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Stephen Watkins – Entrex Inc
TWST: We'd like to begin with a brief historical sketch of the company and a picture of the things you are doing at the present time. Mr. Watkins: Entrex was founded four years ago. We assembled an alliance of industry leaders to create a central location to find, research, track, manage and trade interests in private companies. By researching the methodologies of the public marketplace, we analyzed how EDGAR, the SEC's financial and information reporting structure, and the trading markets of NYSE, NASDAQ and AMEX, created a marketplace to find, research, track, manage and trade interests in public companies. We then worked with industry leaders to create similar methodologies for private companies and a central place for standardized information and financial reporting of private companies. This allows the accredited investor and the alternative investment market space a single central, global resource to find these potential investment opportunities, ultimately providing a whole new asset category for them to offer investment and services. We created two different and distinct environments. We created Entrex, as the EDGAR-type reporting structure, to create credibility and exposure for private companies. And then we work with an alternative trading system to manage trading the securities of these private companies for the accredited investors focused on alternative investments. Within Entrex, the EDGAR-type reporting structure, we work to establish third party credibility for the companies that agree to our disciplines and methodologies. These companies, called Entrex Registered Member Companies, work with financial industry leaders who provide various services to the process we have established. This Entrex process starts with Kroll Background America performing a background check of the principals, including the CEO and CFO. Upon completion, a different division of Kroll performs a corporate review including state-by-state examination, reviewing their legal history, their licensing and a series of qualitative tasks reviewing the corporation. Then Entrex works with a leading law firm to compile various legal documents establishing all material contracts for the Entrex Registered Member Company, culminating in a consistent legal opinion signed by company counsel. Once this work is completed, RSM McGladrey then sends representatives to the Registered Member Company's offices. They assess five different units within each of the companies. McGladrey first verifies the company's customer relationships by talking to a series of the customers. Then McGladrey verifies the vendors. McGladrey then looks at the company's operations, management, and finally they look at finances. McGladrey gives a validation of the business. RSM McGladrey's role is to help provide a baseline of the company's status; both past and present. Finally, with all of this data collected, Morningstar goes out to the company and asks 'where are you going?' Once they have an understanding of the current status of the company and where it is going, they prepare a research and valuation report on the company. Applying their knowledge of the public marketplace they establish a current and future valuation for the Entrex Registered Member Compan
