SuperCom Completes Sale of e-ID Division to OTI

Company to focus on mobile credentialing and tracking solutions for homeland security and RTLS markets


QADIMA, Israel, and MCLEAN, Virginia, January 4 -- SuperCom Ltd. (OTCBB: SPCBF.OB; Euronext: SUP), a provider of incident management, active RF and identification solutions, today announced that on December 31, 2006 it completed the sale of its e-ID Division to On Track Innovations Ltd. ("OTI") (Nasdaq: OTIV) for 2,827,200 restricted shares of OTI common stock, in accordance with an agreement announced on November 8, 2006. The two companies have entered into a service and supply agreement pursuant to which SuperCom will continue to receive revenues from certain existing ID and e-ID contracts for government and commercial projects in Europe, Asia and Africa and OTI will serve as a subcontractor for these projects.

Upon the completion of the sale, a $2,500,000 loan was extended to SuperCom by a financial institution.

"The sale of our e-ID Division to OTI will allow SuperCom's management to focus primarily on the substantial market opportunities we have identified for our Incident Response Management Systems and Active RF Solutions," observed Eyal Tuchman, Chief Executive Officer of SuperCom Ltd. "By allowing municipal and other governmental agencies to track personnel, assets, and other objects on a 'real-time' basis, our RF-based solutions can fulfill critical homeland security requirements for public safety and emergency services agencies and local counter-terrorism task forces. In recent months, we have announced contracts for the deployment of our Incident Response Management System (IRMS) in a number of counties in the U.S., including Los Angeles, and we are currently discussing IRMS deployments with additional governmental agencies in North America. We believe SuperCom's new strategic focus will improve the Company's long-term prospects for revenue and earnings growth and is consistent with our goal of enhancing shareholder value."

"The sale to OTI has also strengthened SuperCom's balance sheet," continued Tuchman. The eventual and anticipated periodic sale of the shares, combined with cash flow from certain existing e-ID contracts, should provide SuperCom with additional financial resources to support our growth strategies."

About SuperCom Ltd.

SuperCom Ltd. provides innovative incident management, active RF and e-ID solutions to the public safety, commercial and government sectors. SuperCom's Incident Response Management System (IRMS) is the industry's most comprehensive mobile credentialing and access control system, as required by Homeland Security and other initiatives. Its Active RF is a complete, cost-effective solution for the continuous tracking of individuals and assets. For more information, visit www.supercomgroup.com.