Press Release

Year 2006 / Tuesday February 21, 8:12 am ET

FreeStar Technology Corporation Reports Revenue Rises 36% In Second Quarter of 2006, Ended December 31

Monthly Transaction Processing Volume Hits 2 Million in December 2005

DUBLIN, Ireland, Feb. 21 /PRNewswire-FirstCall/ -- FreeStar Technology Corp. (OTC Bulletin Board: FSRT - News), an international card payments processor and technology company, today reported its financial results for the second quarter of its 2006 fiscal year, ended December 31, 2005. Revenue rose more than 36% to $577,946 in the period from $424,772 in the comparable period of fiscal 2005.

The company explained that the revenue gains reflect an increase in processing fees as well as fees obtained from development and consulting services generated by the company's subsidiary Rahaxi Processing Oy.

During the month of December, the company said that transaction volume surged to 2 million. The company reported that for the quarter, the volume of payments processed rose more than 13% to 4.8 million from slightly more than 4.2 million during the comparable period a year ago.

FreeStar Technology President and CEO Paul Egan said, "We are excited about the tremendous progress FreeStar Technology has made in expanding our European operating base and our client base. By cultivating additional revenue streams, we grew sales 36%."

Important developments during the quarter included:

* FreeStar Technology partnered with Global Refund and Hypercom to introduce a new point of sale device that delivers a VAT refund to customers making purchases outside their home countries and converts the transaction into the customer's home country currency simultaneously. In one device it bundles the automatic delivery of three functions: payment transaction processing; dynamic currency conversion in 12 major currencies for Visa and MasterCard users and VAT tax refund detection. The customer gets a VAT tax refund check at the time of the transaction. Global Refund offers tax-free shopping services for some 225,000 merchants in 37 countries.

* FreeStar Technology established its corporate headquarters in Dublin, Ireland and also opened an office in Stockholm, Sweden.

In addition, Egan noted that after the close of the fiscal quarter, FreeStar Technology signed private placement agreements to secure $9.2 million in financing from a European finance group, of which $4.6 million has been received. These funds will be used to escalate its operations in ten additional European countries.

For the period, the Company recorded a net loss of $1.77 million, or $0.01 per share, versus a net loss of $1.35 million, or $0.02 per share, for the same period in the prior year. The increased net loss resulted primarily from increased sales, general, and administrative costs for the period, representing continued investment in technical infrastructure and hiring of additional staff. After currency translation, the comprehensive net loss was $1,809,758 versus a loss of $1,299,322 in the prior year's period.

For the six months, ended December 31, 2005, revenue soared 49% to nearly $1.2 million from $0.8 million in the year earlier period. Transaction processing climbed 15% in the period to 9.2 million transactions from 8.0 million for the same period last year. Net loss for the period was $2.7 million compared to a loss of $2.3 million for the year ago period. After currency translation, the comprehensive net loss was $2,713,725 versus a loss of $2,265,556 in the prior year's period.

The company expects revenue levels to increase throughout the next twelve months as it continues to introduce its service offerings, such as EMV transaction processing and its Internet Payment Gateway. In addition, the company believes that it will derive further revenue from the sale of Point of Sale terminals through its relationships with Hypercom and Global Refund.

About FreeStar Technology Corporation

FreeStar Technology Corp. is a payment processing company. Its wholly owned subsidiary Rahaxi Processing Oy., based in Helsinki, has a robust Northern European BASE24 credit card processing platform. Rahaxi currently processes in excess of 1.3 million card payments per month for such companies as Finnair, Ikea and Stockman. The company, based in Dublin, Ireland, maintains satellite offices in Santo Domingo, Dominican Republic, Helsinki and Geneva. For more information, please visit http://www.freestartech.com.

Forward Looking Statements

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the companies, are forward- looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications that may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above. The companies caution that these forward-looking statements are further qualified by other factors including, but not limited to, those set forth in FreeStar's Form 10-KSB filing and other filings with the U S. Securities and Exchange Commission (available at http://www.sec.gov). FreeStar undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events, or otherwise.

For more information, please contact:

FreeStar Technology Corporation,
Paul Egan
Tel: 809-368-2001
E-mail: pegan@freestartech.com

Stern & Co.
Arun Chakraborty
Tel: 212-888-0044
E-mail: achakrab@sternco.com

Source: FreeStar Technology Corporation