Issue with transflt.mer compliance

I am having an issue with transflt.mer compliance.  I am even going to go so far as to say that it is not even being processed by Mercury. 

Steps that I have completed to come to this conclusion:

1.  Capitalized TRANSFLT.MER in the Mercury directory (grasping at straws)

2.  Confirmed that the file is correctly listed in the Mercury.ini file

3.  Started a new file called Nuke.mer and add the lines into that file

4.  Confirmed that the file listed in Mercury.ini was listed as Nuke.mer

5.  Deleted the file TRANSFLT.MER and had Mercury recreate it

6.  Added only one line into the file H, "EHLO User*", D 

7.  Changed the file extension from mer to lis

It should be noted that after any changes that were made to the files, I closed Mercury and did a Service Mercury32 restart. 

The log(s) still show the connections that are suppose to be refused and in the last case the User connection.