Press Release

Year 2006 / Monday November 20, 4:17 pm ET

FreeStar Technology Corp. Announces Results for Three Months, Ended September 30, 2006

Transaction Processing Volume Increases For Ninth Consecutive Quarter

DUBLIN, Ireland, Nov. 20 /PRNewswire-FirstCall/ -- FreeStar Technology Corp. (OTC Bulletin Board: FSRT - News) today announced its financial results for the three months, ended September 30, 2006.

Total revenue decreased by approximately 24% to $461,860 from $602,748 in the comparable period of 2005. The decrease was due to decreased consulting and development fees at the Company's wholly owned subsidiary Rahaxi Processing Oy. The Company's core transaction processing business generated a 12% increase in activity for the quarter, as the total number of transactions processed rose to approximately 4,917,000 transactions during the three months, ended September 30, 2006, compared to approximately 4,388,000 transactions during the comparable quarter of the prior year. The Company's net loss was $2,470,221, an increase of $1,533,191 or approximately 164% compared to a net loss of $937,030 for the comparable period of the prior year.

Paul Egan, FreeStar Technology's president and chief executive, said, "We are pleased to report yet another quarter of growth in our core transaction processing business. In fact, we have now recorded increased volume for 27 consecutive months. We fully intend to continue this trend.

"To this end, we have recently achieved EMV MasterCard Finnish certification for Thyron Systems' Mobile Payment Terminals, which will enable us to provide Thyron card terminals in retails stores, buses and taxis. We have also entered into a sales referral agreement with Maestro Yhtiot/Mikromaestro Oy., a point-of-sale software vendor in Finland."

Ciaran Egan, FreeStar's chief financial officer, pointed out that, "Our decrease in sales from the comparable quarter of the prior year was due primarily to $130,668 in development and consulting services which we generated during the prior year; we had no such revenue in the current period. Our core processing business continues to show strong results."

"On the cost side, we continued to utilize non-cash compensation during the period whenever possible in order to conserve the Company's cash. Though we showed a loss of $2,470,221 for the quarter, this included $1,274,288 in non-cash costs, consisting of non-cash compensation of $1,081,476 as well as depreciation and amortization of $192,812. We believe it's important to include a significant non-cash component in the compensation of our executives and consultants. This not only conserves the Company's cash, but also provides a strong incentive to build shareholder value. We also kept our balance sheet free of long-term debt, and sold common stock during the quarter for proceeds of $1,600,000."

"It is also important to note that our Cost of Sales includes some items that are fixed and semi-variable in nature, such as the costs of leasing some of our computer hardware and software, and some of our software development costs. These costs do not change in direct proportion to sales, so that if our sales should increase, our gross margins could actually widen."

About FreeStar Technology Corporation

FreeStar Technology Corp. provides mission-critical solutions to the financial industry worldwide. Working with merchants and acquires in more than twenty countries, our product suite has empowered partners to focus on their core competencies, while our innovative driven approach has enabled them to benefit from first to market advantage and realize their true potential. FreeStar Technology has adopted a partnership strategy for growth. Our partners are market leaders in their respective industries. These include IKEA, Finnair and Stockman. Our subsidiaries, Rahaxi Processing Oy, Finland, FreeStar Technologies Ireland, Ltd., and FreeStar Dominicana S.A. Dominican Republic, continue to develop and implement first class products and solutions that enhance the service level our partners can offer customers. For more information, please visit http://www.freestartech.com or http://www.rahaxi.com.

Source: FreeStar Technology Corporation