Revenues for the second quarter ended June 30, 2009 were $3.3 million compared with $3.6 million for the first quarter of 2009 and $5.7 million for the second quarter of 2008.

Net loss for the second quarter ended June 30, 2009, was $1 million or $0.06 per basic and fully diluted share, compared with a net income of $2.9 million or $0.18 per basic and fully diluted share for the first quarter of 2009 and with a net loss of $2.1 million or $0.15 per basic and fully diluted share for the second quarter of 2008. Weighted average shares outstanding used in the calculation for the periods were approximately 16.5 million basic and fully diluted for the second quarter of 2009, and approximately 16.5 million basic and fully diluted for the first quarter of 2009, and 14 million for the second quarter of 2008.

For the six months ended June 30, 2009, revenues totaled $6.9 million, compared with $9.8 million for the six months ended June 30, 2008. Net income for the period was $1.9 million or $0.12 per basic and fully diluted share, compared to a net loss of $5 million or $0.36 per basic and fully diluted share for the six months ended June 30, 2008. Weighted average shares outstanding used in the calculation for the periods were approximately 16.5 million basic and fully diluted and 13.8 million basic and fully diluted respectively.

As of June 30, 2009, the Company had cash, cash equivalents, and other financial investments, net, of $38 million, and shareholders' equity of $37 million, compared with $28.8 million, and $38 million as of March 31, 2009.

Commenting on the quarter, CFO of Optibase, Amir Philips, said, "Our second quarter results reflect the continued effects of a slowing economy which contributed to lower revenue and the associated decline in earnings. We continue to keep an eye on expenses and have been diligent in that regard."

He concluded by saying, "Our visibility into upcoming quarters remains challenging as we approach the one-year anniversary of the start of this negative economic environment. As a meaningful recovery appears to be some way off, our focus continues to be on running our business efficiently and controlling our overhead. In addition, we still have a substantial cash balance at our disposal to explore various businesses opportunities that this market downturn has created."

About Optibase

Optibase provides video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and the world's leading broadcast service providers. With a collection of open, standards-based products, Optibase enables its customers to take full advantage of video distribution over their IP network, ensuring superb video quality in a scale of bit-rates for simple and effective video streaming to desktops, STBs and VOD applications. For further information, please visit www.optibase.com.

This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, risks related to the video technologies market in general, and the evolving IPTV market in particular, competition, our ability to manage growth and expansion, general economic conditions and other risk factors. For a more detailed discussion of these and other risks that may cause actual results to differ from the forward looking statements in this news release, please refer to Optibase's most recent annual report on Form 20-F. The Company does not undertake any obligation to update forward-looking statements made herein.

This release and prior releases are available on the Company's Web site at www.optibase.com.

This release and prior releases are also available on the KCSA Public Relations Worldwide Web site at www.kcsa.com.

                                                                                                                 Optibase Ltd.                                                                                                  Condensed Consolidated Statement of Operations                                                                 For the Period Ended June 30, 2009                                                                                                                                                                                                                                                         Six months ended          Three months ended                                                                   June 30     June 30       June 30     June 30                                                                  2009        2008          2009        2008                                                                     $           $             $           $                                                                        Unaudited   Unaudited     Unaudited   Unaudited   Revenues                                                     6,875       9,770         3,282       5,743       Gross profit                                                 3,132       4,964         1,505       2,936       Operating expenses:                                                                                            Research and development, net                                2,076       3,289         813         1,588       Selling, general and administrative                          4,286       6,101         2,066       3,195       Total operating expenses                                     6,362       9,390         2,879       4,783       Operating loss                                               (3,230)     (4,426)       (1,374)     (1,847)     Other income (expenses)                                      4,778       (705)         -           (219)       Financial income (expense), net                              378         115           394         (47)                                                                                                                       Net income (loss) from continuing operations                 1,926       (5,016)       (980)       (2,113)                                                                                                                    Income related to discontinued operations                    -           20            -           10                                                                                                                         Net income (loss)                                            1,926       (4,996)       (980)       (2,103)     Other comprehensive income                                                                                     Unrealized holding losses on available for sale securities   -           (267)         -           -           Total comprehensive income (loss)                            1,926       (5,263)       (980)       (2,103)                                                                                                                    Net income (loss) per share:                                                                                   Basic and diluted                                            $0.12       ($0.36)       ($0.06)     ($0.15)                                                                                                                    Number of shares used in computing Earning per share Basic   16,531      13,829        16,534      14,017      Diluted                                                      16,547      13,829        16,534      14,017                                                                                                                     Amount in thousands except per share data                                                                                                                                                                                      -------------------------------------------------------------------------------  

  Optibase Ltd. Condensed Consolidated Balance Sheets                                                                                                                                                                                            June 30 2009   December 31 2008                                                            Unaudited      Audited                                                                                                       Assets                                                                                     Current Assets:                                                                            Cash, cash equivalents and short term investments, net   38,053         11,386             Trade receivables net of allowance for bad debts         2,342          3,241              Inventories                                              3,119          4,373              Other receivables and prepaid expenses                   695            690                Assets Related To Discontinued Operations                -              -                  Total current assets                                     44,209         19,690                                                                                                                                                                                                   Other long term investments                              2,331          26,388                                                                                                                                                                                                   Fixed assets, net                                        931            1,228              Total assets                                             47,471         47,306                                                                                                        Liabilities and shareholders' equity                                                       Current Liabilities:                                                                       Trade payables                                           1,166          2,276              Accrued expenses and other liabilities                   7,227          7,642              Liabilities Related To Discontinued Operations           162            162                Total current liabilities                                8,555          10,080             Accrued severance pay                                    1,829          2,215              Total shareholders' equity                               37,087         35,011             Total liabilities and shareholders' equity               47,471         47,306                                                                                                        Amounts in thousands                                                                        -------------------------------------------------------------------------------  

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