Xcel Brands, Inc. (XELB)

[56Chevy]

Issues with DTCC? Perhaps. This doesn't mean it can't be resolved in XELB's situation if it is...I'm sure whatever the problem is it's being fervently & diligently pursued by management...but this may help for future ref what some RM's have encountered.

The Depository Trust & Clearing Corporations (DTCC) controls the clearing of all stock in street name and through electronic transfers. If a company’s stock is not DTC eligible it will be illiquid. Although DTC has not technically changed its rules, they are enforcing them differently. DTC is now requiring documents which may not exist or which may be impossible to obtain. For example, DTC requires the original offering document for public issuances. For a company that went public 10 years ago, subsequently failed and became a shell, and changed management a dozen times in between such offering document can be unattainable.

When that same company now wants to complete a reverse merger with a solid operating business, file a registration statement and become fully reporting and transparent, they may not be able to become DTC eligible. In addition, DTC has been taking a very long time to clear penny stocks, even when the paper work is in order. Many months or more can go by without communication. DTC has no time limit requirements so an applicant is at their mercy.