Arotech Consolidating its Simulation Group – Moving IES From Denver to Ann Arbor

Relocation of IES Interactive Training will allow for expanded capabilities and potent market position in growing interactive training industry

February 14, 2006 - Arotech Corporation (NasdaqNM: ARTX) announced today that it is consolidating its Simulation Training operations by moving its IES Interactive Training subsidiary to Ann Arbor, Michigan. The relocation of IES, which will continue to operate under the IES brand name, will facilitate the strengthening of Arotech’s Simulation and Security Division by consolidating its two simulation companies, IES and FAAC. The IES move is expected to be completed by June 2006.

Arotech expects to realize significant product synergies in addition to the clear cost savings this move will create. Each company brings its own unique capabilities to the union, IES with its leadership in interactive video scenario creation and training and FAAC with its extensive expertise in digital graphics and 3D training environments.

"This move has been contemplated for some time, and the more we communicate the possibilities between companies, the more excited we become over bringing our respective strengths together. IES will help to complete many of our vehicle simulator offerings with professional training and courseware offerings," said Dean Krutty, President of Arotech’s FAAC Incorporated subsidiary. "Furthermore, we anticipate synergy at all staff levels to provide an environment conducive to the research and development of new products and services for professional trainers in law enforcement, public safety and the military – ultimately benefiting each corporation and the customers they serve."

"We look forward to the move. By working together with FAAC, IES will be able to create new products and to attain new market segments in the interactive training industry that were difficult to reach prior to this partnership," said Rob McCue, Vice President of IES.

"This consolidation will create an advanced comprehensive interactive training complex which we expect will further enable us to enhance our position in the simulation training world," said Robert S. Ehrlich, Arotech’s Chairman and CEO. "I would like to take this opportunity to thank Greg Otte, IES President, for his contribution to the successful development of IES over the years. Greg has decided not to relocate to Michigan, and will pursue other business opportunities."

About Arotech’s Simulation and Security Division

Arotech’s Simulation and Security Division develops manufactures and markets advanced hi-tech multimedia and interactive digital solutions for training of military, law enforcement, security and private industry personnel. The division’s fully interactive driver-training systems feature state-of-the-art vehicle simulator technology enabling training in situation awareness, risk analysis and decision making, emergency reaction and avoidance procedures, and conscientious equipment operation. Over 100,000 drivers have been trained on its installed base of 244 driving simulators. The division also provides pilot decision-making support software for the F-15, F-16, F-18, and JSF aircraft as well as simulation models for the ACMI/TACTS air combat training ranges. In addition, the division’s use-of-force training products and services allow organizations to train their personnel in safe, productive and realistic environments.

Arotech’s Simulation and Security Division consists of FAAC Incorporated and IES Interactive Training Inc.

About Arotech Corporation

Arotech Corporation is a leading provider of quality defense and security products for the military, law enforcement and security markets, including multimedia interactive simulators/trainers, lightweight armoring and advanced zinc-air and lithium batteries and chargers. Arotech operates through three major business divisions: Armor, Simulation and Security and Battery and Power Systems.

Arotech is incorporated in Delaware, with corporate offices in Auburn, Alabama, and research, development and production subsidiaries in Alabama, Michigan, California and Israel.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary significantly. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Arotech’s products; changing economic conditions; delay, cancellation or non-renewal, in whole or in part, of contracts or of purchase orders; Arotech’s ability to remain listed on the Nasdaq Stock Market in accordance with the Nasdaq’s $1.00 minimum bid price and other continued listing standards; dilution resulting from issuances of Arotech’s common stock upon conversion or payment of its outstanding convertible debt, which would be increasingly dilutive if and to the extent that the market price of Arotech’s stock decreases; and other risk factors detailed in Arotech’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as amended, and other filings with the Securities and Exchange Commission. Arotech assumes no obligation to update the information in this release. Reference to the Company’s website above does not constitute incorporation of any of the information thereon into this press release.