UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



Form 10-Q



(Mark One)



xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2006



oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from _______________ to _______________.



Commission file number: 000-33109



EntreMetrix Corporation

(Exact name of registrant as specified in its charter)



|Nevada
		(State or other jurisdiction of
		incorporation or organization)                          | 81-0555579
		(I.R.S. Employer
		Identification No.)
|-------------------------------------------------------------------------------------------------- | ---------------------------------------------------
|18101 Von Karman Avenue, Suite 330
		Irvine, California
		(Address of principal executive offices) | 92612
		(Zip Code)                                 



Registrants telephone number, including area code    (888) 798-9100



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YesXNo



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one):



|Large accelerated filer  ___ | Accelerated filer ___ | Non-accelerated filerX
|---------------------------- | --------------------- | ----------------------



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     YesNoX



Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:



Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   YesNo



Applicable only to corporate issuers:



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.  As of November 15, 2006, there were 57,987,865 shares of common stock, par value $0.001, issued and outstanding.

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ENTREMETRIX CORPORATION



TABLE OF CONTENTS



PART I



|ITEM 1  | FINANCIAL STATEMENTS                                                                  | 3 
|------- | ------------------------------------------------------------------------------------- | --
|ITEM 2  | MANAGEMENTS DISCUSSION AND ANALYSIS OR FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | 16
|ITEM 3  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            | 26
|ITEM 4  | CONTROLS AND PROCEDURES                                                               | 26
|PART II |                                                                                      
|ITEM 1  | LEGAL PROCEEDINGS                                                                     | 27
|ITEM 1A | RISK FACTORS                                                                          | 27
|ITEM 2  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                           | 27
|ITEM 3  | DEFAULTS UPON SENIOR SECURITIES                                                       | 27
|ITEM 4  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   | 27
|ITEM 5  | OTHER INFORMATION                                                                     | 27
|ITEM 6  | EXHIBITS AND REPORTS ON FORM 8-K                                                      | 27



2

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PART I



This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the Exchange Act).  These statements are based on managements beliefs and assumptions, and on information currently available to management.  Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading Managements Discussion and Analysis of Financial Condition or Plan of Operation.  Forward-looking statements also include statements in which words such as expect, anticipate,  intend, plan, believe, estimate, consider or similar expressions are used.



Forward-looking statements are not guarantees of future performance.  They involve risks, uncertainties and assumptions.  Our future results and shareholder values may differ materially from those expressed in these forward-looking statements.  Readers are cautioned not to put undue reliance on any forward-looking statements.



ITEM 1
        Financial Statements




3



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ENTREMETRIX CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)





|                                                                             |  | As of            
|---------------------------------------------------------------------------- |  | -----------------
|                                                                             |  | September 30,    
|                                                                             |  | 2006             
|                                                                             |  | (Unaudited)      
|ASSETS                                                                      
|Current Assets                                                               |  |                  
|Cash                                                                         |  | $        113,923 
|Accounts receivable, net of allowance for bad debt of $20,817 and $7,317     |  | 75,920           
|Prepaid expenses                                                             |  | 23,391           
|Total Current Assets                                                         |  | 213,234          
|                                                                             |  |                  
|Property and equipment, net of accumulated depreciation                      |  |                  
|of $12,516 for 2006, and $9,840 for 2005                                     |  | 2,441            
|                                                                             |  |                  
|Other Assets                                                                 |  |                  
|Deposits                                                                     |  | 2,760            
|Other receivables                                                            |  | 1,994            
|Total Other Assets                                                           |  | 4,754            
|                                                                             |  |                  
|TOTAL ASSETS                                                                 |  | $        220,429 
|                                                                            
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                       
|Current Liabilities                                                          |  |                  
|Accounts payable                                                             |  | $          20,743
|Payroll liabilities                                                          |  | 191,987          
|Other current liabilities                                                    |  | 216,379          
|Deferred revenue                                                             |  | -                
|Notes payable to related parties, current portion                            |  | 409,873          
|Total current Liabilities                                                    |  | 838,982          
|                                                                             |  |                  
|Notes payable to related parties, net of current portion                     |  | 264,906          
|                                                                             |  |                  
|TOTAL LIABILITIES                                                            |  | 1,103,888        
|                                                                             |  |                  
|Stockholders' Deficit                                                        |  |                  
|Common stock, $0.001 par value, 300,000,000 shares authorized; 57,987,865    |  |                  
|and 56,937,865 shares issued and  outstanding in 2006 and 2005, respectively |  | 57,988           
|Paid-in capital                                                              |  | 715,272          
|Deferred consulting and compensation                                         |  | (245,000)        
|Accumulated deficit                                                          |  | (1,395,554)      
|Treasury stock (194,000 shares, at cost)                                     |  | (16,165)         
|Total Stockholders' Deficit                                                  |  | (883,459)        
|                                                                             |  |                  
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                  |  | $        220,429 



4



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ENTREMETRIX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)





|                                             | For three months ended |                     | For nine months ended
|-------------------------------------------- | ---------------------- | ------------------- | ---------------------
|                                             | September 30,          |                     | September 30,        
|                                             | 2006                   | 2005                |                      
|Revenues                                     | $    1,396,767         | $      1,773,768    |                      
|                                             |                        |                     |                      
|Cost of Revenues                             | 1,329,115              | 1,656,454           |                      
|                                             |                        |                     |                      
|Gross Profit                                 | 67,652                 | 117,314             |                      
|                                             |                        |                     |                      
|Selling, General and Administrative Expenses | 189,695                | 119,352             |                      
|                                             |                        |                     |                      
|Operating Loss                               | (122,043)              | (2,038)             |                      
|                                             |                        |                     |                      
|Other Income (Expenses):                     |                        |                     |                      
|Interest and Other Income                    | 199                    | 1                   |                      
|Interest Expense                             | (8,378)                | (21,045)            |                      
|Total Other Income (Expenses)                | (8,179)                | (21,044)            |                      
|                                             |                        |                     |                      
|Net Loss before Income Taxes                 | (130,222)              | (23,082)            |                      
|                                             |                        |                     |                      
|Provision for Taxes                          | -                      | -                   |                      
|                                             |                        |                     |                      
|Net Loss                                     | $     (130,222)        | $          (23,082) |                      
|                                             |                        |                     |                      
|Net Loss per share, Basic and Diluted        | NIL                    | NIL                 |                      
|                                             |                        |                     |                      
|Weighted Average Number of Shares            | 57,987,865             | 44,860,575          |                      



5



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ENTREMETRIX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|For the nine months ended September, 30,                      |  | 2006                  |  | 2005               
|------------------------------------------------------------- |  | --------------------- |  | -------------------
|CASH FLOW FROM OPERATING ACTIVITIES                           |  |                       |  |                    
|Net loss                                                      |  | $      (147,730)      |  | $      (330,862)   
|Adjustments to Reconcile Net Loss to Net Cash Used in         |  |                       |  |                    
|Operating Activities:                                         |  |                       |  |                    
|Depreciation and amortization                                 |  | 2,677                 |  | 8,141              
|Provision for bad debt                                        |  | 13,500                |  | -                  
|Issuance of stocks for services                               |  | -                     |  | 240,000            
|(Increase) Decrease in:                                       |  |                       |  |                    
|Accounts receivable                                           |  | (44,958)              |  | (93,428)           
|Other receivable                                              |  | (1,994)               |  | 549                
|Prepaid expenses                                              |  | (11,084)              |  | 8,972              
|Deposits                                                      |  | 2,185                 |  | -                  
|Increase (Decrease) in:                                       |  |                       |  |                    
|Accounts payable and accrued expenses                         |  | (221,382)             |  | 29,073             
|Deferred revenue                                              |  | (12,802)              |  | 2,477              
|Net Cash Flows Used in Operating Activities                   |  | (421,588)             |  | (135,078)          
|                                                              |  |                       |  |                    
|CASH FLOW FROM INVESTING ACTIVITIES                           |  |                       |  |                    
|Net Cash Flows Provided by  Investing Activities              |  | -                     |  | -                  
|                                                              |  |                       |  |                    
|CASH FLOW FROM FINANCING ACTIVITIES                           |  |                       |  |                    
|Repayment to related parties                                  |  | (4,000)               |  | (78,610)           
|Proceeds from related party loan                              |  | 170,432               |  | 114,000            
|Proceeds from exercising stock warrants                       |  | 500                   |  | -                  
|Proceeds from sale of stock                                   |  | 250,000               |  | -                  
|Repurchase of common stock                                    |  | (2,415)               |  | (13,750)           
|Net Cash Provided by  Financing Activities                    |  | 414,517               |  | 21,640             
|                                                              |  |                       |  |                    
|NET DECREASE IN CASH                                          |  | (7,071)               |  | (113,438)          
|                                                              |  |                       |  |                    
|CASH AT BEGINNING OF PERIOD                                   |  | 120,994               |  | 117,136            
|                                                              |  |                       |  |                    
|CASH AT END OF PERIOD                                         |  | $        113,923      |  | $           3,698  
|                                                              |  |                       |  |                    
|Supplemental Disclosure of Cash Flow Information:             |  |                       |  |                    
|Interest paid                                                 |  | $          11,160     |  | $         15,815   
|Taxes paid                                                    |  | $                   - |  | $                 -
|Noncash Investment and Financing Activities:                  |  |                       |  |                    
|Addition of debt to retire common shares and accrued interest |  | $                   - |  | $       191,988    





6



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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Nature of Business: EntreMetrix Corporation, (EntreMetrix) was incorporated in the state of Nevada on July 17, 2002.  EntreMetrix is a Business Development Corporation (BDC) focusing on the development of opportunities to invest in eligible portfolio companies providing early stage capital, strategic guidance and operational support.  Its only current portfolio company provides human resource management services including payroll processing, workers compensation and payroll tax filings for small to medium size business.



On February 25, 2004, EntreMetrix entered into a Stock Purchase Agreement with Missouri River and Gold Germ Corp (MRGG).  Pursuant to the agreement, MRGG issued to the owner of EntreMetrix 19,752,460 shares of common stock of MRGG in exchange for 100% of the common stock of EntreMetrix.  The closing date of this exchange transaction was March 8, 2004.



As a result of the acquisition, the former owner of EntreMetrix held a majority interest (80%) in the combined entity (the Company).  Generally accepted accounting principles require in certain circumstances that a company whose stockholders retain the majority voting interest in the combined business to be treated as the acquirer for financial reporting purposes.  Accordingly, the acquisition has been accounted for as a reverse acquisition whereby EntreMetrix is deemed to have purchased MRGG.  However, MRGG remains the legal entity and the registrant for Securities and Exchange Commission (the Commission) reporting purposes.  The historical financial statements prior to March 8, 2004 are those of EntreMetrix.  All shares and per share data prior to the acquisition have been restated to reflect the stock issuance as a recapitalization of EntreMetrix.  After acquiring, the
Company changed its name to EntreMetrix Corporation.



On March 7, 2006 the Company filed form N-54A with the Commission to become a BDC pursuant to section 54 of the Investment Company Act of 1940.  The Companys election provides a platform for the Company to assist eligible, smaller companies, selected by the Company, with guidance, counseling, and financial assistance to help those companies execute their business plans.



EntreMetrix plans to use its BDC status to aid its eligible portfolio companies with early stage capital, strategic guidance and operation support.  The Company plans to leverage its support tools and services to cultivate and support a number of portfolio investment scenarios which they expect to increase the Companys net asset value.  The Company further intends to accelerate its business development platform by using its expertise in capital formation, strategic growth and pubic market entry to benefit its eligible portfolio companies.



Presentation of Interim Information: The accompanying consolidated financial statements as of September 30, 2006 and for the three and nine months ended September 30, 2006 and 2005 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.



7






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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)



However, the Company believes that the disclosures are adequate to make the information presented not misleading.  These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2005.



The balance sheet as of December 31, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.



In the opinion of Management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of September 30, 2006 and for the three and nine months ended September 30, 2006 and 2005 have been made.  The results of operations for the nine months ended September 30, 2006 are not necessarily indicative of the operating results for the full year.



Principle of Consolidation and Presentation: The accompanying consolidated financial statements include the accounts of EntreMetrix and its subsidiaries after elimination of all inter-company accounts and transactions.  Certain prior period balances have been reclassified to conform to the current period presentation.



Use of estimates: The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



Net Loss Per Share: Basic net loss per share includes no dilution and is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding for the period.  Diluted net loss per share does not differ from basic net loss per share since potential shares of common stock are anti-dilutive for all periods presented.  Potential shares consist of stock warrants.



8






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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)



New Accounting Pronouncements: In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48,Accounting for Uncertainty in Income Taxes, (FIN 48).  This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109,Accounting for Income Taxes.This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  FIN 48 is effective for
fiscal years beginning after December 15, 2006. The Company does not expect the adoption of FIN 48 to have a material impact on its consolidated financial statements.



In September 2006, the FASB issued Financial Accounting Standards (FAS) No. 157,Fair Value Measurements. FAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  This statement addresses how to calculate fair value measurements required or permitted under other accounting pronouncements.  Accordingly, this statement does not require any new fair value measurements.  However, for some entities, the application of the statement will change current practice.  FAS No. 157 is effective for the Company beginning January 1, 2008.  The Company is currently evaluating the impact of this standard.



In September 2006, the Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 108 (SAB 108),Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.The stated purpose of SAB 108 is to provide consistency between how registrants quantify financial statement misstatements.



Prior to the issuance of SAB 108, there have been two widely-used methods, known as the roll-over and iron curtain methods, of quantifying the effects of financial statement misstatements.  The roll-over method quantifies the amount by which the current year income statement is misstated while the iron curtain method quantifies the error as the cumulative amount by which the current year balance sheet is misstated.  Neither of these methods considers the impact of misstatements on the financial statements as a whole.



SAB 108 established an approach that requires quantification of financial statement misstatements based on the effects of the misstatement on each of the Companys financial statements and the related financial statement disclosures.  This approach is referred to as the dual approach as it requires quantification of errors under both the roll-over and iron curtain methods.



9






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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)



SAB 108 allows registrants to initially apply the dual approach by either retroactively adjusting prior financial statements as if the dual approach had always been used, or by recording the cumulative effect of initially applying the dual approach as adjustments to the carrying values of assets and liabilities as of January 1, 2006 with an offsetting adjustment recorded to the opening balance of retained earnings.



The Company will initially apply SAB 108 using the cumulative effect transition method in connection with the preparation of the annual financial statements for the year ending December 31, 2006.  The Company does not believe the adoption of SAB 108 will have a significant effect on its consolidated financial statements.



The FASB has also issued FAS 155,Accounting for Certain Hybrid Financial Instrumentsan amendment of FASB Statements No. 133 and 140, FAS 156,Accounting for Servicing of Financial Assets-an amendment of FASB Statement No. 140, and FAS 158,Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, but they will not be applicable to the current operations of the Company.  Therefore a description and the impact on the Companys operations and financial position for each of the pronouncements above have not been disclosed.



NOTE 2  GOING CONCERN



The Companys consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  In the near term, the Company expects operating costs to continue to exceed funds generated from operations.  As a result, the Company expects to continue to incur operating losses and may have insufficient funds to grow its business in the future.  The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations.  As a result, operations in the near future are expected to continue to use working capital.



Management of the Company is actively increasing marketing efforts to increase revenues.  The ability of the Company to continue as a going concern is dependent on its ability to meet its financing arrangement and the success of its future operations.  The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



On May 26, 2006, the Company filed a Form 1-E Offering Circular with the Commission to sell up to $5 million of the Companys common stock.  As of September 30, 2006, the Company sold 1 million shares for a total consideration of $250,000.



10






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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3  ACCRUED EXPENSES



Accrued expenses consist of:



(Unaudited)
        
        (Audited)September 30,
        
        December 31,2006
        
        2005Accrued Interest Expenses
        $             29,967
        
        $             22,003Contingency liability
        140,000
        
        140,000Accrued Professional Expenses
        7,000
        
        16,700Payroll tax penalty
        19,377
        
        16,098Employee Reimbursable
        17,534
        
        -Other
        
        2,501
        
        9,702Total
        
        $           216,379
        
        $           204,503






NOTE 4  NOTES PAYABLE TO RELATED PARTIES



Notes payable to related parties consist of the following:



(Unaudited)
        
        (Audited)September 30,
        
        December 31,2006
        
        20051.) Payable to a related party, interest accruedat 8%, due on December 31, 2006
        $         84,475
        
        $         84,4752.) Payable to a related party, term is open
        1,233
        
        1,2333.) Payable to a related party, interest accruedat 8%, due on December 17, 2007  a
        85,216
        
        -4.) Payable to a related party, interest accruedat 8%, due on December 17, 2007 a
        85,216
        
        -5.) Payable to ICP, a related party, interestaccrued at 12%, due on December 31, 2006  b
        124,000
        
        124,0006.) Payable to former President for the settlement,no interest is accrued, payable in 36 equal$9,722 payments c
        294,639
        
        298,639674,779
        
        508,347Less: current portion
        409,873
        
        240,667Notes payable to related parties, net
        $       264,906
        
        $       267,680




On July 18, 2006, a former attorney of the Company agreed to cancel 1,000,000 shares of the retaining 2,000,000 shares to the Company.  The CEO and the CFO of the Company each agreed to assume half of the total legal fees payable to the attorney for the total amount of $170,432.  The amounts were converted into notes payable accruing interest at 8% per annum, due on December 17, 2007.  The shares will be cancelled in the fourth quarter.



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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 4  NOTES PAYABLE TO RELATED PARTIES    (continued)



On May 20, 2005, the Company entered into a Bridge Loan Agreement with Infinity Capital Partners, LLC (ICP, a related party), to borrow funds up to $250,000 with the interest payable monthly at 12% per annum and due on December 15, 2005.  The Company did not fulfill the payment on December 15, 2005; as a result, a new agreement was made between the parties.



According to the new agreement, a $10,000 penalty was incurred and added to the loan principal, and the loan will continue to bear an interest at 12% per annum on the balance through December 31, 2006.  In addition, the Company also failed to raise additional $200,000 in funding from outside interest pursuant to the Agreement; the Company is contingently liable to issue 3,500,000 restricted shares to the Lender for consideration.  The shares were valued at $0.04 per share on December 31, 2005, and the total amount of $140,000 was accrued and charged to interest expense.  If the loan is not paid in full on or before the extended due date, an additional 10% penalty will be applied and the interest would be payable monthly.  As of September, 30, 2006, the 3,500,000 restricted shares had not yet been issued.



The note is in default due to a pending litigation. (See note 12)



NOTE 5  STOCKHOLDERS EQUITY



As of September 30, 2006, there were 6,949,233 shares of common stock pending to be cancelled due to non-compliance of the vesting conditions stated in the restricted stock bonus agreements dated in September 2004.



On May 26, 2006, the Company filed a Form 1-E Offering Circular with the Commission to sell up to $5 million of the Companys common stock.  The shares are without restrictive legend pursuant to an exemption from registration provided by Regulation E promulgated under the Securities Act of 1933.  The offering began on June 13, 2006 and expires after one year.  The offering can be terminated and amended any time before the expiration date.  On July 7, 2006, the Company sold an aggregate of 1 million shares to two accredited investors for aggregate consideration of $250,000.



NOTE 6  STOCK REPURCHASE



On July 8, 2005, the Board of Directors authorized the Company to repurchase up to two million of its outstanding shares of common stock from time to time over the next twelve months, depending on market conditions, share price and other factors.  During the period, the Company repurchased 194,000 shares in the open market, at an average price of $0.09 per share, for total consideration of $16,165.  Treasury stock is accounted for under the cost method.  The stock repurchase plan expired on July 8, 2006.





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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7  NET LOSS PER SHARE



The following table sets forth the computation of basic and diluted net loss per share:



Three Months Ended
        Six Months EndedSeptember 30,
        September 30,2006
        2005
        2006
        2005Numerator:Net income (Loss)
        $        (130,222)
        $          (23,082)
        $        (147,730)
        $        (330,862)Denominator:Weighted Average Number of Shares
        57,987,865
        44,860,575
        57,321,198
        49,158,353Net income (loss) per share-Basic and Diluted
        NIL
        NIL
        NIL
        $              (0.01)






As the Company incurred net losses for the three and nine months ended September 30, 2006, the effect of dilutive securities totaling 853,448 and 589,678 equivalent shares, respectively, has been excluded from the calculation of dilutive net loss per share because their effects were anti-dilutive.



There were 1,500,000 shares out-of-money warrants excluded from the calculation of diluted earnings per share for three and nine months ended September 30, 2005 because the exercise price of the stock warrants was greater than the average share price of the common stock.



NOTE 8  MAJOR CUSTOMERS AND BUSINESS CONCENTRATION



Revenues from the two major customers for the three months ended September 30, 2006 and 2005 were $663,648 and $592,870 or 50% and 33.4% of total revenue, respectively.



Revenues from the two major customers for the nine months ended September 30, 2006 and 2005 were $1,749,406 and $1,834,187 or 35.0% and 31.2% of total revenue, respectively.



The Company places its cash and cash equivalents with high quality financial institutions. At times, cash balances may be in excess of the FDIC insurance limits. Management considers the risk to be minimal.



NOTE 9  GUARANTEES



The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims.  These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Companys businesses or assets; and (ii) certain agreements with the Companys officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising our of their employment relationship.



13






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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9  GUARANTEES    (continued)



The terms of such obligations vary.  Generally, a maximum obligation is not explicitly stated.  Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated.  Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its consolidated balance sheet as of September 30, 2006.



NOTE 10  SEGMENT INFORMATION



SFAS No. 131 Disclosures about Segments of an Enterprise and Related Information requires that a publicly traded company must disclose information about its operating segments when it presents a complete set of financial statements.  Since the Company has only one segment; accordingly, detailed information of the reportable segment is not presented.



NOTE 11  RISK MANAGEMENT



The Company is expected to various risks of loss related torts; theft of, damage to and destruction of assets, error and omissions and natural disasters for which EntreMetrix does not renew its commercial insurance in 2006.



NOTE 12  PENDING LITIGATION



On June 6, 2006, the Company filed a lawsuit against a former officer of the Company for breach of contract on a settlement agreement signed May 23, 2005.  This matter remains in motion with the Orange County Courts.  The Company is holding any payments due to the same officer on a prior settlement agreement, due to the breach of the contract.



NOTE 13  REVERSE MERGER



Pursuant to terms of a Stock Purchase Agreement dated February 25, 2004, the Company purchased all of the issued and outstanding shares of EntreMetrix in consideration for the issuance of 19,752,460 shares of the Companys common stock to the shareholder of EntreMetrix.



The acquisition is a reverse takeover transaction whereby EntreMetrix is identified as the acquirer (accounting parent) of EntreMetrix Corporation.  The purchase price of EntreMetrix Corporation is assumed to be equal to its book value and no goodwill is recorded on the transaction.  The amount ascribed to the shares issued to the shareholder of EntreMetrix represents the net book value of MRGG at date of closing March 8, 2004.



14






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ENTREMETRIX CORPORATION

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 13  REVERSE MERGER    (continued)



Details of the net liabilities acquired at book value at the acquisition dates are as follows:



Current assets
        $
        19,171Less:  Current liabilities
        
        -$
        19,171




Supplemental Information for EntreMetrix Inc. (formerly known as Missouri River and Gold Gem Corp):



Summary Balance Sheets



March 8, 2004
        
        December 31, 2003Current assets
        $                 19,171
        
        $                   33,316Liabilities
        -
        
        -Net Assets
        $                 19,171
        
        $                   33,316






Stockholders Equity



Stockholders' Equity:
        March 8, 2004
        
        December 31, 2003Preferred stock, $0.001 par value; 100,000,000 sharesauthorized; none issued and outstanding
        $                        -
        
        $                          -Common stock, $0.001 par value; 300,000,000 sharesauthorized;4,962,869 shares issued and outstanding
        4,938
        
        4,938Additional paid-in capital
        638,433
        
        634,833Accumulated deficit
        (624,200)
        
        (610,055)Total stockholders' equity
        $                 19,171
        
        $                  29,716






Summary Statements of Operations



For the Period ended
        
        For the Year EndedMarch 8, 2004
        
        December 31, 2003Revenue
        $                             -
        
        $                                 -General and administrative expenses
        14,145
        
        15,259Net Loss for the Period
        $                    (14,145)
        
        $                        (15,259)






15






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ITEM 2Managements Discussion and Analysis of Financial Condition and Results of Operations.



Our Managements Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).  Forward-looking statements are, by their very nature, uncertain and risky.  These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business  disruptions; the ability to attract and retain
qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.



Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them.  Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements.  You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.



Overview



We focus on the development of opportunities to invest in eligible portfolio companies providing early stage capital, strategic guidance and operational support.  We also provide structural support services for small businesses including financial guidance in areas of treasury management, general accounting oversight and capital formation, employee-related administration and regulatory compliance, as well as handling of such areas as payroll, benefits and insurance operations, regulatory filings and overall HR guidance as the clients Administrative Employer, and strategic guidance in the areas of sales strategy and automation.



Our principal objective is long-term capital appreciation.  We may invest in debt securities of these companies, or may acquire an equity interest in the form of common or preferred stock, warrants or options to acquire stock or the right to convert the debt securities into stock.  We may invest alone, or as part of a larger investment group.  Consistent with our status as a BDC and the purposes of the regulatory framework for BDCs under the 1940 Act, we will offer to provide managerial assistance, potentially in the form of a consulting agreement or in the form of a board of directors seat, to the developing companies in which we invest.



In addition, we may acquire either a minority or controlling interest in mature companies in a roll-up strategy.  It is anticipated that any acquisitions will be primarily in exchange for our common stock, or a combination of cash and stock.  The principal objective of acquisitions pursuant to a roll-up strategy would be to consolidate an industry and either sell the acquired entities as a larger unit, or take the unit public through an initial public offering, spin-off to our shareholders, or reverse merger into a publicly traded shell corporation.



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We operate as an internally managed investment company whereby our officers and employees conduct our operations under the general supervision of our Board of Directors.  We have not elected to qualify to be taxed as a regulated investment company as defined under Subchapter M of the Internal Revenue Code.



Our common stock trades on the over the counter bulletin board under the symbol ERMX.



Our financial statements have been prepared assuming we will continue as a going concern.  Because we have historically incurred operating losses, and expect those losses to continue in the future, our Certified Public Accountants included an explanatory paragraph in their report raising substantial doubt about our ability to continue as a going concern.



Investment Strategy



We intend to make strategic investments in private technology, life science, manufacturing and business service companies which offer unique market opportunities.  Our Investment Committee has adopted a charter to evaluate each opportunity for criteria including market viability, market uniqueness, managements ability, and the added value that the Company can bring to the enhance the value of the prospective portfolio company.  The Investment Committees assessment will also include a review of the prospective portfolio companys readiness and ability to utilize the Companys BDC status to aid it in going public, and make best use of the Companys support tools and services.  The prospective portfolio company will also need to comply with the Companys requirement as a BDC to provision significant managerial oversight, guidance and structural support
including participation on the board of directors.



Our Enstruxis, Inc. Portfolio Company



Our strategy is to expand into several key U.S. markets offering our core support services and cultivating investment opportunities within a growing client base.  We expect to grow through direct sales development in selected local U.S. markets and will continue to develop and evaluate investment and acquisition opportunities in these same local markets of similar firms offering services that complement and support our target clients and investment opportunities.



Our support services include providing Administrative Employer and strategic guidance services to small business owners.  We believe our administrative employer services allow small business owners to outsource the employee-related administrative and regulatory duties in order to concentrate on their core business competencies and growth.  When we provide administrative employer services for our clients or portfolio companies we usually do so under a monthly contract.  The services related to employee administration, payroll, taxes and benefits are bundled with our fee and invoiced to our clients each pay period.  We deliver our invoice and payroll to our clients the day before the clients pay day.  This practice differs from the administrative employer or the payroll service industry, which generally invoices and demands payment prior to payroll delivery.
Our practice, however, creates a collection risk from our small business clients.  To minimize this risk, we extend the payroll float to clients we determined to be credit worthy, although there is no assurances that our determination is accurate, or that our efforts to reduce such risks would be successful.



Our extension of credit to certain of our clients requires us to demand a higher profit margin than is common to the administrative employer industry to compensate us for this higher



17






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level of risk.  This risk of collection, from time to time, creates a working capital deficit for us, which may materially affect our business operations and finances.  For clients who we determine are not credit worthy, we will require either payment in advance or cash on delivery upon rendering of our services, similar to the standard practice of the administrative employer and payroll service industry for all clients.



Because we are a service provider, our primary operating costs and expenses are staff and management payroll, salaries, and benefits.  Our sales and general administrative expenses aside from the foregoing include rent for office space, computer equipment and software services and insurance.  We currently have no copyrights, trademarks or patents, but expect to pursue copyright and trademark protection for some of our marketing programs and materials.  Our business generally is not impacted by seasonal changes.



We do not anticipate performing any significant product research and development.



We do anticipate purchasing or leasing operational facilities in the next twelve months; however, if such a purchase were contemplated it would be subject to our receipt of sufficient income from operations or funds from borrowings or stock sales to enable such purchases or leases.



The number of employees required to operate our business is currently 3 full-time and 1 part time employees.  We scale our staffing based on sales growth leading top client need.  This flexibility allows us to scale up or down based on need.



Regulation as a BDC



Although the 1940 Act exempts a BDC from registration under that Act, it contains significant limitations on the operations of BDCs.  Among other things, the 1940 Act contains prohibitions and restrictions relating to transactions between a BDC and its affiliates, principal underwriters and affiliates of its affiliates or underwriters, and it requires that a majority of the BDCs directors be persons other than interested persons, as defined under the 1940 Act.  The 1940 Act also prohibits a BDC from changing the nature of its business so as to cease to be, or to withdraw its election as, a BDC unless so authorized by the vote of the holders of a majority of its outstanding voting securities.  BDCs are not required to maintain fundamental investment policies relating to diversification and concentration of investments within a single industry.



Generally, a BDC must be primarily engaged in the business of furnishing capital and providing managerial expertise to companies that do not have ready access to capital through conventional financial channels.  Such portfolio companies are termed eligible portfolio companies.  More specifically, in order to qualify as a BDC, a company must (1) be a domestic company; (2) have registered a class of its equity securities or have filed a registration statement with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934; (3) operate for the purpose of investing in the securities of certain types of portfolio companies, namely immature or emerging companies and businesses suffering or just recovering from financial distress; (4) extend significant managerial assistance to such portfolio companies; and (5) have a majority of
disinterested directors (as defined in the 1940 Act).



An eligible portfolio company is, generally, a U.S. company that is not an investment company and that (1) does not have a class of securities registered on an exchange or included in the Federal Reserve Boards over-the-counter margin list; or (2) is actively controlled by a BDC and has an affiliate of a BDC on its board of directors; or (3) meets such other criteria as may be



18






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established by the Securities and Exchange Commission.  Control under the 1940 Act is generally presumed to exist where a BDC owns 25% of the outstanding voting securities of the company.



The 1940 Act prohibits or restricts companies subject to the 1940 Act from investing in certain types of companies, such as brokerage firms, insurance companies, investment banking firms and investment companies.  Moreover, the 1940 Act limits the type of assets that BDCs may acquire to qualifying assets and certain assets necessary for its operations (such as office furniture, equipment and facilities) if, at the time of acquisition, less than 70% of the value of the BDCs assets consist of qualifying assets.  Qualifying assets include: (1) securities of companies that were eligible portfolio companies at the time the BDC acquired their securities; (2) securities of bankrupt or insolvent companies that were eligible at the time of the BDCs initial acquisition of their securities but are no longer eligible, provided that the BDC has maintained a substantial
portion of its initial investment in those companies; (3) securities received in exchange for or distributed in or with respect to any of the foregoing; and (4) cash items, government securities and high-quality short-term debt.  The 1940 Act also places restrictions on the nature of the transactions in which, and the persons from whom, securities can be purchased in order for the securities to be considered qualifying assets.  These restrictions include limiting purchases to transactions not involving a public offering and acquiring securities from either the portfolio company or its officers, directors, or affiliates.



A BDC is permitted to invest in the securities of public companies and other investments that are not qualifying assets, but those kinds of investments may not exceed 30% of the BDCs total asset value at the time of the investment.



A BDC must make significant managerial assistance available to the issuers of eligible portfolio securities in which it invests.  Making available significant managerial assistance means, among other things, any arrangement whereby the BDC, through its directors, officers or employees, offers to provide, and, if accepted does provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company.  The portfolio company does not have to accept the BDCs offer of managerial assistance, and if they do accept may be required to pay prevailing market rates for the services.



We have one wholly-owned subsidiary, Enstruxis, Inc., a Nevada corporation, which is an eligible portfolio company.  We have investments in two other eligible portfolio companies, PreVantix and Advanced Nitride Devices.  We are actively seeking additional quality eligible portfolio companies in which to make an investment and provide managerial assistance.



Three Months Ended September 30, 2006 compared to the Three Months Ended September 30, 2005



Results of Operations



Introduction



Our revenues for the third quarter of 2006 were 21.3% less than the third quarter of 2005, at $1,396,767 compared to $1,773,768, although our cost of revenue as a percentage of revenue remained relatively consistent.  Our revenues for the third quarter of 2006 were 21.9% less than the second quarter of 2006, which were $1,789,030.  Our revenues declined during the third quarter of 2006 because of the loss of clientele in our Enstruxis subsidiary.  All of our revenue was generated by our wholly-owned subsidiary, Enstruxis, for administrative support services.



19






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Revenues and Loss from Operations



Our revenue, cost of revenue, selling, general and administrative expenses, and operating income and loss for the three months ended September 30, 2006, as compared to the three months ended September 30, 2005 and June 30, 2006, are as follows:



3 Months Ended
September 30,
2006
        
        
        3 Months Ended
September 30,
2005
        
        Percentage
Change
Increase
(Decrease)
        
        
        3 Months
Ended
June 30,
2006Revenue
        $
        1,396,767
        
        
        1,773,768
        
        (21.3)
        %
        $
        1,789,030Cost of revenue
        
        1,329,115
        
        
        1,656,454
        
        (19.8)
        %
        
        1,677,577Selling, General & Administrative Expenses
        
        189,695
        
        
        119,352
        
        58.9
        %
        
        75,730Operating income (loss)
        $
        (122,043)
        
        
        (2,038)
        
        5888.4
        %
        $
        35,723




Our cost of revenue consists primarily of client federal and state payroll taxes, client salary & wages, workers compensation, 401K, union benefits and consulting fees.  Our cost of revenue as a percentage of revenue remained relatively consistent at 95% versus 93% and 94% for the third quarters of 2006 and 2005, and the second quarter of 2006, respectively.



Our selling, general and administrative expenses consist primarily of salaries, and related costs for executive, sales finance and other administrative personnel, and the cost of facilities and related spending.  These expenses increased by 51.7% for the third quarter of 2006 versus 2005, despite our decrease in revenues, primarily as a result of increases in legal and consulting fees of 526.3% and 100%. In addition there was an increase in accounting fees, penalties, and stock related fees of approximately 44.3%, 599%, and 824.4% respectively. An offset to this was decrease in rent and commissions expense of 69.0% and 83.8% respectively for the same time period.  The expenses were $75,730 for the second quarter of 2006, a 60.1% decrease compared to $189,695 for the third quarter of 2006.  The major expenses incurred during the three months ended September 30, 2006 and 2005, and June 30, 2006, were:



20








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3 Months Ended
September 30, 2006
        
        
        3 Months
Ended
September 30, 2005
        
        Percentage
Change
Increase
(Decrease)
        
        
        3 Months
Ended
June 30, 2006Major Expenses:Rent
        $
        4,719
        
        $
        15,202
        
        (69.0)
        %
        $
        5,321Commissions
        
        632
        
        
        3,908
        
        (83.8)
        %
        
        0Computer & Software Expenses
        
        2,685
        
        
        2,712
        
        (1.0)
        %
        
        2,513Salary & Wages
        
        44,000
        
        
        66,000
        
        (33.3)
        %
        
        37,500Accounting Fees
        
        14,000
        
        
        9,700
        
        44.3
        %
        
        6.700Legal Fees
        
        31,313
        
        
        5,000
        
        526.3
        %
        
        3,138Penalties
        
        6,019
        
        
        861
        
        599.0
        %
        
        1,313Stock Related Fees
        
        6,933
        
        
        750
        
        824.4
        %
        
        4,461Consulting
        
        47,700
        
        
        0
        
        100
        %Total Major Expenses
        
        158,000
        
        
        104,133
        
        51.7
        %
        
        60,946Total Expenses
        
        189,695
        
        
        119,352
        
        58.9
        %
        
        75,730




Other Income and Expenses and Net Loss



Our other income and expenses and net loss for the three months ended September 30, 2006 and 2005, as compared to the three months ended June 30, 2006 are as follows:



3 Months Ended September 30, 2006
        
        
        3 Months Ended September 30, 2005
        
        Percentage
Change
Increase
(Decrease)
        
        
        3 Months Ended
June 30,
2006Interest and other income
        $
        199
        
        $
        1
        
        19,800
        %
        $
        2Interest expenses
        
        (8,378)
        
        
        (21,045)
        
        (60.2)
        %
        
        (12,002)Total other income (expenses)
        
        (8,179)
        
        
        (21,044)
        
        (61.1)
        %
        
        (12,000)Net income (loss)
        $
        (130,222)
        
        $
        (23,082)
        
        464.2
        %
        $
        23,723




During the three months ended September 30, 2006, our total other expenses decreased by 61.1% compared to the three months ended September 30, 2005 as a result of significant decreases in interest expense arising out of decreases in interest payable debt. Despite this decrease in our total other expenses, our net loss increased by 464.2% from $(23,082) to $(130,222). The increase in net loss in the third quarter of can be attributed to the increase in SG&A of approximately 58.9%



21






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Nine Months Ended September 30, 2006 compared to the Nine Months Ended September 30, 2005



Results of Operations



Introduction



Our revenues for the nine months ending September 30, 2006 were 14.6% less than the third quarter of 2005, at $5,019,525 compared to $5,879,536.  All of our revenue was generated by our wholly-owned subsidiary, Enstruxis, for administrative support services.



Revenues and Loss from Operations



Our revenue, cost of revenue, selling, general and administrative expenses, and operating income and loss for the nine months ended September 30, 2006, as compared to the nine months ended September 30, 2005, are as follows:



9 Months Ended
September 30,
2006
        
        
        9 Months Ended
September 30,
2005
        
        Percentage
Change
Increase
(Decrease)Revenue
        $
        5,019,525
        
        
        5,879,536
        
        14.6
        %Cost of revenue
        
        4,779,491
        
        
        5,540,080
        
        13.7
        %Selling, General & Administrative Expenses
        
        354,302
        
        
        636,143
        
        44.3
        %Operating income (loss)
        $
        (114,268)
        
        
        (296,687)
        
        61.5
        %




Our cost of revenue consists primarily of client federal and state payroll taxes, client salary & wages, workers compensation, 401K, union benefits and consulting fees.  Our cost of revenue as a percentage of revenue remained relatively consistent at 95% versus 94% for the nine months ended September 30, 2006 and 2005, respectively.



Our selling, general and administrative expenses consist primarily of salaries, and related costs for executive, sales finance and other administrative personnel, and the cost of facilities and related spending.  These expenses decreased by 47.4% for the nine months ending September 30, 2006 versus 2005, primarily as a result of salary and wage decrease of approximately 71.3%. In addition there was decrease in rent and commissions expense of 70.9% and 87.1% respectively for the same time period. These were partially offset by increases in consulting, legal, and stock related fees of approximately 100%, 192.8%, and 329.2% respectively. The major expenses incurred during the nine months ended September 30, 2006 and 2005, were:



22



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9 Months Ended
September 30, 2006
        
        
        9 Months
Ended
September 30, 2005
        
        Percentage
Change
Increase
(Decrease)Major Expenses:Rent
        $
        15,319
        
        $
        52,608
        
        (70.9)
        %Commissions
        
        2,505
        
        
        19,446
        
        (87.1)
        %Computer & Software Expenses
        
        15,018
        
        
        15,308
        
        (1.9)
        %Salary & Wages
        
        119,000
        
        
        414,406
        
        (71.3)
        %Accounting Fees
        
        27,700
        
        
        23,700
        
        16.9
        %Legal Fees
        
        34,451
        
        
        11,766
        
        192.8
        %Penalties
        
        10,084
        
        
        3,790
        
        166.1
        %Stock Related Fees
        
        14,657
        
        
        3,415
        
        329.2
        %Consulting
        
        47,700
        
        
        0
        
        100
        %Total Major Expenses
        
        286,434
        
        
        544,438
        
        (47.4)
        %Total Expenses
        
        354,302
        
        
        636,143
        
        (44.3)
        %




Other Income and Expenses and Net Loss



Our other income and expenses and net loss for the nine months ended September 30, 2006 and 2005 are as follows:



9 Months Ended September 30, 2006
        
        
        9 Months Ended September 30, 2005
        
        Percentage
Change
Increase
(Decrease)Interest and other income
        
        203
        
        
        63
        
        222.2
        %Interest expense
        
        (32,865)
        
        
        (33,438)
        
        (1.7)
        %Total other income (expenses)
        
        (32,662)
        
        
        (33,375)
        
        (2.1)
        %Net income (loss)
        $
        (147,730)
        
        
        (330,862)
        
        (55.3)
        %




During the nine months ended September 30, 2006, our total other expenses decreased by 2.1% compared to the nine months ended September 30, 2005 as a result of a slight decrease in interest expense.  Despite only a slight decrease in our total other expenses, our net loss decreased by 55.3% from $(330,062) to $(146,930) as a result of a significant decrease in SG&A of approximately 44.3%.



23

23




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Liquidity and Capital Resources



Introduction



During the nine months ended September 30, 2006, we did not generate positive cash flow.  As a result, we funded our operations by using cash on hand and through cash generated from the sale of our common stock.



A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through additional equity and/or debt financing.  Since inception, we have financed our cash flow requirements through issuances of common stock.  As we expand our activities, we may continue to experience net negative cash flows from operations, pending receipt of sales revenues.



Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings and bank borrowings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital.  In the event we cannot obtain the necessary capital to pursue our strategic plan, we may have to cease or significantly curtail our operations.  This would materially impact our ability to continue operations.



We believe that existing capital and anticipated funds from operations will not be sufficient to sustain operations and planned expansion over the next twelve months.  We anticipate substantial increases in our cash requirements; which will require additional capital generated from either the sale of common stock, the sale of preferred stock, or debt financing.  Consequently, we will be required to seek additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.  No assurance can be made that such financing would be available, and if available it may take either the form of debt or equity.  In either case, the financing could have a negative impact on our financial condition and our stockholders.  We currently have no agreements which would provide for either loans to us, or the sale of our securities.



We anticipate that we will incur operating losses in the next twelve months.  Our lack of operating history makes predictions of future operating results difficult to ascertain.  Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth.  To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel.  There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect
on our business prospects, financial condition and results of operations.



Our cash, accounts receivable, prepaid expenses, total current assets, total assets, total current liabilities, and total liabilities as of September 30, 2006, as compared to September 30, 2005 and June 30, 2006, were as follows:





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September 30,
        
        
        September 30,
        
        
        June 30,2006
        
        
        2005
        
        
        2006Cash
        $
        113,923
        
        $
        3,698
        
        $
        118,799Accounts receivable
        
        75,920
        
        
        103,424
        
        
        45,024Prepaid expenses
        
        23,391
        
        
        28,500
        
        
        36,494Total current assets
        
        213,234
        
        
        135,622
        
        
        200,317Total assets
        
        220,429
        
        
        149,224
        
        
        206,294Total current liabilities
        
        838,982
        
        
        654,396
        
        
        945,852Total liabilities
        
        1,103,888
        
        
        925,077
        
        
        1,209,532




Cash Requirements



Our cash obligations are anticipated to increase substantially over the next 12 months.  The cash would be utilized for operational expenses and general working capital as a result of continued sales growth, continued legal and professional fees as a result of continuing litigation and reserve or deposit requirements which are a result of sales growth of the business.  We intend for these funding requirements to be fulfilled through either equity or debt financing.



Sources and Uses of Cash



Operations



Net cash provided by and (used in) operating activities for the nine months ended September 30, 2006 and 2005 were $(421,588) and $(135,078), respectively.  For the nine months ended September 30, 2006, the net cash provided came primarily from a provision for bad debt of $13,500, offset by a net loss of $147,730 and increases in accounts receivable and prepaid expenses of $44,958 and $11,084, respectfully, plus decreases in accounts payable and accrued expenses of $221,382 and a decrease in deferred revenue of $12,802.



Financing



Net cash provided by investing activities for the nine months ended September 30, 2006 and 2005 was zero.



Net cash provided and (used in) financing activities for the nine months ended September 30, 2006 and 2005, were $414,517 and $21,640, respectively.  For the nine months ended September 30, 2006, the net cash provided was from proceeds from a related party loan and proceeds from sale of stock of $170,432 and $250,000, respectively. This was slightly offset by repayment to related parties of $4,000 and repurchase of common stock of $2,415.



Critical Accounting Policies



Our accounting policies are fully described in Note 2 to our consolidated financial statements.  The following describes the general application of accounting principles that impact our consolidated financial statements.



25






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Our results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principals generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, we evaluate our estimates, including those related to bad debt, inventories, investments, intangible assets, income taxes, financing operations, and contingencies and litigation.



We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.



ITEM 3
        Quantitative and Qualitative Disclosures About Market Risk




Since we have very few assets and only one operating eligible portfolio company there is no quantitative information, as of September 30, 2006, about market risk that has any impact on our present business.  Once we begin making investments in additional eligible portfolio companies we anticipate there will be market risk sensitive instruments and we will disclose the applicable market risk information at that time.



Our primary financial instruments are cash in banks and money market instruments.  We do not believe that these instruments are subject to material potential near-term losses in future earnings from reasonably possible near-term changes in market rates or prices.  We do not have derivative financial instruments for speculative or trading purposes.  We are not currently exposed to any material currency exchange risk.



ITEM 4
        Controls and Procedures




We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of September 30, 2006, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commissions rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2006, our disclosure controls and procedures were effective to ensure the timely collection, evaluation and disclosure of information relating to the Company.



Changes in Internal Control over Financial Reporting



There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II



ITEM 1
        Legal Proceedings




Other than as set forth above, in the ordinary course of business, we may be from time to time involved in various pending or threatened legal actions.  The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations.  However, in the opinion of our management, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.



ITEM 1A
        Risk Factors




There are no material changes to the risk factors in our most recent Annual Report on Form 10-K.



ITEM 2
        Unregistered Sales of Equity Securities and Use of Proceeds




On July 7, 2006, we sold an aggregate of 1,000,000 shares of our common stock, issued without restrictive legend pursuant to an exemption from registration provided by Regulation E promulgated under the Securities Act of 1933, to two accredited investors for aggregate consideration of $250,000.  The investors purchased pursuant to our Offering Circular filed with the Commission on May 26, 2006.



ITEM 3
        Defaults Upon Senior Securities




There have been no events that are required to be reported under this Item.




ITEM 4
        Submission of Matters to a Vote of Security Holders




There have been no events that are required to be reported under this Item.




ITEM 5
        Other Information




None.




ITEM 6
        Exhibits




3.1 (1)
        
        Articles of Incorporation of MCGINNIS-POWELL & SONS, INC. dated July 28, 19833.2 (1)
        
        Articles of Amendment changing name to Missouri River Gold and Gem Corp. dated September 17, 19843.3 (1)
        
        Restated Articles of Incorporation dated August 7, 1986, changing name to American Dental Products Corporation3.4 (1)
        
        Amendment to Articles of Incorporation changing name to Missouri River and Gold Gem Corp. dated May 26, 1990






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3.5 (2)
        
        Amendment to Articles of Incorporation changing name to EntreMetrix Corporation dated May 6, 20043.6 (1)
        
        Bylaws of Missouri River Gold and Gem Corp.31.1
        
        Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
        
        Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
        
        Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
        
        Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




(1)
        Incorporated by reference from our Form 10-SB filed with the Commission on August 21, 2001.


(2)
        Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on May 22, 2006.




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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.







EntreMetrix CorporationDated:  November
			20, 2006
        
        /s/ Scott W. AbsherBy:
        Scott W. AbsherIts:
        President






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