Press Release

Year 2008 / Friday October 17, 6:30 am ET

Freestar Technology Corporation Reports Record Increase in Annual Revenue Of 66%

Bank integrations and Telco System Management projects increase Consulting Services Revenue up 115%
Monthly Fee Model increases Hardware Sales and related Revenue up 164%
New Launches consist of China Unionpay in Paris, France. Terminal Sales to the Caribbean region. Rahaxi Cross Border Dynamic Currency Conversion (DCC) On Track for European expansion

DUBLIN, Ireland, Oct. 17 /PRNewswire-FirstCall/ -- Freestar Technology Corp. (OTC Bulletin Board: FSRT - News) said today the Company has achieved record revenues for the fiscal year ended June 30, 2008. Revenue for the year ended June 30, 2008 was $6,259,707, which is an increase of approximately 66% over the revenue for the prior year ended June 30, 2007.

Paul Egan, Freestar's Chief Executive Officer, said, "We are very pleased with Freestar's continued growth in total revenue. Our introduction of hardware sales has produced significant revenue, and we believe we will have opportunities to continue to increase hardware sales. During fiscal 2008, we also continued to implement our strategy of providing separate but complementary services offerings."

Paul Egan continued, "In fiscal 2008, we announced a significant milestone -- the first live processing of a transaction pursuant to our China Unionpay project. The revenue growth we achieved in 2008 occurred even though we are still in the early stages of seeing returns on our significant investment into the China Unionpay project and our other projects involving Monex and Global Refunds. Each of these could significantly impact our revenue streams in the future."

Dramatic increases in consulting revenue and hardware sales related revenue were the primary components of the increase in revenue, with transaction processing and related revenue showing modest increases as well. Compared to the prior fiscal year, consulting revenue increased by 115%, hardware sales and related revenue increased by approximately 164% and transaction processing and related revenue increased by approximately 7%.

Net cash used in operating activities decreased to $3,713,921, a 35% decrease from the prior fiscal year. The Company processed a total of 19,019,055 transactions during the fiscal year ended June 30, 2008, a modest decrease from the 19,443,999 transactions processed during the prior fiscal year. Transaction processing and related revenue increased to $2,076,309 for the year ended June 30, 2008, compared to $1,945,512 during the prior fiscal year, an increase of approximately 7%.

Ciaran Egan, Freestar's Chief Financial Officer, commented that "Approximately $16,589,334 of our net loss is attributable to non-cash charges, such as depreciation and amortization, impairment charges, and the value of stock options and shares issued to consultants and employees. In order to succeed in this very highly competitive industry, we have to attract top-quality talent, and we believe that by utilizing our financial resources in this fashion we achieve that goal while conserving our cash."

Source: FreeStar Technology Corporation