SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K


(Mark One)

/x/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                      For the fiscal year ended June 30, 2003


/ /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
        EXCHANGE ACT OF 1934
                       For the transition period from _________ to _________


                                    0-18954
                                    -------
                               Commission File No.


                          ODYSSEY PICTURES CORPORATION
                          ----------------------------
             (Exact name of registrant as specified in its charter)


          Nevada                                                  95-4269048
          ------                                                  ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


              16910 Dallas Parkway, Suite 104, Dallas, Texas 75248
           ----------------------------------------------------------
                    (Address of principal executive offices)


Registrant's telephone number, including area code:   (972) 818-7990

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock,
                                                             $.01 par value

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 32,411,934 shares of Odyssey Pictures
Corporation's common stock, par value $.01 per share (the "Common Stock").


<PAGE>
                          ODYSSEY PICTURES CORPORATION
                      Form 10-K Report for the Fiscal Year
                               Ended June 30, 2003

TABLE OF CONTENTS

PART I

Item 1.  Business............................................................ 1
Item 2.  Properties..........................................................10
Item 3.  Legal Proceedings...................................................11
Item 4.  Submission of Matters to a Vote of Security Holders.................15

PART II

Item 5.  Market for Registrant's Common Stock and Related
           Stockholder Matters...............................................16
Item 6.  Selected Financial Data.............................................17
Item 7.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations...............................17
Item 8.  Financial Statements and Supplementary Data.........................20
Item 9.  Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure...............................20

PART III

Item 10. Directors and Executive Officers of the Registrant..................21
Item 11. Executive Compensation..............................................22
Item 12. Security Ownership of Certain Beneficial Owners and Management......25
Item 13. Certain Relationships and Related Transactions......................25
Item 14. Controls & Procedures...............................................27

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K......28
<PAGE>

                                     PART I

ITEM 1. 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.

A change in the entire Board of Directors of the Company (the "Board")  occurred
on April 12, 1995  pursuant to the terms of a Settlement  Agreement  dated as of
March 31, 1995 (the "Settlement  Agreement"),  by and among Robert Hesse,  Shane
O'Neil,  Lawrence I.  Schneider,  Henry N.  Schneider,  Robert E.  Miller,  Jr.,
Russell T. Stern, Jr. (collectively,  a group of shareholders  originally formed
to effect a change in  management  control of the Company and known as the "CECO
Shareholders  Committee"),  the Company,  OEL, Global Intellicom,  Inc., each of
Jerry Silva,  Robert  Ferraro,  N. Norman  Muller,  Thomas W. Smith and David A.
Mortman  (constituting  all the  directors  of the  Company  at the  time of the
execution of the Settlement  Agreement and hereinafter  referred to collectively
as the "Former Directors"), and others.

As  contemplated  by the  Settlement  Agreement,  on April 11, 1995,  the Former
Directors increased the size of the Board from five to six directors and elected
Henry N. Schneider, a designee of the CECO Shareholders Committee a new director
effective  upon the  closing of the  Settlement  Agreement.  The  closing of the
Settlement  Agreement  occurred  on April 12,  1995 and,  upon the  closing  the
resignations of the Former Directors became  effective.  After the closing Henry
N. Schneider,  as sole remaining  director of the Company,  elected  Lawrence I.
Schneider,  Russell T. Stern,  Jr., Patrick J. Haynes,  III and Robert E. Miller
Jr.  as  new  directors  of the  Company.  In  addition  to  the  change  in the
composition of the Board, the Settlement  Agreement  provided for the settlement
of all  outstanding  litigation  between the  Company and the CECO  Shareholders
Committee.  The CECO  Shareholders  Committee  disbanded upon the closing of the
Settlement Agreement. Effective September 8, 1995, each of Messrs. Haynes, Stern
and Henry N. Schneider resigned as directors of the Company and were replaced by
Stephen R.  Greenwald and Ira N. Smith,  each of whom was appointed to the Board
and, together with Lawrence Schneider, elected to executive management positions
to operate the business and affairs of the Company on a day-to-day basis.

On March 6, 1996, the Company declared a reverse  one-for-six stock split of its
Common Stock (the "Reverse Split"),  effective March 18, 1996. All share amounts
and per share prices  reflected in this Report have been adjusted to give effect
to the Reverse Split.

Mr. Schneider resigned his executive position in September,  1997, and in March,
1998,  the Board of Directors  appointed  Mr. Johan  Schotte as Chief  Executive
Officer and Chairman of the Board of the Company.  At the same time,  Mr. Pierre
Koshakji was appointed to the Board and elected as President of the Company. Mr.
Johan Schotte expanded the Board to include additional independent directors and
Messrs.  Greenwald  and Smith  agreed to  terminate  their  existing  employment
agreements in exchange for revised  employment  and  consulting  agreements.  In
connection with the change in management,  an affiliate of Mr. Schotte purchased
convertible  deferred  compensation notes from former management and converted a
portion of these notes into  667,648  shares of the  Company's  common  stock in
April,  1998.  The balance of these notes was converted  into 176,050  shares of
common stock in October 1998.

                                       1
<PAGE>

During the early  1990s,  the  Company  developed  an  excellent  reputation  in
overseas markets for the distribution of quality motion picture entertainment, a
reputation that the Company's  management believes it continues to enjoy despite
its recent  difficulties.  However, due to the changes in management control and
disruptions in the continuity of the Company's  business following the change in
control in 1995, the Company was unable to sustain any substantial activities in
the international distribution of motion pictures.

Under the  leadership of Mr.  Schotte,  the Company sought to  re-establish  its
position as a significant distributor of quality motion pictures by establishing
relationships  and strategic  alliances with  independent and major film studios
along with successful  writers,  directors and producers.  The Company also made
efforts to establish a permanent presence in Europe through select joint-venture
partners.  In August of 1998, the Company  purchased the assets of  Sweden-based
Kimon  Mediaright  KB  ("Kimon"),  consisting  of a film library with  worldwide
and/or  Scandinavian  distribution  rights and Scandinavian  video  distribution
rights to certain Hallmark Entertainment products.

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.  On July 6th of 2001, the
Board voted on the  assignment of Mr. Foster to CEO and Chairman of the Board of
Odyssey Pictures  Corporation.  Mr. Schotte resigned as CEO and Chairman and was
appointed the position of Executive Vice Chairman on the Board.  This change was
due to the  approved  transition  by the Board for the further  growth  plans of
Odyssey.  On  December 7, 2001  Pierre  Koshakji  resigned as director to pursue
other interests. Mr. Koshakji is still involved with E3 Corporation in which the
Company owns an interest. Mr. Koshakji is owed $220,184 in past compensation. On
December 9, 2001 Mr.  Schotte  resigned  from the board of directors to focus on
the Company's two related  entities and other  interests.  Mr.  Schotte lives in
Luxembourg  and was the  managing  director  of the  Company's  99%  subsidiary,
Odyssey Ventures Online Holding, S.A. He is also the controlling shareholder and
director  general of Media Trust,  S.A. of which the Company owns 18%.  Recently
the  Company  held a  shareholders'  election  for  the  removal  of  its  three
directors,  which included Media Trust, SA The Company demanded documentation of
disbursements and expenses  previously  reported in the accounts of the Company.
The Company pursued the control of the subsidiary and settlement of all accounts
is presently  underway.  The Company has offset all  undocumented  expenses from
prior management  contracts and the resulting  amounts were booked as expense or
loss accordingly.  While the Company expects recovery,  a reserve for losses has
been taken  since the  Company has adopted  Statement  of  Financial  Accounting
Standards  No, 5 (SFAS  5),  and,  since a loss  contingency  may  exist in this
matter.

On  January  3, 2002,  at a  regularly  scheduled  board  meeting,  the board of
directors  voted  unanimously to elect Peter Bucher and Kjell Larsson to replace
vacant  positions  made  available  by the  resignation  of Mr.  Schotte and Mr.
Koshakji. Mr. Bucher is a consultant in finance and resides in Germany. Prior to
forming  his  company,  Dival AG, he has a career in  banking  including  Deputy
Administrator with Schaffhaus Canton Bank and the Swiss Banking Association. Mr.
Larsson  resides in Florida and owns  1,518,055  shares of Odyssey  through Kemp
Entertainment,  a  company  he  formed  with his wife in  1999.  Larsson  formed
TigerNet  Order,  Inc. a web  consulting  and marketing  company  through a Kemp
subsidiary and he had served as its President.  TigerNetorder also has a Swedish
subsidiary providing similar services.  Prior to moving to Florida he formed one
of the first video retail chains in Sweden and later became President of Scanbox
AB.


                                       2
<PAGE>

In  January  of 2002,  the  Company  hired C. F. K.  (Frank)  Cole as the  Chief
Financial  Officer and also installed him as corporate  secretary.  Mr. Cole had
served in a consulting capacity for the company for several months following and
has been a venture capitalist and consultant in various capacities over the last
ten years.  Prior to forming  his own  investment  company Mr. Cole was CFO of a
Dallas based holding  company in the commercial  real estate  business.  He also
served as  President  of two of its  subsidiaries  involved in the  property and
asset  management  business.  Mr.  Cole has a career in  banking  and  corporate
financial  consulting  with some of the largest US  companies  involved in those
industries.  Mr. Cole had one-year  contract  with the Company  with  ninety-day
notification  clause.  In July of 2002,  Mr. Cole elected not to continue as CFO
due to personal  reasons.  He continued to assist with the Company until October
of 2002.

(b) Financial Information About Industry Segments

Since the sale of its Double  Helix  subsidiary  in 1991,  the  Company has been
engaged in only one  industry  segment and line of business,  the  international
distribution  of motion  pictures.  In  addition,  in 1999 and 2000 the  company
acquired interests in other technology  segments of the communications  industry
and, more  specifically,  formed a subsidiary  (wholly owned)  entitled  Odyssey
Ventures Online Holding S.A., in Luxembourg. See "Selected Financial Data."

(c) Narrative Description of Business Foreign Sales and Distribution Operations

General.

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."





                                       3

<PAGE>

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 two markets annually, one in Mach and one 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

                                       4
<PAGE>

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.

                                       5
<PAGE>

Strategic Objectives

The above  strategies  are selected out of  availability  in the operations of a
business such as Odyssey, which is limited. Certain revenue periods are realized
at different times. By accommodating the above-mentioned strategies, the Company
will recognize revenues at different points of the processing.  This will create
more  opportunity  for revenues to the Company and not just focus on one area of
revenue as  historically  produced.  Management  must select from the  following
areas of daily management to accomplish this strategy:

          -    Follow similar  guidelines  from other companies that have proven
               this   process  to  be  fruitful   and   incorporate   them  into
               management's infrastructure;

          -    Properly capitalize the Company for its basic costs of seeing the
               implementation begun and make sales contacts regularly;

          -    Begin the various  stages of strategy in order to create a small,
               but secure level of income in each area;

          -    Enhance  the  Company   relationships   with  its  investors  and
               investment bankers to focus on their  participation as income and
               Company performance improves.

          -    Seek  assistance  from outside  sources on shared  management  of
               libraries  of films or  limited  exposure  on new  product to key
               selected  buyers  for a reduced  commission  in order to  attract
               producers and new projects.

          -    Avoid  risk-oriented  projects and acquisitions with long startup
               periods to revenue.  Maintain a budget for  operations  and fixed
               overheads  as well as  utilizing  revenues  from sales to finance
               future marketing and distribution activities.

These  activities  will  continue  to result in  losses  until  such time as the
Company is able to generate  sufficient  revenue to support its  operations.  We
have limited revenue,  we have a history of losses,  we may not be profitable in
the  future,  and will  need  additional  financing  to  accommodate  the  above
activities.

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., 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.

                                       6
<PAGE>

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.  This "dollar
for dollar" transaction resulted in no gain or loss was reported in the issuance
of the shares from Edge.  This  transaction  was treated only as an extension of
investments  into other  technology-related  entities and that management at the
time determined that it would be best to exercise  diversity in investments when
it was limited on capital.

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

                                       7
<PAGE>

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.  Management  may decide to abandon the project  altogether.
Under the latest  accounting  guides as issued under Statement of Position (SOP)
00-2, which presents new accounting,  reporting, and disclosure requirements for
the motion picture industry,  if it is determined that a property in development
will be  disposed  of,  the entity  should  recognize  a loss on these  costs by
charging them to the current  period income  statement.  The Company did issue a
demand for the return of the deposit and a reserve will be made for the prospect
of a loss against receiving the deposit in return.

At the close of  business  on June 30,  2003,  the  Company  did not receive the
anticipated  refund of the deposit and wrote the entire  balance  (consisting of
$67,000) off as a non-recoupable  item. According to the rules as earlier noted,
the Company is required to disclose and write off the entire  amount as and when
it is  recognized  or  deemed  uncollectible.  The  Company  will seek all means
available to it to attempt to recover the loss.

Film Library

In  August,  1998,  the  Company  completed  the  acquisition  of the  assets of
Sweden-based  Kimon,  valued at $4,500,000,  in exchange for 4,500,000 shares of
the Company's subordinated convertible Preferred Stock, Series B, having a value
for  conversion  purposes of $1.00 per share.  Kimon had the right to convert to
Odyssey  common  stock  between  June  30,  2000  and  December  31,  2000  on a
dollar-for-dollar  basis based on the price of the Company's common stock at the
time of  conversion.  Kimon  assets  purchased  consist of a film  library  with
worldwide  and/or  Scandinavian   distribution  rights  and  Scandinavian  video
distribution rights to certain Hallmark Entertainment products. The Kimon Assets
are part of a negative  pledge covenant of the Senior Secured Bond (see "Changes
in Securities and Use of Proceeds").

In connection with the change of control in March, 1998, the Company acquired an
18% equity interest in each of two corporations  affiliated with Mr. Schotte, 1)
E3 Sports New  Mexico,  Inc.  which is the owner of the  Albuquerque  Geckos,  a
second division professional soccer team in New Mexico (subsequently transferred
to  Sacramento),  and the other of which is a consulting  company in  Luxembourg
("Media  Trust").  The Company issued one-year notes in the aggregate  amount of
$450,000  in  consideration  of the  purchase of the equity  interests  in these
companies.  (In June, 1999, the Company  satisfied  $135,000 of these notes, and
the accrued  interest  thereon of $27,225,  by the issuance of 348,721 shares of
the Company's  restricted common stock valued at $.465 per share). The Company's
equity  interest in the entity that owns the  professional  soccer team has been
diluted by half, or to 9%, as a result of a capital  increase/call  in which the
Company did not participate.  The company that owns the soccer team has declared
bankruptcy  and the  assets  of E3 Sports  are  stock  and a note in a  bankrupt
company. Pursuant to this discovery, Odyssey has reserved all of this investment
as a loss. Media Trust S.A. is a Luxembourg  business entity and the Company has
made demand for financial information on the investment.  A reserve has been set
for the  Company's  investment  in  Media  Trust  due to the  lack of  financial
reporting since the inception of the investment.  The Company has obtained legal
representation in Brussels on this matter.

Sales of Film Library

On  January  2,  1996,  the  Company  entered  into an  agreement  with  Regency
International Pictures,  B.V. ("Regency"),  the Company's joint venture partner,
to sell the Company's  interest in the related joint  ventures  through which it
held  approximately 50% ownership  interests in four theatrical motion pictures,
entitled  "Switch",  "Q & A,"  "Guilty  by  Suspicion"  and "This  Boy's  Life".
Pursuant to the  agreement  with  Regency,  the Company  received  $1,000,000 on
January 23, 1996 and $500,000 on February  14, 1996,  in exchange for all of the
Company's interests in the joint ventures.  In addition,  the Company retained a
contingent  interest  in  certain  receivables,  not to exceed  $212,500,  and a
contingent interest in future revenues from the pictures.

                                       8
<PAGE>

On August 29, 1996,  the Company  entered into an agreement  with Kinnevik Media
Properties, Ltd. ("Kinnevik"),  pursuant to which the Company agreed to grant to
Kinnevik  subdistribution  rights in, and to sell to Kinnevik other distribution
rights to,  certain films in the Company's  film library.  In exchange for these
rights, the Company received a total cash  consideration of $1,075,000,  payable
$500,000 on closing,  $275,000 six months after closing,  and $300,000  eighteen
months after closing.  In addition,  the Company  retained a continuing right to
receive revenues from certain of the films, valued by management at a minimum of
approximately $150,000. As part of the transaction,  the Company granted 100,000
stock options to Kinnevik, exercisable over a three-year period at the bid price
of the  Company's  common  stock in  effect  on  August  5,  1996  ($.625).  The
transaction with Kinnevik closed on October 7, 1996.

Recent Financings.

In August,  1998, three unaffiliated  investors  (referred to hereinafter as the
"Belgian  Investment  Group") loaned  4,000,000  Belgian  Francs  (approximately
$100,000) and received one-year convertible notes with interest at 10% per annum
(the notes are  convertible  at a 15% discount to the market  price).  The notes
have  been  extended  through  to  September  30,  2001  In  September  1998  an
unaffiliated  third party loaned $25,000 to the Company and received a six-month
note with interest at 10% per annum.

Thereafter,  the lender  agreed to a six-month  extension  on the note  (through
September,  1999) in  consideration  of an increase in the interest  rate on the
loan to 12% per annum, and the issuance of 12,500 common stock purchase warrants
at $1.00 per share, exercisable through the year 2004.

In December 1998, (i) an unaffiliated  party purchased  625,000 common shares at
$.30  per  share  for  a  total   purchase   price  of  $187,500  (see  "Certain
Relationships  and  Related  Transactions");  and (ii)  counsel  to the  Company
converted  $40,000 of accrued legal fees into 100,000  shares of common stock of
the Company.

During the period between April, 1999 and September, 1999, the Company completed
four private placements to offshore investors,  the first of which was completed
for  575,000  shares  of  common  stock at a  purchase  price of $.30 per  share
(resulting in gross  proceeds to the Company of $172,500),  and the latter three
of which were completed for an aggregate of 1,600,000  shares of common stock at
a purchase  of $.40 per share  (resulting  in gross  proceeds  to the Company of
$400,000).

In August, 1999, the Belgian Investment Group renewed loans of 4,000,000 Belgian
Francs  (approximately  $100,000) and received  one-year  convertible notes with
interest at 10% per annum (the notes are  convertible  at a 15%  discount to the
market price). The notes were extended through to September 30, 2001.


During the  period  between  September,  1999 and  October,  2000,  the  Company
completed two series of private placements to offshore  investors,  the first of
which was  completed  for an aggregate of 3,000,000  shares of common stock at a
purchase price of $.40 per share  (resulting in gross proceeds to the Company of
$1,200,000),  and the second of which was  completed for an aggregate of 960,000
shares of common  stock at a  purchase  price of $1.00 per share  (resulting  in
gross proceeds to the Company of $960,000).

In August,  2000, the Belgian  Investment Group loaned 4,000,000  Belgian Francs
(approximately  $100,000) and received one year convertible  notes with interest
at 10% per annum (the  notes are  convertible  at a 15%  discount  to  themarket
price).  The notes have been extended  through to September 30, 2001. Two of the
loans have been  repaid  and the others  have  agreed to  renewals  with a fixed
amount of shares for possible conversion into common shares.

In June 2002, the notes were extended and renewed into August 2003 and December
2003

In September,  2002, the company borrowed $50,000 for working capital needs in a
sixty-day  note at 12% per annum.  The note has since been  renewed  upon mutual
agreement of the Lender, who is also a shareholder of the company.

                                       9
<PAGE>

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 Filmed/Video content with other
Internet-based  Filmed/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 Foster,  the CEO
and President of the Company,  along with two  administrative  assistants in the
Dallas office.

Tax Loss Carry forward

The  Company is entitled to the  benefits  of certain net  operating  loss carry
forwards to reduce its tax liability. The utilization by the Company of such tax
loss carry  forwards is limited  under  applicable  provisions  of the  Internal
Revenue Code of 1986, as amended,  and the  applicable  regulations  promulgated
thereunder.  As of June 30, 2003,  there were  approximately  $37,552,540 in net
operating loss carry forwards remaining to be used to reduce tax liability.  The
utilization of approximately $4.9 million of these losses in future periods will
be limited to approximately $350,000 per year.


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
                                  -------------------- ------------

                                       10
<PAGE>
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.


                                       11
<PAGE>

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.

                                       12
<PAGE>

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, the 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
increased  amount 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 are
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

                                       13
<PAGE>

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.

A Lawsuit  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.

                                       14
<PAGE>

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 and from prior management activities.  Other than that as
disclosed above, in the opinion of present management,  the aggregate liability,
if any, with respect to these other actions will not materially adversely affect
our financial position, results of operations or cash flows.

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.


Changes in Securities and Use of Proceeds

In  March of 2001 the  Board  of  Directors  approved  a $5  million  US  dollar
denominated  Senior  Secured  debt issue (the  "Senior  Debt") with  convertible
rights  to  common  stock at  maturity  and in  certain  circumstances  (such as
bankruptcy  and/or financial  defaults on other significant  debt).  Reserves of
shares for the  potential  conversion  have been made.  The Senior Debt requires
that the company not pledge any  significant  assets and gives the bondholders a
pledge on the "Kimon  Library"  assets.  The Senior Debt  carries an 8% interest
rate and matures on April 15,  2006.  The Senior Debt is not  registered  in the
United States and is only available to non-US citizens. The Trustee received the
first  subscription  on August 29, 2001 for $160,000.  The funds after financing
expenses of $14,364 were used to pay off two loans of 4 million francs (previous
paragraph) and some rent expenses of an office recently closed in Luxembourg.  A
previous  officer used the  remaining  funds for claimed  expenses.  Odyssey was
pursuing  additional  subscriptions  as of the end of business on June 30, 2002.
During 2003, it was determined  through the  investment  firm of Thurn and Taxis
that the terms of the  subscription  does not allow for a renewal  into the year
extension, therefore the offering is no longer valid in the European markets.

Defaults Upon Senior Securities

An interest  payment  due on April 12, 2002 was made by a third party  therefore
the Senior Secured Bond is in compliance with its requirements. The company does
not have sufficient cash to make its next  semi-annual  payment and,  therefore,
risks the Bond being placed in default.  There were no payments  made during the
course  of  fiscal  2003 and the bond is in  default.  The  Company  has  sought
additional capital from its European sources to assist in renewal of the note or
bringing in an alternate source, or sources, for a long-term position.

                                       15
<PAGE>
                                    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  NASDAQ  Stock  Market,  Inc.
("NASDAQ") on a quarterly  basis for each of the two preceding  fiscal years. On
May 1, 1996,  NASDAQ  notified  the Company that its shares of Common Stock were
being deleted from NASDAQ's Small Cap Market, effective May 2, 1996, because the
Company  did not  maintain a combined  capital  and  surplus of  $1,000,000,  as
required  by Section  1(c)(3) of  Schedule D of the NASD  By-Laws.  Since May 2,
1996, 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.

                                       16
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA (in thousands, except per share data).

The following  table sets forth the selected  financial data for the Company and
should be read in conjunction  with the  Consolidated  Financial  Statements and
Notes  thereto,  and with  Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations, which appear elsewhere in this report.


For the Years Ended June 30,
<TABLE>
<CAPTION>

<S>                                                         <C>      <C>       <C>

                                                               2003     2002      2001
Income Statement Data                                        =======   ======   =======
Revenues                                                     $    66   $  167    $    4
Income(loss) from continuing operations                         (728)    (542)   (1,449)
Income(loss) from discontinued operations                     (1,124)  (1,378)      --
Net income (loss)                                             (1,852)  (1,920)   (1,449)

Per Share Data*

Income(loss) from continuing operations                        (.026)   (.024)     (.08)
Income(loss) from discontinued operations                      (.041)   (.066)       --
Net income (loss)                                               (.07)    (.09)     (.08)
Cash dividends                                                    --       --        --
Weighted average shares                                       27,579   22,540    17,214
Balance Sheet Data
Film costs                                                     3,190    3,638     3,923
Total assets                                                   4,275    4,921     5,796
Indebtedness                                                   4,829    3,725     3,743
Shareholders' equity                                           ( 554)   1,196     2,053

</TABLE>

NOTE:  Per share data and  weighted  average  shares for all  periods  have been
restated to reflect  the effect of a  one-for-six  reverse  stock split in March
1996.


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION.

Results of Operations for the Years Ended June 30, 2003, 2002 and 2001

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  significantly
most of its investments in and to affiliated  entities from prior  activities as
well as accruing for additional unusual expenses. This activity is the result of
management's  change in the operations to form a more cohesive selling group and
in determining the true valuations  according to the revenue sources that we are
attempting to generate as an overall Company and "focused  industry"  guideline.
In the past, the Company was fairly  extended in areas that were not necessarily
its expertise  and current  management  has sought to engage a more  traditional
approach  to the  markets of selling,  broadcast,  and  relying on its  content,
rather than outside investments, to coordinate its sales efforts.

Revenues for the twelve months ended June 30, 2003 decreased to $65,636 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
several 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.  Although there

                                       17
<PAGE>

are other film  properties  that the Company  reviews and has in process,  newer
productions for possible  recognition  into the Company's  markets are harder to
determine due to factors  beyond the Company's  control.  The factors are mainly
due to the independent  market being in an economic slowdown and the shortage of
capital the Company has with which to perhaps  negotiate for the  acquisition of
higher profile  properties.  The Company is in post-production  for several more
film projects  recently acquired and it expected to have these available late in
the coming year (2004). The Company has an advantage,  through a captive vendor,
(JL Media Services LLC) to allow for the post-production  services to be used as
a method of  acquiring  films for little or no money as an advance.  The Company
uses the services of the vendor to afford the  completion of films that may need
such work in exchange for the international (or all worldwide) rights in selling
the product for a fee. New marketing from present management,  specifically, the
attendance at new festivals  and markets and the  additional  tools of promoting
through its Internet  site  (www.odysseypix.com),  has been  hampered due to the
market  conditions  and the extensive time it is taking to revive the buyer base
for the Company and distribute  quality  product as well as gain confidence from
buyers in consistent service.

Costs related to the revenues  decreased to $ 14,615 for the twelve months ended
June 30, 2003 as compared to $106,050 for the twelve  months ended June 30, 2002
and $152,953 for the same period ending Jun 30, 2001.  The relative  decrease in
costs are primarily related to reclassification of depreciation costs associated
with the earlier  acquisition of the Kimon library and Hallmark film assets.  In
the past, and after the transaction  with Kimon was completed,  all depreciation
costs were listed under "Cost of Goods". This was recorded properly if there was
revenue to be recognized along with such  depreciation  treatment.  According to
the latest  account rules as governed in revenue  recognition  and costs related
thereof, Assets are depreciated, as opposed to expensed, if they are expected to
generate value over a period of more than one year. The fact that there was less
revenue than  expected or  calculated  or no revenue  recognized  from the Kimon
assets after purchase,  the transaction as a whole,  would be treated more as an
inventory  item and  therefore  resulted  in a  depreciation,  which  should  be
recorded within operations as an expense rather than a cost item.  Additionally,
the acquisition of the Kimon asset resulted in the acquisition of  Filmzone.com,
(a domain  name for the  web-site  which  will add to the  Company's  efforts in
selling  and  marketing)  which also is a  depreciation  item to be  included in
expense.  Although this did not materially affect the overall asset of the Kimon
Library, a re-evaluation  could occur and in the event that there is substantial
concern  over  the  ability  to  generate  revenue  from  this  asset,   further
write-downs may occur.

Selling,  general and administrative expenses increased by $174,763 to $ 779,289
for  the  twelve-month  period  ended  June  30,  2003  from $  604,526  for the
comparable period ending June 30, 2002. For the period ending June 30, 2001, the
same  expenses  were  663,364.  This  increase is  primarily  due to the Company
experiencing  high legal costs in defense and corporate cleanup work underway as
well as experiencing the added cost of work in progress and production needs for
finalizing  films and making  them ready to market.  The Company has reduced its
travel  related  expenses as well as other  corporate  overheads  in the outside
leases and  expenses.  In addition  the Company  continues  to have to hire on a
contract  basis several  necessary  companies  and/or  individuals  to assist in
various markets, marketing and sales needs as well as to hire advisors on a part
time  basis  due to its  limited  litigation  expertise.  Since  the  change  in
management  control in July of 2001, new management has undertaken several steps
to reverse unfavorable results. The company developed a recapitalization program
with  certain  members of its board and also  received  assistance  from current
shareholders.  The Company was able to license several feature film products and
has entered into an arrangement with selling agencies to assist in its marketing
efforts  for  the  international  territories.  In  addition,  the  company  has
developed  relationships  whereby it will be able to add to sales efforts in the
North American markets of Video and DVD sales on a direct basis. The Company has
also engaged one of its Board members,  and has developed  active  participation
from some strategic alliances, to further assist in its future performance.

                                       18
<PAGE>

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 approximately $948 of cash.

Recent  rulings  require  the  Company to  disclose  certain  off-balance  sheet
transactions,   contingencies   and  related   debts.   Section  401(a)  of  the
Sarbanes-Oxley Act requires public companies to disclose in the annual financial
reports, all material off-balance sheet transactions,  arrangements, obligations
(including   contingent   obligations)   and   other   relationships   or   with
unconsolidated  entities or persons  that may have a material  current or future
effect on one or more of the company's  financial  measures.  This disclosure is
required  for  filings for fiscal  years  ending on or after June 15,  2003.  In
addition,  companies  are required to disclose  (as of December  2003) a tabular
format  depicting the relative  obligations (as defined in FASB #45 and pursuant
to FIN 45) which  encompasses  a)  contingent  requirements  by the Company,  b)
guaranty  against  another  entity's  failure  to  perform,  c)  indemnification
agreement or indemnified parties, e) providing security to an indemnified party.
These  disclosures  are regardless of whether they appear as recordings of or on
the financial statements. The Company has decided to adopt the tabular method of
recording said disclosure  effective as of June 30, 2003 and its presentation is
as follows:

<TABLE>
<CAPTION>

                        TABLE OF CONTRACTUAL OBLIGATIONS AND DISCLOSURE


Account Description                    Total        Less than 1      1-3 Years     3-5 Years    More
<S>                                <C>            <c>              <c>             <c>        <c>
                                                       Year                                     than 5
----------------------------------- ------------- ---------------- --------------- ---------- ----------
Structured Payment Obligations         544,922         90,000          454,922          -          -
Secured and Affiliate Obligations      375,148        160,000          215,148          -          -
Obligations to Leased Premises         132,924            -            132,924          -          -
MG Obligations                         230,584            -            230,584          -          -
Notes and Loan Obligations           1,260,412      1,160,412          100,000          -          -
Accrued Salaries and Contract
  Obligations                          433,922        433,992             -             -          -
Other Term Liabilities Reflected
  on the Balance Sheet                 404,626            -            404,626          -          -
Other Contingencies Not Reflected
  on the Balance Sheet                 515,000         515,000            -             -          -


</TABLE>
                                       19
<PAGE>

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
with  investors in US and Europe.  The Company also received  financial  support
from another  company (JL Media  Services LLC, an affiliate of an officer,  John
Foster) in offsets to  overheads  and  interim  loans,  which are secured by the
Company's  assets.  The Company  continues to structure future capital plans and
has active offers from other outside investment  groups,  investor resources and
individuals  who will  assist in the  financial  support  for  growth and in its
efforts to regain market  awareness.  The Company has made progress in obtaining
additional  funds,  but does have a significant  requirement for further outside
funds in order to retire its debts and potential  contingencies as noted herein.
The Company faces extreme  difficulties on acquiring  additional funds at a time
when it is also attempting to gain revenue from its present and past assets.  In
addition,  economic conditions in the overall entertainment markets in which the
Company is exposed to (the Independent  Markets) involve significant issues that
create  added timing to get to market,  preparation  of product,  acceptance  by
International  and Domestic buyers,  and timely payment from those buyers. It is
uncertain the  economy's  recovery from the downturn that began in calendar 2001
and continues at present and the demand for our services and product will result
in "ready cash" being available in the future.  Without added financing  through
equity  and/or  debt,  the  Company  is at risk in  maintaining  its  day-to-day
existence  as well as  affording  its plans for market  entry of its product and
timely  delivery.  There  can be no  assurance  that we would be able to  obtain
financing or that such financing  would be available on terms  acceptable to us.
Should  financing  from outside  sources not become  available on an  acceptable
level,  there could be adverse  conditions,  which the Company will  experience.
These  include  possible  work  stoppage,  inability  to operate on a consistent
level,  and possibly  resulting in further  aggressive  attempts  from others in
litigation  processes  to make  attempts  to collect  against  the assets of the
Company.

During the period between April, 1999 and September, 1999, the Company completed
four private placements to offshore investors,  the first of which was completed
for  575,000  shares  of  common  stock at a  purchase  price of $.30 per  share
(resulting in gross  proceeds to the Company of $172,500),  and the latter three
of which were completed for an aggregate of 1,600,000  shares of common stock at
a purchase  of $.40 per share  (resulting  in gross  proceeds  to the Company of
$400,000).  During the period  between  September,  1999 and October,  2000, the
Company completed two series of private  placements to offshore  investors,  the
first of which was  completed  for an aggregate  of  3,000,000  shares of common
stock at a purchase price of 40 cents per share  (resulting in gross proceeds to
the  Company  of  $1,200,000),  and the  second  of which was  completed  for an
aggregate  of 960,000  shares of common  stock at a purchase  price of $1.00 per
share  (resulting  in gross  proceeds  to the Company of  $960,000).  During the
period between  October,  2001 and June 2002, the Company  completed a series of
private  placements to both offshore and US investors.  These placements  netted
capital to the  company in the amount of  $916,000  at a range of share  pricing
from 25 to 07 cents per share.


ITEM 8. 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 9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE.

Reference is made to the  Company's  Reports on Form 8-K,  dated  September  24,
1997,  and February 13, 1998,  with respect to a change in  accountants  for the
Company.  There have been no changes to the  accountants  of the company for the
period  ended  June 30,  2002.  The  board  of the  company  did  elect an audit
committee,  as required under the new standard,  and has elected to maintain the
same  relationship as in the past. The new standard was adopted on April 1, 2002
and did not  have a  significant  effect  on the  Company.  As if the  close  of
business on June 30, 2003,  there were no  disagreement  or  conflicts  with the
accountants.

                                       20
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The directors and executive officers of the Company 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  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.  OOJob,  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.

Meetings and Committees of the Board of Directors:

For the fiscal  year  ended June 30,  2003,  there  were seven  meetings  and/or
written  consents in lieu of meetings of the Board of  Directors.  All Directors
attended or consented to in excess of 75% of the meetings  (and consents in lieu
of  meetings) of the Board of  Directors  during said fiscal year.  The Board of
Directors does presently have,  audit and compensation  committees,  as recently
required.

                                       21
<PAGE>

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 11. 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
<TABLE>
<CAPTION>


                           Annual Compensation
                           ----------------------------------------      Long-Term Securities
Name and         Fiscal               Other             Annual            Underlying All Other
Position          Year               Salary       Bonus Compensation    Options  Compensation
                  -------- ---- ------ ----- ------------ ------- ------------
<S>               <C>     <C>    <C>    <C>   <C>        <C>      <c>

John Foster       2003 185,220      --      --                --                --
President /CEO    2002 176,400      --      --                --                --
                  2001 156,000      --      --                --                --
                  2000  49,250      --      --                --                12,312
</TABLE>


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, nor in 2002, or 2001.

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.


                                       22
<PAGE>

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

In March,  1998,  Mr.  Stephen  Greenwald  stepped down as CEO of the Company in
connection  with a change in  management  control of the Company.  In connection
with such change of management, Mr. Greenwald terminated his existing employment
agreement and entered into a new compensation  arrangement with the Company. Mr.
Greenwald  agreed to serve as managing  director of the Company through December
31, 1999,  and was to receive the sum of $130,000  during such period in varying
monthly  payments.  In addition,  in  consideration  of terminating his existing
employment agreement,  Mr. Greenwald was to receive an additional $130,000, also
payable in varying  monthly  amounts during the two-year  period ending December
31,  1999.  In  September,  1999,  Mr.  Greenwald  resigned as a Director of the
Company to pursue  other  interests.  He also  agreed to settle all  outstanding
payments due to him under his employment agreement,  and to resign as a Managing
Director of the Company,  in consideration of receiving a settlement  payment of
$100,000, together with 200,000 shares of restricted common stock.

In  connection  with the change in  management  control of the Company in March,
1998,  Mr. Ira Smith,  a former  officer and  director  of the Company  (through
S.F.H.  Associates,  Inc.),  agreed  to serve in a  consulting  capacity  to the
Company for the period  beginning  in March,  1998  through  December  31, 1999.
Pursuant  to such  consulting  agreement,  Mr.  Smith's  consulting  company was
entitled to receive the sum of $160,000 during such period,  payable at the rate
of $8,000 per month,  commencing  May, 1998. In addition,  in  consideration  of
terminating his then existing employment  agreement with the Company,  Mr. Smith
was  entitled  to receive an  additional  $100,000,  payable in varying  monthly
amounts during the term of the consulting agreement.  Following a default by the
Company  under the  consulting  agreement,  Mr. Smith  agreed to  terminate  his
consulting agreement with the Company in consideration of receiving a settlement
payment of $100,000, together with 200,000 shares of restricted common stock.

In connection  with the change of control in the Company in March,  1998,  Johan
Schotte  entered  into  a  two-year  employment   agreement  with  the  Company,
commencing as of January 1, 1998 and continuing  through  December 31, 1999. Mr.
Schotte's  compensation  was fixed at $150,000 per year during such period.  Mr.
Koshakji also entered into a two-year  employment  agreement with the Company at
the rate of $150,000 per annum.  The agreement with Mr. Schotte was extended for
an  additional  period of one year at the rate of  $250,000  per  year,  and the
agreement with Mr.  Koshakji was extended for a period of six months at the rate
of  $5,000  per  month.  As of June  30,  2000,  a  substantial  portion  of the
compensation due to Messrs. Smith and Koshakji under their respective agreements
was past due for the period from  January 1, 1998  through the fiscal year ended
June 30, 2000. Mr. Koshakji resigned his position as President of the Company on
September 30, 2000.

In  connection  with the  change of  management,  an  affiliate  of Mr.  Schotte
purchased  a total of  $230,000  of  deferred  compensation  notes from  Messrs.
Greenwald and Smith, and converted approximately 75% of these notes into 667,648
shares of the Company's common stock in April, 1998. The balances of these notes
were converted into 176,050 shares of common stock in October, 1998.

                                       23
<PAGE>

In  November,  1998,  the  Board of  Directors  of the  Company  authorized  the
following bonus incentive  compensation package for each of Messrs.  Schotte and
Koshakji:

(I)  Warrants:  2% of the Company's total outstanding stock each year, beginning
     with the fiscal year  commencing  July 1, 1998,  and each year  thereafter.
     Warrants  shall be priced at the average  bid price for the 10  consecutive
     trading days  preceding the issue date each year,  and  exercisable  at any
     time  following  the issue date.  Messrs.  Schotte and  Koshakji  were each
     issued 103,385 warrants as of July 1, 1998 at an exercise price of $.74 per
     share.  Messrs.  Schotte and Koshakji  each waived their right to receive a
     warrant bonus for the fiscal year commencing July 1, 1999.

(II) Performance Bonus: Each year beginning with the fiscal year ending June 30,
     1999, and each year thereafter, if the Company's gross revenues increase by
     20% or more over the gross revenues of the preceding  year, the performance
     bonus shall be the greater of either 1% of the revenue differential or 2.5%
     of the EBITDA. No performance bonuses have been awarded under this plan.

(III)Market  Cap  Bonus:  At the end of each  fiscal  year,  beginning  with the
     fiscal year commencing July 1, 1998, if the Company's market capitalization
     increases  from the preceding  year based on the average  closing price for
     the 30 previous  consecutive trading days, the market  capitalization bonus
     shall equal 1% of the differential.

Messrs.  Schotte and  Koshakji  each waived  their right to receive a market cap
bonus for the fiscal years commencing July 1, 1999 and July 1, 2000.

John 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.


Compensation  Committee Report and Compensation Committee Interlocks and Insider
Participation

The  entire  Board  of  Directors  determines  executive  officer  compensation.
Subsequent  to the  period  ending  June 30,  2002,  the Board had  appointed  a
separate   compensation   committee  to   determine  or  set  future   executive
compensation.  The Board's executive  compensation policy is intended to attract
and retain key  executives,  compensate  them at appropriate  levels and provide
them with both cash and equity incentives to enhance the Company's value for all
of its stockholders.

                                       24
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information concerning ownership of common stock,
as of  September  25,  2000,  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           Status            Shares                    Percentage of
Beneficial Owner                    Beneficially Owned        Class
================================================================================
Patrick Speeckaert         Director         2,000             Less than 1%
John Foster                Director,        2,000             Less than 1%
President/CEO
Kjell Larsson              Director         1,518,055         4.7%
Peter Bucher               Director         -0-               -0-
--------------------------------------------------------------------------------
All Executive Officers
& Directors As
A Group (4 Persons)                         1,522,055         4.7%
================================================================================


ITEM 13. CERTAIN RELATIONSHIPS, RELATED AND SUBSEQUENT TRANSACTIONS.

In September 2002, the Emerging  Issues Task Force ("EITF")  reached a consensus
on Issue 02-15,  which addressed the accounting for convertible  debt for equity
exchanges.  The EITF concluded that transactions where equity is used as payment
for  debt  conversions  should  be  accounted  for  as  induced  conversions  in
accordance  with SFAS 84. SFAS 84 requires a non-cash charge to earnings for the
implied value of an inducement to convert from convertible debt to common equity
securities  of the issuer.  The  accounting is to be applied  prospectively  for
convertible  debt for equity  exchanges  completed after September 11, 2002, the
date of the EITF's  consensus.  We have  applied  the  provisions  of SFAS 84 to
convertible  debt for equity exchanges  transaction  completed during the fourth
quarter,  and all  transactions  have been expensed  properly,  with no material
changes from prior reporting periods.

In April,  1997,  Robert E. Miller,  Jr. (who resigned as a Director  during the
fiscal  year ended June 30,  2000) made a loan to the  Company in the amounts of
$25,000.  The loan was payable on demand,  accrued interest at the rate of 9.25%
per annum, and was secured by a collateral  assignment of the Company's $300,000
receivable due from Kinnevik.  See  "Business-Sales of Distribution  Rights." In
consideration  of making the loan,  the lender  received a five-year  warrant to
purchase 25,000 shares of common stock of the Company,  exercisable at $1.00 per
share.  Mr. Miller agreed to a rollover of his loan to be paid from the proceeds
of a second Kinnevik  receivable due in September 1998. In  consideration of the
rollover,  Mr. Miller received  12,500  warrants,  exercisable  over a five-year
period at $1.00 per share.  Mr.  Miller's  loan was rolled over for a subsequent
six-month  period on an  unsecured  basis with  interest  at the rate of 10% per
annum.  Mr. Miller  thereafter  agreed to another  six-month  rollover  (through
September,  1999), in  consideration  of which he received an additional  12,500
warrants  exercisable over a five-year period at $1.00 per share, an increase in
the  interest  rate on his  loan  to 12%  per  annum,  and an  extension  on the
expiration  date of all warrants  issued in connection with his loan to the year
2004. In December 1999, Mr. Miller converted his $25,000 loan into 57,876 shares
of common stock of the Company at a conversion price of  approximately  $.43 per
share.  The "per share"  price was based upon a formula of a  predetermined  and
mutually  agreed-upon discount to the market and was expensed in interest during
that period, as well as credited from short-term notes during that same period.

                                       25
<PAGE>

In June, 1998, the Company entered into the following related party transactions
with E3 Sports New Mexico,  Inc., a company which is an affiliate of Mr. Schotte
and Mr.  Koshakji and in which the Company  holds a minority  interest:  (i) the
Company  purchased  a  $25,000  sponsorship  from the  Albuquerque  Geckos,  the
professional  soccer team owned by the affiliate;  and (ii) the Board authorized
the Company to loan up to $100,000 to the affiliate,  payable no later than July
15, 1999 with interest at 15% per annum (the loan is secured by 10,000 shares of
E3 Sports new Mexico, Inc.). The loan is currently outstanding.

In July, 1998, the Company entered into the following related party transactions
with Media Trust S.A., a company  which is an  affiliate  of Mr.  Schotte and in
which the Company holds a minority  interest:  (i) the Company  agreed to make a
$2,500  loan to the  affiliate,  payable  in one year with  interest  at 15% per
annum; (ii) the Company engaged the affiliate to introduce prospective investors
to the  company,  in exchange  for which the  affiliate  will receive 10% of any
investments  made in the  Company  by  persons  or  entities  introduced  by the
affiliate,  together with five-year  warrants (100 warrants per $1,000 invested)
at an exercise  price equal to the market  price of the  Company's  stock on the
date of the investment. In connection with convertible loans made to the Company
in 1998 by Belgian investors in the aggregate amount of approximately  $100,000,
and the  purchase of 625,000  shares of common stock of the Company by Lecoutere
Finance,  S.A.  in  December,  1998 (see  below),  a total of  29,540  five-year
warrants have been issued to Media Trust, S.A. with exercise prices ranging from
$.38 per share to $.98 per  share.  The  $2,500  loan to Media  Trust  S.A.  was
outstanding as of June 30, 2001 along with the reconciliation of commissions, if
any,  which may have been due to Media Trust.  As of June 30, 2002,  the company
has offset certain receivables to any outstanding balances,  except for the fact
that there are four  unsecured  promissory  notes that,  although  they are with
individuals directly, have been booked under `notes payable' Media Trust.

There was no activity with respect to the amounts left  outstanding and owing to
the  Company,  in  fiscal  2003,  other  than a  request  for  reimbursement  of
outstanding amounts owed to the Company. As of the close of business on June 30,
2003,  there were amiable  discussions  underway as to the  positive  outcome of
these amounts being recovered.

During the fiscal  year ended June 30,  2000,  Mr.  Koshakji  loaned the Company
approximately  $2,500,  with such loan  bearing  interest at the rate of 18% per
annum (the same interest rate being charged to Mr. Koshakji for such funds).

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 wrote off the entire balance as of the end
June 30, 2003.

Commencing in January of 2000,  the Company  accrued rent expense at the rate of
$1,000 per month for the use of office  space in  Luxembourg,  which is owned by
Media Trust,  S.A, a company  affiliated  with Mr.  Schotte,  the former CEO and
Chairman of the Company. As of June 30, 2002, there are no outstanding  balances
owed in relation to this rent  expense and the company has no further  agreement
for lease of rental space under this former arrangement.

In February 2000,  the maturity date of 500,000  common stock purchase  warrants
held by Lecoutere Finance S.A. (an affiliate of Mr. Schotte) was extended for an
additional  seven-year  period  through  February  25, 2007.  The warrants  were
originally  issued to Mr.  Schotte  and other  investors  in  February,  1997 in
connection  with a capital  investment in the Company of $375,000.  The warrants
were  originally  scheduled to expire on February  25, 2000.  At the time of the
original  investment,  Mr.  Schotte was not  affiliated  with the  Company.  The
warrants will continue to have the same exercise price of $1.06 per share.

                                       26
<PAGE>

In April of 2001, the Company's subsidiary, Odyssey Ventures Online Holding S.A.
formulated a subscription  document in Luxembourg,  specific to non-US investors
in seeking a capital amount totaling 5.0 million US Dollars.  As of the close of
business on June 30, 2001,  there were no  subscribers  or  participants  in the
subscription  document and non were expected to  participate in the near future.
As of the end of June 30, 2003 the subscription  agreement has expired and there
is no further activity planned on this issue.

In May of 2001,  management  entered  into  discussion  regarding  the  possible
restructure  of the  present  management  for and in  consideration  of  certain
adjustments to the operational  direction of company.  It is  contemplated  that
certain assets and  liabilities  would be taken over by Mr. Schotte in an effort
to streamline the debts of Odyssey and the directions of its subsidiary, Odyssey
Ventures  Online Holding S.A.  During such a transition,  Mr. Schotte would step
down as an employee of the Corporation to manage the  subsidiary.  The intention
would be to  transact  the  eventual  purchase  or split of the  subsidiary  for
certain  consideration.  Such  a  transaction  would  be  noted  in  forthcoming
quarterly reports, if approved and enacted upon. This transition would place Mr.
Foster in the position of CEO and Chairman of the Board. The Board has scheduled
such a meeting to occur on or before the end of  November  2001.  On July 6th of
2001, the Board voted on the assignment of Mr. Foster to CEO and Chairman of the
Board of Odyssey Pictures Corporation.  Mr. Schotte resigned as CEO and Chairman
and was  appointed the position of Executive  Vice  Chairman on the Board.  This
change was due to the approved  transition  by the Board for the further  growth
plans of Odyssey.

During the past two years,  the  president  and CEO as well as certain  parties,
including  shareholders and entities,  have made advances to the Company.  These
advances are interest  bearing and were made to the Company for working  capital
purposes.  These  advances  are included in due to related  party  transactions,
affiliates  and notes payable in the  accompanying  financial  statements.  Also
included in these amounts were unpaid salaries and wages, net of advances,  made
to the CEO of the Company.


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
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.

                                       27
<PAGE>
                                     PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 10-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)


                                       28
<PAGE>

--------------------------------------------
(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

     (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



                                       29
<PAGE>

                                   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: October 14, 2003                         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.



/s/ John W. Foster
-------------------------
John W. Foster
CEO, Chairman and President



/s/ Kjell Larsson
------------------------
Kjell Larsson
Director


/s/ Patrick Speeckaert
------------------------
Patrick Speeckaert
Director


/s/ Peter Bucher
-------------------------
Peter Bucher
Director


                                       30

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


Report of Independent Accountants

To the board of directors and Shareholders of Odyssey Pictures Corporation:

In our  opinion,  the  accompanying  consolidated  balance  sheets  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, 2003, 2002 and 2001 and the results
of their  operations  and their cash flows for the periods  ended June 30, 2003,
2002 and 2001 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


                                      F-1
<PAGE>
<TABLE>
<CAPTION>

                                                    Odyssey Pictures Corporation
                                                     Consolidated Balance Sheet


                                                            Assets

                                                                                              June 30, 2003     June 30, 2002
                                                                                             ===============   ==============
<S>                                                                                        <C>               <C>
Cash                                                                                       $             948            3,675
Account Receivable (Net of allowances of 58,415 and -0- )                                            229,326          267,587
Advances in Films and Ventures                                                                       108,151           56,900
Other Assets, Prepaids and Deposits                                                                  100,142          166,500
                                                                                             ---------------   --------------
  Total Current Assets                                                                               438,568          494,662
                                                                                             ---------------   --------------
Film Properties
Filmzone, Hallmark and Kimon Assets                                                                4,055,318        4,311,024
Amortization and Depreciation                                                                       (865,302)        (474,322)
                                                                                             ---------------   --------------
  Total Film Properties                                                                            3,190,016        3,836,702
                                                                                             ---------------   --------------
Other Assets
Production in Progress                                                                                61,533            4,500
Affiliates and Subsidiaries                                                                          584,916          584,916
                                                                                             ---------------   --------------
  Total Other Assets                                                                                 646,448          589,416
                                                                                             ---------------   --------------
         Total Assets                                                                              4,275,032        4,920,780
                                                                                             ===============   ==============

                                                            Liabilities
Current Liabilities
Accounts Payable                                                                                   1,187,416          890,037
Structured Payments and Other Payables                                                               717,776          503,910
Accrued Interest Accumulated                                                                         240,821          228,021
Deposits and Other                                                                                   235,584          235,584
Other Accrued Liabilities and Reserves                                                               419,265          360,733
                                                                                             ---------------   --------------
  Total Current Liabilities                                                                        2,800,861        2,218,285
                                                                                             ---------------   --------------
Other Liabilities
Short Term Loans                                                                                     113,462           45,000
Other Notes Payable                                                                                1,188,950        1,118,851
Contract Liabilties                                                                                  625,515          343,151
Long Term Debt                                                                                       100,000                -
                                                                                             ---------------   --------------
  Total Other Liabilities                                                                          2,027,926        1,507,002
                                                                                             ---------------   --------------
          Total Liabilities                                                                        4,828,788        3,725,287
                                                                                             ===============   ==============



                                                         Shareholders' Equity

Preferred Stock, par value .10, Authorized 10,000,000 shares
                                                                                                           -                -
Preferred Stock, Series B, par value .10, Authorized 10,000,000 shares
                                                                                                           -                -
Common stock, par value $.01; Authorized 40,000,000 shares.
  Issued and outstanding (net of treasury shares), 32,4323,938 28,033,70298,038
Accumulated deficit                                                                              (35,700,284)     (33,780,164)
Capital in excess of par value                                                                    36,674,843       36,597,743
Current net income                                                                                (1,852,253)      (1,920,123)
                                                                                             ---------------   --------------
  Total shareholders' equity (deficit)                                                              (553,756)       1,195,494
                                                                                             ---------------   --------------
 Total Liabilities and Shareholders' Equity (Deficit)                                              4,275,032        4,920,781
                                                                                             ===============   ==============





                             The accompanying notes are an integral part of these financial statements

                                                                  F-2
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                   Odyssey Pictures Corporation
                                              Consolidated Statements of Operations

                                                                                            For the Years Ended June 30,
                                                                                        2003            2002             2001
                                                                                    ==============  ==============   ==============
<S>                                                                                 <C>           <C>              <C>
Revenue                                                                                  $ 65,636        $168,615           $3,706
Expenses
     Costs related to revenues                                                             14,615         106,050          152,953
     Officers salaries and expense                                                        185,220         271,839          156,763
     Selling, general and administrative expenses                                         594,069         257,687          506,601
                                                                                    --------------  --------------   --------------
                                                                                          793,904         635,576          816,317
                                                                                    --------------  --------------   --------------

     Operating income (loss)                                                             (728,268)       (466,961)        (812,610)
                                                                                    ==============  ==============   ==============

Other income (expenses)
     Litigation settlements and legal fees                                               (127,209)       (126,789)        (471,236)
     Amortization Expense                                                                (390,980)        (75,000)         (49,380)
     Reserves for losses on investments                                                  (322,706)       (709,222)               -
     Financing fees                                                                        (8,834)       (384,127)         (38,148)
     Interest income                                                                            -             138           12,001
     Interest expense                                                                    (274,256)       (158,070)         (68,776)
     Foreign Currency translations                                                              -             (92)               -
                                                                                    --------------  --------------   --------------

     Income (loss) from operations
     before provision for income taxes                                                 (1,852,253)     (1,920,123)      (1,428,150)
     Provision / Benefit for income taxes

NET INCOME (LOSS)                                                                    $ (1,852,253)   $ (1,920,123)    $ (1,428,150)
                                                                                    ==============  ==============   ==============

Basic income (loss) per share                                                               (0.07)          (0.09)           (0.08)

     Weighted average common shares outstanding                                        27,578,560      22,540,417       17,213,988
                                                                                    ==============  ==============   ==============

Diluted income (loss) per share                                                             (0.07)          (0.09)           (0.08)

     Weighted average common shares outstanding                                        27,578,560      22,540,417       17,213,988
                                                                                    ==============  ==============   ==============




                                 The accompanying notes are an integral part of these financial statements

                                                                     F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                  Odyssey Pictures Corporation
                                             Consolidated Statements of Cash Flows


                                                                                             For the Years Ended June 30,
                                                                                       2003              2002              2001
                                                                                 ----------------  ----------------  ---------------
<S>                                                                                <C>              <C>               <C>

Cash Flows From Operating Activities:
    Net income (loss)                                                                 (1,852,253)     $ (1,920,123)    $ (1,448,758)
       Adjustments to reconcile net income (loss) to net
         cash used in operating activities:
       Amortization of film costs                                                        390,980           102,695          107,664
       Additions to film costs                                                                 -           182,814                -
       Other depreciation and amortization                                                     -            75,000           27,080
       Issuance of shares of common stock in consideration for services rendered               -           144,000                -

    Changes in assets and liabilities:
       Accounts receivable, net                                                          (29,254)         (184,681)         116,627
       Allowances for doubtful accounts                                                   58,415                 -                -
       Notes receivable and advances                                                       9,100           112,682
       Prepaid expenses and other and affiliate accounts                                 361,703           (12,500)          40,200
       Accounts payable, accrued expenses and deposits                                   566,356            (7,999)         400,448
       Structured payments and accrued management contracts                              260,354          (103,658)        (631,002)
       Accrued interest                                                                   12,800             1,607                -
                                                                                 ----------------  ----------------  ---------------

       Net cash used in operating activities                                            (221,799)       (1,610,163)      (1,387,740)
                                                                                 ----------------  ----------------  ---------------

Cash Flows From Investing Activities:
       Acquisition of fixed assets, production or distribution advances                  (35,635)          (19,419)               -
       Subsidiary Activity (including reserves for losses)                               (76,649)          601,917         (179,668)
                                                                                 ----------------  ----------------  ---------------
       Net cash used in investing activities                                            (112,284)          582,498         (179,668)
                                                                                 ----------------  ----------------  ---------------

Cash Flows From Financing Activities:

       Net proceeds from private placement sale of common stock
         (excluding stock issued for services)                                           128,000           916,000          405,000
       Net proceeds/payments - notes and loans payable                                   203,358           113,177        1,133,356
                                                                                 ----------------  ----------------  ---------------
       Net cash provided by financing activities                                         331,358         1,029,177        1,538,356
                                                                                 ----------------  ----------------  ---------------

       Net increase (decrease) in cash                                                    (2,726)            1,512          (29,052)
       Cash at beginning of period                                                         3,674             2,162           31,214
                                                                                 ----------------  ----------------  ---------------

       Cash at end of period                                                                 948           $ 3,674          $ 2,162
                                                                                 ================  ================  ===============





                                            The accompanying notes are an integral part of these financial statements

                                                                             F-4
</TABLE>

<PAGE>
                          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  and  2001  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 note 2 to our audited
          consolidated financial statements.

     d.   Generally Accepted Accounting  Principles.  Our consolidated financial
          statements have been prepared in accordance with GAAP.

     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,  and manages certain  investments through a subsidiary named
Odyssey Ventures Online Holding S.A., which is based in Luxembourg.

                                      F-5
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


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.

In December 1999, the  Securities and Exchange  Commission  ("SEC") issued Staff
Accounting  Bulletin 101,  Revenue  Recognition  in Financial  Statements  ("SAB
101"),  which  summarized  the SEC staff's view in applying  generally  accepted
accounting  principles  to revenue  recognition  in  financial  statements.  The
Company  has  reviewed  its revenue  recognition  policies  and revised  them to
conform  to  SAB  101,   specifically   with  respect  to   distributor-for-hire
arrangements.  Accordingly,  there were no restatements to be effected and there
is no material change in the statements herein.

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, 2002,
and  2001,  were 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.

Revenue  allocated to the primary market,  usually the theatrical  market (which
the Company is rarely  involved  with), is recognized as revenue on the date the
completed  film is  available  for  exploitation  in the related  territory  and
certain other conditions of sale have been met pursuant to criteria specified by
SoP-00-2.

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.

                                      F-6
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements

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 noted
herein,  and  estimated  residual and  participation  costs are  accrued,  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,  2002,  the  Company had no  multiple-title
contracts in the markets.

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

     -    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.

     -    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.  Note,  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,
cine 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.

                                      F-7
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements

d)   Investments:

Investments   consist  of  shares  of  common  stock  of  four   privately  held
corporations.  Two are  corporations  controlled by a previous CEO and Chairman,
Johan Schotte, where the Company has an 18% ("minority") ownership.  The Company
wrote down 63% of the investment due to its internal evaluation and the prospect
of its  eventual  realization  of any  distributable  profit or  revenues  being
doubtful as to the value as presented  (see "Related  Party  Transactions,  Item
13").  The Company has a 99%  ownership  in a venture  capital  company that has
equity  investments in four other  companies,  one being publicly  traded.  This
investment  is accounted  for using the cost method.  According to the Company's
recently adopted  Statement of Financial  Accounting  Standards No. 94 (SFAS 94)
wherein the Company is required to report consolidated  financial statements for
majority-owned  subsidiaries in order to eliminate  off-balance  sheet financing
activities,  the  Company  has  elected  to  continue  its  cost  method  due to
exceptions (as defined within the guidelines of SFAS 94) as follows:

1)   The Company considers this investment to be a non-consolidation event.
2)   The  subsidiary is a non-active  and  non-participating  entity in the same
     business as the Company.
3)   A serious doubt as to the realization of the investment(s)  made exists. In
     this case, a significant write-down of the assets has been made.
4)   There are no adjustments to be made to reflect  subsequent  changes in fair
     market value.
5)   The Company  expects to regain  control of the assets (as noted herein) and
     liquidate them for its recorded value.

The fourth is an  investment  in Filmzone  that is  accounted  as  inventory  in
progress  after the Company  acquired the  remaining  50% in February of 2002 by
completing its  acquisition  agreement (as dated August 7, 2000) with cash. This
investment  is accounted  for using the cost method since it was the purchase of
an  Internet  Domain  and not an  operating  entity.  There was no effect on the
amortization  schedules as the remaining funds were booked as a payable item and
therefore, were already booked at the time of the transaction.

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.

                                      F-8
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements

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

In January of 2000,  the Board  appointed  Mr. John Foster as  President  of the
Company and also elected him to the Board of Directors. Mr. Foster still remains
as the Company's  President and his contract was renewed for the periods  ending
June 30,  2001 and 2002.  Subsequently,  Mr.  Foster  was  nominated  as CEO and
Chairman of the Board on July 6, 2001. Mr. Johan Schotte stepped down as CEO and
became Executive Vice Chairman.  Mr. Schotte resigned from his board position on
December 12th. Mr. Pierre  Koshakji,  a previous  President and Secretary of the
Company,  resigned  on December  9th. On January 3, 2002 the board of  directors
filled  these two  vacancies  with Mr.  Peter  Bucher and Mr.  Kjell  Larsson by
unanimous  vote of the board.  In January the Company hired Mr. C. F. K. (Frank)
Cole,  as Chief  Financial  Officer.  Mr. Cole was hired on a one-year  contract
expiring on December  31st of 2002.  In August of 2002,  Mr. Cole  requested  to
decrease his  involvement  in the Company due to personal needs and requested to
re-establish  his position as Vice President of Finance and reduce his hours. In
October of 2002, Mr. Cole  discontinued his services to the Company.  Mr. Foster
assumed the matters of CFO until a replacement  can be employed.  As of June 30,
2003,  there was only one officer  employed by the Company and the Company  uses
various outside resources to assist in its daily operations and tasks.

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 these 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  has 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 co  produced  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

                                      F-9
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


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 President,  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  market 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 Filmed/Video content, were either not available or built upon
in prior years,  as may have been 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 Filmed/Video  content over the
Internet,  from which the Company developed a joint venture with Kasstech,  Inc.
as noted 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,  films  product and
delivery methods,  revenue has suffered.  Turnaround of assets acquired has been
delayed (as earlier mentioned). The Company's films are not obsolete, unsaleable
or marketable and, therefore, have not had to accelerate removal of asset values
or additional write-offs.  The reason for this is due to offers,  considerations
of  contracts,   inquiries   from  past   customers   ("Licensees")   and  other
relationships  that  management  has had in the  past  with  Licensees,  and the
opportunities  that  exist in  development  of new  contacts  and  applying  the
Company's assets to new emerging markets.

                                      F-10
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


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.

4.   ACQUISITION OF FILM ASSETS

On July 14, 1998, the Company entered into an Asset Purchase Agreement through a
Preferred stock issue with Sweden based Kimon Mediaright KB ("Kimon"),  pursuant
to which the Company  acquired  certain  intangible  assets from Kimon valued at
$4,500,000.  Kimon assets  purchased  consist of a film  library with  worldwide
and/or  Scandinavian  distribution  rights and Scandinavian  video  distribution
rights to certain Hallmark Entertainment  products. On February 26, 2000, all of
the  Preferred  Shares of Kimon were  converted to Common Shares under a revised
valuation,  which was due to an alteration of the original  agreement dated July
14, 1998  whereas a  "dollar-for-dollar"  exchange  was reduced for  purposes of
re-evaluating  Filmzone.com (a domain name with other possible services that the
Company  can  use  in  its  sales  efforts)  was  undertaken,  According  to the
valuation, an average discount was made on the exchange resulting in an exchange
to .91 per share. This conversion was not related to any inducement offer by the
Company,  however, we due to the re-evaluation of the acquisition itself and was
exercised to the benefit of the Company.  Therefore there were 4,101,283  shares
issued for the 4,500,000 Preferred Shares.  Since the transaction from July 1998
was  adjusted  to the above  discount  along with  certain  "bonuses"  and other
considerations  being rescinded,  the shares were required to be issued with the
restrictions  that  accompany  new stock issues.  All  schedules  related to the
transaction,  such  as the  accounting  for the  asset  of  Filmzone.com  (which
resulted in a deduction  of the Kimon  Library  and an equal  allocation  to the
asset of Filmzone) and the  amortization  of both the Kimon Library and Filmzone
were properly allocated according to GAAP accounting guidelines.

In May of 2002 the company entered into an agreement to distribute certain films
from a local supplier.

The company  engaged in its first marketing of film product that it had acquired
for sales and licensing for markets beginning June 2002.

                                      F-11
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


5.   INCOME TAXES

At June 30,  2003,  the  Company  had a net  operating  loss  carry  forward  of
approximately  $35,700,287.  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 note, 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 a Non-US
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 note
occurred  from the Company  entering  into a  long-term  debt  arrangement  with
another lender. The Settlement Note 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.  Pursuant to the  required  adoption of  Statement  of Financial
Accounting  Standards No, 123 (SFAS 123),  and in concert with the  requirements
issued in the Emerging Issues Task Force 96-18 (EITF 96-18), there was no charge
to the  issuance of the warrants  since,  firstly the note was funded and issued
and is an  interest-bearing  instrument  charged  in  accordance  with  interest
expense  requirements  and,  secondly  the  warrants  were  issued  only  as  an
inducement for said loan and certain market  conditions relate to achievement of
a specified market target price. The warrants expire in April of 2007.

In August of 2002, a series of overhead  advances 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
advances were all made on short-term interest bearing loans.

                                      F-12
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


In September,  2002, the Company borrowed $50,000 for working capital needs in a
sixty-day note at 12% per annum. The loan also repriced certain warrants already
outstanding  to a price of six cents per  share.  The  total  warrants  affected
306,666  shares and  extended the final  exercise  date of all  certificates  to
September  23, 2005.  Additional  warrants  could be required if the loan is not
paid per its terms.  The  repricing  of the warrants  was not  recognized  as an
accounting  item and  expensed  due to the fact that  there was no basis for the
original  issue and the recent  adoption of Statement  of  Financial  Accounting
Standards No, 84 (SFAS 84) states a  recognition  in expense in the case of fair
market value for  "debtor-induced  conversion"  of a convertible  debt, or which
there was no change in such fair market value.

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 and
advances for overhead  expenses from a series of lenders,  inclusive of the CEO,
totaling  $39,000.  These  loans  and  advances  all were  made on a  short-term
interest-bearing basis.


7.   AGREEMENTS TO SATISFY CERTAIN LIABILITIES THROUGH ISSUANCE OF COMMON STOCK

During the quarter ended March 31, 2002, the Company  satisfied  consulting fees
for investment banking services related to past private placements with warrants
to purchase 500,000 shares at a price of 25 cents per share expiring on December
12, 2003 to a private party.  Pursuant to the Company's adoption of Statement of
Financial  Accounting  Standards  No, 123 (SFAS  123),  and in concert  with the
requirements issued in the Emerging Issues Task Force 96-18 (EITF 96-18),  there
was no charge to the  issuance  of the  warrants  since,  firstly  work that was
performed  was  charged  in the  issuance  of shares of stock (see  below)  and,
secondly the warrants were issued only as an inducement  for future  consultancy
issues,  if requested  by the Company and,  lastly,  certain  market  conditions
relate to achievement of a specified  market target price.  With respect to this
same party, services were expensed in the quarter ending March 31, 2002 totaling
$150,000 by the issue of 500,000  shares of  unregistered  restricted  shares of
stock. According to the Company's adoption of Financial Accounting Standards No,
123 (SFAS 123),  and in concert  with the  requirements  issued in the  Emerging
Issues Task Force 96-19 (EITF 96-19), a mutual fair-market  valuation was placed
on the  issuance  and  approved  by  management.  This issue  resulted in single
expense charged to services for the specified period.

     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.

     In January of 2003,  the Company issued a total of 215,000 common shares to
two  parties  in  consideration  of  loans  made  to  the  Company.  These  were
specifically 140,000 shares to one private party and 75,000 shares to another.

                                      F-13
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


     During the period of January  through March 2003, the Company  reserved the
following shares to be issued:  an aggregate of 827,807 shares towards employees
for  payment  of past  services  and  considerations  for  continuing  services.
Specifically,  these were to three employees;  one for a total of 77,807 shares,
one for 500,000  shares (in payment  against  past salary) and the other was for
250,000 shares (in partial payment of salary).


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.


9.   SHAREHOLDERS' DEFICIT

The company continues to experience losses and an increasing loss carry forward.
The Deficit will continue to grow until the Company is able to increase revenues
to a point  beyond  break even.  The Company  does not release  earnings  and/or
revenue projections.  The Company desires to utilize the losses for tax purposes
against potential future taxable earnings.  The utilization of tax losses can be
significantly  reduced if there is a change of control. As the Company is widely
held and freely traded the Company  cannot  control  whether a change of control
might occur.  Such an action would limit the taxable losses in any one year to a
formula equal to the  applicable  federal bond rate times the losses at the time
of  change of  control.  Additionally  the  Company  must  file its tax  returns
properly with the additional  information required to be able to utilize the tax
losses.  The Company is in the process and has engaged two firms to complete the
tax returns.


10.  STOCK OPTIONS AND WARRANTS

During the fiscal year ended June 30, 1997, a total of 1,153,333  warrants  were
issued  to  officers,  directors,  employees,  consultants  and  third  parties,
exercisable  at prices  ranging  from $ 0.625 per share to $1.06 per share.  The
warrants are exercisable  for periods ranging from three to five years.  None of
such warrants have been exercised. All are to expire this coming year.

                                      F-14
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


The Company's  stock has been  relatively  thinly traded and the Company  cannot
predict the extent to which a trading  market  will  develop.  The common  stock
trades on the  Over-the-Counter  Bulletin Board and is thinly traded compared to
larger more widely known  companies in this same industry.  Thinly traded common
stock can be more volatile than common stock trading in an active public market.
The Company  cannot  predict the extent to which an active public market for the
common stock will develop or be sustained in the future.

During the fiscal year ended June 30,  1998,  a total of 254,260  warrants  were
issued to third  parties,  exercisable at prices ranging from $1.00 per share to
$1.65 per share.  The warrants are  exercisable  for periods ranging from two to
five years.  None of such  warrants  have been  exercised.  All will expire this
year.

In July 1998, the Company  entered into a consulting  agreement with Media Trust
S.A., a company  that is an  affiliate  of Mr.  Schotte and in which the Company
holds a minority  interest  (see  "Related  Party  Transactions")  to  introduce
prospective  investors to the Company,  in exchange for which the affiliate will
receive  10% of any  investments  made in the  Company by  persons  or  entities
introduced by the affiliate,  together with five-year warrants (100 warrants per
$1,000 invested) at an exercise price equal to the market price of the Company's
stock on the date of the investment.  In connection with convertible  loans made
to the Company in 1998 by a group  investors  (the "Belgian  Investors")  in the
aggregate amount of approximately US$100,000, and the purchase of 625,000 shares
of common stock of the Company by Lecoutere Finance,  S.A. in December,  1998, a
total of 29,537 five-year warrants was issued to Media Trust, S.A. with exercise
prices  ranging  from 38 cents per share to 98 cents  per  share.  None of these
warrants  have been  exercised.  In July of 2002,  the company did not renew the
consulting  arrangement  with Media  Trust,  but has an  obligation  ongoing for
commission  obligations if one of its clients  reinvests into Odyssey,  up until
July 2003.

In December  1998,  Lecoutere  Finance S.A., an affiliate of the then CEO of the
Company,  Johan Schotte (see "Related Party  Transactions"),  purchased  625,000
shares of common  stock  from the  Company  for an  aggregate  consideration  of
$187,500 (30 cents per share).  The price was based on the average  price of the
Company's  common  stock for the 30-day  period  preceding  the date of purchase
(i.e., 37 cents per share),  less a 20% discount due to the restricted nature of
the shares purchased. On December 1, 1998, a total of 50,000 three-year warrants
were issued to three  parties  (one of which is an  affiliate of the Company) in
consideration  of  extending  the  maturity  date of loans to the  Company.  The
warrants have an exercise price of $1.00 per share.  None of these warrants have
been exercised.

During the fiscal year ended June 30,  1999,  a total of 467,660  warrants  were
issued to  officers,  directors  and holders of notes  payable,  exercisable  at
prices  ranging from $0.55 to $1.65.  The warrants are  exercisable  for periods
ranging from two to five years,  except for two officers' issuances that have no
expiration date. None of such warrants have been exercised.  In October of 2000,
a  non-related  party was issued  warrants  for a purchase  price of $25,000 for
$1.00 per share  consideration.  As of the close of business  on June 30,  2003,
none of these warrants have been exercised. 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.

On April 19, 2002 the Company entered in a Joint Venture with a private company,
Kasstech, Inc., to exclusively sell its patent-pending digitization services for
a period of ten years.  These services are believed to be  technically  the most
efficient available service for transmission of picture and sound through normal
phone  lines with a possible  900 to 1  compression  ratio.  The  Company is the
managing partner of the Joint Venture with all  administrative and sales duties.
Originally  Odyssey agreed to reserve shares of stock for possible  funding into
the Joint  Venture and to pay  Kasstech and its owner for some of the rights and
services.  On October 9, 2002,  Odyssey and Kasstech  agreed to discontinue  the
share contribution and reserves of stock.

                                      F-15

<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


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, thecompany 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  September  of  2002,  the  company   signed  an  arrangement   with  Orpheus
Entertainment,  a manufacturer  of Video,  DVD and Compact Disc recordings and a
distributor  for  all  North  American  and  International   markets.   In  this
arrangement,  the  company  shall  pay a number  of  registered  shares  for the
consultation  and advice of marketing and placement of product into all markets.
The result of this type of stock  arrangement  will allow the  Company to have a
higher  margin on product it delivers  to the market  from the retail  level for
video and DVD sales in North America on a direct basis. In addition, the Company
also signed an arrangement  for  distribution  of its  soundtracks  and original
audio works with the same company for international distribution.


11. CHANGES IN SECURITIES AND USE OF PROCEEDS

In  March of 2001 the  Board  of  Directors  approved  a $5  million  US  dollar
denominated  Senior  Secured  debt issue (the  "Senior  Debt") with  convertible
rights  to  common  stock at  maturity  and in  certain  circumstances  (such as
bankruptcy  and/or financial  defaults on other significant  debt).  Reserves of
shares for the  potential  conversion  have been made.  The Senior Debt requires
that the company not pledge any  significant  assets and gives the bondholders a
pledge on the "Kimon  Library"  assets.  The Senior Debt  carries an 8% interest
rate and matures on April 15,  2006.  The Senior Debt is not  registered  in the
United States and is only available to non-US citizens. The Trustee received the
first  subscription  on August 29, 2001 for $160,000.  The funds after financing
expenses of $14,364 were used to pay off two loans of 4 million francs (previous
paragraph) and some rent expenses of an office recently closed in Luxembourg.  A
previous  officer  used the  remaining  funds for claimed  expenses.  Odyssey is
pursuing additional subscriptions.

     In December of 2001, the Company completed a private placement of 2,000,000
shares to an accredited  (non U.S.) investor  resulting in gross proceeds to the
Company in the amount of $250,000.


     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.

                                      F-16
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


     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.

     In June 2003,  the Company  signed a Securities  Purchase  Agreement with a
U.S.  private  investment  company  for the sale of a  $150,000  8%  convertible
debenture and a warrant to purchase up 1,500,000 shares of our common stock. The
debenture  bears interest at 8%, matures two years from the date of issuance and
is convertible into shares of our common stock. The number of common shares into
which this  debenture  may be  converted  is 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.  The
warrants expire in June 2006 and are exercisable at $1.00 per share. The warrant
holder is obligated to exercise the warrant  concurrently with the conversion of
the debenture for a number of shares equal to ten times the dollar amount of the
debenture being converted. The total amount of 100,000 was funded to the company
with the investor  holding back an agreed-upon  $50,000 for future legal expense
and anticipated  costs to be covered in relation to any future offering or added
registration needs.


12. DEFAULTS UPON SENIOR SECURITIES

An interest  payment  due on April 12, 2002 was made by a third party  therefore
the Senior  Secured Bond was in compliance  with its  requirements.  The company
does not, and did not,  have  sufficient  cash to make its past  (Payment due on
October 2002) and next (April 2003) semi-annual  payments and, therefore,  risks
the Bond being placed in default.  There were no payments made during the course
of fiscal  2003 and the bond is in default.  The  Company has sought  additional
capital from its  European  sources to assist in renewal of the note or bringing
in an alternate source, or sources, for a long-term position.


                                      F-17
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


13. RELATED PARTY TRANSACTIONS

In  November  1998,  the  Company  entered  into  the  following  related  party
transaction with E 3 Sports New Mexico, Inc., a company which is an affiliate of
Mr.  Schotte  and Mr.  Koshakji  (at the  time  of the  transaction  the CEO and
President  of the  Company,  respectively)  and in  which  the  Company  holds a
minority  interest:  (i) the Company  purchased a $25,000  sponsorship  from the
Albuquerque  Geckos,  the professional  soccer team owned by the affiliate;  and
(ii) the Board  authorized  the Company to loan up to $100,000 to the affiliate,
payable no later than July 15, 1999 with  interest at 15% per annum (the loan is
secured by 10,000 shares of E 3 Sports New Mexico,  Inc.). The loan has not been
repaid and the Company has terminated  accruing interest.  Current management is
pursuing  information  regarding  Company  interests.  For the current year, the
company  has  elected to write off the entire  amount  listed as an asset  which
totals 153,774 due to its uncollectible nature.

In July 1998, the Company entered into the following related party  transactions
with Media Trust S.A., a company  which is an  affiliate  of Mr.  Schotte and in
which the Company holds a minority interest:  (i) the Company has agreed to make
a $2,500  loan to the  affiliate,  payable in one year with  interest at 15% per
annum; (ii) the Company engaged the affiliate to introduce prospective investors
to the  Company,  in exchange  for which the  affiliate  will receive 10% of any
investments  made in the  Company  by  persons  or  entities  introduced  by the
affiliate,  together with five-year  warrants (100 warrants per $1,000 invested)
at an exercise  price equal to the market  price of the  Company's  stock on the
date of the investment. In connection with convertible loans made to the Company
in 1998 by Belgian investors in the aggregate amount of approximately  $100,000,
and the  purchase of 625,000  shares of common stock of the Company by Lecoutere
Finance, S.A. in December 1998 (see below), a total of 29,537 five-year warrants
was issued to Media Trust,  S.A. with exercise  prices ranging from 38 cents per
share to 98 cents per share.  In  December  1998,  Lecoutere  Finance  S.A.,  an
affiliate of the then CEO of the  Company,  purchased  625,000  shares of common
stock from the Company for an aggregate  consideration of $187,500 (30 cents per
share).  The price was based on the average price of the Company's  common stock
for the 30-day period preceding the date of purchase (37 cents per share) less a
20% discount due to the restricted nature of the shares purchased.

On December 1, 1998, a total of 50,000 three-year  warrants were issued to three
parties  (one of which is an  affiliate  of the  Company)  in  consideration  of
extending  the  maturity  date of loans to the  Company.  The  warrants  have an
exercise  price of $1.00 per  share.  In October of 2000,  a  non-related  party
exercised  warrants  for a  purchase  price  of  $25,000  for  $1.00  per  share
consideration.  During the course of these transactions, the Company accumulated
a net  deficit  owed to Media  Trust in the  amount  of  $42,591  after  certain
deductions and accommodations of expenses were met. Note that present management
never  realized a value in the ongoing  efforts of Media Trust,  and that it was
entitled to 18%  interest in Media trust net  proceeds,  combined  with the fact
that the Company  did not receive  required  disclosure  in order to  accurately
report to its shareholders, management elected to declare it right of offset and
deduct the liability  from its exposure to affiliated  and related  entities and
transaction  n order t so secure its  position  and  protect  and  preserve  the
Company's interest in its outside  "interparty-related"  investments (being that
of Mr.  Schotte).  In spite of its  repeated  demands and  requests  for payment
and/or  reimbursement,  there was no response.  Being that the company has never
received  required  financial reports from Media Trust and has made attempts and
as well as demands,  management elected to fully offset any outstanding  amounts
owing  and  properly  recorded  these  against  current  write-downs  of  assets
considered  related in nature.  Although the company is still pursuing financial
information  from Mr.  Schotte,  the main principal and director of Media Trust,
with no  response  at this  present  time,  the company has elected to write off
substantially  all debts  against  advances  and  loans  for lack of  sufficient
information.

                                      F-18
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


In October of 2001,  the company  entered  into an Exclusive  Film  Distribution
Agreement  ("Agreement")  with JL Media Services LLC, a company  specializing in
supply of feature  films  product  and of which the  current  CEO has a minority
interest  in  ("Media").   The  terms  of  this  Agreement  enables  Odyssey  to
exclusively  sell and license  feature  films  belonging to Media as well as new
productions  for a commission  in the total amount of 15% of the Gross  Proceeds
(as earlier  defined in Revenue  Recognition)  and deduct  limited  expenses the
Company may have  incurred  from the sales and  marketing  of each  product.  In
consideration for this exclusive  arrangement,  the Company shall pay, in shares
of common  stock,  an amount  equivalent  to the same 15% based  upon  quarterly
reports  and  upon  the  average  trade  price of each  calendar  quarter.  This
Agreement extends for a period of fifteen years;  however, the revenue share for
stock extends only for a period of five years,  unless otherwise adjusted by the
Parties.

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.  However,  in light of the recent adoption by the
Company in  Statement  of  Financial  Accounting  Standards  No, 5 (SFAS 5, loss
contingency), a reserve was established referring to any potential losses.

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 note 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 note bears an interest rate of 12% per annum and is due
upon demand.


14. EXTRAORDINARY OR NON-RECURRING ITEMS

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 note  between the parties,
which was dated effective  January 2001, in October of 2001. The note 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.

In January of 2003, the Company sought, and was granted, an additional extension
of the Note 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, the
Company owed JL Media Services LLC a total of $215,148.

The company  reversed some expenses claimed by a previous officer due to lack of
documentation.  The  Company  wrote  off a  prior  entry  for a  deposit  on the
production of a film project  where an option  period had elapsed.  The item was
carried as a prepaid asset. These items are netted out in Non-recurring items.

                                      F-19
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


For the period ending June 30, 2002, the Company expensed $125,000 in consulting
fees  tied  to  previous  and  current  marketing  services  begun  by  previous
management.  The  valuation  of the charge was made  pursuant  to the  Company's
adoption of Statement of Financial  Accounting  Standards No, 123 (SFAS 123), as
earlier  described,  as a present  fair-market value and as mutually accepted by
both parties

Unusually high costs associated with the litigation settlements, including legal
fees and interest on legal fees,  were  $126,789 for the period  ending June 30,
2002. There were additional unusually high costs associated with the same issues
for the  following  year. As of June 30, 2003,  the Company  expensed a total of
82,355 in excess litigation expense along with $58,068 in extra charges and late
fees, and also added a reserve in the amount of $127,209 for future  expectation
of settlements and expense.

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 note
extensions  from  a  financial   consultant,   Cofima  Finanz,   AG  in  Zurich,
Switzerland.  The  amount was placed in an  interest-bearing  term note,  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.  As  earlier  mentioned  in  Item  3,  Legal
Proceedings,  the Company has attempted to settle all lawsuits and disputes. The
Company,  although  it has  settled  the major  lawsuits  (two of which are in a
"workout"  stage) and still has two known judgments  totaling  $65,000,  and has
been dismissed from a possible class-action suit, still faces ongoing litigation
on the Muller-Smith  case. As there are remaining motions and discovery underway
at present,  the motions and results of the discovery  have not yet been decided
upon.  Due  to  the  inherent  uncertainties  of  litigation  (even  though  the
litigation  is beyond its  preliminary  stage),  the Company  cannot  accurately
predict the ultimate outcome of the motions. The Company's defense will possibly
be a continuing effort that has a significant expense,  which it may not be able
to afford.  Even at this  juncture,  should the Company lose its defense,  there
could  possibly be a judgment  entered which would be in excess of $300,000.  In
addition,  due to the Company being unable to meet its current  obligations when
due, or timely, there could be others who may elect to sue for non-payment.

The company  added a one-time  expense for Filmzone due to its  development  and
reposturing  of the sales  purpose for the  website.  Pursuant to the  Company's
adoption of  Statement of Financial  Accounting  Standards  No, 95 (SFAS 95), as
earlier  described,  it was determined that a significant  amount  ($75,000) was
considered  to be a  development  expense and,  accordingly  to such ruling,  is
considered an expense, which was deducted from operations.

The company  reduced is valuation of the Odyssey  Ventures Online  Holdings,  SA
("OVO")  assets  mainly  due  to  its  determination  of  liquidity  and  recent
recognition  of certain  startup  expenses.  In  addition,  and  pursuant to the
Company's adoption of Statement of Financial  Accounting  Standards No, 95 (SFAS
95), as earlier described, it was determined that a significant amount ($67,293)
was considered to be a development  expense and,  accordingly to such ruling, is
considered an expense, which was deducted from operations. The company wrote off
all of the development  expense relating to the OVO initial startup. In light if
the recent  write-down  (as  opposed to the  Company's  earlier  adoption of the
AICPA's  Statement of Position SOP 98-5,  where all startup  expenses were to be
written off as incurred) the Company had been exposed to expenses  under its own
obligation from prior  management and in advancing  initial funds for OVO. These
advances were  maintained  under  Subsidiary  investments  since the Company was
supposed to be reimbursed upon OVO subsequent and anticipated  funding.  As this
did not  occur,  and in view of the  earlier  disclosures,  a  reserve  has been
expensed.

                                      F-20
<PAGE>
                          ODYSSEY PICTURES CORPORATION
                  Notes to Consolidated Financial Statements


The company  reduced its  valuation  of the Media Trust SA  investment  and note
receivable due to undeterminable recovery. The company wrote off its loan to the
Geckos Soccer team, a once  partially  owned  affiliate of E3 Sports New Mexico,
Inc., due to its unexpected recovery.


15. 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 LLC, 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  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 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 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.




                                      F-21