U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A
                                 Amendment No. 2

(MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER: 0-28749

                         FREESTAR TECHNOLOGY CORPORATION
                        -------------------------------
               (Exact Name of Company as Specified in Its Charter)

                      Nevada                              88-0446457
        --------------------------------                  ----------
        (State or Other Jurisdiction of                (I.R.S. Employer
         Incorporation or Organization)               Identification No.)



                 31 Mespil Road, Ballsbridge, Dublin 2, Ireland
                    ----------------------------------------
                    (Address of Principal Executive Offices)


                                 353 1 618 5060
                                --------------
                          (Company's Telephone Number)


                   ------------------------------------------
                    (Former Name, Former Address, and Former
                   Fiscal Year, if Changed Since Last Report)

     Indicate  by check  mark  whether  the  Company  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or for such shorter period that the Company
was  required  to file  such  reports),  and (2)  been  subject  to such  filing
requirements for the past 90 days:  Yes  X    No
                                        ---      ---

     Indicate by check mark  whether the Company is a shell  company (as defined
in Rule 12b-2 of the Exchange Act): Yes       No  X
                                        ---      ---

     As of May 19,  2006,  the Company had  210,658,732  shares of common  stock
issued and outstanding.

      Transitional  Small  Business  Disclosure  Format (check one):
Yes     No   X
   ---      ---

                                       1
<PAGE>


                        AMENDMENT NO. 2 EXPLANATORY NOTE
                        --------------------------------

     We are filing Amendment No. 2 (this "Amendment") to the Freestar Technology
Corporation Quarterly Report on Form 10-QSB for the three months and nine months
ended  March  31,  2006,  in  response  to  comments  issued by the staff of the
Division of Corporation  Finance of the Securities and Exchange  Commission (the
"Commission").  The  Commission  issued their comments to the Company on July 6,
2006 and October 3, 2006 in connection  with its review of the Company's  Annual
Report on SEC Form 10-KSB and Quarterly Reports on SEC Form 10-QSB.

     Based on these  comments and  discussions  with the  Commission,  and after
consultation with the Company's  independent  registered public accounting firm,
the  Company  previously  filed  its  Amendment  No.  1 to  present  the cost of
amortizing   capitalized   computer  software  as  a  cost  of  revenue  in  our
consolidated  statements  of losses.  Such costs were  previously  classified as
selling,  general and administrative  expenses. In this regard, the Company also
expanded the comparison of the three months and nine months ended March 31, 2006
to the three  months and nine months  ended  March 31, 2004 in the  Management's
Discussion  and  Analysis  and Plan of  Operation.  The  Company is filing  this
Amendment  No. 2 to its  Quarterly  Report on Form 10-QSB for the three and nine
months ended March 31, 2006 in order to present certain  additional  disclosures
regarding the  reclassification of these expenses;  specifically,  we have added
Footnote no. 8 in order to fully  disclose  the effects of this change.  We have
also amended our report regarding the effectiveness of our disclosure  controls.
We have also amended our disclosure in Part I, Item 3 Controls and Procedures.


     This change in presentation has no impact on previously  reported net loss,
loss per  share,  revenue,  cash,  total  assets,  cash  flow or  deficiency  in
stockholders' equity. For the convenience of the reader, this Form 10-QSB/A sets
forth the entire Form 2005 10-QSB. There are no other significant changes to the
original Form 10-QSB other than those  outlined  above.  This Form 10-QSB/A does
not reflect events  occurring  after the filing of the original Form 10-QSB,  or
modify or  update  disclosures  therein  in any way other  than as  required  to
reflect the  Amendment  set forth below.  Among other  things,  forward  looking
statements  made in the original Form 10-KSB (other than the  restatement),  and
such forward looking statements should be read in their historical  context.  In
addition,  currently-dated  certifications  from our Chief Executive Officer and
Chief Financial Officer have been included as exhibits to this Amendment.


<PAGE>


                                TABLE OF CONTENTS





PART I - FINANCIAL INFORMATION                                              PAGE



ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

         CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2006 ........... 3

         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
         THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2006
         AND 2005 (restated) ...................................... .......... 4

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE
         MONTHS ENDED MARCH 31, 2006 AND 2005 ................................ 5

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ................ 7


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS ...........................................15

ITEM 3.  CONTROLS AND PROCEDURES .............................................26


PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS....................................................27


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS..........27


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES......................................28


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................28


ITEM 5.  OTHER INFORMATION....................................................28


ITEM 6.  EXHIBITS.............................................................28


SIGNATURES....................................................................29


                                       2
<PAGE>



PART I - FINANCIAL INFORMATION




ITEM 1.  FINANCIAL STATEMENTS.

                         FREESTAR TECHNOLOGY CORPORATION
              CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31,
                                   (UNAUDITED)

       ASSETS

                                                                 2006
                                                             ------------

Current assets:
 Cash and cash equivalents                                   $  4,300,035
 Accounts receivable, net of allowance for
   doubtful accounts of $33,723                                   363,033
 Employee loan                                                     35,000
 Other current assets                                              68,978
 Inventory (see note 2)                                           121,750
                                                             ------------

        Total current assets                                    4,888,796
                                                             ------------

Property, plant and equipment, net of accumulated
   depreciation and amortization of $66,244                       116,481


Software license, net of accumulated
   amortization of $749,181                                     1,511,974
Customer relationships and contracts, net of
   accumulated amortization of $529,290                         1,437,914
Software, net of accumulated amortization of $672,035           1,509,046
                                                             ------------

        Total assets                                         $  9,464,211
                                                             ============

       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses                            791,352
 Note payable - current portion, net of
   discount of $5,789 (see note 3)                                644,211
 Due to related parties for advances                               47,487
                                                             ------------

        Total current liabilities                               1,483,050

Stockholders' Equity:
 Convertible preferred stock, series A,
   $0.001 par value, 1,000,000 shares  authorized;
   1,000,000 shares issued and outstanding                          1,000
 Convertible preferred stock, series B,
   $0.001 par value, 4,000,000 shares  authorized,
   issued and outstanding                                           4,000
 Additional paid-in capital - preferred stock                   6,368,058
 Common stock, $0.001 par value, 500,000,000
   shares authorized; 218,671,491 shares issued
   and outstanding (see note 4)                                   218,671
 Additional paid-in capital - common stock                     53,246,204
 Common stock subscriptions receivable                         (1,000,000)
 Common stock subscribed                                          927,043
 Common stock cancellation receivable                             (46,000)
 Common stock issued in advance                                    (4,600)
 Deferred compensation                                         (2,599,012)
 Accumulated deficit                                          (49,036,845)
 Accumulated other comprehensive gain  (loss)                     (97,358)
                                                             ------------

        Total stockholders' equity                              7,981,160
                                                             ------------

         Total liabilities and stockholders' equity          $  9,464,211
                                                             ============

The  accompanying  notes form an integral part of these  consolidated  condensed
financial statements.

                                       3
<PAGE>


                         FREESTAR TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                          Three Months    Three Months    Nine Months     Nine Months
                                                              Ended           Ended          Ended           Ended
                                                            March 31,       March 31,       March 31,       March 31,
                                                              2006            2005            2006            2005
                                                           (restated)      (restated)      (restated)      (restated)
                                                          ------------    ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>             <C>
Revenue                                                   $    494,296    $    412,778    $  1,674,990    $  1,203,502
Cost of revenue                                                363,793         478,060       1,307,165       1,081,235
                                                          ------------    ------------    ------------    ------------
Gross profit (loss)                                            130,503         (65,282)        367,825         122,267
Selling, general and administrative expenses                 2,336,463       6,689,373       5,244,969       9,203,516
                                                          ------------    ------------    ------------    ------------
Loss from operations                                        (2,205,960)     (6,754,655)     (4,877,144)     (9,081,249)

Other income (expenses):
    Gain on legal settlement                                         -         350,000               -         350,000
    Gain on disposal of assets                                       -          (1,371)          2,223          (1,371)
    Interest income/(expense)                                  (10,736)         (7,474)        (47,982)         (9,378)
                                                          ------------    ------------    ------------    ------------
Loss before income taxes                                    (2,216,696)     (6,413,501)     (4,922,903)     (8,741,999)
Income taxes                                                         -               -               -               -
                                                          ------------    ------------    ------------    ------------
Net Loss                                                    (2,216,696)     (6,413,501)     (4,922,903)     (8,741,999)

Other - Comprehensive income (loss):
   Gain (Loss) on foreign exchange                              (5,831)        (41,112)        (13,349)         23,831
                                                          ------------    ------------    ------------    ------------
Comprehensive loss                                        $ (2,222,527)   $ (6,454,613)   $ (4,936,252)   $ (8,718,168)
                                                          ============    ============    ============    ============

Loss per share - basic                                    $      (0.01)   $      (0.08)   $      (0.03)   $      (0.13)
                                                          ============    ============    ============    ============

Weighted average shares outstanding - basic                179,804,800      81,807,128     144,171,217      69,408,410
                                                          ============    ============    ============    ============

Weighted average shares outstanding - diluted              204,311,787     105,807,128     168,678,204      93,408,410
                                                          ============    ============    ============    ============
</TABLE>


The  accompanying  notes form an integral part of these  condensed  consolidated
financial statements.

                                       4
<PAGE>

                          FREESTAR TECHNOLOGY CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            Nine Months   Nine Months
                                                               Ended         Ended
                                                             March 31,     March 31,
                                                               2006           2005
                                                            -----------    -----------
<S>                                                         <C>            <C>
Cash flows used for operating activities:
     Net loss                                               $(4,922,903)   $(8,741,999)

 Adjustments  to  reconcile  net loss to net  cash
   provided  by  (used  in) operating activities:
    Gain on legal settlement                                       --         (350,000)
    Amortization of discount on note                             37,189           --
    (Gain) loss on disposal of fixed assets                      (2,223)         1,371
    Depreciation and amortization                               464,195        470,453
    Warrants issued pursuant to joint
      venture agreement                                         259,305           --
    Non-cash compensation                                     2,397,997      7,582,642
 Changes in assets and liabilities:
  (Increase) decrease in assets:
    Accounts receivable                                        (193,678)       (28,347)
    Inventory                                                  (121,750)          --
    Employee loan                                               (35,000)          --
    Other assets                                                (32,782)      (102,411)

 Increase (decrease) in liabilities
    Accounts payable and accrued expenses                      (453,140)      (341,344)
    Due to shareholders                                            --          196,053
    Payment of accrued salary to officers                      (263,553)          --
                                                            -----------    -----------
       Total adjustments                                      2,056,560      7,428,417
                                                            -----------    -----------

       Net cash used in operating activities                 (2,866,343)    (1,313,582)
                                                            -----------    -----------

Cash flows provided by (used in) investing activities:
    Purchase of fixed assets                                    (56,281)       (50,258)
    Cash from sale of fixed assets                                2,223          4,054
    Purchase of software and capitalized software cost         (457,455)      (326,438)
                                                            -----------    -----------
       Net cash used in investing activities                   (511,513)      (372,642)
                                                            -----------    -----------

Cash flows provided by (used in) financing activities:
    Proceeds from issuance of demand loans                         --          900,000
    Proceeds from sale of common stock                        5,770,000           --
    Advanced from related parties                                57,178           --
    Payments to related parties for advances                   (189,954)          --
    Proceeds from exercise of stock options/warrants          1,437,492        804,000
    Advances (repayments) from related party, net                  --          192,086
                                                            -----------    -----------
       Net cash provided by financing activities              7,074,716      1,896,086
                                                            -----------    -----------


Net increase  in cash and cash equivalents                    3,696,860        209,862

Foreign currencly translation adjustments                       (29,503)      (209,161)

Cash and cash equivalents, beginning of period                  632,678        206,205
                                                            -----------    -----------
Cash and cash equivalents, end of period                    $ 4,300,035    $   206,906
                                                            ===========    ===========

Supplemental disclosure of cash flow information:

     Interest paid                                          $      --      $      --
                                                            ===========    ===========

     Income tax paid                                        $      --      $      --
                                                            ===========    ===========

     Effect of reverse split of common stock                $      --      $   410,112
                                                            ===========    ===========

     Shares of common stock issued for services             $   996,800    $   586,558
                                                            ===========    ===========


                                       5
<PAGE>


     Expensing of deferred services                         $      --      $ 1,296,084
                                                            ===========    ===========

     Issuance of 20 million shares of
       common stock to officers                             $      --      $ 4,600,000
                                                            ===========    ===========

     Issuance of options to officers                        $      --      $ 1,100,000
                                                            ===========    ===========


     Gain on legal settlement                               $      --      $   350,000
                                                            ===========    ===========

     Adjust deferred compensation for the period            $   528,762    $      --
                                                            ===========    ===========

     Shares of common stock issued for
       subscriptions receivable                             $   400,000    $      --
                                                            ===========    ===========

     Cancellation of shares of common stock                 $   378,574    $      --
                                                            ===========    ===========

     Cancellation of shares of common stock                 $   263,349    $   500,000
                                                            ===========    ===========

     Fair value of options issued to
       consultants and employees                            $   828,758    $      --
                                                            ===========    ===========

     Write-off of stock options receivable                  $     1,500    $      --
                                                            ===========    ===========

     Imputed interest on note issued for
       legal settlement                                     $    24,727    $      --
                                                            ===========    ===========

     Value of term extension of warrants and
       options to consultants                               $   259,305    $      --
                                                            ===========    ===========

     Issuance of 4,600,000 shares of stock in advance       $     4,600    $      --
                                                            ===========    ===========

     Issuance of 2,238,857 hares of common stock to
        consultants for services                            $ 1,330,556    $      --
                                                            ===========    ===========

     Issuance of 1,100,000 shares of restricted stock to
        consultants for services                            $   473,000    $      --
                                                            ===========    ===========

     Issuance of 500,000 shares of restricted stock to
        employees for services                              $   382,500    $      --
                                                            ===========    ===========

     Issuance of 46,000,000 shares of common stock in a
        financing transaction, to be cancelled              $    46,000    $      --
                                                            ===========    ===========

</TABLE>

The  accompanying  notes form an integral part of these  condensed  consolidated
financial statements.


                                       6
<PAGE>

                         FREESTAR TECHNOLOGY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis Of Presentation
---------------------

The  accompanying  unaudited  condensed  consolidated  financial  statements  of
FreeStar Technology  Corporation,  a Nevada corporation  ("Company"),  have been
prepared in accordance  with the  instructions to Form 10-QSB and do not include
all of the information and footnotes required by accounting principles generally
accepted in the United  States of America for  complete  consolidated  financial
statements.  These condensed consolidated financial statements and related notes
should be read in conjunction with the Company's Form 10-KSB for the fiscal year
ended June 30, 2005. In the opinion of management,  these condensed consolidated
financial  statements  reflect all  adjustments  that are of a normal  recurring
nature and which are necessary to present  fairly the financial  position of the
Company as of March 31, 2006,  and the results of operations  and cash flows for
the three months and nine months  ended March 31, 2006 and 2005.  The results of
operations  for the three  months and nine  months  ended March 31, 2006 are not
necessarily indicative of the results that may be expected for the entire fiscal
year.  Certain  amounts in the prior period on the Statements of Cash Flows have
been changed to conform to the current period presentation.

Nature of Business Operations
-----------------------------

The Company (formerly Freestar  Technologies) was formed on November 17, 1999 as
a Nevada  corporation.  The  Company  is a  provider  of  payment  services  and
processing.  Its principal offices are in Dublin,  Ireland; the Company also has
offices in Helsinki, Finland; Stockholm,  Sweden; Geneva, Switzerland; and Santo
Domingo, the Dominican Republic.

The  Company  intends  to  derive  revenues  from  its core  payment  processing
products,  which include:  (1) Authorization:  transaction fees it receives from
processing online point of sale terminal transactions;  (2) Point of Sale: sales
of "Point of Sale" terminals;  (3) Transaction Fees:  stemming from its Internet
Payment  Gateway;  (4) Dynamic  Currency  Conversion:  credit  card  services to
merchants  and  acquiring  banks (the Company will provide  transaction  gateway
services and settlement with participating  banking  institutions);  (5) Private
Label Cards:  transaction  management services provided for a private label card
issuer;  and (6)  Consulting  Fees:  consulting  services  provided to financial
institutions  and  merchants.  The Company's  revenue for the three months ended
March 31, 2006 was  primarily  generated  from the  transaction  processing  and
consulting fees through its Finland operations.

Going Concern
-------------

The accompanying  condensed consolidated financial statements have been prepared
inconformity with accounting  principles generally accepted in the United States
of America,  which  contemplate  continuation of the Company as a going concern.
However,  the Company has reported a net loss of $2,216,696 for the three months
ended March 31, 2006 and  $22,102,463  for the year ended June 30, 2005, and had
an accumulated deficit of $49,036,845 as of March 31, 2006.

The Company cannot be certain that anticipated revenues from operations will be
sufficient  to  satisfy  its  ongoing  capital  requirements.  If the  Company's
financial   resources  are  insufficient  the  Company  may  require  additional
financing  in order to  execute  its  operating  plan  and  continue  as a going
concern. The Company cannot predict whether this additional financing will be in
the form of equity or debt, or be in another  form.  The Company may not be able
to obtain the  necessary  additional  capital on a timely  basis,  on acceptable
terms, or at all. In any of these events, the Company may be unable to implement
its current plans for expansion,  repay its debt  obligations as they become due
or respond to competitive  pressures,  any of which  circumstances  would have a
material  adverse  effect on its business,  prospects,  financial  condition and
results of operations.

Management plans to take the following steps that it believes will be sufficient
to  provide  the  Company  with the  ability  to  continue  as a going  concern.
Management's  belief is based on the Company's  operating plan, which in turn is
based on assumptions that may prove to be incorrect. Management intends to raise
financing  through  the sale of its stock in private  placements  to  individual
investors.  Management  may raise  funds in the public  markets,  or through the
issuance  of debt,  though  there  currently  are no plans to do so.  Management

                                       7
<PAGE>

believes  that  with  this  financing,  the  Company  will be  able to  generate
additional  revenues that will allow the Company to continue as a going concern.
This will be accomplished by hiring additional  personnel and focusing sales and
marketing efforts on the distribution of product through key marketing  channels
currently being developed by the Company. The Company also intends to pursue the
acquisition of certain strategic industry partners where appropriate.


Revenue Recognition
-------------------

The Company  recognizes  revenues from  contracts in which the Company  provides
only consulting services as the services are performed. The contractual terms of
the  agreements  dictate the  recognition  of revenue by the  Company.  Payments
received in advance are deferred until the service is provided.

Contract costs include all direct equipment, material, and labor costs and those
indirect costs related to contract performance, such as indirect labor. Selling,
general and administrative costs are charged to expense as incurred.  Provisions
for estimated  losses on  uncompleted  contracts are made in the period in which
such  losses  are  determined.   Changes  in  contract   performance,   contract
conditions,  and estimated  profitability  that may result in revisions to costs
and income are recognized in the period in which the revisions are determined.

For revenue from product  sales,  the Company  recognizes  revenue in accordance
with Staff Accounting  Bulletin ("SAB") No. 104,  "Revenue  Recognition,"  which
superseded SAB No. 101, "Revenue  Recognition in Financial  Statements." SAB No.
101  requires  that  four  basic  criteria  must be met  before  revenue  can be
recognized:  (1) persuasive  evidence of an arrangement exists; (2) delivery has
occurred;   (3)  the  selling   price  is  fixed  and   determinable;   and  (4)
collectibility is reasonably assured.  Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products  delivered and the  collectibility of those amounts.  Provisions
for discounts and rebates to customers,  estimated  returns and allowances,  and
other  adjustments  are  provided  for in the same period the related  sales are
recorded.  The  Company  defers any  revenue  for which the product has not been
delivered  or is subject  to refund  until  such time that the  Company  and the
customer jointly determine that the product has been delivered or no refund will
be required.  SAB No. 104  incorporates  Emerging Issues Task Force ("EITF") No.
00-21,  "Multiple-Deliverable  Revenue  Arrangements."  EITF No. 00-21 addresses
accounting  for  arrangements  that may involve the delivery or  performance  of
multiple  products,  services  and/or  rights  to  use  assets.  The  effect  of
implementing EITF No. 00-21 on the Company's consolidated financial position and
results of operations was not significant. This issue addresses determination of
whether an arrangement  involving more than one  deliverable  contains more than
one unit of accounting and how the arrangement  consideration should be measured
and  allocated  to the  separate  units of  accounting.  EITF No.  00-21  became
effective for revenue  arrangements entered into in periods beginning after June
15, 2003.  For revenue  arrangements  occurring on or after August 1, 2003,  the
Company revised its revenue  recognition policy to comply with the provisions of
EITF No. 00-21.

For those contracts which contain multiple  deliverables,  management must first
determine whether each service, or deliverable, meets the separation criteria of
EITF No. 00-21. In general, a deliverable (or a group of deliverables) meets the
separation  criteria if the deliverable has standalone value to the customer and
if there is objective  and reliable  evidence of the fair value of the remaining
deliverables  in the  arrangement.  Each  deliverable  that meets the separation
criteria is considered a "separate unit of accounting." Management allocates the
total arrangement consideration to each separate unit of accounting based on the
relative  fair  value  of  each  separate  unit of  accounting.  The  amount  of
arrangement  consideration  that is allocated to a unit of  accounting  that has
already been delivered is limited to the amount that is not contingent  upon the
delivery  of  another  separate  unit  of  accounting.   After  the  arrangement
consideration has been allocated to each separate unit of accounting, management
applies the  appropriate  revenue  recognition  method for each separate unit of
accounting as described  previously based on the nature of the arrangement.  All
deliverables  that do not meet the  separation  criteria  of EITF No.  00-21 are
combined into one unit of accounting,  and the appropriate  revenue  recognition
method is applied under SAB No. 101. Processing fee revenue is earned based upon
the actual number of  transactions  processed  through the Company's  processing
system.  Transaction  processing  fees are  recognized  in the  period  that the
service is  performed.  These fees are  typically  charged on a per  transaction
basis, depending on the arrangement with the customer.

                                       8
<PAGE>

Stock Based Compensation
------------------------

On  January  1, 2006 the  Company  adopted  Statement  of  Financial  Accounting
Standards  No. 123 (revised  2004)  "Share-Based  Payment"  ("SFAS 123 (R) which
requires  the  measurement  and  recognition  of  compensation  expense  for all
share-based  payment awards made to employees and directors  including  employee
stock options and employee stock purchases  related to a Employee Stock Purchase
Plan based on the estimated  fair values.  SFAS 123 (R) supersedes the Company's
previous accounting under Accounting Principles Board Opinion No.25, "Accounting
for Stock Issued to Employees" ("APB 25") for the periods beginning fiscal 2006.


The  Company  adopted  SFAS 123 (R) using the  modified  prospective  transition
method,  which required the application of the accounting standard as of January
1, 2006. Freestar's Consolidated Financial Statements as of and for three months
March 31,  2006  reflect  the  impact of SFAS  123(R).  In  accordance  with the
modified  prospective  transition method, the Company's  Consolidated  Financial
Statements  for the prior periods have not been restated to reflect,  and do not
include the impact of SFAS 123 (R). Stock based compensation  expense recognized
under SFAS 123 (R) for the three  months  ended March 31, 2006 was $0. Pro forma
stock based  compensation  was  $1,100,019  for the three months ended March 31,
2005.

Stock-based  compensation  expense  recognized during the period is based on the
value of the portion of share-based  payment awards that is ultimately  expected
to vest during the period.

A summary of option  activity  under the Plan as of March 31, 2006,  and changes
during the period then ended are presented below:


                                                                Weighted-
                                                                 Average
                                                                 Exercise
                                                Options           Price
                                               ----------      -----------

 Outstanding at December 31, 2005                 500,000      $     0.15
    Issued                                             --              --
    Exercised                                    (500,000)           0.15
    Forfeited or expired                               --              --
                                               ----------      ----------
 Outstanding at March 31, 2006                         --      $       --
                                               ==========      ==========

    Non-vested at March 31, 2006                       --      $       --
                                               ==========      ==========

    Exercisable at March 31, 2006                      --      $       --
                                               ==========      ==========

There are no employee options outstanding as of March 31, 2006.

Aggregate  intrinsic  value of options  outstanding  and options  exercisable at
March 31, 2006 was $0 and $0, respectively. Aggregate intrinsic value represents
the difference between the Company's closing stock price on the last trading day
of the fiscal  period,  which was $0.47 as of March 31,  2006,  and the exercise
price multiplied by the number of options outstanding.  Total intrinsic value of
options exercised was $1,400,000 and $160,000 for the three months periods ended
March 31, 2006 and 2005, respectively.  As of March 31, 2006, total unrecognized
stock-based compensation expense related to non-vested stock options was $0.

The total fair value of options vested was $0 and $0 for the three-month periods
ended March 31, 2006 and 2005, respectively.

The modified  transition method of SFAS 123 (R) requires the presentation of pro
forma  information  for periods  presented prior to the adoption of SFAS 123 (R)
regarding  net loss an net loss per share as if we had  accounted  for our stock
plans under the fair value method of SFAS 123 (R). For pro forma  purposes,  the
fair  value of stock  options  was  estimated  using  the  Black-Scholes  option
valuation model and amortizing on a straight-line  basis.  The pro forma amounts
are as follows:

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                Three Months Ended   Nine Months Ended
                                                                  March 31, 2005       March 31, 2005
                                                                  --------------      --------------
<S>                                                               <C>                 <C>
Net loss - as reported                                            $ (6,413,501)       $ (8,741,999)
Add:  Stock-based employee compensation expense
   included in reported loss                                         1,100,000           1,100,000
Deduct: Total stock-based employee compensation expense
   determined under fair-value based method for all awards          (1,100,019)         (1,100,019)
                                                                  --------------      --------------
Net loss - pro forma                                              $ (6,413,520)       $ (8,742,018)
                                                                  ==============      ==============

Basic & diluted loss per share - as reported                      $      (0.08)       $      (0.13)
Basic & diluted loss per share - pro forma                        $      (0.08)       $      (0.13)

</TABLE>

Capitalized Software Development Costs
--------------------------------------

In accordance with Statement of Financial  Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer  Software to be Sold,  Leased or Otherwise
Marketed," the Company  capitalizes  certain costs related to the development of
new software  products or the enhancement of existing  software products for use
in our transaction  processing  software.  These costs are capitalized  from the
point in time that technological feasibility has been established,  as evidenced
by a working model or detailed  working program design to the point in time that
the  product  is  available  for  general  release  to  customers.   Capitalized
development  costs are  amortized on a  straight-line  basis over the  estimated
economic  lives of the  products,  beginning  when the  product  is placed  into
service.   Research  and  development   costs  incurred  prior  to  establishing
technological  feasibility  and costs  incurred  subsequent  to general  product
release  to  customers   are  charged  to  expense  as  incurred.   The  Company
periodically  evaluates  whether  events or  circumstances  have  occurred  that
indicate that the remaining useful lives of the capitalized software development
costs should be revised or that the remaining  balance of such assets may not be
recoverable.

The Company often has under  development  several  discreet  design  features or
enhancements,  each of which may be  completed  and  released  to  customers  at
different  times.  During the three  months  ended March 31,  2006,  the Company
placed into service and began amortizing  approximately $10,226 of software. The
total net book value of software  in service at March 31, 2006 is  approximately
$522,021.  During  the three  months  ended  March 31,  2006,  the  Company  has
purchased and capitalized from a third party software  totaling $120,145 for new
software  under  development.  The  total  net  book  value  of  software  under
development  at March 31, 2006 is  approximately  $986,814.  At March 31,  2006,
total  software  capitalized  at  under  SFAS  No.  86  is  $1,509,050,  net  of
accumulated amortization of $672,035.

Software costs also include the Enhanced Transactions Secured Software ("ETSS"),
which was  originally  contributed  by the founder and president of  ePayLatina,
S.A.,  Paul  Egan,  who is also  president  of the  Company.  This  software  is
essential for the use of the Company's ePayPad.  Software costs also include the
development  costs related to adding  enhancements  to this software  consisting
primarily of labor cost.  Software costs are amortized on a straight-line  basis
over a  period  of three to six  years.  These  costs  have  been  substantially
amortized as of March 31, 2006.

Inventories
-----------

Inventory  is stated at the lower of cost,  using the average  cost  method,  or
market.

2. INVENTORIES

Inventory at March 31, 2006  consists of the Company's  Point of Sale  Terminals
which  have  been  purchased  from  third  party  manufacturers.  Components  of
inventories as of March 31, 2006 are as follows:


Finished goods       $121,750
                     --------
Total                $121,750
                     ========

                                       10
<PAGE>

3. NOTES PAYABLE

The Company has  outstanding  a one-year  convertible  note  payable in the face
amount of $650,000.  The note is due May 12, 2006.  The terms of the note do not
include a stated  interest  rate,  and the Company  has imputed  interest at the
annual  rate of 8% per annum for a discount of $49,428 at the  inception  of the
note.  During the three months ended March 31,  2006,  the Company  amortized to
interest expense the amount of $12,487;  at March 31, 2006, the remaining amount
of the discount is $5,789. The note payable was converted to 1,183,283 shares of
common stock in May, 2006 (see Note 7).


4. COMMON STOCK

Private Placement of Common Stock
---------------------------------

         On January 27, 2006, the Company signed subscription  agreements with a
group of offshore  investors  for the sale of an  aggregate  of $9.2  million in
Company  common  stock,  plus warrants  (the  "January  Financing").  Due to the
failure  of the  investment  group  to  timely  fund in full the  first  payment
required for the purchase of shares and  warrants,  the Company  terminated  the
January  Financing;  all shares and warrants issued  thereunder were returned by
the  escrow  holder to the  Company  for  cancellation,  and any funds  received
pursuant  to the January  Financing  were  returned by the escrow  holder to the
investors.

            In March 2006,  a group of  European  investors  (collectively,  the
"Investors"),  lead by Olympia  Holding AS,  informed the Company that they were
willing to invest on the same terms and conditions  that were negotiated for the
now-terminated  January  Financing,  and the  Company  agreed to this  financing
transaction with the Investors (the "March Financing").

            Pursuant to the March  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.  The shares  which will be held in escrow by Carl Hessel  ("Escrow
Holder"),  a director  and major  stockholder  of the  Company  based in Geneva,
Switzerland,  along  with  the  warrants.  Pursuant  to the  terms  of  the  New
Financing,  the first payment of $4.6 million is due immediately,  with a second
payment of $4.6  million due within  three  months  thereafter.  As of March 31,
2006,  the Company had received  cash in the amount  $3,552,150  pursuant to the
March Financing,  and had issued  17,850,000 shares of common stock and warrants
to purchase an additional 19,402,174 shares (see Note 5).

            The  warrants to be issued  pursuant to the March  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 March Financing and the shares and warrants issued in the
March  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 now-terminated
January  Financing and for the March  Financing.  In  connection  with the March
Financing,  the Company has agreed to allow C20 to keep the 4,600,000  shares of
Company common stock, plus warrants to purchase  13,000,000 million shares, that
were  originally  issued as  compensation  for its services  with respect to the
January  Financing.  The  warrants to be issued to C20 have a two-year  exercise
period and the following strike prices:  warrants to purchase  12,000,000 shares
at $1.00 and  warrants  to purchase  1,000,000  shares at $1.50.  No  additional
securities or  consideration  will be issued to C20 in connection with the March
Financing.

                                       11
<PAGE>

Sales Of Securities
-------------------

During the three months ended March 31, 2006,  the Company  issued the following
shares of common stock:

The Company issued a total of 2,238,857  shares of common stock registered under
Form S-8 to  various  consultants  and legal  counsel  for  current  and  future
services valued at $1,330,557 (an average of $0.59 per share, which approximates
the fair value of the shares at the time the services were rendered).

The Company  issued a total of 1,100,000  shares of  restricted  common stock to
various  consultants  for current  and future  services  valued at $473,000  (an
average of $0.43 per share,  which  approximates the fair value of the shares at
the time the services were rendered).

The Company issued a total of 500,000  shares of restricted  common stock to two
employees for services valued at $382,500 (an average of $0.77 per share,  which
approximates  the  fair  value of the  shares  at the  time  the  services  were
rendered).

The Company  issued a total of 500,000 shares of common stock  registered  under
Form S-8 for $75,000 pursuant to the exercise of options by an employee.

The Company issued a total of 1,652,355  shares of restricted  common stock to a
consultant for $147,957 cash pursuant to the exercise of options and warrants.

The Company  issued a total of 3,000,000  shares of restricted  common stock for
$900,000 cash.

The Company issued a total of 17,850,000  shares of restricted  common stock and
warrants  to  purchase  19,702,174  shares  of  restricted  common  stock  at  a
weighted-average  exercise  price  of  $3.96  per  share  for  an  aggregate  of
$3,570,000 cash.

The Company  issued a total of  46,000,000  shares of  restricted  common  stock
pursuant to a financing which was cancelled.  The Company expected to have these
shares returned for cancellation.

The Company issued a total of 4,600,000  shares of restricted  common stock to a
consultant for services  regarding the sale of shares for cash. The Company also
issued to this consultant  warrants to purchase  12,000,000 shares of restricted
common stock at a price of $1.00 per share,  and warrants to purchase  1,000,000
shares of restricted common stock at a price of $1.50 per share.

5. SEGMENT INFORMATION

The Company currently operates two business segments: (1) the sale of its secure
transaction  processing  system ePayPad and related service  (Paysafe),  and (2)
transaction  processing  fees  generated  through its wholly  owned  subsidiary,
Rahaxi  Processing Oy.  Intercompany  receivable and payable are subtracted from
the total  assets and  liabilities  for the  segments,  that are  eliminated  in
consolidation and therefore, do not themselves impact consolidated results.

The  following  table  summarizes   segment  asset  and  operating  balances  by
reportable segment:

<TABLE>
<CAPTION>
                                                  Three months ended            Nine months ended
                                                       March 31                     March 31
                                                ------------------------    ------------------------
                                                   2006          2005          2006          2005
                                                ----------    ----------    ----------    ----------
<S>                                             <C>           <C>           <C>          <C>
Sales to external customers:
Corporate                                             --            --            --            --
PaySafe                                               --            --            --            --
Rahaxi                                             494,296       412,778     1,674,990     1,203,502
                                                ----------    ----------    ----------    ----------
Total sales to external customers:                 494,296       412,778     1,674,990     1,203,502
                                                ==========    ==========    ==========    ==========

Depreciation and amortization:
Corporate                                             --            --            --            --
PaySafe                                              9,875        16,865        29,430        40,440
Rahaxi                                             149,167       144,381       437,765       430,013
                                                ----------    ----------    ----------    ----------
Total depreciation and amortization:               159,042       161,246       464,195       470,453
                                                ==========    ==========    ==========    ==========

                                       12
<PAGE>

General and administrative expense:
(not including depreciation and amortization)
Corporate                                        1,904,772     6,309,450     4,026,921     8,731,320
PaySafe                                             51,587       148,930       167,526        61,787
Rahaxi                                             316,420       188,736       862,305       251,622
                                                ----------    ----------    ----------    ----------
Total general and administrative expense         2,272,779     6,647,116     5,056,752     9,044,729
                                                ==========    ==========    ==========    ==========

Capital expenditures:
Corporate                                             --            --            --            --
Paysafe                                               --          10,142          --          35,913
Rahaxi                                             160,655        99,953       513,736       340,783
                                                ----------    ----------    ----------    ----------
Total capital expenditures                         160,655       110,095       513,736       376,696
                                                ==========    ==========    ==========    ==========

Operating loss:
Corporate                                       (1,904,772)   (6,448,484)   (4,026,921)   (8,353,256)
Paysafe                                            (61,462)      (62,558)     (196,956)     (231,047)
Rahaxi                                            (239,726)     (243,613)     (653,267)     (483,339)
                                                ----------    ----------    ----------    ----------
Total operating loss                            (2,205,960)   (6,754,655)   (4,877,144)   (9,081,249)
                                                ==========    ==========    ==========    ==========

Segment assets:
Corporate                                        4,011,339       158,242     4,011,339       158,242
Paysafe                                             37,774        88,348        37,774        88,348
Rahaxi                                           5,401,407     4,831,373     5,401,407     4,831,373
                                                ----------    ----------    ----------    ----------
Total segment assets                             9,450,520     5,077,963     9,450,520     5,077,963
                                                ==========    ==========    ==========    ==========

</TABLE>


6. RELATED PARTY TRANSACTIONS

Amounts due to related parties at March 31, 2006 consist of the following:

Accrued Salaries - Officers
---------------------------

     The Company's president, Paul Egan, who is also a shareholder,  had delayed
payment of a portion  of his salary in order to  conserve  the  Company's  cash.
During the three months  ended March 31, 2006,  the Company paid the amount past
due to Mr.  Egan in the amount of  $10,753  and at March 31,  2006,  there is no
accrued salary due to Paul Egan.

     The  Company's  chief  financial  officer,  Ciaran  Egan,  who  is  also  a
shareholder, had delayed payment of a portion of his salary in order to conserve
the Company's  cash.  During the three months ended March 31, 2006,  the Company
paid the amount  past due to Mr.  Egan in the amount of $22,800 and at March 31,
2006, there is no accrued salary due to Ciaran Egan.

Advances By Related Parties
---------------------------

     Paul Egan has  advanced  funds to the  Company  for its  operations.  These
amounts include net advances of $35,666 and accrued interest of $11,369 at March
31, 2006.

     Ciaran Egan has  advanced  funds to the Company for its  operations.  These
amounts  include net  advances of $389 and accrued  interest of $63 at March 31,
2006.

     The Company  expects to repay these amounts as soon as sufficient cash flow
from operations is generated.  Interest on the unpaid balances is accrued at the
rate of 7% per annum.

7. SUBSEQUENT EVENTS


         In April 2006, the Company received  $1,047,830 (net of bank charges of
$30,000)  pursuant to the March Financing (See note 4), and issued an additional
5,150,000 shares of common stock and two-year warrants to purchase an additional
3,597,826 shares at prices ranging from $1.50 to $8.50.

         In April 2006, the Company signed subscription  agreements with a group
of offshore  investors led by Swedish  Credit and Finance .AB for the sale of an
aggregate  of 25 million  shares of Company  common  stock for  $10,000,000  (an
average price per share of $0.40), plus warrants (the "April Financing").

                                       13
<PAGE>

            The Company will issue 25 million  newly issued shares of restricted
common  stock under  Regulation S at an average  price of $0.40 per share,  plus
warrants  to  purchase  25 million  shares of Company  common  stock with strike
prices ranging from $1.50 to $3.00.

Conversion Of Note Payable
--------------------------

         In May 2006,  the  Company  converted  a note  payable in the amount of
$650,000 to 1,183,283 shares of common stock.

8. RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated its financial  statements for the three and nine months
ended March 31, 2006 to correct the following errors in the financial statements
previously filed:

The Company erroneously recorded the cost of amortizing its capitalized software
costs as a component of selling,  general and administrative costs instead of as
a component of cost of sales.

The net effect of the correction of this error was to:

Increase the Company's reported cost of revenue for the three months ended March
31, 2006 by $93,358 from $268,435 to $363,793.

Decrease the Company's reported selling, general and administrative expenses for
the three months ended March 31, 2006 by $93,358 from $2,431,821 to $2,336,463.

Increase the Company's  reported cost of revenue for the nine months ended March
31, 2006 by $275,978 from $1,031,187 to $1,307,165.

Decrease the Company's reported selling, general and administrative expenses for
the nine months ended March 31, 2006 by $275,978 from $5,520,947 to $5,244,969.

The correction of the error has resulted in no change in the Company's  reported
Consolidated  Balance Sheet as of March 31, 2006 and  Consolidated  Statement of
Cash Flows for the nine months ended March 31, 2006.

However,  the restatement did affect the individual  components of the Company's
cost of revenue and selling, general and administrative costs as reported on its
Consolidated  Statement of Operations for the three months and nine months ended
March 31, 2006 and 2005.

Following are  reconciliations of the Company's  restatement of the Consolidated
Statement of Operations for the three and nine months ended March 31, 2006.

<TABLE>
<CAPTION>

                                            Three Months Ended March 31, 2006     Nine Months Ended March 31, 2006
                                              (As Restated)  (As Reported)         (As Restated)  (As Reported)
                                              -------------  -------------         -------------  -------------
<S>                                           <C>            <C>                   <C>             <C>
Revenues                                       $   494,296    $   494,296           $ 1,674,990    $ 1,674,990
Cost of revenue                                    363,793        268,435             1,307,165      1,031,187
Gross Profit (loss)                                130,503        225,861               367,825        643,803
Operating Expenses:
Selling, General &                               2,336,463      2,431,821             5,244,969      5,520,947
Administrative expenses
Loss from Operations                            (2,205,960)    (2,205,960)           (4,877,144)    (4,877,144)
Other income (expense):
Gain on legal settlement                              --             --                   --             --
Gain on disposal of assets                            --             --                   2,223          2,223
Interest expense, net                              (10,736)       (10,736)              (47,982)       (47,982)
Taxes                                                 --             --                    --             --
Net loss                                        (2,216,696)    (2,216,696)           (4,922,903)    (4,922,903)
Earnings per common share                      $     (0.01)   $     (0.01)          $     (0.03)   $     (0.03)
(basic and diluted)


                                            Three Months Ended March 31, 2005     Nine Months Ended March 31, 2005
                                              (As Restated)  (As Reported)         (As Restated)  (As Reported)
                                              -------------  -------------         -------------  -------------
Revenues                                       $   412,778    $   412,778           $ 1,203,502    $ 1,203,502
Cost of revenue                                    478,060        359,071             1,081,235        787,366
Gross Profit (loss)                                (65,282)        53,707               122,267        416,136
Operating Expenses:
Selling, General &                               6,689,373      6,808,362             9,203,516      9,497,385
Administrative expenses
Loss from Operations                            (6,754,655)    (6,754,655)           (9,081,249)    (9,081,249)
Other income (expense):
Gain on legal settlement                           350,000        350,000               350,000        350,000
Gain on disposal of assets                          (1,371)        (1,371)               (1,371)
Interest expense, net                               (7,474)        (1,371)               (9,378)        (9,378)
Taxes                                                 --           (7,474)                 --             --
Net Income (loss)                               (6,413,501)    (6,413,501)           (8,741,999)    (8,741,999)
Earnings per common share                      $     (0.08)   $      (.01)          $     (0.13)   $     (0.13)
(basic and diluted)
</TABLE>



                                       14
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

     The following  discussion and analysis of the Company's financial condition
and results of operations is based upon, and should be read in conjunction with,
its condensed  consolidated  financial  statements  and related  notes  included
elsewhere in this Form 10-QSB/A.


Overview
--------

     The e-payments  and e-commerce  market is composed of debit and credit card
issuers, switch interchanges,  transaction acquirers and transaction generators,
including  Automated Teller Machine ("ATM") networks,  retail merchant locations
and the Internet. The routing, control and settlement of e-payments is a complex
activity due to the large number of locations  and variety of sources from which
transactions can be generated,  the large number of issuers in the market,  high
transaction  volumes,  geographically  dispersed  networks,  differing  types of
authorization and varied reporting requirements.  These activities are typically
performed online and must be conducted 24 hours per day, seven days per week.

     The Company's  products and services are primarily  focused on facilitating
electronic payments ("e-payments") and electronic commerce ("e-commerce"). These
products  and  services   are   designed  for  use   principally   by  financial
institutions,   retailers,  and  e-payment  processors,  both  in  domestic  and
international markets.

     The Company  intends to derive  revenues  from its core payment  processing
products,  which include:  (1) Authorization:  transaction fees it receives from
processing online point of sale terminal transactions;  (2) Point of Sale: sales
of "Point of Sale" terminals;  (3) Transaction Fees:  stemming from its Internet
Payment  Gateway;  (4) Dynamic  Currency  Conversion:  credit  card  services to
merchants  and  acquiring  banks (the Company will provide  transaction  gateway
services and settlement with participating  banking  institutions);  (5) Private
Label Cards:  transaction  management services provided for a private label card
issuer;  and (6)  Consulting  Fees:  consulting  services  provided to financial
institutions  and  merchants.  The Company's  revenue for the three months ended
March 31, 2006 was primarily  generated from the transaction and consulting fees
through its Finland operations.

     BASE24  software  from ACI  Worldwide and  Hewlett-Packard  ("HP")  NonStop
servers, provides the Company with a fast, powerful authorization system. BASE24
software offers high data integrity for mission-critical  environments.  ACI and
HP have a strong and  long-standing  relationship  in e-payment  implementations
worldwide.

     This  hardware  and  software  system  will  enable the Company to meet the
latest   Visa   and   MasterCard   standards   and  to  pave  the  way  for  EMV
Europay/MasterCard/Visa  ("EMV") compliance. The Company will also be capable of
supporting the latest Visa 3D secure payment  technology.  EMV is an agreed-upon
protocol for the introduction of smart cards.  Chip-based bank and payment cards
provide a substantial increase in the security of consumer payment transactions.
EMV is also  gaining  momentum  in Asia and  America,  and may help bring  about
complete  global  interoperability  of  bankcards  for  consumers.  All  payment
processors  will have to be able to accept  payments  mediated by smart cards in
order to remain  competitive,  and meeting EMV compliance has major implications
for all aspects of the payment handling processes. Management believes that with
the Company's investment in the NonStop systems running the newest ACI software,
it can meet its  projected  increasing  capacity  needs and ensure future volume
growth.


                                       15
<PAGE>

     Management believes that the Company's near term growth  opportunities will
be  derived  from the  European  marketplace  and a  significant  portion of its
resources,  both financial and personnel,  will be directed  towards  developing
those  opportunities.  The Company  also  believes  that,  from a  technological
infrastructure  point of view, it will centralize the hosting and development of
its processing system in Europe from its operations in Helsinki, Finland.

     The Company's  principal offices are in Dublin,  Ireland.  The Company also
has offices in Helsinki,  Finland; Stockholm,  Sweden; Geneva, Switzerland;  and
Santo Domingo,  the Dominican Republic.  While the Company's offices in Finland,
Sweden,  and  Switzerland  will  primarily  focus on the  European  market,  the
Company's office in the Dominican Republic will continue to pursue opportunities
in the  Caribbean and Latin  America.  Management  believes that these  emerging
markets  could offer  favorable  opportunities  in the longer term,  although no
revenues  are  anticipated  from such  markets  within the next 12  months.  The
Company has initiated  discussions  with regard to establishing a market for its
products in Asia, specifically China.

     Effective November 8, 2004, the Company implemented a one for seven reverse
split of its common stock. The new trading symbol for the Company's common stock
as of that date was  "FSRT".  The  Company's  unaudited  condensed  consolidated
financial statements included in this report reflect the effects of this reverse
stock-split.

Results Of Operations
---------------------

THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THREE MONTHS ENDED MARCH 31, 2005

(a) REVENUE

     The Company had revenue of $494,296  for the three  months  ended March 31,
2006 compared to $412,778 for the three months ended March 31, 2005, an increase
of $81,518 or  approximately  20%. The substantial  majority of the increase was
due  primarily to the  generation  of  consulting  and  development  fees by the
Company's subsidiary, Rahaxi Processing Oy. The other reason for the increase in
revenue  was an  increase  in  transaction  processing  fees by Rahaxi due to an
increased  volume of  transactions  processed.  The Company expects the trend of
increased  processing fees and transactional  volume to continue  throughout the
remainder  of fiscal  2006 with the  addition  of new  clients  and a  continued
increase in consumers' preference to use credit and debit cards instead of cash.

     For the three months ended March 31, 2006, the Company processed  4,071,907
transactions,  an increase of 621,868 or  approximately  18%, over the 3,450,039
transactions  that were  processed in the  corresponding  period ended March 31,
2005. For the three months ended March 31, 2006,  revenue from  processing  fees
increased by $4,218,  or one  percent,  compared to the three months ended March
31, 2005. Transaction processing revenue grew slower than transaction processing
volume  due  to  lower  fees  charged  per  transaction  as a  result  of  price
discounting implemented in order to penetrate certain markets.

     During the three months ended March 31, 2006, the Company derived  revenues
of $77,300 from  development and consulting  services  supplied to clients.  The
Company did not receive such fees during the  comparable  period ended March 31,
2005.  The  Company  expects to receive  further  revenue  from  consulting  and
development fees throughout the remainder of fiscal 2006.

     The Company expects  revenue levels to increase  throughout the next twelve
months as it  continues  to  penetrate  its target  markets,  and as the Company
introduces new 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 Refunds.  There can be no guarantee that
the  Company's  products will be accepted in the  marketplace  or that its sales
efforts  will be  successful.  Please see  "Factors  That May  Affect  Operating
Results."

     A  significant  percentage  of the  Company's  revenue for the three months
ended March 31, 2006 has been  derived from a limited  number of its  customers,
primarily   Finnish   customers  for  its   transaction   processing   products.
Approximately  49% of the Company's total revenues were  attributable to its ten
largest  customers.  The Company derived additional revenue from clients outside
of Finland during the three months ended March 31, 2006; this revenue  accounted
for  approximately  15% of total  revenue  for the  period.  The Company did not
obtain revenue  outside of Finland during the three months ended March 31, 2005.
The future loss of any major  customer  could have a material  adverse effect on
the  Company's  business,  financial  condition and results of  operations.  The
Company  believes  that  this  customer  concentration  will  continue  for  the
remainder of fiscal 2006,  but will gradually  start to be diluted  beginning in
the second half of fiscal 2006 as it continues to pursue  operations  outside of
Finland.

                                       16
<PAGE>

     The  majority of  Company's  revenues  for the three months ended March 31,
2006 have been generated by its operations outside of the United States, and its
future growth rate is, in part  dependent on continued  growth in  international
markets.  The  Company  expects the  majority of its  revenues to continue to be
generated  outside of the U.S.  through the remainder of fiscal year 2006.  (The
Company's fiscal year 2006 runs from July 1, 2005 through June 30, 2006).

(b) COST OF REVENUE

     Cost of revenue was  $363,793  for the three  months  ended March 31, 2006,
compared to $478,060  for the three  months  ended March 31, 2005, a decrease of
$114,267 or approximately 24%. The decrease in cost of revenue is due in part to
a reduction in the amount of materials and services  that were  purchased by the
Company.  Approximately  $95,358  of the cost of revenue  is  attributed  to the
amortization of capitalized software;  this cost will not increase directly with
an increase in sales,  but will only increase as the Company adds to or improves
its operating software.

     Cost of revenue can be expected to increase in the coming  twelve months if
the Company  continues its current trend of increasing  sales.  The Company also
intends to expand its service  offering and its  business  mix will  necessarily
change, so that gross margin as a percent of sales may not remain constant.  The
fixed portion of cost of revenue  attributable  to the  amortization of software
costs  will  become  smaller  as a  percentage  of sales if  sales  continue  to
increase, thus increasing the Company's operating margin.

(c) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and administrative expenses were $2,336,463 for the three
months ended March 31, 2006  compared to  $6,689,373  for the three months ended
March 31, 2005, a decrease of $4,352,910 or approximately  65%. During the three
months ended March 31, 2006,  the primary  components of selling,  general,  and
administrative expenses were: consulting fees of $1,460,362, of which $1,385,916
were non-cash  costs;  payroll and related costs of $228,272;  depreciation  and
amortization of $63,684; facility costs, such as rent, telephone, and utilities,
of $147,648;  travel and entertainment costs of $141,957;  professional services
of $53,941; and investor relations costs of $29,620. The Company also charged to
Selling,  General, and Administrative expenses the amount of $259,305, which was
the cost of revaluing previously  outstanding  warrants and options,  which were
issued  pursuant to an agreement  to jointly  develop  certain of the  Company's
products.

     The level of future  selling,  general  and  administrative  expenses  will
largely  depend on the pace of the  Company's  growth in the market for  payment
processing products and upon the cost of outside services and professional fees,
including  legal fees  relating to  litigation.  The Company fully expects these
costs to increase as it continues its expected rollout of product offerings.  In
addition,  selling  expenses will continue to increase due to increased focus on
obtaining new customers.  The Company intends to focus  additional  resources in
the areas of sales  personnel  salaries,  trade  show  participation,  and other
promotional expenses.  In addition,  the Company may pursue further acquisitions
in order to facilitate its growth and exploit market opportunities,  which would
further drive up legal and accounting fees, payroll, and travel costs.

(d) INTEREST EXPENSE

     The Company had net  interest  expense of $10,736  during the three  months
ended March 31, 2006  compared to net  interest  expense of $7,474 for the three
months ended March 31, 2005, an increase of $3,262 or approximately  44%. Higher
interest expense was due primarily to interest on notes payable in the amount of
$12,487,  partially  offset by  interest  earned by the  Company on higher  cash
balances during the period.

     Currently,  the Company is utilizing  equity  financing  partly in order to
avoid the interest  charges  associated  with debt financing.  Accordingly,  the
Company does not expect  interest  expense to materially  increase in the coming
twelve months. There can be no guarantee that this will be the case, however, as
the market  price for the  Company's  common stock could  change,  forcing it to
pursue  alternative  methods of financing the Company's cash needs. In addition,
the  Company  could  receive  an offer of  attractive  debt  financing  or could
undertake  additional  financing with regard to an  acquisition,  in which cases
interest expense would significantly increase.

(e) NET LOSS

     For the reasons stated above, the Company recorded a net loss of $2,216,696
for the three months ended March 31, 2006 compared to  $6,413,501  for the three
months ended March 31, 2005, a decrease of $4,196,805 or  approximately  65. The
decreased  loss is  primarily  due to the  increase  in sales  and  decrease  in
general, and administrative expenses for the period. The Company may continue to
incur losses on both a quarterly and annual  basis,  and  anticipates  continued
losses for at least the next 12 months.  In  addition,  the  Company  expects to
continue  to incur  significant  costs of  services  and  substantial  operating


                                       17
<PAGE>

expenses. Therefore, the Company will need to significantly increase revenues to
achieve  profitability  and a positive cash flow. The Company may not be able to
generate sufficient revenues to achieve profitability.

     The Company  will attempt to continue to fund its  operations  through debt
and equity  financing  until it  achieves  profitability,  of which  there is no
guarantee.  The Company expects these concerns regarding its perceived viability
to continue throughout the fiscal year 2006.

NINE MONTHS  ENDED  MARCH 31, 2006  COMPARED TO NINE MONTHS ENDED MARCH 31, 2005

(a) REVENUE

     The Company had revenue of  $1,674,990  for the nine months ended March 31,
2006  compared to  $1,203,502  for the nine  months  ended  March 31,  2005,  an
increase of $471,488  or  approximately  39%.  The  substantial  majority of the
increase was due primarily to the generation of consulting fees by the Company's
subsidiary,  Rahaxi  Processing Oy. The other reason for the increase in revenue
was an increase in transaction processing fees by Rahaxi. The Company expects
this  trend of  increasing  transactional  volume  to  continue  throughout  the
remainder  of fiscal  2006 with the  addition  of new  clients  and a  continued
increase in consumers' preference to use credit and debit cards instead of cash.

     For the nine months ended March 31, 2006, the Company processed  13,287,548
transactions,  an increase of 1,791,649 or approximately 15% over the 11,495,899
transactions  that were  processed in the  corresponding  period ended March 31,
2005.  For the nine months ended March 31, 2006,  revenue from  processing  fees
Increased by $89,888,  or 7.4% percent,  compared to the nine months ended March
31, 2005. Transaction processing revenue grew slower than transaction processing
volume  due  to  lower  fees  charged  per  transaction  as a  result  of  price
discounting implemented in order to penetrate certain markets.

     During the nine months ended March 31, 2006 the Company derived revenues of
$381,600 from  development  and  consulting  services  supplied to clients.  The
Company did not receive such fees during the  comparable  period ended March 31,
2005.  The  Company  expects to receive  further  revenue  from  consulting  and
development fees throughout the remainder of fiscal 2006.

(b) COST OF REVENUE

     Cost of revenue was  $1,307,165  for the nine months  ended March 31, 2006,
compared to $1,081,235  for the nine months ended March 31, 2005, an increase of
$225,930 or approximately 21%. The increase in cost of revenue is due in part to
continued  investment in the Company's  technical  infrastructure  and hiring of
additional staff, as well as increased sales volume.  Approximately  $275,978 of
the cost of revenue is attributed to the  amortization of capitalized  software;
this cost will not increase  directly  with an increase in sales,  but will only
increase as the Company adds to or improves its operating software.

(c) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and administrative  expenses were $5,244,969 for the nine
months  ended March 31, 2006  compared to  $9,203,516  for the nine months ended
March 31, 2005, a decrease of $3,958,547 or  approximately  43%. During the nine
months ended March 31, 2006,  the primary  components of selling,  general,  and
administrative expenses were: consulting fees of $2,472,443, of which $2,397,997
were non-cash  costs;  payroll and related costs of $852,756;  depreciation  and
amortization of $176,584;  travel and entertainment costs of $395,392;  facility
fees, such as rent, telephone,  and utilities, of $336,541; legal and accounting
fees of $223,603; fees for professional services of $114,762; investor relations
costs of $56,020;  and recruiting costs of $36,341. The Company also credited to
selling,   general,   and   administration   expenses  the  amount  of  $263,349
representing the original issuance cost of shares issued to consultants in prior
periods, which have been returned to the Company and cancelled. The Company also
charged to Selling, General, and Administrative expenses the amount of $259,305,
which was the cost of  revaluing  previously  outstanding  warrants and options,
which were issued  pursuant to an  agreement to jointly  develop  certain of the
Company's  products.  The fixed portion of cost of revenue  attributable  to the
amortization  of software  costs will become smaller as a percentage of sales if
sales continue to increase, thus increasing the Company's operating margin.


(d) INTEREST EXPENSE

     The  Company  had net  interest  expense of $47,982  during the nine months
ended March 31, 2006  compared  to net  interest  expense of $9,378 for the nine
months  ended March 31,  2005,  an increase  of $38,604 or  approximately  412%.
Higher  interest  expense was due  primarily to interest on notes payable in the
amount of $37,189.


                                       18
<PAGE>

(e) NET LOSS

     For the reasons stated above, the Company recorded a net loss of $4,922,903
for the nine months  ended March 31, 2006  compared to  $8,741,999  for the nine
months ended March 31, 2005, a decrease of $3,819,096 or approximately  44%. The
decreased loss is primarily due to the decrease in non-cash  compensation  costs
included in sales, general, and administrative expenses.

OPERATING ACTIVITIES

     The net cash  used in  operating  activities  was  $2,866,259  for the nine
months  ended March 31, 2006  compared to  $1,313,582  for the nine months ended
March 31, 2005, an increase of $1,552,677 or  approximately  118%.  Cash used in
operating activities during the nine months ended March 31, 2006 is attributable
primarily to the net loss of $4,936,510  partially offset by non-cash charges of
$2,694,491 (net of $263,349 for stock returned to the Company and cancelled) and
$464,195 of depreciation and  amortization.  Cash from operating  activities was
also  decreased  by  $1,086,212  due to  changes  in the  components  of working
capital.

INVESTING ACTIVITIES

     Net cash used in investing  activities was $511,513,  which was an increase
of $138,871 or approximately  37% compared to cash used in investing  activities
of  $372,642  for the nine  months  ended  March 31,  2005.  This  increase  was
primarily due to decreased  investing by the Company in software and capitalized
software costs.

LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 2006,  the Company had total  current  assets of $4,888,796
and total current  liabilities  of $1,483,050,  resulting in working  capital of
$3,405,746. The Company had cash and cash equivalents of $4,300,035 at March 31,
2006.  As of  March  31,  2006,  the  Company  had  an  accumulated  deficit  of
$49,036,845.  The Company's historical losses and accumulated deficit has raised
substantial  doubt as to the Company's  ability to continue as a going  concern.
The  independent  auditors  report  on our June 30,  2005  financial  statements
included in the Form 10-KSB states that our difficulty in generating  sufficient
cash flow to meet our  obligations  and  sustain  operations  raise  substantial
doubts about the our ability to continue as a going concern.

     On January 27, 2006,  the Company  signed  subscription  agreements  with a
group of offshore  investors  for the sale of an  aggregate  of $9.2  million in
Company  common  stock,  plus warrants  (the  "January  Financing").  Due to the
failure  of the  investment  group  to  timely  fund in full the  first  payment
required for the purchase of shares and  warrants,  the Company  terminated  the
January  Financing;  all shares and warrants issued  thereunder were returned by
the  escrow  holder to the  Company  for  cancellation,  and any funds  received
pursuant  to the January  Financing  were  returned by the escrow  holder to the
investors.

     In  March  2006,  a  group  of  European   investors   (collectively,   the
"Investors"),  lead by Olympia  Holding AS,  informed the Company that they were
willing to invest on the same terms and conditions  that were negotiated for the
now-terminated  January  Financing,  and the  Company  agreed to this  financing
transaction with the Investors (the "March Financing").

     Pursuant to the March  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.  The shares  which will be held in escrow by Carl Hessel  ("Escrow
Holder"),  a director  and major  stockholder  of the  Company  based in Geneva,
Switzerland,  along  with the  warrants.  Pursuant  to the  terms  of the  March
Financing, the first payment of $4.6 million was due immediately,  with a second
payment of $4.6  million due within  three  months  thereafter.  As of March 31,
2006,  the Company had received  cash in the amount  $3,552,150  pursuant to the
March Financing,  and had issued  17,850,000 shares of common stock and warrants
to purchase an additional 19,402,174 shares.

     The warrants to be issued pursuant to the March 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


                                       19
<PAGE>

            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 March Financing and the shares and warrants issued in the
March  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  now-terminated
January  Financing and for the March  Financing.  In  connection  with the March
Financing,  the Company has agreed to allow C20 to keep the 4,600,000  shares of
Company common stock, plus warrants to purchase  13,000,000 million shares, that
were  originally  issued as  compensation  for its services  with respect to the
January  Financing.  The  warrants to be issued to C20 have a two-year  exercise
period and the following strike prices:  warrants to purchase  12,000,000 shares
at $1.00 and  warrants  to purchase  1,000,000  shares at $1.50.  No  additional
securities or  consideration  will be issued to C20 in connection with the March
Financing.

         In April 2006, the Company received  $1,047,830 (net of bank charges of
$30,000)  pursuant to the March Financing (See note 4), and issued an additional
5,150,000 shares of common stock and two-year warrants to purchase an additional
3,597,826 shares at prices ranging from $1.50 to $8.50.


         In April 2006, the Company signed subscription  agreements with a group
of offshore  investors led by Swedish  Credit and Finance .AB for the sale of an
aggregate  of 25  million  shares of  Company  common  stock for  $10,000,000(an
average price per share of $0.40), plus warrants (the "April Financing").

            The Company will issue 25 million  newly issued shares of restricted
common  stock under  Regulation S at an average  price of $0.40 per share,  plus
warrants  to  purchase  25 million  shares of Company  common  stock with strike
prices ranging from $1.50 to $3.00.

     The accompanying  financial statements have been prepared assuming that the
Company continues as a going concern that contemplates the realization of assets
and the  satisfaction of liabilities in the normal course of business.  However,
the ability of the Company to continue as a going concern on a longer-term basis
will be  dependent  upon its  ability  to  generate  sufficient  cash  flow from
operations  to meet its  obligations  on a timely  basis,  to obtain  additional
financing, and ultimately, attain profitability.

     Management plans to continue raising  additional  capital through a variety
of fund raising methods during fiscal 2006 and to pursue all available financing
alternatives in this regard. Management may also consider a variety of potential
partnership or strategic alliances to strengthen its financial position. Whereas
the Company has been successful in the past in raising capital, no assurance can
be given that these  sources of  financing  will  continue to be available to us
and/or that demand for our  equity/debt  instruments  will be sufficient to meet
our capital needs, or that financing will be available on terms favorable to the
Company. The financial statements do not include any adjustments relating to the
recoverability  and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. If funding is insufficient
at any time in the  future,  the Company  may not be able to take  advantage  of
business opportunities or respond to competitive  pressures,  or may be required
to reduce the scope of its planned product  development  and marketing  efforts,
any of which could have a negative impact on its business and operating results.
In  addition,  insufficient  funding may have a material  adverse  effect on the
Company's financial condition, which could require the Company to:

     O    curtail operations significantly;

     O    sell significant assets;

     O    seek  arrangements  with strategic  partners or other parties that may
          require  the Company to  relinquish  significant  rights to  products,
          technologies or markets; or

     O    explore other strategic alternatives including a merger or sale of the
          Company.

     To the extent that the Company raises  additional  capital through the sale
of equity or convertible  debt  securities,  the issuance of such securities may
result in significant dilution to existing stockholders. If additional funds are
raised  through  the  issuance of debt  securities,  these  securities  may have
rights,  preferences  and  privileges  senior to holders of common stock and the
terms of such  debt  could  impose  restrictions  on the  Company's  operations.


                                       20
<PAGE>

Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's operational needs, the Company may seek to compensate providers of
services by issuance of stock in lieu of cash, which may also result in dilution
to existing shareholders.

     The Company has been successful in obtaining cash resources through private
placements and the exercise of options.  Financing  activities  provided cash of
$7,074,716  during the nine months ended March 31, 2006  compared to  $1,896,086
for the nine  months  ended  March  31,  2005,  an  increase  of  $5,178,630  or
approximately  273%.  During the nine months ended March 31,  2006,  the Company
received  $5,770,000 in cash from the sale of common stock,  and $1,437,492 from
the exercise of stock options.

CERTAIN INDEBTEDNESS

     Paul Egan has  advanced  funds to the  Company  for its  operations.  These
amounts include net advances of $35,666 and accrued interest of $11,369 at March
31, 2006.

     Ciaran Egan has  advanced  funds to the Company for its  operations.  These
amounts  include net  advances of $389 and accrued  interest of $63 at March 31,
2006.

     The Company  expects to repay these amounts as soon as sufficient cash flow
from operations is generated.  Interest on the unpaid balances is accrued at the
rate of 7% per annum.

ACCRUED SALARIES

     The Company's president, Paul Egan, who is also a shareholder,  had delayed
payment of a portion  of his salary in order to  conserve  the  Company's  cash.
During the three months  ended March 31, 2006,  the Company paid the amount past
due to Mr.  Egan in the amount of  $10,753  and at March 31,  2006,  there is no
accrued salary due to Paul Egan.

     The  Company's  chief  financial  officer,  Ciaran  Egan,  who  is  also  a
shareholder, had delayed payment of a portion of his salary in order to conserve
the Company's  cash.  During the three months ended March 31, 2006,  the Company
paid the amount  past due to Mr.  Egan in the amount of $22,800 and at March 31,
2006, there is no accrued salary due to Ciaran Egan.

EXCHANGE RATES

     The Company's  operations are  principally  in Helsinki,  Finland under the
name of Rahaxi Processing Oy., operated in its local currency,  the Euro, and in
Dominican  Republic  under  the name  ePayLatina  S.A.,  operated  in its  local
currency, the Dominican Republic Peso. All assets and liabilities are translated
at exchange  rates in effect at the end of the year.  Accounts for  consolidated
statements of operations are translated at weighted  average rates for the year.
Gains and losses from translation of foreign currency financial  statements into
U.S.  dollars  are  included  in  Other  -  comprehensive   income  (loss).  The
accumulated foreign currency  translation  adjustment was $(97,442) at March 31,
2006.

     Any  significant  change in exchange rates may have a favorable or negative
effect on both the revenues and operational costs of the Company. In particular,
the  value of the  U.S.  dollar  to the Euro  impacts  the  Company's  operating
results.  The Company's expenses are not necessarily incurred in the currency in
which revenue is generated,  and, as a result,  it is required from time to time
to  convert  currencies  to meet  the  Company's  obligations.  In  addition,  a
significant portion of the Company's  financial  statements are prepared in Euro
and translated to U.S. dollars for consolidation.

INFLATION

     The impact of  inflation  on the costs of the  Company,  and the ability to
pass on cost  increases  to its  customers  over time is  dependent  upon market
conditions. The Company is not aware of any inflationary pressures that have had
any significant  impact on the Company's  operations over the past quarter,  and
the  Company  does  not  anticipate  that  inflationary   factors  will  have  a
significant impact on future operations.

OFF-BALANCE SHEET ARRANGEMENTS

     The Company does not maintain  off-balance  sheet  arrangements nor does it
participate in non-exchange  traded  contracts  requiring fair value  accounting
treatment.

                                       21
<PAGE>

OTHER

     The Company does not provide  post-retirement or  post-employment  benefits
requiring charges under Statements of Financial Accounting Standards No. 106 and
No. 112.

CRITICAL ACCOUNTING POLICIES

     The SEC has issued Financial  Reporting Release No. 60,  "Cautionary Advice
Regarding Disclosure About Critical Accounting Policies" ("FRR 60"),  suggesting
companies  provide  additional  disclosure and commentary on their most critical
accounting  policies.  In FRR 60, the  Commission  has defined the most critical
accounting  policies as the ones that are most  important to the  portrayal of a
Company's financial  condition and operating results,  and require management to
make its most difficult and subjective judgments,  often as a result of the need
to make  estimates  of  matters  that are  inherently  uncertain.  Based on this
definition,  the Company's most critical accounting policies include: (a) use of
estimates  in  the   preparation  of  financial   statements;   (b)  stock-based
compensation arrangements;  (c) revenue recognition;  and (d) long-lived assets.
The methods,  estimates and  judgments  the Company uses in applying  these most
critical  accounting  policies  have a  significant  impact on the  results  the
Company reports in its financial statements.

(a) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

     The preparation of these financial  statements requires the Company to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,   and  related  disclosure  of  contingent  assets  and
liabilities.  On an on-going  basis,  the  Company  evaluates  these  estimates,
including those related to revenue recognition and concentration of credit risk.
The Company bases its estimates on  historical  experience  and on various other
assumptions  that is  believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about the carrying values
of assets and  liabilities  that are not readily  apparent  from other  sources.
Actual results may differ from these estimates  under  different  assumptions or
conditions.

(b) STOCK-BASED COMPENSATION ARRANGEMENTS

     The Company intends to issue shares of common stock to various  individuals
and entities for management,  legal,  consulting and marketing  services.  These
issuances  will be valued at the fair market  value of the service  provided and
the number of shares issued is  determined,  based upon the open market  closing
price  of  common  stock as of the date of each  respective  transaction.  These
transactions  will  be  reflected  as  a  component  of  selling,   general  and
administrative expenses in the accompanying statement of operations.

(c) REVENUE RECOGNITION

     The  Company  recognizes  revenues  from  contracts  in which  the  Company
provides only consulting services as the services are performed. The contractual
terms of the  agreements  dictate  the  recognition  of revenue by the  Company.
Payments received in advance are deferred until the service is provided.

     Contract costs include all direct equipment,  material, and labor costs and
those indirect costs related to contract  performance,  such as indirect  labor.
Selling,  general and  administrative  costs are charged to expense as incurred.
Provisions for estimated losses on uncompleted  contracts are made in the period
in which such losses are determined.  Changes in contract performance,  contract
conditions,  and estimated  profitability  that may result in revisions to costs
and income are recognized in the period in which the revisions are determined.

     For  revenue  from  product  sales,  the  Company   recognizes  revenue  in
accordance   with  Staff   Accounting   Bulletin   ("SAB")  No.  104,   "Revenue
Recognition,"  which superseded SAB No. 101,  "Revenue  Recognition in Financial
Statements."  SAB No. 101 requires  that four basic  criteria must be met before
revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable;  and (4)
collectibility is reasonably assured.  Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products  delivered and the  collectibility of those amounts.  Provisions
for discounts and rebates to customers,  estimated  returns and allowances,  and
other  adjustments  are  provided  for in the same period the related  sales are
recorded.  The  Company  defers any  revenue  for which the product has not been
delivered  or is subject  to refund  until  such time that the  Company  and the
customer jointly determine that the product has been delivered or no refund will
be required.  SAB No. 104  incorporates  Emerging Issues Task Force ("EITF") No.
00-21,  "Multiple-Deliverable  Revenue  Arrangements."  EITF No. 00-21 addresses

                                       22
<PAGE>

accounting  for  arrangements  that may involve the delivery or  performance  of
multiple  products,  services  and/or  rights  to  use  assets.  The  effect  of
implementing EITF No. 00-21 on the Company's consolidated financial position and
results of operations was not significant. This issue addresses determination of
whether an arrangement  involving more than one  deliverable  contains more than
one unit of accounting and how the arrangement  consideration should be measured
and  allocated  to the  separate  units of  accounting.  EITF No.  00-21  became
effective for revenue  arrangements entered into in periods beginning after June
15, 2003.  For revenue  arrangements  occurring on or after August 1, 2003,  the
Company revised its revenue  recognition policy to comply with the provisions of
EITF No. 00-21.

     For those contracts which contain  multiple  deliverables,  management must
first  determine  whether each service,  or  deliverable,  meets the  separation
criteria  of  EITF  No.  00-21.  In  general,  a  deliverable  (or  a  group  of
deliverables)  meets the separation  criteria if the  deliverable has standalone
value to the  customer and if there is  objective  and reliable  evidence of the
fair value of the remaining  deliverables in the  arrangement.  Each deliverable
that  meets  the   separation   criteria  is  considered  a  "separate  unit  of
accounting."  Management  allocates the total arrangement  consideration to each
separate  unit of  accounting  based on the relative fair value of each separate
unit of accounting. The amount of arrangement consideration that is allocated to
a unit of  accounting  that has already been  delivered is limited to the amount
that is not contingent upon the delivery of another separate unit of accounting.
After the arrangement  consideration has been allocated to each separate unit of
accounting,  management applies the appropriate  revenue  recognition method for
each separate unit of accounting as described  previously based on the nature of
the arrangement.  All deliverables  that do not meet the separation  criteria of
EITF No. 00-21 are combined  into one unit of  accounting,  and the  appropriate
revenue recognition method is applied.

     Processing   fee  revenue  is  earned  based  upon  the  actual  number  of
transactions  processed  through the Company's  processing  system.  Transaction
processing  fees are  recognized  in the period that the  service is  performed.
These fees are typically  charged on a per transaction  basis,  depending on the
arrangement with the customer.

(d) LONG-LIVED ASSETS

     Long-lived assets to be held and used are analyzed for impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. The Company evaluates at each balance sheet date whether
events and  circumstances  have occurred that indicate possible  impairment.  If
there are indications of impairment,  the Company uses future  undiscounted cash
flows of the  related  asset  or  asset  grouping  over  the  remaining  life in
measuring  whether the assets are recoverable.  In the event such cash flows are
not expected to be sufficient to recover the recorded  asset values,  the assets
are written down to their estimated fair value. Long-lived assets to be disposed
of are reported at the lower of carrying  amount or fair value of asset less the
cost to sell.

FORWARD LOOKING STATEMENTS.

     This Form 10-QSB/A contains "forward looking statements" within the meaning
of Rule 175 of the  Securities  Act of 1933,  as  amended,  and Rule 3b-6 of the
Securities Act of 1934, as amended.  When used in this Form 10-QSB/A,  the words
"expects,"  "anticipates,"  "believes,"  "plans," "will" and similar expressions
are intended to identify forward-looking  statements.  These are statements that
relate to  future  periods  and  include,  but are not  limited  to,  statements
regarding  our  adequacy  of  capital  resources,  need and  ability  to  obtain
additional financing,  the features and benefits of our services,  our operating
losses and negative cash flow, and our critical accounting policies.


     Forward-looking  statements are subject to certain risks and  uncertainties
that could cause actual results to differ materially from those projected. These
risks and uncertainties  include, but are not limited to, those discussed above,
as well as the  risks  set  forth  under  "Factors  That  May  Affect  Operating
Results." These forward-looking statements speak only as of the date hereof. The
Company  expressly  disclaims any obligation or undertaking to release  publicly
any updates or revisions to any forward-looking  statements  contained herein to
reflect  any change in its  expectations  with  regard  thereto or any change in
events, conditions or circumstances on which any such statement is based.


                                       23
<PAGE>

FACTORS THAT MAY AFFECT OPERATING RESULTS

     The operating results of the Company can vary significantly  depending upon
a number of factors,  many of which are outside the Company's  control.  General
factors that may affect the Company's operating results include:

     O    market acceptance of and changes in demand for products and services;

     O    a small  number of customers  account  for, and may in future  periods
          account  for,  substantial  portions  of the  Company's  revenue,  and
          revenue  could  decline  because of delays of  customer  orders or the
          failure to retain customers;

     O    gain or loss of clients or strategic relationships;

     O    announcement  or  introduction  of new  services  and  products by the
          Company or by its competitors;

     O    price competition;

     O    the  ability to upgrade  and develop  systems  and  infrastructure  to
          accommodate growth;

     o    the  ability  to  introduce  and  market   products  and  services  in
          accordance with market demand;

     o    changes in governmental regulation; and

     o    reduction  in or delay  of  capital  spending  by  clients  due to the
          effects of terrorism, war and political instability.


     The Company believes that its planned growth and profitability  will depend
in large part on the ability to promote its  services,  gain  clients and expand
its  relationship  with current  clients.  Accordingly,  the Company  intends to
invest in marketing  and  development  of its client  base,  and may also pursue
strategic  partnerships.  If the  Company is not  successful  in  promoting  its
services and expanding its client base, this may have a material  adverse effect
on its financial condition and the ability to continue to operate the business.

     The Company is also  subject to the  following  specific  factors  that may
affect the Company's operating results:

(a) COMPETITION

     The market for  electronic  payment  systems and  electronic POS systems is
intensely  competitive  and we expect  competition to continue to increase.  The
Company's  competitors  for POS systems include  VeriFone and Ingenico,  amongst
others, and companies such as Global Payments, First Data and Euroconnex for the
Company's electronic payment software. In Finland, the Company faces competition
from  companies  such as  Point,  which is the  largest  terminal  vendor in the
Finnish  market,  as well as companies such as Screenway and Altdata,  which are
Point of Sale software  vendors.  In addition,  the companies  with whom we have
strategic relationships could develop products or services that compete with the
Company's products or services.  In addition,  some competitors in the Company's
market  have  longer  operating  histories,   significantly  greater  financial,
technical, marketing and other resources, and greater brand recognition than the
Company does. The Company also expects to face  additional  competition as other
established  and  emerging  companies  enter the market for  electronic  payment
solutions.  To be competitive,  the Company  believes that it must,  among other
things,  invest  significant  resources in developing new products,  improve its
current  products and  maintain  customer  satisfaction.  Such  investment  will
increase the Company's expenses and affect its profitability. In addition, if it
fails  to  make  this  investment,  the  Company  may  not be  able  to  compete
successfully with its competitors, which could have a material adverse effect on
its revenue and future profitability.

(b) TECHNOLOGICAL AND MARKET CHANGES

     The  markets  in which the  Company  competes  are  characterized  by rapid
technological  change,  frequent new product  introductions,  evolving  industry
standards and changing  needs of customers.  There can be no assurance  that the
Company's  existing  products  will  continue to be properly  positioned  in the
market or that the Company  will be able to introduce  new or enhanced  products
into the market on a timely basis, or at all. Currently, the Company is focusing
on upgrading  and  introducing  new  products.  There can be no  assurance  that
enhancements  to  existing  products  or  new  products  will  receive  customer
acceptance. As competition in the electronic payments industry increases, it may
become increasingly difficult for the Company to be competitive.


                                       24
<PAGE>

     Risks  associated  with the  development  and  introduction of new products
include delays in development and changes in payment  processing,  and operating
system  technologies that could require the Company to modify existing products.
There is also the risk to the  Company  that  there  may be  delays  in  initial
shipments of new products.  Further risks inherent in new product  introductions
include  the   uncertainty   of   price-performance   relative  to  products  of
competitors,  competitors'  responses  to the  introductions  and the  desire by
customers  to evaluate new products  for longer  periods of time.  Further,  the
Company  expects  that its  revenue  during  fiscal  2006 will be  significantly
affected  by the timing and  success of the  introduction  of new  products  and
services during the fiscal year.

(c) NEW VERSIONS OF COMPANY'S PRODUCTS MAY CONTAIN ERRORS OR DEFECTS

     The  Company's  electronic  payment  software  products  and  point of sale
devices are complex and, accordingly,  may contain undetected errors or failures
when first  introduced or as new versions are  released.  This may result in the
loss of, or delay in, market acceptance of the Company's  products.  The Company
has in the past discovered  software errors in its new releases and new products
after their  introduction.  The Company has experienced delays in release,  lost
revenues and customer  frustration  during the period  required to correct these
errors. The Company may in the future discover errors and additional scalability
limitations in new releases or new products after the commencement of commercial
shipments or be required to compensate customers for such limitations or errors,
 which could  materially  adversely  affect the Company's  business,  cash flow,
financial condition and results of operations.


(d) NO ASSURANCE OF SUCCESSFUL AND TIMELY PRODUCT DEVELOPMENT

     The Company's  products and proposed  enhancements are at various stages of
development and additional  development and testing will be required in order to
determine the technical  feasibility  and commercial  viability of the products.
There can be no assurance that the Company's product development efforts will be
successfully  completed.  The  Company's  proposed  development  schedule may be
affected by a variety of  factors,  many of which will not be within the control
of the Company,  including  technological  difficulties,  access to  proprietary
technology of others,  delays in regulatory approvals,  international  operating
licenses,  and the availability of necessary funding.  In light of the foregoing
factors,  there can be no assurance that the Company will be able to complete or
successfully  commercialize  new  products.  The  inability  of the  Company  to
successfully  complete the  development  of new products or to do so in a timely
manner,  could force the Company to scale back  operations,  or cease operations
entirely.

(e) MARKET ACCEPTANCE

     The  Company's  success  is  dependent  on  the  market  acceptance  of its
products.  Market acceptance of the Company's products will be dependent,  among
other  things,  upon  quality,  ease  of  use,  speed,  reliability,   and  cost
effectiveness. Even if the advantages of the Company's products are established,
the Company is unable to predict how quickly,  if at all,  the products  will be
accepted by the marketplace.

(f) PROTECTION OF PROPRIETARY RIGHTS

     The  Company's  success and ability to compete will be dependent in part on
the protection of its potential patents,  trademarks, trade names, service marks
and other  proprietary  rights.  The Company intends to rely on trade secret and
copyright  laws to protect the  intellectual  property that it plans to develop,
but there can be no assurance that such laws will provide sufficient  protection
to the  Company,  that  others  will not  develop  services  that are similar or
superior to the  Company's,  or that third  parties  will not copy or  otherwise
obtain and use the Company's proprietary  information without authorization.  In
addition,  certain of the Company's know-how and proprietary  technology may not
be patentable.

     The Company may rely on certain  intellectual  property licensed from third
parties,  and may be required to license additional  products or services in the
future.  There can be no  assurance  that these  third  party  licenses  will be
available or will continue to be available to the Companion  acceptable terms or
at all. The  inability to enter into and  maintain any of these  licenses  could
have a material adverse effect on the Company's business, financial condition or
operating results.

     There is a risk  that  some of the  Company's  products  may  infringe  the
proprietary rights of third parties.  In addition,  whether or not the Company's
products  infringe  on  proprietary  rights of third  parties,  infringement  or
invalidity  claims may be asserted or  prosecuted  against it and it could incur

                                       25
<PAGE>

significant  expense in  defending  them.  If any claims or actions are asserted
against the Company,  it may be required to modify its products or seek licenses
for these  intellectual  property rights.  The Company may not be able to modify
its products or obtain  licenses on commercially  reasonable  terms, in a timely
manner or at all. The Company's failure to do so could have a negative affect on
its business and revenues.

(g) DEPENDENCE ON SUPPLIERS

     The  Company  depends  upon a number of  suppliers  for  components  of its
products.  There is an inherent  risk that certain  components  of the Company's
products  will  be   unavailable   for  prompt   delivery  or,  in  some  cases,
discontinued.  The  Company  only  has  limited  control  over  any  third-party
manufacturer as to quality  controls,  timeliness of production,  deliveries and
various  other  factors.  Should  the  availability  of  certain  components  be
compromised,  it could force the Company to develop  alternative  designs  using
other  components,  which  could  add to the cost of goods  sold and  compromise
delivery commitments.  If the Company is unable to obtain components in a timely
manner,  at an  acceptable  cost,  or at all, the Company may need to select new
suppliers or redesign or reconstruct  processes  used to build its products.  In
such an  instance,  the Company  would not be able to  manufacture  any security
devices  for a period of time,  which  could  materially  adversely  affect  its
business, results from operations, and financial condition.

(h) KEY PERSONNEL

     The  Company's  success is largely  dependent on the  personal  efforts and
abilities of its senior management. The loss of certain members of the Company's
senior  management,  including  the Company's  chief  executive  officer,  chief
financial  officer and chief technical  officer,  could have a material  adverse
effect on the Company's business and prospects.

     The  Company  intends  to  recruit in fiscal  year 2006  employees  who are
skilled  in  e-commerce,  payment,  funds  management,  payment  reconciliation,
Internet  and other  technologies.  The failure to recruit  these key  personnel
could have a material adverse effect on the Company's business. As a result, the
Company  may  experience  increased  compensation  costs  that may not be offset
through  either  improved  productivity  or  higher  revenue.  There  can  be no
assurances  that we will be  successful  in retaining  existing  personnel or in
attracting and recruiting experienced qualified personnel.

(i) LIMITATIONS ON LIABILITY AND INDEMNIFICATION

     The Company's  articles of incorporation  and bylaws include  provisions to
the effect that we may indemnify any director,  officer, or employee, as well as
limit the  liability  of such  persons.  In addition,  provisions  of Nevada law
provide for such  indemnification,  as well as for a limitation  of liability of
our directors and officers for monetary  damages  arising from a breach of their
fiduciary duties. Any limitation on the liability of any director or officer, or
indemnification  of  any  director,   officer,  or  employee,  could  result  in
substantial  expenditures being made by the Company in covering any liability of
such persons or in indemnifying them.

(j) LITIGATION

     As stated under Legal Proceedings,  the Company is subject to a lawsuit and
a regulatory  investigation.  It is possible  that one or more of these  matters
could be  resolved  in a manner that  ultimately  would have a material  adverse
impact on the  Company's  business,  and could  negatively  impact its revenues,
operating margins, and net income.



ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     The Company  maintains  disclosure  controls and  procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities  Exchange Act of 1934, as
amended) that are designed to ensure that  information  required to be disclosed
in our periodic  reports  filed under the  Exchange Act is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to our
management,  including our principal  executive officer and principal  financial
officer, to allow timely decisions regarding required disclosure.

                                       26
<PAGE>


     Under  the  supervision  and  with  the   participation  of  the  Company's
management,  including the Chief Executive Officer and Chief Financial  Officer,
the Company has  evaluated  the  effectiveness  of its  disclosure  controls and
procedures  as of the end of the period  covered by this  report.  Based on that
evaluation,  in light of the restatement of the Company's  financial  statements
due to the error with software  amortization costs being incorrectly  classified
as selling,  general and administrative  expenses instead of as cost of revenue,
the Chief  Executive  Officer and Chief  Financial  Officer have  concluded that
these  disclosure  controls and procedures were ineffective as of the end of the
period covered by this Report.  Subsequent to the period covered by this Report,
the Company  reviewed the software  amortization  classification  error with its
auditors and hired an internal  Financial  Controller  to improve its  reporting
process and procedures.  The Financial  Controller has been assigned the task of
reviewing the categories of expenses included in cost of revenue.



CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES


     There were no changes in our internal  controls  over  financial  reporting
that  occurred  during the quarter  ended  March 31,  2006 that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.



PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

      During the quarter ended March 31, 2006, there were no material changes to
the legal  proceeding  or  investigations  reported  in Part II, Item 1 - "Legal
Proceedings"  in the  Company's  Form 10-QSB  filed with the SEC on February 21,
2006 (the "Prior  10-Q").  From time to time, we may become  involved in various
Lawsuits and legal  proceedings  which arise in the ordinary course of business.
Litigation is subject to inherent  uncertainties,  and an adverse  result in any
such matters that may arise from time to time may harm our business.  Other than
as set forth in the  Prior  10-Q,  the  Company  is not a party to any  material
pending  legal  proceeding  and,  to the best of its  knowledge,  no such action
against the Company has been threatened.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

     The  Company  made  the  following  sales  of   unregistered   (restricted)
securities  during the quarter ended on March 31, 2006 (not previously  reported
in a Form 8-K):

         On January 2, 2006, the Company issued  4,600,000  shares of its common
stock to a  consultant  for  services  provided  in  connection  with an  equity
financing.  The  Company  charged  the par  value of these  shares  of $4,600 to
additional paid-in capital.

         On January 20, 2006,  the Company  issued  250,000 shares of its common
stock valued at $145,000 to an employee for services provided.

                                       27
<PAGE>

         On January 27, 2006,  the Company  issued  250,000 shares of its common
stock valued at $237,500 to an employee for services provided.

         On February 27, 2006, the Company sold  3,000,000  shares of its common
stock for $900,000 cash to an individual investor in a private placement.

         On March 6, 2006, the Company  issued an aggregate of 1,652,355  shares
of its common  stock  pursuant to the  exercise of options and  warrants for the
total amount of $147,957 cash.

         On March 30, 2006,  the Company issued  1,100,000  shares of its common
stock  valued at $473,000 to a consultant  for  services to be provided  through
January 10, 2007.

         On March 29 and 30, 2006, the Company issued  17,850,000  shares of its
common stock for $3,570,000 cash.

     No commissions were paid in connection with any of these sales. These sales
were undertaken  under Rule 506 of Regulation D under the Securities Act of 1933
or Regulation S of the Securities Act. Each of the  transactions did not involve
a public  offering  and each of the  investors  represented  that  he/she  was a
"sophisticated" or "accredited" investor as defined in Rule 502 of Regulation D.

     There have been no  purchases of common stock of the Company by the Company
or any affiliated purchaser during the three months ended March 31, 2006.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.



ITEM 5.  OTHER INFORMATION.

SUBSEQUENT EVENT



         In April 2006, the Company received  $1,047,830 (net of bank charges of
$30,000)  pursuant to the March Financing (See note 4), and issued an additional
5,150,000 shares of common stock and two-year warrants to purchase an additional
3,597,826 shares at prices ranging from $1.50 to $8.50.

         In April 2006, the Company signed subscription  agreements with a group
of offshore  investors led by Swedish  Credit and Finance .AB for the sale of an
aggregate  of 25  million  shares of  Company  common  stock for  $10,000,000(an
average price per share of $0.40), plus warrants (the "April Financing").

            The Company will issue 25 million  newly issued shares of restricted
common  stock under  Regulation S at an average  price of $0.40 per share,  plus
warrants  to  purchase  25 million  shares of Company  common  stock with strike
prices ranging from $1.50 to $3.00.




ITEM 6.  EXHIBITS.

     Exhibits  included or incorporated by reference herein are set forth in the
attached Exhibit Index.


                                       28
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     FREESTAR TECHNOLOGY CORPORATION

Dated: November 3, 2006                  By: /s/ Paul Egan
                                         ---------------------------------------
                                             Paul Egan
                                             Chief Executive Officer

Dated: November 3, 2006                  By: /s/ Ciaran Egan
                                         ---------------------------------------
                                             Ciaran Egan Secretary/Treasurer/
                                             Chief Financial Officer



                                       29
<PAGE>



                                  EXHIBIT INDEX

Number                                      Description
------            --------------------------------------------------------------

3.1               Articles   of   Incorporation,   dated   November   17,   1999
                  (incorporated  by  reference  to Exhibit 3.3 of the Form 10-SB
                  filed on January 3, 2000).

3.2               Certificate of Amendment of Articles of  Incorporation,  dated
                  September 8, 2000 (incorporated by reference to Exhibit 3.4 of
                  the Form S-8 filed on August 17, 2001).

3.3               Certificate of Amendment to Articles of  Incorporation,  dated
                  February 15, 2001 (incorporated by reference to Exhibit 3.1 of
                  the Form 8-K filed on February 20, 2001).

3.4               Certificate of Amendment to Articles of  Incorporation,  dated
                  December 15, 2002 (incorporated by reference to Exhibit 3.4 of
                  the Form 10-QSB filed on March 12, 2003).

3.5               Certificate of Amendment to Articles of  Incorporation,  dated
                  February 24, 2003 (incorporated by reference to Exhibit 3.5 of
                  the Form 10-QSB filed on March 12, 2003).

3.6               Bylaws,  dated November 17, 1999 (incorporated by reference to
                  Exhibit 3.2 of the Form 10-SB filed on January 3, 2000)

4.1               Certificate of Powers, Designations, Preferences and Rights of
                  Series A Preferred Stock of the Company, dated August 10, 2001
                  (incorporated  by reference to Exhibit 4 of the Form 8-K filed
                  on August 14, 2001).

4.2               Certificate  of  Designation  (Series  A),  dated June 9, 2005
                  (incorporated  by  reference  to  Exhibit  4.1 of the Form 8-K
                  filed on October 20, 2005).

4.3               Certificate  of  Designation  (Series  B),  dated June 9, 2005
                  (incorporated  by  reference  to  Exhibit  4.2 of the Form 8-K
                  filed on October 20, 2005).

31.1              Rule  13a-14(a)/15d-14(a)  Certification  of Paul Egan  (filed
                  herewith).

31.2              Rule  13a-14(a)/15d-14(a)  Certification of Ciaran Egan (filed
                  herewith).

32                Section 1350 Certification of Paul Egan and Ciaran Egan (filed
                  herewith).



                                       30