PAYNOVA ACQUIRES SALES AND SUPPORT COMPANY AND STRENGTHENS PRESENCE IN NORTH AMERICA

Thanks to a series of initiatives and agreements, Paynova has strengthened its presence on the North American market, both through an agreement concerning acquisition of an American sales and support company, with mainly variable remuneration payments related to generated transaction volumes, and through an agreement for locally adapted customer support via a call centre.

The aim of the initiative is to improve the service for American e-retailers and users, in order to be able to develop activities and volumes more quickly than would otherwise be possible.

“Paynova’s services are in ever greater demand. Besides central Europe, the Asian and American markets have developed positively over the last few years. We believe in continued huge potential in the USA and we have, therefore, strengthened our presence there, at the same time securing the capacity for continued growth by strengthening local customer support,” says Paynova’s CEO Lars Ekstedt.

Agreement on acquisition of sales and support company

Paynova has concluded an agreement with the company’s American agent for expanded cooperation in North American and a strategic acquisition of a USA-based sales and support company, LDL West LLC. The purchase sum in the agreement is strongly linked to the company’s ability to establish new transaction volumes. The common objective is for Paynova to obtain a connection to a large part of the agent’s network of e-retailers and their existing transaction volumes. The purchase sum consists of two elements, a smaller cash sum corresponding to the company’s net cash at the time of the acquisition, and a variable payment in the form of option rights to subscribe to shares in Paynova.

The number of option rights is based on added transaction volume in accordance with a step model, with the maximum remuneration, 400,000 option rights, being paid when the generated monthly transaction volume exceeds USD 40 million. In the event of lower volumes, a linear falling number of option rights becomes due, down to 100,000 for a volume of USD 10 million. No variable payment is paid if the monthly transaction volumes are lower than USD 10 million. The transaction volumes will be checked during the second quarter of 2006.

Establishment of call centre support for the North American market

Paynova has secured locally adapted support for the company’s North American customers through a new partnership with an American call centre company. Capacity will thus also be ensured for the different American time zones in the event of increased transaction volumes.

Financing and issue of subscription options

At the Paynova extraordinary general meeting on 21 June 2005 a decision was taken to authorise the board to issue shares, convertible promissory notes or promissory notes associated with option rights to subscribe to shares and thus be able to deviate from the shareholders’ preferential rights. The number of shares was limited to a maximum of 3,000,000 and the aim was to give the board the option of financing strategic company acquisitions.

Based on this authorisation, the board decided on 19 December to utilise a maximum of 400,000 shares via option rights on the terms of one share at a subscription rate of SEK 10 for one option right. The issue is taking place in the form of promissory notes associated with option rights to subscribe to shares, which are placed in “escrow” pending the checking of transaction volumes during the second quarter. The shares can be subscribed to until 30 November 2006 at the latest and market terms otherwise apply.

The board believes that through these agreements and partnerships, Paynova can generate significant growth in transaction volumes, income and profit during the first quarter of 2006 against limited costs and dilution of ownership for the company and shareholders.

For further information, please contact:

Lars Ekstedt, CEO

Telephone: + 46(0)8-517 100 37

Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, E-retailers get a payment guarantee for around twenty payment options in 8 languages with 7 currencies in a security-certified interface (PCI). Consumers can open an account, a Paynova wallet, free of charge on the Internet to make purchases simpler and more secure, as well as deal with transfers between family members, friends and acquaintances. Paynova has an agreement with more than 900 e-retailers. Most are found in the following priority segments: travel, retailing and media/network games. The company has been listed on NGM Equity since February 2004. For more information: www.paynova.com