**SECURITIES AND EXCHANGE COMMISSION**** Washington, D.C. 20549**

**Form 10-KSB/A    Amendment No. 3**

** [X] Annual Report under Section 13 or 15(d) of the Securities**** Exchange Act of 1934** 

**For the fiscal year ended June 30, 2003**** or**** [  ]      Transitional Report under Section 13 or 15(d) of the**

** Securities Exchange Act of 1934**

                                   

| 0-18954                |
|------------------------|
|                        |
| Commission file number |

| **ODYSSEY PICTURES CORPORATION**                                  |
|-------------------------------------------------------------------|
|                                                                   |
| (Exact name of small business issuer as specified in its charter) |

| Nevada                   |   | 95-4269048                           |
|--------------------------|--------|--------------------------------------|
|                          |   |                                      |
| (State of incorporation) |   | (IRS Employer Identification Number) |

| 2321 Coit Rd. Suite E,  Plano, TX 75075 |
|----------------------------------------------|
|                                              |
| (Address of principal executive office)      |

| (972) 867-0055              |
|-----------------------------|
|                             |
| (Issuer's telephone number) |

**Securities registered under Section 12(b) of the Exchange Act: NONE**

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

| Common Stock: $.01 Par Value |
|------------------------------|
|                              |
| (Title of Class)             |

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the  preceding 12 months (or for such  shorter  period that the  registrant  was required  to file  such  reports),  and  (2) has  been  subject  to such  filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate  by check  mark if there  is no  disclosure  of  delinquent  filers  in response 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. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the Registrant as of June 30, 2003 was  approximately  $6,482,387 (based on the mean between  the  closing  bid and asked  prices of the Common  Stock on such date), which value,  solely for the purposes of this calculation,  excludes shares held by Registrant's  officers and directors.  Such exclusion  should not be deemed a determination by Registrant that all such  individuals are, in fact,  affiliates of the Registrant.

As of June 30, 2003 there were outstanding 32,982,039 shares of Odyssey Pictures Corporation's common stock, par value $.01 per share (the "Common Stock").

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**ODYSSEY PICTURES CORPORATION**    Form 10-KSB/A Amendment No. 3

Report for the Fiscal Year    Ended June 30, 2003

TABLE OF CONTENTS
| PART I

Item 1.  Business          Item 2.  Properties          Item 3.  Legal Proceedings          Item 4.  Submission of Matters to a Vote of Security Holders          PART II

Item 5.  Market for Registrant's Common Stock and Related Stockholder Matters          Item 6.  Selected Financial Data          Item 7.  Management's Discussion and Analysis of Financial                     Condition and Results of Operations          Item 8.  Financial Statements and Supplementary Data          Item 9.  Changes in and Disagreements with Accountants on                     Accounting and Financial Disclosure          PART III

Item 10. Directors and Executive Officers of the Registrant          Item 11. Executive Compensation          Item 12. Security Ownership of Certain Beneficial Owners and Management          Item 13. Certain Relationships and Related Transactions          Item 14. Controls & Procedures

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K          Signature |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a) General Development of Business

Odyssey  Pictures  Corporation  ("Odyssey" or the "Company"),  formerly known as Communications and Entertainment Corp., was formed in December 1989 as a holding company.  At such time, the Company had no material  assets.  In September 1990, Double Helix Films, Inc.  ("Double Helix"),  a producer of low budget films, and Odyssey  Entertainment Ltd. ("OEL"), an international film distribution company, were merged with  wholly  owned  subsidiaries  of the Company  (the  "Mergers"). Subsequent  to the  Mergers,  each of Double Helix and OEL became a wholly owned subsidiary  of the  Company.  In June 1991,  the Company  sold Double  Helix and thereafter  began to focus on the  distribution  of motion  pictures in overseas markets as its primary business.

While  continuing to develop and  re-establish  the Company's film  distribution business,  management's  objective was to aggressively  build a diverse,  global media company  independent in ownership from the major film and music companies. Management  also  sought to  establish  a group of  domestic  and  international companies  providing both content and distribution in film,  music,  publishing, sports,  merchandising  and other multimedia  outlets. 

(b) Narrative Description  Business

The distribution of films involves two principal activities - the acquisition of rights from the  licensor or the seller,  usually the  producer or writer of the film, and the licensing of the distribution  rights to  subdistributors in their respective markets. In general,  the rights obtained from the producer relate to all media, including theatrical distribution, video and all forms of television. In some cases,  the licensing of rights to  subdistributors  may exclude certain territories and/or media. It is unlikely that  subdistributors  would bypass the Company and deal  directly  with the  licensors  of film  rights.  Historically, independent  licensors  of film  rights  prefer  to  deal  with a  single  sales agent/distributor  rather  than deal with  various  subdistributors  in  foreign markets. Consequently,  even if a particular subdistributor attempted to perform the function of the Company,  it is unlikely that the film's  licensor  would be willing to deal with such subdistributor due to detailed servicing requirements. Furthermore,  with respect to any particular film, the Company  typically enters into exclusive  distributorship  arrangements,  thereby  precluding  others from competing  with the  Company  with  respect to that film.  Moreover,  in certain circumstances,  the  Company  may also  provide  a  financing  function  for the production  of a film,  which a  subdistributor  would  generally  be  unable to provide. See "Terms of Distribution Agreements."

Terms of Distribution Agreements.

A distributor  such as the Company,  which  coordinates  worldwide  sales in all territories and media,  generally  handles foreign  distribution.  Overseas film sales companies rely on local  subdistributors  to physically deliver the motion picture and  related  marketing  materials  and to collect  revenues  from local exhibitors and other local distributors of the film. Typically,  the territorial rights  for a  specific  medium  such as  television  exhibition  are sold for a "cycle" of  approximately  seven years,  after which the rights become available for additional cycles.

The film distribution business breaks down into two broad categories:

1.   Sales Agency  Representation.  As a sales agent, the Company  undertakes to represent  and  license  a motion  picture  in all  markets  and media on a best-efforts basis, with no guarantees or advances,  for a fee ranging from 15% to 25%, and typically for a term ranging from seven to fifteen years.

2.   Distribution. As a distributor, the Company may provide the producer of the film a guarantee of a portion of the budget of the project.  This guarantee may be in the form of a bank commitment to the producer, secured by license agreements with foreign licensees, which is used by the producer to finance the production.  Typically,  a distributor would receive a distribution fee ranging from 25% to 35% over a term ranging from 15 years to perpetuity. In addition,  the distributor may negotiate,  or otherwise  acquire,  a profit participation in the film project.

Once the rights to a picture are obtained  (either as sales agent or distributor which may involve a minimum  guarantee),  the Company  then seeks to license its rights  to  subdistributors  in  the  territories  for  which  it  has  acquired distribution  rights.  In  general,  the grant of rights to the  subdistributors includes all media other than satellite,  although satellite is included in some subdistributors'  territories.  The  subdistributor in each territory  generally pays for its distribution rights with a down payment at the time the contract is executed   with  the   balance   due  upon   delivery  of  the  picture  to  the subdistributor.  (Delivery  occurs upon the  Company's  acceptance of the master negative  and  its  obtaining   access  to  certain  items   necessary  for  the distribution of the film). In some instances,  the subdistributors'  obligations for the  payment due on  delivery  are  secured by a letter of credit.  Although there are a number of markets each quarter,  major sales take place primarily at three film markets:

          1)   "MIF" in Cannes, France each May;              2)   "MIFED" in Milan, Italy each October; and,              3)   "AFM" in Los Angeles each February (Although in 2004, AFMA plans to sponsor one  market in November).

In  general,  after  financing  (if any) is  repaid,  the  Company  applies  the distribution receipts from its subdistributors in the following manner:

          1)   First to the payment of commissions due to the Company,              2)   Then second to the recovery of certain distribution expenses,              3)   Then  to  the  reimbursement  of  the  Company  for  its  minimum guarantee or advance, if any, 4) Then finally to the producer.

The Company and the producer  according  to the  percentages  negotiated  in the agreement  between  the  Company  and the  producer,  if any,  share  additional distribution receipts.  Independent Film Production and Product Acquisition Film distribution  companies  such as the  Company  primarily  represent  independent producers of motion pictures (rather than motion picture studios) in all related markets  and all  media,  including  theatrical  release,  television  and  home video/DVD distribution, and cable or satellite-distributed media. Producers seek to be  independent  producers  of  motion  pictures  for a variety  of  reasons, including  greater creative control of a project and potentially  greater profit participation  through the retention of the copyright or the ability to sell the film directly in particular  markets.  Often, young, new directors and producers have no choice  but to  independently  produce  their  projects,  and the motion picture  industry has a long history of  "breakthrough"  films produced at a low cost  by  first-time   producers  and  directors  which   subsequently   achieve considerable revenues. The Company has generally obtained its product from among these  independently  produced  films  rather  than from  major  motion  picture studios,   which  typically  have  their  own  in-house  distribution  networks. Nevertheless, from time to time, the Company has entered into "split rights", or shared,  arrangements  with studios to represent a film in certain markets.  The Company's  management seeks to identify  attractive projects very early in their development,  either through relationships with producers,  directors and agents or other known suppliers of product,  or through  industry  announcements of new productions.  In addition,  the Company attends  independent  festivals and film markets,  such as the Sundance  Film  Festival,  The New York  Independent  Film Festival and the Cannes Film Festival, in order to locate new product.

Business Strategy

The Company's  strategy is to capitalize on the reputation and the experience of its management team to package, produce and distribute independent feature films and expand its growth and  infrastructure  through  acquiring or partnering with other related entities,  also utilizing the industry to obtain certain financing for projects.  The execution of the Company's  strategy comes from operating the following  activities  within each  service it  provides  which,  in turn,  will generate revenues from both fees and commissions.

          1)   Packaging - The Company expects to become involved with packaging (the process by which one undertakes a particular film project in screenplay form and assembles cast, crew,  financing,  introduces banks and other  institutions  to the  "package"  (either for the company or for the producer) and may establish  partnerships from contributing  buyers  in order to  secure  the  distribution  and market  position  for the film,  if actually  produced.  For this activity, the company shall receive a percentage of the budget of the film and perhaps an equity interest as well.

          2)   Produce - For film  projects  in script form that may be acquired exclusively  for the  company,  a separate  schedule  is provided which will enable the packaging on an "in house" basis.  That is, to hire all  crewmembers,  contract a director,  and assemble all necessary  elements for  production and financing of the proposed project.  The Company, in this case, is also able to partner with other  production  teams  or  distribution  companies  for  added security  and in  reducing  risk in order for the project to have market interest early on. The Company shall retain percentages of the budget as well as receive  fees as a producer  and shall also control a major  portion of the equity  resulting in an increased chance for higher revenue portions from sales in the world and US markets.

          3)   Distribute  - The  Company  plans to acquire a certain  number of films per year as well as  assemble a  distribution  package  for other films that are  completed.  This will  generate  commission revenues  from sales and  marketing  income for which the Company can achieve its buyers' interest.

          4)   Related Entities - From time to time, the Company may be asked to engage in financing and/or distribution  activities for companies that could fill the need for  continued  product.  If  conditions were of a financially secure nature,  management would attempt to acquire  or  otherwise   partner  with  these  potential   target companies  in  order  to  expand  its  base  and  diversity  as a supplier.

          5)   Industry financing - Certain  arrangements will be sought whereby the  markets can provide  financing  in advance for feature  film product.  It is the Company's  intention to seek alternate methods of this  "off-balance  sheet"  financing  in order to secure more product under its control.

Subsidiary Operations

During the year 2000 and into 2001,  Odyssey has  completed the  acquisition  of Filmzone.com, an informational entertainment resource site that presently serves the public for retrieval of current film information.  The acquisition was added as a subsequent part of the earlier announced Kimon  acquisition.  Odyssey plans on  renovating  the site to serve the buyer markets in order to access the films it acquires.  The site will offer pricing and a high grade of  technology  where the  viewer  can access the  commercials,  trailers  and  artwork as well as the territories open for sale.

During the first part of 2001,  along with the assistance of the Kimon Group and Filmzone.com,  Odyssey  has  developed  its web site,  which will  announce  its activities and news, as well as its new films coming out in the future.  The Web site address is noted as  "Odysseypix.com"  and became "live" in the latter part of 2001.

In March of 2000,  the Company formed  Odyssey  Ventures  Online Holding S.A.,  Luxembourg corporation ("OVO"), for the purpose of making investments in various technology-related entities. OVO's original strategy was to invest and co-invest with venture  capital  investment and management  groups,  with the intention of developing  products and services related to digital  commerce,  content and the distribution thereof.

During the course of the fourth quarter of the fiscal year ending June 30, 2001, management determined that the maintenance and costs of overseeing the assets of OVO,  with the long term benefits in  technology  business  having to be revised significantly, require a change in the earlier plans to pursue added investments in  related  technological  ("Tech")  companies.  Recent  downgrades  of outside investments have affected the growth plans of many companies.  The fact that the Company  has had  numerous  difficulties  in securing  its long term  investment capital and has had little or no  financial  activity,  the  prospects of future investments  and growth plans of subsidiary  operations  have been  discontinued although  efforts are  maintained  to recover  values and perhaps trade in other capacities,  which are and remain  options  to  management.  Odyssey  has sought recoupment  of the  value of these  assets  perhaps  through  a  profitable  (or redeemable)  transaction  form  former  associates  of  the  Company.  It is the intention of the Company to seek another buyers within the year and perhaps make a sale of the assets,  or liquidate  the assets of the  subsidiary in an orderly manner.  In the case of the latter,  the Company has made a reserve and has made significant  write-downs of its valuation.  A determination  will be made during the year if no buyer or alternative manner of selling the assets is found.

Since the  formation of OVO in March,  2000,  the Company has made the following investments:  (i) an  investment  of  $500,000  for a 6.25%  equity  interest in PurchasePooling.com,  Inc., a web-based demand aggregating  service developed to enable government entities and businesses to realize significant cost savings by combining their purchasing power on large-ticket  capital equipment,  as well as other  goods and  services;  (ii) an  investment  of  $136,668  for a 25% equity interest in  Webtelemarketing.com,  an  Internet-based  company  specializing in online  recruiting  by linking  the supply  and demand  sides of the  employment industry;  (iii) an investment  of $25,000 for a 1% equity  interest in Exchange Enterprises,  Inc., a privately held company that has developed a patent-pending Internet  cash card that allows  consumers  to purchase  products  and  services online  without  the use of  credit  cards or bank  accounts.  The  interest  in Purchase  Pooling was acquired in February of 2000.  In September of 2000,  OVO, through a common  relationship  within the two entities of Purchase  Pooling and Edge  Technologies,  (EDGE is a major investor in Purchase  Pooling)  determined that it would be profitable to acquire,  through a stock swap, 264,000 shares in Edge Technology.  This resulted in a 30% ($150,000)  devaluation of the Purchase Pooling  investment and a $150,000 basis for the Edge investment.  The basis for this  purchase  of  264,000  shares of stock was at a value of $1.76 per  share, which was the exchange agreed upon in the  transaction.  As of June 30, 2002, an analysis was completed on the valuation.  It was determined that the share price had not yet met its  targeted  amount and that the current  price (based upon an average trading of the prior 30 days) was .41 per share. 

The Company has determined that the entire carrying cost of PurchasePooling.com, Inc. is impaired and has written down the entire value as of June 30, 2003.

The aggregate assessed value on the exchange if interest in Edge and Purchase Pooling is as follows:

Purchase Pooling - Investment of $500,000 for 6.25% results in 1% being based at $80,000.

Edge $150,000 exchange for 264,000 shares of stock results in 1.385% of Edge.

Development  In April 1999,  the Company  purchased  an option with the right of first  refusal to be the exclusive  worldwide  distributor  of a motion  picture entitled  "HARA." The film is an  action-packed  semi-biographical  martial arts love story. Prior management owned an indirect 50% equity interest,  through its affiliated companies, in Red Sun Productions, Inc., the rights holder of "HARA". In April of 2000, the Company made a refundable  advance of $60,000  towards the acquisition  of the  exclusive  rights  to  exploit  the  film  worldwide,  when completed.  This advance was made with the  intention  of producing  the project into a feature  length  movie  based upon the  prospects  of new  financing  for productions  becoming available.  As of June 30, 2001,  financing has not become available and the project remains in script form, but was registered as an asset of the Company under the classification of "deposits". It was prior management's intention,  at the time,  to package and finance  the film  project.  During the course of the next year,  there was a transition in  management  and, as well, a significant change in the economics of film financing.  It became known that the prior  management  did not have the financing  available  for this project.  New management  determined  that it  could  not  sustain  the  risks  involved  with financing  such a project  and,  requested  that the  deposit be  returned.  New management  has  experience in the industry  risks and further  determined  that future  financing  may not become  available  for this  project  for a number of reasons;  some being the fact that the  script  itself  would  need  substantial expense in rewrites and would need to re-evaluated  at a later date;  there will be no assurance that this  particular  genre of story will be marketable at that time in the future; unknown elements may exist on the actual claim of rights and the Company could not determine a true cost for a completed product.  Therefore, there would be no revenue results from which the Company could rely upon without spending more funds.  The Company has determined that the entire carrying cost of the asset  is impaired and has written down the entire value as of June 30, 2003.

Competition

The entertainment industry generally,  and the film industry in particular,  are highly competitive.  The Company's  competition includes the smaller independent producers as well as motion picture studios.  Many of the Company's  competitors have financial and other resources,  which are significantly  greater than those available to the Company.  The Company faces  competition  in all aspects of the business  and  cannot  give  the  assurance  that it  will  be  able to  compete effectively.  New  markets  require the  Company to compete  for  licensees  and sub-distributors  (as further defined herein) of Film/Video content with other Internet-based  Film/Video  distributors  through  cassette  tape  and/or DVD. Although our Joint Venture relationship assists us greatly in not seeking others and compete for relationships  with manufacturers and developers of transmission services  with playback and  broadcast  capabilities.  The business of providing content over the Internet is experiencing  rapid growth and is  characterized by substantial  technological  changes,  and there are new and varying  established companies entering into the same fields. Many of these companies have financial, technological,  promotional and other resources that are much greater than those available  to us and  could  use or adapt  their  current  technology,  or could purchase technology, to provide a service directly competitive with the Company.

Operations

The  Company's  operations  have  been  greatly  reduced  as  a  result  of  the restructuring of the Company by new management.  The Company's  principal office is located in Dallas,  Texas (see  "Properties")  and, as of June 30, 2003,  the Company had three full-time  employees,  consisting of Mr. John W. Foster,  the CEO and President of the Company,  along with two  administrative  assistants in the Dallas office.

ITEM 2. PROPERTIES

The Company  presently  conducts its operations out of leased  premises at 16910 Dallas Parkway,  Dallas,  Texas,  consisting of approximately 2,500 square feet. The  premises  are  presently  being made  available  to the  Company  through a sublease  agreement  with JL Media  Services  LLC,  an  affiliated  party to Mr. Foster. Rent expense for each of the fiscal years is as follows:

                                  -------------------- ------------                                      June 30, 2003         $44,398                                      -------------------- ------------                                      June 30, 2002         $40,936                                      -------------------- ------------                                      June 30, 2001         $34,094                                      -------------------- ------------                                      June 30, 2000         $17,649                                      -------------------- ------------                                      June 30, 1999         $84,939                                      -------------------- ------------

In May of 2003, the Company entered into a lease agreement to rent space for the office of Kjell Larsson,  director of sales and marketing,  as an accommodation. The term of the lease is until April of 2005 and has a monthly  lease expense of $321.  There was a deposit of $624 paid  according  to the  requirements  of the lease. The added obligation to the Company is as follows:

                                 ------------ ----------                                     2003 -       $2,247                                     ------------ ----------                                     2004 -       $3,852                                     ------------ ----------                                     2005 -       $1,284                                     ------------ ----------

ITEM 3. LEGAL PROCEEDINGS

On or about May 15,  1995,  Credit  Lyonnais  Bank  Nederland  N.V.  and Cinecom Entertainment  Group, Inc. filed a Complaint in the Superior Court for the State of California,  County of Los Angeles,  captioned Credit Lyonnais Bank Nederland N.V. and Cinecom  Entertainment  Group, Inc. v. Odyssey  Distributors,  Ltd. And Does 1 through  100 (No. BC 127790).  They  allege  that  Odyssey  Distributors, Ltd.(a subsidiary of the Company) collected but failed to remit to them assigned distribution proceeds in the amount of $566,283.33 from the foreign distribution of "Aunt Julia and the  Scriptwriter"  and "The Handmaid's  Tale." The Complaint alleges  claims for breach of contract and breach of fiduciary  duty and demands damages in excess of  $566,283,  attorney's  fees,  an  accounting,  a temporary restraining order and a preliminary  injunction.  In June 1995, the Court denied plaintiffs an attachment and stayed the action pending arbitration in New York.

In September,  1996, the Court dismissed the Complaint.  In December,  1996, the Company  settled the  outstanding  litigation  with Generale  Bank  ("Generale") (formerly   known  as  Credit   Lyonnais  Bank   Nederland   N.V.)  and  Cinecom Entertainment  Group Inc.  Pursuant  to the  settlement  agreement,  the Company agreed to pay to Generale  the sum of $275,000  in  complete  settlement  of the claim,  payable $25,000 upon execution of the settlement  agreement,  $25,000 on each of June 30 and December 31 in the years 1997,  1998 and 1999,  and $100,000 on June 30,  2000.  The Company  and  Generale  later  agreed upon a new payment schedule as follows:  $25,000 on or before  October 15, 1997 (payment was made); $30,000 on each of April 15, 1998,  June 30, 1998,  December 31, 1998,  June 30, 1999,  and December 31, 1999;  and $100,000 on June 30, 2000.  The Company is in default of this payment schedule. The consequences of not curing a default could result in the entry of a confession of judgment  already executed by the Company for the amount of  $275,000.  This  confession  of Judgment  is against  Odyssey Distributors,  Ltd., a wholly owned but non-operating,  non-active subsidiary of the Company.

In August 1995, G.P. Productions,  Inc. ("GP") and Greenwich Subject Films, Inc. ("Greenwich") commenced an action entitled G.P. Productions,  Inc. and Greenwich Studios,  Inc. v. Double Helix Films,  Inc.,  Communications  and Entertainment, Inc.,  Krishna  Shaw,  Gerald  Muller  and Norman  Muller in the  United  States District Court, Southern District of Florida (Case No. 95-1188).  Mr. Muller has demanded  that the Company  indemnify  him against any  expenses,  judgments and amounts paid in settlement of the action.  The Company  contends that, by virtue of Mr.  Muller's  breaches of fiduciary duty and violation of his obligations to the Company, it is not required to provide indemnification.

GP and  Greenwich  allege that they are the  exclusive  owners of the films "The Gallery"  and "South  Beach".  They assert  claims for  copyright  infringement, unfair competition,  breach of contract,  accounting,  conversion,  civil theft, conspiracy  and  fraudulent  conveyance.  The Complaint  demands a recall of the films,  an  attachment,   preliminary  and  permanent   injunctive   relief,  an accounting,  and  unspecified  compensatory,  punitive and treble  damages.  The Company's  motion to transfer  venue of the action was granted in November 1995, and the case  was  transferred  to the  United  States  District  Court  for the Southern  District of New York.  There has been no activity in this matter since the transfer of venue in 1995.

In October,  1995,  Canon  Financial  Services filed a Complaint in the Superior Court of New Jersey entitled Canon Financial  Services,  Inc. v.  Communications and  Entertainment  Corp.  The plaintiff is claiming that it is due  $47,499.83, plus damages,  pursuant to a lease agreement. The Company has filed an Answer in this action and the Court has denied plaintiff's motion for summary judgment. No trial date has yet been set in this matter.

In December,  1995, Robert F. Ferraro, a former director of the Company, brought an action against the Company in the Supreme Court of the State of New York, New York  County.  The action  was  brought  on a  promissory  note in the amount of $25,000 and  plaintiff  obtained a judgment on a summary  judgment  motion.  The plaintiff  has not yet  moved  to  enforce  the  judgment  and  the  Company  is considering  whether  or not it has a claim for  indemnification  against  prior management in  connection  with the issuance of the note.  The judgment,  in the meantime,  has been  assigned to an outside  collection  agency that has been in contact with  Management of Odyssey and Odyssey has made payments in keeping the matter from  accelerating.  As of the close of business  on June 30,  2003,  the outstanding  balance  remains at  approximately  $27,500 and is  confirmed as an active judgment.

In March, 1996, an action was filed against the Company in Los Angeles Municipal Court by Judy  Hart,  in which  the  plaintiff  claims  that she is due  $17,920 pursuant to a  promissory  note.  The Company  has filed a  cross-claim  seeking offsets  against the amount due and other  damages.  On May 21,  1998, a default judgment  was  entered  on  behalf  of  plaintiff  in  the  amount  of  $22,261. Subsequently,  plaintiff  filed a motion to include  attorneys fees and costs in the  aggregate  amount of  approximately  $17,000.  The Company is attempting to reach a settlement with plaintiff.  As of the end June 30, 2003,  there has been no contact with the plaintiff and no indication of any activity.

In March,  1996, a class action complaint was filed against the Company entitled Dennis  Blewitt v. Norman  Muller,  Jerry Minsky,  Dorian  Industries,  Inc. and Communications and Entertainment Corp. The complaint seeks damages in connection with the Company's  treatment in its financial  statements of the disposition of its  subsidiary,  Double Helix Films,  Inc. in June 1991.  The  complaint  seeks unspecified  damages  on  behalf  of all  persons  who  purchased  shares of the Company's  common  stock  from and after June 1992.  A second  action,  alleging substantially  similar  grounds,  was filed in December 1996 in Federal Court in the United States District Court for the Southern  District of California  under the caption  heading "Diane  Pfannebecker v. Norman Muller,  Communications  and Entertainment  Corp., Jay Behling,  Jeffrey S. Konvitz,  Tom Smith, Jerry Silva, David  Mortman,  Price  Waterhouse & Co.,  Todman & Co.,  and Renato  Tomacruz." Following  the filing of the second  action,  the first action was  dismissed by stipulation  in May 1997. The Company filed a motion to dismiss the complaint in the second  action and after a hearing  on the motion in July,  1997,  the Court dismissed  the  federal  securities  law  claims  as  being  time-barred  by the applicable statute of limitations, and dismissed the state securities law claims for lack of subject  matter  jurisdiction.  The Ninth  Circuit  upheld the lower court's  dismissal of this action on appeal.  The case was refiled in California state  court in August  1998.  The Court  granted  motions to dismiss two of the complaints filed by the Plaintiff,  whereupon a third complaint was filed.  More recently,  a fourth  amended  complaint  has been filed  adding  claims that the defendants,  including  the  Company,  violated  provisions  of  the  California Securities  Laws.  There  was no trial  date set in this  matter.  In a  related action, Thomas Smith and Norman Muller  ("Muller-Smith") former directors of the Company and  co-defendants in the Pfannebecker  matter,  filed an action against the Company in the Los Angeles Superior Court seeking  indemnification  from the Company  in  connection  with their  status as  defendants  in the  Pfannebecker matter.  The  Company  intends  to  defend  this  action  on  the  grounds  that Muller-Smith  committed  wrongful acts as directors of the Company and failed to comply with various fiduciary obligations to the Company. The Company has met on several  occasions,  through its legal  counsel,  to discuss and answer  certain attempts  at  settlement.  Due to the  nature  and  complications  of this suit, matters have generally  been very slow to receive  response to. In June of 2002, the  Plaintiff,  along with the  defendants  and Odyssey's  Counsel,  attended a hearing on the merits of the Class Action Status.

The Judge  ruled in favor of the  defendants  in that  there  were no grounds to continue this case as a class action. Subsequently,  Odyssey was able to receive a dismissal of this case.  Odyssey,  at the same time,  entered into  settlement discussions  with  respect  to  any  claims  of   indemnification   and  settled outstanding  possible  claims  and  potential  cross  claims  to  all  remaining co-defendants for a nominal amount of money, with the exception of Muller-Smith.

The  Company  attempted  to  further  clarify  its  stand on its  position  with Muller-Smith as earlier noted, however; these attempts were unsuccessful for the Company.  The Company attempted also to discuss settlement  activity,  and these settlement discussions did fail. The Company was not able to provide an amicable solution to this matter of indemnification and reimbursement of expense (claimed to be in excess of $350,000) and Odyssey posed its defense against Muller-Smith, knowing  that  the end  result  could  be an  entry  of  judgment  in  favor  of Muller-Smith.  A judgment,  if awarded,  would contain all collection rights and remedies  available to the judgment  holder.  In April of 2003,  the  California Court upheld the indemnification  claim for Muller-Smith and declared a judgment against  Odyssey  in the  amount  of  $360,000,  which  was  promptly  filed  in California  and  domesticated  in New York and in Texas as well. The Company met with   Muller-Smith   on  April  21and  sought   settlement   discussions   with Muller-Smith.  In a subsequent  conversation on May 6, Muller-Smith  refused the opportunity  to  continue  settlement  discussions.  Muller-Smith  notified  the Company  that an  additional  $100,000  was owed  against the same  claim.  This Additional amount for legal fees was being sought (and later was granted) as an addition to the judgment as well. Should the Company not be able to resolve this issue by either making full  payment or  entering  into an amicable  and  affordable  settlement arrangement,  then the  Company  would be  severely  hampered  in its ability to adequately  manage  the  operations.  The  Company  would  expect to  experience continued business interruption, collection efforts, garnishments, and defending this situation without a resolve will take a substantial amount of the Company's time  and  resources.   The  Company  will  need  to  seek  alternate  means  of capitalization  in  order  to meet not  only  its  operating  payments  but also possible  payments in  settlement.  There are certain  remedies in the Company's attempts to perhaps confront the judgment and render the judgment unenforceable. These include, but may not me limited to, future possible discoveries, which may or may not be  determined  as acts of wrongful or  criminal  intent  against the Company, fraudulent actions or similar wrongful activities.  Presently there may be numerous activities  surrounding this issue, such as depositions,  claims and collection activities.

The Screen  Actors Guild  ("SAG") has also asserted that there are amounts owing to several actors arising out of "Down Range." In September,  1999, SAG obtained an arbitration award against Down Range for a total amount of $96,183, inclusive of salaries to the actors,  pension and health contributions and late fees. Down Range was also ordered to pay $200 to the arbitrator.  Additionally,  there were two actors,  Corbin Bernsen and Jeff Fahey, who had pay-or-play  contracts.  The outcome of these  contracts and the actors' claims has not been resolved.  There has been no activity on this  matter from any source or other  assertions  as of the close of business on June 30, 2003.

Mr. Ian Jessel ("Jessel")  entered into a three-year  employment  agreement with the Company,  commencing  November 9, 1998 and  continuing  through  November 9, 2001.  Jessel's  responsibilities  included  management of the Company's  Motion Picture & Television Division.  Jessel's compensation was set at a rate equal to $300,000  per annum for the first year,  $350,000 per annum for the second year, and $400,000 per annum for the third year.  The  agreement  also  provided for a yearly bonus based upon the net profits of the film division and the Company.

The  Company  paid the sum of  $50,000  to Jessel in  fiscal  1999 and  deferred payment of the  balance of the  compensation  due to him.  In June 1999,  Jessel notified the Company that he was suspending  services to the Company for failure to pay his compensation on a timely basis. The Company believes it was justified in deferring certain payments due to Jessel.  Jessel commenced an action against the Company in  November  1999 in the Los Angeles  Superior  Court,  seeking the salary  and other  benefits  he claims he is  entitled  to under his  three-year employment  agreement.  The Company  intends to vigorously  defend the action on several  grounds,  including  Jessel's  breach  of  his  obligations  under  the agreement.  Discovery  was  ongoing in this  matter and a trial date was set for April 30,  2001.  Amounts  that could have been due to Jessel  were  reserved in accrued wages as a contingent amount. In December of 2000,  management requested mediation  talks to begin and had made efforts to settle the ongoing  litigation matters.  A  settlement  had been  reached and had been voted as accepted by the Board.  All  settlement  discussion and offers have been reserved and are within the reserved  amount(s).  As of June 30, 2002, the company had made  significant payments  towards the balance of the settlement.  Subsequently,  the company and Jessel have made an arrangement for repayment of the balance of this debt.

Although a payment schedule has not been determined until the Company can, or is able to,  adhere to one,  the  parties  have  been  working  amicably  to afford payments on an "as available"  basis and, from time to time, have issued certain reports  and updates in order to maintain  constant  contact  with Jessel on the activities within the Company. There is and remains a risk, however, that if the sum total of the payment is not paid or satisfied, or becomes significantly past due and if Jessel may cease to coordinate  with the Company (or vice versa) then there could be enforcement of an allowed  judgment.  The amount of this judgment could be in excess of $375,000  plus  interest  accrued.  If such enforcement would be acted upon, then all rights and remedies  afforded to a judgment holder shall  become  effective  and  expose  the  Company  to the  collection  of said judgment. In this case, the Company would face significant expense in attempting to defend or protect the  judgment  from being filed and such an instance  would require substantial management time and cash from operations to accommodate such an action.

Mr.  Dennis  Morgan  ("Morgan")  commenced  an action  against  the  Company  in December, 1999 in the Los Angeles Superior Court alleging that he was promised a position as head of a music  division to be  established by the Company and that such oral  agreement  was  intended  to be  confirmed  in writing but never was. Morgan brought claims against the Company and others for the purported breach of an  oral  agreement,  purported  breach  of  an  implied  agreement,  fraud  and fraudulent conveyances. The Company has served written discovery and is awaiting responses  to  interrogatories  and the  production  of  documents.  The Company contends  that  there was no  employment  relationship  with,  nor any  monetary commitments to, Morgan, and that it committed no breach or wrongdoing.  A trial; date was set for this matter.  The parties began discussing  settlement terms in order to alleviate the costs of ongoing litigation. As of the end of June, 2001, the  Company  entered  into  preliminary  settlement  and  expects  satisfy  any outstanding  complaints.  The company has made payments  towards this settlement and shall continue to pay on a promissory  note basis.  As of June 30, 2002, the company had made payments  towards the balance of the settlement.  Subsequently, the company and Morgan have made a payment arrangement,  which involves a period of time in  structured  payments.  Although  a  payment  schedule  has not  been determined until the Company can, or is able to, adhere to one, the parties have been working  amicably to afford  payments on an "as available"  basis and, from time to time,  have  issued  certain  reports  and  updates in order to maintain constant contact with Morgan on the activities  within the Company.  In April of 2003, a judgment was filed in the State of  California  in favor of Morgan.  The amount  of  this  judgment  is  $225,000  plus  accrued  interest,  although  an agreed-upon arrangement exists indicating  non-enforcement as long a progress is being made on the  outstanding  debt. If  enforcement  of this judgment would be acted upon,  then all rights and  remedies  afforded to a judgment  holder shall become effective and expose Odyssey to the collection  process of said judgment. In this case, the Company would face significant expense in attempting to defend or protect the  judgment  from being filed and such an  instance  would  require substantial  management time and cash from operations  and/or outside sources to accommodate such an action.

An action  was filed in the State of New York  Watson,  Farley and  Williams  v. Odyssey Pictures Corp., Gold Leaf Pictures,  Belgium, Johan Schotte,  Chardonnay Enterprise  Ltd, and A Hero From Zero N.V.  Complaint  filed April 30, 2001, New York Supreme Court,  New York County.  The complaint  states a balance owing for services  rendered from the period  beginning 1997 through to April of 2000. The notice of complaint  was  received on August 10, 2001.  The Company has answered this  complaint  denying  its  position  in the named  defendants.  The  Company contends that it did, in fact, pay any and all  outstanding  related legal bills related to the Plaintiff's corporate  involvement.  The Company did hire counsel in New York and has made an  attempt  to offer a  settlement  on  behalf  of the remaining  defendants.  No  response  has been made from the  Plaintiff  on this matter as of the close of business on June 30, 2002 as well as June, 30, 2003. There is a pending  litigation  from  another law firm in Los  Angeles,  Arter & Hadden LLP,  which is from  representation  in the above suits prior to specific counsel  moving to  another  firm  currently  representing  the  Company in some matters.  It is the Company`s intention to pay or settle this amount as and when it is economically  feasible to do so. The amount due is $30,000. In February of 2002,  a default  judgment  was  entered in the matter and the Company is making arrangements  to  make  payments  over  a  period  of  time.  The  judgment  was domesticated in Texas and there is a local collection  attorney assigned to this in  Dallas,  Texas  and they are  pursuing  collection  activity.  The party has accepted a monthly payment  arrangement to be made, yet the Company had not made any payments as of the end of June 30, 2003.

The Company is subject to other  legal  proceedings  that arise in the  ordinary course of its business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No  matters  were  submitted  to a vote of  security  holders  during the fourth quarter of the fiscal year covered by this Report.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

The following table sets forth the range of high and low bid information for the Common  Stock of the  Company as  reported  by the  OTCBB on a quarterly  basis for each of the two preceding  fiscal years. The Company's shares have traded in the over-the-counter market on the OTC Bulletin Board. The Company's Common Stock trades under the symbol OPIX.

No dividends  have been declared or paid with respect to the Common  Stock.  The bid quotations represent inter-dealer prices and do not include retail mark-ups, markdowns or commissions and may not necessarily represent actual transactions.

Common Stock
| Fiscal 2001    |   | High  |   | Low   |
|----------------|--------|-------|--------|-------|
|                |   |       |   |       |
| First Quarter  |   | $1.52 |   | $1.09 |
| Second Quarter |   | 1.38  |   | .50   |
| Third Quarter  |   | 1.00  |   | .34   |
| Fourth Quarter |   | .45   |   | .33   |
| Fiscal 2002    |   | High  |   | Low   |
|----------------|--------|-------|--------|-------|
|                |   |       |   |       |
| First Quarter  |   | $ .38 |        | $ .15 |
| Second Quarter |   | .34   |        | .10   |
| Third Quarter  |   | .61   |        | .31   |
| Fourth Quarter |   | .47   |        | .12   |
| Fiscal 2003    |   | High   |   | Low   |
|----------------|--------|--------|--------|-------|
|                |   |        |   |       |
| First Quarter  |   | $ .215 |        | $ .05 |
| Second Quarter |   | .165   |        | .04   |
| Third Quarter  |   | .10    |        | .06   |
| Fourth Quarter |   | .12    |        | .12   |

As of June 30,  2003,  there were  approximately  13,696  record  holders of the Company's  Common  Stock.  This  includes   approximately  20  identified  stock brokerage firms, which typically hold stock for multiple customers in their own, or "street"  name.  Confidentiality  laws do not allow the Company to inquire on actual numbers of customers held by these firms.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

Results of Operations for the Years Ended June 30, 2003 and 2002 Net loss for the year  ended  June 30,  2003 was due mainly to the fact that the Company  did not  release  any  new  films  nor  receive  any  income  from  its investments  through its  subsidiary,  and the Company wrote down  most of its investments in and to affiliated  entities from prior  activities as well as stopped accruing for additional unusual expenses.

Revenues for the twelve months ended June 30, 2003 decreased to $65,540 compared to $168,615 for the twelve  months ended June 30, 2002 and $3,706 for the period ending June 30, 2001.  Primarily,  this was the first results of the selling and licensing of its library of films and in reviving  some of its contacts from the prior  activity of  distribution.  At the end of June 30, 2003,  the Company had a few new films ready to be made  available for delivery  during the first two quarters of the new fiscal year. These new films came from  independent  sources with which the Company and new management had made arrangements.  However, the independent  has been  in an economic slowdown limiting the Company's revenues and making it difficult to raise capital.

Because of lack of revenues associated with them, the Company has determined that $4,896,504 in long lived assets are impaired and the Company has taken a charge in this amount.

Liquidity and Capital Resources

The Company's  continued  existence is dependent upon its ability to resolve its liquidity  problems.  The company must achieve and sustain a profitable level of operations  with  positive  cash  flows and must  continue  to obtain  financing adequate  to meet  its  ongoing  operation  requirements.  These  factors  raise substantial  doubt about the Company's  ability to continue as a going  concern. The  auditors'  report on these  financial  statements  contains an  explanatory paragraph indicating there is substantial doubt about our ability to continue as a going concern.  The Company relies heavily on its added interim loans, capital contributions  and  increased  equity  placements  from  its  current,  and new, shareholders.   In  addition,  the  Company  continues  its  attempt  to  secure additional  funding through a variety of opportunities and is currently engaging in negotiations to secure such funds. The Company cannot make assurances that it will  be  successful  in  doing  adding  to its  working  capital  to  meet  its expenditure  needs  and  service  of its  debts.  There  are no lines of  credit available to the Company.  The Company cannot make  assurances  that  additional funds will be available from any of these sources on favorable terms, if at all. At June 30, 2003, the Company held no cash.

In the past  fiscal  year,  management  has  taken  steps to fund the  Company's operations  primarily  through private  placements of the Company's common stock.  The Company received  financial  support from JL Media  Services LLC, an affiliate of an officer,  John W. Foster in offsets to  overhead  and  interim  loans,  which are secured by the Company's  assets. 

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The  response  to this Item is  submitted  as a separate  section of this report commencing on page F-1. The accompanying  consolidated financial statements have been  prepared  assuming  that the Company will continue as a going concern and, therefore,  has the ability to manage the recovery of its assets and satisfy its liabilities in the normal course of its continued operation.

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

As if the  close  of business on June 30, 2003,  there were no  disagreement  or  conflicts  with the accountants.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The directors and executive officers of the Company for the reported period are as follows:
| Name               |   | Age |   | Position                                                 |
|--------------------|--------|-----|--------|----------------------------------------------------------|
|                    |   |     |   |                                                          |
| John W. Foster     |   | 50  |        | Director, Chairman of the Board and CEO/President        |
| Patrick Speeckaert |   | 56  |        | Director, Compensation Committee, Audit committee        |
| Peter Bucher       |   | 61  |        | Director                                                 |
| Kjell Larsson      |   | 50  |        | Director, Compensation Committee, Audit Committee, Sales |

Set forth below is information  regarding the business experience of the current Directors and executive officers of the Company.

John W. Foster  has  been  an   independent   financial   consultant  and  analyst specializing in turnaround  situations and management  restructuring in specific industries  including the  entertainment  and  communications  industry.  He has extensive background in information systems and data processing, and worked as a consultant  and investment  advisor in  determining  strategies of financing and investments  in  motion  picture   projects  for  investors,   distributors  and producers.  Mr. Foster  served as interim  President of the Company from January 2000  through June 2000,  and was formally  working in the position of President from that time.  His  contract was  extended  through  2002 and 2003,  and he is currently  serving as Chairman,  President and CEO of the Company effective July 1, 2001 to present.

Patrick  Speeckaert has served as Managing Director of Morrow & Co., Inc. of New York, a leading company specializing in advising international corporations with respect to issues  involving  corporate  governance,  shareholder  relations and solicitations,  until 2003.  Recently,  Mr.  Speeckaert became the President and Chairman of OOJob America Inc.  Job,  based in New Canaan,  Connecticut,  is a ten-year  old  European  company  specializing  in  computerized   behavior  and professional assessments. Clients include large banks, retailers, manufacturers, government and employment agencies.

Mr. Peter Bucher is an independent  corporate  investment advisor and consultant based in  Switzerland.  His career in banking  since the early  1960's  includes relationships with the Swiss Banking Association.  He is currently active in his community as political  leader and maintains his business in investment  banking on a full time basis.

Mr.  Kjell  Larsson  is based in  Florida  and has been  involved  with the film industry for over twenty years.  Mr. Larsson has produced and sold in all facets of the film business and is also a shareholder of Odyssey  Pictures  through his company,  Kemp  Entertainment.  In 1972. Mr. Larsson pursued a technical  career receiving a Technical  Engineer's Degree in Sweden and later, in his capacity of sales  and  marketing,  created  one of the  first  video  retail  chains in the Scandinavian Market, which resulted in the Presidency of the Swedish division of Scanbox  A/S, a major film and video  distribution  company in the  Scandinavian market.  Serving as producer  and  co-producer  of several  feature  films,  Mr. Larsson has  significant  background  in developing a film project from start to finish, including financing,  budgeting and production. Mr. Larsson relocated to Palm Coast, Florida in 1993. He also served as President of TigerNetOrder, Inc., an Internet facilitator specializing in E-Trade and Web Stores.

Compliance  with Section  16(a) of the  Securities  Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors,  and persons who own more than 10% of a registered class of the Company's equity securities,  to file reports of ownership and changes in ownership  with the  Securities  and  Exchange  Commission  (the  "Commission"). Officers,  directors  and  greater  than 10%  stockholders  are  required by the Commission's regulations to furnish the Company with copies of all section 16(a) forms they file.  To the  Company's  knowledge,  based solely on a review of the copies of reports furnished to the Company during the fiscal year ended June 30, 2003,  the  Company's  officers,  directors  and greater  than 10%  stockholders complied with all filing requirements under section 16(a) except that Mr. Foster did not file Form 3 Reports.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to the chief executive officer of the Company, the only  compensated  executive  officer- as of June 30,  2003.  Other  significant employees would not be required to be included in the table due to the fact that such employees were not executive officers of the Company at the end of the most recently completed fiscal year:
|   | **Summary Compensation Table**                             |
|--------|------------------------------------------------------------|
|   |                                                       |   |   | **Annual Compensation** |   |   | **Payouts** |   |   |
|   |                                                       |   |   |  |   |   |  |   |   |
|   | **Name and            Principal Position**                 |   | **Fiscal            Year** |   | **Salary** |   | **Bonus** |   | **Other Annual****Compensation** |   |   |   | **Underlying             Options** |   | **All Other**** Compensation** |
|   |                                                            |   |  |   |  |   |  |   |  |   |   |   |  |   |  |
|   | John W. Foster,               President/CEO |   | 2003 |  | 185,220 |   | -- |   | -- |   |   |   | -- |  |                                    -- |
|   |                                                       | 2002 |  | 176,400 |  | -- |   | -- |   |   |   | -- |   | -- |
|   |                                                       | 2001 |   | 156,000 |   | -- |   | -- |   |   |   | -- |  | -- |
|   |                                                       |   | 2000 |   | 49,250 |   | -- |   | -- |   |   |   | -- |   | 12,312 |

Options/Stock Appreciation Rights:

There were no issues with respect to stock options and stock appreciation rights ("SARs")  granted to  executive  officers  during the fiscal year ended June 30, 2003 or in 2002.

Aggregated Option/SAR Exercises and Fiscal Year-End Options/SAR Value Table

Note: No bonus has been paid or  distributed in the past four quarters of fiscal 2003 or fiscal 2002.

Director Compensation

The Company does not have any standard  arrangements pursuant to which directors of the  Company  are  compensated  for  services  provided  as a  director.  All directors  are entitled to  reimbursement  for expenses  reasonably  incurred in attending  Board of Directors'  meetings.  In the period ending 2000, each Board Member  received  2000  shares  of  Common  Stock  in  consideration  for  their participation.  There  have  been no other  distributions  of Stock to the Board Members as of the end of June 30, 2003 and the same periods ending June 30, 2002 and 2001.

Compensation   Agreements,   Termination  of  Employment  and  Change-in-Control Arrangements:

John W. Foster  served as interim  President  of the  Company  from  January,  2000 through  June,  2000 at the rate of $9,850  per month.  In July 2000,  he became President of the Company and agreed to a one-year  extension of his agreement at the rate of $12,000 per month, plus allowances,  plus a 5% increase in salary on an  annual  basis  until  otherwise  contracted.  There  was no  stock  or stock incentive  arrangement  included.  In July of  2001,  Mr.  Foster  continued  as President  and was  voted as  Chairman  and CEO by the  Board of  Directors.  He received a pay  increase  to $14,700  per month and his  contract  was  extended through June 30, 2002, with a 5% increase beginning July 1, 2002 through to June 30,  2003.  A  significant  amount of Mr.  Foster's  salary has gone  unpaid and remains payable by the Company as of the end of June 30, 2003.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information concerning ownership of common stock, as of  September  25,  2003,  by each  person  known  by the  Company  to be the beneficial  owner  of more  than  5% of the  common  stock,  each  director  and executive officer, and by all directors and executive officers of the Company as a group.
| **Name of beneficial owner**                                       |   | **Status**                     |   | **Shares**** beneficially**** owned** |   | **Percentage          of Class** |
|--------------------------------------------------------------------|--------|--------------------------------|--------|-------------------------------------------------|--------|----------------------------------|
|                                                                    |   |                                |   |                                                 |   |                                  |
| Patrick Speeckaert                                                 |   | Director                       |   | 2,000                                           |   | Less than 1%                     |
| John W. Foster                                                     |   | Director,        President/CEO |   | 2,000                                           |   | Less than 1%                     |
| Kjell Larsson                                                      |   | Director                       |   | 1,518,055                                       |   | 4.7%                             |
| Peter Bucher                                                       |   | Director                       |   | -0-                                             |   | -0-                              |
|                                                               |   |                           |   |                                                 |   |                                  |
|                                                               |   |                           |   |                                                 |   |                                  |
| All Executive Officers &          Directors - (4) - as a group |   |                           |   | 1,522,055                                       |   | 4.7%                             |

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In April,  1999, the Company purchased a refundable option for $60,000 to be the exclusive worldwide distributor of a motion picture entitled "HARA." The film is an action  martial arts love story and was expected to start  pre-production  in January,  2001.  Former  Management  of the Company  owns an indirect 50% equity interest in Red Sun  Productions,  Inc.,  a production  company,  which owns all rights to the film  "HARA." As was  mentioned  earlier  (Subsidiary  Operations, Development  April 1999).  The  determination of the disposition of this advance has not been decided upon as of the close of business on June 30, 2002  although the Company wishes to seek its refund on any outstanding advances in general. As mentioned earlier herein, the Company impaired the entire balance as of the end June 30, 2003.

PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)(1) The  response  to this  portion  of Item 14 is  submitted  as a  separate section of this report commencing on page F-1.

(a)(2) See (a)(1) above.

(a)(3) Exhibits

3.1  Articles of Incorporation, as amended through June 30, 1995  (1)    3.2  Amendments to Articles of Incorporation filed in March and June, 1996 (8)    3.3  Amendment to Articles of Incorporation filed in January, 1997 (9)    3.4  By-laws  (1)    4.1  Indenture  between Odyssey and Continental Stock Transfer and Trust Company ("Continental") dated as of July 15, 1987 (1)    4.2  Form of Supplemental Indenture between Continental and the Company  (1)    4.3  Form of Common Stock Certificate  (1)    4.4  Form of options granted of officers, directors and 5% stockholders  (2)    4.5  Form of Warrant issued to purchasers  parties to the 1995 Private Placement completed September 30, 1995  (5)    4.6  Form of 12% Unsecured  Promissory Note issued to purchasers  parties to the 1995 Private Placement completed September 30, 1995   )5)    4.7  Form of Stock Option  Agreement by and between the Company and officers and directors of the Company, for stock options issued in April 1995  (5)    4.8  Form of Common  Stock  Purchase  Warrant by and  between  the  Company  and officers, directors,  employees and consultants of the Company for warrants issued during the fiscal year ended June 30, 1996    (8)    4.9  Common Stock Purchase Warrant, dated March 6, 1996, between the Company and G & H Media, Ltd. (assignee of Stephen R. Greenwald) (7)    4.10 Common Stock Purchase Warrant, dated March 6, 1996, between the Company and Lawrence I. Schneider   (7)    4.11 Common Stock Purchase Warrant, dated March 6, 1996, between the Company and Ira N. Smith   (7)    4.12 Form of Common  Stock  Purchase  Warrant by and  between  the  Company  and officers, directors,  employees and consultants of the Company for warrants issued during the fiscal year ended June 30, 1997  (9)    4.13 Preferred Stock Certificate, Series A, issued to Kinnevik Media Properties, Ltd. in September, 1997  (10)    4.14 Convertible Note issued to Augustine Fund L.P. in July, 1998  (12)    4.15 Preferred Stock Certificate,  Series B, issued to Kimon, Inc. in September, 1998  (10)    10.01 1989 Long Term Incentive Plan  (1)    10.02 Sub-Lease for office  premises at 16910 Dallas  Parkway, Suite 104, Dallas Texas dated February 1, 2001   (8)    10.03 Settlement Agreement and Release between  Paramount  Pictures  Corporation and Odyssey Distributors,  Ltd. (a wholly owned subsidiary of the Company), and Guarantee agreement of the Company, each dated as of September 26, 1996(9)    10.04 Stock  Purchase  Agreement  between the  Company  and  Flanders  Film S.A. relating to purchase  of minority  stock  interest in E3 Sports New Mexico, Inc. and Media Trust S.A.,  and related  promissory  notes for $135,000 and $315,000, dated March 2, 1998   (10)    10.05 Employment Agreement with Johan Schotte, dated March 2, 1998  (10)    10.31 Convertible Note issued to Augustine Fund, L.P. in July, 1998  (12)    10.32 Asset  Purchase  Agreement  between the Company and Kimon  Mediaright KB,a Swedish limited partnership, dated July 14, 1998 (10)    10.33 Employment Agreement with Pierre Koshakji, dated March 2, 1998  (11)    10.34 Employment Agreement with Ian Jessel, dated December, 1998  (13)    10.35 Settlement Agreement with Stephen Greenwald, dated September, 1999  (13)    21.1 Subsidiaries of the Registrant  (3)    31.1 Officer's Certification Pursuant to Section 302 (14)    31.2 Officer's Certification Pursuant to Section 302 (14)      32.1 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (14)

(1)  Incorporated herein by reference to the Company's Registration Statement on Form S-4, File No. 33-34627.    (2)  Incorporated herein by reference to the Company's Registration Statement on Form S-1, File No. 33-43371.    (3)  Incorporated  herein by reference to the Company's  Current  Report on Form 8-K filed April 12, 1995, File No. 0-18954.    (4)  Incorporated  herein by reference to the Company's  Current  Report on Form 8-K filed August 30, 1995, File No. 0-18954.    (5)  Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the fiscal year ended June 30, 1995, File No. 0-18954.    (6)  Incorporated  herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1995, File No. 0-18954.    (7)  Incorporated  herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, File No. 0-18954.    (8)  Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1996, File No. 0-18954.    (9)  Incorporated herein by reference to the Company's Registration Statement on Form S-1, File No. 333-20701.    (10) Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1997, File No. 0-18954    (11) Incorporated herein by reference to Amendment No. 1 to the Company's Annual Report on Form 10-K for the  Fiscal  Year  Ended  June 30,  1997,  File No. 0-18954    (12) Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1998, File No. 0-18954    (13) Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1999, File No. 0-18954    (14) Provided herewith.

     (b)  Reports on Form 8-K

     The  Company  filed no Reports  on Form 8-K during the last  quarter of the period covered by this Report.

     (c) See (a)(3) above.

     (d) None

ITEM 14. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the  participation of our  management,  including  the  chief  executive  officer,  or CEO,  and chief financial  officer,  or CFO, of the effectiveness of the design and operation of our disclosure procedures.  Based on that evaluation, our management,  including the CEO and CFO,  concluded  that our disclosure  controls and  procedures  were not effective as of June 30,  2003.  There have been no  significant  changes in our internal  control over  financial  reporting  during the 2002 calendar year that have materially  affected,  or are reasonably likely to materially  affect,  our internal control over financial reporting.

----

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**Michael F. Cronin    Certified Public Accountant****Orlando****, FL 32708**

    Board of Directors and Shareholders    Odyssey Pictures Corp.    Dallas, TX

I have audited the accompanying balance sheet of Odyssey Pictures Corp. as of June 30, 2003 and the related statements of operations, stockholders' deficiency and cash flows for the year then ended. The financial statements are the responsibility of the directors. My responsibility is to express an opinion on these financial statements based on my audit. The financial statements of Odyssey Pictures Corp. as of June 30, 2002 were audited by other auditors whose report thereon, dated November 1, 2002, expressed an unqualified opinion.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board *(United States)*. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, I express no such opinion. 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. I believe that my audits provide a reasonable basis for my opinion.         In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Odyssey Pictures Corp. as of June 30, 2003 and the results of its operations, its cash flows and changes in stockholders' deficiency for the year then ended  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. As discussed in financial statement notes, the Company has incurred a $6,148,000 loss from operations and consumed $277,000 of cash due to its operating activities.  The Company may not have adequate readily available resources to fund operations through June 30, 2004. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in the Notes. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

June 3, 2008
| /s/ Michael F. Cronin       |
|-----------------------------|
|                             |
| Michael F. Cronin           |
| Certified Public Accountant |

----

Want & Ender CPA, P.C.    386 Park Ave. South Suite 1816    New York, NY. 10016

Report of Independent Accounts

To the board of directors and Shareholders of Odyssey Pictures Corporation

In our opinion, the accompanying consolidated balance sheet and related consolidated statement of operations, shareholders' equity and of cash flows present fairly, in all respects, the financial position of Odyssey Pictures Corporation and its subsidiaries at June 30, 2002 and the results of their operations and their cash flows for the period ended June 30, 2002 in conformity with generally accepted accounting principals.

These financial statements are the responsibility of the company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards, which 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 test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principals used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above.

The company is a defendant in various lawsuits. The company has filed counteractions and preliminary hearings and discovery proceedings on several actions are in progress. The ultimate outcome of the litigation cannot be determined at present. Most liabilities that may result upon adjudication have been accrued in the accompanying financial statements.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 3 to the financial statements, the Company has suffered recurring losses from operations, as a net capital deficiency and has insufficient working capital to meet its

current obligations and liquidity needs. The factors raise substantial doubt about the company's ability to continue as a going concern managements plans in regard to these matters are also described in note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

New York City, New York

/s/ Want & Ender, CPA    ----------------------------    Want & Ender, CPA, P.C.    November 1, 2002

----

| Odyssey Pictures Corporation                             |
|----------------------------------------------------------|
| Balance Sheet                                            |
| June 30,                                                 |
|                                                     |   |   |   |
| Assets                                                   | **2003** |   | **2002** |
|                                                     | (restated) |   |   |
|                                                     |  |   |  |
| Current Assets                                           |   |   |   |
| Cash & cash equivalent's                             | $0 |   | $3,675 |
| Accounts receivable                                      | 0 |   | 182,550 |
| Receivable from related parties                          | 0 |   | 85,037 |
| Prepaid expenses                                         | 0 |   | 166,500 |
|                                                     |  |   |  |
|   Total current assets                              | 0 |   | 437,762 |
|                                                     |   |   |   |
| Film inventory (net)                                     | 0 |   | 3,893,602 |
| Amortizable intangible assets, net                       | 6,500 |   | 0 |
| Investments in unconsolidated subsidiaries               | 0 |   | 584,916 |
| Other                                                    | 0 |   | 4,500 |
|                                                     |  |   |  |
| Total assets                                             | $6,500 |   | $4,920,780 |
|                                                     |   |   |   |
| *Liabilities and Stockholders' Deficiency*               |   |   |   |
|                                                     |   |   |   |
| Current Liabilities:                                     |   |   |   |
| Accounts payable                                         | $2,064,041 |   | $1,374,596 |
| Accounts payable-related parties                         | 71,734 |   | 19,350 |
| Accrued interest                                         | 240,821 |   | 228,221 |
| Other accrued expenses                                   | 858,256 |   | 596,317 |
| Debt obligations in default                              | 1,302,412 |   | 45,000 |
|                                                     |  |   |  |
|   Total current liabilities                         | 4,537,265 |   | $2,263,484 |
|                                                     |   |   |   |
| Derivative liability                                     | 68,971 |   | 0 |
| Long term debt                                           | 0 |   | 1,311,173 |
| Related parties                                          | 143,413 |   | 150,829 |
|                                                     |   |   |   |
| Stockholders' Deficiency:                                |   |   |   |
| common stock-40,000,000 authorized $0.01 par value       |   |   |   |
| 32,982,039 issued & outstanding (30,392,039 in 2002) | 329,820 |   | 298,038 |
| Additional paid in capital                               | 36,776,252 |   | 36,597,543 |
| Accumulated deficit                                      | (41,849,221) |   | (35,700,287) |
|                                                     |  |   |  |
| Total Stockholders' Deficiency                           | (4,743,149) |   | 1,195,294 |
|                                                     |  |   |  |
| Total Liabilities and Stockholders' Deficiency           | $6,500 |   | $4,920,780 |
|                                                     |   |   |   |
|                                                     |   |   |   |

See Notes to Financial Statements.

----

| Odyssey Pictures Corporation                         |
|------------------------------------------------------|
| Statement of Operations                              |
|                                                 |
|                                                 |   |   |   |
|                                                 | Fiscal Years Ended June 30, |
|                                                 | **2003** |   | **2002** |
|                                                 | (restated) |   |   |
|                                                 |  |   |  |
| Net Sales                                            | $65,540 |   | $168,615 |
| Costs Applicable to Sales & Revenue              | 107,383 |   | 106,050 |
|                                                 |  |   |  |
| Gross Profit                                         | (41,842) |   | 62,565 |
|                                                 | -63.8% |   | 37.1% |
|                                                 |   |   |   |
| Selling, General & Administrative Expenses       | 936,075 |   | 529,618 |
| Settlements                                          | 0 |   | 126,789 |
| Permanent Impairment of Long Lived Assets            | 4,896,504 |   | 709,222 |
| Depreciation and Amortization                        | 0 |   | 75,000 |
|                                                 |  |   |  |
|   Total Operating Expenses                      | 5,832,579 |   | 1,440,629 |
|                                                 |  |   |  |
| Income (Loss) Before Other Income & Income Taxes | (5,874,421) |   | (1,378,064) |
|                                                 |   |   |   |
| *Other Income (Expense)*                             |   |   |   |
| Interest Income                                      | 0 |   | 138 |
| Interest (Expense)                                   | (274,256) |   | (542,197) |
|                                                 |  |   |  |
| Income (Loss) Before Income Taxes                    | (6,148,677) |   | (1,920,123) |
|                                                 |  |   |  |
|                                                 |   |   |   |
| Income Taxes                                         | 259 |   | 0 |
|                                                 |   |   |   |
|   Net Loss available to common shareholders     | ($6,148,936) |   | ($1,920,123) |
|                                                 |  |   |  |
| Basic and Diluted Net Loss Per Common Share          | ($0.19) |   | ($0.09) |
|                                                 |  |   |  |
| Weighted Average Common Shares Outstanding (Basic)   | 31,687,039 |   | 22,540,417 |
|                                                 |  |   |  |

See Notes to Financial Statements.

 

----

| Odyssey Pictures Corporation                             |
|----------------------------------------------------------|
| Statement of cash Flows                                  |
|                                                     |
|                                                     | Fiscal Years  Ended June 30, |
|                                                     | **2003** |   | **2002** |
|                                                     | (restated) |   |   |
|                                                     |  |   |  |
| Cash Flows from Operating Activities:                    |   |   |   |
| Net Loss                                                 | ($6,148,936) |   | ($1,920,123) |
| Adjustments required to reconcile net loss to cash flows |   |   |   |
| from operating activities:                               |   |   |   |
|    Depreciation, Amortization & Bad Debts  | 0 |   | 177,395 |
|    Additions to film costs                     | 0 |   | 182,814 |
|    Impairment                                  | 4,896,504 |   | 0 |
|    Stock Issued for Services                   | 0 |   | 144,000 |
|    Options Issued for Services                 | 76,262 |   | 0 |
| Changes in Operating Assets & Liabilities:           |   |   |   |
|    Accounts Receivable                         | 0 |   | (184,681) |
|     notes receivable and advances         | 9,100 |   | 112,682 |
|    Prepaid Expenses                            | 5,001 |   | (12,500) |
|    Accounts Payable & Accrued Expenses     | 885,293 |   | (111,657) |
|    Accrued Expenses                            | 0 |   | 1,607 |
|                                                     |  |   |  |
|   Net cash used by operating activities             | (276,776) |   | (1,610,463) |
|                                                     |   |   |   |
|                                                     |   |   |   |
| Cash Flows from Investing Activities:                    |   |   |   |
|    Investments in film inventory               | 0 |   | (19,419) |
|   Subsidiary activity                               | 0 |   | 601,917 |
|                                                     |  |   |  |
|   Net cash used by investing activities             | 0 |   | 582,498 |
|                                                     |   |   |   |
| Cash Flows from Financing Activities:                    |   |   |   |
|   Proceeds from Sale of Common Stock                | 103,000 |   | 916,000 |
|   Loan Proceeds                                     | 170,102 |   | 113,177 |
|                                                     |  |   |  |
|   Net cash used by financing activities             | 273,102 |   | 1,029,177 |
|                                                     |   |   |   |
|                                                     |   |   |   |
| Net Change In Cash                                       | (3,675) |   | 1,212 |
| Cash-Beginning                                           | 3,675 |   | 2,163 |
|                                                     |  |   |  |
| Cash-Ending                                              | $0 |   | $3,375 |
|                                                     |  |   |  |

See Notes to Financial Statements.

----

| Odyssey Pictures Corporation                                                                     |                     |
|--------------------------------------------------------------------------------------------------|--------------------------|
| Statement of Stockholders' Deficiency                                                            |                     |
|                                                                                             |                     |   |   |   |   |   |   |   |   |
|                                                                                             | Stockholders' Deficiency |
|                                                                                             |                          |
|                                                                                             | Common Stock             |   |   |   |
|                                                                                             |                          |   |   |   |
|                                                                                             | Shares                   |   | Common Stock            Amount |   | Additional            Paid-In Capital |   | Accumulated            Deficit |   | Total |
|                                                                                             |                          |   |  |   |  |   |  |   |  |
| Balance at June 30, 2001                                                                         | 21,762,558               |   | $243,266 |   | $35,624,038 |   | ($33,780,164) |   | $2,087,140 |
|                                                                                             |                          |   |  |   |  |   |  |   |  |
| Common stock issued for services                                                                 | 690,000                  |   | 6,900 |   | 137,100 |   |   |   | 144,000 |
| Shares issued for cash                                                                           | 7,939,481                |   | 79,395 |   | 836,605 |   |   |   | 916,000 |
| Net Loss                                                                                         |                     |   |   |   |   |   | (1,920,123) |   | (1,920,123) |
|                                                                                             |                          |   |  |   |  |   |  |   |  |
| Balance at June 30, 2002                                                                         | 30,392,039               |   | 329,561 |   | 36,597,743 |   | (35,700,287) |   | 1,227,017 |
|                                                                                             |                          |   |  |   |  |   |  |   |  |
| Shares issued for cash                                                                           | 2,590,000                |   | 259 |   | 102,741 |   |   |   | 103,000 |
| Fair value of stock based compensation,               net of unvested forfeitures |                     |   |   |   | 76,262 |   |   |   | 76,262 |
| Net Loss                                                                                         |                     |   |   |   |   |   | (6,148,936) |   | (6,148,936) |
|                                                                                             |                          |   |  |   |  |   |  |   |  |
| Balance at June 30, 2003                                                                         | 32,982,039               |   | $329,820 |   | $36,776,746 |   | ($41,849,223) |   | ($4,742,657) |
|                                                                                             |                          |   |  |   |  |   |  |   |  |
|                                                                                             |                     |

See Summary of Significant Accounting Policies and Notes to Financial Statements.

----

**ODYSSEY PICTURES CORPORATION**    Notes to Consolidated Financial Statements

All  schedules  have been  omitted  because  the  requested  information  is not required,  or,  because the  information  required is included in the  financial statements or Notes thereto.

The  accompanying  financial  statements  have been  prepared  assuming that the Company will continue as a going concern. Continuation of the Company as a going concern is dependent upon whether the Company will be able to raise enough funds for its  operations.  If the  Company  is  unable  to obtain  new  funding,  the company's  operations may be materially  affected.  The  accompanying  financial statements do not include any adjustments  that might result from the outcome of this uncertainty.

1.       Summary of  Significant Accounting Policies:

     a.   Risks and Uncertainties:

     As is inherent in the Company's business,  there are many and varying risks and  uncertainties.  This is including the Company's  limited  abilities to generate  profitability  over the past several years, its unproven business model  and the many  changes  that  have been  experienced  in the  foreign markets (as to buying and government -imposed  limitations,  along with the changes in foreign  demand for the company's  product),  the Company has to depend on various alternatives that may be presently unknown in nature. The  Company's  success  will  depend  upon the  resurgence  of the  independent  product, its ability to expand into other areas of distribution (such an CD  recordings,  DVD's and Video markets) and other methods of broadcast  (such as Cable,  secure  internet  access,  direct  satellite  transmission)  and whatever may be or become  available to  independents  during the course of future business.

     b.   Reclassifications:

     Certain  items  in  the  2002 financial  statements  have  been  reclassified to conform to the 2003 presentation.

     c.   The  application  of the  following  accounting  policies,  which  are  important  to  our  financial  position  and  results  of  operations, requires   significant   judgments   and  estimates  on  the  part  of  management. For a summary of all of our accounting policies, including the accounting  policies  discussed  below,  see Notes 2 to our audited consolidated financial statements.

     e.   Accounting for Motion Pictures and Television Programs.  In June 2000, the Accounting Standards Executive Committee of the American Institute of Certified  Public  Accountants  issued  Statement of Position  00-2 "Accounting by Producers or Distributors  of Films" ("SoP 00-2").  SoP 00-2   establishes   new   accounting   standards   for  producers  or distributors  of films,  including  changes  in  revenue  recognition, capitalization  and  amortization  of costs  of  acquiring  films  and television programs and accounting for exploitation  costs,  including advertising and marketing expenses.

a) Organization and Nature of Operations:

Odyssey Pictures Corporation (the "Company") was organized in December 1989 as a Nevada corporation.  It was primarily  structured as a holding company for media activities.  The Company is currently engaged in the international  distribution of motion pictures.

b) Principles of Consolidation:

The consolidated  financial  statements include the accounts of the Company, its wholly owned  subsidiaries and majority owned or controlled joint ventures.  All significant    intercompany    accounts    have   been    eliminated.    Certain reclassifications have been made to prior year amounts to conform to the current period presentation and new standards as issued.

c) Revenue Recognition:

In June 2000, the American Institute of Certified Public  Accountants  ("AICPA") issued  Statement of Position 00-2,  "Accounting by Producers or Distributors of Films" (SoP 00-2), which established new accounting  standards for producers and distributors of films as well as changes in revenue  recognition and the methods of accounting for  exploitation  or  development  and overhead  costs.  SoP 00-2 requires  that  advertising  costs be  expensed  in  accordance  with SoP  93-7, "Reporting on Advertising  Costs" while all other  exploitation  costs are to be expensed as  incurred.  Development  costs for  abandoned  projects and indirect overhead costs are to be charged to expense instead of being capitalized to film costs. The Company adopted the  pronouncement  effective January 1, 2002 and the effect on net income (loss) of recognizing these revenues is not material.

Revenues from foreign  theatrical,  home video,  television  and pay  television licensing  contracts are recognized when the film is available for exhibition by the licensee and when certain other  conditions are met.  Revenues from domestic theatrical  distribution  of films are  recognized  as the films are  exhibited. Virtually all of the Company's revenues for the period ended June30, 2003, and 2002were from  foreign  distribution  rights  and  continuing  ancillary revenues,  such  as  foreign  income  from  soundtracks  or  other  revenue  not previously accounted for (known as "residuals") relating thereto.

Revenue is recognized in accordance  with the  provisions of SoP-02 and SAB 101. The Company  licenses  certain film rights  through  international  distribution agreements  either on a direct  commission basis or that may require the payment of minimum  license fees known as "Minimum  Guarantees"  ("MG's").  The MG's are typically  payable on delivery and  acceptance by the Company of the  respective completed  film and these MG's may be subject to further  increase  based on the actual  distribution  results in the respective  territory.  Minimum  Guarantees related  to  contracts  which  contain   holdback   provisions   precluding  the distributor  from exploiting  secondary  markets until certain time periods have lapsed are allocated  across those  markets and  recognized as revenue when each holdback  provision  expires.  As of the close of business in June 30, 2002, the Company had no films in  distribution  that neither  require an MG nor were in a "hold-back" restriction.

Cash payments, advances or other fees are recorded as and when collected, unless all the conditions of revenue  recognition have not been met. In the case of the latter, revenues are recorded as deferred revenue until all conditions are met.

c) Film Costs:

Film costs include (1) development cost, (2) cost of production,  (3) investment in distribution rights, and (4) marketing and distribution expenses.  Film costs are amortized,  subject to the adoption of the new accounting standards as Notes herein,  and  estimated  residual and  participation  costs are  ccrued,  on an individual  film basis in the ratio that the current  year's gross film revenues bear to  management's  estimate of total  ultimate  gross film revenues from all sources.

Film costs are stated at the lower of cost or estimated net realizable  value on an  individual  film basis.  Ultimate  revenue and cost  forecasts for films are periodically  reviewed by  management  and revised  when  warranted  by changing conditions. When estimates of total revenues and costs indicate that a film will result  in an  ultimate  loss,  additional  amortization  is  provided  to fully recognize such loss.

Revenue from the sale or licensing of motion pictures and television programs is recognized upon meeting all recognition  requirements of SoP 00-2.  Revenue from the  theatrical  release  of  motion  pictures  is  recognized  at the  time  of exhibition based on the company's participation in box office receipts.  Revenue from the sale of DVDs in the retail  market,  net of an allowance  for estimated returns,  is  recognized  on the latter of shipment  to the  customer or "street date" (when it is  available  for sale by the retail  marketer).  Under  revenue sharing  arrangements,  rental  revenue is  recognized  when we are  entitled to receipts and such receipts are  determinable.  Revenues from television,  cable, pay-per-view  or other  transmitted  broadcast  methods are recognized  when the motion  picture or  television  program is available to that  respective  market (through  licensees) for such  broadcast.  For television  licenses that include separate or restricted  availability (sometimes referred to as "windows") during a given license period,  revenue is allocated over the "window" period.  Revenue from sales of  international  territories is recognized when the feature film or television  program is  available to the  distributor  for  exploitation  and no special conditions for delivery exist. Under most sales contracts,  full payment is required upon  delivery.  For contracts  that provide for rights to exploit a program on multiple media (e.g. theatrical,  video, television) with a fee for a single  motion  picture or television  program where the contract  specifies the permissible  timing of release to various  media,  the fee is  allocated  to the various media based on management's assessment of the relative fair value of the rights to exploit  each media and is  recognized  as the  program is released to each media. For  multiple-title  contracts with a fee, the fee is allocated on a title-by-title  basis,  based on  management's  assessment  of the relative fair value of each title.  As of June 30,  2003,  the  Company had no  multiple-title contracts in the markets.

According to the new standards,  the following  changes in accounting  have been adopted:

     o    Advertising and marketing costs, which were previously  capitalized to  investment in films and  television  programs on the balance sheet and amortized using the individual film forecast method,  are now expensed the first time the advertising takes place.

     o    The  capitalization of production costs is limited to revenue that has been  contracted for in the applicable  markets until such time as the criteria  for  recognizing  revenues  are  met.  Notes,  this  is  also applicable to secondary markets, or reissue of product (after original license contracts have expired).

Revenue  recognized  from ancillary  markets is recorded at the time of receipt, since it is not  traditionally  included  within the  estimates of revenue with a particular  project's  primary  release,  and may not  ever  become  a  realized revenue,  or the  Company  did not have  those  rights  to  exploit  within  its distribution network.

d) Investments:  none

e) Earnings (Loss) Per Share:

Earnings  (loss) per share are  computed  using the weighted  average  number of common shares outstanding during the respective periods.

f) Use of Estimates:

The preparation of financial statements in conformity 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,  disclosure of contingent assets and liabilities at the date of the financial  statements,  and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

g) Fair Value of Financial Instruments:

The  carrying  value of cash,  Notes  receivable  and Notes  and  loans  payable approximates fair value because of the short-term maturity of these instruments.

h) Impact of Recently Issued Accounting Standards:

In the course of developing and evaluating  accounting  policies and procedures, the Company used  estimates,  assumptions  and  judgments to determine  the most appropriate  methods  to be  applied.  Such  processes  are used in  determining capitalization of costs related to any film investments, potential impairment of those  investments,  operating  cost  reimbursements,  and taxable  income.  The Company has not yet  assessed  the impact of the  adoption  of  recently  issued accounting  standards  on  our  consolidated  financial  position,   results  of operations or cash flows.

The Company has adopted recent requirements of Revenue recognition. Revenue from the sale or licensing of motion  pictures and television  programs is recognized upon meeting all recognition requirements of Statement of Position (SoP 00-2) as further defined in the Revenue Recognition Policy Noted herein.  Included in the Company's  newly  adopted  standards,  the  Statement  of  Financial  Accounting Standards No. 145 (SFAS 145) will require gains and losses on  extinguishment of debt to be classified as income or loss from continuing  operations  rather than as extraordinary  items as previously  required under SFAS No. 4.  Extraordinary treatment  will be required for certain  extinguishments  as provided in APB No. 30.  The  provisions  of SFAS No. 145  related  to the SFAS No. 4  revision  are effective for financial  statements  issued for fiscal years beginning after May 15, 2002, however, early adoption is encouraged.  Once adopted, any gain or loss on extinguishment of debt that was classified as an extraordinary  item in prior periods   presented  that  does  not  meet  the  criteria  in  APB  No.  30  for classification  as an  extraordinary  item should be  reclassified.  Under staff

accounting  Bulletin 74 (SAB 74) the  Company is  required  to disclose  certain information related to other new accounting  standards,  which have not yet been adopted due to delayed effective dates.

2. Changes in Management Control:   none

3. Results of Operations and Management's Plans:

The Company's  continued  existence is dependent upon its ability to resolve its liquidity  problems.  The Company must achieve and sustain a profitable level of operations  with  positive  cash  flows and must  continue  to obtain  financing adequate to meet its ongoing  operation  requirements.  To offset hese factors, the  company has  embarked on an  aggressive  capital  campaign  and has been in development for determining  it's most effective  method of exploiting  recently acquired film rights and re-establishing its contacts in the foreign and US Home Video  markets.  Since July 2001,  new  management   as embarked on a program to reverse the unfavorable  results, by significantly  reducing overhead and taking steps to rebuild  revenues.  Net loss for the recent periods has been due to the delay  in  receipt  of  revenue  and  getting  to the  markets  at the  time the availability  to  release  the  films coproduced  or  otherwise  acquired  for distribution  (which  results are  recorded in the  Company's  Film  Costs).  In December the Company did enter into an exclusive  distribution  agreement with a library of  films.  The company has just begun the  process of  marketing  this library, which includes the development of sales materials, creating descriptive listing  sheets for  licensees and to seek foreign  sales  representatives.  One sales  representative is under contract for the Scandinavian market. The company attended its first film market in several  years in Los Angeles and rejoined its affiliation with the American Film Marketing  Association in 2002,  however,  in 2003,  the  Company  was  unable to  continue  its  annual  dues and  expects to re-establish  its  membership  status  as soon  as  economically  feasible.

The  Company's  operations  have  been  greatly  reduced  as  a  result  of  the restructuring of the Company by new management.  The Company's  principal office is located in  Dallas,  Texas and as of June 30,  2003,  the  Company  had three full-time  employees,  consisting  of Mr.  Foster,  the  CEO and   resident,  an administrative secretary, and a production-administrative assistant. The Company also engaged  Kjell  Larsson to direct sales and marketing on a full time basis. The Company also hires on occasion, several professionals in sales on a contract and commission basis. These  professionals are located in our major market areas of Los Angeles and Europe. Additional staff is planned in the administrative and sales areas, the latter of whom may be commission or contract basis.

         a) Factors Affecting Operating Results

The Company has a significant investment in Film Costs, which contain relatively most of its asset  valuation.  The Company has  experienced  difficulties in the past in  generating  revenues  to  realize a value on its  assets as  indicated. Several  factors have hampered the Company's  ability to effectively  arket and sell or  license  the film  titles  it has.  These  reasons  are  mainly  to the following circumstances:

New  management  and new board  members  have had a limited  period of time with which to work  together and evaluate the business and  prospects.  The Company's operating  history,  coupled  with  the  emerging  nature  of  new  markets  for independent  films and other forms of broadcast as well as new   technologies  in Internet-delivered Film/Video content, were either not available or built upon in prior years,  as may have been the case with other  similar  companies.  Past economic downturns  in the  Foreign  markets  and an overall  decline in the  independent markets in general makes  predicting  future  operating  results  difficult.  In addition,  the Company's  Licensee  prospects must be considered in light of the uncertainties  encountered  by  past  negative  experiences  with  the  Company. Although  management  and certain  board  members have  experience  in providing market  expertise and positive  results,  this activity,  along with the rapidly evolving markets,  (specifically  for delivery of Film/Video  content over the Internet,  from which the Company developed a joint venture with Kasstech,  Inc. as Notesd earlier),  may create unknown and uncertain results.  The result is the Company's exposure to certain risks, which, as summarized, include the Company's ability to:

     1)   Acquire and retain repeat buyers and licensees for Foreign Territories the Company was once active in; and,

     2)   Build awareness, acceptance and confidence in new management's ability to deliver; and,

     3)   Acceptance and awareness of Filmzone.com, the Content, the new formats available  (for  the  library  product  as well as the  Company's  new product); and,

     4)   Renew or extend  existing  financial  relationships  and  acquire  new content and new provider relationships; and,

     5)   Manage growth to stay competitive and fulfill customer demand; and,

     6)   Generate cash from operations and raise capital.

If the  Company  should  fail to  manage  these  risks  successfully,  it  would materially  adversely  affect  financial  performance.  The above  elements make prediction of future revenue difficult. There are no assurances that the Company will be able to predict our future revenue  accurately.  Because the Company has had a  significant  amount of  restoration  of client  base,  reduction of current film  product and higher cost delivery methods,  revenue has suffered.  Turnaround of assets acquired has been delayed (as earlier mentioned).

In addition,  the Company's past  relationship  through the Kimon transaction in involves a "yet to be  determined"  value from its  exclusive  arrangement  with Hallmark Entertainment, as described herein, the results of this transaction and its related activities are not known at this time.

The Company has had, and will  continue to have, a number of fixed  expenses and may be unable to adjust spending in a timely manner to compensate for unexpected revenue shortfalls.  Accordingly,  any significant  shortfall in relation to any expectations  could  cause  significant  declines  in these and other  operating results.   Quarterly   revenue,   expenses  and  operating  results  could  vary significantly in the future, and that period-to-period comparisons should not be relied upon as indications of future performance.  Due to the foregoing factors, it is likely that in some future quarters our operating  results will fall below the  expectations  of  securities  analysts  and  investors,  which could have a material adverse effect on the trading price of our common stock.

         b) Other factors which may affect Operations:

The loss of key employees could jeopardize our growth prospects. The loss of the services  of any  of  our  executive  officers  or  other  key  employees  could materially  adversely  affect our business.  Our future  success  depends on the continued  service  and  performance  of our  senior  management  and  other key personnel,  particularly  of John W. Foster,  Chairman  and CEO, and  President. There are no employment  agreements with any of our executive  officers or other key employees.

The Company's inability to hire new employees may hurt our growth prospects. The failure to hire new  personnel  could damage the  Company's  ability to grow and expand its business.  The  Company's  future  success  depends on its ability to attract,  hire and  retain  highly  skilled  technical,  managerial,  editorial, marketing/sales  and  customer  service  personnel,  and  competition  for these experienced individuals is considered high.

5. Income Taxes:

At June 30,  2003,  the  Company  had a net  operating  loss  carry  forward  of approximately  $42 million.  Effective as of the  beginning of fiscal 2002,  the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income  Taxes"  (known as "SFAS  109"),  on a  prospective  basis.  SFAS 109 requires  the Company to change its method of  accounting  for income taxes from the  deferred  method  to the  liability  method.  Under the  liability  method, deferred tax liabilities  and assets are recognized for the tax  consequences of temporary  differences  between the financial  reporting and tax basis of assets and  liabilities.  There were no  significant  changes by the  adoption  of this method  and, as a result of the  company's  net  operating  losses at the period ending June 30, 2003, no provision for income tax has been recognized.

The utilization of approximately $4,900,000 of these losses in future periods is estimated by the Company to be limited to  approximately  $350,000 per year (the "annual earn out limitation"). The use of these tax losses to offset against any future gains in any one tax year may be limited if a change of control is deemed to occur per United States tax  regulations.  As  Management  does not possess a majority of the outstanding  stock they cannot affect the occurrence of a change of control  event.  The  company  has not filed a tax  return  since 1993 and is currently in the process of completing all tax returns.

6. Notes and Loans Payable:

In January of 2001,  the company had entered into a  settlement  with Ian Jessel (Ian Jessel vs.  Odyssey  Pictures  Corporation)  of which an amount of $385,000 plus  interest of 10% per annum.  This amount has been  reduced from the accrued portion of the balance sheet and entered into current  structured Notes payable, resulting in an increase to the Notes Payable.  The Settlement is in the form of a Notes, with no specific payment  arrangements due to the Company's inability to make any  payments  on a regular  basis.  As the Company  progresses  in seeking alternate financing, moderate payments have been made which have been acceptable to Mr. Jessel.

In June of 2001,  the company  borrowed  funds on an interim basis from an investor  who is also a  shareholder  of the Company in order to pay the initial payment to Mr.  Jessel,  which was $140,000.  The repayment of this interim Notes occurred  from the Company  entering  into a  long-term  debt  arrangement  with another lender. The Settlement Notes does carry a default clause which, if called and not cured  timely,  could  result in the  filing of a judgment  against  the Company  in the  total  amount  that  would be due at that  time,  plus  accrued interest.  Unsecured  Promissory  Notes:  In August of 2001, two unsecured Notes previously  recorded  under Media Trust Notes  Payable  were paid in full,  thus reducing the liabilities to the Unsecured Promissory Notes by $98,550.

In April of 2002 the company  received  short-term  loans from an  individual to accommodate  certain cash needs. To facilitate  these loans,  the Company issued warrants to purchase 25,000 shares  unregistered  common stock  exercisable at a price of $0.40.  The warrants expire in April of 2007.

In August of 2002,  a series of    loans were made  totaling  $9,500 for specific  expenses by certain  unrelated  parties.  The CEO loaned an additional amount of funds to the Company to accommodate  certain overhead expenses.  These funds were accounted for as short-term interest bearing loans.

In September,  2002, the Company borrowed $50,000 for working capital needs in a sixty-day Notes at 12% per annum.  This Notes is in default.

In November of 2002, the Company  borrowed  $30,000 from an unrelated  party for overhead  use on a  short-term  basis.  This was  subsequently  repaid  upon the successful closing of a private placement, as Noted herein.

From February  through to June of 2003, the Company  received  various loans for overhead  expenses  from a series of  lenders,  inclusive  of the CEO,  totaling $39,000. These loans all were made on a short-term interest-bearing basis.

***Convertible Debt***

In June, 2003, we issued a $100,000 convertible promissory Notes. The Notes bears interest at 8% per annum until paid or converted. Interest is payable monthly commencing July, 2003. The initial conversion rate is $0.25 per share (subject to standard anti-dilution and certain re-set provisions). The convertible Notes matures on June, 2005.

The convertible debt securities were issued with a non-detachable conversion feature and 1,500,000 detachable warrants. We evaluate and account for such securities in accordance with EITF Issue Nos. 98-5, 00-19, 00-27, 05-02, 05-04 and 05-08, and SFAS No. 133, *Accounting for Derivative Instruments and Hedging Activities*  as amended.

In accordance SFAS No. 133, we evaluate that the holder's conversion right provision, interest rate adjustment provision, liquidated damages clause, cash premium option (if applicable), and the redemption option (collectively, the debt features) contained in the terms governing the Notes to determine whether they are or are not clearly and closely related to the characteristics of the Notes. Accordingly, if the features qualify as embedded derivative instruments at issuance and, furthermore if they do or do not qualify for any scope exception within SFAS No. 133 (paragraphs 12-32), then they are required by SFAS No. 133 to be accounted for separately from the debt instrument and recorded as derivative financial instruments.

The Notes is convertible at the option of the holder at any time and from time to time into Common Stock of the Company at an initial conversion price of $0.25 per share, subject to standard anti-dilution and certain re-set adjustments. Pursuant to the terms of the Notes, the conversion price will be reset (the "Reset Provision") to the number of common shares into will be equal to the  dollar  amount of the debenture  being  converted  multiplied  by  eleven,  minus the  product  of the conversion  price,  multiplied  by ten times the dollar  amount of the debenture being converted,  divided by the conversion price. The conversion price is equal to the lesser of (i) $.25; or (ii) 80% of the average of the three lowest prices during the 20 trading days before but not including  the  conversion  date.

Material Events that would cause default under the Notes include:
    - failure to pay principal when due;
    - failure to pay any interest, late fees
    - failure to perform other covenants under any Notes that is not cured by thirty-five days after notice;
    - any representation or warranty under the financing documents that is untrue or incorrect in any material respect;
    - certain events such as bankruptcy or assignment for the benefit of creditors of the Company or any of its subsidiaries;
    - the Company becoming party to a change of control transaction;
    - failure to maintain the required reservation of additional shares of authorized common stock;

The 1,500,000 warrants permit the purchasers to purchase 1,500,000 shares of common stock at an initial exercise price of $1.00 per share and are exercisable from June 30, 2003 until June 30, 2006. They contain standard anti-dilution provisions similar to the convertible debt.

The values ascribed to the Notes, the conversion feature of the Notes, other potential embedded derivative features, and detachable warrants follow the guidance of EITF Issue No. 00-19,*  Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock*  ; SFAS No. 150,*  Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity* ; and EITF Issue No. 00-27, *Application of Issue No. 98-5 to Certain Convertible Instruments*  .

The terms of the convertible debentures include a reset conversion feature which provides for a reduction in conversion price of the debentures into shares of the Company's common stock at a rate at 80% of the average of the three lowest prices during the 20 trading days before but not including  the  conversion  date. Because the conversion option is indexed to our own stock and a separate instrument with the same terms would be classified in stockholders' equity in the statement of financial position, the written option is was not considered to be a derivative instrument for the issuer under SFAS 133 paragraph 11(a) However, under EITF 00-19 we have determined that the current conversion rate is not fixed and determinate and will change in circumstances outside management's control and, accordingly, the conversion feature was separated from the host contract.

In accordance with the FASB Emerging Issues Task Force ("EITF") Issue No. 98-5 "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios" and EITF Issue No. 00-27 "Application of Issue No. 98-5 to Certain Convertible Instruments," we determined that the convertible Notes contains an embedded beneficial conversion feature resulting in a discount to the carrying amount of the Notes equal to:
|   | (i) | the difference between the effective conversion rate and the market price of our common stock on the date of issuance; multiplied by |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------|
|   | (ii) | the number of shares into which the Notes are convertible. Per EITF Issue No. 98-5 and EITF Issue No. 00-27, upon issuance we recorded a $68,971 discount to the convertible Notes. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

For convertible debt securities, any recorded discount resulting from the allocation of proceeds to the beneficial conversion feature should be recognized as interest expense over the minimum period from the date of issuance to the date of maturity using the effective yield method.

The Company used the Black-Scholes option pricing model in valuing the detachable warrants. The inputs for the valuation analysis of the warrants include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate. The key inputs for the valuation analysis in June, 2003 were a volatility of 100%, common stock value of $0.10 and a risk free interest rate of 6.0%. In accordance with EITF 98-5, the Company recorded the warrants as a debt discount and additional paid-in capital for their relative fair value of $31,029.

This Notes was considered to have an embedded beneficial conversion feature because the effective conversion price was less than the quoted market price at the time of the issuance. The Company allocated the proceeds of the debt between the warrants and the debt based on relative fair values which amounted to $31,029 and 68,971 respectively. The beneficial conversion feature of $68,971 was recorded separately based on the intrinsic value method per EITF 98-5. The intrinsic value of the beneficial conversion feature exceeds the proceeds allocable to the convertible debt therefore, the amount of the discount assigned to the beneficial conversion feature was limited to the amount of the proceeds allocable to the convertible debt.

The aggregate discount of $100,000 will be amortized to interest expense over the term of the Notes using the straight-line method. The carrying value of the Notes, net of corresponding unamortized of discount is as follows:

| Face amount of Notes            | $  100,000                                                             |
|---------------------------------|-----------------------------------------------------------------------------|
| Less unamortized discount       | ($ 100,000)                                                                 |
| Carrying value at June 30, 2003 | $             0 |

7.   Common Stock

In December of 2001,  the Company  issued  500,000  shares of common  stock to a private  European  company for its services in investment  banking and financial consultation for and on behalf of the Company.

In June of 2002,  the  Company  issued  190,000  shares of  common  stock to two parties for financial services and consulting  arrangements as previously agreed  upon by management.  These were  specifically,  140,000 shares to one individual and 50,000 shares for a private company for services.

In July of 2002,  the Company issued 100,000 shares of common stock to a private European   company  for  its  services  in  investment   banking  and  financial consultation for and on behalf of the Company.

8. Commitments and Contingencies:

Lease  Commitments:  The  Company  conducts  its  operations  out of  sub-leased premises at 16910 Dallas Parkway, Suite 104, Dallas, Texas 75248, which consists of  approximately  2,500 square feet.  The  premises  are  presently  being made available to the Company as a sublease by another company related to Mr. Foster, named JL Media  Services  LLC.  Rent expense for the space is $ 2,500 per month, with a $5,000  deposit and will continue for a period of five years,  to March 1 of 2006.  During  the fiscal  year  ending  June 30,  2002,  the lease  payments increased per the master lease  agreement for expense  allotment  (approximately $2457 annually).  In January of 2003, the expense allocation  increased to where the  proportionate  amount for the Company was $2835 per month.  Therefore,  the lease  expense  totaled  $44,398 as  compared to $40,935 as of June 30, 2002 and

$34,094 for the same period ending 6-30-01.  The Company has storage  facilities to store its older  records and film  materials  and leases on a  month-to-month basis of $395 each month.

In May of 2003, the Company entered into a lease agreement to rent space for the office of Kjell Larsson,  director of sales and marketing,  as an accommodation. The term of the lease is until April of 2005 and has a monthly  lease expense of $321.  There was a deposit of $624 paid  according  to the  requirements  of the lease. The added obligation to the Company is as follows:

         2003 - $2,247             2004 - $3,852             2005 - $1,284

The company has no other outstanding lease obligations.

10. Stock Options and Warrants:

**Summary of Warrant Activity**

The convertible Notes was issued with 1,500,000 detachable warrants. Exercise prices are $1.00 and expire three years from the date of issuance, June, 2006.. We evaluate and account for such securities in accordance with EITF Issue Nos. 98-5, 00-19, 00-27, 05-02, 05-04 and 05-08, and SFAS No. 133, *Accounting for Derivative Instruments and Hedging Activities* as amended. We also issued 1,100,000 warrants for services.

The Company used the Black-Scholes option pricing model in valuing the warrants. The inputs for the valuation analysis of the warrants include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate. The key inputs for the valuation analysis at June 30, 2003 were a volatility of 100%, common stock value of $0.10 and a risk free interest rate of 6.0%. A table summarizing the assumptions is as follows:

| Year | Interest Rate | Dividend Yield | Expected Volatility | Expected Life |
|------|---------------|----------------|---------------------|---------------|
| 2003 | 6.0%          | 0.0%           | 100.0%              | 60 mos.       |
| 2002 | 6.0%          | 0.0%           | 50.0%               | 60 mos.       |

The following table provides summary information on the various warrants issued by us in private placement transactions; the warrants exercised to date; the warrants that are presently exercisable and the current weighted average exercise prices of such warrants.

|                                 |        |   |      | Weighted average exercise price | Weighted average remaining contractual term (years) | Aggregate intrinsic value* |
|--------------------------------------|-------------|--------|-----------|---------------------------------|-----------------------------------------------------|----------------------------|
|                                 |        |   |      |
|                                 |        |   | Shares    |
|                                      |             |        |           |                                 |
| Options outstanding at June 30, 2001 | 3,310,659   | $0.42  |      |                            |
| Granted                              | 725,000     | $0.65  |      |                            |
| Exercised                            | 0           | $0.00  |      |                            |
| Lapsed                               | (1,153,333) | $0.63  |      |                            |
| Options outstanding at June 30, 2002 | 2,882,326   | $0.48  | 4.0       | $0                              |
| Granted                              |        |   | 2,600,000 | $0.61                           |                                                |                       |
| Exercised                            |        |   | 0         | $0.00                           |                                                |                       |
| Lapsed                               |        |   | 0         | $0.00                           |                                                |                       |
| Options outstanding at June 30, 2003 | 5,482,326   | $0.54  | 2.4       | $20,000                         |
| Options exercisable at June 30, 2003 | 5,482,326   | $0.54  | 2.4       | $20,000                         |

| The following table summarizes the status of the Company's aggregate warrants as of June 30, 2003: |
|----------------------------------------------------------------------------------------------------|
|                                                                                               | *Warrants Outstanding* |   | *Warrants Exercisable* |
| Range of            exercise prices                                                                | Shares | weighted average            exercise price | Weighted average            remaining life            in months | Shares | weighted average            exercise price |
|                                                                                                    |  |  |  |  |  |
| $ 0.01-$ 0.50                                                                                      | 3,069,540 | $0.19 | 17.4 | 3,069,540 | $0.19 |
| $ 0.51-$ 1.00                                                                                      | 2,412,786 | $0.98 | 43.3 | 2,412,786 | $0.98 |
| *Total Shares*                                                                                     | 5,482,326 |   |   | 5,482,326 |   |

**Derivatives**

We follow the provisions of SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133") along with related interpretations EITF No. 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" ("EITF 00-19") and EITF No. 05-2 "The Meaning of ‘Conventional Convertible Debt Instrument' in Issue No. 00-19" ("EITF 05-2").  SFAS No. 133 requires every derivative instrument (including certain derivative instruments embedded in other contracts) to be recorded in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative's fair value recognized currently in earnings unless specific hedge accounting criteria are met.  We value these derivative securities under the fair value method at the end of each reporting period (quarter), and their value is marked to market at the end of each reporting period with the gain or loss recognition recorded against earnings.  We continue to revalue these instruments each quarter to reflect their current value in light of the current market price of our common stock.  We utilize the Black-Scholes option-pricing model to determine fair value.  Key assumptions of the Black-Scholes option-pricing model include applicable volatility rates, risk-free interest rates and the instrument's expected remaining life.  These assumptions require significant management judgment.

Per the guidance of EITF No. 00-19 and EITF No. 05-2, the re-set features of the 2003 convertible Notes did not meet the required tests Therefore, the conversion feature of the 2003 Notes was considered an embedded derivative in accordance with SFAS No. 133. Accordingly, we bifurcated the derivative from the  host contract and recorded the liability at its fair value of $68,971. The fair value of the derivative liability was determined using the Black-Scholes option pricing model. The key inputs for the valuation analysis at June 30, 2003 were a volatility of 100%, common stock value of $0.10 and a risk free interest rate of 6.0%.

We classify derivatives as either current or long-term in the balance sheet based on the classification of the underlying convertible debt instrument. 

11. Changes in Securities And Use of Proceeds.

On December 12, 2001 an  unaffiliated  party that  arranged a private  placement received for its services  warrants of 500,000  shares with an exercise price of 25 cents per share. The warrants expire in one year.

In April of 2002 the company  raised  $100,000 for debt reduction by the sale of 625,000  shares  of  restricted  stock.  The  price of 6.25  cents per share was calculated  on the use of funds to  reduce  debt,  versus  the  overall  cost of interest  against the debt to be retired,  which was past due. Had this debt not been repaid at that time, the Company would have faced financial penalties since the loan was not renewable. Along with the sale, the company granted warrants for up to 125,000 shares of restricted stock at a price of 16 cents per share.  This price was later  reduced to 6 cents per share in a subsequent  transaction  (see "Subsequent Events").

In June of 2002, the Company  raised  $316,000 in multiple  transactions  by the sale of restricted  stock.  The price for the shares ranged from 6.7 cents to 16 cents per share, depending on whether warrants or commissions were involved, and were calculated on the use of funds to reduce debt as before stated. Some of the sales  included  warrants for up to three years for the  purchase of  restricted stock at a price of 16 cents per share.  The funds were used for working capital and debt reduction.

During the fiscal year ended June 30,  2002,  2001 and 2000,  no  warrants  were issued to officers,  directors.  During the Fiscal year ended June 30, 2003,  no stock was issued to officers or directors,  however 750,000 shares were reserved for  future  issue  against  salaries  or  contracts,  which  were  past due and considered  as partial  payments.  Additional  rights to warrants  may have been granted after the end of the year, see below "Subsequent Events".

In February of 2002,  the Company  completed a private  placement  of  1,000,000 shares to  accredited  (non U.S.)  investor  resulting in gross  proceeds to the Company in the amount of $250,000.

In April of 2002, the Company completed a private placement of 625,000 shares to an accredited  investor resulting in gross proceeds to the Company in the amount of $100,000.

In June of 2002,  the Company  completed  four private  placements to accredited investors; the first of which was completed for 1,500,000 shares of common stock resulting  in  gross  proceeds  to the  Company  of  $100,000;  the next was for 2,124,481 shares of common stock resulting in $150,000 gross proceeds;  the next was for 465,000  shares of commons stock  resulting in $50,000 gross proceeds to the Company;  The final one was for 225,000 shares of common stock  resulting in gross proceeds to the Company of $16,000.

**The following is a summary of  transactions of the Company for the fiscal period ending June 30, 2003 involving  sales of securities by the Company that were not registered under the Securities Act of 1933 (the "Securities Act"):**

In October of 2002, the Company  issued 90,000 shares in a private  placement to an  accredited  U.S.  investor,  resulting  in gross  proceeds  of $3,000 to the company.

In May of 2003, the Company issued 2,500,000 shares to a U.S. private investment company  resulting in $100,000 gross  proceeds to the company.  The terms of the share purchase requires a put and call agreement by and between four individuals related to the company and extends to one year beyond its date of issue. The Company  is not obligated to redeem the shares.

12. Impairment.

Assets are initially recorded at fair value and are reviewed for impairment at least annually or more frequently if impairment indicators arise.

In assessing the recoverability of our assets management relies on a number of factors including operating results, business plans, economic projections, anticipated future cash flow, assumed royalty rates and marketplace data. There are inherent uncertainties related to these factors and management's judgment in applying these factors to the assessment of recoverability. We have elected to make the first business day of the last month in the fiscal year the annual impairment assessment date. Asset valuations are calculated using an income approach based on the present value of future cash flows of each applicable reporting unit. Changes in economic and operating conditions impacting these assumptions could result in impairment in future periods.

We could be required to evaluate the recoverability of our assets prior to the required annual assessment if we experience disruptions to the business such as end market conditions, unexpected significant declines in operating results, divestiture of a significant component of the Company and market capitalization declines. These types of events and the resulting analysis could result in goodwill or asset impairment charges in the future.

Due to lack of operating revenue over the last three years we have re-evaluated our estimates of the future cash flows to be derived from the underlying assets and have concluded that the future cash flows did not exceed the carrying value of our assets and, therefore, recognized an aggregate impairment charge of $4,896,504 at June 30, 2003. A summary of the classification of the underlying assets is as follows:

| Summary of impairment expense: |       |
|--------------------------------|------------|
| Film Inventory                 | $4,021,349 |
| Investments                    | 528,668    |
| Unrecoverable prepaid expenses | 88,000     |
| Uncollectible receivables      | 258,487    |
|                           |            |
|   Total                   | $4,896,504 |

13. Related Party Transactions:    

In March 2002,  the Company  gave  notice to the  Managing  Director of it s 99% owned Luxembourg subsidiary, Odyssey Ventures Online Holdings, S.A ("OVO"), that it was removing all  Directors  and  replacing  them with members of the Odyssey Pictures  Corporation  Board. The Company has hired legal counsel in Brussels to recover the assets of the  subsidiary to facilitate the Company in either a sale or its assets or an orderly liquidation.  While the Company was advised that the action in March was legally  binding,  the  Company's  legal  counsel  delivered formal notice to further  formalize the actions taken in July. The Company is in the  process  of  exploring  all  avenues  for full  recovery  of these  assets, inclusive of possible lawsuit.  This carrying value of $461,000 was fully impaired under the category "investments" at June 30, 2003.

As of  June  30,  2003,  the  Company  had  two  loans  payable  to  one  of its stockholders, of which the balance owing along with accrued interest was $54,570 and  $10,740.  The Notes bears an interest  rate of 12% per annum and is due upon demand.

As of June 30, 2003, the Company had two additional  loans payable to one of its stockholders, of which the balance owing along with accrued interest was $51,480 and  $20,254.  The Notes bears an interest  rate of 12% per annum and is due upon demand.

A related party to the Company's CEO, JL Media Services LLC,  advanced funds and services for overheads and  operations of the Company from January to October of 2001.  The Company  began  repaying  towards a formal Notes  between the parties, which was dated effective  January 2001, in October of 2001. The Notes carries an interest of 12% per annum and has  provisions to be increased  from time to time depending  upon the  operations,  services  and  overhead  needs of the Company, should it be necessary. As of the end of the period of June 30, 2002 the Company owed $192,035 in interest and  principal,  which became due and payable on March 1, 2002. The Company sought,  an was granted,  a renewal for said loan effective as of the due date of March,  1, 2002  through  to a new due date of  January 1, 2003, with no penalties. This Notes is currently in default.

In January of 2003, the Company sought, and was granted, an additional extension of the Notes for a period of 10 months,  or to October 30, 2003,  with no payment or penalty.  The provisions of the loan also include the acceptance of shares of stock in the Company for payments of interest, if so elected. As of June 30, 2003 the Company owed JL Media Services LLC a total of $215,148.

The  services  were  paid by the  issuance  of the  500,000  shares  of stock in December.  The contract for services is not being renewed. An additional $98,000 was expensed for  consideration  of  continuation  of services and fees for Notes extensions  from  a  financial   consultant,   Cofima  Finanz,   AG  in  Zurich, Switzerland.  The  amount was placed in an  interest-bearing  term Notes,  with a scheduled  payment  date not  beginning  in next  fiscal  year.  Pursuant to the guidelines as  established  and adopted by the Company in Statement of Financial Accounting Standards No, 5 (SFAS 5, loss contingency), an accounting reserve for possible  liabilities was established  referring to various  lawsuits as express earlier herein. As this reserve was recently established, a total of $250,000 in "other  accrued"  expenses has been  charged  during the fiscal  periods  ending 6-30-01  and  6-30-02  inclusively. 

14. Subsequent Events:

In July of 2003, a complaint was filed in the State of Florida between  Distinct Web Creations, Inc. and the Company and names the individual, John W. Foster, as defendants.  The  complaint is for  non-payment  of services  resulting  from an assumed contract for the transaction of Filmzone.Com and Filmzone LC, a Florida Limited Liability  Company,  as completed in early 2001. The amount owing on the claim is  $12,000  and seeks  the  repayment  of this  amount  plus  unspecified damages.  The Company has engaged counsel in Florida and will vigorously  defend its  position  for both the Company  and for Mr.  Foster.  Discovery  process is underway.

In August  2003,  the  Company  signed an addendum  to the  Securities  Purchase Agreement  with  the US  investment  company  for  the  sale  of a  $100,000  8% convertible  debenture  and a warrant to  purchase  up  2,500,000  shares of our common stock. This debenture was secured  additionally with third party property related to the  Kasstech  Joint  Venture  wherein  30% of those  proceeds,  plus additional  considerations on future funding,  will be used for the venture. The Company also agreed to issue 120,000  shares of stock in  consideration  for the third party property participation.

In August of 2003. the Company received notice of a federal tax lien being filed in the amount of $27,210 for  non-payment of federal  payroll tax deposits.  The Company  has filed an appeal to the lien and notice and is expected to fully pay any and all amounts owning as soon as funds become available.

In August of 2003,  the Company  completed and  registered an S-8  prospectus in satisfaction of  consultation  fees and contract labor pursuant to the rules and regulations   afforded  in  such  registration   under  "Advice  and  Consulting Agreements".  The Company was able to satisfy a total of $50,000 in  outstanding fees due for earlier work performed against consulting agreements, and continued work to be performed that the Company needed assistance with.

In September of 2003, the Company  completed its first recognized sale of one if its films to a U.S.  Television  distributor.  A licensing agreement was entered into for a  period  of time  with a  minimum  guarantee  and a  revenue  sharing relationship for Video and DVD sales.

**Restatement of Financial Statements**

***Adjustment 1 Impairment of Long-Lived Assets:*** We received several comment letters from the staff of the Securities and Exchange Commission asking for additional information and clarification of the carrying value of our assets.  Upon review, we have determined our assets are impaired. The carrying value of assets subject to our revaluation was previously reported at $ 4,89,6504. Due to the lack of operating revenue over the last three years we have re-evaluated our estimates of the future cash flows to be derived from the underlying assets and have concluded that the future cash flows did not exceed the carrying value of our assets and, therefore, recognized an aggregate restated impairment charge of $4,896,504 at June 30, 2003. A summary of the classification of the underlying assets is as follows:

| Summary of impairment expense:   |       |
|----------------------------------|------------|
| Film Inventory                   | $4,021,349 |
| Investments                      | 528,668    |
| Unrecoverable prepaid expenses   | 88,000     |
| Uncollectible receivables        | 258,487    |
|   Total                     | $4,896,504 |
| Less amounts previously recorded | (622,420)  |
| Net adjustments                  | $4,274,084 |

***Adjustment 2 Beneficial Conversion Feature and Detachable Warrants:*** We have also determined our previous accounting for the convertible Notes and detachable warrants was in error. Upon review, we failed to ascribe a value to the detachable warrants and recognize a beneficial conversion feature in conformity with the FASB Emerging Issues Task Force ("EITF") Issue No. 98-5 "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios" and EITF Issue No. 00-27 "Application of Issue No. 98-5 to Certain Convertible Instruments,".

The Company used the Black-Scholes option pricing model in valuing the detachable warrants. The inputs for the valuation analysis of the warrants include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate. The key inputs for the valuation analysis in June, 2003 were a volatility of 100%, common stock value of $0.10 and a risk free interest rate of 6.0%. In accordance with EITF 98-5, the Company recorded the warrants as a debt discount and additional paid-in capital for their relative fair value of $31,029

The Notes was considered to have an embedded beneficial conversion feature because the effective conversion price was less than the quoted market price at the time of the issuance. The Company allocated the proceeds of the debt between the warrants and the debt based on relative fair values which amounted to $31,029 and 68,971 respectively. The beneficial conversion feature of $68,971 was recorded separately based on the intrinsic value method per EITF 98-5. The intrinsic value of the beneficial conversion feature exceeds the proceeds allocable to the convertible debt therefore the amount of the discount assigned to the beneficial conversion feature was limited to the amount of the proceeds allocable to the convertible debt.

***Adjustment 3 Derivative Liability:*** We have also determined our previous accounting for the embedded conversion feature of the Notes was in error. We follow the provisions of SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133") along with related interpretations EITF No. 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" ("EITF 00-19") and EITF No. 05-2 "The Meaning of ‘Conventional Convertible Debt Instrument' in Issue No. 00-19" ("EITF 05-2").  SFAS No. 133 requires every derivative instrument (including certain derivative instruments embedded in other contracts) to be recorded in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative's fair value recognized currently in earnings unless specific hedge accounting criteria are met.  We utilize the Black-Scholes option-pricing model to determine fair value.  Key assumptions of the Black-Scholes option-pricing model include applicable volatility rates, risk-free interest rates and the instrument's expected remaining life.  These assumptions require significant management judgment.

Per the guidance of EITF No. 00-19 and EITF No. 05-2, the re-set features of the 2003 convertible Notes did not meet the required tests Therefore the conversion feature of the 2003 Notes was considered an embedded derivative in accordance with SFAS No. 133. Accordingly, we bifurcated the derivative from the host contract and recorded the liability at its fair value of $68,971. The fair value of the derivative liability was determined using the Black-Scholes option pricing model. The key inputs for the valuation analysis at June 30, 2003 were a volatility of 100%, common stock value of $0.10 and a risk free interest rate of 6.0%.

***Adjustment 4 Warrants Issued for Services:*** We have also determined our previous accounting for the warrants issued for services was in error. We issued 1,100,000 warrants for services but did not recognize the fair value of those warrants (or value of services) as required under EITF EITF 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services".

The Company used the Black-Scholes option pricing model in valuing the warrants. The inputs for the valuation analysis of the warrants include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate. The key inputs for the valuation analysis at June 30, 2003 were a volatility of 100%, common stock value of $0.10 and a risk free interest rate of 6.0%. The calculation of fair value resulted in a charge to earnings of $76,262.

*** Reclassification:*** We also reclassified several items in the balance sheet and statement of operations and cash flows. The reclassifications on the balance sheet were made primarily to reflect a reclassification to current for debt instruments determined to be in default of their material terms. Items were reclassified on the statement of operations and statement of cash flows in order to comply with comments raised by the S.E.C. regarding the classification of such items under Reg. S-X.

We have restated our Balance Sheet as of June 30, 2003 and the Statements of Operations and Cash Flows and Shareholders' Deficit for the year then ended to correctly reflect these items.

Schedule of journal entries related to each adjustment:

| **Adjustment 1**                                       |      |   |      |
|--------------------------------------------------------|-----------|--------|-----------|
| Impairment Expense                                     | 4,274,084 |   |      |
|   Film Inventory                                  |      |   | 3,251,549 |
|   Accounts Receivable                        |      |   | 229,326   |
|   Prepaid Expenses                                |      |   | 208,293   |
|   Investment in Subsidiaries                      |      |   | 584,916   |
| *Results of Impairment Analysis*                       |      |   |      |
|                                                   |      |   |      |
| **Adjustment 2**                                       |      |   |      |
| Convertible Notes Discount                             | 31,029    |   |      |
|   Common Stock                                    |      |   | 31,029    |
| *Relative Fair Value of Detachable Warrants issued in* |      |   |      |
| *connection with 2003 convertible Notes*               |      |   |      |
|                                                   |      |   |      |
| **Adjustment 3**                                       |      |   |      |
| Convertible Notes Discount                             | 68,971    |   |      |
|   Derivative Liability                            |      |   | 68,971    |
| *fair value of Embedded Conversion Feature issued in*  |      |   |      |
| *connection with 2003 convertible Notes*               |      |   |      |
|                                                   |      |   |      |
| **Adjustment 4**                                       |      |   |      |
| General & Administrative expenses                  | 76,262    |   |      |
|   Common Stock                                    |      |   | 76,262    |
| *fair value of warrants issued for services*           |      |   |      |

Schedule of adjustments and impact on amounts previously reported and the revised balances:

----

|                                                |                            |   | Balance Sheet Adjustments |   |
|-----------------------------------------------------|---------------------------------|--------|---------------------------|--------|
|                                                |                                 |
|                                                | as originally          reported |   | 1                         |   | 2 , 3 & 4 |   | reclassifications &          miscellaneous |   | as restated |
|                                                |                                 |   |                           |   |  |   |  |   |  |
| **Assets**                                          |
|                                                |                            |   |                      |   |   |   |   |   |   |
|                                                |                            |   |                      |   |   |   |   |   |   |
| Current Assets                                      |                            |   |                      |   |   |   |   |   |   |
| Cash & cash equivalent's                        | $948                            |   |                      |   |   |   | (948) |   | $0 |
| Accounts receivable                                 | 229,326                         |   | (229,326)                 |   |   |   |   |   | 0 |
| Prepaid expenses                                    | 208,293                         |   | (208,293)                 |   |   |   |   |   | 0 |
|                                                |                                 |   |                      |   |   |   |   |   |  |
|   Total current assets                         | 438,567                         |   |                      |   |   |   |   |   | 0 |
|                                                |                            |   |                      |   |   |   |   |   |   |
| Property & equipment (net)                      | 0                               |   |                      |   |   |   |   |   | 0 |
| Film inventory (net)                                | 3,251,549                       |   | (3,251,549)               |   |   |   |   |   | (0) |
| Goodwill                                            | 0                               |   |                      |   |   |   |   |   | 0 |
| Amortizable intangible assets, net                  | 0                               |   |                      |   |   |   | 6,500 |   | 6,500 |
| Investments in unconsolidated subsidiaries          | 584,916                         |   | (584,916)                 |   |   |   |   |   | 0 |
| Other                                               | 0                               |   |                      |   |   |   |   |   | 0 |
|                                                |                            |   |                      |   |   |   |   |   |   |
| total assets                                        | $4,275,032                      |   |                      |   |   |   |   |   | $6,500 |
|                                                |                            |   |                      |   |   |   |   |   |   |
| ***Liabilities and Stockholders' Equity***          |
|                                                |                            |   |                      |   |   |   |   |   |   |
| Current Liabilities:                                |                            |   |                      |   |   |   |   |   |   |
| Accounts payable                                    | $1,905,192                      |   |                      |   |   |   | 158,849 |   | 2,064,041 |
| Accounts payable-relayed parties                    | $0                              |   |                      |   |   |   | 71,734 |   | 71,734 |
| Accrued interest                                    | $240,821                        |   |                      |   |   |   |   |   | 240,821 |
| Other accrued expenses                              | $235,584                        |   |                      |   |   |   | 622,672 |   | 858,256 |
| Debt obligations in default                         | $419,265                        |   |                      |   |   |   | 883,147 |   | 1,302,412 |
|                                                |                                 |   |                      |   |   |   |   |   |  |
|   Total current liabilities                    | $2,800,862                      |   |                      |   |   |   |   |   | 4,537,265 |
|                                                |                            |   |                      |   |   |   |   |   |   |
| Derivative liability                                |                            |   |                      |   | $68,971 |   |   |   | 68,971 |
| Long term debt                                      | $2,027,926                      |   |                      |   |   |   | (2,027,926) |   | 0 |
| Related parties                                     | $0                              |   |                      |   | ($100,000) |   | 243,413 |   | 143,413 |
|                                                |                            |   |                      |   |   |   |   |   |   |
| Stockholders' Equity:                               |                            |   |                      |   |   |   |   |   |   |
| common stock-200,000,000 authorized $0.02 par value |                            |   |                      |   |   |   |   |
| 10,883,818 issued & outstanding                 | 323,398                         |   |                      |   |   |   |   |   | 323,398 |
| Additional paid in capital                          | 36,675,383                      |   |                      |   | 107,291 |   |   |   | 36,782,674 |
| Accumulated deficit                                 | (37,552,537)                    |   | (4,274,084)               |   | (76,262) |   | 53,662 |   | (41,849,221) |
|                                                |                                 |   |                      |   |   |   |   |   |  |
| Total Stockholders' Equity                          | (553,756)                       |   |                      |   |   |   |   |   | (4,743,149) |
|                                                |                            |   |                      |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity          | $4,275,032                      |   |                      |   |   |   |   |   | $6,500 |

----

|                                                 | Statement of Operations Adjustments |
|------------------------------------------------------|-------------------------------------|
|                                                 |                                     |
|                                                 | as originally          reported     |   | 1 |   | 4 |   | reclassifications          & miscellaneous |   | as restated |
|                                                 |                                     |   |  |   |  |   |  |   |  |
|                                                 |                                |   |   |   |   |   |   |   |   |
| Net Sales                                            | $65,636                             |   |   |   |   |   | (96) |   | $65,540 |
| Costs Applicable to Sales & Revenue              | 14,615                              |   |   |   |   |   | 92,768 |   | 107,383 |
|                                                 |                                     |   |   |   |   |   |   |   |  |
| Gross Profit                                         | 51,021                              |   |   |   |   |   |   |   | (41,842) |
|                                                 | 77.7%                               |   |   |   |   |   |   |   | -63.8% |
|                                                 |                                |   |   |   |   |   |   |   |   |
| Selling, General & Administrative Expenses       | 779,289                             |   |   |   | 76,262 |   | 80,524 |   | 936,075 |
| Settlements                                          | 127,209                             |   |   |   |   |   | (127,209) |   | 0 |
| Permanent Impairment of Long Lived Assets            | 322,706                             |   | 4,274,084 |   |   |   | 299,714 |   | 4,896,504 |
| Depreciation and Amortization                        | 390,980                             |   |   |   |   |   | (390,980) |   | 0 |
|                                                 |                                     |   |   |   |   |   |   |   |  |
|   Total Operating Expenses                      | 1,620,184                           |   |   |   |   |   |   |   | 5,832,579 |
|                                                 |                                     |   |   |   |   |   |   |   |  |
| Income (Loss) Before Other Income & Income Taxes | (1,569,163)                         |   |   |   |   |   |   |   | (5,874,421) |
|                                                 |                                |   |   |   |   |   |   |   |   |
| *Other Income (Expense)*                             |                                |   |   |   |   |   |   |   |   |
| Interest (Expense)                                   | (283,090)                           |   |   |   |   |   | 8,834 |   | (274,256) |
|                                                 |                                     |   |   |   |   |   |   |   |  |
| Income (Loss) Before Income Taxes                    | (1,852,253)                         |   |   |   |   |   |   |   | (6,148,677) |
| Income Taxes                                         | 0                                   |   |   |   |   |   | 259 |   | 259 |
|   Net Loss available to common shareholders     | ($1,852,253)                        |   |   |   |   |   |   |   | ($6,148,936) |
|                                                 |                                     |   |   |   |   |   |   |   |  |
| Basic and Diluted Net Loss Per Common Share          | ($0.07)                             |   |   |   |   |   |   |   | ($0.22) |
|                                                 |                                     |   |   |   |   |   |   |   |  |
| Weighted Average Common Shares Outstanding (Basic)   | 27,578,560                          |   |   |   |   |   |   |   | 27,578,560 |
|                                                 |                                     |   |   |   |   |   |   |   |  |

----

Restated Statement of Cash Flows
|                                                     |   | as originally          reported |   | impact of          error correction          adjustments |   | as restated  |
|----------------------------------------------------------|--------|---------------------------------|--------|----------------------------------------------------------|--------|--------------|
|                                                     |   |                                 |   |                                                          |   |              |
| Cash Flows from Operating Activities:                    |   |                            |   |                                                     |   |         |
| Net Loss                                                 |   | ($1,852,253)                    |   | ($4,296,683)                                             |   | ($6,148,936) |
| Adjustments required to reconcile net loss to cash flows |   |                            |   |
| from operating activities:                               |   |                            |   |                                                     |   |         |
|    Depreciation, Amortization & Bad Debts  |   | 449,395                         |   | (449,395)                                                |   | 0            |
|    Additions to film costs                     |   | 0                               |   | 0                                                        |   | 0            |
|    Impairment                                  |   | 0                               |   | 4,896,504                                                |   | 4,896,504    |
|    Stock Issued for Services                   |   | 0                               |   | 0                                                        |   | 0            |
|    Options Issued for Services                 |   | 0                               |   | 76,262                                                   |   | 76,262       |
| Changes in Operating Assets & Liabilities:           |   |                            |   |                                                     |   |         |
|    Accounts Receivable                         |   | (29,254)                        |   | 29,254                                                   |   | (0)          |
|     Notess receivable and advances        |   | 9,100                           |   | 0                                                        |   | 9,100        |
|    Prepaid Expenses                            |   | 361,703                         |   | (356,702)                                                |   | 5,001        |
|    Accounts Payable & Accrued Expenses     |   | 826,710                         |   | 58,583                                                   |   | 885,293      |
|    Accrued Expenses                            |   | 12,800                          |   | (12,800)                                                 |   | 0            |
|                                                     |   |                                 |   |                                                          |   |              |
|   Net cash used by operating activities             |   | (221,799)                       |   | (54,977)                                                 |   | (276,776)    |
|                                                     |   |                            |   |                                                     |   |         |
|                                                     |   |                            |   |                                                     |   |         |
| Cash Flows from Investing Activities:                    |   |                            |   |                                                     |   |         |
|    Investments in film inventory               |   | (35,635)                        |   | 35,635                                                   |   | 0            |
|   Subsidiary activity                               |   | (76,649)                        |   | 76,649                                                   |   | 0            |
|                                                     |   |                                 |   |                                                          |   |              |
|   Net cash used by investing activities             |   | (112,284)                       |   | 112,284                                                  |   | 0            |
|                                                     |   |                            |   |                                                     |   |         |
| Cash Flows from Financing Activities:                    |   |                            |   |                                                     |   |         |
|   Proceeds from Sale of Common Stock                |   | 128,000                         |   | (25,000)                                                 |   | 103,000      |
|   Loan Proceeds                                     |   | 203,358                         |   | (33,256)                                                 |   | 170,102      |
|                                                     |   |                                 |   |                                                          |   |              |
|   Net cash used by financing activities             |   | 331,358                         |   | (58,256)                                                 |   | 273,102      |
|                                                     |   |                            |   |                                                     |   |         |
| Net Change In Cash                                       |   | (2,725)                         |   | (950)                                                    |   | (3,675)      |
| Cash-Beginning                                           |   | 3,675                           |   | 0                                                        |   | 3,675        |
|                                                     |   |                                 |   |                                                          |   |              |
| Cash-Ending                                              |   | $950                            |   | ($950)                                                   |   | $0           |

----

**SIGNATURES**

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                                ODYSSEY PICTURES CORPORATION

Dated: June 12, 2008                 by: /s/ John W. Foster                                                    ------------------------------                                                    John W. Foster,                                                    President

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the following  persons on behalf of the  Registrant and in the capacities and on the dates indicated have signed this report below.