U.S. 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.
[_] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from to
-------- --------.
Commission file number: 000-32845
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OPUS COMMUNITIES INC.
---------------------
(Name of Small Business Issuer in Its Charter)
TEXAS 75-2668876
----- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
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Securities registered under Section 12(g) of the Exchange Act:
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 [X] No [_]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B 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 [X].
The issuer's revenues for the year ended December 31, 2004, were $0.
The aggregate market value of the registrant's voting and non-voting common equity held by non-affiliates was approximately $993,200 on the last business day of the registrant's most recently completed annual report. On April 19, 2005, the number of shares outstanding of the registrant's common stock, $0.001 par value, was 63,880,000.
TABLE OF CONTENTS
PART I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ITEM 1. Description Of Business . . . . . . . . . . . . . . . . . . 3
ITEM 2. Description Of Property . . . . . . . . . . . . . . . . . . 4
ITEM 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 4
ITEM 4. Submission Of Matters To A Vote Of Security Holders . . . . 7
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 5. Market For Common Equity And Related Stockholder Matters . 4
ITEM 6. Management's Discussion And Analysis Or Plan Of Operation . 5
ITEM 7. Financial Statements. . . . . . . . . . . . . . . . . . . . 8
Changes In And Disagreements With Accountants On
ITEM 8. Accounting And Financial Disclosure . . . . . . . . . . . . 9
ITEM 8A. Controls And Procedures . . . . . . . . . . . . . . . . . . 9
PART III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ITEM 9. Directors And Executive Officers. . . . . . . . . . . . . . 9
ITEM 10. Executive Compensation. . . . . . . . . . . . . . . . . . . 10
Security Of Certain Beneficial Owners And Management
ITEM 11. And Related Stockholder Matters . . . . . . . . . . . . . . 11
ITEM 12. Certain Relationships And Related Transactions. . . . . . . 12
ITEM 13. Exhibits And Reports On Form 8-K. . . . . . . . . . . . . . 12
ITEM 14. Principal Accountant Fees and Services. . . . . . . . . . . 12
INDEX TO EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
CERTIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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PART I
Forward-looking Information
This information statement contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements relate to future events or to our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of such terms or other comparable terminology. These statements are only predications. Actual events or results do differ materially from those indicated by such forward-looking statements.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance, or achievements. Moreover, the Company does not assume responsibility for the accuracy and completeness of such forward-looking statements. The company is under no duty to update any of the forward-looking statements after the date of this information statement to conform such statements to actual results. The foregoing management's discussion and analysis should be read in conjunction with the Company's financial statements and the notes herein.
ITEM 1. DESCRIPTION OF BUSINESS
As used herein, the term "Company" refers to Opus Communities, Inc., a Texas corporation, unless the context indicates otherwise. The Company, formerly known as Cobra Financial Services, Inc. ("Cobra"), was incorporated on September 16, 1996 for the purpose of investing in agricultural land and projects. Although the Company's operations have historically consisted of providing investments in the agricultural industry, including our attempt to export meat products, the Company closed its agricultural operations due to continued losses in 2003. The winding down of these operations was facilitated by the Company's December 2002 sale of farm equipment to our major shareholder in exchange for his discharge of our indebtedness to him of approximately $36,400. This sale and discharge of indebtedness occurred in conjunction with the termination of our farm lease. To reflect the change in operations the Company's name was changed to Opus Communities, Inc. on August 19, 2004.
The Company's business in 2004 consisted of searching for viable business operations to acquire or merge with in our attempt to achieve profitability. We are attempting to obtain profitability by searching for candidates with which to merge or acquire.
At present, we have no employees and our affairs are handled by our officers.
ITEM 2. DESCRIPTION OF PROPERTY
Our headquarters are located at 2600 Ventura Dr. Suite 1521, Plano, TX 75093. We believe that our facilities are adequate for our needs and that additional suitable space will be available on acceptable terms as required. We do not own any real estate.
ITEM 3. LEGAL PROCEEDINGS
On March 10, 2005, Opus Corporation, Opus Northwest Corporation, Opus South Corporation and Opus West Corporation filed a civil lawsuit in The United States District Court for the Southern District of Florida against Opus Communities, Inc. alleging among other things, Trademark Infringement and Unfair Competition. Opus Communities denies the allegations and has retained counsel in an attempt to settle the litigation. Opus Communities, Inc. has agreed to change the name of the Corporation and is taking the necessary steps for a name change.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Company's security holders during the fourth quarter of 2004.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is traded on the NASD's Pink Sheets under the symbol "OPUC". Because no meaningful trading market for the Company's common stock occurred until 2004, the table below sets forth the high and low sales prices for the Company's common stock for only the third quarter of 2004 and for the interim period thereafter. The quotations below reflect inter-dealer prices, without retail markup, markdown or commission and may not represent actual transactions. All figures reflect a six-for-one (6-for-1) forward stock split which became effective on August 19, 2004.
Year Quarter High Low
2004 Third * $1.20 $1.05
Fourth $1.25 $0.64
*Note that trading in our common stock on the Pink Sheets did not
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begin until approximately September 8, 2004.
Shareholders
The Company is authorized to issue One Hundred Thousand (100,000,000) shares of Common Stock and Twenty Million (20,000,000) shares of preferred stock ("Preferred Stock"). As of April 19, 2005, there were approximately 30 shareholders of record holding a total of 63,880,000 shares of Common Stock.
Dividends on the Common Stock
The Company has not declared a cash dividend on its Common Stock in the last two fiscal years and the Company does not anticipate the payment of future dividends. The Company may not pay dividends on its Common Stock without first paying dividends on its Preferred Stock. There are no other restrictions that currently limit the Company's ability to pay dividends on its Common Stock other than those generally imposed by applicable state law.
Recent Sales of Unregistered Securities
In July 2000, we issued 250,000 shares of common stock in a private offering that was offered without registration under the Securities Act of 1933 (the "Act"). The total amount raised was $25,000. All of the shares were issued pursuant to exemptions from registration under Sections 3(b) and 4(2) of the Act and Regulation D.
Securities authorized for issuance under equity compensation plans.
--------------------------------------------------------------------------------
Plan Category Number of Weighted- Number of securities
securities to be average price remaining available for
issued upon of outstanding future issuance under
exercise of options, equity compensation
outstanding warrants and plans (excluding
options, rights securities reflected in
warrants and (b) column (a))
rights (c)
(a)
--------------------------------------------------------------------------------
Equity 0 0 0
compensation plans
approved by
security holders
--------------------------------------------------------------------------------
Equity 0 0 0
compensation plans
not approved by
security holders
--------------------------------------------------------------------------------
Total 0 0 0
--------------------------------------------------------------------------------
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-looking Information
This information statement contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements relate to future events or to our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other comparable terminology. These statements
are only predictions. Actual events or results may differ materially. There are a number of factors that could cause our actual results to differ materially from those indicated by such forward-looking statements.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance, or achievements. Moreover, it does not assume responsibility for the accuracy and completeness of such forward-looking statements. The Company is under no duty to update any of the forward- looking statements after the date of this information statement to conform such statements to actual results. The foregoing management's discussion and analysis should be read in conjunction with the Company's financial statements and the notes herein.
Plan of operation
Our business plan is to seek to acquire or merge with potential businesses that may, in the opinion of management, warrant our involvement. Management's discretion is unrestricted, and we may participate in any business whatsoever that may in the opinion of management meet the business objectives discussed herein. We may investigate businesses of any kind or nature, including those in finance, technology, manufacturing, service, research and development, communications, insurance, brokerage and transportation. Management may also seek to become involved with other development stage companies or companies that could be categorized as financially troubled. We may effect a business combination with another business outside the United States. We have not limited the scope of our search to a particular region or country. Accordingly, to the extent that the acquired business may be located or operate in a foreign jurisdiction, our operations may be adversely affected to the extent of the existence of unstable economic, social and/or political conditions in such foreign regions and countries. We may not be capable of reviewing the potential operational risks surrounding foreign businesses.
Other than general corporate activities, including the negotiation and consummation of a business combination, we will not engage in any substantive commercial business until such time as we have effected a business combination.
Results of operations
The following discussion should be read in conjunction with the audited financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the fiscal year ended December 31, 2004; and should further be read in conjunction with the financial statements included in this report. Comparisons made between reporting periods herein are for the year ended December 31, 2004 as compared to the year ended December 31, 2003.
YEAR ENDED DECEMBER 31, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003
Revenues for the fiscal year ended December 31, 2004 and the same period for 2003 was $0. The operating loss increased to $47,052 as compared to $1,267 in 2003 as a result in a increase of Professional Fees from $0 for the year ended December 2003, to $15,622 for 2004
and a increase in consulting expenses from $0 for the year-end December 31, 2003 to $5,000 in 2004, and an increase of Officers Salary from $0 for the year ended December 2003, to $24,860 for 2004.
-------------------------------------------- EXPENSES 2004 2003 -------------------------------------------- Consulting Expenses $ 5,000 $ 0 -------------------------------------------- Officer Salary and Expenses 24,860 0 -------------------------------------------- Professional Fees 15,622 0 -------------------------------------------- Lease 0 0 -------------------------------------------- Vehicle 0 0 -------------------------------------------- Depreciation 0 0 -------------------------------------------- Other 1,488 1,267 -------------------------------------------- |
Liquidity and capital resources
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003.
As of December 31, 2004, our net cash used in operating activities was $4,630, compared to $267 for the same period in 2003. Net cash used in investing activities as of December 31, 2004 and the same period in 2003 was $0. Net cash provided from financing activities increased to $22,600 for the year ended December 31, 2004 from $1,000 for the same period in 2003.
Going Concern
The Company has relied upon its Chief Executive Officer, Carlton Fleming, for its capital requirements and liquidity. The Company will continue to seek alternate sources of financing to allow the Company to acquire other operating entities which may improve the Company's weak liquidity and capital resources. Additionally, the Company may continue to use its equity and resources of its president to finance operations. However, no assurances can be provided that the Company will be successful in acquiring assets, whether revenue-producing or otherwise, or that Mr. Fleming will continue to assist in financing the Company's operations.
ITEM 7. FINANCIAL STATEMENTS
The Company's financial statements for the fiscal year ended December 31, 2004 are attached hereto beginning on page F-1.
Board of Directors
Opus Communities Inc.
We have audited the accompanying balance sheet of Opus Communities Inc.("Company"), formerly Cobra Financial Services Inc. as of December 31, 2004 and the related statement of operations, statement of stockholders' equity, and the statement of cash flows for the twelve month period ended December 31, 2004 and 2003 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on my audit.
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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the 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 audit provides a reasonable basis for my opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2004 and the results of its operations and its cash flows for the twelve month period ended December 31, 2004 and 2003 in conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and negative working capital that raise substantial doubt about its ability to continue as a going concern. This is further explained in the notes to financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Clyde Bailey P.C.
San Antonio, Texas
March 30. 2005
OPUS COMMUNITIES INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
BALANCE SHEET
AS OF DECEMBER 31, 2004
A S S E T S
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Current Assets
--------------
Cash $ 4,630
-------
Total Current Assets 4,630
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Total Assets $ 4,630
=========
L I A B I L I T I E S
---------------------
Current Liabilities
-------------------
Accrued Interest $ 82
Note Payable 25,000
Total Current Liabilities 25,082
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Total Liabilities $ 25,082
Commitments and Contingencies -
S T O C K H O L D E R S ' E Q U I T Y
--------------------------------------
Preferred Stock
20,000,000 authorized shares, par
value $.001 no shares issued and
outstanding
Common Stock 63,880
100,000,000 authorized shares, par value $.001
63,880,000 shares issued and outstanding
Additional Paid-in-Capital (28,920)
Stock to be issued 22,600
Retained Earnings (78,012)
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Total Stockholders' Equity (Deficit) (20,452)
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Total Liabilities and Stockholders' Equity $ 4,630
=========
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The accompanying notes are integral part of these Financial Statements.
OPUS COMMUNITIES INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
STATEMENT OF OPERATIONS
--------------------------
FOR THE YEARS ENDED
DECEMBER 31
--------------------------
2004 2003
------------ ------------
REVENUES:
---------
Revenues - -
------------ ------------
Total Revenues $ - $ -
EXPENSES:
---------
Consulting Expenses 5,000 0
Officer Salary and Expenses 24,860 0
Professional Fees 15,622 0
Interest Expense 82 0
Other Expenses 1,488 1,267
------------ ------------
Total Expenses 47,052 1,267
Net Loss from Operations $ (47,052) $ (1,267)
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Provision for Income Taxes:
Income Tax Benefit (Expense) - -
------------ ------------
Net Loss $ (47,052) $ (1,267)
============ ============
Basic and Diluted Earnings Per Common Share $ (0.00) $ (0.00)
------------ ------------
Weighted Average number of Common Shares 81,313,333 93,780,000
used in per share calculations ============ ============
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The accompanying notes are integral part of these Financial Statements.
OPUS COMMUNITIES INC
Statement of Stockholders' Equity
$0.001 Stock Paid-In Retained Stockholders'
Shares Par Value to be Issued Capital Earnings Equity
-------------- -------------- -------------- -------------- -------------- ---------------
Balance January 1, 2003 93,780,000 $ 93,780 $ - $ (63,820) $ (29,693) $ 267
Net Loss (1,267) (1,267)
-------------- -------------- -------------- -------------- -------------- ---------------
Balance December 31, 2003 93,780,000 $ 93,780 $ - $ (63,820) (30,960) $ (1,000)
Stock Cancelled (30,000,000) (30,000) $ 30,000
Stock Issued for Services 100,000 100 4,900 5,000
Stock Issued for Cash - 22,600 22,600
Net Loss (47,052) (47,052)
-------------- -------------- -------------- -------------- -------------- ---------------
Balance December 31, 2004 63,880,000 $ 63,880 22,600 $ (28,920) (78,012) $ (25,452)
============== ============== ============== ============== ============== ===============
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The accompanying notes are integral part of these Financial Statements.
OPUS COMMUNITIES INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
STATEMENT OF CASH FLOWS
--------------------------
FOR THE YEAR ENDED
DECEMBER 31
--------------------------
2004 2003
------------ ------------
Cash Flows from Operating Activities:
-------------------------------------
Net Loss $ (47,052) $ (1,267)
Stock Issued for Services 5,000 -
Changes in operating assets and liabilities:
Accrued Interest 82 -
------------ ------------
Net Cash Used in Operating Activities $ (41,970) $ (1,267)
Cash Flows from Investing Activities:
-------------------------------------
Fixed Assets - -
------------ ------------
Net Cash Used in Investing Activities $ - $ -
------------ ------------
Cash Flows from Financing Activities:
-------------------------------------
Advances from Officer (1,000) -
Stock Issued for Cash 22,600
Short Term Borrowing 25,000 1,000
------------ ------------
Net Cash Provided from Financing Activities $ 46,600 $ 1,000
------------ ------------
Net Increase (Decrease) in Cash $ 4,630 $ (267)
Cash Balance, Begin Period 4,630 -
------------ ------------
Cash Balance, End Period $ - $ 267
============ ============
Supplemental Disclosures:
Cash Paid for interest - -
Cash Paid for income taxes - -
Stock Issued for Services 5,000 -
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The accompanying notes are integral part of these Financial Statements.
OPUS COMMUNITIES, INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
NOTES TO FINANCIAL STATEMENTS
OPUS Communities Inc.("the Company") was originally incorporated under the laws of the State of Texas on September 16, 1996 as Cobra Financial Services Inc. for the purpose to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Texas. The company has a total of 100,000,000 authorized shares with a par value of $.001 per share and with 63,880,000 shares issued and outstanding as of December 31, 2004. On May 10, 2000, an amendment to the Articles of Incorporation was filed with the Texas Secretary of State to increase the authorized common share to 100,000,000, authorized 20,000,000 in preferred stock, and change the par value to $.001 for both classes of stock. On August 19, 2004, an amendment and restated articles of incorporation was filed with the Secretary of State of Texas to change the name from Cobra Financial Services Inc. to OPUS Communities Inc.
The Company has adopted the provisions of Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes. The Company accounts for income taxes pursuant to the provisions of the Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes", which requires an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure on contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The Company's financial statements are prepared using the accrual method of accounting. Revenues are recognized when earned and expenses when incurred. Fixed assets are stated at cost. Depreciation and amortization using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes.
OPUS COMMUNITIES, INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
NOTES TO FINANCIAL STATEMENTS
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," which simplifies the computation of earnings per share requiring the restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average number of common shares outstanding during each year.
The carrying value of financial instruments including marketable securities, notes and loans receivables, accounts payable and notes payable approximate their fair values at December 31, 2004.
In December 2004, the FASB issued FASB Staff Position No. 109-1 ("FSP FAS No. 109-1"), "Application of FASB Statement No.109, `Accounting for Income Taxes,' to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004." The American Jobs Creation Act of 2004 introduces a special tax deduction of up to 9.0 percent when fully phased in, of the lesser of "qualified production activities income" or taxable income. FSP FAS 109-1 clarifies that this tax deduction should be accounted for as a special tax deduction in accordance with SFAS No. 109. Although FSP FAS No. 109-1 was effective upon issuance, we are still evaluating the impact FSP FAS No. 109-1 will have on our financial statements.
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs", an amendment of Accounting Research Bulletin No. 43, Chapter 4. SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We do not believe adoption of SFAS No. 151 will have a material effect on our financial position, results of operations or cash flows.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29." SFAS No. 153 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. APB Opinion No. 29, "Accounting for Nonmonetary Transactions," provided an exception to its basic measurement principle (fair value) for exchanges of similar productive assets. Under APB Opinion No. 29, an exchange of a productive asset for a similar productive asset was based on the recorded amount of the asset relinquished. SFAS No. 153 eliminates this exception and replaces it with an exception of exchanges of nonmonetary assets that do no have commercial substance. SFAS No. 153 is effective for the Company as of January 1, 2005. The Company will apply the requirements of SFAS No. 153 when such an exchange occurs.
OPUS COMMUNITIES, INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
NOTES TO FINANCIAL STATEMENTS
On August 2, 2004, the Company agreed to cancel 5,000,000 shares to the Company's principal shareholder.
On August 4, 2004, the Company agreed to a six to one forward split of the outstanding common stock. At the time of the forward split there were 10,630,000 shares outstanding resulting in 63,780,000 common shares outstanding after the forward-split.
On September 1, 2004, the Company issued 100,000 shares for consulting services. These shares have been valued at $5,000 for the services provided.
In the fourth quarter of 2004 a total of $22,600 was received pursuant to a subscription agreement from two unrelated parties. The private placement agreement calls for the stock to issued at $.75 per share.
Also, Carlton Fleming advanced the Company a total of $1,000 in 2003 that is recorded as Advances from Officer, and $24,860 in 2004 as Officer Salary.
An officer of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may in the future become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts
On December 13, 2004 a promissory note was secured for $25,000 from an unrelated party that matured February 14, 2005, but was extended for ninety days until May 14, 2005. The note carries an interest rate of 8% and accrued interest in the amount of $82 has been recorded as of December 31, 2004. The note carries a conversion feature at the option of the Company to be converted for 100,000 shares.
Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from timing differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the timing differences are expected to reverse. The Company's previous principal temporary differences
OPUS COMMUNITIES, INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
NOTES TO FINANCIAL STATEMENTS
relate to revenue and expenses accrued for financial purposes, which are not taxable for financial reporting purposes.
The components of the provision for income tax (expense) benefits are as follows:
Year Ended December 31,
-----------------------
2004 2003
---- ----
Deferred:
Federal $ 15,259 $ 411
State 2,117 57
Valuation Allowance ( 17,376) (468)
------------- -------------
$ -0- $ -0-
------------- -------------
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Such income tax (expense) benefits are included in the accompanying consolidated financial statements as follows:
Year Ended December 31,
-----------------------
2004 2003
---- ----
Loss from operations ($17,376) ($1,267)
Non-Deductible Expenses and Non-Taxable Income -0- -0-
--------------------------
($17,376) ($1,267)
--------------------------
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The above provision has been calculated based on Federal and State statutory rates in the adjusted rates of 34% for Federal and 4.5% for State tax rates.
Temporary differences, which give rise to deferred tax assets and liabilities are as follows:
Year Ended December 31,
-----------------------
2004 2003
---- ----
Deferred tax assets:
Net Operating Loss $ 28,810 $ 11,434
------------- -------------
Total deferred tax assets: 28,810 11,434
Deferred tax liabilities:
Net Income -0- -0-
------------- -------------
Valuation Allowance $ (28,810) $ (11,434)
------------- -------------
Net deferred tax assets (liabilities) $ -0- $ -0-
============= =============
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OPUS COMMUNITIES, INC.
(FORMERLY COBRA FINANCIAL SERVICES INC.)
NOTES TO FINANCIAL STATEMENTS
The accompanying financial statements have been prepared in conformity with principles of accounting applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has no revenue and has not yet generated sufficient working capital to support its operations. The Company's ability to continue as a going concern is dependent, among other things, on its ability to reduce certain costs, obtain new contracts and additional financing and eventually, attaining a profitable level of operations.
It is management's opinion that the going concern basis of reporting its financial condition and results of operations is appropriate at this time. The Company plans to increase cash flows and take steps towards achieving profitable operations through its business plan.
On March 10, 2005, Opus Corporation, Opus Northwest Corporation, Opus South Corporation and Opus West Corporation filed a civil lawsuit in The United States District Court for the Southern District of Florida against Opus Communities, Inc. alleging among other things, Trademark Infringement and Unfair Competition. Opus Communities denies the allegations and has retained counsel in an attempt to settle the litigation. Opus Communities, Inc. has agreed to change the name of the Corporation and is taking the necessary steps for a name change.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
During 2003 and 2004, the Company had no changes or disagreements with its
accountants, Clyde Bailey, P.C., on accounting or financial disclosures.
ITEM 8A. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company carried
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out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Chief Financial Officer of the Company, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, the Company's Chief Executive Officer and the Chief Financial Officer of the Company concluded that the Company's disclosure controls are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings. There have been no significant changes in the Company's internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company conducted its evaluation.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors, Executive Officers and Control Persons
NAME AGE POSITION(S) AND OFFICE(S) --------------- --- ------------------------- Carlton Fleming 43 President, Chief Executive Officer and Director Dane Mc Daniel 36 Secretary, Treasurer and Director Casey Boaz 34 Director |
Mr. Carlton Fleming, age 43, is our president and a member of our board of directors. Mr. Fleming has held this position since the company's inception. From 1987 until 1992, Mr. Fleming was a branch manager for J.W. Gant, a securities broker-dealer. From 1992 until 1996, Mr. Fleming was the branch manager for LaJolla Capital Corporation, a securities broker-dealer, until he co-founded Lloyd Wade Securities, Inc. Mr. Fleming retired from the securities industry in 1996. Since his retirement, Mr. Fleming has held the position of president of D & C Holdings, a privately held Texas corporation that conducted business as a pre-owned automobile dealer, and R & F Enterprises, Inc., a privately held Texas corporation that owned multiple health and tanning salons. Mr. Fleming currently dedicates 100% of his time to our business.
Mr. Dane McDaniel, age 36, is our secretary, treasurer and a member of our board of
directors. Mr. McDaniel has been an officer and director of the company since 1997. From 1992 until present, Mr. McDaniel has held various positions with Hussmann Manufacturing, a company that manufactures refrigerated coolers. Mr. McDaniel does free-lance accounting and bookkeeping for various companies.
Mr. Casey Boaz, age 34, is a member of our board of directors. Mr. Boaz was also one of our original founders. He has 7 distinguished years of service in the United States Navy from 1989-1996. Mr. Boaz is also a Gulf War veteran. In 1996, he earned a BS/BA in management from Troy State University. Mr. Boaz has experience in estate planning and trust preparation, investment banking and auditing. From 1997 to 1999, he was with Metlife where he held a Series 6 license and an insurance license and provided financial planning services to Metlife clients, including, but not limited to, advice on retirement planning, 401K plans and life insurance policies. From 1999 to 2000, Mr. Boaz was with Union Planters Investments where he held a Series 6, 7 and insurance license and provided Union Planters Investments' clients with financial planning services, including, but not limited to, advice on retirement planning, 401K plans and life insurance policies. He was employed with First Star Bank from 2000, where he held a Series 6, 7 and insurance license and provided financial planning services to First Star Bank's clients, including, but not limited to, advice on retirement planning, 401K plans and life insurance policies. Mr. Boaz purchased his current business in early 2001. He currently owns and operates Cole Youngers, a hardware and lumber company in southern Missouri.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4 and 5 furnished to the Company, the Company is not aware of any persons who at any time during the fiscal year ended December 31, 2003, was a director, officer, or beneficial owner of more than ten percent of the Common Stock of the Company, and that they failed to file, on a timely basis, reports required by Section 16(a) of the Securities Exchange Act of 1934 during such fiscal year.
We did not have an audit committee in 2003 and 2004, because we did not have any independent directors. We are in the process of searching for independent directors, as well as an audit committee financial expert.
We have not yet adopted a Code of Ethics for Business Conduct but expect to do so in the short term.
ITEM 10. EXECUTIVE COMPENSATION
Any compensation received by our officers, directors, and management personnel will be determined from time to time by our board of directors. Our officers, directors, and management personnel will be reimbursed for any out-of-pocket expenses incurred on our behalf.
The table set forth below summarizes the annual and long-term compensation for services in all capacities to us payable to our Chief Executive Officer and our other executive officers during the year ending December 31, 2004. Our Board of Directors may adopt an incentive stock
option plan for our executive officers which would result in additional compensation.
SUMMARY COMPENSATION TABLES
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Annual Compensation
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Name and Other Annual
Principal Position Year Salary ($) Bonus ($) Compensation ($)
------------------------------------------------------------------------------------
Carlton Fleming, 2004 $24,860 -0- -0-
President
------------------------------------------------------------------------------------
Carlton Fleming, 2003 -0- -0- -0-
President
------------------------------------------------------------------------------------
Carlton Fleming, 2000 -0- -0- -0-
President
------------------------------------------------------------------------------------
Dane McDaniel, 2003 -0- -0- -0-
Secretary & Treasurer
------------------------------------------------------------------------------------
Dane McDaniel, 2002 -0- -0- -0-
Secretary & Treasurer
------------------------------------------------------------------------------------
Dane McDaniel, 2001 -0- -0- -0-
Secretary & Treasurer
------------------------------------------------------------------------------------
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---------------------------------------------------------
Awards Payouts
----------------------------------------------------------------------------------------------
Restricted Securities LTIP All Other
Name and Principal Stock Underlying Payouts Compensation
Position Year Award(s)($) Options/ ($) ($)
SARs(#)
----------------------------------------------------------------------------------------------
Carlton Fleming, 2004 -0- -0- -0- -0-
President
----------------------------------------------------------------------------------------------
Carlton Fleming, 2003 -0- -0- -0- -0-
President
----------------------------------------------------------------------------------------------
Carlton Fleming, 2002 -0- -0- -0- -0-
President
----------------------------------------------------------------------------------------------
Dane McDaniel, 2004 -0- -0- -0- -0-
Secretary & Treasurer
----------------------------------------------------------------------------------------------
Dane McDaniel, 2003 -0- -0- -0- -0-
Secretary & Treasurer
----------------------------------------------------------------------------------------------
Dane McDaniel, 2002 -0- -0- -0- -0-
Secretary & Treasurer
----------------------------------------------------------------------------------------------
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Compensation of Directors
The Company's directors are not compensated for any meeting the board of directors, which they attend.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the ownership of the Company's Common Stock as of November 19, 2004, with respect to: (i) each person known to the Company to be the beneficial owner of more than five percent (5%) of the Company's Common Stock; (ii) all directors; and (iii) directors and executive officers of the Company as a group. As of November 19, 2004, there were 63,880,000 shares of Common Stock issued and outstanding.
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Title of Class Name and Address of Amount and Nature Percent of
Beneficial Owner of Beneficial Class(1)
Ownership(1)
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Executive Officers & Directors
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Common Stock Carlton Fleming
($0.001 par value) 2600 Ventura Dr., Suite 1521
Plano, Texas 75093 42,000,000 65.7%
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Common Stock Dane McDaniel
($0.001 par value) 17 Belaire Court
Truesdale, Missouri 63383 1,008,000 1.57%
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Common Stock Casey Boaz
($0.001 par value) RR1 Box 45B
Birchtree, Missouri 65438 1,008,000 1.57%
-----------------------------------------------------------------------------------------------------
Common Stock Directors and Executive Officers
($0.001 par value) as a Group
(3 individuals) 44,016,000 68.9%
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(1) The number of shares and percentage of class beneficially owned by the entities above is determined under rules promulgated by the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The inclusion herein of such shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of such shares. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares such power with his or her spouse) with respect to all shares of capital stock listed as owned by such person or entity.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 1, 2002, Mr. Fleming entered into a Settlement Agreement with the Company resolving various unsecured personal loans he had previously made with the Company totaling $36,423 (the "Debt"). The Company owned certain farm equipment, which it sold to Mr. Fleming in exchange for the discharge of the Debt owned in accordant with the terms and conditions set forth in the Settlement Agreement. As of December 31, 2002, the Company was indebted to its president, Carlton Fleming, in the amount of $0.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(1) Exhibits. Exhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits beginning on page 15 of this Form 10-KSB, which is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
The aggregate fees billed by Clyde Bailey, PC for professional services rendered for the audit of the Company's annual financial statements for the fiscal years ended December 31, 2004 and 2003 and for the reviews of the financial statements included in the Company's Quarterly Reports on Form 10-QSB for those fiscal years were $3,000 and $3,000, respectively.
Audit-Related Fees
Clyde Bailey, PC did not render any professional services for information technology services relating to financial information systems design and implementation for the fiscal years ended December 31, 2004 and December 31, 2003.
Tax Fees
Clyde Bailey, PC did not render any professional services for tax compliance, tax advice, or tax planning during 2004. The fees associated for the preparation of the 2004 and 2003 Corporate tax returns were approximately $450, and $450 respectively.
All Other Fees
The aggregate fees billed by Clyde Bailey, PC for services rendered to the Company, other that the services described under "Audit Fees" and "Audit-Related Fees" and tax fees amount to $0 and $0 for the fiscal years December 31, 2004 and 2003, respectively.
In discharging its oversight responsibility with respect to the audit process, the Audit Committee of the Board of Directors obtained from the independent auditors a formal written statement describing all relationships between the auditors and the Company that might bear on the
auditors' independence consistent with Independence Standards Board Standard No.1, "Independence Discussions with Audit Committees", discussed with the auditors any relationships that may impact their objectivity and independence and satisfied itself as to the auditors' independence.
The Committee also discussed with management and the independent auditors the quality and adequacy of the Company's internal controls and the outsourced audit functions, responsibilities, budgeting and staffing. The Committee reviewed with the independent auditors their audit plans, audit scope and identification of audit risks. The Committee discussed and reviewed with the independent auditors all communications required by auditing standards generally accepted in the United States of America, including those described in Statement on Auditing Standards No. 61, as amended, "Communication with Audit Committees", and discussed and reviewed the results of the independent auditors audit of the financial statements. The Committee also discussed the results of the internal audit examinations.
SIGNATURES
Opus Communities Inc.
Carlton Fleming, President
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.
Signature Title Date
President, Chief Executive Officer May , 2005
-------------------- and Director ---
Carlton Fleming
Secretary, Treasurer and Director May , 2005
-------------------- ---
Dane McDaniel
Director May , 2005
-------------------- ---
Casey Boaz
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INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
3(i) * Articles of Incorporation of the Company. (Incorporated by
reference from the Company's Form 10SB12G, file number 000-
32845, effective on June 5, 2001).
3(ii) * Certificate of Amendment to Articles of Incorporation.
(Incorporated by reference from the Company's Form 10-KSB, file
number 000-32845, effective on December 23, 2004).
3(ii) * Bylaws of the Company. (Incorporated by reference from the
Company's Form 10SB12G, file number 000-32845, effective on
June 5, 2001).
10(i) * Settlement Agreement by and between Cobra Financial Services,
Inc. and Mr. Carlton Fleming, dated effective December 1, 2002.
(Incorporated by reference from the Company's Form 10-KSB, file
number 000-32845, effective on December 23, 2004).
31(i) 16 Certification of Chief Executive Officer under Section 302 of the
Sarbanes-Oxley Act of 2002.
31(ii) 17 Certification of Chief Financial Officer under Section 302 of the
Sarbanes-Oxley Act of 2002.
32(i) 18 Certification of Chief Executive Officer of Opus Communities Inc.
Pursuant to 18 U.S.C. Sec.1350
32(i) 19 Certification of Chief Financial Officer of Opus Communities Inc.
Pursuant to 18 U.S.C. Sec.1350
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* Previously filed as indicated and incorporated herein by reference from the referenced filings previously made by the Company.
EXHIBIT 31(i)
CERTIFICATION
I, Carlton Fleming, as Chief Executive Officer of Opus Communities, Inc. (the "Company"), certify that:
1. I have reviewed this annual report on Form 10-KSB of the Company;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this annual report;
4. The small business issuer's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
(a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under my
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made
known to myself by others within those entities, particularly during
the period in which this annual report is being prepared;
(b) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed
under my supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report my
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based
on such evaluation; and
(d) disclosed in this report any change in the small business
issuer's internal controls over financial reporting that occurred
during the small business issuer's most recent fiscal year that has
materially affected, or is reasonably likely to materially effect, the
small business issuer's internal controls over financial reporting;
and
5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors;
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which
are reasonable likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial
information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting
EXHIBIT 31(ii)
CERTIFICATION
I, Dane McDaniel, as Chief Financial Officer of Opus Communities, Inc. (the "Company"), certify that:
1. I have reviewed this annual report on Form 10-KSB of the Company;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this annual report;
4. The small business issuer's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
(a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under my
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries,
is made known to myself by others within those entities,
particularly during the period in which this annual report is
being prepared;
(b) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under my supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this
report my conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) disclosed in this report any change in the small business
issuer's internal controls over financial reporting that
occurred during the small business issuer's most recent fiscal
year that has materially affected, or is reasonably likely to
materially effect, the small business issuer's internal controls
over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors;
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting
EXHIBIT 32(i)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Certification Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Annual Report of Opus Communities, Inc. (the "Company") on Form 10-KSB for the year ended December 31, 2004, as filed with the Securities and Exchange Commission, on the date hereof (the "Report"), the undersigned, Carlton Fleming, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to 18 U.S.C., Section 1350, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May , 2005
--- --------------------------------
Carlton Fleming
Chief Executive Officer
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EXHIBIT 32(ii)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Certification Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Annual Report of Opus Communities, Inc. (the "Company") on Form 10-KSB for the year ended December 31, 2004, as filed with the Securities and Exchange Commission, on the date hereof (the "Report"), the undersigned, Dane McDaniel, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to 18 U.S.C., Section 1350, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May , 2005
--- ----------------------------
Dane McDaniel
Chief Financial Officer
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