More Troubles at Prepaid Card Holdings, Inc.

Prepaid Card Holdings, Inc. (PINKSHEET: PPDC), the company behind the BankFreedom prepaid MasterCard and Bank Freedom prepaid Visa card line of products, announced today that they are looking for a new CPA firm (as their previous accountant failed to notify the company that he had lost his license). This is another setback in a series for the company.
In a press release today, Prepaid Card Holdings announced that

[I]t is conducting a search for a new accounting firm. Gruber & Company LLC of Lake Saint Louis, MO had previously audited the company’s financial statements and assisted in preparing the company’s quarterly filings…. Gruber & Company LLC failed to notify Prepaid Card Holdings, Inc. their accountant had lost his accounting license and no work had been performed on the third quarter 10Q filing until only a few weeks before Prepaid Card Holdings, Inc. third quarter 10Q filing was due.

This is one of a series of issues at the company. Recently, the company announced the settlement of a dispute between the company and its COO. The COO was removed from the company by resolution in July 2008.

In the most recent 10K filed by the company (on March 27, 2009), the company announced the resolution of several other disputes, stating:

During the year ended December 31, 2008, the Company had a dispute with one of its vendors over the amount of about $360,000. On January 13, 2009, the Company agreed to a settlement of this dispute. We have agreed to execute a note in the amount of $182,900 at 4% simple annual interest payable monthly over three years, whereby we will pay $5399.64 a month.

On January 20, 2009, Robert McBride and Bruce Barton filed a complaint against the Company in the District Court for Clark County, Nevada for damages in excess of $40,000. Mr. McBride and Mr. Barton claim the Company owes each of them cash payments or restricted stock pursuant to agreements allegedly executed between the Company and the plaintiffs while Mr. McBride was president of the Company. We are disputing these claims. On February 5, 2009 Mr. McBride and Barton filed a motion for preliminary injunction against the company. That motion was denied by the court on March 16th 2009.

Shares of PPDC currently hover around $0.0019 off a 1 year high of approximately $0.13.

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