[ Back ]

EDGAR FILINGS

Year 2006 / February 01

FREESTAR TECHNOLOGY CORPORATION (FSRT.OB)

Sale of Equity, Other Events, Financial Statements and Exhibits

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

On January 27, 2006, FreeStar Technology Corporation (the "Company") signed subscription agreements with a group of offshore investors (the "Investors") led by Swedish financier, analyst and writer Soren Moberg for the sale of an aggregate of $9.2 million in Company common stock, plus warrants (the "Financing").

The Company will issue 46 million newly issued shares of restricted common stock under Regulation S at $0.20 per share, plus warrants to purchase 50 million shares of Company common stock with two-year exercise periods and strike prices ranging from $1.50 to $8.50, as set forth below. Pursuant to the terms of the Financing agreed to by the Company and the Investors, the Company will issue all 46 million shares immediately, which will be held in escrow by Carl Hessel ("Escrow Holder"), a director and major stockholder of the Company based in Gevena, Switzerland, along with the warrants. The Investors are to make the first payment of $4.6 million dollars within 7 days of the issuance of the shares and a second payment of $4.6 million dollars within four months thereafter. One-half of the shares and warrants will be released by the Escrow Holder to the Investors upon receipt of the first payment and the second half of the shares and warrants will be released by the Escrow Holder upon receipt of the second payment from the Investors. If any Investor fails to make the required payments, such Investor's portion of the shares and warrants will be returned to the Company by the Escrow Agent for cancellation.

The warrants to be issued pursuant to the Financing are as follows:

         Exercise Price       Number of shares of Company Common Stock
         per share             underlying Warrants

         $1.50                  14 million shares
         $2.50                  11 million shares
         $4.50                  7 million shares
         $5.50                  7 million shares
         $6.50                  7 million shares
         $8.50                  4 million shares

All warrants have a two-year exercise period from the date of issuance of the warrants. No registration rights were granted to the Investors in connection with the Financing and the shares and warrants issued in the Financing will be restricted securities, subject to the applicable restrictions set forth in Regulation S promulgated under the Securities Act of 1933, as amended.

C20 Investments assisted as a placement agent for the Financing and will receive 4.6 million shares of Company common stock, plus warrants to purchase 13 million shares, as compensation for its services with respect to the Financing. The warrants to be issued to C20 have a two-year exercise period and the following strike prices: warrants to purchase twelve million shares at $1.00 and warrants to purchase one million shares at $1.50.

The form of subscription agreement and form of warrant used in the Financing are attached hereto as Exhibits 10.1 and 10.2, respectively. All dollar amounts referenced herein are in U.S. dollars.

ITEM 8.01. OTHER EVENTS.

Exhibit No. Description of Exhibit

10.1         Form of Subscription Agreement
10.2         Form of Warrant
99.1         Press Release of FreeStar Technology Corporation,
               dated February 1, 2006.