****


**UNITED
STATES**


**SECURITIES
AND EXCHANGE COMMISSION**


**Washington,
D.C. 20549**





**Form
10-KSB**





x
    ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





**For
the fiscal year ended December 31, 2004**





o
    TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from _______________ to _______________.








**Commission
file number: 000-26651**





**Trinity3
Corporation**


(Name of
small business issuer in its charter)





**Delaware**
      (State
      or other jurisdiction of
      incorporation
      or organization)
    **65-0884085**
      (I.R.S.
      Employer
      Identification
      No.)**1920
      Main Street, Suite 980**
      **Irvine,
      California**
      (Address
      of principal executive offices)
    **92614**
      (Zip
      Code)





**Issuer’s
telephone number (949) 910-2383**





Securities
registered under Section 12(g) of the Exchange Act:





**Common
stock, par value $0.0001**


(Title of
class)





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 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. Yes o No x .





Check if
there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. o





State
issuer’s revenues for its most recent fiscal year.  The
issuer’s gross revenues for the year ended December 31, 2004 were $ 1,247,394 .





State the
aggregate market value of voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in rule
12b-2 of the Exchange Act.) $1,029,760, based on the closing bid price of $0.09
for our common stock on April 11, 2005.





State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date. As of April 11, 2005, there were 11,441,773
 shares of common stock, par value $0.0001, issued and
outstanding.





**DOCUMENTS
INCORPORATED BY REFERENCE**





If the
following documents are incorporated by reference, briefly describe them and
identify the part of the form 10-KSB (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to rule
424(b) or (c) of the Securities Act of 1933 (“Securities Act”). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).
None.





Transitional
Small Business Disclosure Format (check one): Yes oNo x













****


**Trinity3
Corporation**





**TABLE
OF CONTENTS**





PART
      I
    
    3ITEM
      1 -
    DESCRIPTION
      OF BUSINESS
    3ITEM
      2 -
    DESCRIPTION
      OF PROPERTY
    5ITEM
      3 -
    LEGAL
      PROCEEDINGS
    6ITEM
      4 -
    SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
    6PART
      II
    
    7ITEM
      5 -
    MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
    7ITEM
      6 -
    MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    10ITEM
      7 -
    FINANCIAL
      STATEMENTS
    17ITEM
      8 -
    CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
    17ITEM
      8A -
    CONTROLS
      AND PROCEDURES
    17ITEM
      8B -
    OTHER
      INFORMATION
    17PART
      III
    18ITEM
      9 -
    DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE ACT
    18ITEM
      10 -
    EXECUTIVE
      COMPENSATION
    19ITEM
      11 -
    SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    21ITEM
      12 -
    CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
    22ITEM
      13 -
    EXHIBITSITEM
      14 -
    PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
    25


2




**PART
I**





This
Annual 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
possible or assumed future results of operations of the Company 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. The Company's 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 - DESCRIPTION OF BUSINESS**





**Organizational
History**





We are a
holding company, originally incorporated as Arngre, Inc. in the State of Florida
on August 23, 1988. On March 26, 1999 we changed our name to Silver King
Resources, Inc., and on June 24, 1999, we reincorporated by merging into a
Delaware corporation known as Silver King Resources (Delaware), Inc. Effective
at the time of the reincorporation, we changed our name to Silver King
Resources, Inc.





On July
17, 2000, in connection with an Agreement and Plan of Merger dated March 21,
2000, we changed our name to eNexi Holdings, Inc. Later, on November 7, 2002, in
connection with an Agreement and Plan of Merger dated April 12, 2002, we changed
our name to Trinity3 Corporation.





All of
the businesses of Arngre, Silver King Resources, and eNexi Holdings have been
abandoned, shut down or sold. We currently operate through two active wholly
owned subsidiaries: Trinity3 Acceptance Corporation, a California Corporation
and Skyline Orthopedics, Inc., a California corporation, (“Skyline”). We also
have one inactive wholly owned subsidiary, Caiban Holdings, Inc., a Delaware
corporation (“Caiban”), and Skyline has one inactive wholly owned subsidiary,
Core Management Systems, Inc., a California corporation (“Core”). Due to
inactivity, we are currently in the process of formally dissolving Caiban.
Core’s operations have been fully merged into Skyline.





**Skyline
Orthopedics, Inc.**




We
acquired Skyline and Core on February 11, 2004. Skyline, and its subsidiary
Core, are engaged in the marketing and distribution of durable medical equipment
and billing systems, to hospitals, physician groups, and healthcare insurance
providers in California and Nevada.





3


Skyline’s
Products and Services





Products:





Skyline
services healthcare and hospital organizations, orthopedic surgeon physician
practices, and physical and sports therapy clinics. Skyline’s products include
Continuous Passive Motion (CPM) equipment, and a wide variety of orthopedic soft
goods, including braces and supports for arms, elbows, knees and legs. CPM
equipment is used by patients during post operative recovery and rehabilitation
from knee or shoulder surgery. Orthopedic soft goods for arms, elbows, knees,
and legs are part of a full range of physical therapy, rehabilitative and post
operation recovery devices designed to either help forestall the need for
surgery, or speed up recovery after a necessary or elective surgery. All of the
products distributed by Skyline are manufactured by third parties.





Services





Skyline
provides services and support for the administration, maintenance, distribution,
and receivable collection functions associated with practice groups utilizing
durable medical equipment products, and offers custom tailored billing and
collection services for practice groups providing different services. We offer
clients a remote medical management system that is custom tailored to each
specific practices’ needs. Skyline’s “stock and bill” software-based system
allows for “real-time” inventory management by practices/hospitals with soft
good inventory, encompassing the complete patient billing process, including
office visits, x-rays, casting procedures, and other billing and collection
functions. “Stock and bill” is becoming an ever more popular industry trend with
doctors, as it enables the practice to subcontract out this portion of the
business and frees the practice to concentrate on patient care.





Distribution





Skyline
markets to new customers through direct relationships with hospitals, managed
care entities, and physician groups. Most of our existing customer relationships
were established by Skyline’s founder and a small internal sales staff. In the
future, we intend to expand those existing relationships, while continuing to
add new customers, through an integrated strategic marketing plan.





Competition





Durable
Medical Equipment (DME) is a multi-billion dollar industry in the U.S. that can
be described as everything from the sales of items as small as syringes to items
as large as hospital beds. Competition in the DME distribution business is
considered intense. We have chosen to concentrate on a specific subsection of
the market often referred to as “orthotics and prosthetics.” We concentrate
largely on the orthotics segment. The industry is primarily comprised of
numerous independent operators, most of whom serve only their local or regional
market. There is extreme market fragmentation at this level. Although there are
a few national entities who concentrate more on the prosthetic segment; there
are no established national distributors whom we consider to be direct
competition, even though although almost all manufacturers of DME have a direct
marketing strategy in addition to sales through distributors. We currently
possess a very established presence and strong name recognition in several large
metropolitan areas of California and Nevada.





4


As a
holding company, our strategy is not only to expand the existing operations of
Skyline by growing top line revenues through marketing efforts, but also to make
strategic acquisitions of key independent operators. Additionally, we will look
to grow industry demand by adding new product introductions.





Suppliers





Our top 5
suppliers comprise approximately 50% of our total purchases. These include
Aircast, DJ Ortho, Generation II USA, Innovation Sports and Vantage Orthopedics,
all recognized leaders in the industry. Our licensing agreement with Vantage
Orthopedics makes us the exclusive Southern California distributor of Body Glove
branded DME braces and supports, allowing us a large base for growth in this
area.





Customers





We
currently service seven major customers, who in aggregate account for
approximately 90% of the Company’s revenues. One customer accounts for
approximately 50% of Company revenues. By segment, the following table breaks
out our revenue by product line:








Product
      Line Segment
    
    %
      of RevenuesCPM’s
    
    40Soft
      Goods
    
    30Braces
    
    20Billing
      Services
    
    10Total
    
    100
    %





Intellectual
Property





We do not
have any trademarks, patents, or other intellectual property.





Research
and Development





We have
not spent any material amount of time or money on research and development, and
do not anticipate doing so in the future.





Compliance
with Environmental Laws





There are
no environmental laws applicable to which we are subject.





Employees





We
currently employ seven individuals. Of these, two are officers, while five are
employed at Skyline.





**ITEM
2 - DESCRIPTION OF PROPERTY**





Our
corporate headquarters is subleased from an entity owned and controlled by one
of our officers and directors, Steven D. Hargreaves. We sublease 2,200 square
feet in Irvine, California pursuant to the terms of a verbal, month to month
lease at $6,282 per month. Mr. Hargreaves’ lease of the premises expires on May
15, 2005. After Mr. Hargreaves lease expires we plan on leasing a new location,
with Skyline, in Orange County, California.





5


Our
subsidiary, Skyline Orthopedics, Inc., leases 2,111 square feet of office space
in Newport Beach, California pursuant to the terms of a three-year lease which
expires on May 15, 2005. The rent is currently $3,589 per month. Although
Skyline has two one-year options to extend the lease, it currently plans on
leaving its current location on May 15, 2005, and leasing new office space with
us.





**ITEM
3 - LEGAL PROCEEDINGS**





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
4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





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




6





**PART
II**





**ITEM
5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS**





**Market
Information**





Our
common stock currently trades on the Over the Counter Bulletin Board under the
symbol “TRYT,” and has traded under that symbol since March 31, 2003. Prior to
March 31, 2003, our common stock was traded under the symbol “ENHI.” There have
been a limited number of trades in our common stock.





The
following table sets forth the high and low bid information for each quarter
during the prior two fiscal years, as provided by The NASDAQ Stock Market, Inc.
The information reflects prices between dealers, and does not include retail
markup, markdown, or commission, and may not represent actual
transactions.





High
    
    
    Low**Fiscal
      year ended December 31, 2003:**First
      Quarter
    
    $
    0.03
    
    $
    0.00Second
      Quarter
    
    $
    0.00
    
    $
    0.00Third
      Quarter
    
    $
    0.00
    
    $
    0.00Fourth
      Quarter
    
    $
    0.01
    
    $
    0.00**Fiscal
      year ended December 31, 2004:**First
      Quarter
    
    $
    0.16
    
    $
    0.01Second
      Quarter
    
    $
    0.10
    
    $
    0.06Third
      Quarter
    
    $
    0.10
    
    $
    0.06Fourth
      Quarter
    
    $
    0.12
    
    $
    0.05**Fiscal
      year ended December 31, 2005:**First
      Quarter
    
    $
    0.16
    
    $
    0.05Second
      Quarter (through April 11, 2005)
    
    $
    0.15
    
    $
    0.06





The
Securities Enforcement and Penny Stock Reform Act of 1990 requires additional
disclosure relating to the market for penny stocks in connection with trades in
any stock defined as a penny stock. The Commission has adopted regulations that
generally define a penny stock to be any equity security that has a market price
of less than $5.00 per share, subject to a few exceptions which we do not meet.
Unless an exception is available, the regulations require the delivery, prior to
any transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated therewith.





**Holders**





As of
December 31, 2004 and April 11, 2005, there were 11,441,773 shares of our common
stock issued and outstanding and held of record by approximately 125
shareholders of record, respectively. There are no shares of our preferred stock
issued or outstanding.





7


**Dividends**





We have
not paid any dividends on our common stock and do not expect to do so in the
foreseeable future. We intend to apply our earnings, if any, in expanding our
operations and related activities. The payment of cash dividends on our common
stock in the future will be at the discretion of the Board of Directors and will
depend upon such factors as earnings levels, capital requirements, our financial
condition and other factors deemed relevant by the Board of
Directors.





**Securities
Authorized for Issuance Under Equity Compensation Plans**





2000
Employee Stock Option Plan





In 2000
our Board of Directors adopted the 2000 Employee Stock Option Plan. Under the
2000 plan, 300,000 shares of common stock were authorized for issuance as
Incentive Stock Options or Non-Incentive Stock Options to our key employees,
officers, directors or consultants.





The
purchase price of the common stock subject to each Incentive Stock Option shall
not be less than the fair market value (as determined in the 2000 Plan), or in
the case of the grant of an Incentive Stock Option to a principal stockholder,
not less that 110% of fair market value of such common stock at the time such
option is granted. The purchase price of the common stock subject to each
Non-Incentive Stock Option shall be determined at the time such option is
granted, but in no case less than 85% of the fair market value of such shares of
common stock at the time such option is granted.





The 2000
plan shall terminate 10 years from the earlier of the date of its adoption by
the Board of Directors or the date on which the 2000 plan is approved by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock entitled to vote thereon, and no option shall be granted after
termination of the 2000 plan. Subject to certain restrictions, the 2000 plan may
at any time be terminated and from time to time be modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock present, or represented, and entitled to vote at a meeting duly
held in accordance with the applicable laws of the State of Delaware. We have
granted options on all 300,000 shares of stock under the 2000 Plan.





2002
Incentive and Nonstatutory Stock Option Plan





Our Board
of Directors adopted, and our shareholders approved, the 2002 Incentive and
Nonstatutory Stock Option Plan (the “2002 Plan”) on August 16, 2002. Under the
2002 Plan, 400,000 shares of common stock have been authorized for issuance as
Incentive Stock Options or Nonstatutory Stock Options to our key employees,
officers, directors or consultants.





The
purchase price of the common stock subject to each Incentive Stock Option shall
not be less than the fair market value (as determined in the 2002 Plan), or in
the case of the grant of an Incentive Stock Option to a principal stockholder,
not less that 110% of fair market value of such common stock at the time such
option is granted. The purchase price of the common stock subject to each
Nonstatutory Stock Option shall be determined at the time such option is
granted, but in no case less than 100% of the fair market value of such shares
of common stock at the time such option is granted.





8


The 2002
Plan shall terminate 10 years from the earlier of the date of its adoption by
the Board of Directors or the date on which the 2002 Plan is approved by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock entitled to vote thereon, and no option shall be granted after
termination of the 2002 Plan. Subject to certain restrictions, the 2002 Plan may
at any time be terminated and from time to time be modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock present, or represented, and entitled to vote at a meeting duly
held in accordance with the applicable laws of the State of Delaware. We have
granted options on all 400,000 shares of stock under the 2002 Plan.





2003
Incentive and Nonstatutory Stock Option Plan





On May
31, 2003, our Board of Directors approved the Trinity3 Corporation Incentive and
Nonstatutory Stock Option Plan. The 2003 Plan was approved by our shareholders
at the May 31, 2004 shareholders’ meeting. Under the 2003 Plan, 5,000,000 shares
of common stock have been authorized for issuance as Incentive Stock Options or
Nonstatutory Stock Options to our key employees, officers, directors or
consultants. The terms of the 2003 are substantially the same as the 2002 Plan.
We have granted options on all 5,000,000 shares of stock under the 2003
Plan.





As of
December 31, 2004, the plan information is as follows:


**Plan
      Category**
    **Number
      of Securities to be issued upon exercise of outstanding options, warrants
      and rights**
    **Weighted-average
      exercise price of outstanding options, warrants and
      rights**
    **Number
      of securities remaining available for future issuance under equity
      compensation plans [excluding securities reflected in column
      (a)]****(a)**
    **(b)**
    **(c)****Equity
      compensation plans approved by security holders**
    5,700,000
    $
      0.111
    -0-**Total**
    5,700,000
    $
      0.111
    -0-


****


**Recent
Sales of Unregistered Securities**





On
December 10, 2004, in connection with a consulting agreement entered into with
Jeffrey S. Willmann, we issued to Mr. Willmann warrants to purchase a total of
up to 300,000 shares of our common stock, restricted in accordance with Rule
144, at an exercise price of $0.06 per share. Mr. Willmann will be assisting us
with identifying potential acquisition targets, assisting with the development
of new business, and client expansion. Mr. Willmann is now one of our Directors,
but was not at the time of the issuance of these warrants. The issuance was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
and the investor was an accredited investor.





On
December 17, 2004, in connection with the cancellation of $250,000 in
indebtedness, we issued 30,000 shares of our common stock, restricted in
accordance with Rule 144, to one individual. The issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, and the
individual was a sophisticated purchaser.





9





**ITEM
6 - MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION**





**Disclaimer
Regarding Forward Looking Statements**





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; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; 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 Annual 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.





**Summary
Overview**





We
currently are divided into three business units: healthcare, consumer products
and East Asian Import Export. First, is our healthcare division, anchored by our
subsidiary, Skyline Orthopedics, Inc. (“Skyline”), and its subsidiary, Core
Management Services, Inc. (“Core”), both of which we purchased on February 11,
2004. Effective with the date of the acquisition, we merged all operations of
Core into Skyline. Skyline is engaged in the marketing and distribution of
durable medical equipment and billing systems, to hospitals, physician groups,
and healthcare insurance providers in California and Nevada. Skyline’s products
include Continuous Passive Motion (CPM) equipment, and a wide variety of
orthopedic soft goods, including braces and supports for arms, elbows, knees and
legs. Additionally, Skyline provides services and support for the
administration, maintenance, and receivable collection functions associated with
practice groups utilizing durable medical equipment products, offering custom
tailored billing and collection services for practice groups requiring custom
tailored services. We plan on growing this division through internal growth of
top line revenues and strategic acquisitions. The consolidated operations of
Skyline are included in the included financial statements, for all operations
beginning February 12, 2004.





Second,
is our consumer products division, anchored by our subsidiary, Trinity3
Acceptance Corp (“TAC”), which is a financing subsidiary set up to facilitate
payments between Trinity3
Corporation, its
customers and its suppliers. TAC produced minimal revenue of $20,000 in calendar
2003 and no revenues in 2004. Our consumer products division has had no other
operations or revenues since inception. We are seeking opportunities in this
area to provide shareholder value.





10


Third, is
our East Asian Import Export division, anchored by Caiban Holdings, Inc.
(“Caiban”). As we realign the company, we have decided to focus on opportunities
outside of East Asian Import Export business, and as a result, will be selling
or shutting down Caiban which has had no operations or sales since
inception.





As a
result of our growth plans, our biggest challenges will be threefold: managing
our growth, generating positive cash flow, and integrating our acquisition of
Skyline.





Explanatory
Paragraph in Our Independent Certified Public Accountant’s
Report





Our
independent accountants have included an explanatory paragraph in their most
recent report, stating that our audited financial statements for the period
ending December 31, 2004 were prepared assuming that we will continue as a going
concern. They note that we incurred losses and that there are no assurances that
we will be able to meet our financial obligations in the future.





Our
independent accountants included the explanatory paragraph based primarily on an
objective test of our historical financial results. Although we agree that this
explanatory paragraph is applicable when the objective test is applied, we
believe that upon successful implementation of our business plan in the next
fiscal year, future audit reports will be issued without this explanatory
paragraph.





**Results
of Operations**





Introduction




Our
operations for the fourth quarter 2004 versus 2003 are vastly different,
reflecting our change from a development stage company to one with operations,
as a result of the Skyline acquisition. Our consolidated financial statements
for the three months ended December 31, 2004 reflect this change in operations.
Our consolidated gross revenues for the three months ended December 31, 2004
were $362,809 compared to $-0- for the same period in 2003. With our increase in
revenues, we also incurred significant operating costs and we continue to
operate at a loss. Our fourth quarter 2004 operating expenses are larger because
of the increase in fixed costs necessary to operate the parent company and its
recently acquired operating subsidiaries. As a result, our operating expenses
during the fourth quarter 2004 of $234,664 were significantly greater than the
same period in 2003 of $28,800. The parent company corporate expenses, including
general, administrative, and net interest expense items totaled $96,055,
contributing to a consolidated fourth quarter loss of ($80,150).  However,
the healthcare segment contributed earnings of $27,282 during the fourth
quarter.





11





**Three
months ended December 31, 2004 compared to three months ended December 31, 2003**





Revenues,
Expenses and Loss from Consolidated Operations




Our
revenues, cost of revenues, general and administrative expenses, and loss from
consolidated operations for the three months ended December 31, 2004 and 2003,
respectively, are as follows:




**Three
      months ended****December
      31**2004
    
    
    *%
      of Revenue*
    
    
    2003
    
    
    *%
      of Revenue*
    
    
    *Percent
      Change*Gross
      Revenues
    
    $
    362,809
    
    
    *100.0*
    
    $
    —
    
    
    *100.0*
    
    
    *—*Reimbursement
      Adjustment
    
    
    124,923
    
    
    *34.4*
    
    
    —
    
    
    *—*
    
    
    *—*Net
      Revenues
    
    
    237,886
    
    
    *65.6*
    
    
    —
    
    
    *—*
    
    
    *—*Cost
      of Net Revenues
    
    
    64,435
    
    
    *17.8*
    
    
    —
    
    
    *—*
    
    
    *—*Depreciation
    
    
    11,377
    
    
    *3.1*Gross
      Profit
    
    
    162,074
    
    
    *44.7*
    
    
    —
    
    
    *—*
    
    
    *—*General
      & Administrative Expenses
    
    
    234,664
    
    
    *64.7*
    
    
    28,800
    
    
    *nm*
    
    
    *715*
    *%*Interest
      and Taxes
    
    
    7,560
    
    
    *2.1*
    
    
    —
    
    
    *—*
    
    
    *—*Net
      Loss
    
    $
    (80,150
    )
    
    *(22.1*
    *)*
    $
    (28,800
    )
    
    *nm*
    
    
    *178*
    *%*





Revenues





Gross
revenues for the three months ended December 31, 2004 were $362,809 compared to
$-0- for the same period in 2003. This increase in 2004 is due to the operations
acquired in the Skyline acquisition. The operations of Skyline and Core
accounted for $362,809, or 100%, of our gross revenues for the three months
ended December 31, 2004.





Cost
of Net Revenues





Cost of
net revenues was $124,923 for the three months ended December 31, 2004 compared
to $-0- for the same period in 2003. This increase in 2004 is due to the
operations acquired in the Skyline acquisition. The cost of net revenues for
Skyline were $124,923, or 100%, of our total cost of net revenues for the three
months ended December 31, 2004.





Operating,
General and Administrative Expenses





General
and administrative expenses were $234,664 for the three months ended December
31, 2004 as compared to $28,800 for the same period in 2003, an increase of
715%. This increase in 2004 is due to the operations acquired in the Skyline
acquisition, which carries its own general and administrative
overhead.





Net
Loss





The
Company experienced a consolidated net loss of ($80,150) for the three months
ended December 31, 2004 compared to a net loss of ($28,800) for the same period
in 2003, an increase of 178%. Partially offsetting this net loss was the
profitable operations of Skyline, acquired in February 2004. Conversely, larger
parent company corporate expenses, including general, administrative, and net
interest expense items continued to keep consolidated earnings below the
breakeven mark.





12





**Year
ended December 31, 2004 compared to year ended December 31,
2003**





Revenues,
Expenses and Loss from Operations




Our
revenues, cost of revenues, general and administrative expenses, and loss from
operations for the years ended December 31, 2004 and 2003, respectively, are as
follows:





**Year
      ended****December
      31**2004
    
    
    *%
      of Net Revenue*
    
    
    2003
    
    
    *%
      of Revenue*
    
    
    *Percent
      Change*Gross
      Revenues
    
    $
    1,247,394
    
    
    *100.0*
    
    $
    20,000
    
    
    *100.0*
    
    
    *6,137*
    *%*Reimbursement
      Adjustment
    
    
    401,472
    
    
    *32.2*
    
    
    —
    
    
    *—*
    
    
    *—*Net
      Revenues
    
    
    845,922
    
    
    *67.8*
    
    
    —
    
    
    *—*
    
    
    *—*Cost
      of Net Revenues
    
    
    203,260
    
    
    *16.3*
    
    
    —
    
    
    *—*
    
    
    *—*Depreciation
    
    
    39,162
    
    
    *3.1*Gross
      Profit
    
    
    603,500
    
    
    *48.4*
    
    
    20,000
    
    
    *nm*
    
    
    *3,113*
    *%*General
      & Administrative Expenses
    
    
    767,556
    
    
    *61.5*
    
    
    157,676
    
    
    *688*
    *%*
    
    *387*
    *%*Interest
      and Taxes
    
    
    26,012
    
    
    *2.1*
    
    
    800
    
    
    *4*
    *%*
    
    *8,047*
    *%*Net
      Loss
    
    $
    (190,068
    )
    
    *(15.2*
    *)*
    $
    (138,476
    )
    
    *(592*
    *%)*
    
    *37*
    *%*





Revenues





Gross
revenues for the year ended December 31, 2004 were $1,247,394 compared to
$20,000 for the same period in 2003, an increase of 6,137%. This increase is due
to the operations acquired in the Skyline acquisition. The operations of Skyline
accounted for $1,247,394, or 100%, of our gross revenues for the year ended
December 31, 2004.





Cost
of Net Revenues





Cost of
net revenues was $401,472 for the year ended December 31, 2004 compared to $-0-
for the same period in 2003. This increase in 2004 is due to the operations
acquired in the Skyline acquisition. The cost of net revenues for Skyline was
$401,472 or 100%, of our total cost of net revenues for the year ended December
31, 2004.





Operating,
General and Administrative Expenses





General
and administrative expenses were $767,556 for the year ended December 31, 2004
as compared to $157,676 for the same period in 2003, an increase of 387%. This
increase in 2004 is due to the operations acquired in the Skyline acquisition,
which carries its own general and administrative overhead.





Net
Loss





We
experienced a net loss of ($190,068) for the year ended December 31, 2004
compared to a net loss of ($138,476) for the same period in 2003, an increase of
37%. Partially offsetting this net loss was the profitable operations of Skyline
Orthopedics, acquired in February 2004. Conversely, larger parent company
corporate expenses, including general, administrative, and net interest expense
items continued to keep consolidated earnings below the breakeven
mark.





13





**Segment
Reporting**





Trinity3
currently is divided into three business segments: healthcare, consumer products
and East Asian Import Export. Consumer products and East Asian Import Export
segments are currently not reportable segments, as neither their operations, nor
assets, meet the 10% threshold requirements of SFAS 131. East Asian Import
Export is currently inactive. The healthcare segment, anchored by Skyline
Orthopedics, Inc., (“Skyline”), is engaged in the marketing and distribution of
durable medical equipment and billing systems, to hospitals, physician groups,
and healthcare insurance providers in California and Nevada. The segment’s
products include Continuous Passive Motion (CPM) equipment, and a wide variety
of orthopedic soft goods, including braces and supports for arms, elbows, knees
and legs. The following table breaks out reportable information for the
healthcare segment, for the three months and years ended December 31, 2004 and
2003, respectively:




**Three
      months ended****December
      31**
    
    **Year
      ended****December
      31*****Healthcare
      Segment Operations:***
    
    **2004**
    
    ***%
      of Revenue***
    
    **2003**
    
    **2004**
    
    ***%
      of Revenue***
    
    **2003**Gross
      Revenues
    
    $
    362,809
    
    
    *100.0*
    
    $
    —
    
    $
    1,247,394
    
    
    *100.0*
    
    $
    —Reimbursement
      Adjustment
    
    
    124,923
    
    
    *34.4*
    
    
    
    
    
    401,473
    
    
    *32.2*Net
      Revenues
    
    
    237,886
    
    
    *65.6*
    
    
    
    
    
    845,921
    
    
    *67.8*Cost
      of Net Revenues
    
    
    64,435
    
    
    *17.8*
    
    
    —
    
    
    203,260
    
    
    *16.3*
    
    
    —Gross
      profit
    
    
    173,451
    
    
    *47.8*
    
    
    —
    
    
    642,661
    
    
    *51.5*
    
    
    —Operating
      expenses:General
      and administrative
    
    
    146,169
    
    
    *40.3*
    
    
    —
    
    
    489,823
    
    
    *39.3*
    
    
    —Segment
      operating earnings
    
    $
    27,282
    
    
    *7.5*
    
    $
    —
    
    $
    152,838
    
    
    *12.3*
    
    $
    —***Healthcare
      Segment Assets:***Total
      assets
    
    $
    471,455
    
    
    *—*
    
    $
    —
    
    $
    471,455
    
    
    *—*
    
    $
    —








Segment
Reporting does not include depreciation and income taxes attributable to the
segment, nor does it include corporate general, administrative, and interest
expense. The following table reconciles Segment Operating Earnings to
Consolidated Earnings (Loss) for the three months and years ended December 31,
2004 and 2003, respectively:




***Reconciliation
      of Segment Operations to Consolidated Earnings
      (Loss):***
    
    **Three
      months ended****December
      31**
    
    
    **Year
      ended****December
      31****2004**
    
    
    **2003**
    
    
    **2004**
    
    
    **2003**Segment
      operating earnings
    
    $
    27,282
    
    $
    —
    
    $
    152,838
    
    $
    —Segment
      depreciation
    
    
    (11,377
    )
    
    —
    
    
    (39,162
    )
    
    —Income
      taxes
    
    
    —
    
    
    —
    
    
    (1,600
    )
    
    —Corporate
      general and administrative expenses
    
    
    (88,495
    )
    
    
    
    
    (277,732
    )Corporate
      interest expense
    
    
    (7,560
    )
    
    —
    
    
    (24,412
    )
    
    —Consolidated
      earnings (Loss)
    
    $
    (80,150
    )
    $
    —
    
    $
    (190,068
    )
    $
    —




14


**Liquidity
and Capital Resources**





Introduction




During
year ended December 31, 2004, we generated positive operating cash flows. Cash
totaled $1,875 and $39 at December 31, 2004 and 2003, respectively.





Cash,
current assets, total assets, current liabilities, and total liabilities as of
December 31, 2004 and
2003, respectively, are as follows:




December
      31
    
    
    *Percentage
      Change*2004
    
    
    2003Cash
    
    $
    1,875
    
    $
    39
    
    
    *nm*
    *%*Total
      Current Assets
    
    $
    241,754
    
    $
    39
    
    
    *nm*
    *%*Total
      Assets
    
    $
    398,945
    
    $
    39
    
    
    *nm*
    *%*Total
      Current Liabilities
    
    $
    720,984
    
    $
    176,710
    
    
    *nm*
    *%*Total
      Liabilities
    
    $
    720,984
    
    $
    176,710
    
    
    *nm*
    *%*





Cash
Requirements





We
believe that we have, and will have, sufficient cash flow to continue its
operations for the next twelve months. Our working capital and other capital
requirements during this fiscal year and thereafter will vary based on a number
of factors, including potential revenues generated by our subsidiaries.
Additionally, we may look to public and private sources of financing. There can
be no assurance, however, that we can obtain sufficient capital on acceptable
terms, if at all. Under such conditions, failure to obtain such capital likely
would affect adversely our ability to continue as a going concern, or at a
minimum negatively impact our ability to timely meet our business objectives.





Sources
and Uses of Cash





*Operations*





Net cash
used by operations was $99,921 for the year ended December 31, 2004, as compared
to $96,757 for the same period in 2003. Negative operating cash flows during
2004 were created primarily by the fixed and overhead expenses associated with
running the parent company.





*Investing*





Net cash
used by investing activities was $268,977 and $-0- for the years ended December
31, 2004 and 2003, respectively. Investing activities for the year ended
December 31, 2004 consisted of (1) the acquisition of net assets in the Skyline
acquisition: $250,000 cash down payment, less $8,846 cash acquired; and (2)
$27,823 in purchases of new equipment.





*Financing*





Net cash
provided by financing activities was $370,734 and $96,748, for the years ended
December 31, 2004 and 2003, respectively. In 2004, financing activities included
loans to the company from officers, netting $43,334; sale of company stock for
cash, netting $25,000; warrant exercise, netting $2,400; and issuance of
debentures, netting $300,000. Net cash provided by financing activities during
the year ended December 31, 2003 included loans to the company from officers,
netting $46,748; and sale of company stock for cash, netting $50,000.





15


**Debt
Instruments, Guarantees, and Related Covenants**





As of
December 31, 2004 and 2003, the Company had $300,000 and $-0-, respectively, of
debt instruments outstanding. During the first quarter 2004, in a private
placement, the Company issued $300,000 of 10% convertible debentures, plus
attached warrants to acquire 240,000 shares of Company common stock at $0.01 per
share, in exchange for $300,000. The debentures are due March 1, 2005, and are
convertible at the option of the holder into Company common stock at $2.00 per
share. The proceeds were used to complete the Skyline acquisition and fund the
Company’s working capital requirements. The 10% interest rate on the convertible
debentures did not add any current debt service load to the Company, during 2004
as the interest was due at maturity, which was March 1, 2005. Interest expense
for the three months and years ended December 31, 2004 of $7,560 and $24,412,
respectively, is entirely attributable to this debenture issue.





On March
2, 2005, we received a notice of default from the holder of one of the
debentures, who subsequently agreed to grant us until March 31, 2005 to pay down
a portion of the debenture. We were unable to do so, and on March 31, 2005, the
holder notified us of our default on the debenture and his intention to convert
the outstanding balance into our common stock, unless the debenture is paid in
full by the end of a 60 day grace period, as provided for in the debenture.





**Critical
Accounting Policies**





The
discussion and analysis of the Company’s financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared in accordance with Generally Accepted Accounting Principles (GAAP). The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries. Significant inter-company accounts and transactions
have been eliminated in consolidation. Inventory, which consists only of
finished goods, is stated at the lower of cost or market, with cost being
determined by the first-in, first-out (FIFO) method. Property and equipment was
purchased in the acquisition of Skyline Orthopedics, Inc., and is valued at the
fair market value on the date of the purchase. Depreciation is recorded over the
estimated useful lives of the assets (three to five years) using the
straight-line method. Major improvements are capitalized, while repair and
maintenance expenditures are expenses as incurred.





**Off
Balance Sheet Contracts**





At
December 31, 2004 and 2003, there were no “off balance sheet” contracts or items
to record.





16


**ITEM
7 - FINANCIAL STATEMENTS**








Index
      to Financial StatementsIndependent
      Auditors’ Report
    F-1Consolidated
      Balance Sheet
    F-2Consolidated
      Statement of Operations
    F-3Consolidated
      Statement of Changes in Stockholders’ Equity (Deficit)
    F-4Consolidated
      Statement of Cash Flows
    F-5Notes
      to Consolidated Financial Statements
    F-6




****


**ITEM
8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE**





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





**ITEM
8A - CONTROLS AND PROCEDURES**





The
Company's Chief Executive Officer and Chief Financial Officer (or those persons
performing similar functions), after evaluating the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended) as of a date
within 90 days of the filing of this annual report (the “Evaluation Date”), have
concluded that, as of the Evaluation Date, the Company's disclosure controls and
procedures were effective to ensure the timely collection, evaluation and
disclosure of information relating to the Company that would potentially be
subject to disclosure under the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder. There were no significant
changes in the Company's internal controls or in other factors that could
significantly affect the internal controls subsequent to the Evaluation
Date.





**ITEM
8B - OTHER INFORMATION**





All
information required to be filed on a Form 8-K during the three months ended
December 31, 2004 was filed with the Commission on a Form 8-K. For a description
of our Form 8-Ks filed during this three month period see Item 13(b),
below.





17
 
 **PART
III**





**ITEM
9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT**





The
following table sets forth the names and ages of our current directors and
executive officers, the principal offices and positions held by each person and
the date such person became a director or executive officer. Our executive
officers are elected annually by the Board of Directors. The directors serve
one-year terms until their successors are elected. The executive officers serve
terms of one year or until their death, resignation or removal by the Board of
Directors. Unless described below, there are no family relationships among any
of the directors and officers, and none of our officers and directors serve as a
director for any other reporting issuer.





**Name**
    
    **Age**
    
    **Position(s)**Steven
      D. Hargreaves
    
    46
    
    President,
      Chief Financial Officer, and Director (2002)Shannon
      T. Squyres
    
    45
    
    Chief
      Executive Officer, Secretary, and Director (2002)Jeffrey
      S. Willmann
    
    36
    
    Director
      (2005)





**Steven
D. Hargreaves** , 46, is
a director, President and Chief Financial Officer of the Company. From 1993 to
the present, Mr. Hargreaves has been a Managing Director of Genesis Partners, an
investment management firm involved in all aspects of equity investments. Prior
to co-founding Genesis Partners, Mr. Hargreaves was an equity research analyst
specializing in emerging growth companies with Dean Witter Reynolds from 1992 to
1993. Mr. Hargreaves began his professional career as a Certified Public
Accountant having worked for firms Arthur Andersen and Ernst & Whinney. Mr.
Hargreaves graduated from University of Southern California in 1991 with a
Masters of Business Administration degree (MBA) concentrating in Finance; and
from California State University, Long Beach in 1983 with a Bachelor of Science
(BS) in Business Administration.





**Shannon
T. Squyres** , 45, is
a director, Chief Executive Officer and Secretary. Mr. Squyres has worked in the
financial industry for over 20 years and has a wide range of expertise with
extensive experience in corporate finance, investor relations and press
relations. From 1987 to the present, Mr. Squyres has been president of Market
Pathways Financial Relations, Inc., a financial relations consulting firm
working with publicly traded companies. Prior to founding Market Pathways
Financial Relations in 1987, Mr. Squyres was a partner and director with the
Newport Beach, CA firm of Investor Communication Systems where he established
and organized regional offices in Chicago, New York, Portland and San Francisco.
Mr. Squyres has worked with, and consulted to, numerous companies in a diverse
group of industries including: healthcare (dental supplies & services,
medical supplies, pain management networks, and specialty medical products);
consumer products (consumer electronics, computer software & hardware and
sporting goods); and various manufacturing companies servicing both the
healthcare and consumer products segments. Mr. Squyres graduated from California
State University, Fullerton in 1982 with a Bachelor of Arts degree (BA) in
Communications/Public Relations.





18


**Jeffrey
S. Willmann** ,
35, **** joined
our Board of Directors in February 2005 and brings a vast knowledge of the
healthcare industry. Currently he serves as acting Chief Financial Officer to
LightBridge Hospice, Inc. of San Diego, outside Board Consultant to Family
Choice Health Plan of Michigan, and outside Consultant to Sharp Health Plan of
San Diego. From 2001 to 2003, Mr. Willmann served as Vice President & Chief
Financial Officer of Sharp Health Plan, San Diego (a subsidiary of Sharp
HealthCare) where revenue more than doubled under his tenure. Prior to Sharp,
Mr. Willmann was a co-founder of Trinity Health Ventures, Inc., where he served
as President and Chairman of the Board from 1997 to 2001, before a successful
sale of the  company
in 2001 to Odyssey Healthcare (ODSY), a publicly traded healthcare conglomerate
with a market capitalization of $400 million. Prior to Trinity Health Ventures,
Inc., Mr. Willmann had been associated with healthcare industry leaders FHP,
Inc. (merged into Pacificare, [PHS], 1997) from 1996 to 1997; Aetna U.S.
Healthcare [AET] from 1995 to 1996; and Health Choice Arizona (formerly part of
Tenet Healthcare) from 1991 to 1995. Mr. Willmann graduated from Arizona State
University in 1993 with a Master of Health Service Administration degree (MHSA);
and from Concordia College, Moorhead, Minnesota with a **** Bachelor
of Arts degree (BA) in Hospital & Business Administration, 1991, Cum Laude
Honors.





Audit
Committee





We do not
currently have an audit committee, primarily because until our acquisition of
Skyline we have had very little business activity other than maintaining our
current corporate status.





Compliance
with Section 16(a) of the Securities Exchange Act of 1934





Section
16(a) of the Securities Exchange Act of 1934 requires the Company's directors
and executive officers and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.





During
the two most recent fiscal years, to the Company’s knowledge, the following
delinquencies occurred:





**Name**
    **No.
      of Late Reports**
    **No.
      of Transactions Reported Late**
    **No.
      of**
      **Failures
      to File**Steven
      D. Hargreaves
    2
    2
    -0-Shannon
      T. Squyres
    2
    2
    -0-Jeffrey
      S. Willmann
    1
    1
    -0-





Code
of Ethics





On March
25, 2003, our Board of Directors unanimously adopted a Code of Ethics that
applies to each of our employees, officers, and directors. Our Code of Ethics is
designed to promote honest and ethical conduct, full, fair and accurate
disclosure, and compliance with all applicable laws, rules and regulations. A
copy of our Code of Ethics is incorporated by reference as an exhibit to this
filing.





**ITEM
10 - EXECUTIVE COMPENSATION**





The
Summary Compensation Table shows certain compensation information for services
rendered in all capacities for the fiscal years ended December 31, 2004 and
2003. In addition, the table shows compensation for our current executive
officers. Other than as set forth herein, no executive officer’s salary and
bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.





19


**Annual
      Compensation**
    
    **Long
      Term Compensation****Awards**
    
    **Payouts****Name
      and**
      **Principal
      Position**
    **Year**
    **Salary**
      **($)**
    **Bonus**
      **($)**
    **Other
      Annual**
      **Compensation**
      **($)**
    
    **Restricted
      Stock**
      **Awards**
      **($)**
    **Securities
      Underlying Options SARs**
      **(#)**
    
    **LTIP
      Payouts**
      **($)**
    **All
      Other**
      **Compensation**
      **($)**Steven
      D. Hargreaves,
    2004
    $1
    -0-
    -0-
    
    -0-
    -0-
    
    -0-
    -0-President
    2003
    $1
    -0-
    -0-
    
    -0-
    2,500,000
    
    -0-
    -0-Shannon
      T. Squyres,
    2004
    $1
    -0-
    -0-
    
    -0-
    -0-
    
    -0-
    -0-CEO
      and Secretary
    2003
    $1
    -0-
    -0-
    
    -0-
    2,500,000
    
    -0-
    -0-





**OPTION/SAR
      GRANTS IN LAST FISCAL YEAR**
      **(Individual
      Grants)****Name**
    **Number
      of Securities**
      **Underlying**
      **Options/SARs
      Granted**
      **(#)**
    **Percent
      of Total**
      **Options/SARs
      Granted**
      **To
      Employees In Fiscal**
      **Year**
    **Exercise
      or Base Price**
      **($/Share)**
    **Expiration
      Date**Steven
      D. Hargreaves
    -0-
    N/A
    N/A
    N/AShannon
      T. Squyres
    -0-
    N/A
    N/A
    N/A





**AGGREGATED
      OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR**
      **AND
      FY-END OPTION/SAR VALUES****Name**
    **Shares
      Acquired On**
      **Exercise**
      **(#)**
    **Value
      Realized**
      **($)**
    **Number
      of Unexercised**
      **Securities
      Underlying**
      **Options/SARs
      at FY-End**
      **(#)**
      **Exercisable/Unexercisable**
    **Value
      of Unexercised**
      **In-The-Money**
      **Option/SARs**
      **at
      FY-End**
      **($)**
      **Exercisable/Unexercisable**Steven
      D. Hargreaves
    N/A
    N/A
    N/A
    N/AShannon
      T. Squyres
    N/A
    N/A
    N/A
    N/A





We do not
have employment agreements with any of our officers or directors, and they do
not receive or accrue any compensation at this time.





On May 6,
2002, we issued 150,000 options to each of Mr. Hargreaves and Mr. Squyres under
our 2000 Employee Stock Option Plan as compensation for services rendered. The
options are exercisable until May 6, 2007 at an exercise price of $0.825 per
share.





On May
15, 2002, we issued 200,000 options to each of Mr. Hargreaves and Mr. Squyres
under our 2002 Incentive and NonStatutory Stock Option Plan as compensation for
services rendered. The options are exercisable until May 15, 2012 at an exercise
price of $0.825 per share.





On May 31, 2003, we issued 2,500,000 options to each
of Mr. Hargreaves and Mr. Squyres under our 2003 Incentive and Nonstatutory
Stock Option Plan as compensation for services rendered. The options are
exercisable until May 31, 2013 at an exercise price of $0.011 per
share.





20


**I** **TEM
11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT**





The
following table sets forth, as of April 11, 2005, certain information with
respect to the Company’s equity securities owned of record or beneficially by
(i) each Officer and Director of the Company; (ii) each person who owns
beneficially more than 5% of each class of the Company’s outstanding equity
securities; and (iii) all Directors and Executive Officers as a
group.





Common
      StockTitle
      of Class
    
    Name
      and Address of
      Beneficial
      Owner
    
    Amount
      and Nature of Beneficial Ownership
    
    Percent
      of
      Class (1)Common
      Stock
    
    Steven
      D. Hargreaves (2)
      1920
      Main Street, Suite 980
      Irvine,
      CA 92614
    
    6,650,072
      (3)
    
    46.6%
      (3)Common
      Stock
    
    Shannon
      T. Squyres (2)
      1920
      Main Street, Suite 980
      Irvine,
      CA 92614
    
    6,650,072
      (4)
    
    46.6%
      (4)Common
      Stock
    
    Chris
      A. McDonald
      1280
      Bison Street
      Newport
      Beach, CA 92660
    
    700,000
    
    6.1%Common
      Stock
    
    Jeffrey
      S. Willmann
      1920
      Main Street, Suite 980
      Irvine,
      CA 92614
    
    55,000
    
    <1%All
      Officers and Directors
      as
      a Group (3 Persons)
    
    13,355,144
      (3)(4)
    
    78%
      (3)(4)




(1)
    Unless
      otherwise indicated, based on 11,415,878 shares of common stock
      outstanding. Shares of common stock subject to options or warrants
      currently exercisable, or exercisable within 60 days, are deemed
      outstanding for purposes of computing the percentage of the person holding
      such options or warrants, but are not deemed outstanding for purposes of
      computing the percentage of any other
person.





(2)
    Indicates
      a Director and Officer of the Company.


(3)
    Includes
      2,500,000 shares of common stock which may be acquired upon the exercise
      of options at $0.011 per share, 150,000 shares of common stock which may
      be acquired upon the exercise of options at $0.825 per share, and 200,000
      shares of common stock which may be acquired upon the exercise of options
      at $0.825 per share.





(4)
    Includes
      2,500,000 shares of common stock which may be acquired upon the exercise
      of options at $0.011 per share, 150,000 shares of common stock which may
      be acquired upon the exercise of options at $0.825 per share, and 200,000
      shares of common stock which may be acquired upon the exercise of options
      at $0.825 per share.





There are
no current arrangements that will result in a change in control.





21





**ITEM
12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





On April
12, 2002, we entered into an Agreement and Plan of Merger with Caiban Holdings
Inc., a Delaware corporation, Caiban Enterprises, Inc., Shannon T. Squyres,
Steven D. Hargreaves, Michael Kwok, and Harold Radie (collectively, the “Caiban
Stockholders”). Pursuant to the terms of the Agreement and Plan of Merger which
closed on April 23, 2002, Caiban Enterprises, Inc. acquired all of the issued
and outstanding shares of capital stock of Caiban Holdings, Inc. from the Caiban
Stockholders in exchange for an aggregate of 7,835,200 newly issued shares of
our common stock, with Shannon Squyres and Steven Hargreaves receiving 3,800,072
shares each (after giving effect to the 1-for-5 reverse stock split effective
March 31, 2003. Concurrently, Caiban Enterprises, Inc. was merged into Caiban
Holdings, Inc. and Caiban Holdings, Inc. became our wholly-owned subsidiary. As
a condition to the Agreement and Plan of Merger, our directors prior to the
transaction were required to resign and appoint Shannon Squyres and Steven
Hargreaves as our executive officers and members of our Board of
Directors.





On May 6,
2002, we issued 150,000 options to each of Mr. Hargreaves and Mr. Squyres under
our 2000 Employee Stock Option Plan as compensation for services rendered. The
options are exercisable until May 6, 2007 at an exercise price of $0.825 per
share.





On May
15, 2002, we issued 200,000 options to each of Mr. Hargreaves and Mr. Squyres
under our 2002 Incentive and NonStatutory Stock Option Plan as compensation for
services rendered. The options are exercisable until May 15, 2012 at an exercise
price of $0.825 per share








On May
31, 2003, we issued 2,500,000 options to each of Mr. Hargreaves and Mr. Squyres
under our 2003 Incentive and Nonstatutory Stock Option Plan as compensation for
services rendered. The options are exercisable until May 31, 2013 at an exercise
price of $0.011 per share.





On
December 10, 2004, we entered into a consulting agreement with Jeffrey S.
Willmann, under which Mr. Willmann will assist us with identifying potential
acquisition targets, the development of new business, and with client expansion.
Under the terms of the consulting agreement, we issued Mr. Willmann warrants to
purchase a total of up to 300,000 shares of our common stock, restricted in
accordance with Rule 144, at an exercise price of $0.06 per share. Mr. Willmann
is now one of our Directors, but was not at the time we entered into the
consulting agreement.





At
December 31, 2004 and December 31, 2003, loans from officers and directors to
the company totaled $93,582, and $50,248, respectively. These loans are non
interest bearing and are payable upon demand.





22





**ITEM
13 - EXHIBITS**


****


**(a)**  **Exhibits**





2.1
      (1)
    Agreement
      and Plan of Merger dated April 12, 2002 by and between eNexi Holdings,
      Inc., its subsidiary, Caiban Enterprises, Inc., and its
      shareholders2.2
      (9)
    Reorganization
      and Stock Purchase Agreement dated February 4, 20042.3
      (9)
    Extension
      Agreement dated February 10, 20042.4
      (9)
    Promissory
      Note dated February 11, 20042.5
      (9)
    Guaranty
      dated February 11, 20042.6
      (9)
    Security
      Agreement dated February 11, 20042.7
      (9)
    Consulting
      Agreement dated February 11, 20043.1
      (2)
    Certificate
      of Incorporation of Silver King Resources (Delaware), Inc., filed on April
      13, 19993.2
      (2)
    Certificate
      of Merger of Silver King Resources, Inc. into Silver King Resources
      (Delaware), Inc.3.3
      (3)
    Certificate
      of Amendment of Certificate of Incorporation dated July 17, 2002, changing
      name to eNexi Holdings, Inc.3.4
      (4)
    Certificate
      of Amendment of Certificate of Incorporation dated November 5, 2002,
      changing name to Trinity3 Corporation3.5
      (4)
    Certificate
      of Amendment of Certificate of Incorporation dated February 20, 2003,
      increasing the authorized common stock3.6
      (5)
    Bylaws
      of Silver King Resources (Delaware), Inc.4.1
      (9)
    Securities
      Purchase Agreement and Investor Questionnaire dated February 9,
      20044.2
      (9)
    10%
      Convertible Debenture dated February 9, 20044.3
      (9)
    Security
      Agreement dated February 9, 20044.4
      (9)
    Warrant
      Agreement dated February 9, 200410.1
      (7)
    ENexi
      Holdings, Inc. 2000 Equity Incentive Plan10.2
      (4)
    Form
      of Stock Option Agreement under 2000 Equity Incentive
  Plan






23


10.3
      (4)
    ENexi
      Holdings, Inc. 2002 Stock Option/Stock Issuance Plan10.4
      (4)
    Form
      of Option Agreement under 2002 Stock Option/Stock Issuance
      Plan10.5
      (4)
    Trinity3
      Corporation 2003 Incentive and Nonstatutory Stock Option
    Plan10.6
      (4)
    Form
      of Option Agreement under the 2003 Incentive and Nonstatutory Stock Option
      Plan10.7
      (8)
    Trinity3
      Corporation 2004 Omnibus Securities and Stock Option
  Plan10.8
      (8)
    Form
      of Incentive Stock Option Agreement under the 2004 Omnibus Securities and
      Stock Option Plan10.9
      (8)
    Form
      of Nonstatutory Stock Option Agreement under the 2004 Omnibus Securities
      and Stock Option Plan10.10
    Standard
      Office Lease for Premises Occupied by Skyline Orthopedics,
      Inc.10.11
      (10)
    Consulting
      Agreement with Jeffrey S. Willmann dated December 10,
  200410.12
      (10)
    Trinity3
      Corporation Warrant dated December 10, 200414
      (6)
    Code
      of Ethics21
    Subsidiaries
      of Trinity3 Corporation23.1
    Consent
      of Mendoza Berger & Company, LLP31.1
    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.




24


(1)
    Incorporated
      by reference from Exhibit 2.1 to our Current Report on Form 8-K filed with
      the Commission on May 8, 2002.
  (2)
    Incorporated
      by reference from our Form 10-SB filed with the Commission on July 8,
      1999.
 
 (3)
    Incorporated
      by reference from our Schedule 14C filed with the Commission on May 26,
      2000.
 
 (4)
    Incorporated
      by reference from our Annual Report on Form 10-KSB filed with the
      Commission on April 15, 2003.
 
 (5)
    Incorporated
      by reference from our Form 10-SB filed with the Commission on July 8,
      1999.
 
 (6)
    Incorporated
      by reference from our Quarterly Report on Form 10-QSB for the quarter
      ended March 31, 2003 and filed with the Commission on May 16,
      2003.
 
 (7)
    Incorporated
      by reference from of our Registration Statement on Form SB-2 filed with
      the Commission on June 16, 2000.
 
 (8)
    Incorporated
      by reference from our Current Report on Form 8-K dated and filed with the
      Commission on June 8, 2004.
 
 (9)
    Incorporated
      by reference from our Current Report on Form 8-K dated and filed with the
      Commission on February 26, 2004.
 
 (10)
    Incorporated
      by reference from our Current Report on Form 8-K dated and filed with the
      Commission on December 16, 2004.
  
 **(b)**  **Reports
on Form 8-K**





On
December 16, 2004, we filed an Item 3.02 Current Report on Form 8-K dated
December 10, 2004 describing the consulting agreement we entered into with
Jeffrey S. Willmann, pursuant to which we issued Mr. Willmann warrants to
purchase a total of up to 300,000 shares of our common stock, restricted in
accordance with Rule 144, at an exercise price of $0.06 per share.





On
December 20, 2004, we filed an Items 1.02 and 3.02 Current Report on Form 8-K
dated December 17, 2004, describing the following: (i) the execution of a
Settlement Agreement and General Release with the previous owner of Skyline
Orthopedics, Inc., for the termination of our agreement with him, and the
termination of a $250,000 promissory note, and corresponding guarantee, with the
same individual; and (ii) in connection with the execution of the Settlement and
General Release and the cancellation of $250,000 in indebtedness, our issuance
of 30,000 shares of our common stock, restricted in accordance with Rule 144, to
the former owner of Skyline Orthopedics, Inc.





**ITEM
14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES**





**Audit
Fees**





During
the fiscal years ended December 31, 2004 and 2003, we accrued or paid Mendoza
Berger & Company, LLP a total of $27,716 and $26,377, respectively, for
professional services rendered in connection with performance of our independent
audits of our annual financial statements and reviews of financial statements
included in our Form 10-QSBs.





25


**Audit
Related Fees**





During
the fiscal years ended December 31, 2004 and 2003, we accrued or paid Mendoza
Berger & Company, LLP a total of $-0- and $-0-, respectively, for other assurance
and related services related to the performance of the audit and review of the
Company’s financial statements not included under Audit Fees.





**Tax
Fees**





During
the fiscal years ended December 31, 2004 and 2003, we accrued or paid Mendoza
Berger & Company, LLP a total of $-0- and $621, respectively, in fees for
professional services for tax planning and preparation.





**All
Other Fees**





During
the fiscal years ended December 31, 2004 and 2003, the Company did not accrue or
pay Mendoza Berger & Company, LLP, for any other fees.





Of the
fees described above, 100% were approved by the Board of Directors of the
Company as there was not an Audit Committee in place at the time of the
approvals.




26





**SIGNATURES**





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.








Dated:April
      21, 2005
    /s/Steven
      D. HargreavesBy:Steven
      D. HargreavesIts:President
      and Chief Financial OfficerDated:
      April 21, 2005
    /s/Shannon
      T. SquyresBy:Shannon
      T. SquyresIts:Chief
      Executive Officer and Secretary








In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




Dated:April
      21, 2005
    /s/Steven
      D. HargreavesBy:Steven
      D. Hargreaves, DirectorDated:April
      21, 2005
    /s/Shannon
      T. SquyresBy:Shannon
      T. Squyres, DirectorDated:
      April 21, 2005
    /s/Jeffrey
      S. WillmannBy:Jeffrey
      S. Willmann, Director










27





Consolidated
Financial Statements and


Report of
Independent Registered Accounting Firm





TRINITY3
CORPORATION AND SUBSIDIARIES





December
31, 2004 and 2003




28





**REPORT
OF INDEPENDENT REGISTERED ACCOUNTING FIRM**





To the
Board of Directors and Stockholders


of
Trinity 3 Corporation





We have
audited the accompanying consolidated balance sheets of Trinity3 Corporation (a
Delaware corporation) and subsidiaries as of December 31, 2004 and 2003, and the
related consolidated statements of income, stockholders’ equity (deficit), and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Trinity3
Corporation and subsidiaries as of December 31, 2004 and 2003, and the results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.





The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern. As discussed further in Note 3, the
Company has incurred significant losses. The Company’s viability is dependent
upon its ability to obtain future financing and the success of its future
operations. These factors raise substantial doubt about the Company’s ability to
continue as a going concern. Management’s plan in regard to these matters is
also described in Note 3. The consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.








/s/ **Mendoza Berger & Company, LLP**








Irvine,
California


April 21,
2004




F-1





**Trinity3
Corporation and Subsidiaries**


**CONSOLIDATED
BALANCE SHEETS**







**ASSETS**





**December
      31, 2004**
    
    
    **December
      31, 2003**Current
      assets:Cash
    
    $
    1,875
    
    $
    39Accounts
      receivable (net of allowance for doubtful accounts of $48,728 and
    
    
    
    
    
    —$-0-,
      at December 31, 2004 and December 31, 2003, respectively)
    
    
    184,476
    
    
    —Inventory
    
    
    55,403
    
    
    —Total
      current assets
    
    
    241,754
    
    
    39Property,
      plant and equipment
    
    
    190,574
    
    
    —Less:
      accumulated depreciation
    
    
    (38,433
    )
    
    —152,141
    
    
    —Goodwill
      (Note 4)
    
    
    5,050
    
    
    —Total
      assets
    
    $
    398,945
    
    $
    39





**LIABILITIES
AND STOCKHOLDERS’ EQUITY**





Current
      liabilities:Accounts
      payable
    
    $
    301,364
    
    $
    125,662Accrued
      expenses
    
    
    24,438
    
    
    —Note
      payable - related party (Note 5)
    
    
    93,582
    
    
    50,248Income
      tax payable
    
    
    1,600
    
    
    800Convertible
      debentures - (Note 7)
    
    
    300,000
    
    
    —Total
      current liabilities
    
    
    720,984
    
    
    176,710Commitments
      (Note 6)
    
    
    —
    
    
    —Stockholders’
      equity: (Notes 4 and 7)Common
      Stock:
      $0.0001
      par value, 2,000,000,000 shares authorized, 11,441,773 and 10,221,773
      shares issued and outstanding at December 31, 2004 and December 31, 2003,
      respectively.
    
    
    1,144
    
    
    1,022Additional
      paid-in capital
    
    
    99,456
    
    
    61,378Common
      Stock Subscribed, 650,000 shares
    
    
    6,500
    
    
    —Accumulated
      deficit
    
    
    (429,139
    )
    
    (239,071
    )Total
      stockholders’ equity (deficit)
    
    
    (322,039
    )
    
    (176,671
    )Total
      liabilities and stockholders’ equity
    
    $
    398,945
    
    $
    39





*The
accompanying notes are an integral part of these financial
statements* ****





F-2





Trinity3 Corporation and Subsidiaries




**CONSOLIDATED
STATEMENTS OF INCOME**







**Year
      ended****December
      31****2004**
    
    
    **2003**Gross
      Revenues
    
    $
    1,247,394
    
    $
    20,000Reimbursement
      adjustment
    
    
    401,472
    
    
    —Net
      revenues
    
    
    845,922Cost
      of net revenues
    
    
    203,260
    
    
    —Depreciation
    
    
    39,162
    
    
    —Gross
      profit
    
    
    603,500
    
    
    20,000Operating
      expenses:General
      and administrative
    
    
    767,556
    
    
    157,676Income
      (loss) from operations beforeinterest
      and provision for income taxes
    
    
    (164,056
    )
    
    (137,676
    )Interest
      expense
    
    
    24,412
    
    
    —Loss
      before provision for income taxes
    
    
    (188,468
    )
    
    (137,676
    )Provision
      for taxes
    
    
    1,600
    
    
    800Net
      loss
    
    $
    (190,068
    )
    $
    (138,476
    )Loss
      per share - basic and diluted
    
    $
    (.02
    )
    $
    (.01
    )Weighted
      average number of common shares outstanding - basic and
      diluted
    
    
    11,271,417
    
    
    9,878,157




*The
accompanying notes are an integral part of these financial
statements*




F-3




**Trinity3
Corporation and Subsidiaries**


**CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)**







**Common
      Stock****Number**
      **of**
      **Shares**
    
    **Amount**
    
    **Additional**
      **Paid-in**
      **Capital**
    
    **Common
      Stock Subscribed, Not Issued**
    
    **Accumulated**
      **Deficit**
    
    **Total**
      **Stockholders’**
      **Equity**Balance
      at December 31, 2002
    
    
    9,781,773
    
    $
    978
    
    $
    8,022
    
    $
    —
    
    $
    (100,595
    )
    $
    (91,595
    )Shares
      issued for cash
    
    
    100,000
    
    
    10
    
    
    49,990
    
    
    —
    
    
    —
    
    
    50,000Shares
      issued for services
    
    
    340,000
    
    
    34
    
    
    3,366
    
    
    —
    
    
    —
    
    
    3,400Net
      loss
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    (138,476
    )
    
    (138,476
    )Balance
      at December 31, 2003
    
    
    10,221,773
    
    
    1,022
    
    
    61,378
    
    
    —
    
    
    (239,071
    )
    
    (176,671
    )Shares
      issued for acquisition (Note 4)
    
    
    480,000
    
    
    48
    
    
    6,252
    
    
    —
    
    
    —
    
    
    6,300Shares
      issued for cash: (Note 7)private
      placement of stock
    
    
    50,000
    
    
    5
    
    
    24,995
    
    
    —
    
    
    —
    
    
    25,000warrant
      exercise under debentures
    
    
    240,000
    
    
    24
    
    
    2,376
    
    
    —
    
    
    —
    
    
    2,400Shares
      issued for services (Note 7)
    
    
    550,000
    
    
    55
    
    
    5,445
    
    
    —
    
    
    —
    
    
    5,500Shares
      subscribed, not issued, 650,000 shares(Note
      7)
    
    
    —
    
    
    —
    
    
    —
    
    
    6,500
    
    
    —
    
    
    6,500Shares
      cancelled
    
    
    (100,000
    )
    
    (10
    )
    
    (990
    )
    
    —
    
    
    —
    
    
    (1,000
    )Net
      loss
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    (190,068
    )
    
    (190,068
    )Balance
      at December 31, 2004
    
    
    11,441,773
    
    $
    1,144
    
    $
    99,456
    
    $
    6,500
    
    $
    (429,139
    )
    $
    (322,039
    )





*The
accompanying notes are an integral part of these financial
statements*




F-4




**Trinity3
Corporation and Subsidiaries**


**CONSOLIDATED
STATEMENTS OF CASH FLOWS**





**Year
      ended**
      **December
      31****2004**
    
    **2003**Cash
      flows from operating activities:Net
      loss
    
    $
    (190,068
    )
    $
    (138,476
    )Adjustments
      to reconcile net loss to net cash used by operating
      activities:Depreciation
    
    
    39,162
    
    
    —Shares
      issued for services
    
    
    5,500
    
    
    3,400Shares
      subscribed for services
    
    
    6,500
    
    
    —Shares
      cancelled, previously issued for services
    
    
    (1,000
    )
    
    —Changes
      in current assets and current liabilities:(Increase)
      decrease accounts receivable, net
    
    
    (83,462
    )
    
    —(Increase)
      decrease inventory
    
    
    (10,245
    )
    
    —Increase
      (decrease) accounts payable
    
    
    125,559
    
    
    38,319Increase
      (decrease) accrued expenses
    
    
    7,333
    
    
    —Increase
      (decrease) taxes payable
    
    
    800
    
    
    —Net
      cash provided (used) by operating activities
    
    
    (99,921
    )
    
    (96,757
    )Cash
      flows from investing activities:Purchases
      of new equipment
    
    
    (27,823
    )
    
    —Acquisition
      of net assets, less cash balance
    
    
    (241,154
    )
    
    —Net
      cash provided (used) by investing activities
    
    
    (268,977
    )
    
    —Cash
      flows from financing activities:Proceeds
      from note payable - related party
    
    
    43,334
    
    
    46,748Issuance
      of common stock:For
      cash
    
    
    25,000
    
    
    50,000Warrants
      exercised
    
    
    2,400
    
    
    —Issuance
      of debentures
    
    
    300,000
    
    
    —Net
      cash provided (used) by financing activities
    
    
    370,734
    
    
    96,748Net
      increase (decrease) in cash
    
    
    1,836
    
    
    (9
    )Cash,
      beginning of period
    
    
    39
    
    
    48Cash,
      end of period
    
    $
    1,875
    
    $
    39




*The
accompanying notes are an integral part of these financial
statements*





F-5





TRINITY3 CORPORATION AND
SUBSIDIARIES




**CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)**


---



**Year
      ended****December
      31****2004**
    
    **2003**Supplemental
      disclosures of non-cash operating, investing, and financing
      activitiesIssuance
      of common stock for acquisition
    
    $
    6,300
    
    $
    —Issuance
      of common stock for services
    
    $
    5,500
    
    $
    3,400Common
      stock subscribed for services
    
    $
    6,500
    
    $
    —





*The
accompanying notes are an integral part of these financial
statements*




F-6




**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**1.**  **ORGANIZATION
AND HISTORY**





Trinity 3
Corporation, formerly known as eNexi Holdings, Inc. and Caiban Holdings, Inc.
(the Company), a Delaware Corporation, was incorporated on September 15, 2000.
The Company is focused in three divisional areas: healthcare, consumer products
and developing export and import opportunities with East Asian countries.




As
disclosed in Note 4, the Company acquired Skyline Orthopedics, Inc. on February
11, 2004, and accounted for the acquisition as a purchase.


****


**2.**  **SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES**




**Principles
of Consolidation**








The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries. Significant intercompany accounts and transactions
have been eliminated in consolidation.





**Use
of Estimates**





The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.





**Fair
Value of Financial Instruments** ****




The
Company measures its financial assets and liabilities in accordance with
accounting principals generally accepted in the United States of America. For
certain Company financial instruments, including cash, accounts payable and
other accrued liabilities, the carrying amounts approximate fair value, due to
their short maturities. The amounts shown for notes payable also approximate
fair value because current interest rates offered the Company for debt of
similar maturities are substantially the same.




F-7





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**Revenue**





Revenues
are recognized on the date services and related products are provided to
patients and are recorded at amounts estimated to be received under
reimbursement arrangements with third-party payors, including private insurers,
prepaid health plans, and Medicare.





Due to
the nature of the industry and the reimbursement environment in which the
Company operates, certain estimates are required to record net revenues and
accounts receivable at their net realizable values. Inherent in these estimates
is the risk that they will have to be revised or updated as additional
information becomes available. Specifically, the complexity of many third-party
billing arrangements and the uncertainty of reimbursement amounts for certain
services from certain payors may result in adjustments to amounts originally
recorded. Such adjustments are typically identified and recorded at the point of
cash application, claim denial or account review.





Management
performs periodic analyses to evaluate accounts receivable balances to ensure
that recorded amounts reflect estimated net realizable value. Specifically,
management considers historical realization data, accounts receivable aging
trends, other operating trends, the extent of contracted business and business
combinations. Also considered are relevant business conditions such as
governmental and managed care payor claims processing procedures and system
changes.





**Accounts
Receivable**





Accounts
receivable are reduced by an allowance for doubtful accounts which provides for
those accounts from which payment is not expected to be received, although
services were provided and revenue was earned. Upon determination that an
account is uncollectible, it is written-off and charged to the
allowance.




**Inventory**





Inventory,
which consists only of finished goods, is stated at the lower of cost or market,
with cost being determined by the first-in, first-out (FIFO)
method.




**Property,
Equipment and Depreciation**





Property
and equipment was purchased in the acquisition of Skyline Orthopedics, Inc. (See
Note 4) and valued at the fair market value on the date of the purchase.
Depreciation is recorded over the estimated useful lives of the assets (three to
five years) using the straight-line method. Major improvements are capitalized,
while repair and maintenance expenditures are expensed as incurred. Depreciation
expense for the years ended December 31, 2004 and 2003 was $39,162 and $-0-,
respectively. The following table summarizes total Property and
Equipment:





**December
      31, 2004**
    
    **December
      31, 2003**Equipment
    
    $
    135,120
    
    $
    —Computers
      and Software
    
    
    55,454
    
    
    —Less:
      Accumulated Depreciation
    
    
    (38,433
    )
    
    —Net
    
    $
    152,141
    
    $
    —




F-8





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**







Goodwill




Goodwill
arising from business combinations represents the excess of the purchase price
over the estimated fair value of the net assets of the businesses acquired. In
accordance with the provisions of SFAS No. 142, goodwill is not amortized but
tested annually for impairment or more frequently if circumstances indicate the
possibility of impairment *.* Management does not believe any impairment of its goodwill existed at December
31, 2004




**Income
Taxes**




Deferred
income taxes are reported using the liability method. Deferred tax assets are
recognized for deductible temporary differences and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.


****


**Net
Loss Per Share**




In
February 1997, the Financial Accounting Standards Board (FASB) issued SFAS No.
128 “Earnings Per Share” which requires the Company to present basic and diluted
earnings per share, for all periods presented. The computation of loss per
common share (basic and diluted) is based on the weighted average number of
shares actually outstanding during the period. The Company has common stock
equivalents, which have not been included in the net loss per share calculation
since their effect would be anti-dilutive.





**Stock
Based Compensation**





The
Company applies APB Opinion 25 and related interpretation in accounting for
stock options. The Company did not record any compensation expense related to
stock option grants, for the years ended December 31, 2004 and 2003, as all
options were granted with exercise prices at or above fair market
value.




**Options**
    
    **Weighted
      Average Exercise Price**Options
      outstanding at December 31, 2002
    
    
    700,000
    
    $
    .825Granted
      during the year
    
    
    5,000,000
    
    
    .011Surrendered,
      forfeited or expired
    
    
    —
    
    
    —Exercised
    
    
    —
    
    
    —Options
      outstanding at December 31, 2003
    
    
    5,700,000
    
    $
    .111Granted
      during the year
    
    
    —
    
    
    —Surrendered,
      forfeited or expired
    
    
    —
    
    
    —Exercised
    
    
    —
    
    
    —Options
      outstanding at December 31, 2004
    
    
    5,700,000
    
    $
    .111





Exercisable
options outstanding and the related weighted average exercise price at December
31, 2004 and 2003 were 5,700,000 at $.111 per share and 700,000 at $.825 per
share, respectively.


F-9


**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





The
following tabulation summarizes certain information concerning outstanding and
exercisable options at December 31, 2004 and 2003:




**2004**
    
    
    **2003**Outstanding
      options:Number
      outstanding
    
    
    5,700,000
    
    
    5,700,000Weighted
      average exercise price
    
    $
    .111
    
    $
    .111Weighted
      average remainingcontractual life in years
    
    
    8.210
    
    
    9.375Exercisable
      options:Number
      outstanding
    
    
    5,700,000
    
    
    5,700,000Weighted
      average exercise price
    
    $
    .111
    
    $
    .111





If the
Company had elected to recognize compensation based on the fair value of the
options granted at the grant date, net loss and loss per share would not have
been affected as shown below:




**2004**
    
    **2003**Pro
      Forma:Net
      Loss - as reported
    
    $
    (190,068
    )
    $
    (138,476
    )Stock
      based compensation expense included inreported net income, net of
      related tax effect.
    
    $
    —
    
    $
    —Stock
      based compensation expense, under fairvalue based method, net of
      related tax effect.
    
    $
    —
    
    $
    —Pro
      forma net loss
    
    $
    (190,068
    )
    $
    (138,476
    )Net
      Loss Per Share - as reported
    
    $
    (0.02
    )
    $
    (0.01
    )Pro
      forma net loss per share
    
    $
    (0.02
    )
    $
    (0.01
    )





No
options were granted during the year ended December 31, 2004. The fair value of
each option granted during the year ended December 31, 2003, was $-0-. The fair
value of each option grant was estimated on the date of the grant using the
Black-Scholes Option Pricing Module, using the following
assumptions:




**2004**
    
    
    **2003**Risk-free
      interest rate
    
    
    4.24
    %
    
    3.60
    %Expected
      life in years
    
    
    8.210
    
    
    9.375Expected
      volatility
    
    
    9.54
    %
    
    19.85
    %Expected
      dividend yield
    
    
    —
    
    
    —




F-10


****


**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**New
Accounting Pronouncements**





In
December 2004 the FASB issued revised SFAS No. 123R, "Share-Based Payment". SFAS
No. 123R sets accounting requirements for "share-based" compensation to
employees and requires a company to measure the cost of employee services
received in exchange for an award of equity instruments based on the fair value
of the award on the date of grant. The cost will be recognized over the period
during which the employee is required to provide service in exchange for the
award (usually the vesting period). Adoption of SFAS No. 123R is required as of
the beginning of the first interim or annual reporting period that begins after
December 15, 2005, for the company. Accordingly, the Company will adopt the
statement for the interim reporting period ending March 31, 2006. The Company
currently discloses the effect on net (loss) income and (loss) earnings per
share of the fair value recognition provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation". The Company is currently evaluating the impact of the
adoption of SFAS 123R on its financial position and results of operations,
including the valuation methods and support for the assumptions that underlie
the valuation of the awards.





**3.**  **GOING
CONCERN**




The
accompanying consolidated financial statements, which have been prepared in
conformity with accounting principles generally accepted in the United States of
America, contemplates the continuation of the Company as a going concern. The
Company has sustained significant losses and has used capital raised through the
issuance of stock to fund its activities. Continuation of the Company as a going
concern is contingent upon establishing and achieving profitable operations.
Such operations will require management to secure additional financing for the
Company in the form of debt or equity.


F-11





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**4.**  **ACQUISITION**





On
February 11, 2004, the Company completed the acquisition of all of the issued
and outstanding stock of Skyline Orthopedics, Inc., a California corporation
(“Skyline”), and its wholly-owned subsidiary, Core Management Systems, Inc., a
California corporation (“Core”), making Skyline a wholly-owned subsidiary of the
Company. Effective with the date of the acquisition, we merged all operations of
Core into Skyline. Skyline, located in Newport Beach, California, is engaged in
the marketing and distribution of durable medical equipment (DME) and billing
systems to hospital networks, physician groups, and healthcare insurance
providers throughout California and Nevada. The final terms of the acquisition
were as follows:





§
    $250,000
      in cash at the closing.


§
    Issuance
      of 480,000 shares of restricted common stock (of this, 450,000 were issued
      at the closing of the acquisition in February 2004, and 30,000 shares were
      issued in December 2004 to extinguish a $250,000 note payable issued at
      the closing of the acquisition).


§
    Commencement
      of a consulting agreement with the selling shareholder for a period of up
      to 12 months. Under the consulting agreement, the selling shareholder
      received an additional 250,000 shares of common
stock.





The
Skyline shareholder is an unrelated party to the Company and its affiliates, and
the purchase price was determined by arms-length negotiations. The cash portion
of the purchase price was paid by the Company using funds raised in a private
placement of debentures and warrants as discussed in Note 7.





*The
fair market value on February 11, 2004 of net assets purchased is as
follows:*





Cash
    
    $
    8,846Accounts
      receivable, Net
    
    
    101,014Inventory
    
    
    45,158Property
      and equipment, FMV
    
    
    163,479Goodwill
    
    
    5,050Total
      cost of acquisition
    
    
    323,547Less:
      liabilities assumed
    
    
    (67,247
    )Net
      consideration paid
    
    $
    256,300





*Consideration
paid:*





Cash
    
    $
    250,000Stock
      Issued: 480,000 shares
    
    
    6,300Net
      consideration paid
    
    $
    256,300




F-12





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**5.**  **RELATED
PARTY TRANSACTIONS**





**Notes
Payable - Related Parties**





Throughout
2003 and 2004, the Company’s officers and directors made various loans to the
Company. These loans are non interest bearing and are payable upon demand. The
total amount of these loans at December 31, 2004 and 2003 was $93,582 and
$50,248, respectively.





**6.**  **LEASE
COMMITMENTS**





In
January of 2003, the Company entered into a month to month office facility
sublease for its corporate headquarters from an entity owned and controlled by
one of its officers and directors, a related party. Lease payments are $6,282,
plus prorated utilities, common area maintenance (CAM) and property taxes.





The
healthcare division leases office space in Newport Beach, California pursuant to
the terms of a three-year lease at $3,589 per month. This lease is scheduled to
expire May 15, 2005.





Total
rent expense is summarized as follows:





**12/31/2004**
    
    **12/31/2003**Rent
      Expense
    
    $
    143,580
    
    $
    75,384





Total
minimum lease payments under non-cancelable lease commitments are as
follows:


**For
      the year ended December 31,****2005**
    
    **2006**
    
    **2007**
    
    **2008**
    
    **2009**Minimum
      Lease Payments due
    
    $
    16,151
    
    $
    —
    
    $
    —
    
    $
    —
    
    $
    —





**7.** **STOCK,
DEBENTURE AND WARRANT TRANSACTIONS**





**Sale
of Common Stock with Warrants**





During
the years ended December 31, 2004 and 2003, the Company sold 50,000 and 100,000
shares of its common stock, in private placements pursuant to provisions of
Section 4(2) of the Securities Act of 1933 to accredited investors, for net
proceeds of $25,000 and $50,000, respectively. In 2004, each share “unit”
contained one attached “A” warrant exercisable at $1.00 per share, expiring two
years from registration of the underlying stock, and one “B” warrant exercisable
at $2.00 per share, expiring 3 years from the date of issuance of the unit.





At
December 31, 2004, and 2003, 300,000 and 200,000, of these warrants were issued
and outstanding, respectively.





**Sale
of Debentures with Warrants**





During
the year ended December 31, 2004, the Company raised a total of $302,400 from a
private placement of debentures and warrants. The Company issued $300,000 in 10%
convertible debentures, plus warrants to acquire 240,000 shares of Company
common stock at $0.01 per share. Net proceeds received from the debenture
offering were $300,000. The debentures, which are secured by substantially all
of the assets of the Company, are due March 1, 2005, and are convertible at the
option of the holder into Company common stock at $2.00 per share. All warrants
issued under the debenture offering were exercised, for a total amount of
240,000 common shares issued in the first quarter of 2004. Net proceeds received
from the exercise of the warrants was $2,400.





F-13


On March
2, 2005, the Company received a notice of default from the holder of a $250,000
debenture, who subsequently agreed to grant the Company until March 31, 2005 to
pay down a portion of the debenture. The Company was unable to do so, and on
March 31, 2005, the holder notified the Company of its default on the debenture
and the intention to convert the outstanding balance into common stock, unless
the debenture is paid in full by the end of a 60 day grace period, as provided
for in the debenture.





**Issuance
of Common Stock for Services**





During
the years ended December 31, 2004 and 2003, the Company entered into various
consulting agreements. The agreements provide for 200,000 shares of restricted
common stock and 1,000,000 shares of unrestricted common stock to be issued for
services provided in 2004 and 340,000 shares of unrestricted common stock to be
issued for services provided in 2003. The value of the compensation was based on
the fair market value of the shares on the dates of the agreements. The Company
recorded compensation expense related to these agreements of $12,000 and $3,400
for the years ended December 31, 2004 and 2003, respectively.





During
the years ended December 31, 2004 and 2003, 550,000 shares of common stock
valued at $5,500 and 340,000 shares of common stock valued at $3,400,
respectively, had been issued for services under the agreements discussed
above.





During
the year ended December 31, 2004, 150,000 shares of common stock valued at
$1,500 were subscribed for services provided under the agreements discussed
above. Additionally, 500,000 shares of common stock valued at $5,000 were
subscribed for other services.





**Issuance
of Warrants on Common Stock for Services**





During
the years ended December 31, 2004, and 2003, warrants were issued to acquire
1,100,000 shares of the Company’s common stock exercisable between $.01 and $.06
per share, the fair market value on the date of grants. These warrants were
issued to service providers to the company, including certain consultants and
legal counsel for services to be rendered to the Company.





**Issuance
of Common Stock to Cancel Note Payable**





During
the year ended December 31, 2004, 30,000 shares of common stock were issued in
exchange for settlement of a $250,000 Note Payable related to the acquisition of
Skyline (See Note 4).





**Cancellation
of Preferred Stock**





In April
2004, the company cancelled its Preferred Series A, B, C, and D stock. No shares
were issued or outstanding during the years ended December 31, 2004 and 2003,
respectively.




F-14





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**8.**  **EMPLOYEE
STOCK OPTION PLANS**





**2000
Employee Stock Option Plan**





In 2000
the Board of Directors adopted the 2000 Employee Stock Option Plan. Under the
2000 plan, 300,000 shares of common stock were authorized for issuance as
Incentive Stock Options or Non-Incentive Stock Options to our key employees,
officers, directors or consultants.





The
purchase price of the common stock subject to each Incentive Stock Option shall
not be less than the fair market value (as determined in the 2000 Plan), or in
the case of the grant of an Incentive Stock Option to a principal stockholder,
not less that 110% of fair market value of such common stock at the time such
option is granted. The purchase price of the common stock subject to each
Non-Incentive Stock Option shall be determined at the time such option is
granted, but in no case less than 85% of the fair market value of such shares of
common stock at the time such option is granted.





The 2000
plan shall terminate 10 years from the earlier of the date of its adoption by
the Board of Directors or the date on which the 2000 plan is approved by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock entitled to vote thereon, and no option shall be granted after
termination of the 2000 plan. Subject to certain restrictions, the 2000 plan may
at any time be terminated and from time to time be modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock present, or represented, and entitled to vote at a meeting duly
held in accordance with the applicable laws of the State of Delaware. The
Company granted options on all 300,000 shares of stock under the 2000
Plan.





**2002
Incentive and Nonstatutory Stock Option Plan**





The Board
of Directors adopted, and the shareholders approved, the 2002 Incentive and
Nonstatutory Stock Option Plan (the “2002 Plan”) on August 16, 2002. Under the
2002 Plan, 400,000 shares of common stock have been authorized for issuance as
Incentive Stock Options or Nonstatutory Stock Options to our key employees,
officers, directors or consultants.





The
purchase price of the common stock subject to each Incentive Stock Option shall
not be less than the fair market value (as determined in the 2002 Plan), or in
the case of the grant of an Incentive Stock Option to a principal stockholder,
not less that 110% of fair market value of such common stock at the time such
option is granted. The purchase price of the common stock subject to each
Nonstatutory Stock Option shall be determined at the time such option is
granted, but in no case less than 100% of the fair market value of such shares
of common stock at the time such option is granted.





The 2002
Plan shall terminate 10 years from the earlier of the date of its adoption by
the Board of Directors or the date on which the 2002 Plan is approved by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock entitled to vote thereon, and no option shall be granted after
termination of the 2002 Plan. Subject to certain restrictions, the 2002 Plan may
at any time be terminated and from time to time be modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock present, or represented, and entitled to vote at a meeting duly
held in accordance with the applicable laws of the State of Delaware. The
Company granted options on all 400,000 shares of stock under the 2002
Plan.




F-15





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**2003
Incentive and Nonstatutory Stock Option Plan**





On May
31, 2003, the Board of Directors approved the Trinity3 Corporation Incentive and
Nonstatutory Stock Option Plan. The 2003 Plan was approved by its shareholders
at the May 31, 2004 Shareholder meeting. Under the 2003 Plan, 5,000,000 shares
of common stock have been authorized for issuance as Incentive Stock Options or
Nonstatutory Stock Options to our key employees, officers, directors or
consultants. The terms of the 2003 are substantially the same as the 2002 Plan.
The Company granted options on all 5,000,000 shares of stock under the 2003
Plan.





**2004
Omnibus Securities and Stock Option Plan**





On April
26, 2004, the Company’s Board of Directors approved the Trinity3 Corporation
2004 Omnibus Securities and Stock Option Plan. The Plan was approved by the
shareholders at the Annual Shareholder Meeting on May 31, 2004. Under the 2004
Plan, 2,000,000 shares of common stock have been authorized for issuance as
Incentive Stock Options or Nonstatutory Stock Options to key employees,
officers, directors or consultants. The terms of the 2004 Plan are substantially
the same as the 2003 Plan, more fully described in the Company’s Annual Report
on form 10-KSB for the year ended December 31, 2003.





No grants
have occurred to date under the 2004 Plan.





F-16





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**9.** **INCOME
TAXES**
 
 The
components of the deferred tax assets are as follows:




**2004**
    
    
    **2003**Deferred
      tax assets:Net
      operating loss carryforward
    
    $
    1,626,000
    
    $
    1,550,000Valuation
      allowance
    
    
    (1,626,000
    )
    
    (1,550,000
    )Net
      deferred tax assets
    
    $
    —
    
    $
    —





The
Company had available approximately $4,080,000 and $3,890,000 of unused Federal
and State net operating loss carryforwards, respectively, at December 31, 2004
and 2003, which were generated primarily by one of the company’s subsidiaries,
that may be applied against future taxable income. These net operating loss
carryforwards expire for Federal purposes in 2024. There is no assurance that
the Company will realize the benefit of the net operating loss carryforwards.
$800 and $1,600 is included in the provision for income taxes for the minimum
tax due to the State of California for the years ended December 31, 2004 and
2003, respectively.





SFAS No.
109 requires a valuation allowance to be recorded when it is more likely than
not that some or all of the deferred tax assets will not be realized. At
December 31, 2004 and 2003, valuations for the full amount of the net deferred
tax asset were established due to the uncertainties as to the amount of the
taxable income that would be generated in future years.





Under the
Tax Reform Act of 1986, the benefits from net operating losses carried forward
may be impaired or limited in certain circumstances. Events which may cause
limitations in the amount of net operating losses that the Company may utilize
in any one year include, but are not limited to, a cumulative ownership change
of more than 50% over a three-year period. The impact of any limitations that
may be imposed for future issuances of equity securities, including issuances
with respect to acquisitions, have not been determined.





Reconciliation
of the differences between the statutory tax rate and the effective income tax
rate is as follows:





****
    
    
    **December
      31, 2004**
    
    
    **December
      31, 2003**Statutory
      federal tax (benefit) rate
    
    
    (34.00
    )%
    
    (34.00
    )%Statutory
      state tax (benefit) rate
    
    
    (5.83
    )%
    
    (5.83
    )%Effective
      tax rate
    
    
    (39.83
    )%
    
    (39.83
    )%Valuation
      allowance
    
    
    39.83
    %
    
    39.83
    %Effective
      income tax rate
    
    
    0.00
    %
    
    0.00
    %




F-17





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**10.**  **PRO
FORMA**





The
following tables represent restated pro forma results as if the acquisition of
Skyline had occurred on January 1, 2003. These pro forma financial statements
make certain assumptions as outlined below (see (a) - (d) below) and are based
upon such assumptions. These pro forma statements are not necessarily indicative
of past results, and actual past results may vary from these pro forma
statements.





*Unaudited
Pro forma Consolidated Income Statements, Trinity3 and Skyline, 2004 vs.
2003:*




**Year
      ended****December
      31, 2004**
    
    **Year
      ended****December
      31, 2003******
      ****
    
    
    **Skyline**
    
    
    **Trinity3**
    
    
    **Combined**
    
    
    **Skyline**
    
    
    **Trinity3**
    
    
    **Combined**Revenues
    
    $
    1,308,072
    
    
    —
    
    $
    1,308,072
    
    $
    1,544,272
    
    
    20,000
    
    $
    1,564,272Reimbursement
      Adjustment
    
    
    439,400
    
    
    —
    
    
    439,400
    
    
    562,763
    
    
    —
    
    
    562,763Net
      Sales
    
    
    868,672
    
    
    —
    
    
    868,672
    
    
    981,509
    
    
    20,000
    
    
    1,001,509Cost
      of Revenues
    
    
    278,840
    
    
    —
    
    
    278,840
    
    
    290,858
    
    
    —
    
    
    290,858Depreciation
    
    
    32,696
    
    
    —
    
    
    32,696
    
    
    32,696
    
    
    —
    
    
    32,696Gross
      profit
    
    
    557,136
    
    
    —
    
    
    557,136
    
    
    657,955
    
    
    20,000
    
    
    677,955Operating
      expenses:General
      and administrative
    
    
    489,823
    
    
    277,733
    
    
    767,556
    
    
    529,978
    
    
    157,676
    
    
    687,654Earnings
      before interest & taxes
    
    
    67,313
    
    
    (277,733
    )
    
    (210,420
    )
    
    127,977
    
    
    (137,676
    )
    
    (9,699
    )Interest
      expense
    
    
    —
    
    
    30,000
    
    
    30,000
    
    
    —
    
    
    30,000
    
    
    30,000Provision
      for income taxes
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    —Net
      Income
    
    $
    67,313
    
    
    (307,733
    )
    $
    (240,420
    )
    $
    127,977
    
    
    (167,676
    )
    $
    (39,699
    )Earnings
      (Loss) per share-basicand diluted
    
    $
    —
    
    
    —
    
    $
    (0.02
    )
    $
    —
    
    
    —
    
    $
    (0.00
    )





(a)
    Tables
      based on assumption that the acquisition took place on January 1, 2003,
      and all reported revenues are from January 1, 2003
  forward.





(b)
    Previous
      owner's salary for period January 1, 2003 to February 11, 2004, is backed
      out to zero.





(c)
    Assumes
      entire $163,479 Fair Market Value of Property & Equipment at
      acquisition date of February 11, 2004 is acquired on January 1, 2003 and
      is depreciated over a subsequent 60 month life. This is $8,174 per
      calendar quarter.





(d)
    Assumes
      $300,000, 10% subordinated debentures issued on January 1, 2003. Interest
      expense is $7,500 per calendar quarter.





F-18





**Trinity3
Corporation and Subsidiaries**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
31, 2004 AND 2003**





**11.**  **SEGMENT
INFORMATION**




Trinity3
currently is divided into three business segments: healthcare, consumer products
and East Asian Import Export. Consumer products and East Asian Import Export
segments are  currently
not reportable segments, as neither their operations, nor assets, meet the 10%
threshold requirements of SFAS 131. East Asian Import Export is currently
inactive.  The
healthcare segment is anchored by Skyline Orthopedics, Inc. (“Skyline”) as
described more fully in Note 4. The Healthcare segment is engaged in the
marketing and distribution of durable medical equipment and billing systems, to
hospitals, physician groups, and healthcare insurance providers in California
and Nevada. The segment’s products include Continuous Passive Motion (CPM)
equipment, and a wide variety of orthopedic soft goods, including braces and
supports for arms, elbows, knees and legs. The following table breaks out
reportable information for the healthcare segment, for the three months and
years ended December 31, 2004 and 2003:




***Healthcare
      Segment Operations:***
    
    **Year
      ended****December
      31****2004**
    
    
    **2003**Gross
      Revenues
    
    $
    1,247,394
    
    $
    —Reimbursement
      Adjustment
    
    
    401,473Net
      Revenues
    
    
    845,921Cost
      of Net Revenues
    
    
    203,260
    
    
    —Gross
      profit
    
    
    642,661
    
    
    —Operating
      expenses:General
      and administrative
    
    
    489,823
    
    
    —Segment
      operating earnings
    
    $
    152,838
    
    $
    —***Healthcare
      Segment Assets:***Total
      assets
    
    $
    471,455
    
    $
    —





Segment
Reporting does not include depreciation and income taxes attributable to the
segment, nor does it include corporate general, administrative, and interest
expense. The following table reconciles Segment Operating Earnings to
Consolidated Earnings (Loss) for the three months and years ended December 31,
2004 and 2003:




***Reconciliation
      of Segment Operations to Consolidated Earnings
      (Loss):***
    
    **Year
      ended****December
      31****2004**
    
    
    **2003**Segment
      operating earnings
    
    $
    152,838
    
    $
    —Segment
      depreciation
    
    
    (39,162
    )
    
    —Income
      taxes
    
    
    (1,600
    )
    
    —Corporate
      general and administrative expenses
    
    
    (277,732
    )Corporate
      interest expense
    
    
    (24,412
    )
    
    —Consolidated
      earnings (Loss)
    
    $
    (190,068
    )
    $
    —




* * * *
*







F-19