U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 
 Form 10-QSB
 
 
 
  
 For the quarterly period ended March 31, 2004
 
 
 
 
 For the transition period from _______________ to _______________.
 
 
 Commission file number: 000-26651
 
 
 Trinity3 Corporation
 (Exact name of registrant as specified 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) 
 Registrant's telephone number, including area code (949) 910-2383
 
 
 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 No_X_
 
 
 Applicable only to issuers involved in bankruptcy proceedings during the preceding five years
 
 Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes No
 
 
 Applicable only to corporate issuers
 
 State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. As of June 18, 2004, there were 11,411,773 shares of common stock, par value $0.0001, issued and outstanding.
 
 
 Transitional Small Business Disclosure Format
 (check one):
 
 Yes  No .
 
  TRINITY3 CORPORATION
 
 
  TABLE OF CONTENTS
 
 PART IItem 1.
Financial Statements
3Item 2.
Management's Discussion and Analysis or Plan of Operation
13Item 3.
Controls and Procedures
17PART IIItem 1.
Legal Proceedings
18Item 2.
Changes in Securities and Use of Proceeds
18Item 3.
Defaults Upon Senior Securities
18Item 4.
Submission of Matters to a Vote of Security Holders
18Item 5.
Other Information
18Item 6.
Exhibits and Reports on Form 8-K
19
 2
  PART I
 
  
  
 ITEM 1  Financial Statements
 
 3
 Trinity3 Corporation and Subsidiaries
 (Formerly known as eNexi Holdings, Inc. and Caiban Holdings, Inc.)
 CONSOLIDATED BALANCE SHEETS
 ASSETS**March 31, 2004**(Unaudited)


December 31, 2003Current assets:Cash

$
24,445

$
39Accounts Receivable


186,460Less: Allowance for doubtful accounts


(82,042
)Net


104,418Inventory


45,158Prepaids


6,695Total Current Assets


180,716


39Property, Plant and Equipment


163,479Less: Accumulated Depreciation


(6,630
)Net


156,849Goodwill (Note 5)


253,250Total assets

$
590,815

$
39
 LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
178,705

$
125,662Accrued expenses


1,836Note payable - related party


49,676


50,248Income tax payable


1,600


800Note Payable   (Notes 3 and 5)


250,000Convertible Debentures   (Notes 3 and 5)


300,000Total current liabilities


781,817


176,710Stockholders equity: (Notes 3 and 5)


-


-Common Stock:$0.0001 par value, 2,000,000,000 shares authorized, 11,411,773 and 10,221,773 shares issuedand outstanding at March 31, 2004 and December 31, 2003, respectively.


1,141


1,022Common Stock subscribed  650,000 shares


1,475Additional paid-in capital


97,659


61,378Accumulated deficit


(291,277
)

(239,071)Total stockholders equity (deficit)


(191,002
)

(176,671
)Total liabilities and stockholders equity

$
590,815

$
39
 
 *The accompanying notes are an integral part of these financial statements*
 4
  Trinity3 Corporation and Subsidiaries
 (Formerly known as eNexi Holdings, Inc. and Caiban Holdings, Inc.)
 CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
 (UNAUDITED)
  Three months ended
March 31, 2004

Three months ended
March 31, 2003Revenues
$
137,498

-Cost of Goods Sold

34,691

-Gross Margin

102,807

-Operating expenses:General and administrative

144,947

34,529Earnings (Loss) before Interest, Taxes & Depreciation

(42,140)

(34,529)and provision for income taxesInterest Expense

1,836

-Depreciation

6,630

-Loss from operations

(50,606)

(34,529)Provision for taxes

1,600

-Net loss
$
(52,206)
$
(34,529)Loss per share
$
(.00)
$
(.00)Weighted average number of common shares outstanding

10,899,575

9,781,773
  The accompanying notes are an integral part of these financial statements
  5
  Trinity3 Corporation and Subsidiaries
(Formerly known as eNexi Holdings, Inc. and Caiban Holdings, Inc.)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)



**Common Stock**Number of Shares


Amount


Additional Paid-in Capital


Common Stock Subscribed


Deficit Accumulated


Total Stockholders EquityBalance 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)


450,000


45


4,455


-


-


4,500Shares issued for cash: (Note 3)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 3)


450,000


45


4,455


-


-


4,500Shares subscribed (650,000 shares)


-


-


-

$
6,500


-


6,500Shares subscribed - Deferred compensation


-


-


-


(3,350
)

-


(3,350
)Shares issued  Deferred compensation


-


-


-


(1,675
)

-


(1,675
)Net loss














(52,206
)

(52,206
)Balance at March 31, 2004


11,411,773

$
1,141

$
97,659

$
1,475

$
(291,277
)
$
(191,002
)
 The accompanying notes are an integral part of these financial statements
 
 6
  Trinity3 Corporation and Subsidiaries
 (Formerly known as eNexi Holdings, Inc. and Caiban Holdings, Inc.)
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 Three months ended
March 31, 2004

Three months ended
March 31, 2003Cash flows from operating activities:Net loss

$
(52,206
)
$
(34,529
)Depreciation


6,630


-Adjustments to reconcile net loss to net cash used in operating activities:Changes in current assets and current liabilities:





-Increase (decrease) accounts receivable, net


(104,418
)

-Increase (decrease) inventory


(45,158
)

-Increase (decrease) prepaids/deposits


(6,695
)

(25,000
)Increase (decrease) accounts payable


53,043


3,036Increase (decrease) accrued expenses


1836


-Increase (decrease) taxes payable


800


-Net cash provided by (used in) operations


(146,168
)

(56,493
)Cash flows from financing activities:Proceeds from note payable - related party


-


56,453Payment of note payable - related party


(572
)

-Issuance of common stock:





-for cash 


25,000


-for services 


4,500


-under warrant exercise 


2,400


-Stock subscription


1,475Acquisition related issuances:note payable 


250,000


-stock -


4,500


-Issuance of debentures


300,000


-Investment activities:Property, plant & equipment, net


(163,479
)

-Goodwill generated in acquisition


(253,250
)

-Net cash provided by (used in) financing &financing & investment activities


170,574


56,453Net increase (decrease) in cash


24,406


(40
)Cash, beginning of period


39


48Cash, end of period

$
24,445

$
8
  The accompanying notes are an integral part of these financial statements
  7
  TRINITY3 CORPORATION AND SUBSIDIARIES
 (Formerly known as eNexi Holdings, Inc. and CaiBan Holdings, Inc.)
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 (UNAUDITED)
  **
**
Three months ended
March 31, 2004
**
Three months ended
March 31, 2003
****
**
**
**
**
***Supplemental disclosures of non-cash**operating, investing, and financing activities*Issuance of stock for acquisition$
4,500

$
-Issuance of stock for services

$
4,500

$
-
  The accompanying notes are an integral part of these financial statements
  8
 Trinity3 Corporation and Subsidiaries
 (Formerly known as eNexi Holdings, Inc. and CaiBan Holdings, Inc.)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2004 AND 2003
 
  1.  INTERIM FINANCIAL INFORMATION
 
 The financial statements of Trinity3 Corporation and Subsidiaries (the Company) as of March 31, 2004 and for the three months ended March 31, 2004 and 2003 and footnote information are unaudited. All adjustments (consisting only of normal recurring adjustments) have been made which, in the opinion of management, are necessary for a fair presentation. Results of operations for the three months ended March 31, 2004 are not necessarily indicative of the results that may be expected for any future period. The balance sheet at December 31, 2003 was derived from audited financial statements.
 
 Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted. These financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2003.
 
  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.
 
 Useful Life of Assets, Depreciation
 
 Equipment  5 years
 Computers and Software  3 years
 9
 3.  STOCK, DEBENTURE AND WARRANT TRANSACTIONS
 
 Sale of Common Stock
 
 During the first quarter of 2004, the company sold 50,000 shares of its common stock, in a private placement pursuant to provisions of Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D, to accredited investors, for net proceeds of $25,000.
 
 Sale of Debentures with Warrants
 
 During the first quarter of 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 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.
 
 Issuance of Common Stock for Services Rendered
 
 During the first quarter of 2004, 597,500 shares were issued or accrued at fair market value of $.01 per share to various consultants for services rendered and to be rendered to the company. The expense of these shares resulted in a charge of $5,975 recorded in the current period.
   Issuance of Warrants on Common Stock for Services Rendered
 
 During the first quarter of 2004, warrants were issued, exercisable at $.01 per share, the fair market value on the date of grant, on 600,000 shares of the companys stock to certain consultants to the company for services to be rendered to the company.
 
 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 2002 or 2003.
 10
  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. Skyline and Core, located in Newport Beach, California, are 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 Company intends to continue and expand this business. Terms of the acquisition were $250,000 in cash at the closing, issuance of a promissory note in the principal amount of $250,000, issuance of 450,000 shares of Company common stock, and 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 Company stock which vests over the subsequent 12 months. 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 3.
 
 The Fair Market Value on 2/11/04 of Assets purchased is as follows:
 
 Asset

AmountCash
$
8,846Accounts Receivable, Net

101,014Inventory

45,158Property and Equipment, FMV

163,479Goodwill generated

253,250Total Cost of Acquisition

571,747Less: Liabilities Assumed

(67,247)Net consideration paid
$
504,500Consideration Paid by Category:Cash
$
250,000Note Payable

250,000Stock Issued (450,000 shares)

4,500$
504,500  The Company has elected to exercise its option under the Purchase/Sale agreement to offset certain scheduled payments to the seller, including $150,000 due May 11, 2004 and $100,000 due August 9, 2004, pending the final outcome of the resolution of certain acounting and contractual issues. The Purchase Agreement allows for offsetting certain specific and non specific liabilities and losses incurred as of transaction date and post-transaction date. Management has estimated the minimum amount of offsets to the purchase price to be approximately $297,000.
 
 11
   5. SUBSEQUENT EVENTS
 
 Stock Option Plans
 
 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 December 31, 2003 10K filing. No grants have occurred to date under the 2004 Plan.
  12
  ITEM 2 Management 's Discussion and Analysis or Plan of Operation
 
 Disclaimer Regarding Forward Looking Statements
 
  
  
   Three months ended
March 31, 2004


Three months ended
March 31, 2003Statement of Operations Data:Revenue
$
137,498

$
-Expenses

189,704


34,529Net Loss

(52,206)


(34,529)Balance Sheet Data:Current Assets

180,716


25,008Total Assets

590,815


25,008Total Current Liabilities

781,817


151,132Accumulated Deficit

(291,277)


(135,124)Stockholders Equity (Deficit)
$
(191,002)

$
(126,124)
  13
  Summary Overview
 
  
  
  
  
 Results of Operations
 
  Introduction
  14
  Three months ended March 31, 2004 compared to three months ended March 31, 2003 (unaudited)
 
 Revenues, Expenses and Loss from Operations
 
 Our revenues, cost of goods sold, general and administrative expenses, and loss from operations for the three months ended March 31, 2004 and 2003, respectively, are as follows:
  Three months ended
March 31, 2004


Three months ended
March 31, 2003

Percentage ChangeRevenue
$
137,498

$
-

nmCost of Goods Sold

34,691


-

nmGeneral & Administrative Expenses

144,947


34,529

319%Interest, Depreciation and Taxes

10,066


-

nmLoss from Operations
$
(52,206)

$
(34,529)

51%
  Revenues
 
 .
 
 Cost of Goods Sold
 
   
 Operating, General and Administrative Expenses
 
    Net Loss
   15
  Liquidity and Capital Resources
 
 Introduction
 
  
   March 31, 2004


March 31, 2003


Percentage ChangeCash
$
24,445

$
8


nmTotal Current Assets

180,716


25,008


622%Total Assets

590,815


25,008


2,262%Total Current Liabilities

781,817


151,132


417%Total Liabilities
$
781,817

$
151,132


417%
  Cash Requirements
 
  
 Sources and Uses of Cash
 
 Operations
 
  
 Financing
 
   16
  Debt Instruments, Guarantees, and Related Covenants
 
  
  
 Critical Accounting Policies
 
  
 Off Balance Sheet Contracts
 
  
   
 ITEM 3 Controls and Procedures
 
   17
 PART II
 
 ITEM 1 Legal Proceedings
 
  
 ITEM 2 Changes in Securities and Use of Proceeds
 
 
 
  
  
 ITEM 3 Defaults Upon Senior Securities
 
  
 ITEM 4  Submission of Matters to a Vote of Security Holders
 
  
 ITEM 5  Other Information
 
 Acquisition of Skyline Orthopedics, Inc.
  
   18
  Status of Promissory Note
    ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K
 
 
 No.

Title2.1 (1)

Reorganization and Stock Purchase Agreement dated February 4, 20042.2 (1)

Extension Agreement dated February 10, 20042.3 (1)

Promissory Note dated February 11, 20042.4 (1)

Guaranty dated February 11, 20042.5 (1)

Security Agreement dated February 11, 20042.6 (1)

Consulting Agreement dated February 11, 20043.1 (2)

Certificate of Incorporation of Silver King Resources (Delaware), Inc., filed on April 13, 19993.2 (3)

Certificate of Merger of Silver King Resources, Inc. into Silver King Resources (Delaware), Inc.3.3 (4)

Certificate of Amendment of Certificate of Incorporation dated July 17, 2002, changing name to eNexi Holdings, Inc.3.4 (5)

Certificate of Amendment of Certificate of Incorporation dated November 5, 2002, changing name to Trinity3 Corporation  19
   3.5 (6)

Certificate of Amendment of Certificate of Incorporation dated February 20, 2003, increasing the authorized common stock3.6 (7)

Bylaws of Silver King Resources (Delaware), Inc.4.1 (1)

Securities Purchase Agreement and Investor Questionnaire dated February 9, 20044.2 (1)

10% Convertible Debenture dated February 9, 20044.3 (1)

Security Agreement dated February 9, 20044.4 (1)

Warrant Agreement dated February 9, 200410.1

Form of Securities Purchase Agreement for 10% Convertible Debenture and Warrant Units10.2

Form of Convertible Debenture for 10% Convertible Debenture and Warrant Units10.3

Form of Security Agreement for 10% Convertible Debenture10.4

Form of Warrant for 10% Convertible Debenture and Warrant Units31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1

Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2

Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  (1)  Incorporated by reference from our Current Report on Form 8-K dated and filed with the Commission on February 26, 2004.
 
 
 
 
  20
  21
  SIGNATURES
  Dated:  June 25, 2004
Trinity3 Corporation/s/ Shannon T. SquyresBy: Shannon T. SquyresIts: Chief Executive Officer and SecretaryDated: June 25, 2004
Trinity3 Corporation/s/ Steven D. HargreavesBy: Steven D. HargreavesIts: President and Chief Financial Officer






22