prior to the repayment of the Loan, the Parent is entitled, at its sole discretion, to convert the Loan into ordinary shares of the Company at a price per share equals to $0.043. Failure to complete the Merger could either create dilution to the existing shareholders due to the Parent’s conversion of the Loan into ordinary shares while also making the Parent a controlling shareholder in the Company, or, if not converted, will require the repayment of the Loan. In addition, on March 1, 2022, the Parent provided U-Bank a guarantee for the repayment of the U-Bank Loan. Failure to complete the Merger will lead to a requirement for the repayment of the U-Bank Loan. In any event where the Company will be required to repay the Loan or the U-Bank Loan, the Company will need to either raise additional funds, which may be difficult considering the Company’s inability to raise funds without the prior written approval of the Parent unless the Merger Agreement is terminated, as stipulated under the Merger Agreement and the Loan Agreement, and further considering the circumstances. Failure to raise funds may lead to difficulties paying suppliers and service providers of the Company as well as may hamper the repayment of loans (including the Loan) and any other debt incurred towards the Parent, and may, eventually, lead to either a creditor approaching the Israeli court petitioning to declare the Company insolvent in accordance with the Insolvency Law, or require the Company to file such petition.

Our obligation to pay a termination fee or reimburse Parent’s expenses under certain circumstances and the restrictions on our ability to solicit or engage in negotiations with respect to other acquisition proposals may discourage other transactions that may be favorable to our shareholders.

Until the Merger is completed or the Merger Agreement is terminated, with limited exceptions, the Merger Agreement prohibits us from entering into, soliciting or engaging in negotiations with respect to acquisition proposals or other business combinations. In certain circumstances, OTI is required to pay the Parent a termination fee of $1,500,000, as described in the section of this Proxy Statement captioned “The Merger Agreement -Termination Fee Payable by the Company”. Furthermore, non-completion of the Merger would be considered an “event of default” under the Loan Agreement, which can result in either the Parent’s requirement for an immediate repayment of the Loan, or an increase of the interest on the Loan amount to 16% interest, at the Parent’s sole discretion.

If the Merger is not consummated by July 1, 2022, the Parent may choose to terminate the transaction contemplated by the Merger Agreement under certain circumstances.

The Merger is subject to the satisfaction or waiver of certain closing conditions described under “The Merger Agreement-Conditions to the Merger” beginning on page 58 of this Proxy Statement and set forth in the Merger Agreement. The fulfillment of certain of these conditions is beyond our control, such as the receipt of shareholder approval of the Merger by our shareholders. If the Merger has not been completed by the termination date, the Parent may terminate the Merger Agreement, except that the right to terminate the Merger Agreement in this circumstance will not be available to the Parent if its material breach of the Merger Agreement has been the principal cause of or resulted in the failure of the Merger to occur on or before such date and such action or failure constitutes a breach of the Merger Agreement.

If we experience significant delays in completing the Merger, we may need to seek additional capital to finance the business.

As agreed under the Term Sheet, the Parent has provided the Company with the Loan, while stating that additional loans may be provided, provided a guarantee to U-Bank for the U-Bank Loan and further assisted the Company by providing certain suppliers of the Company with guarantees for the purpose of ensuring that the Company is able to operate its business. If we experience significant delays in completing the Merger, we may be in default under the Loan Agreement which may lead to the Parent’s requirement for an immediate repayment of the Loan as well as its unwillingness to further support the Company and therefore, we may need to seek additional capital to finance the Company and its operations and for the possible repayment of the Loan, which additional capital may not be available when needed on acceptable terms, or at all. The failure to obtain such additional capital may have a material adverse effect on the Company and on our ability to complete the Merger.

Failure to meet the Standards for Continued Qualification for the OTCQX International Tier as per the OTCQX Rules for International Companies could result in moving the Company’s securities to the OTC Pink and eventually cause limited liquidity and a lower price per share.

On February 16, 2022, the Company received a notice from the OTC Markets Group stating that the Company has failed to meet the standards for continued qualification for the quotation of the Company’s shares on the OTC Markets, as its per share minimum bid price was lower than $0.10 and its market capitalization has stayed below $5,000,000 for more than 30 consecutive days. The Company was given a cure period of 180 days during which the Company should meet the applicable criteria for 10 consecutive trading days. In the event where such criteria are not met during the cure period, the Company’s securities will be moved from the OTCQX International to OTC Pink, which might result in a more limited liquidity and price of our securities, and might make it harder for you to sell your shares. You may be unable to sell your securities unless a market can be established or sustained.

SUMMARY

This summary highlights selected information from this document and may not contain all of the information that is important to you. To understand the Merger fully, you should read carefully this entire document, its annexes and the documents we refer to. See “Where You Can Find More Information” beginning on page 67 of this Proxy Statement. The Merger Agreement is attached as Annex A to this Proxy Statement and is incorporated by reference into this Proxy Statement. We encourage you to read it in its entirety, as it is the most important legal document that governs the Merger.

Parties Involved in the Merger

On Track Innovations Ltd.

OTI is a developer of contactless payment solutions, Near Field Communication (NFC) technology based, for the unattended market. Since 1990, we have been providing systems, devices and services to operators and integrators with solutions and components that are simple to implement. To date, OTI has deployed over one million payment solutions to our focused unattended markets: self-service kiosk, micro-markets and vending machines, entertainment and gaming, ATM, Mass Transit Ticketing Validation, and fuel payments. OTI operates through regional offices, supporting clients and payment industry partners with its unique contactless payment solutions. OTI’s ordinary shares are currently quoted on the OTCQX® market, or OTCQX, under the symbol OTIVF.

Nayax Ltd.

Nayax Ltd. is a global commerce enablement and payments platform designed to help merchants scale their business. Nayax offers a complete solution including localized cashless payment acceptance, management suite, and consumer engagement tools, enabling merchants to conduct commerce anywhere, at any time. With foundations and global leadership in serving unattended retail, Nayax has transformed into a comprehensive solution focused on its customers’ growth across channels. Today, Nayax has 8 global offices, over 550 employees, connections to more than 80 merchant acquirer and payment method integrations and is a recognized payment facilitator worldwide. Nayax’s mission is to improve our customers’ revenue potential and operational efficiency. For more information, please visit www.nayax.com, which is not incorporated into this Proxy Statement.

OTI Merger Sub Ltd.

OTI Merger Sub Ltd. is a wholly owned direct subsidiary of Nayax Ltd. and was formed on March 7, 2022, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement.

See “The Merger Proposal-Parties Involved in the Merger” beginning on page 26 of this Proxy Statement.

OTI’s Reasons for Approval of the Merger; Recommendation of the Board of Directors

After careful consideration, the Board has:

Accordingly, the Board recommends that you vote “FOR” the Merger Proposal.

In reaching its decision to approve the Merger Proposal and to recommend that OTI’s shareholders vote to approve the Merger Proposal, OTI’s Board consulted with OTI’s management and its legal advisors and considered a number of strategic, financial and other factors, including, among others, the desire to prevent the Company from entering into a state of insolvency and the very limited time frame in which such preventative actions should be taken, as described under “The Merger-Reasons for Approval of the Merger; Recommendation of the Board of Directors” beginning on page 35 of this Proxy Statement.

Interests of Certain Persons; Share Ownership of OTI’s Directors and Executive Officers

When considering the recommendation by OTI’s Board to vote “FOR” the Merger Proposal, you should be aware that executive officers and directors of OTI have interests in the Merger that may be perceived as different from, or in addition to, your interests, including:

If the Merger Proposal is approved, the ordinary shares held by our directors and executive officers will be treated in the same manner as outstanding ordinary shares held by all other shareholders. For more information, see the sections of this Proxy Statement captioned “The Merger-Interests of Certain of OTI’s Executive Officers and Directors in the Merger” beginning on page 38 of this Proxy Statement and “The Merger-Effects of the Merger on Company Share Plans and Warrants” beginning on page 39 of this Proxy Statement.

As of the Record Date for the shareholder meeting, the current directors and executive officers of OTI, as a group, beneficially owned in the aggregate approximately 4,620,496 ordinary shares of the Company, constituting 6.1% of the outstanding ordinary shares, not including options as these are out of the money.

See “Share Ownership of Certain Beneficial Owners, Directors and Executive Officers of OTI” beginning on page 65 of this Proxy Statement.

As noted above, our executive officers will receive certain compensation and realize value on equity held in connection with the Merger. The Company’s board was aware of and considered these interests, among other matters, in reaching its decisions to (i) approve the Merger, (ii) approve and declare advisable the Merger Agreement, and (iii) resolve to recommend the adoption of the Merger Agreement by OTI shareholders. See “Non-Binding, Advisory Vote on Transaction-Related Compensation for OTI’s Executive Officers” beginning on page 62 of this Proxy Statement.

The Merger Agreement

The Merger Agreement is attached as Annex A to this Proxy Statement. You should read the Merger Agreement carefully in its entirety. It is the most important legal document governing the Merger. See “The Merger Agreement” beginning on page 48 of this Proxy Statement.

The Loan Agreement

The Loan Agreement is attached as Annex B to this Proxy Statement. You should read the Loan Agreement carefully in its entirety. The Loan Agreement was entered into by the Parent and the Company to facilitate the Loan to the Company, as stipulated under the Term Sheet. The Merger Agreement incorporates certain provisions of the Loan Agreement and therefore the two should be read together for a complete understanding of the Merger and its stages. See “The Merger-Background of the Merger” beginning on page 26 of this Proxy Statement.

Event of Default under the Loan Agreement

Under the terms of the Loan Agreement, the Company is required to either (i) immediately repay the Parent the Loan or (ii) the annual interest rate on the Loan amount shall be increased to 16%, at the Parent’s sole discretion, under certain circumstances detailed therein, including the following circumstances:

Structure of the Merger

The Merger is being effected as a merger between OTI and Merger Sub under the Companies Law. In the Merger, Merger Sub, a wholly-owned subsidiary of the Parent, will be merged with and into OTI, with OTI surviving the Merger and becoming a wholly-owned subsidiary of the Parent. See “The Merger Agreement” beginning on page 48 of this Proxy Statement.

Merger Consideration

At the Effective Time (as such term is defined under the Merger Agreement) of the Merger, by virtue of the Merger and without any additional action on the part of OTI, the Parent, Merger Sub or the holders of any of the ordinary shares, each ordinary holder of a certificate (or evidence of shares in book-entry form) which immediately prior to the Effective Time represented any of the Company’s ordinary shares (other than ordinary shares held in the treasury of OTI, reserved for future grants under the Company share plans or owned by the Parent or any direct or indirect wholly-owned subsidiary of OTI or of the Parent (if any), which will be canceled and retired without any conversion or consideration paid in respect thereof and will cease to exist), shall cease to have any rights with respect thereto, except the right to receive its pro rata portion of the Merger Consideration per each ordinary share, in cash, without interest and less applicable withholding taxes.

See “The Merger-Effects of the Merger on Our Ordinary Shares” beginning on page 39 of this Proxy Statement and “The Merger Agreement-Merger Consideration” beginning on page 49 of this Proxy Statement.

Treatment of Options and Restricted Shares Outstanding under our Company Equity and Share Plans

At the Effective Time, each option shall be terminated for no cost, without receiving consent from the holder of such option.

At the Effective Time, each vested and unvested restricted share will be accelerated and such shares shall participate in the Merger, without any increase to the Merger Consideration.

Voting and Support Agreement

Jerry L. Ivy Jr. Descendants’ Trust (“Ivy”), the Company’s controlling shareholder, and its affiliates, who collectively hold approximately 34.8% of the outstanding ordinary shares of the Company on the date of the Merger Agreement, have entered into a voting and support agreement with the Parent, pursuant to which Ivy agreed to vote, or cause his affiliates to vote, its ordinary shares:

See “The Voting and Support Agreement.”

The Meeting

Date, Time, Place and Agenda. The shareholder meeting is scheduled to be held at the offices of the Company’s legal counsel, Gornitzky & Co., located at Vitania Tel Aviv Tower, 20 Haharash St., Tel Aviv, Israel 6761310, on May 10, 2022 at 10:00 AM (Israel time). The meeting is being held for the purpose of considering a proposal to approve the acquisition of OTI by the Parent, including approval of the Merger Agreement, the Merger, the Merger Consideration, and all other transactions and arrangements contemplated under the Merger Agreement.

Other than the Merger Proposal and the Advisory Proposal, we do not currently expect there to be any other matters on the agenda at the shareholder meeting; however, if any other matter is properly presented at the shareholder meeting, including voting on the adjournment or postponement of the shareholder meeting, the persons named in the enclosed proxy card will vote upon such matters in accordance with their discretion.

Record Date. OTI has fixed April 4, 2022 as the record date for the shareholder meeting. If you owned ordinary shares at the close of business on the record date, you are entitled to vote on matters that come before the shareholder meeting. There are 75,775,393 ordinary shares entitled to be voted at the shareholder meeting.

Required Vote. Provided that a quorum is present, the adoption and approval of the Merger Proposal at the shareholder meeting requires the affirmative vote of the holders of 75% of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), excluding abstentions and broker non-votes and excluding any votes of our ordinary shares held by the Parent, Merger Sub or by any person holding at least 25% of the means of control of the Parent or Merger Sub, or any person or entity acting on behalf of the Parent, Merger Sub or any family member of, or entity controlled by a Merger Sub Affiliate. Approval of the Advisory Proposal and the Adjournment Proposal require each the affirmative vote of a majority of the votes cast thereon.

In order for your vote to be counted with respect to the Merger Proposal, you must affirm on the proxy card or voting instruction form that you are not a Merger Sub Affiliate. If you do not so affirm, your vote will not count towards the tally for the Merger Proposal. See “The Extraordinary General Meeting - Required Vote for the Merger Proposal” beginning on page 23 of this Proxy Statement.

Conditions to the Merger

The parties will complete the Merger only if the parties satisfy or waive several conditions. The conditions include, among others:

Conditions to Each Party’s Obligations.

Conditions to Parent’s and Merger Sub’s Obligations.

Conditions to OTI’s Obligations.

See “The Merger Agreement-Conditions to the Closing of the Merger” beginning on page 58 of this Proxy Statement.

Termination of the Merger Agreement

The Parent and OTI can agree to terminate the Merger Agreement by mutual written consent at any time prior to the Effective Time of the Merger. In addition, the Parent can terminate the Merger Agreement if any of the following, among other things, occurs:

In addition, the Company can terminate the Merger Agreement if the Merger Agreement was voted against, or if the required majority was not obtained for the approval of the Merger in this extraordinary meeting of shareholders.

See “The Merger Agreement-Termination of the Merger Agreement” beginning on page 59 of this Proxy Statement.

No Solicitation of Acquisition Proposals

The Merger Agreement contains detailed provisions restricting OTI’s right to solicit acquisition proposals.

See “The Merger-Reasons for the Merger” beginning on page 35 of this Proxy Statement.

Termination Fees

The Company is required to pay the Parent a termination fee of $1,500,000, if the Merger Agreement is terminated under any of the following circumstances:

See “The Merger Agreement- Termination Fee Payable by the Company” beginning on page 60 of this Proxy Statement.

Expenses

Except as otherwise provided in the Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such fees and expenses.

See “The Merger Agreement-Fees and Expenses” beginning on page 60 of this Proxy Statement.

Absence of Appraisal Rights

Under Israeli law, holders of ordinary shares are not entitled to statutory appraisal rights in connection with the Merger.

Regulatory Approvals

See “The Merger-Regulatory Matters” beginning on page 46 of this Proxy Statement.

Material U.S. Federal and Israeli Income Tax Consequences

The receipt by a U.S. holder of cash in exchange for the OTI ordinary shares in connection with the Merger will be a taxable transaction for U.S. federal income tax purposes. Generally, a U.S. holder will recognize gain or loss equal to the difference between the amount of cash it receives in connection with the Merger and its aggregate adjusted tax basis in the OTI ordinary shares that it exchanges therefor.

The receipt of cash in exchange for the OTI ordinary shares in connection with the Merger is generally a taxable transaction for Israeli income tax purposes and requires the withholding of applicable Israeli tax at source. However, certain exemptions from Israeli tax withholding may be applicable to non-Israeli holders of our ordinary shares under certain provisions of the Israeli Income Tax Ordinance (New Version) 1961, as amended, and we intend to submit an application to the ITA in order to clarify the withholding mechanism. We cannot assure you that our application will be accepted.

See “The Merger-Material U.S. Federal and Israeli Income Tax Consequences” for a summary discussion of material U.S. federal income tax consequences of the Merger to U.S. holders and material Israeli tax consequences in connection with the Merger. You should consult your tax advisor about the particular tax consequences of the Merger to you.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements. Forward-looking statements are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements contained in the sections entitled “Questions and Answers about the Shareholder Meeting and the Merger” beginning on page 1 of this Proxy Statement, “Summary” beginning on page 12 of this Proxy Statement and “The Merger” beginning on page 26 of this Proxy Statement, and in statements containing words such as “believes”, “estimates”, “anticipates”, “intends”, “continues”, “contemplates”, “expects”, “may”, “will”, “could”, “should” or “would” or other similar words or phrases. These statements, which are based on information currently available to us, are not guarantees and involve risks and uncertainties that could cause actual results to materially differ from those expressed in, or implied by, these statements. These forward-looking statements speak only as of the date on which the statements were made and we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statement included in this document or elsewhere. In addition to other factors and matters contained in this document, these statements are subject to risks, uncertainties, and other factors, including, among others:

Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by the forward-looking statements in this document. The business, financial condition or results of operations of OTI could be materially adversely affected by any of these factors. OTI does not undertake any obligation to revise or update any forward-looking statements to reflect any event or circumstance that arises after the date of this document, except as required by law. The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document.

MARKET PRICE AND DIVIDEND DATA

Markets

Since October 31, 2019, our ordinary shares, formerly listed on the Nasdaq Capital Market, have been quoted on the OTCQX Market under the symbol “OTIVF”.

Dividends

We have never declared or paid any cash dividends on our ordinary shares. We have retained any future earnings to finance operations and to expand our business and, therefore, may not pay any cash dividends on ordinary shares in the future.

THE EXTRAORDINARY GENERAL MEETING

General; Date; Time and Place

This document is furnished in connection with the solicitation of proxies by OTI’s Board for use at the shareholder meeting. The shareholder meeting will be held at the principal business office of Gornitzky & Co., located at Vitania Tel Aviv Tower, 20 Haharash St., Tel Aviv, Israel 6761310, on May 10, 2022 at 10:00 AM (Israel time), unless it is postponed or adjourned.

Purpose of the Shareholder Meeting

At the shareholder meeting you will be asked to consider and vote upon a proposal to approve the acquisition of OTI by the Parent, including the (i) approval of the Merger Proposal: (a) the Merger Agreement; (b) the Merger on the terms and subject to the conditions set forth in the Merger Agreement and in accordance with Sections 314-327 of the Companies Law, following which Merger Sub will cease to exist as a separate legal entity and OTI will become a wholly-owned subsidiary of the Parent; (c) the consideration to be received by the shareholders of OTI in the Merger, consisting of $4,500,000 in the aggregate, in cash, without interest and less any applicable withholding taxes, for each ordinary share owned immediately prior to the Effective Time; and (d) all other transactions and arrangements contemplated by the Merger Agreement; (ii) approval on a non-binding, advisory basis, of certain compensation that may be paid or become payable to OTI’s executive officers and/or directors in connection with the Merger and the agreements and understandings pursuant to which such compensation may be paid or become payable which we refer to as the Advisory Proposal; and (iii) approval of a proposal to adjourn the extraordinary general meeting to a later date or dates if necessary to solicit additional proxies if there are insufficient votes to approve the Merger at the time of the extraordinary general meeting, which we refer to as the Adjournment Proposal.

In addition to the Merger Proposal, the Advisory Proposal and the Adjournment Proposal, you also will be asked to consider and, as applicable, vote upon, any other business that may properly come before the shareholder meeting or any adjournment or postponement of the shareholder meeting, including voting on the adjournment or postponement of such meetings. OTI currently does not contemplate that any other matters will be considered at the shareholder meeting.

Shareholders Entitled to Vote; Record Date

Shareholders of record who held the OTI ordinary shares at the close of business on April 4, 2022 (the “Record Date”) are entitled to vote at the shareholder meeting. In addition, shareholders who, as of the Record Date, held ordinary shares through a bank, broker or other nominee which is a shareholder of record of OTI or which appears in the participant list of a securities depository, are considered to be beneficial owners of shares held in street name. These proxy materials are being forwarded to beneficial owners by their bank, broker or other nominee that is considered the holder of record. Beneficial owners have the right to direct how their shares should be voted and are also invited to attend the shareholder meeting, but may not actually vote their shares in person at the meeting unless obtaining, prior to the meeting, a legal proxy from such bank, broker or other nominee that authorizes them to vote their shares.

As of the Record Date, there were 75,775,393 ordinary shares issued, outstanding and entitled to vote at the shareholder meeting.

Recommendation of the Board of Directors

After careful consideration, the Board has:

ACCORDINGLY, THE OTI BOARD UNANIMOUSLY RECOMMENDS THAT OTI’S SHAREHOLDERS VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT, “FOR” THE NON-BINDING, ADVISORY VOTE ON CERTAIN COMPENSATION ARRANGEMENTS AND “FOR” THE ADJOURNMENT PROPOSAL.

Quorum and Voting

Pursuant to OTI’s amended and restated articles of association, the quorum required for the shareholder meeting consists of at least two shareholders present, in person or by proxy, who hold or represent in the aggregate at least 33 1/3% of the voting power in OTI. If a quorum is not present within 30 minutes from the time appointed for the shareholder meeting, the shareholder meeting will stand adjourned either (a) to the same day in the next week, at the same time and place, unless such day falls on a statutory holiday (either in Israel or in the U.S.), in which case the meeting will be adjourned to the first business day afterwards which is not a statutory holiday, (b) to such later day and at such time and place as indicated in the notice of such meeting, or (c) to such later day than the date pursuant to clause (a) above if the Company has sent to the shareholders a prior notice of no less than 72 hours before the date set for the postponed meeting. At the adjourned meeting, any matter that was to be addressed during the shareholder meeting will be addressed, provided at least two shareholders are present in person or by proxy, regardless of the voting power in OTI held by them.

If you are a beneficial owner of shares and do not specify how you want to vote on your proxy card, your bank, broker or other nominee will not be permitted to instruct the depositary to cast a vote with respect to the Merger Proposal or the Advisory Proposal. Banks, brokers and other nominees who hold shares in “street name” for clients typically have authority to vote on “routine” proposals even when they have not received instructions from beneficial owners, absent specific instructions from the beneficial owner of the ordinary shares to the contrary. However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of non-routine matters, such as adoption and approval of a merger and the proposal to approve, on a non-binding, advisory basis, the merger-related executive compensation. On the proposals, if a beneficial owner does not provide instructions to his, her or its bank, broker or other nominee, the ordinary shares will not be voted (referred to as a “broker non-vote”). Broker non-votes and abstentions will be treated as neither votes “for” nor “against” any matter, although they will be counted as present in determining whether a quorum is present. If your ordinary shares are held of record by a bank, broker, or other nominee, we urge you to give instructions to your bank, broker, or other nominee as to how your ordinary shares should be voted so that you thereby participate in the voting on the proposals.

Each ordinary share is entitled to one vote on the proposals or any other item that comes before the shareholder meeting. If two or more persons are registered as joint holders of any ordinary share, the right to attend the shareholder meeting will be conferred upon each of such joint owners, but the right to vote at the shareholder meeting and/or the right to be counted as part of the quorum thereat will be conferred exclusively upon the more senior among the joint holders attending the shareholder meeting, in person or by proxy. For this purpose, seniority will be determined by the order in which the names appear in OTI’s shareholder register.

Required Vote for the Merger Proposal

Provided that a quorum is present, the adoption and approval of the Merger Proposal at the shareholder meeting requires the affirmative vote of the holders of 75% of our ordinary shares present, in person or by proxy, at the meeting (or any adjournment or postponement thereof), excluding abstentions and broker non-votes.

Pursuant to Section 320(c) and Section 327 to the Companies Law, the approval of the Merger Proposal requires the affirmative vote of the holders of 75% of ordinary shares present, in person or by proxy, at the meeting where a quorum is present and voting on the proposal, not including abstentions and broker non-votes and excluding any votes of our ordinary shares held by the Parent, Merger Sub or by any person holding at least 25% of the means of control of the Parent or Merger Sub, or any person or entity acting on behalf of the Parent, Merger Sub or any family member of, or entity controlled by a Merger Sub Affiliate.

In order for your vote to be counted, you must affirm on the proxy card or voting instruction form that you are not a Merger Sub Affiliate. If you do not so affirm, your vote will not count towards the tally for the merger proposal.

The Required Vote for the Advisory Proposal and the Adjournment Proposal

The proposal to approve, on a non-binding, advisory basis, the merger-related executive compensation, as well as the proposal to approve the Adjournment Proposal, requires the affirmative vote of a majority of votes cast thereon. For purposes of each such proposal, if your ordinary shares are present at the special meeting but are not voted on this proposal, or if you have given a proxy and abstained on this proposal, or if you fail to submit a proxy or to vote in person at the special meeting, as applicable, the ordinary shares held by you or your bank, brokerage firm or other nominee will not be counted in respect of, and will not have an effect on, the proposal to approve, on a non-binding, advisory basis, the merger-related executive compensation or the Adjournment Proposal, as the case may be.

Voting Results

The preliminary voting results will be announced at the shareholder meeting (when completed, if such meeting is adjourned). The final voting results will be tallied by Broadridge and will be published following the shareholder meeting on a Current Report Form 8-K filed with the SEC.

Voting of Proxies

If you are a record shareholder, your signed proxy card must be received by the Company at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or at the Company’s registered office, by 10:00 a.m. (Israel time) on May 7, 2022, or 3:00 a.m. (Eastern time) on May 7, 2022, to be counted towards the tally of ordinary shares so voted. In the alternative, a proxy card may be presented in person to the chairman of the shareholder meeting at such meeting in order to be counted towards the tally of votes at the meeting. If you are a record shareholder and attend the shareholder meeting, you may vote in person, and if you so vote, your proxy will not be used.

Even if you plan to attend the shareholder meeting, if you hold your ordinary shares in your own name as the shareholder of record, please vote your ordinary shares using a proxy. DO NOT enclose or return your share certificate(s) with your proxy. Properly executed proxies that do not contain voting instructions will not be voted in respect of the proposals.

ON TRACK INNOVATIONS LTD.Shares Held in Street Name. If your ordinary shares are held in a stock brokerage account or by a bank, broker or other nominee, you are considered the “beneficial holder” of the ordinary shares held for you in what is known as “street name.” If that is the case, you may instruct your bank, broker or other nominee how to vote by completing and returning the proxy card provided by your bank, broker or other nominee. If you plan to attend the shareholder meeting, you will need a proxy from your bank, broker or other nominee in order to be given a ballot to vote the ordinary shares.

Voting through Agent

A shareholder may appoint a voting agent to vote in his or her place by way of signing a writ of appointment in accordance with the Company’s Articles of Association.

Revoking or Changing Your Vote

Shares Registered in Your Name. Any proxy you give pursuant to this solicitation may be revoked by you at any time before it is voted. Proxies may be revoked by one of three ways:

Any written notice of revocation or subsequent proxy submitted to us (other than at the shareholder meeting) should be delivered to our principal business office, located at 5 Hatnufa St., Yokneam Industrial Zone, Yokneam, Israel 2069200, to the attention of Assaf Cohen, or via email to assaf@otiglobal.com, in accordance with the required timing described in the bullet-points above.

Shares Held in Street Name. If your ordinary shares are held in a stock brokerage account or by a bank or other nominee, in order to change your voting instructions, you must follow the directions from your broker, bank or other nominee to change those instructions.

The Proxy

Amir Eilam and Assaf Cohen will serve as the proxy for shareholders of OTI under the enclosed form of proxy with respect to the matters to be voted upon at the shareholder meeting.

Share Ownership of OTI Directors and Executive Officers

As of the Record Date for the shareholder meeting, directors and executive officers of OTI beneficially owned, in the aggregate, approximately 6.1% of the ordinary shares outstanding.

Solicitation of Proxies

In addition to solicitation by mail, directors, officers and employees of OTI may solicit proxies for the shareholder meeting from OTI shareholders personally or by telephone, facsimile and other electronic means without compensation other than reimbursement for their actual expenses. Arrangements also will be made with bankers, brokers and other nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of ordinary shares held of record by those persons, and OTI will, if requested, reimburse the record holders for their reasonable out-of-pocket expenses in so doing. In addition, we have engaged Alliance Advisors, LLC. to assist in the solicitation of proxies and to provide related informational support, for a fee of $10,000 plus reimbursement for reasonable expenses.

PLEASE DO NOT SEND IN ANY OTI SHARE CERTIFICATES WITH YOUR PROXY CARDS.

Request to Include Item on the Agenda

A shareholder holding, or shareholders holding together, at least one percent of the voting rights represented at the meeting are entitled to request that the Board of Directors include an item on the agenda, provided the item is suitable to be dealt with at the meeting. Such request must have been submitted to the Company within 7 days after the publication of the notice of the meeting.

Attending the OTI Shareholder Meeting

Only OTI shareholders, including joint holders, who held shares of record as of the close of business on April 4, 2022, and other persons holding valid proxies for the shareholder meeting are entitled to attend the shareholder meeting. All shareholders and their proxies should be prepared to present photo identification. In addition, if you are a record holder, your name is subject to verification against the list of record holders on the record date prior to being admitted to the shareholder meeting. OTI shareholders who are not record holders but hold shares through a bank, broker or other nominee in “street name” should be prepared to provide proof of beneficial ownership on the record date, such as a recent account statement prior to April 4, 2022, or similar evidence of ownership. A “street name” holder who wishes to vote his, her or its ordinary shares at the shareholder meeting will furthermore need to present a signed, legal proxy from the bank, broker or other nominee through which the ordinary shares are held. If you do not provide photo identification or comply with the other procedures outlined above upon request, you will not be admitted to the shareholder meeting.

Contact for Questions and Assistance in Voting

If you have a question about the Merger or how to vote or revoke a proxy you should contact:

Alliance Advisors, LLC

200 Broadacres Drive, 3rd Floor

Bloomfield, New Jersey 07003

Shareholders Call Toll Free: 844-557-9028

or

Assaf Cohen

5 Hatnufa St.,

Yokneam Industrial Zone,

Yokneam, Israel 2069200

assaf@otiglobal.com

Other Matters

OTI is not aware of any other business to be acted upon at the shareholder meeting. If, however, other matters are properly brought before the shareholder meeting or any adjournment or postponement of the shareholder meeting, the persons named as proxy holders will each have discretion to act on those matters, including to vote in their discretion to adjourn or postpone the shareholder meeting or any adjournment or postponement thereof.

THE MERGER PROPOSAL

PARTIES INVOLVED IN THE MERGER

On Track Innovations Ltd.

5 Hatnufa St., Yokneam Industrial Zone

Yokneam, Israel 2069200

PROXY STATEMENTOTI is a developer of contactless payment solutions, NFC technology based, for the unattended market. Since 1990, we have been providing systems, devices and services to operators and integrators with solutions and components that are simple to implement. To date, OTI has deployed over one million payment solutions to our focused unattended markets: self-service kiosk, micro-markets and vending machines, entertainment and gaming, ATM, Mass Transit Ticketing Validation, and fuel payments. OTI operates through regional offices, supporting clients and payment industry partners with its unique contactless payment solutions. OTI’s ordinary shares are currently quoted on the OTCQX under the symbol OTIVF.

INTRODUCTIONNayax Ltd.

3 Arik Einstein St.

Herzliya, Israel 465907

Nayax Ltd. is a global commerce enablement and payments platform designed to help merchants scale their business. Nayax offers a complete solution including localized cashless payment acceptance, management suite, and consumer engagement tools, enabling merchants to conduct commerce anywhere, at any time. With foundations and global leadership in serving unattended retail, Nayax has transformed into a comprehensive solution focused on its customers’ growth across channels. Today, Nayax has 8 global offices, over 550 employees, connections to more than 80 merchant acquirer and payment method integrations and is a recognized payment facilitator worldwide. Nayax’s mission is to improve our customers’ revenue potential and operational efficiency. For more information, please visit www.nayax.com.

This proxy statementOTI Merger Sub Ltd.

3 Arik Einstein St.

Herzliya, Israel 465907

OTI Merger Sub Ltd. is a wholly owned direct subsidiary of Nayax Ltd. and the accompanying proxy card are being sent by On Track Innovations Ltd. (the “Company”) to the holders of record of the Company’s outstanding ordinary shareswas formed on October 25, 2021 (the “Record Date”). We intend to first mail this proxy statement and our annual report to shareholdersMarch 7, 2022, solely for the fiscal year ended December 31, 2020, as well aspurpose of engaging in the enclosed proxy card, on or about [●], 2021, to all shareholders entitled to vote at the Annual Meeting. The Record Date has been fixedtransactions contemplated by the Company’s Board of Directors (the “Board”) as described hereunder. The accompanying proxy is being solicited by the Board for use at our 2021 Annual General Meeting (the “Meeting”), to be held on Thursday, December 2, 2021, at 10:00 A.M. Israel time, at our offices, 5 Hatnufa St., Yokneam Industrial Zone, Yokneam, Israel, 2069200Merger Agreement and athas not engaged in any adjournment or postponement thereof; however, we are actively monitoring developments with regard to the coronavirus, or COVID-19, and it is possible that the Meeting may be held solely by means of remote communication. In the event it is not possible or advisable to hold the Meeting in person, we will announce alternative arrangements for the Meeting as promptly as practicable. The cost of solicitation of proxies will be borne by the Company. Directors, officers and employees of the Company may also assist in the solicitation of proxies by mail, telephone, telefax, in person or otherwise, without additional compensation. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting materials to the owners of the Ordinary Shares held in their names and the Company will reimburse them for their reasonable out-of-pocket expenses incurredbusiness activities other than in connection with the distribution of such proxy materials.transactions contemplated by the Merger Agreement.

THE MERGER

The Board has fixed October 25, 2021 as the Record Date for the Meeting. Only shareholders of record on the Record Date are entitled to notice of and to vote at the Meeting or any adjournment or postponement thereof. On October 25, 2021, there were [●] outstanding ordinary sharesBackground of the Company (“Ordinary SharesMerger”). Each Ordinary Share is entitled to one vote per share. Subject to the provisions of Israeli law and pursuant to the Amended and Restated Articles of Association of the Company (the “Articles”), no business may be transacted at any shareholder meeting unless a quorum is present when the meeting begins. The quorum required for a meeting of shareholders is at least two shareholders present in person or by proxy, holding in the aggregate at least one third (33 1/3%) of the issued and outstanding Ordinary Shares as of the Record Date (the “Quorum”). Abstentions will not be counted with respect to the items below, but will be counted in determining if a Quorum is present. Broker non-votes, as defined below, are counted in determining if a Quorum is present.

All Ordinary Shares represented in person or by valid proxies received by the Company prior to the Cut-Off Date (as defined below), and not revoked, will be voted as specified in the proxies or voting instructions. Votes that are left blank will be voted as recommended by the Board. With regard to other matters that may properly come before the Meeting, votes will be cast at the discretion of the proxies.

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. In the event that a broker, bank, or other agent indicates on a proxy that it does not have discretionary authority to vote certain shares on a non-routine proposal, then those shares will be treated as broker non-votes. Because Items No. 1, 2, 3, 4, 5 and 6 in this proxy statement are non-routine proposals, your broker, bank or other agent will not be entitled to vote on these proposals without your instructions. Items No. 7 and 8 are routine proposals, so your broker, bank or other agents will be entitled to vote on that proposal without your instruction. No vote is required for Item No. 9.

Any shareholder who has submitted a proxy may revoke it at any time before it is voted, by written notice addressed to and received by our Secretary, by submitting a duly executed proxy bearing a later date, but not after the Cut-Off Date, or by electing to vote in person at the Meeting. The mere presence at the Meeting of the person appointing a proxy does not, however, revoke the appointment.

We will not be able to count a proxy card unless we receive it at our principal executive offices at 5 Hatnufa St., Yokneam Industrial Zone, Yokneam, Israel, 2069200, or at our proxy agent, Broadridge Financial Solutions Inc. at Vote Processing, c/o Broadridge, 51 Mercedes Way Edgewood, NY 11717, in the enclosed envelope, by Monday, November 29, 2021, at 10:00 A.M. Israel time, which is Monday, November 29, 2021 at 3:00 A.M. Eastern Time (“Cut-Off Date”). You may also vote by telephone or over the Internet on our proxy agent’s website at www.proxyvote.com until the Cut-Off Date by following the instructions included on the enclosed proxy card.

Our website address and our proxy agent’s website address are included several times in this proxy statement as a textual reference only, and the information in these websites is not incorporated by reference into this proxy statement.

ITEM NO. 1 - ELECTION OF DIRECTORS

Introduction

The number of our directorsfollowing is at least five and not more than ten, as provided for by our Articles. Currently we have six directors serving on our Board, with one director, Mr. Anderson, having his term expiring at the Meeting. In addition, our Board voted to appoint Ms. Hardardottir to act as director effective as of May 5, 2020, and voted to add an additional member, Mr. Uri Arazy as a director effective as of March 3, 2021. The Board has nominated Ms. Hardardottir, Mr. Arazy and Mr. Anderson, who currently serve as directors to be our Director Nominees. Shareholders will be asked to elect eachsummary of the Director Nomineesmaterial events leading up to hold office untilthe execution of the Merger Agreement. Throughout the period described below, prior to and in between our next general meeting following three years from their election, or, if Item No. 5 below is approved, until the Company’s next annual meeting of shareholders. Further, in Item No. 2, we are proposing to elect an external director to replace Ms. Marks, who is stepping down as an external director, effective December 1, 2021.

We have been advised by the Director Nominees that they are willing to be named as nominees and are willing to serve as directors, if elected. If some unexpected occurrence should make necessary, in the discretionformal meetings of the Board, the substitution of some other person for the nominee, it is the intention of the persons named in the proxy to vote for the election of such other person as may be designated by the Board.

Furthermore, as required by the Israeli Companies Law of 1999-5759, as amended (the “Companies Law”), the Director Nominees have declared in writing that they possess the requisite skills and expertise, as well as sufficient time, to perform their duties as directors of the Company.

The names of each current member of our Board, our executive officers, and their ages as of the Record Date, are as follows:

Information about the Board

The principal occupation, business experience and education of each nominee for election as director are set forth below.

Nominees for Election

William C. Anderson III was elected in 2014 as a director and was reelected in November 2017 to serve until the general meeting of shareholders that will take place three years following his reelection. Mr. Anderson is the founder of AmpThink LLC, a wireless solutions company focused on building large, complex, wireless networks employing different technologies, and has been acting as the President of AmpThink LLC since its incorporation in 2011. Prior to AmpThink, Mr. Anderson was co-founder of Genesta, a wireless systems integrator specializing in the design and deployment of warehouse automation systems, where Mr. Anderson from 2000 to 2011 acted as Chief Technology Officer. Mr. Anderson holds a degree in Economics and Philosophy from Boston College and a Master’s degree in Management Science from The State University of New York.

The Company believes Mr. Anderson’s qualifications, including his years of experience in the high-tech industry and network solutions business, as well as his experience as Chief Technology Officer and President of private American companies, make him suitable to serve as a director of the Company.

Uri Arazy was appointed by the Board to serve as a director in March 2021, and until the next general meeting of shareholders of the Company, at which directors are being elected. He served in a variety of positions in Intel Corporation between 1984 and 2019. Between 2005 and 2019, Mr. Arazy served as an Investment Director of Intel Capital Israel. InAmir Eilam, the past five years, Mr. Arazy invested and served on the board of directors of technology startups including WSC Sports Technologies, Interlude, Spotinst, Moovit, Velostrata, Cloudify and Gigaspaces. Mr. Arazy holds a B.A. in Computer Science from Queens College, NY, an M.Sc. in Computer Science from Columbia University, NY, an M.B.A. from Tel Aviv University and Northwestern University and an M.A. in Security and Diplomacy from the Tel Aviv University.

The Company believes Mr. Arazy’s experience in the high-tech industry and his vast experience serving as a director make him suitable to serve as a directorcurrent Chief Executive Officer of the Company.

Sandra B. Hardardottir was appointed in May 2020 as a directorCompany, and as ChairmanAssaf Cohen, Chief Financial Officer of our Board. From 1994 to 2001, Ms. Hardardottir was the founder and Managing Director of Premier Recruitment Ltd., a recruitment company specializing inCompany, updated the construction industry, and co-founder of Premier Electrical Ltd., an electrical contractor in the commercial and industrial sectors. From 2003 to 2008, Ms. Hardardottir served initially as a Senior Business Analyst and then was promoted to Senior Executive of a national U.S. management consulting firm. From 2008 to 2012, Ms. Hardardottir held interim roles such as President and Director of Operations of companies that required short term relief to shareholders and leadership teams that faced immediate challenges requiring a shift in strategic focus and rebuilding of core competencies to align with company goals. From 2014 to 2017, Ms. Hardardottir acted as a Senior Business/Executive Analyst for Cogent Analytics, LLC, performing holistic business analysis and providing recommendations to improve performance through organizational structuring, operational efficiencies, and profit engineering. Ms. Hardardottir completed an International Finance Reporting and Controls course and holds an M.B.A. with honors from Durham University Business School in England.

The Company believes Ms. Hardardottir’s operational executive management and board experience with companies from various industrial sectors makes her suitable to serve as a director and Chairmanmembers of the Board of Directors ofon the Company.

Other Currently Serving Directors

Leonid Berkovitch has served as an External Director since April 2020. Mr. Berkovitch has nearly 30 years of experience in the smart card industry, having worked in leading technology companies in areas including telecom, e-transactionsrelevant events and digital security. From 1996 to 2004, Mr. Berkovitch served as a Senior Vice President Sales EMEA, Marketing & Product lines Director in the Test & Transactions Division of Schlumberger Limited (NYSE: SLB). From 2004 to 2006, Mr. Berkovitch served as a Business Unit Director for Axalto. From 2006 to 2011, Mr. Berkovitch served as a Managing Director Emerging Businesses for Gemalto N.V. Mr. Berkovitch joined Orange Group at the end of 2011 and served as a Vice-President Product Marketing in Viaccess-Orca (an affiliate company of Orange) until 2018. Since 2018, he has been Director IoT, Connected Home at Orange’s Corporate Unit and since the end of 2020, has taken a position of Senior Director; Connectivity at Orange Business Services. Mr. Berkovitch holds a Master of Science degree in Telecommunication Engineering from the State University of Telecommunications of Saint-Petersburg.developments.

Donna Marks has served as a director since 2015,The Company’s management team and currently qualifiesBoard actively monitor and assess developments in related industries. In addition, our management team and Board regularly consider and evaluate options for achieving the Company’s long-term strategic goals and enhancing shareholder value as an External Director under the Companies Law. Ms. Marks submitted her resignation from the Board, effective December 1, 2021. Ms. Marks is a Certified Public Accountant with a wide variety of experience serving clients in various industries over her 39 years in the practice of public accounting. Ms. Marks has servedindependent company, as a director, working at the Fuoco Group, LLC, an accounting firm between the years 2011 and 2014, while actingwell as a consultant for Fuoco Group through 2018. Priorpotential strategic alternatives to joining the Fuoco Group, Mrs. Marks was the managing partner of her own firm, Donna Marks, PA and served as a Managing Director at American Express Tax and Business Services (which merged into the international accounting firm of RSM International). Ms. Marks earned a B.A. in Business Administration degree in Accounting (magna cum laude) from the University of South Florida in 1978 and is a member of the Florida Institute of Certified Public Accountants.

Michael Shanahan has served as a director since January 2020. Mr. Shanahan has served as owner and managing partner at Shanahan Law Firm since 2006. From 1988 to 1998, Mr. Shanahan served as an associate and then partner at the Seattle, Washington law firm, Bauer Moynihan & Johnson. From 1998 to 2003, Mr. Shanahan served as Vice President of administration and general counsel for Western Pioneer, Inc., and from 2003 to 2006, as Vice President of administration and general counsel for Blue North Fisheries, Inc., both companies in the fishing industry. In addition, since 1997, Mr. Shanahan has served as an adjunct professor at the Seattle University Law School. Mr. Shanahan holds a J.D. from the Seattle University School of Law and a B.A. from the University of Washington.

Executive Officers

Yehuda Holtzman was appointed as the Company’s Chief Executive Officer in November 2019. Mr. Holtzman served from 1998 to 2011 as president of MobileAccess Ltd., a cellular technology company he co-founded and sold to Corning in 2011. Following that, Mr. Holtzman co-founded and was the Chief Executive Officer of ExploreGate Ltd., a big data/AI company, and from 2016 until 2018, he was the Chief Executive Officer of Mobilogy Inc., a provider of mobile lifecycle solutions which was acquired in 2018.

Assaf Cohen was appointed as the Company’s Chief Financial Officer in February 2018. Prior to his appointment, Mr. Cohen served as the Company’s controller and deputy Chief Financial Officer from July 2015 and oversaw the Company’s finance department in this capacity. Prior to joining the Company, Mr. Cohen was a controller at a private company, Samgal Ltd., for a year and a half and prior to that he was a senior accountant at Ernst & Young. Mr. Cohen received a B.A. in economics and accounting from the Haifa University, and he is a Certified Public Accountant in Israel.

There are no family relationships between any of our directors or executive officers.

It is proposed that the following resolution be adopted at the Meeting:

“RESOLVED, to elect each of Sandra B. Hardardottir, William C. Anderson and Uri Arazy as Directors on the Board starting on the date of the Meeting until our next general meeting.”

Required Vote

The affirmative vote of a majority of the Ordinary Shares voting on the matter is required to approve this resolution. The voting for each director shall be conducted separately. Since abstentions are not considered votes cast, they will have no impact on the outcome of this proposal. Broker non-votes will not impact the results of the vote on this proposal, but will be counted for purposes of determining whether there is a quorum.

The Board recommends a vote FOR the election of each of Sandra B. Hardardottir, William C. Anderson and Uri Arazy as Directors to the Board until our next general meeting.

ITEM NO. 2 — ELECTION OF AN EXTERNAL DIRECTOR

Background

Under the Companies Law, a public company incorporated under the laws of the State of Israel must elect at least two External Directors; therefore, the Company is subject to the requirement to elect External Directors and to comply with the audit committee and compensation committee composition requirements under the Companies Law.enhance shareholder value.

On October 9, 2021, Ms. Marks announced24, 2018, the Company received a written notice from the Nasdaq Stock Market LLC. (“Nasdaq”) indicating that shethe Company was not in compliance with the Nasdaq listing rules, as the Company’s closing bid price for its ordinary share was below $1.00 per share for more than 30 consecutive days. On October 22, 2019, and due to the Company’s continued non-compliance with the Nasdaq listing rules, the Company received a notice stating that its securities will step downbe delisted from her positionNasdaq. Following the delisting of the Company’s securities from Nasdaq, as an External Director effective December 1, 2021. Mr. Berkovitch acts as our second External Director and his term expires in April 2023.of October 31, 2019, the Company’s shares were quoted on the OTCQX Markets.

External Director Nominee

Zvi Atlas isOn December 23, 2019, in connection with OTI’s need to raise funds to operate its business, and after examination of different fund raising possibilities, including loans and other investments in equity, and after considering the difficulties in approving certain possible investments due to Mr. Jerry Ivy’s holdings in the Company, OTI entered into a nomineeshare purchase agreement (the “SPA”) with Jerry L. Ivy Jr. Descendants’ Trust (“Ivy”), Mr. William C. Anderson, then a member of OTI’s Board and currently acting as chairman of OTI’s Board, and Mr. James Scott Medford, then a member of OTI’s Board and its chairman (collectively, the “SPA Investors”), determined by the Board, after negotiations on the terms thereof, to serve as an External Directorbe in the best interest of the Company for a three year term. Mr. Atlas servedand as managing partner at Ezra Yehuda Rozenblum Internal Audit Firm (Kreston Israel) from 2019 until December 2020 when he retired. From 1997 to 2019, and again after retirement since January 2021, Mr. Atlas served as owner and Chief Executive Officer at AIM Atlas Investment Management Ltd., a private risk management consulting firm. In addition, between 2010 and 2012, Mr. Atlas served as a member of the board of directors and the audit committee of CredoRax (Malta) Ltd., a licensed private Merchant Acquiring Bank. Mr. Atlas holds an M.B.A. in Finance from the Tel Aviv University, a B.Sc. in Industrial Engineering from the Tel Aviv University and a Certification of Tax and Accounting Consultant by the Ministry of Finance of Israel.

The Company believes that Mr. Atlas’ professional and corporate experience, as well as his knowledge and familiarity with corporate finance and accounting, marketing, and product management, make him suitable to serve as an External Director of the Company.

The Company has received a statement from Mr. Atlas, in which he declares that he meets all of the requirements applicable to External Directors, as set forth in the Companies Law. Furthermore, based on Mr. Atlas’ statements, he meets the requirement of the Companies Law that an External Director shall possess financial and accounting expertise.

The Company is not aware of any reason why Mr. Atlas, if elected as an External Director, would be unable to serve as such. The Company does not have any understanding or agreement with respect to the future election of Mr. Atlas.

It is proposed that the following resolution be adopted at the Meeting:

“RESOLVED, to elect Zvi Atlas as an External Director on the Board for a three-year term, commencing on the date of the Meeting and to approve the compensation payable to him as provided for in this proxy statement.”

Required Vote

The affirmative vote of a majority of the Ordinary Shares voting on the matter is required to approve this resolution, provided either: (i) included in such majority is at least a majority of the Ordinary Shares of shareholders who are non-controlling shareholders and do not have a personal interest in said election (excluding a personal interest that is not related to the relationship with the controlling shareholder)¹, excluding for such purpose any abstentions; or (ii) the total number of Ordinary Shares of shareholders specified in clause (i) who voted against this resolution does not exceed two percent of the voting rights in the Company. Since abstentions are not considered votes cast, they will have no effect on the outcome of this proposal. Broker non-votes will not impact the results of the vote on this proposal, but will be counted for purposes of determining whether there is a quorum.

The Board recommends a vote FOR the above resolution.

ITEM NO. 3 – APPROVAL OF AN AMENDED AND RESTATED COMPENSATION POLICY

The Companies Law provides that public companies incorporated under the laws of Israel, whose shares have been offered to the public in or outside of Israel, such as the Company, are required to adopt a policy governing the compensation of “Office Holders”. The Companies Law defines the term “Office Holder” of a company to include a director, the chief executive officer, the chief financial officer and any manager who is directly subordinated to the chief executive officer. As reported on the Company’s Current Report on Form 8-K that was filed with the SEC on September 30, 2019, the proposal to amend the compensation policyDecember 26, 2019. As part of the SPA, the Company (as amended from timesold an aggregate amount of 12,500,000 shares (the “SPA Shares”) at a price per share of $0.20, raising an aggregate amount of $2,500,000, made in two tranches. The SPA also determined that Ivy will be entitled to time,appoint two members to the “Compensation Policy”) thatBoard. Furthermore, Ivy was includedalso granted with information rights affording Ivy the right to receive any information or report concerning operations and performance similar to and concurrent with the Company’s reports to its Board as well as pre-emptive rights, according to which if the Company offers, or intends to offer, any equity securities (including any convertible instruments), except certain exempt issuances, the Company is required to first offer such securities to Ivy.

Starting in March 2020, the COVID-19 pandemic has adversely affected the Company in various ways, including, but not limited to, a decrease in the Company’s Proxy Statement filed withrevenues (compared to the Securitiesforecast), derived from a decrease in sales of mass transit ticketing in the Polish market, mainly due to lockdowns and Exchange Commission (“SEC”)other restrictions imposed due to the COVID-19 pandemic, longer components’ procurement lead time, a shortage in components, postponement of sales, slower execution of transactions, increases in prices of components and other matters. In addition, the longer lead time and the rising prices for components required the Company to purchase a larger amount of components in advance, causing a larger expense on August 23, 2019such components than the one that was not approved byestimated. Since 2020, the general meeting ofCompany has taken measures to reduce costs and balance its financials, including, among other things, applying salary reductions.

On April 14, 2020, the shareholders of the Company asapproved the proposal did not receiveclosing of the requisite majority requiredsecond tranche under the Companies Law. NotwithstandingSPA, which led to Ivy becoming a controlling shareholder in the above, under the Companies Law, the board of directors of a company may overrule the resolutionCompany, as he then held 26% of the general meeting of the company’s shareholders to not approve proposed changes to the company’s compensation policy, if certain conditions are met. Accordingly, and pursuant to the Companies Law, on November 5, 2019, the Board approved the same proposed amendments to the Compensation Policy, as were included in the Company’s Proxy Statement filed on August 23, 2019. In this Meeting, the Company wishes to submit the Company’s amended and restated compensation policy for executive officers, introducing amendments related to the Company’s directors’ and officers’ insurance (“D&O Insurance”)share capital, as well as the Company’s abilityappointment of certain directors to grant equity to its employees, as further described below, for the approval of its shareholders. Following the recommendation of the Compensation Committee of the Board, (the “Compensation Committee”) and the approval of the Board, we recommend to approve the Compensation Policy.

A compensation policy is required to address, among other things, matters relating to insuring the liability of Office Holders in customary D&O Insurance. In connection with the D&O Insurance, historically, the Israeli Securities Authority (the “ISA”) determined that compensation policy of a company must include, among other things, reference to the premium, framework for change over the three years limit of liability and deductible. However, in a recent public legal opinion, the ISA has re-examined its position, considering the unique circumstances of the D&O Insurance market and the external changes that have taken place over the recent years in the insurance market. Following such examination, the ISA resolved to waive the demand that the compensation policy would include, when addressing D&O Insurance matters, limitation on the premium paid for such D&O Insurance, and, if applicable, the deductible amounts under the D&O Insurance, provided that the same are in line with market conditions at the time the policy is made.

Accordingly, and in accordance with the position of the ISA, we propose to amend Section [●] to the Compensation Policy to reflect such position changes, which each of the Compensation Committee and Board deemed necessary in light of the changes in insurance markets in recent years, and would provide us with flexibility that is necessary in light of market conditions that we cannot change.

In addition, the Company has conducted a review of the compensation payable to its directors and provided for in Item 4 below. Following the review and after the approval of our Compensation Committee and our Board, the Company proposes to amend the Compensation Policy to align with what the Company believes would be proper and adequate compensation to its directors. Accordingly, the Company is also proposing to amend Sections [●] to the Compensation Policy.

Lastly, the Company is also proposing to amend Sections [●] to the Compensation Policy to allow the Company to grant its employees and directors, among others, restricted shares, equity and bonuses in an amount that will create an incentive for such employees and directors, which will encourage them to assist the Company in its efforts to generate revenues (the “Amended Policy”).

A marked copy of the Amended Policy indicating the proposed amendments thereof is attached hereto as Exhibit A.

It is proposed that the following resolution be adopted at the Meeting:

“RESOLVED, that the Company’s Amended and Restated Compensation Policy, in the form attached as Exhibit A to the proxy statement, be, and hereby is, approved.”

Required Vote

The affirmative vote of a majority of the Ordinary Shares voting on the matter is required to approve this resolution, provided either (i) included in such majority is at least a majority of the Ordinary Shares of shareholdersincluding Mr. Michael Shanahan, who are non-controlling² shareholders nor having a personal interest in said resolution; or (ii) the total number of Ordinary Shares of shareholders specified in clause (i) who voted against this resolution does not exceed two percent of the voting rights in the Company. Since abstentions are not considered votes cast, they will have no effect on the outcome of this proposal. Broker non-votes will not impact the results of the vote on this proposal, but will be counted for purposes of determining whether there is a quorum

The Board recommends a vote FOR approval of the proposed resolution.

ITEM NO. 4 – APPROVAL OF COMPENSATION PAYABLE TO DIRECTORS IN OFFICE

The Companies Law provides that companies incorporated under the laws of the State of Israel, whose shares are listed for trade on a stock exchange or have been offered to the public in or outside of Israel, such as the Company, shall be required to receive the approval of their compensation committee, their board of directors and their shareholders, when approving the terms of directors’ engagement with the company.

In this Meeting, and subject to the approval of the Amended Policy under Item No. 3 above, the Company wishes to submit the Directors’ Compensation Plan (the “Directors Compensation Plan”) for the approval of its shareholders. The Directors Compensation Plan is designed to attract, retain and compensate highly qualified directorswas nominated by providing them with competitive compensation and equity interests in the Company, to align their interests with those of the Company’s shareholders. Following the recommendation of the Compensation Committee and the approval of the Board, we recommend to approve the Directors Compensation Plan, in the form attached hereto as Exhibit B. In addition,Ivy in accordance with the terms of the Amended Policy (if approved)SPA, and was appointed on January 21, 2020. On May 5, 2020, the Directors Compensation Plan, and further subjectBoard also appointed Ms. Sandra Bjork Hardardottir, a relative of Ivy, as a director on the Board, which appointment was also made by Ivy pursuant to some directors agreeing to terminate certain option grants they hold, as shown in the table below, the Company wishes to grant the directors restricted shares (“Restricted Shares”) as further detailed in the table below.

Under the Companies Law, the terms of engagement with a controlling shareholder or a relative thereof require a special approval. Forthe SPA.

On December 5, 2020, the Board resolved that, purpose, a person will be deemed to be a controlling shareholder ifbased on information provided by the person has the power to direct the activitiesmanagement of the Company, the Company was in an urgent need to raise additional funding to secure its ability to maintain its business. Furthermore, the Company’s management had been searching for alternative funding, and reached the conclusion that a convertible loan from Ivy, under the terms further described below, was an appropriate option. Further to the management’s analysis, the Board resolved that it was in the best interests of the Company to receive a loan from Ivy. On December 9, 2020, the Company entered into the Loan Agreement with Ivy (the “Ivy Loan Agreement”) under which Ivy extended a loan to the Company in the amount of up to $1,500,000, payable in two trenches (the “Ivy Loan Amount”). The Ivy Loan Amount was secured pursuant to a debenture by a first priority floating charge over all the tangible or intangible assets and other than by reason of being a director or other office holderproperty of the Company as wellof the date of the Ivy Loan Agreement or thereafter acquired. Under the Ivy Loan Agreement, it was agreed that the Company will use the Ivy Loan Amount to pursue strategic options, including the engagement of an investment bank to identify opportunities for a sale of the Company. Accordingly, on December 2, 2020, the Company signed an engagement letter with an investment bank (the “Investment Bank”) to act as the Company’s exclusive financial adviser for the purpose of effecting a sale of the Company. It was also agreed that the Ivy Loan Amount and all accrued interest would mature and be payable in full by June 17, 2021, provided that the maturity date could be extended. The Ivy Loan Amount bore interest at a rate of 8.0% per annum, provided, however, that upon an extension of the maturity period beyond the initial maturity date, the interest would automatically increase, effective as of such maturity date, to the rate of 10.0% per annum. Pursuant to the Ivy Loan Agreement, at any time prior to the repayment in full of the Ivy Loan Amount, together with interest accrued and all other amounts outstanding under the Loan Agreement (the “Secured Amount”), Ivy would be entitled, at its sole discretion, to demand to convert (the “Conversion Right”) the entire Secured Amount into ordinary shares, at a price per share reflecting certain discount, changing depending on the time of conversion. In addition, the Ivy Loan Agreement stated that the Company would maintain its then-current level of debt in Bank Leumi Le’Iseael (“BLL”), subject to certain exceptions, and would not create or permit to subsist any of the security interests stated thereon on any of the Company’s assets and property, except for certain permitted security interests and future fixed changes on assets of the Company.

On January 26, 2021, the Ivy Loan Agreement was amended to allow for an additional lender, Mr. James Scott Medford, who was no longer, at that point, a member of the board, to join Ivy and lend an additional $100,000 bringing the Ivy Loan Amount to an aggregate amount of up to $1,600,000. On March 2, 2021, the Ivy Loan Agreement and the terms thereof were approved by the shareholders of the Company. The Loan Agreement was subsequently extended twice, as further detailed below, extending the maturity date to January 28, 2022.

On March 29, 2021, as part of the Company’s efforts to mitigate the losses caused by the COVID-19 pandemic and for other reasons, and pursuant to the Board’s determination, after reviewing the terms of the agreement, that it was in the best interest of the Company to sell the Company’s shares in OTI’s Polish subsidiary, ASEC S.A. (“ASEC”), the Company entered into an agreement for the sale of shares in ASEC, by and between the Company and Vector Software SP. Z O.O (“VS”), under which VS purchased from the Company 100% of the issued and outstanding share capital of ASEC for $3,000,000, of which approximately $2,100,000 was used to repay loans provided to ASEC by Polish banks, while the remainder was used to finance OTI’s continuing business.

In discussions conducted in February and March of 2021, OTI’s management presented the Board with cash-flow projections showing a need for additional funding to secure the quarterly cash-flow fluctuation and provide a buffer for the market uncertainty and litigation settlements. The idea of conducting a rights offering was brought up as a personway of raising funds while allowing the Company’s existing shareholders to avoid dilution, offering them terms parallel to those of Ivy (i.e., setting a price per share equal to the conversion price per share of the Ivy Loan Amount under the Ivy Loan Agreement at the time of the rights offering). Following an extensive discussion on the terms of the proposed rights offering, the Board approved the conducting of the rights offering. Between April and May of 2021, the Company conducted a rights offering (the “Rights Offering”), pursuant to a prospectus dated April 20, 2021, under which the Company offered its shareholders the ability to exercise subscription rights and purchase, for every subscription right held by them as of April 14, 2021, one ordinary share of the Company, at a purchase price of $0.174 per share, before the expiration of the Rights Offering that is holding 25%took place on May 19, 2021. For the purpose of securing a full subscription, Ivy provided the Company with a commitment letter pursuant to which he committed to fully exercise his rights, while additionally requesting to exercise additional rights un-subscribed for, for up to approximately $2,825,000 in the aggregate, subject to the limitation that such holdings, including those of Ivy’s affiliates, will not exceed 45% or more of the voting rightsCompany’s issued and outstanding share capital following the conclusion of the Rights Offering. The Rights Offering was oversubscribed and generated $3,300,000 in gross proceeds to the Company, and the issuance of an aggregate of 18,965,517 ordinary shares at a price of $0.174 per share, out of which 10,896,304 were issued to Ivy and its affiliates, bringing Ivy and its affiliates to own 35.9% of the Company’s general meeting, if there is no additional shareholder holding more than 50%issued and outstanding share capital.

Starting on December 2, 2020, the Investment Bank engaged by the Company to assist the Company in identifying potential buyers to the Company. For that purpose, the Company established a data room, allowing interested parties bound by confidentiality and showing interest to review the Company. During that time, the Investment Bank, following the approval of Mr. Yehuda Holtzman, the former CEO of the voting rightsCompany, approached many potential buyers, anonymously (i.e., without exposing the Company), and examined the interest of such potential buyers to purchase the Company. Out of dozens of potential buyers approached by the Investment Bank, during March and April of 2021, 8 companies signed a non-disclosure agreement, allowing further discussions for such potential purchase.

On May 12, 2021, the Investment Bank presented a draft of one initial non-binding term-sheet to the Board, which was still under negotiations. The Investment Bank explained that the reason for having only one offer made was the fact that the market was slowing down in comparison to the previous quarter, while adding that buyers were looking for aggressive revenue growth. The Company received no other offers term sheets. As part of the discussions with the Board, the Investment Bank added that the Company could make efforts to demonstrate higher revenues, but this would require additional time.

On the Maturity Date of the Ivy Loan Agreement, Ivy had not yet converted the Ivy Loan Amount, which meant that, unless extended, the Company needed to repay the Ivy Loan Amount. Based on information provided to the Board by the Company’s management, the Board determined that the Company should continue to preserve its available cash. Furthermore, the management reported that efforts to find alternative financing options to refinance the Ivy Loan Amount under terms that are better than the terms of the Ivy Loan Agreement were not fruitful and no favorable alternative was found. Following the approval of the Board, and the agreement of Ivy, being the majority of the lenders, to exercise its option to extend the maturity date, the parties entered into a notice of exercise of option and agreement (the “Extension Agreement”), according to which the maturity date was extended until December 17, 2021.

On June 18, 2021, the Investment Bank updated the management that the party that provided the initial draft for a non-binding term-sheet had informed the Investment Bank that due to reasons such as pricing, path to profitability and a long path to the U.S. market, it decided not to move forward with the offer to acquire the Company.

Ms. Hardardottir isOn August 10, 2021, the Company entered into settlement agreements with two companies, Merwell Inc. (“Merwell”) and SuperCom Ltd. (“SuperCom”), with which the Company had been litigating since 2013. Such settlements were approved by the Board, which determined them to be in the best interest of the Company. Under the settlement with Merwell the Company paid an amount of NIS 5,700,000 (approximately $1,766,000) while under the settlement with SuperCom, SuperCom paid the Company an amount of NIS 5,128,000 (approximately $1,589,000), resulting in a relativenet expense of a controlling shareholdertotal of approximately $177,000 to the Company.

Through the years, the Company has been receiving loans BLL in various amounts of up to $4,000,000 on the Company’s accounts in BLL, composed of, at the relevant times of a credit line of up to $2,500,000 against invoices for products, a credit line of up to $1,000,000 against customer purchase orders and a credit line of up to $500,000 against invoices for SaaS (i.e., software as a service). As collateral for the various loans provided by BLL, BLL was granted with a first ranking charge over all of the Company’s assets and rights. BLL funding through the years was critical to the operation of the Company and therefore, votingwas the primary mechanism for funding the manufacturing of committed orders.

Since the extension of the date of the repayment of the Ivy Loan Amount to December 17, 2021, the Company had been negotiating with Ivy to either convert the Ivy Loan Amount to equity or further extend the repayment date of the Ivy Loan Amount. Given the proximity to December 17, 2021, and based on the projected cash-flows, projected revenues and the Company’s cash balances presented for September 30, 2021, the Company stated that if the Ivy Loan Amount was to be repaid in December, and without further fund raising, it would have only sufficient funds to continue to operate its business until the end of the third quarter of 2022, however, the Company was unable to assure that the it will be able to continue its operations for a period of at least 12 months. This created a substantial doubt regarding the Company’s ability to continue as a going concern, which is why a note of going concern was added to the Company’s financial statements for the third quarter of 2021. The addition of the going concern note caused the Company additional difficulties as suppliers were more reluctant to either provide the Company with credit or allow it to defer certain payments, and insisted on immediate payments.

Following a long process and after approaching many companies, none of the pursued opportunities matured and no additional offer was made. On October 18, 2021, the Investment Bank provided the Company with a notice of termination of its engagement.

During November 2021, the Board attempted to obtain additional funding through various third parties while also reaching out to Ivy. After several discussions with Ivy, Ivy notified the Company that he would consider providing the Company with additional funding of up to $5,000,000. In later discussions and as part of the negotiations on the terms of such potential additional funding that took place during November of 2021, Ivy stated that such potential funding would be subject to the Company’s presentation of a financial plan demonstrating profitability in the near future. If none was provided, the Company was set to pay back the Loan Amount at the Maturity Date. A few meetings were conducted, including a face-to-face meeting conducted on November 7, 2021, with a Company management representative, a person working with Ivy, and Mr. Zvi Atlas, then a director nominee and Company’s counsel. In the meeting, the outline for an additional loan was provided and discussed, and it was agreed that the Company’s counsels will provide an initial draft based on the Ivy Loan Agreement.

On November 7, 2021, a meeting was conducted with BLL in which a management representative, Mr. Atlas and a person working with Ivy were present, for the purpose of increasing the factoring loans. During that meeting, the person working with Ivy provided background about Ivy to the bank and stated that Ivy was committed to the Company and had faith in its abilities. The person working with Ivy further told BLL that Ivy was in discussions with the Company on additional credit to be provided by Ivy.

On November 11, 2021, the Company presented the Board with the key terms of the potential loan to be provided by Ivy, and the Board designated Mr. Atlas, then a director nominee, to act as the Board’s representative to the negotiations.

On December 12, 2021, the management updated the Board with respect to the termsimpacts of herthe going concern note on the Company’s cash-flow, as well as the reasonable possibility of recognizing materially lower revenues for the fourth quarter of 2021. The management stated that the Company’s needed to further increase its cash in order to support the 2022 operation plan. On December 16, 2021, the Company’s management stated based on the cash flow projections, that the Company would not be able to pay its employee’s salaries by January 9, 2022. During that time, the management was working on the 2022 budget while discussing with the Board the ability of the Company to defer certain payments.

On December 16, the Company and Ivy entered into an additional agreement to extend the Maturity Date of the Ivy Loan Agreement from December 17, 2021, to January 28, 2022.

On December 23, 2021, the Board convened and discussed all potential fund raising options, including an idea of conducting a PIPE transaction (if even available to OTI) that was brought up as a last resort, subject to Ivy’s agreement for waiver of his preemptive rights granted under the SPA, the possible engagement requiresof a special majority, asnew financial advisor to assist in the Company’s attempts of raising certain debt funding (from which the Company was expecting a response about possible representation after his examination of materials provided for below. In addition, the proposed Directors Compensation Policy shall apply,to him with respect to the maximum extent possible, also to our External Directors. The Companies Law provides that compensation to External Directors needs to be approved by a special majority, as outlined below.

We urge our shareholders to review Item No. 4 “Approval of an AmendedCompany’s status and Restated Compensation Policy”different obligations) and the information under “Compensationattempts to locate other potential buyers, if any, of Directorsthe Company, as part of its efforts to avoid insolvency. The Board discussed each of the fund raising options and Executive Officers” for more information.

each of their feasibility, considering the Company’s situation as well as the limitations imposed by the note of going concern and the agreements with Ivy (both the SPA and the Loan Agreement). The information relatingBoard additionally discussed the possible inability of the Company to pay its employees their December salaries, and was also informed of the possible need to initiate insolvency procedures. By that time, Ivy remained undecided as to its willingness to provide an additional loan and did not provide comments to the cancellationdraft loan agreement sent to his counsel on November 11, 2021. The possibility of optionsconducting a PIPE transaction was further examined and grants of Restricted Sharesthe limitations to such fund raising efforts, such as Ivy’s preemptive rights and related terms thereof can be found below (the “Equity Grant Scheme”). Upon vesting of Restricted Shares, the grantee shall be required to pay the par value of the share no longer subject to restriction of NIS 0.1.

Item No. 4A – Approval of Compensation Payable to Directors in Officer, Not Including Compensation to Ms. Sandra Hardardottir

It is proposed that the following resolution be adopted at the Meeting:

“RESOLVED, subject to theneed for a special approval of the Amended Policy, to approveshareholders in certain instances, was presented.

On December 26, 2021, Ms. Hardardottir informed the Directors Compensation PlanBoard and the Equity Grant Scheme,management that Ivy informed her that he did not intend to extend or renew the loan he provided under the Ivy Loan Agreement, and further approveasked to be advised as to the next steps to be taken by the Company. At that eachpoint, the Board instructed management to (i) examine Ivy’s willingness to allow the Company to pursue funding opportunities, bearing in mind the rights Ivy had under the SPA and the Ivy Loan Agreement, (ii) to assess, based on the Company’s cash-flow, how long the Company had to raise such additional funding, and (iii) convene the Board and weigh in the alternatives.

On December 27, 2021, Mr. Atlas, the newly appointed external director, excludingprovided Ms. Sandra B. Hardardottir, shallthen the chairperson of the Board, his official letter of resignation from the Board, announcing his resignation with immediate effect.

On December 28, 2021, the Board reconvened. First, the Board was informed of Mr. Atlas’ resignation from the Board. Following her update with respect to Mr. Atlas’ resignation, Ms. Hardardottir, chairperson of the Board, also tendered her resignation from the Board, announcing that it would be entitledtaking effect immediately, and then she left the meeting. Mr. William C. Anderson was then appointed as chairman of the meeting. The management then provided the remaining members of the Board a review of the current financial status in the Company. The Board discussed, further to previous meetings and further to Ivy’s announcement, the Company’s ability to continue its operations while reviewing the cash-flow projection and understanding the Company’s ability to continue to operate. In addition, the Board discussed further the limitations and implications of initiating insolvency procedures and it was agreed that the management would exhaust any potential solution to avoid bankruptcy in any way.

On December 30, 2021, the Board was updated by the management as to the compensation set forth incurrent financial and business situation and was further presented with the Directors Compensation Plan without further shareholders’ approval.”status of the Company’s fund raising efforts, which included:

Required VoteIn addition, the Board was presented with the possible legal routes under the Insolvency Law.

The affirmative voteBoard agreed to present Ivy with the financial plan and examine a possible cooperation (whether by assisting the Company with a request for a credit line with BLL or approaching the Court to declare that the Company was unable to pay its debts, while filing for a stay-of-execution order, a certain relief offered to companies affected by the COVID-19 pandemic under the Insolvency Law). In addition, the Board resolved to continue pursuing the funding options presented to it and assessing the question of a majorityinsolvency.

On December 30, 2021, after the conclusion of the Ordinary Shares voting onBoard meeting, Mr. Michael Shanahan, a director, tendered his resignation from the matterBoard, with immediate effect. After Mr. Shanahan’s resignation, the Board was composed of three members – Mr. William C. Anderson, Mr. Leonid Berkovitch and Mr. Uri Arazy.

On January 4, 2022, the Board convened and the management informed the Board that BLL had rejected various payments to suppliers while further discussing the implications of such rejection. Further, the management informed the Board that the Company provided BLL with an update as to the Company’s financial situation. The management stated that it requested BLL to renew its credit line while stating that the Company is required to approve this resolution. The votinglooking for each director shall be conducted separately. Since abstentions are not considered votes cast, they will have no impact onadditional funding. At that meeting, the outcomemanagement further recommended that the Board file for a stay of this proposal. Broker non-votes will not impact the resultsproceedings order under a special COVID route created as part of the vote on this proposal, but willInsolvency Law. The Board agreed to present Ivy with the budget that might be countedacceptable to him for purposesthe purpose of determining whether thereattempting to secure an additional loan. Furthermore, the Board determined that the Company is a quorum.insolvent unless it obtains additional funding.

TheOn January 5, 2022, the management updated the Board recommends a vote FOR approvalthat BLL froze all of the proposed resolution.Company’s bank accounts, such that no withdrawals could be made, including ones needed for the pre-payment for future productions, which further impaired the Company’s ability to recover from the financial difficulties. In addition, BLL converted the money that the Company then had in its USD account into NIS in order to offset the Company’s debt in its NIS account, which reduced the debt.

Item No. 4B – Approval of Compensation Payable to Ms. Sandra Hardardottir

It is proposed thatOn January 6, 2022, the following resolution be adopted atCompany provided BLL with an update and presented them with the Meeting:

“RESOLVED, subject2022 budget. BLL asked questions with respect to the approval of the Amended Policy, to approve that Sandra B. Hardardottir shall be entitled to the compensation set forth in the Directors Compensation Plan without further shareholders’ approval.”

Required Vote

The affirmative vote of a majority of the Ordinary Shares voting on the matter is required to approve this resolution, provided either (i) included in such majority is at least a majority of the Ordinary Shares of shareholders who are non-controlling³ shareholders nor having a personal interest in said resolution; or (ii) the total number of Ordinary Shares of shareholders specified in clause (i) who voted against this resolution does not exceed two percent of the voting rights in the Company. Since abstentions are not considered votes cast, they will have no effect on the outcome of this proposal. Broker non-votes will not impact the results of the vote on this proposal, but will be counted for purposes of determining whether there is a quorum.

The Board recommends a vote FOR approval of the proposed resolution.

ITEM NO. 5 – APPROVAL OF GRANT OF EQUITY TO MR. YEHUDA HOLTZMAN, CHIEF EXECUTIVE OFFICER OF THE COMPANY

The Compensation Committee and the Board believe there is a need to provide and rewards for both short term and long term performance, and therefore suggests to grant Mr. Yehuda Holtzman, Chief Executive Officerpossibility of the Company 1,050,000 Restricted Shares,to secure an additional loan from Ivy. Later that day, Ivy announced that he would not be providing additional funding and BLL, in light of the refusal of Ivy to extend further funding to the Company, advised that it, as well, was unwilling to extend further credit.

On January 7, 2022, the Board determined that the Company was insolvent from a cash flow perspective and could not pay its debts when they became due. It determined further that the best course of action would be to commence insolvency proceedings with the court and to request the appointment of a trustee while the management will continue to work with the trustee to be appointed in order to try and implement a rehabilitation plan in accordance with the plan that was presented and approved by the Board.

On January 10, 2022, the Company filed a petition (the “Petition”) with the Israeli county court of Nazareth (the “Court”) in accordance with the Insolvency Law, seeking a court order to commence proceedings with respect to the Company, which will provide the Company with the court’s protection in accordance with the Insolvency Law. In addition, the Petition provided that the Company sought to obtain a court order to operate the Company for a period of thirty days under court protection in order to rehabilitate the Company, based on a 90-day plan provided by the Company showing how and when the Company would be able to reach a balanced cash-flow.

On January 12, 2022, the management conducted several meetings with seven potential buyers/investors, five of which were not interested in purchasing the Company. One showed interest in purchasing the Company; however, on the evening of January 12, 2022, after reviewing the materials provided to it, it informed the Company that it would not provide an offer and was no longer interested in purchasing the Company. Following a short communication between the Company and the Parent made as part of the Company’s efforts to locate a purchaser as a last resort from insolvency, the management informed the Board of a non-binding offer from the Parent for the purchase of the Company and the provision of a loan, and it was suggested to amend the court application such that the order to commence proceedings shall be postponed by approximately two weeks, while appointing a temporary trustee, for the purpose of entering into a transaction with the Parent. For the purpose of approaching the Court, the Parent provided the Company with an email to be presented to the Court stating that it was willing to purchase 100% of the Company’s shares, “as-is”, for a total amount of $10,000,000, to be split between payment of debts and the remainder paid to the shareholders. The Parent further stated in the email that it was willing to move fast and inject the Company with at least $3,000,000 to cover short term debts that were due, while noting that such amount would be deducted from the $10,000,000 offered.

On January 13, 2022, a Court hearing took place in which the Company presented the Parent’s offer to the Court, following which the Court deferred any further action or order in connection with the petitions filed in order for the Company to conclude negotiations with the Parent.

Between January 14, 2022 and January 18, 2022, the Company and Parent negotiated the terms set forthof a binding term sheet for the purchase of the Company.

On January 18, 2022, at 9:30 AM (EST), which was 4:30 PM (Israel time), the Board met and discussed the binding term sheet negotiated with the Parent (the “Term Sheet”). The Board and the management agreed to conduct further negotiations, while the Board appointed Mr. Anderson to take part in the table below. Upon vesting of Restricted Shares,negotiations and represent the grantee shall be required to pay the par value of the share no longer subject to restriction of NIS 0.1.Board.