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PRESS RELEASE

Year 2007 / Wednesday February 21, 5:30 am ET

FreeStar Technology Corporation reports revenue rises 40% in the second quarter, ended december 31, 2006

Transaction Processing Volume Expands For Tenth Consecutive Quarter

Highlights of Second Quarter, Ended December 31

• Revenue increased 40% to $811,902 from second quarter 2005
• Transactions processed rose 9.6% to 5.3 million from 4.4 million a year ago

Highlights of Six Months, Ended December 31

• Revenue increased 8% to $1.27 million from $1.18 million in the same period a year ago
• Transactions processed climbed 10% to 10.2 million from 9.2 million in the prior period

Dublin- February 21, 2007--FreeStar Technology Corp. (OTC Bulletin Board: FSRT - News), an international card payments processor and technology company, today reported financial results for the second quarter and six-month periods of the fiscal year, ending June 30, 2007.

In the second quarter, ended December 31, 2006, revenue rose 40% to $811,902 from $577,946 in the comparable period of fiscal 2006. The increase resulted from revenue generated by the company’s subsidiary Project Lifecycle Partners, Ltd., which was acquired 41 days before the end of the quarter. During the quarter, the company began shipping transaction processing terminals, which bolstered revenue as well.

The Company’s transaction processing volume rose 9.6% to 5.3 million transactions during the three months, ended December 31, from 4.8 million transactions during the comparable quarter of the prior year.

FreeStar Technology President and CEO Paul Egan said, “We continue to experience steady, organic growth in our core processing business. December was the 36^th month that we recorded year-over-year increases in processing volume.  We expect this trend to continue and, in fact, accelerate.” 

“We are particularly pleased at the reception to the marketing of transaction processing terminals in Finland, which we expect will help expand our transaction processing customer base,” he added.

“We shipped 200 terminals by year end, producing both hardware sales revenue as well as processing revenue.  The sales, which are accounted for upon payment, were partially recognized during the last quarter.  The balance will be taken into revenue in the fiscal quarter, ending March 31.” 

“We have already ordered 1,500 more terminals, which we expect to receive this month and expect to place several more orders of this magnitude by June 30.” 

The Company’s net loss was $3,124,457 for the second fiscal quarter, an increase of $1,355,279, or approximately 77%, compared to a net loss of $1,796,178 for the comparable period of the prior year.  

Ciaran Egan, FreeStar Technology’s chief financial officer, explained that 54% of the quarterly loss of $3,124,457 stemmed from non-cash charges, such as non-cash compensation and depreciation.  He noted that the company continues to adhere to its policy of conserving cash, whenever possible, so that it can use its resources to build its product base. 

The Company’s revenue for the fiscal six months, ended December 31, 2006, rose 8% to $1,273,762 from $1,180,694 in the comparable period of fiscal 2006. 

For the six-month period of fiscal 2007, transactions processed rose 10% to 10.2 million transactions from 9.2 million in the year earlier period. 

The company lost $5,594,679, an increase of $2,888,472, or approximately 107%, compared to a loss of $2,706,207 during the comparable period of the prior fiscal year.

Among the significant accomplishments during the most recent fiscal quarter, Egan noted the company’s certification as a third party service provider for China UnionPay, Ltd., its relationship agreement with Project Life Cycle Partners and PCI and EMV Certification from VISA, MasterCard and Monex DCC, which has strengthened our ability to attract blue chip clients.

Egan said, “The emergence of China UnionPay into the European retail market is one of the most exciting developments in the payment industry in decades.  We have achieved a major milestone and we believe our relationship with China UnionPay will prove to be well worth the years of work and substantial investment we have devoted to it.”

“We are also very excited about our relationship with Project Life Cycle Partners,” he added.  PLC deepens our payments industry expertise and helps speed the integration of our products with new and existing customers.  The synergy between the companies means that our complementary skills and resources will increase revenue as well as the efficiency and productivity of our operations.”

ABOUT FREESTAR TECHNOLOGY CORPORATION

FreeStar Technology Corp. provides mission-critical solutions to the financial industry worldwide. Working with merchants and acquirers in more than twenty countries, its product suite has empowered partners to focus on their core competencies, while its 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. Its partners are market leaders in their respective industries.  These include IKEA, Finnair and Stockman. Its 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 its partners can offer their customers. For more information, please visit http://www.freestartech.com or http://www.rahaxi.com.

SOURCE: FreeStar Technology Corporation.