Paychest Inc (PYCT)

[mortalmyth]

Anvil, I believe the answer to your question lies in the following, taken from PayChest's financial report. This agreement was consummated after the two DTC Audits and note the effective date that they could legally convert the preferred shares. Compare that to the April 2012 date, when the company was notified the DTC Chill was imposed. Note that I initially thought that Cardiff Bay Holdings was the offending entity (as it's Banks baby), but on reviewing their contract details they were issued Notes and not preferred shares, which PayChest indicated was the cause of the Chill. As such, I'd have to say it was most likely LIG.

In October 2011, LIG the group of investors arranged or led by Liani Holdings Ltd. exchanged $300,000 of debt for convertible preferred shares of the Company, convertible at $0.0001 no earlier than 12 months from the date of issue. The preferred shares were issued at a discount of 25% to compensate the LIG investors for a) a non-cash payment and b) the absence of a coupon. Their loan normally attracts 15% interest.

Also, I believe the DTC did perform the audits and they subsequently made PayChest hire a TA after it was discovered in the second audit that PayChest, acting as its own TA, was under reporting the amount of shares actually issued into the market which is a major no-no. And, if there were no actual DTC audits performed, I'm sure the DTC would have made PayChest retract the references in their documentation (PRs and financial reports) by now. As such, I think it's unlikely to not have been done.

Anyway, those are my thoughts. Have a good one.