🎯 Role & Responsibilities

🏦 EMPIRE STOCK TRANSFER & CUSTODY FAQ

Regulated Custody for SEC Category 1 Tokenized Securities

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✅ SEC CATEGORY 1 COMPLIANT | Issuer-Sponsored Tokenized Securities pursuant to SEC Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets Joint Statement dated January 28, 2026

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🏦 EMPIRE STOCK TRANSFER ROLE

Q: What is Empire Stock Transfer's role in the OTCOTCM MemeProtocol ecosystem?

A: Empire Stock Transfer serves as the SEC-registered transfer agent and qualified custodian for all Series "M" shares:Preferred Shares backing ST22 Tokenized Securities. This role is essential for SEC Category 1 compliance.

🛡️ OurCustody Responsibilities:

Responsibilities

• 🔄
Processredemptions (not for companies)
• 📋 Maintain regulatory compliance

Responsibility	Description
🔒 Qualified Custody	Hold shares in segregated, restricted custody accounts
✅ Deposit Verification	Verify share deposits forbefore ST22 token minting
🔐 Oracle Integration	Provide real-time cryptographic verification to platformTransfer Hooks
📋 Regulatory Compliance	Maintain SEC transfer agent compliance
🎖️ Golden Medallion	Provide Golden Medallion Signature Guarantee for transfers
📊 CUSIP Coordination	Coordinate CUSIP assignment for clear ownership chain
🔄 Conversion Processing	Process protective conversions when triggered

Category 1 Requirement Fulfillment

Category 1 Requirement	Empire Stock Transfer Role
🏦 Regulated Custody	SEC-registered transfer agent holding all backing shares
💎 True Equity Backing	Verifies and maintains 1:1 share-to-token ratio
🔗 Clear Ownership Chain	Golden Medallion Guarantee + CUSIP coordination
🛡️ Investor Protection	Real-time custody verification via oracle system

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Q: Is Empire Stock Transfer affiliated with OTCOTCM MemeProtocol, Corp?

Inc.?

A: No. Empire Stock Transfer and OTCM Protocol, Inc. are No, we'recompletely independent entities.entities:

Regulated,

Factor	Status
🏛️ Empire Stock Transfer:	Independent, SEC-registered transfer agent
🏢 OTCM Protocol, Inc.	Wyoming Digital Asset Corporation
🤝 Relationship:	Arms-length commercial agreementsservice agreement
⚖️ IndependenceRegulatory Oversight:	Separate regulatory oversightsupervision
🔍 TransparencyIndependence:	No ownership, control, or financial interest overlap
📋 Conflicts	Legally prohibited conflicts of interest

Why Independence Matters for Category 1

Benefit	Explanation
🛡️ Investor Protection	Custodian cannot be influenced by protocol interests
⚖️ Regulatory Compliance	SEC requires independent qualified custody
🔍 Audit Trail	Clear separation for regulatory examination
🏦 Institutional Trust	Institutions require independent custody

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Q: What are Empire Stock Transfer's qualifications?

A: Empire Stock Transfer is fully qualified to serve as Category 1 custodian:

Qualification	Status
📜 SEC Registration	SEC-registered transfer agent
🏦 Transfer Agent	Licensed transfer agent services
🎖️ Medallion Program	STAMP, SEMP, and MSP participant
📊 CUSIP Services	Authorized CUSIP agent
🔐 Cybersecurity	SOC 2 Type II compliant
📋 Experience	[Years] of transfer agent experience
💼 Clients	Serves [number] issuers

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🔒 CustodyCUSTODY & Security

SECURITY

Q: How are the Series "M" shares held?

A: Shares are held in segregatedsegregated, restricted custody accounts: with multiple layers of protection:

// Custody account specifications
interface CustodyAccount {
  // Account namingStructure 📛
  naming: "OTCOTCM MemeProtocol - [SYMBOL] Series 'M' Reserve";
  type: "Segregated Custody Account";
  status: "Permanently Restricted";

  // Category 1 Compliance 🏛️
  category1: {
    regulatedCustody: true,           // SEC-registered custodian
    trueEquityBacking: true,          // Real shares, not derivatives
    clearOwnershipChain: true,        // CUSIP + Golden Medallion
    investorProtection: true          // Oracle verification
  };

  // Security featuresFeatures 🛡️
  security: {
    segregation: "Completely separate from companyissuer accounts",
    restrictions: "No tradingtrading, allowed"transfer, or withdrawal permitted",
    permanentLock: "ExceptIrrevocable custody deposit",
    legends: "Restrictive legends on share certificates",
    goldenMedallion: "Golden Medallion Guarantee required for tokenany holder redemptions",
    additionalLegends: "Extra restrictive markings"movement"
  };

  // Access controlsControls 🚫
  access: {
    companyAccess:issuerAccess: false,              // Issuer CANNOT access
    otcmProtocolAccess: false,        // OTCM Protocol CANNOT access
    tradingEnabled: false,            // No trading permitted
    withdrawalRights: "TokenProtective holdersconversion only",
    modification: "Permanently prohibited"
  };

  // Verification 🔐
  verification: {
    oracleIntegration: true,          // Real-time verification
    frequency: "Every ~400ms",        // Continuous monitoring
    cryptographicProof: true,         // Cryptographic attestation
    auditTrail: "Complete and immutable"
  };
}

Physical

vs.




Book-Entry

Holdings

Holding Type	Status	Security
📜 Physical Certificates	Held in secure vault	Restrictive legends applied
💻 Book-Entry	Electronic records	System-enforced restrictions
🔐 Both	Equivalent protection	Same custody rules apply

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Q: Can companies ever access their deposited shares?

A: Absolutely not. Empire Stock Transfer will automatically reject any companyissuer attempts to:

Prohibited Action	Enforcement
🚫 Withdraw shares	System-level blocking + legal prohibition
🔄 Transfer shares	Requires Golden Medallion (issuer cannot obtain)
💰 Redeem tokens for shares	Issuer wallets permanently blacklisted
🔍 Access the custody account	No login credentials, no physical access
📝 Modify share terms	Cannot alter Certificate of Designation
📊 Request share count changes	1:1 ratio permanently locked

Multi-Layer Enforcement

┌─────────────────────────────────────────────────────────────┐
│              CUSTODY PROTECTION LAYERS                       │
├─────────────────────────────────────────────────────────────┤
│                                                               │
│  Layer 1: LEGAL AGREEMENTS                                   │
│  ├── Tripartite Agreement prohibits access                   │
│  ├── Severe penalty clauses                                  │
│  └── Fiduciary duty to token holders                         │
│                                                               │
│  Layer 2: EMPIRE STOCK TRANSFER SYSTEMS                      │
│  ├── Account flagged as "PERMANENT CUSTODY"                  │
│  ├── No issuer access credentials exist                      │
│  ├── Golden Medallion required (issuer cannot obtain)        │
│  └── Staff trained to reject all issuer requests             │
│                                                               │
│  Layer 3: SMART CONTRACT ENFORCEMENT                         │
│  ├── Issuer wallets blacklisted for redemption               │
│  ├── Transfer Hooks verify custody on every transaction      │
│  └── Cannot mint tokens without verified custody             │
│                                                               │
│  Layer 4: REGULATORY OVERSIGHT                               │
│  ├── SEC supervision of transfer agent                       │
│  ├── Category 1 compliance requirements                      │
│  └── Audit trail for regulatory examination                  │
│                                                               │
└─────────────────────────────────────────────────────────────┘

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Q: What happens to the shares in different scenarios?

🔒A: MultipleThe safeguardsshares ensureremain permanentin lockup.custody under all normal circumstances. Only protective conversion can move them:

Scenario	What Happens to Shares
🏢 Normal Operations	Remain in custody indefinitely
📈 Token Price Increases	Remain in custody (no change)
📉 Token Price Decreases	Remain in custody (no change)
💰 Issuer Wants Shares Back	Rejected — shares remain in custody
🔄 Issuer Merger/Acquisition	Protective conversion may trigger
💸 Issuer Bankruptcy	Protective conversion triggers → common stock
🏛️ SEC Enforcement	Protective conversion triggers → common stock
⚖️ Criminal Indictment	Protective conversion triggers → common stock
🚫 OTCM Protocol Failure	Shares remain safe; conversion rights preserved

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Q: What is the Golden Medallion Signature Guarantee?

A: The Golden Medallion Guarantee is a critical security feature for Category 1 compliance:

What It Is

Aspect	Description
🎖️ Definition	Signature guarantee from authorized financial institution
📜 Programs	STAMP, SEMP, or MSP medallion programs
🏦 Issuers	Banks, broker-dealers, credit unions
🔐 Purpose	Authenticates share transfers and prevents fraud

Role in Category 1 Compliance

Function	How It Supports Category 1
🔗 Clear Ownership Chain	Authenticates every transfer in custody chain
🛡️ Investor Protection	Prevents unauthorized transfers
📋 Audit Trail	Creates verifiable record of share movements
🏦 Institutional Standard	Required by SEC-registered transfer agents

Why Issuers Cannot Circumvent Custody

Protection	Explanation
🚫 Cannot Obtain Medallion	Issuers cannot get Medallion for their own custodied shares
🏦 Bank Verification	Medallion issuers verify identity and authority
📋 Liability	Medallion issuer liable for unauthorized transfers
🔒 System Design	Designed specifically to prevent unauthorized access

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🔍 VerificationVERIFICATION & OracleORACLE System

SYSTEM

Q: How does the verification system work?

A: OurEmpire Stock Transfer operates a Reserve Oracle systemSystem that provides real-time verification:cryptographic verification to OTCM Protocol's Transfer Hooks:




Oracle



Architecture

🔄

┌─────────────────────────────────────────────────────────────┐
Process:
│                 
CUSTODY 
💾ORACLE DatabaseSYSTEM                        │
├─────────────────────────────────────────────────────────────┤
│                                                               │
│  ┌─────────────────┐                                         │
│  │ EMPIRE STOCK    │                                         │
│  │ TRANSFER        │                                         │
│  │ ─────────────── │                                         │
│  │ • Share Count   │                                         │
│  │ • Custody Status│                                         │
│  │ • CUSIP Verify  │                                         │
│  │ • Trigger Watch │                                         │
│  └────────┬────────┘                                         │
│           │                                                   │
│           │ Cryptographic Attestation                        │
│           │ (Every ~400ms)                                   │
│           ▼                                                   │
│  ┌─────────────────┐                                         │
│  │ ORACLE BRIDGE   │                                         │
│  │ ─────────────── │                                         │
│  │ • Encrypt Data  │                                         │
│  │ • Sign Message  │                                         │
│  │ • Timestamp     │                                         │
│  │ • Transmit      │                                         │
│  └────────┬────────┘                                         │
│           │                                                   │
│           │ Signed Verification                              │
│           ▼                                                   │
│  ┌─────────────────┐                                         │
│  │ TRANSFER HOOK   │                                         │
│  │ ─────────────── │                                         │
│  │ • Verify Sig    │                                         │
│  │ • Check 1:1     │                                         │
│  │ • Block if Fail │                                         │
│  │ • Allow if Pass │                                         │
│  └─────────────────┘                                         │
│                                                               │
└─────────────────────────────────────────────────────────────┘

Verification Process

• 🔐
EncryptedAPIsends
• 🤖
contractsverify

Step	Action	Frequency
1️⃣	Empire database confirms exact share count (1,000,000,000)	Continuous
2️⃣	Oracle bridge creates cryptographic proofattestation	Every Smart~400ms
3️⃣	Signed message transmitted to Solana network	Real-time
4️⃣	Transfer Hook verifies signature and data	Per transaction
5️⃣	Transaction approved ONLY if 1:1 ratio 👁confirmed	Per transaction

What Gets Verified

ensures

Verification	Description	Failure Action
📊 Share Count	Exactly 1,000,000,000 shares in custody	Block all transactions
🔐 Custody Status	Account in "PERMANENT CUSTODY" status	Block all transactions
📋 CUSIP Match	CUSIP matches registered Series M	Block all transactions
⚠️ ContinuousTrigger monitoringEvents	No complianceprotective conversion triggers active	Initiate conversion
🏦 Empire Status	Empire Stock Transfer operational	Block all transactions

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Q: What information does Empire share with the platform?

A: Empire Stock Transfer shares Onlyonly essential verification data:data required for Category 1 compliance:

✅ Data Shared with OTCM Protocol

Data Type	Purpose	Sensitivity
✅ Shared: ✅ Confirmation of shareShare deposit Deposit	Verify custody established	Low
📊 Current Share Count	Verify 1:1 backing ratio	Low
🔍 Series Type Verification	Confirm Series M designation	Low
📋 CUSIP Verification	Clear ownership chain	Low
🔄 Conversion Ratio Status	Track any conversions	Low
⚠️ Trigger Event Monitoring	Protective conversion alerts	Medium
🏦 Custody Account Status	Operational verification	Low

🚫 Data NEVER Shared

Data Type	Reason	Protection
🔒 Confidential Company Information	Privacy laws	Encrypted at rest
💰 Issuer Financial Details	Business confidentiality	Not collected
👥 Shareholder Personal Information	Privacy regulations	Segregated systems
📋 Private Corporate Records	Attorney-client privilege	Not retained
🏦 Other Client Information	Fiduciary duty	Complete segregation

Data Security Standards

Standard	Implementation
🔐 Encryption	AES-256 encryption in transit and at rest
🛡️ Access Control	Role-based access, multi-factor authentication
📋 Audit Logging	Complete audit trail of all data access
🏛️ Compliance	SOC 2 Type II certified
🔍 Monitoring	24/7 security monitoring

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Q: What happens if the oracle system fails?

A: Multiple safeguards protect against oracle failure:

Failsafe Mechanisms

Mechanism	Action
🔴 Circuit Breaker	Trading automatically halts if oracle offline
⏰ Stale Data Detection	Transactions blocked if verification >5 minutes old
🔄 Redundant Oracles	Multiple oracle nodes for failover
📋 Manual Verification	Human verification available for critical operations
🛡️ Conservative Default	System defaults to BLOCK if any uncertainty

Oracle Failure Scenarios

Scenario	System Response
📡 Network Outage	Trading halted until connection restored
💻 Oracle Node Failure	Failover to backup nodes
🔐 Signature Invalid	Transaction blocked, security alert
⏰ Stale Data	Trading halted, fresh verification required
🏦 Empire System Down	Trading halted until Empire operational

🛡️ Key Principle: The system is designed to fail safe—any uncertainty results in blocked transactions, never false approvals.

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🔄 PROTECTIVE CONVERSION

Q: What is protective conversion and how does Empire Stock Transfer handle it?

A: Protective conversion automatically converts Series "M" Preferred Shares to common stock when adverse events occur:

Trigger Events

Trigger	Detection	Action
💸 Bankruptcy Filing	Court filing monitoring	Conversion initiated
🏛️ SEC Enforcement	Public enforcement action	Conversion initiated
⚖️ Criminal Indictment	Public records monitoring	Conversion initiated
🔄 Adverse Merger	Corporate action notification	Conversion initiated
🏢 Dissolution	State filing monitoring	Conversion initiated
🚨 Material Adverse Event	Per Certificate of Designation	Conversion initiated

Conversion Process

┌─────────────────────────────────────────────────────────────┐
│              PROTECTIVE CONVERSION PROCESS                   │
├─────────────────────────────────────────────────────────────┤
│                                                               │
│  Step 1: TRIGGER DETECTION                                   │
│  ├── Oracle monitors for trigger events                      │
│  ├── Event detected and verified                             │
│  └── Alert sent to Empire Stock Transfer                     │
│                                                               │
│  Step 2: VERIFICATION                                        │
│  ├── Empire confirms trigger event validity                  │
│  ├── Legal review if required                                │
│  └── Conversion authorized                                   │
│                                                               │
│  Step 3: SHARE CONVERSION                                    │
│  ├── Series M shares converted to common stock               │
│  ├── Per conversion ratio in Certificate of Designation      │
│  └── New common shares recorded                              │
│                                                               │
│  Step 4: TOKEN HOLDER NOTIFICATION                           │
│  ├── On-chain event emitted                                  │
│  ├── Token holders notified of conversion                    │
│  └── Claim process initiated                                 │
│                                                               │
│  Step 5: CLAIM PROCESSING                                    │
│  ├── Token holders submit conversion claims                  │
│  ├── Empire verifies token ownership                         │
│  └── Common shares issued to verified holders                │
│                                                               │
└─────────────────────────────────────────────────────────────┘

What Token Holders Receive

Before Conversion	After Conversion
ST22 tokens representing Series M	Common stock in issuer company
Trade on CEDEX	Trade per applicable securities laws
Rights per Certificate of Designation	Standard common shareholder rights
Empire custody (indirect)	Direct registration or broker custody

⚠️ Important: Conversion to common stock does NOT guarantee value. In bankruptcy, common stock may have zero value. Protective conversion ensures token holders have the same rights as other shareholders.

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📋 COMPLIANCE & AUDIT

Q: How does Empire Stock Transfer maintain compliance?

A: Empire Stock Transfer maintains comprehensive compliance for Category 1 requirements:

Regulatory Compliance

Requirement	Implementation
📜 SEC Registration	Current SEC transfer agent registration
🏦 Examination	Subject to SEC examination
📋 Record Keeping	Maintain records per SEC Rule 17Ad
🔐 Cybersecurity	SOC 2 Type II compliance
📊 Reporting	Annual compliance reporting

OTCM Protocol-Specific Compliance

Requirement	Implementation
🏦 Regulated Custody	Category 1 qualified custody
💎 1:1 Backing	Continuous verification
🔗 Ownership Chain	CUSIP + Golden Medallion
🛡️ Investor Protection	Oracle integration
📋 Audit Trail	Complete transaction history

Audit Capabilities

Audit Type	Frequency	Scope
🔍 Internal Audit	Quarterly	Operational compliance
📊 External Audit	Annual	SOC 2 Type II
🏛️ Regulatory Exam	As scheduled	SEC examination
💻 System Audit	Continuous	Oracle and security

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Q: What records does Empire Stock Transfer maintain?

A: Comprehensive records for regulatory compliance and audit:

Record Type	Retention	Purpose
📜 Custody Agreements	Permanent	Legal documentation
📊 Share Balances	Permanent	1:1 verification
🔄 Transaction History	7 years minimum	Audit trail
🔐 Oracle Logs	7 years	Verification records
📋 Correspondence	5 years	Communication records
⚠️ Trigger Events	Permanent	Conversion documentation
🎖️ Medallion Records	Permanent	Transfer authentication

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❓ ADDITIONAL QUESTIONS

Q: What if Empire Stock Transfer goes out of business?

A: Multiple protections ensure continuity:

Protection	Description
📜 SEC Oversight	SEC supervises transfer agent transitions
🔄 Successor Custodian	Tripartite Agreement specifies successor process
📋 Record Transfer	All records transferred to successor
🛡️ Share Protection	Shares cannot be lost—must transfer to qualified successor
⚖️ Legal Framework	Transfer agent regulations ensure continuity

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Q: Can token holders contact Empire Stock Transfer directly?

A: For most inquiries, token holders should contact OTCM Protocol. However:

Inquiry Type	Contact
🔄 Protective Conversion Claims	Empire Stock Transfer directly
📋 Shareholder Registration	After conversion, Empire directly
🏦 Custody Verification	Via OTCM Protocol (oracle system)
❓ General Questions	OTCM Protocol support

Contact Information

Contact	Purpose
📧 custody@empirestocktransfer.com	Custody inquiries
📞 [Phone Number]	Conversion claims
🌐 www.empirestocktransfer.com	General information

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Q: How does Empire Stock Transfer coordinate with OTCM Protocol for new tokenizations?

A: Structured onboarding process:

• 🔍
• 🔄
ratiostatus

Step	Empire Role	OTCM Protocol Role
1️⃣	Open custody account	Complete issuer KYB
2️⃣	Verify share countcertificates	Draft SeriesCertificate typeof Designation
3️⃣	Apply restrictive legends	State filing coordination
4️⃣	Confirm deposit	Mint ST22 tokens
5️⃣	Activate oracle feed	Enable Transfer Hooks
6️⃣	Ongoing verification	Ongoing Conversioncompliance

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📋 Document Information

Field	Value
📄 Document Version	3.0
📅 Last Updated	January 2026
📍 Jurisdiction	United States
🏛️ Regulatory Framework	SEC Category 1 (Issuer-Sponsored Tokenized Securities)
🏦 Custodian	Empire Stock Transfer Inc. (SEC-registered transfer agent)

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⚠️ TriggerDisclaimer: eventThis monitoringFAQ

provides general information about custody arrangements for OTCM Protocol's Category 1 tokenized securities. It does not constitute legal or investment advice. Consult qualified professionals for specific guidance.

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🚫© Never2026 Shared:OTCM Protocol, Inc. | All Rights Reserved

Empire

• 🔒Stock ConfidentialTransfer companyInc. information
is
• 💰an Financialindependent, details
SEC-registered
• 👥transfer Shareholderagent lists
providing
• 📋qualified Privatecustody corporateservices records
for
ST22

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Tokenized Securities pursuant to SEC Category 1 framework. Empire Stock Transfer is not affiliated with OTCM Protocol, Inc.