2022 CarbonEase
Offered by Entrex Carbon Offset Company, LLC
1,999,999 Shares of 2022 CarbonEase
Compliance Grade Carbon Offset Backed Securities
Reg A, Tier 1 Offering
Pending SEC Qualification
PART II
OFFERING CIRCULAR
2022 CarbonEase
Compliance Grade Carbon Offset Backed Securities
Offered By the Entrex Carbon Offset Company, LLC
150 E Palmetto Park Road, Suite 800
Boca Raton, FL 33432
Best Efforts Offering of up to 1,999,999 2022 CarbonEase Securities
Minimum Purchase: 1 Share Unit ($10.00)
This prospectus relates to the offering and sale of up to one million,
nine hundred and ninety nine thousand nine hundred and ninety nine
(1,999,999) shares of 2022 CarbonEase compliance grade carbon offset
backed securities for an aggregate maximum gross dollar offering of
nineteen million, nine hundred and ninety nine thousand, nine hundred
and eighty dollars ($19,999,980) (the Offering).
The Offering is being made pursuant to Tier 1 of Regulation A,
promulgated under the Securities Act of 1933. Each 2022 CarbonEase
compliance grade carbon offset backed security will be offered at
ten dollars ($10.00) per unit. There is a minimum purchase amount
of one 2022 CarbonEase security at $10.00. Each unit represents
one United Nations and/or World Bank registered, validated,
verified and minted 2022 metric tonne carbon offset (as defined).
Owners of a 2022 CarbonEase security may, exclusively at the option
of the owner and at the then current cost of the materialization,
convey ownership of the security to the transfer agent of record
in exchange for a notarized Certificate of Retirement representing
the retirement of the carbon offset backed security and the
underlying compliance grade carbon offset (the carbon offset
backed by the security) being registered, validated, verified
and minted 2022 metric tonne carbon offset; Materialization
and Conferment on an authorized United Nations Authorized Registry.
Upon receipt of the Certificate of Retirement, no further benefit
is provided to the owner through the materialization and conferment
of the 2022 CarbonEase certificate.
Investing in this offering involves a high degree of risk,
and you should not invest unless you can afford to lose your
entire investment; see Risk Factors. This offering circular
relates to the offer and sale or other disposition of up to
one million, nine hundred and ninety nine thousand nine hundred
and ninety nine (1,999,999) 2022 CarbonEase securities sold per
unit at $10.00 whereby each security shall represent one United
Nations and/or World Bank registered, validated, verified and
minted 2022 metric tonne carbon offset (as defined).
This is our offering, and no public market currently exists
for our 2022 CarbonEase securities. The proposed sale will
begin as soon as practicable after this Offering Circular has
been qualified by the Securities and Exchange Commission
(the SEC) and the relevant State regulators, as necessary,
and will terminate on the sooner of the sale of the maximum
number of shares being offered or the decision by Company
management to deem the offering closed. The shares offered
hereby are offered on a best efforts basis, and there is
no minimum offering.
While this offering is being qualified by the Securities and
Exchange Commission, we have a current Regulation D exempt
offering being sold by the principals of the Company representing
the same terms and conditions of this Regulation A offering
(as filed).
When and if this offering becomes qualified, we will cease
the Regulation D offering and convert the Reg D securities
into the registered security offered herein and continue to
solicit the qualified Regulation A offering.
Securities purchased by buyers of the Regulation D exempt
offering will be converted into securities of the final
Regulation A qualified offering if and when it occurs.
We have made no arrangements to place subscription proceeds
or funds in an escrow, trust or similar account, which means
that the proceeds or funds from the sale of the Regulation A
and Regulation D securities will be immediately available to
us to purchase the underlying carbon offsets securities
representing one United Nations and/or World Bank registered,
validated, verified and minted 2022 metric tonne carbon offset,
less fees (see Use of Funds).
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT
PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES
OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR
OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED
PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE
COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN
INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE
EXEMPT FROM REGISTRATION.
THE 2022 CARBONEASE COMPLIANCE GRADE CARBON OFFSET BACKED
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR APPLICABLE
STATE SECURITIES LAWS, AND ARE BEING OFFERED AND SOLD IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THESE LAWS. THE 2022 CARBONEASE COMPLIANCE GRADE CARBON
OFFSET BACKED SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
REGULATORY AUTHORITY NOR HAS THE COMMISSION OR ANY STATE
REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF
THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING
CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
# of Price to
Securities Public (2)
Per Security $1.00
Total Minimum 1 $10.00
Total Maximum 1,999,999 $19,999,990
Proceeds to Proceeds to
Per Security: (1) Issuer others
Total Minimum: $9.00 $1.00
Total Maximum: $17,999,991.00 1,999,999.00
(1)
The amounts shown are before deducting organization and
offering
costs to us, which include legal, accounting, printing, due
diligence, marketing, consulting, finders fees, selling and
other costs incurred in the offering of the common stock.
(2)
2022 CarbonEase securities are offered at $10.00 per unit.
We are following the Offering Circular format of disclosure
under Regulation A.
The date of this Regulation A offering circular is June 1, 2022.
FORWARD LOOKING STATEMENTS
THIS OFFERING CIRCULAR MAY CONTAIN FORWARD LOOKING STATEMENTS
AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY,
ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE
FORWARD LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF,
ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE
TO THE COMPANYS MANAGEMENT. WHEN USED IN THE OFFERING
MATERIALS, THE WORDS ESTIMATE, PROJECT, BELIEVE, ANTICIPATE,
INTEND, EXPECT AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT
MANAGEMENTS CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND
ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE
COMPANYS ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTAINED IN THE FORWARD LOOKING STATEMENTS. INVESTORS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE
MADE.
PART II
ITEM #2
TABLE OF CONTENTS
PART II ITEM 1 SUMMARY OF THE OFFERING CIRCULAR
PART II ITEM 2 TABLE OF CONTENTS
PART II ITEM 3a SUMMARY OF INFORMATION IN OFFERING CIRCULAR
PART II ITEM 3b RISK FACTORS
PART II ITEM 4 DILUTION
PART II ITEM 5 PLAN OF DISTRIBUTION
PART II ITEM 6 USE OF PROCEEDS TO ISSUER
PART II ITEM 7 DESCRIPTION OF BUSINESS
PART II ITEM 8 DESCRIPTION OF PROPERTY
PART II ITEM 9 MANAGEMENTS DISCUSSIONAND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND
SIGNIFICANT EMPLOYEES
PART II ITEM 11 COMPENSATION OF DIRECTORS AND OFFICERS
PART II ITEM 12 SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS
PART II ITEM 13 INTEREST OF MANANGEMENT AND OTHER
CERTAIN TRANSACTIONS
PART II ITEM 14 SECURITIES BEING OFFERED
PART F/S ITEM 15 FINANCIAL STATEMENTS
PART III ITEM 16 INDEX TO EXHIBITS
PART III ITEM 17 SIGNATURE PAGE
PART II
ITEM 3a
SUMMARY OF INFORMATION IN OFFERING CIRCULAR
As used in this prospectus, references to the Company,
company, we, our, us, 2022 CarbonEase or the Entrex
Carbon Offset Company or Company refer to Entrex Carbon
Offset Company, LLC. unless the context otherwise indicates.
You should carefully read all information in the prospectus,
including the financial statements and their explanatory
notes, under the Financial Statements prior to making an
investment decision.
THE COMPANY
Organization:
The Entrex Carbon Offset Company, LLC was incorporated under
the laws of the State of Florida on December 8th, 2020.
Our principal office is located at 150 East Palmetto
Park Road, Suite 800, Boca Raton FL, 33432.
Management:
Our Chief Executive Officer & Chairman is Stephen H. Watkins.
Our Vice Chairman is Rick Rochon. Our other Officers initially
include Thomas Harblin who assists in the sales operations of
the Company, Colin Turney who assists in marketing of the
company and Thomas Hatfield who manages our technology platform.
Controlling Shareholders:
Stephen H. Watkins, through the Entrex Holding Company,
EHCo, LLC, is the controlling member of the LLC.
Description of Parent Corporation Business:
Entrex Carbon Market was founded in 2019 with a mission to
create the leading place to find, research, track, manage and
trade carbon offsets.
The companys initial focus has been carbon offsets represent
millions of various vintage offsets from around the world.
Buyers found these offsets but had significant due diligence
and underwriting costs associated with a trade which resulted
in high friction, difficult, due diligence driven, bi lateral
trades.
The companys bi lateral transaction history exemplified how
opaque price discovery was in the market and, most important,
how significant carbon offset underwriting was prior to a trade
(required by buyers due to historical rampant fraud in the
industry). We found there was no disciplined, reliable supply
of compliance grade offsets for buyers to have comfort in the
quality and ease of transaction execution.
These two fundamental market shortcomings (quality and efficiency)
had us assemble a network of United Nations and World Bank
carbon offset project owners into a structure that makes them
private issuers of carbon offset securities under the SEC
jurisdiction.
These private carbon offset backed securities still had
buyer challenges due to the historical fraud challenges
resulting in buyers still having to manage the underwriting
of each issuers unique offsets there was no standardized,
credible underwriting in the market.
The Entrex Carbon Market revised its vision to create the
leading place to find, research, track, manage and trade of
standardized compliance grade carbon offsets with regulatory
oversight.
The Entrex Carbon Market revised its strategy to create and
market compliance grade offsets which inherently provided
comfort and confidence for buyers. In an effort to mitigate
this underwriting cost for buyers Entrex and KPMG established
a relationship whereby KPMGs Project Management Organization
(PMO) oversees the ISO Auditors and Registry methodologies
from project registration through minting and finally
retirement of the security. We believe the collective efforts
of United Nations Registries, ISO approved Auditors and KPMG
managing authentication and provenance of each security would
provide buyers the confidence and comfort in the underlying
compliance grade offsets which is not a regulatory term nor
represents any compliance body approval of said offsets.
The Entrex Carbon Market established compliance grade carbon
offsets to create comfort, confidence and convenience for
buyers of carbon offsets.
Entrex Carbon Offset Company, LLC
The Entrex Carbon Market realized that efficient trading of
these standardized compliance grade carbon offsets needed a
global distribution system; a network through which regulated
brokers could transact securitized compliance grade carbon
offsets. This is where the Entrex Carbon Offset Company offers
a solution.
The Entrex Carbon Offset Company securitizes Entrexs
compliance grade carbon offsets into standardized carbon
offset backed security registered with the United States
Securities and Exchange Commission and sold through regulated
parties.
Entrexs compliance grade carbon offset backed securities are
intended to be traded by regulated market members as private
securities, private carbon offset backed securities in a public
equity (PIPE), or as a registered security of a public company.
The Entrex Carbon Offset Company envisions the 2022 CarbonEase,
as an SEC qualified carbon offset backed security which will
offer buyers and sellers an efficiently traded, standardized,
compliance grade carbon offset backed securities for regulated
market members to offer to their clients.
2022 CarbonEase offers a standardized compliance grade
carbon offset backed security sold through regulatory compliant
transactions and regulated market members. Buyers can gain
comfort and confidence that they are buying authenticated
compliance grade carbon offsets with known providence.
The 2022 CarbonEase development can be summated into four
distinct events.
1. Standardization of the underlying carbon offset is overseen
by KPMGs Project Management Organization (PMO) who oversees the
ISO Auditors tracking UN Registry methodologies from project
registration through minting and finally retirement of the
security. This process provides authentication and providence
of each carbon offset assuring a consistent standard.
2. Securitization occurs when Entrex and KPMG assigns specific
UN Registry carbon offset serial numbers to specific CarbonEase
security serial numbers. KPMGs Capital Market Team will
manage agreed upon procedures to confirm the carbon offset
backed components to the Compliance grade specification which
collectively establishes the basis for the compliance grade
carbon offset backed security.
3. Public Market Trading will occur when regulated traders can
access the qualified 2022 CarbonEase via Bloomberg, Reuters and
other trading desktops. Traders can then establish bid and
offers and electronically trade the 2022 CarbonEase security
electronically providing frictionless trades.
4. Retirement occurs when an owner redeems their security
through the regulated transfer agent. The transfer agent
notifies Entrex and KPMGs Project Management Organization who
then oversees the retirement of the specific serial numbers at
the United Nations Registry which then results in a retirement
certificate being provided to the redeemed security last owner.
Below we represent a high level summary of the 2022 CarbonEase
Standardization, the Securitization into an Backed Security
and the associated Redemption
We believe the above processes allow any carbon offset project,
overseen by KPMG, result in a standardized compliance grade
carbon offset backed security, which can be efficiently traded
with simplified retirement solution (and associated authorized
retirement certificates) for global carbon buyer: resolving
todays challenges through existing public market infrastructure.
The end to end offset development, securitization and retirement
process is managed by Entrexs blockchain enabled IBM, award
nominated, technology platform.
THE OFFERING
Securities Offered:
1,999,999 2022 CarbonEase compliance grade carbon offset
backed securities.
Each 2022 CarbonEase Security will be offered at $10.00 per unit.
Each unit shall be assigned a designated United Nations or World
Bank Carbon minted offset underwritten by a Serialized Carbon
Offset via Entrexs Blockchain enabled Carbon Securitization System.
Termination of the Offering:
The offering will commence as soon as practicable after this
Offering Circular has been qualified by the Securities and
Exchange Commission (the SEC) and the relevant state regulators,
as necessary and will terminate on the sooner of the sale of
the maximum number of 2021 Entrex Carbon Offset securities
being sold or when no further non retired 2021 Carbon Offsets
are available for resale from the United Nations or World
Bank Registries or via the decision by Company management to
deem the offering closed.
Offering Cost:
We estimate our total offering expenses shall be paid by our
parent company the Entrex Carbon Market, LLC. Trade costs,
by regulated broker dealers, shall be paid by the buyer either
as part of the sell price or as an addition to the sell price.
PART II
ITEM 3b
RISK FACTORS
Investing in our securities involves risk. In evaluating the
Company and an investment in the 2022 CarbonEase security
careful consideration should be given to the following risk
factors, in addition to the other information included in
this Offering circular. Each of these risk factors could
materially adversely affect Entrex Carbon Offset Companys
business, operating results or financial condition, as well
as adversely affect the value of an investment in our securities.
The following is a summary of the most significant factors
that make this offering speculative or substantially risky.
The company is still subject to all the same risks that all
companies in its industry, and all companies in the economy,
are exposed to. These include risks relating to economic
downturns, political and economic events and technological
developments (such as cyber security). Additionally,
early stage companies are inherently riskier than more
developed companies. You should consider general risks as
well as specific risks when deciding whether to invest.
Risks Related to the Company
Entrex Carbon Offset Company is a development stage business
and may be adversely affected managing the business and
regulatory challenges of the market sector.
The Company has limited capitalization and a lack of working
capital and as a result is dependent on raising funds to grow
and expand its business. The Company lacks sufficient working
capital in order to execute its business plan. The ability
of the Company to move forward with its objective/s is
therefore highly dependent upon the success of the offering
described herein. Should we fail to obtain sufficient working
capital through this offering we may be forced to abandon our
business plan.
Because we have a limited history of operations we may not be
able to successfully implement our business plan:
We cannot assure you that our intended activities or plan of
operation will be successful or result in revenue or profit
to us and any failure to implement our business plan may have
a material adverse effect on the business of the Company.
We are dependent on the sale of our securities to fund our
operations and will remain so until we generate sufficient
revenues to pay for our operating costs:
Our officers and directors have made no written commitments
with respect to providing a source of liquidity in the form
of cash advances, loans and/or financial guarantees. There
can be no guarantee that we will be able to successfully sell
our securities. Such liquidity and solvency problems may
force the Company to cease operations if additional financing
is not available. No known alternative resources of funds are
available in the event we do not generate sufficient funds
from operations.
We rely on partners and related entities to Register,
Validate, Verify, Mint and Retire Carbon Offsets which would
provide the underwriting collateral for the Entrex Carbon
Offset Securities. If the services offered under respective
agreements are not fully adhered and/or our license from
Entrex is revoked our operations could be severely affected:
Accordingly, our operations are subject to the risks inherent
in the establishment of a new business enterprise, including
access to capital, licensed technologies, successful
implementation of our business plan and limited revenue from
operations.
Risks Relating to Our Business
We will be dependent upon key administrative personnel of
Entrex Carbon Offset Company for our future success,
particularly Stephen H. Watkins:
If we lose this member of the Entrex Carbon Offset Companys
management team, our ability to implement our business strategy
could be significantly harmed.
There is currently no active trading market for our securities:
Our ability to grow will depend on our ability to sell the 2022
CarbonEase Securities to Market ONLY after the Entrex Carbon
Market has Registered, Validated, Verified and Minted Carbon
Offsets. Today the Entrex Carbon Market has discussions with
136 Carbon Offset Projects which are interested in moving forward.
Entrex Carbon Market will only engage these parties once we the
2022 CarbonEase security, in its private, PIPE or registered
structure has been presented and of interest to buyers.
If no Carbon Offsets from the Entrex Carbon Market to secure
the 2022 CarbonEase Securities it is possible that no 2022
CarbonEase Offset Securities will be available for sale.
Our financial condition and results of operations will depend
on our ability to manage our future growth effectively:
The Entrex Carbon Offset Company is a company with limited
operating history which has many indications of interest for
the CarbonEase product. If the sales of the 2022 CarbonEase
do not occur as expected the current and future of the Company
may be at risk. As such, it is subject to the business risks
and uncertainties associated with any new business enterprise,
including the lack of experience in managing or operating a
business of this type.
Accomplishing this result on a cost effective basis is largely
a function of our management personnels structuring of
administrative duties, their ability to provide competent,
attentive and efficient services to us, and our access
to financing on acceptable terms.
We will operate in a highly competitive market for investment
opportunities:
We compete for investors and buyers of Carbon Offset securities
who have access to private Carbon Offsets which lack liquidity
and the securitization features the 2022 CarbonEase Securities
shall provide. It is possible that potential buyers might
prefer the lack of liquidity or the lack of securitization
which the 2022 CarbonEase provides and therefore would not
have demand in the market. Many of our competitors offer
private carbon offset securities which albeit lack what we
see as the 2022 CarbonEase benefits but which may be
perceived as better investment opportunity if this
occurs our ability to implement our business strategy
could be significantly harmed.
Our operating results are subject to fluctuation as a
result of the nature of our business, and if we fail to
achieve our objectives, ECO, LLC may not continue to
operate.
We could experience fluctuations in our quarterly and
annual operating results due to a number of factors,
some of which are beyond our control, including the
number of investors and the number of companies that
agree to offer Carbon Offset Securities allowing us to
issue the 2022 CarbonEase Securities. If investors
lack interest or Carbon Offset are not available for
securitization then the CarbonEase Securities may not be
available to sell and our business model and potential
unable to operate.
There are significant potential conflicts of interest
which could impact our returns:
Our management team (and any that may be retained in
the future), and the future members of a the Entrex
Carbon Offset Company, LLC may serve as officers,
directors or principals of entities that operate in
the same or a related line of business or other
companies managed by affiliates of the EHCo, LLC,
the Entrex Holding Company, which may be formed in
the future. Accordingly, if this occurs, they may
have obligations to investors in those entities, the
fulfillment of which might not be in the best interests
of our investors or the company.
Operational and/or Ownership conflicts of interest:
Our management team (and any that may be retained in
the future), and the future members of the Entrex
Carbon Offset Company, LLC may be owners or principals
of entities that the EHCo, LLC may purchase.
Accordingly, if this occurs, they may have obligations
to investors in those entities which may not be in
the best interest of the 2021 Entrex Carbon Offset
Security holders,
Our Management may choose to, exclusively at their
option, to sell or reclassify one or more class/es
of securities which could convey rights and
privileges to their owners:
The Entrex Carbon Offset Company, LLC management has
the right to sell or convert any of the Companys
securities into various securities of any other company,
if deemed appropriate, exclusively at the option of
the management, into a private or publicly listed Company.
Our Management may change our objectives, operating
policies and strategies without prior notice or any
stockholder approval:
Our management has the authority to modify or waive
certain of our operating policies and strategies
without prior notice and without investor approval.
However, absent investor approval,
we may not change the nature of our business so as
to cease to exist unless sold or purchased at the
exclusive option of management. We cannot predict
the effect any changes to our current operating
policies or strategies would have on the business
model, operating results and returns to investors.
Nevertheless, the effects may adversely affect our
business and impact our ability to make distributions.
Changes in laws or regulations governing our operations
may adversely affect our business:
We are subject to regulation by laws at the local,
state and federal levels. These laws and regulations,
as well as their interpretation, may be changed
from time to time. Any change in these laws or
regulations could have a material adverse effect
on our business.
Because the 2022 CarbonEase may be publicly traded,
there will be uncertainty regarding our value:
We have arbitrarily established a price of our
securities based on our perception of comparables
in the industry and our anticipated operating methodology.
This valuation may fluctuate significantly and
could have no relevance to actual results of the
CarbonEase security or the Entrex Carbon Offset C
ompany, LLC.
Entrex Carbon Offset Companys purchase of related
companies:
At the discretion of management; we may or may
not elect to purchase related companies which may
or may not have conflicts of interest for the
Company or management using proceeds of this
offering or establishing debt or other securities
which may have a negative effect on to 2022
CarbonEase security and offering.
Entrex Carbon Offset Companys purchase and license
of technologies from related parties:
At the discretion of management; we may or may not
elect to purchase and license technologies from
related companies which may or may not have conflicts
of interest for the Company or management using
proceeds of this offering or establishing debt or
other securities which may have a negative effect
on to 2022 CarbonEase security and the holders of
this offering.
Entrex Carbon Offset Companys limited operational
experience:
Entrex Carbon Offset Company has had limited
operations which may not, be sufficient for the
business and plans outlined. If management fails
to operate as planned the operational cash flows
could limit the value of the 2022 CarbonEase
Security holders or significantly affect the
operations of the enterprise. If sufficient
funds are not available to manage Entrex Carbon
Offset Company, LLC and/or any of the partners or
related companies the value of the Entrex
Carbon Offset Securities could diminish in value.
PART II
ITEM 4
DILUTION
We are offering Securities called 2022 CarbonEase
which will each be collateralized by one non retired
minted carbon offset, or the future minted Carbon
Offset, of a United Nations or World Bank Registered
Carbon Offset Issuer.
We are limited to issuing 1,999,999 2022 CarbonEase
Securities pursuant to this offering. This represents
the World Banks estimate for an additional 26 Billion
Carbon Offsets needed worldwide to offset existing
carbon production.
If global issuers choose to assign to the Entrex Carbon
Offset Company more 2022 Minted Carbon Offsets than the
offered amount of 2022 CarbonEase Securities the Company
may chose to issue a secondary offering to offset demand.
As such each of the 2022 CarbonEase Securities Offered
in the prospectus will maintain their allocated and
assigned 2022 Carbon Offset however additional units
may be offered, based on available United Nations and
World Bank Registries of Carbon Offsets, which may
authorize additional 2022 CarbonEase Securities if
allowed by regulatory bodies.
Therefore, future offerings may dilute the 2022
CarbonEase collectively for the company, the Entrex
Carbon Offset company but would not dilute the
compliance grade carbon offset backed nature of the
CarbonEase security.
PART II
ITEM 5
PLAN OF DISTRIBUTION
We are offering a maximum of 1,999,999 2022 CarbonEase
on a no minimum, best efforts basis. The offering will
terminate upon the earlier to occur of: (i) the sale of
all 2022 CarbonEase, or (ii) the decision by Company
management to deem the offering closed.
Our 2022 CarbonEase Securities are not currently listed
on any national exchange or qualified for trading on
any electronic quotation system. No securities are being
sold for the account of security holders; all net proceeds
of this offering will go to the Company.
Warrants/options:
As of the date of this prospectus, there are no
outstanding warrants to purchase our securities.
State Securities Laws:
Under the securities laws of some states the 2022
CarbonEase Securities may be sold in such states
only through registered or licensed brokers or
dealers. In addition, in some states the 2022
CarbonEase Securities may not be sold unless the
2022 CarbonEase Securities have been qualified for
sale in the state or an exemption from registration
or qualification is available and is complied with.
PART II
ITEM 6
USE OF PROCEEDS TO ISSUER
We estimate that the net proceeds from the
sale of the 1,999,999 2022 CarbonEase Securities
pursuant to this Offering will be approximately
$17,999,991 after deducting the estimated offering,
selling and operational expenses of approximately
$1,999,999.
Accordingly, we expect net proceeds,
estimated as discussed above as follows, if we raise
the maximum offering amount: Maximum Offering Amount:
$19,999,990
Fully funding Offering: 100% $19,999,990
Disclosed Broker Fees: 10% $ 1,999,999
Net Offering distributed: 90% $ 17,999,991
Net Offering distributed to the Company shall be used
in the following manner: Acquisition of the
compliance grade carbon offset minted securities to
provide a carbon offset for each of the 2022 CarbonEase
Securities.
PART II
ITEM 7
DESCRIPTION OF BUSINESS
Description of Business:
Entrex was founded in 2001 to create a capital market
system for entrepreneurial companies (Entrex is short for
entrepreneurial exchange).
Since that time, Founder & CEO Stephen H. Watkins has
assembled both a team and a family of companies with
leading edge technology, using the IBM technology stack,
to serve the needs of all market participants: companies,
investors and intermediaries. As a final step in this
evolution the Entrex Holding Company (EHCo or Entrex)
was established to help drive synergies among these
underlying companies, and to create a comprehensive
market system, similar to the infrastructures of NASDAQ
or NYSE, yet to help smaller companies access capital
while providing control, compliance, and transparency
to all market participants.
Entrex Licenses the Origination through Trading Technology
to various businesses including the Entrex Carbon Market
LLC. (www.EntrexCarbonMarket.com).
The Entrex Carbon Market provides services to create
offsets for entities which have underdeveloped Carbon
Offsets. As part of the Entrex Carbon Market process
to Register, Validate, Verify, Mint, Trade and Retire
an issuers carbon offsets Entrex Carbon Offset
Company, LLC is assigned serialized Carbon Offsets
which become an asset of the Company to which it
assigns value to each of the 2022 CarbonEase
securities as described in this prospectus.
Description of Operations:
Entrex Carbon Offset Company, LLC is a consolidator
and assembler of Carbon Offsets. Each 2022 CarbonEase
is collateralized by an Issuers 2022 Carbon Offset.
Entrex Carbon Offset Company, LLC utilizes its employees
and partners to Register, Validate, Verify, Mint, Trade
and Retire an issuers carbon. After an Issuers
Carbon Offsets have be minted each offset can be
assigned to a specific 2022 CarbonEase Security (
This offering) until retired.
These Entrex Carbon Offset Securities with assigned
Carbon Offsets are then sold to an Issuer, pursuant
to this offering, for the Issuer, and/or their
assignees, ultimately traded for the benefit of the
issuer and redeemed or retired if the 2022 CarbonEase
security owner desired to use the underlying offsets
for their carbon neutrality plans.
Historical Operations:
Entrex Carbon Offset Company, LLC has no historical
operations but relies on the Entrex Holding Companys
technology platform, licensed in 2019, to operate and
manage the assignment and collateralization of an
Issuers Carbon Offsets for and on behalf of the
Entrex Carbon Market, LLC.
Information of the Licensed Technology platform is
available in the IBM Case Study on www.EntrexCarbonMarket.com.
Current Operations:
Entrex Carbon Offset Company, LLC is managed by
Stephen H. Watkins the CEO of the Entrex Holding Company
(EHCo, LLC), Entrex Carbon Market, LLC and the Entrex
Carbon Offset Company, LLC. As such once a Licensees
Carbon Offsets are Minted within the Entrex Carbon
Markets methodologies he would operate Entrex Carbon Offset
Company, through a limited staff and independent
contractors, which, in turn, would utilize the licensed
technology platform to execute the assignment of a
Licensees Entrex Carbon Offsets to 2022 CarbonEase Security
under the oversight of KPMG.
Once assigned and collateralize the 2022 CarbonEase securities
would be sold through regulated market members.
When a 2022 Entrex Carbon Offset is Retired by an owner the
Entrex Carbon Offset Company staff would then manage the
Retirement of the carbon offset/s with the appropriate
United Nations or World Bank Registry and manage the
retirement of the security for trading under the oversight of KPMG.
Growth Strategy:
The Companys growth is anticipated through further sales
via the Entrex Carbon Market and its independent sales and
marketing initiatives to potential Carbon Offset producers.
Each Carbon Offset Producer who becomes a Licensee of the
Entrex Carbon Market would then contractually, once their
Carbon Offsets are Minted, be obligated to assign their
Carbon Offsets to the Entrex Carbon Offset Companys
CarbonEase Security pursuant to this prospectus.
If more compliance grade carbon offsets are available
to the Entrex Carbon Offset Company we may choose to have
additional offerings similar to this or elect a different
structure which offers efficiency to market which offers
the same or additional benefits.
The timing and commencement of our growth plans may be
influenced by the success of this prospectus offering.
And we may not raise sufficient proceeds through this
offering in order to fully execute our business plans.
PART II
ITEM 8
DESCRIPTION OF PROPERTY
The Entrex offices are located on the 8th Floor at 150
East Palmetto Park Road, Boca Raton, Florida.
Entrex Carbon Offset, LLC operates licensed technologies
to originate, place and service Carbon Offsets and their
issuances on behalf of clients. These technologies are
located in IBM Licensed Servers located in nationwide
web based server facilities which manage backup and
operations of said servers and technology.
Today limited personnel operate at this location and
often are working within related entities of Entrex
Carbon Offset, LLC and the holding company EHCO, LLC.
We anticipate, pursuant to the completion of this
offering to supplement our team.
PART II
ITEM 9
MANAGEMENT DISCUSSION AND ANALSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Entrex Carbon Offset Company operates on a cash flow
breakeven basis since our inception. We anticipate
hiring employees and/or independent contractors pursuant
to offset our operating needs.
CarbonEase acquires compliance grade carbon offsets from
the Entrex Carbon Markets Carbon Offset Rights Agreement
(CORA). This agreement is analogous to an oil and
gas mineral rights agreement. Entrexs CORA is a patent
pending contract which assigns the sale of KPMG overseen
carbon offset projects to the Entrex Carbon Offset Company
which in turn assembles carbon offset backed securitized
offsets into the CarbonEase security as defined herein.
The Entrex Carbon Market has over 100 Carbon Offset
Producing Real Estate Projects (COPRe Projects) representing
over 2,000,000 acres of forestry lands which potentially
produce nearly 200,000,000 offsets. If all of these come
to market, we could have over $2,000,000,000 in COPRe
CarbonEase product available to market.
Entrex has also developed their Oil and Gas Cap and
Trade program. These projects cap leaking oil and
gas wells which in turn create carbon offsets. Entrex
has helped develop legislation with the State of
Louisiana which, if executed, provides legal rights to
the offsets to the service provider. There are an
estimated 2.1 million oil and gas wells in the United States
which are estimated to produce about $250,000 carbon
offsets: a multi billion dollar additionality opportunity.
The Entrex Carbon Offset Company is the recipient of
assigned Entrex Carbon Market Licensed Carbon Offsets
COPRe and Cap and Trade Carbon Offset Projects).
We do not anticipate this to be a labor intensive
business therefore few full time, if any, employees are
expected to be needed on behalf of the CarbonEase
processes all services are done by external parties
and sales through regulated agents.
The Entrex Carbon Market management shall be accountable
for all processes on behalf of 2022 CarbonEase Security
Holders. This creates an efficient end to end process
and single point of contact for 2022 CarbonEase security
holders.
Plan of Operations:
We believe the Entrex Carbon Market licensed technology
platform has matured to an operational basis over the
15 years of development of the IP. In 2017 Entrex
proved through our technology we can originate, structure,
place, trade and service private Securities which have been
pushed out to the blockchain.
FINRA regulators have reviewed the technology and operational
processes culminating at the private trades and debt payment
distributions on behalf of security holders and we believe
they have no functional nor compliant issues with the manner
in which Entrex processes Securities domestically which
in turn this technology could manage the assignment and
retirement of the Entrex Carbon Offset Securities offered
in this prospectus through the regulated parties we have engaged.
Material Changes:
Excluding normal operational growth and associated changes
in operations and/or technology no material changes are
expected in the operations or investor returns in 2022 thru
2023.
Various micro and macro economic national or global events
could have significant effect on the holdings of the Company
as these events could or would have operational effect on the
held securities of underlying companies.
Liquidity:
The 2022 Entrex Carbon Offset Securities are expected to
have limited liquidity unless listed on an over the counter
or public market. Management actively plans of listing the
2022 Entrex Carbon Offset Securities once approved by the
United States Securities and Exchange pursuant to this prospectus.
PART II
ITEM 10
DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS
Our executive officers and directors as of the date of
this offering are as follows:
Name Position
Stephen H. Watkins Managing Member
Richard Rochon Board
Thomas Hatfield Partner
Tom Harblin Partner
Colin Turney Partner
Stephen H. Watkins: is Managing Member and is the founding
Chairman and CEO of various majority owned entities of the
Entrex Holding Company (EHCo, LLC). Stephen is an
experienced entrepreneur founding a series of successful
information and business services companies; two of which
grew to billion dollar market cap companies. Stephen a
uthored the book Capital Cant Fund What It Cant Find.
In the past he wrote a syndicated bi monthly finance
column read by over eight million national readers at its
peak.
Richard C. Rochon: is Vice Chairman of the Board of the
Entrex Holding Company (EHCo, LLC). Mr. Rochon has
extensive experience as an investor, shareholder,
director and officer of various public and private companies
throughout his career and has been involved in numerous
acquisitions, divestitures, spin offs, initial public
offerings, secondary offerings and other corporate
financings and transactions. Prior to joining Entrex Mr.
Rochon formed RPCP.
Thomas Hatfield: Manages the IBM Technology Platforms
across EMI and the associated Entrex Capital Market
System companies. Mr. Hatfield brings over 30 years
of expertise creating and solving complex online
information systems. His technical experience includes the
US Army and with General Electric where was a Engineer for
final testing and ground station operations for military
space satellite communications. His expertise is over
20 years creating custom systems, for organizations including
NEC Electronics, Flextronics and PeopleSoft.
PART II
ITEM 11
COMPENSATION OF DIRECTORS AND OFFICERS
Name Total Compensation*
Stephen H. Watkins $1.00
Richard Rochon $1.00
Thomas Hatfield $1.00
Tom Harblin $1.00
Colin Turney $1.00
*Compensation for operators and directors of the Company
are provided via wholly owned subsidiaries of EHCo, LLC
the Entrex Holding Company and thru management or
licensing agreements to agreed parties.
Officers and Directors:
At our sole discretion we may add additional Officers and
Directors and compensate them through annual retainer fees
along with reimbursement of reasonable out of pocket
expenses incurred in connection with attending each meeting.
Each independent Officer and Director will receive $500 in
connection with each meeting that they attend, plus
reimbursement of reasonable out of pocket expenses incurred
in connection with attending each committee meeting not held
concurrently with a board meeting. No compensation is
expected to be paid to Directors or Officers until this
offering is made effective.
Compensation for expenses, Officers and Directors will
be managed through the sole decisions and directions of the
Managing Member.
Indemnification Agreements:
We shall enter into indemnification agreements with our
Directors and Officers. The indemnification agreements
are intended to provide our Directors the maximum
indemnification permitted under law and/or requested by
the respective Officer and/or Director. Each indemnification
agreement provides that EMI shall indemnify the Director or
Office who is a party to the agreement (an Indemnitee),
including the advancement of legal expenses, if, by reason
of his or her corporate status, the Indemnitee is, or is
threatened to be made a party to or a witness in any
threatened, pending, or completed proceeding.
Significant Employees:
As of the date of this prospectus, Stephen H. Watkins is the
Managing Member of the Entrex Holding Company and is a key
party to the various Entrex companies. Other staff members
and/or entities will be involved in Entrex Carbon Market and
Entrex Carbon Offset Company to manage the creation,
assignment and retirement of the 2022 CarbonEase Securities
discussed in this prospectus.
At the sole discretion of management various employment
agreements and/or contracts may be made with key personnel
which regulate the manner of compensation and the potential
option purchases as provided in the employment agreements.
Family Relationships:
There are no family relationships among our directors or
officers
Involvement in Certain Legal Proceedings:
None of our control persons are known to have been involved
in any of the following events during the past five years:
1.
Bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer
either at the time of the bankruptcy or within two years
prior to that time;
2.
Any conviction in a criminal proceeding or being subject to
a pending criminal proceeding (excluding traffic violations
and other minor offences);
3.
Being subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court
of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or
banking activities. Watkins, Managing Member, has a
past AWC issued by FINRA and is believed to be compliant
and an SEC conformation was requested in 2020. Further
summary and analysis is available in the due diligence
room or upon request; or
4.
Being found by a court of competent jurisdiction
(in a civil action), the Commission or the Commodity
Futures Trading Commission to have violated a federal
or state securities or commodities law, and the judgment
or decision has not been reversed, suspended, or vacated.
Changes in Control:
We are unaware of any contract, or other arrangement or
provision of our Articles or by laws, the operation of
which may at a subsequent date result in a change of
control of our company.
PART II
ITEM 12
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS
Title of Class Name of Beneficial
Preferred Member Interests* EHCo, LLC
2021 Entrex Carbon Offsets** This Offering
Title of Class Amount
Preferred Member Interests* 1,000
2021 Entrex Carbon Offsets** 1,999,999
Title of Class Percent of Class
Preferred Member Interests* 100%*
2021 Entrex Carbon Offsets** 100%**
*Preferred Member Interests have voting rights
controlled by Watkins the Managing Member of the EHCo, LLC
** Non Voting Shares representing underlying offsets
authorized and allocated to the maximum provided by
regulators.
PART II
ITEM 13
INTEREST OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS
n/a
(the balance of this page is intentionally blank)
PART II
ITEM 14
SECURITIES BEING OFFERED
We are offering a maximum of 1,999,999 2022 CarbonEase
Securities, each collateralized by an associated, serialized
and minted Carbon Offset via a United Nations or World Bank
Carbon Registry. Investors, in turn, will own through the
CarbonEase Security a specific, registry serialized carbon
offset until retired by the CarbonEase owner or when canceled
two years after the serialization year on the last business
day of the year. At that point any unredeemed/retired 2022
CarbonEase Securities will be materialized and Entrex Carbon
Offset Company shall be the recipient of the related carbon
offset of unredeemed securities. Notice shall be provided
prior to the 12/31 liquidation date to owners of record (
2022 CarbonEase Securities will liquiditate on 12/31/2024).
Any owners that acknowledge shall be provided a certificate
referencing their ownership of the carbon offset registry
serial number. Security holders who do not notify the Entrex
Carbon Offset company of their desires and intent of the
CarbonEase security may forfeit future rights of the Security
and associated carbon offsets.
The Entrex Carbon Offset Security only have rights and
warranties associated with the associated and serialized
Carbon Offset via a United Nations or World Bank Carbon
Registry. The only right the Entrex Carbon Offset Security
holder maintains are the rights and warranties associated
with the carbon offset as defined herein.
2022 CarbonEase Securities have no dividend rights;
2022 CarbonEase Securities have no voting rights;
2022 CarbonEase Securities have no liquidation rights;
2022 CarbonEase Securities have no pre emptive rights;
2022 CarbonEase Securities have no conversion rights;
2022 CarbonEase Securities have no redemption provisions;
2022 CarbonEase Securities have no rights inferred to the
selection of the Managing Member;
2022 CarbonEase Securities have no rights inferred to the
decisions of the Managing Member;
22022 CarbonEase Securities have no voting rights for any
future Board of Directors if created;
2022 CarbonEase Securities have no voting rights or
selection of any Officers;
2022 CarbonEase Securities have no decision on the leverage
the Company decides to obtain;
2022 CarbonEase Securities have no decision on and sale/merger
or acquisition;
2022 CarbonEase Securities have no liabilities for further
calls or future offerings;
2022 CarbonEase Securities have no liabilities
associated with the company;
2022 CarbonEase Securities have no financial benefit
beyond the associated Carbon Offset Collateral.
PART F/S
ITEM 15
PROJECTED FINANCIAL STATEMENTS
Income Statement
Not Operating
10-31-2022
Balance Sheet
Assets:
Cash: 0.00
Contracted Carbon Offsets: $19,999,990.00
Liabilities
Payables for Carbon Offsets: $11,999,994.00
Equity: $7,999,996.00
Liabilities and Equity: $19,999,990.00
Note 1. Organization, History and Business
Entrex Carbon Offset Company (the Company) was authorized
as a Limited Liability Corporation in Florida on December
8th 2020 and initiated operations on January 1st 2022. The
Company was established for the purpose of creating a
tradable security for the benefit of the Entrex Carbon
Market Carbon Offset Rights Agreement licensed Clients.
The Companys fiscal year end is December 31.
Note 2. Related Party Transactions
Entrex Carbon Market, LLC creates carbon offsets, pursuant
to license which are overseen by KPMG. Produced carbon
offsets are then sold to buying companies and this company;
Entrex Carbon Offset Company, LLC. Management of the various
related parties may have conflicts of interest between entities.
Note 3. Income Taxes
The Company adopted the provisions of ASC 740 10 50, formerly
FIN 48, and Accounting for Uncertainty in Income Taxes. The
Company had no material unrecognized income tax assets or
liabilities as of October 31, 2022.
The Companys policy regarding income tax interest and
penalties is to expense those items as general and administrative
expense but to identify them for tax purposes. During the period
from inception through October 31, 2022 there were no income tax,
or related interest and penalty items in the income statement, or
liabilities on the balance sheet. The Company anticipates filing
income tax returns in the U.S. federal jurisdiction and the State
of Florida. We are not currently involved in any income tax
examinations.
Note 4. Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. Currently,
the Company has no operating history and has not generated any
revenue nor expenses. These factors raise substantial doubt
about the Companys ability to continue as a going concern.
Management believes that the Companys capital requirements will
depend on many factors including the success of the Companys
development efforts and its efforts to raise capital. Management
also believes the Company needs to raise additional capital for
working capital purposes. There is no assurance that such
financing will be available in the future. The conditions
described above raise substantial doubt about our ability to
continue as a going concern. The financial statements of the
Company do not include any adjustments relating to the
recoverability and classification of recorded assets, or the
amounts and classifications of liabilities that might be necessary
should the Company be unable to continue as a going concern.
ITEM 16
INDEX TO EXHIBITS
Exhibit A. State Filing Documents
Exhibit B. Federal EIN
Exhibit C. SEC Reg A Filing Confirmation
PART III
Exhibit A.
State Current Status Documents
PART III
Exhibit B.
Federal EIN
PART III
Exhibit C.
SEC Confirmation of Reg A filing
Original Filing Acceptance:
Amended Filing Accepted:
PART III
Exhibit D.
Signature Page
Pursuant to the requirements of Regulation A, the issuer certifies
that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form 1 A and has duly caused this
Offering statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boca Raton and County of
Palm Beach, in the State of Florida, December 9, 2020.
ENTREX CARBON OFFSET, LLC
By:
/s/ Stephen H. Watkins
Name:
Stephen H. Watkins
Title:
Managing Member
(and Principal Executive Officer)
In accordance with the requirements of the Securities Act
of 1933, this registration statement was signed by the following
persons in the capacities and on the dates stated.
Signature
/s/ Stephen H. Watkins
Title
Managing Member
Date
October 31, 2022
Stephen H. Watkins
(and Principal Executive Officer