HONG KONG--(Marketwired - Jun 27, 2013) - PayChest, Inc. (
In April 2012, the Company became aware that the Depository Trust Company (DTC), a company that oversees and clears deposits of physical stock certificates in the US, imposed a temporary chill on accepting the Company's share certificates for deposit. These "chills" are designed to protect shareholders' interests and can be placed on Company certificate deposits for a variety of reasons. As far as the Company can tell, the temporary chill was triggered as a result of an increase in issued and outstanding shares, caused by preferred shareholders converting existing preferred stock into common stock.
Previously, under a number of agreements, certain of the Company's investors funded the Company by purchasing preferred stock with a conversion feature. These preferred stockholders converted their preferred stock into common stock to benefit from the possible upside of their investment. As such, the group converted 545,000 shares of preferred stock at $0.0001 resulting in the issuance of 5,450,000,000 shares of common stock. Many of those shares cannot be deposited into the DTC clearing system for possible future sale.
The DTC chill can, and does, affect a company's funding source in that it influences the internal policies and procedures of some brokerage firms. One such policy is that some brokers have restricted or blocked buy orders from customers wishing to purchase the Company's shares on the open market. As a result, trading volumes are at historic lows. Funding has been limited to a maintenance basis whereby only essential capital requirements will be funded. According to the funding sources, upon removal of the chill, further ongoing funding is slated to return.
Previously, the Company announced a $1.2 million purchase order for 16 containers of Mibella flushable and biodegradable sanitary products with a UK distributor. Each container wholesales for approximately $75,000, depending on product and pack size mix. In a typical sales cycle, our Company would pay for some or all of the production materials in advance. The contractual risk of starting supply and then stopping threatened the distributor and end customer with an unreliable supply chain that would have damaged confidence. The Company anticipates the purchase order will be fulfilled after the chill is lifted and finance is flowing again.
For legal reasons, news releases have been infrequent while the Company has been addressing the DTC chill until a plan was agreed upon. The Company and our legal counsel have been working with the DTC to provide them with the necessary documentation the DTC has requested. The Company has addressed a number of specific issues raised by the DTC. The Company now needs to address one final issue and propose a plan of action to the DTC to bring this to a conclusion. The Company must execute this action plan in a timely manner and is confident that once the plan has been executed and all necessary documents delivered to the DTC, they will remove the chill.
Through this time, the Company has continued to produce and release its quarterly and annual filings. The Company's filings are submitted with the OTC markets and can be found on www.otcmarkets.com .
Shareholders and interested parties are encouraged to call or e-mail the Company and be put on the Company's e-mail list for upcoming news releases.
NOTES ABOUT FORWARD-LOOKING STATEMENTS Except for any historical information contained herein, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties, including those described in the Company's filings with OTC Markets http://www.otcmarkets.com/stock/PYCT/financials
Certain statements contained in this release that are not historical facts constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created by that Act. Reliance should not be placed on forward-looking statements because they involve unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Forward-looking statements may be identified by words such as estimates, anticipates, projects, plans, expects, intends, believes, should and similar expressions and by the context in which they are used. Such statements are based upon current expectations of the Company and speak only as of the date made.
Historical news releases on the Company can be found at http://www.paychest.com/news.htm
Contact: PayChest, Inc. ir@paychest.com Tom Hands 1-416-619-5242 from overseas: +1-416-619-5242 Tobie Oliver 1-800-624-7479 from overseas: +1-714-274-7206
