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 (FEE REQUIRED)

For the fiscal year ended June 30, 1998

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES 
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from _________ to _________

                         Commission file number 0-18954


                          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 Number)


                      1601 Elm Street, Dallas, Texas 75201
                     ---------------------------------------
                    (Address of principal executive offices)


Registrant's telephone number, including area code: (214)  720-1622

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 ____ No __x___

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.

     The aggregate  market value of the voting stock held by  non-affiliates  of
the Registrant as of December 15, 1998 was  approximately  $3,490,447  (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 December 15, 1998 there were outstanding  6,974,340 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, 1998


                                TABLE OF CONTENTS

                                                                              
                                     PART I
                              
                                                                      Page
Item 1. Business ..................................................     2
Item 2. Properties ................................................     9

Item 3. Legal Proceedings .........................................    10

Item 4. Submission of Matters to a Vote of Security Holders .......    14


                                     PART II

Item 5. Market for Registrant's Common Stock and Related
          Stockholder Matters .....................................    15

Item 6. Selected Financial Data ...................................    16

Item 7. Management's Discussion and Analysis of Financial 
          Condition and Results of Operations .....................    17

Item 8. Financial Statements and Supplementary Data ...............    19

Item 9. Changes in and Disagreements with Accountants 
          on Accounting and Financial Disclosure...................    19


                                    PART III

Item 10. Directors and Executive Officers of the Registrant ........   19

Item 11. Executive Compensation ....................................   21

Item 12. Security Ownership of Certain Beneficial 
          Owners and Management ....................................   26

Item 13. Certain Relationships and Related Transactions ............   28


                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and 
          Reports on Form 8-K ......................................   30



                                       1
<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 he  Company's
common  stock in April,  1998.  The balance of these notes were  converted  into
176,050 shares of common stock in October, 1998.

                                       2
<PAGE>

     During the early 1990s,  the Company  developed an excellent  reputation in
overseas markets for the distribution of quality motion picture entertainment, a
reputation which 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  has been  unable  to  sustain  any  substantial
activities in the international distribution of motion pictures.

     Under the leadership of Mr. Schotte,  the Company will seek to re-establish
its  position  as a  significant  distributor  of  quality  motion  pictures  by
establishing  relationships and strategic  alliances with major film studios and
successful  writers,  directors  and  producers.  The  Company  also  intends to
establish a permanent presence in Europe through select joint-venture  partners.
In this  connection,  the Company  purchased  the assets of  Sweden-based  Kimon
Mediabright  KB ("Kimon")  in August,  1998,  consisting  of a film library with
worldwide  and/or  Scandanavian   distribution  rights  and  Scandanavian  video
distribution  rights to certain  Hallmark  Entertainment  products.  In December
1998,  the  Company  hired Mr.  Ian  Jessel,  who is past  President  of Miramax
International  and who will join the Company's  Board of Directors on January 1,
1999, to head up its film division.

     While   continuing  to  develop  and   re-establish   the  Company's   film
distribution   business,   new  management's   objective  going  forward  is  to
aggresively build a diverse,  global media company independent in ownership from
the major film and music companies. Management will seek to establish a group of
domestic and international  companies providing both content and distribution in
film, music, publishing, sports, merchandising and other multimedia outlets. See
"Business - Narrative Description of Business - Business Strategy."


(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. See "Selected Financial Data."


(c)  Narrative Description of Business
--------------------------------------

Foreign Sales and Distribution Operations

     General.
     -------

     The foreign  distribution of films involves two principal  activities - the
acquisition  of rights from the licensor or the seller,  usually the producer of
the film, and the licensing of the  distribution  rights to  subdistributors  in
foreign markets. In general, the rights obtained from the producer relate to all
media,  including  theatrical  distribution,  video and all forms of television.
However,  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.  Furthermore,  with respect to any particular  film, the Company
would typically  enter into an exclusive  distributorship  arrangement,  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. Foreign distribution is generally handled
by a distributor  such as the Company which  coordinates  worldwide sales in all
territories   and  media.   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 license for additional
cycles.

The film distribution business breaks down into two broad categories:

     o  Sales  Agency  Representation.  As a  sales  agent,  the  Company  would
undertake 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 of 15-20%, and
typically for a term ranging from seven to fifteen years.

     o 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 of 25-35%
over a term ranging from 15 years to perpetuity.  In addition,  the  distributor
may acquire a profit participation in the film project.


     Once the  rights  to a  picture  are  obtained  either  as  sales  agent or
distributor with minimum  guarantee,  the Company would then seek 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 the  interpositive  and certain other items
necessary  for  the  distribution  of  the  film).  In  certain  instances,  the
subdistributors'  obligations  for the payment due on delivery  are secured by a
letter of credit.  Sales take place  primarily  at three film  markets - Cannes,
France in May;  MIFED in Milan,  Italy in October;  and the American Film Market
("AFM") in Los Angeles in February.

     In general,  after  financing (if any) is repaid,  the Company  applies the
distribution   receipts  from  its  subdistributors  first  to  the  payment  of
commissions  due to the Company,  then to the  recovery of certain  distribution
expenses advanced by the Company,  and third, to the extent not recouped as part
of the repayment of the financing,  to the  reimbursement of the Company for its
guarantee,  if any, paid to the producer.  Additional  distribution receipts, if
any,  are shared by the Company and the producer  according  to the  percentages
negotiated in the agreement between the Company and the producer.

                                       4
<PAGE>
Independent Film Production and Product Acquisition

     Overseas  film  distribution   companies  such  as  the  Company  primarily
represent  independent  producers of motion pictures (rather than motion picture
studios) in all overseas markets and all media,  including  theatrical  release,
television  and home  video  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 a
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 very low cost by first time  producers  and  directors  which
subsequently achieve considerable  revenues.  The Company has generally obtained
its product from among these independently produced films rather than from major
motion  picture  studios which  typically  have their own in-house  distribution
networks.  Nevertheless,  from time to time, the Company has entered into "split
rights" arrangements with studios to represent a film in the overseas market.

     The Company's  management seeks to identify  attractive projects very early
in their development, either through relationships with producers, directors and
agents or through industry  announcements of new productions.  In addition,  the
Company's acquisitions personnel attends festivals and film markets, such as the
Sundance  Film  Festival  and the Cannes Film  Festival,  in order to locate new
product.

Business Strategy

     The  Company's  strategy  is  to  capitalize  on  its  reputation  and  the
experience of its management team to build a global media company independent in
ownership  from the major film studios and music  companies.  The  Company's new
Board of Directors and executive management intend to integrate the Company into
today's total  entertainment and media  environment.  "Odyssey Media", or a name
more  appropriate,  will be established as the parent to a diversified  group of
U.S. and  international  companies  providing both content and  distribution  in
film, music, publishing, sports, merchandising and other multimedia outlets.

     The value  and  growth  of  "Odyssey  Media"  is  intended  to be  achieved
primarily through  acquisition of, and joint ventures with,  established private
and public media  companies.  Such  companies  may be attracted by the strategic
relations  and access to business  that the other  Odyssey  media  companies may
provide;  the international  markets that Odyssey may participate in; and access
to the public markets for capital and exposure.

     Such  companies may be  identified  through the  experience  and the strong
international  entertainment,  sport,  banking  and private  investment  network
contacts that the executive management and Board of Directors possess.  Targeted
companies would be acquired  primarily  through  issuance of new equity capital,
stock swaps and other means.

     The  parent  company  will  provide  each  company  with  strong  corporate
governance policies, direction for its management,  strategic planning guidance,
control and reporting systems,  marketing assistance,  cross promotion and other
promotional  support, as well as with assistance with business and joint venture
development, merger and acquisition assistance,  executive and management search
support,  and other  services.  The emphasis will be to optimize each individual
company's success as well as the cross-success of the entire media company.  The
proposed business strategy for each division of "Odyssey Media" is as follows:

Odyssey Pictures: The film production and distribution division will continue to
operate as Odyssey Pictures for the purpose of providing a presence in Hollywood
and New York and  establishing  a permanent  presence in Europe  through  select
joint-venture  partners.  The foreign sales agency business unit of Odyssey will
be  de-emphasized,  since it would only be feasible as part of the Company's own
distribution  network,  which will be expanded as soon as new Odyssey properties
are ready for worldwide distribution.  In order to insure a high quality regular
product flow,  alliances  will be sought with major film studios and  successful
writers, directors and producers.

                                       5
<PAGE>

Odyssey  Music:  The music unit of Odyssey will be initiated from Europe through
exploitation and music publishing of the Techno/Dance music genre due to its low
investment  cost versus high return,  and will serve as a basis to penetrate the
U.S. market. This base will allow the launch of new acts via movie sound tracks.
A U.S. operation will be set up as soon as practicable.

Odyssey  Publishing:  Publishing  will encompass all print and electronic  media
including  multi-media and Internet services as well as the traditional products
and services  associated  with  magazines and other  publications.  When finally
viable,  Odyssey Publishing will leverage  intellectual  property from the other
media properties, for example, book and multi-media products derived from motion
pictures.

Odyssey Sports: Ownership and management of sport teams and entertainment events
will be pursued  at the minor and major  league  levels as a means of  providing
content and avenues of  advertising,  promotion,  and access to business for the
entire media company and its clients.  It will also be pursued as an opportunity
for ancillary revenues through venue management and  merchandising.  At present,
the  Company  owns a  minority  interest  in the  Albuquerque  Geckos,  a second
division professional soccer team in New Mexico.

Odyssey Merchandising:  Manufacturing, sourcing, and distribution of merchandise
will be pursued  and grown by Odyssey as a natural  business  complement  to all
other media companies as well as a stand-alone business unit.

Strategic Objectives

     To  properly  build  Odyssey  Media,  the  Company's  Board  and  executive
management will seek to implement the following strategies:

-  Create  and  implement  strong  corporate  governance  policies  and the most
effective corporate infrastructure;

- Properly capitalize the Company and seek a NASDAQ listing;

-  Acquire  profitable  media-related  operations  that will  contribute  to the
Company's near-term and long term earnings;

- Leverage  connections  between investors and projects in Europe and the United
States;   identify  talent  and  management  that  will  augment  the  Company's
abilities;

- Limit risk in the manner companies are acquired and investments are financed;

-  Maintain a cost  consciousness  in  acquisition,  financing,  production  and
distribution activities.


Recent Acquisitions

     In August,  1998,  the Company  completed the  acquisition of the assets of
Sweden-based Kimon Mediabright KB ("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 will
have 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  Scandanavian  distribution  rights and
Scandanavian  video  distribution  rights  to  certain  Hallmark   Entertainment
products.

     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,  one of which is the owner of the Albuquerque Geckos, a second division
professional  soccer  team in New  Mexico,  and the  other  of  which is a media
production  company in  Luxembourg.  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.

                                       6
<PAGE>
Sales of Library Films

     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.

     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 and October of 1995,  the Company  concluded a private  placement
pursuant to which it issued unsecured promissory notes to unaffiliated investors
in the aggregate  amount of $312,500.  The notes had a maturity date of one year
and accrued  interest  at the rate of 12% per annum.  A total of 6.25 units were
sold at a purchase price of $50,000 per unit. In addition,  warrants were issued
to the  purchasers at the rate of 4,167  warrants for each unit sold, or a total
of 26,042  warrants (on a post Reverse  Split basis).  Each warrant  certificate
entitled the holder thereof to purchase one share of common stock at an exercise
price of either  $2.83 per share (the August  warrants)  or $2.37 per share (the
October warrants) over a three year period commencing one year after the closing
of the private placement.  After paying expenses and commissions of $42,500, the
Company received net proceeds of $270,000 from the private placement.  The notes
issued in the private  placement  were due to be paid by the Company  upon their
respective due dates on August 28 and October 3, 1996.

     The Notes and interest were not repaid as scheduled.  The Company  proposed
that  Noteholders  either defer  maturity of their notes and  exchange  existing
warrants  for  shares,  or cancel the notes and  warrants  in their  entirety in
exchange  for a greater  number of shares.  The Company  offered to register any
shares  issued in  exchange  for the  notes.  On August 12,  1997,  the date the
registration  became effective,  a total of $262,500 of notes were exchanged for
595,455 shares of registered  stock.  The remaining notes for $50,000 (held by a
single investor) have not been paid and are in default.

     In  September,  1996,  the  Company  entered  into  an  agreement  with  an
unaffiliated  third party for the purchase of 1,000,000  shares of the Company's
common  stock  (and  an  additional  1,000,000  warrants)  in  consideration  of
$750,000. Following a dispute between the parties concerning the satisfaction of
certain  conditions to closing,  the parties reached a settlement in June, 1997,
pursuant to which the investor  purchased  66,667  shares of common stock of the
Company for $50,000, or $.75 per share.

                                       7
<PAGE>

     In  September,  1996,  the  Company  reached an  agreement  with  Paramount
Pictures,  pursuant to which  Paramount  would cancel the Company's  contractual
guarantee of $2.7 million in full,  in exchange for which the Company  agreed to
(i)  relinquish all further  distribution  rights to "Wuthering  Heights";  (ii)
assign to Paramount all of its rights in any outstanding distribution agreements
for the film, and any  receivables to be generated  therefrom;  (iii)  guarantee
that Paramount  would collect a total of $500,000 in sales revenue from existing
distribution  agreements  no later  than  January  15,  1997.  Existing  license
agreements yielded  approximately  $420,000 in net revenues prior to January 15,
1997 (of which the Company would have been entitled to retain  approximately 20%
thereof in commissions).  The Company paid $250,000 in net revenues to Paramount
and is currently in  negotiations  with  Paramount  regarding  the timing of the
remaining $250,000 payment.

     In  January,  1997,  prior  counsel  to the  Company  agreed to  exchange a
promissory  note in the  face  amount  of  $70,000  for  120,000  shares  of the
Company's common stock.

     In February,  1997,  the Company  completed  the sale of 500,000  shares of
common  stock and  500,000  common  stock  purchase  warrants  to four  offshore
European investors for an aggregate  consideration of $375,000. The warrants are
exercisable over a three year period (expiring February 25, 2000) at an exercise
price of $1.06  per  share.  One of the  investors  was Johan  Schotte,  who was
subsequently elected as CEO of the Company in March, 1998.

     In April,  1997,  Stephen R.  Greenwald,  Lawrence I.  Schneider and Robert
Miller,  Jr., all  directors  of the  Company,  made loans to the company in the
amounts of $50,000, $25,000 and $25,000, respectively.  Each loan was payable on
demand and accrued  interest  at the rate of 2 points over prime per annum.  The
notes were  secured by a collateral  assignment  of the  Company's  300,000 note
receivable  from Kinnevik.  In  consideration  of making the loans,  the lenders
received  five-year  warrants to purchase shares of common stock of the Company,
exercisable  at $1.00 per share.  Messrs.  Schneider  and Miller  each  received
25,000 warrants and Mr. Greenwald  received 50,000 warrants as consideration for
making the loans to the Company. In addition, two independent unaffiliated third
parties made additional $25,000 loans to the Company in June and August, 1997 on
the same terms and conditions as the loans made by Mr. Greenwald,  Schneider and
Miller.  In May,  1998, the loans of Mr.  Schneider and one of the  unaffiliated
parties were paid from the proceeds of the Kinnevik  receivable.  The  remaining
lenders  agreed to a rollover of their loans  (aggregating  $100,000)  against a
second  Kinnevik  receivable and, in  consideration,  will receive an additional
50,000  warrants in the  aggregate,  exercisable at $1.00 per share over a three
year period. In September, 1998, all but $25,000 of these loans were repaid from
the proceeds of the Kinnevik receivable. The remaining lender, Robert E. Miller,
Jr., a director of the  Company,  agreed to a rollover of his $25,000 loan on an
unsecured  basis for an additional six month period with interest at the rate of
10% per annum.

     In  September,  1997,  the  Company and  Kinnevik  Media  Properties,  Ltd.
executed an  agreement  pursuant to which  Kinnevik  agreed to purchase  500,000
shares of  convertible,  redeemable  preferred  stock of the Company,  par value
$1.00 per share, for an aggregate purchase price of $500,000. Kinnevik agreed to
purchase the first  $250,000 of preferred  stock at the closing,  an  additional
$125,000 of preferred  stock 90 days after  closing,  and the final  $125,000 of
preferred stock 270 days (subsequently  extended to 360 days) after closing. The
preferred  stock would bear interest at the rate of 10% per annum which would be
paid in kind  semi-annually  by the issuance of  additional  shares of preferred
stock at a par value of $1.00 per  share.  Kinnevik  would  have the right for a
five-year period to convert the preferred stock into common stock of the Company
on a  share-for-share  basis.  The  Company  would  have the right to redeem the
preferred  stock for $1.25 per  share in the event the  Company's  common  stock
traded  at a price of $2.00  per  share or more for a period  of 20  consecutive
trading days. The Company agreed to help secure television  distribution  rights
for Kinnevik from third parties, and introduce various projects to Kinnevik from
time to time  which  may be of  interest  to  Kinnevik.  In the  event  Kinnevik
acquires any rights as a result of any  introductions  made by the Company,  the
parties  agree to mutually  determine  the value of such  services and to redeem
shares of the preferred stock at $1.00 per share based on the aggregate value of
the services so determined.
                                       8
<PAGE>

     The Company  received  $150,000 in funding from the Augustine Fund, L.P. in
July,  1998. In exchange for the  financing,  the Augustine Fund received a zero
coupon $150,000 convertible note as well as up to 150,000 transferable warrants,
exercisable  at $1.60 per share for a three year period.  Augustine  can convert
into restricted shares of the Company's common stock at a discount to the market
price of Odyssey common stock at the time of conversion  (i.e.,  at the lower of
the  market  price on the  closing  date,  or 80% of the market  price  prior to
conversion). Augustine and certain Augustine associated parties were also issued
a total of 45,000  shares of  restricted  common  stock in  connection  with the
transaction.

     In August,  1998, three  unaffiliated  investors  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).

     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.

     In  November   1998,  the  Company  issued  200,000  common  shares  to  an
unaffiliated party in exchange for $88,000 of barter credits.

     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.

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  major  motion  picture  studios  and  music
companies.  Many of the Company's competitors have financial and other resources
which are significantly greater than those available to 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 December 15, 1998, the
Company had four full-time  employees,  consisting of Mr. Schotte, Mr. Koshakji,
Mr. Jessel and Mr. Greenwald,  the CEO, President,  CEO of the film division and
Managing Director of the Company, respectively.

Tax Loss Carryforward

     The  Company is entitled to the  benefits  of certain  net  operating  loss
carryforwards  to reduce its tax  liability.  The  utilization by the Company of
such tax loss  carryforwards  is  limited  under  applicable  provisions  of the
Internal  Revenue  Code of 1986,  as  amended,  and the  applicable  regulations
promulgated   thereunder.   As  of  June  30,  1998,  there  were  approximately
$29,000,000 in net operating loss  carryforwards  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
1601 Elm Street,  Dallas, Texas,  consisting of approximately 2,500 square feet.
The  premises  are  presently   being  made  available  to  the  Company  as  an
accommodation  by a company  affiliated  with Mr. Johan Schotte,  the CEO of the
Company.  Rent expense for each of the fiscal  years ended June 30, 1998,  1997,
and 1996 was $29,905,  $69,002,  and $38,772,  respectively.  In June, 1998, the
Company entered into a sublease for office space in Los Angeles, California with
an  affiliate of the CEO of the  Company.  The  sublease is on a  month-to-month


                                       9
<PAGE>

basis at the rate of $1,500  per month.  The  Company  intends to utilize  these
premises for the months of June thru December, 1998. Commencing January 1, 1999,
and continuing until May 29, 2000, the Company intends to sublease approximately
5,000 square feet from an  unaffiliated  party at the rate of $12,823 per month.
(The proposed sublease is contingent upon the Company's ability to post a letter
of credit  equal to six  months'  rent under the  sublease).  The  premises  are
located at 2049 Century Park East, Suite 2750, in Los Angeles,  California.  The
Company  intends to sublease such portions of the premises as may be appropriate
from time to time during the term of the sublease.


Item 3.  Legal Proceedings

     On December 20, 1990, Hibbard Brown & Company, Inc. ("Hibbard Brown") filed
a complaint entitled Hibbard Brown & Company,  Inc. v. Double Helix Films, Inc.,
Odyssey  Entertainment Ltd. and  Communications  and Entertainment  Corp. in the
Supreme Court of the State of New York, County of New York. The Complaint sought
payment of $300,000 under an agreement with the Company,  Odyssey,  Double Helix
and  Hibbard  Brown dated  December  21,  1989 for  certain  investment  banking
services  allegedly  performed  in  introducing  Odyssey  and  Double  Helix and
assisting them in consummation of the Mergers by which they became  wholly-owned
subsidiaries of the Company. A counterclaim  seeking recovery of $50,000 paid to
Hibbard Brown upon execution of the Agreement was asserted.

     Hibbard Brown's motion for summary  judgment was granted in October,  1991.
On January 30, 1992,  the Company  moved,  by order to show cause,  to renew and
thereupon deny,  dismiss or stay Hibbard Brown's  previously  granted motion for
summary  judgment on the ground that Hibbard Brown had  intentionally  concealed
the fact that it was an unauthorized foreign corporation transacting business in
New York. By Order dated March 2, 1992,  the court granted the Company's  motion
in part by renewing  the action and staying  judgment  pending  Hibbard  Brown's
qualification in New York. On October 29, 1992, Hibbard Brown moved for an order
vacating  the stay of  judgment,  a  declaration  that it was now an  authorized
foreign  corporation  and  reinstatement  of the  summary  judgment  granted  in
October, 1991 or, in the alternative,  to rehear its motion for summary judgment
on the original papers and grant judgment in its favor.

     On January 29, 1993, Double Helix,  Odyssey and the Company cross-moved for
an order  granting  reargument  and/or  renewal  of Hibbard  Brown's  motion for
summary  judgment  and  consolidating  the  litigation  with an action  that the
Company had brought  against  Hibbard Brown  (described  below),  or staying the
issuance,  entry and execution of judgment  pending the  resolution and trial of
the Company's action against Hibbard Brown.

     On March 26, 1993,  the court issued a Decision and Order vacating the stay
of entry of the $300,000 judgment against the Company and granting the Company's
cross-motion for a stay of execution  pending the determination of the Company's
action against  Hibbard Brown.  The Company's  cross-motions  for reargument and
renewal and consolidation were denied.

     By Decision and Order dated June 18, 1993,  the court  affirmed the stay of
execution of the  judgment,  but required the Company to obtain a bond to secure
the stay. The Company obtained a non-collateral bond.

     On March 5, 1992, the Company instituted an action entitled  Communications
and  Entertainment  Corp. v. Hibbard Brown & Company in the Supreme  Court,  New
York County,  for the return of 150,000 shares of Common Stock previously issued
on the ground  that  Hibbard  Brown  failed to perform  the  required  services.
Hibbard Brown counterclaimed for breach of contract.

     In July 1993,  after  considerable  pre-trial  discovery,  the  Company and
Hibbard Brown moved for summary judgment. By Decision and Order dated August 11,
1993, the court denied both motions.  Both parties  appealed.  On March 3, 1994,
the appellate court affirmed the denial of summary judgment.

                                       10
<PAGE>

     On or about October 14, 1994,  Hibbard Brown filed a voluntary petition for
relief  under  Chapter  11,  Title 11 of the United  States Code with the United
States  Bankruptcy  Court,  Southern  District  of New York.  Consequently,  the
Company's  action  against  Hibbard  Brown has been  automatically  stayed.  The
Company has filed a Proof of Claim. In January 1998 the U.S. Bankruptcy Court of
the Southern  District of New York approved a final settlement of the bankruptcy
of Hibbard Brown.

     On or about  September 11, 1992,  Joseph  Duignan  brought an action in the
Superior Court of New Jersey,  Mercer County,  entitled Joseph Duignan v. Double
Helix Films Limited  Partnership No. 1, L.P., Double Helix Films,  Inc., Cinecom
International  Films, Film Gallery,  Inc., Stan Wakefield,  Jerry Silva,  Arthur
Altarac and Anthony Tavone (MER-L-4262-92).  Jerry Silva, the only defendant who
was served,  is former Vice  Chairman of the Board of  Directors of the Company.
Mr.  Silva has demanded  that the Company  indemnify  him against any  expenses,
judgments,  and amounts paid in settlement of the action.  The Company  contends
that it is not required to indemnify Mr. Silva because he breached his fiduciary
duties to the Company.

     Mr.  Duignan  claims  that he  invested  $75,000 to  acquire a  partnership
interest in Double  Helix Films  Limited  Partnership  No. 1 and that Mr.  Silva
forged or caused to be forged his signature on a  Subscription  Agreement  dated
July 28, 1986. The Complaint  alleges claims for rescission,  unjust  enrichment
(against  Double  Helix),  conversion,  fraud,  breach  of  contract,  breach of
fiduciary  duty and breach of covenants of good faith and fair dealing  (against
Mr. Silva and Double Helix). Mr. Duignan seeks to recover compensatory  damages,
including but not limited to, his alleged $75,000  investment,  punitive damages
and attorney's fees. Mr. Silva has answered the Complaint.

     On or about  December 30,  1994,  Krishna  Shah,  who  allegedly  served as
President of Double  Helix from about July 1991 until about March 1993,  brought
an action in the Superior  Court of  California,  Los Angeles  County,  entitled
Krishna Shah v. Norman Muller,  Communications and Entertainment  Corp., ATC II,
Carnegie Film Group,  Inc.,  Jerry Minsky,  Perry  Scheer,  Susan Bender,  Larry
Myers,  Robert Hesse,  Double Helix Films, Inc. and Does 1-100,  alleging claims
for breach of an oral  agreement  to pay Mr. Shah  $152,000  (which he allegedly
advanced  for the  benefit of Double  Helix)  and to give him a 19.5%  ownership
interest in its corporate successors.  The Company's current management has paid
Mr.  Shah the sum of $15,000 in July 1998 and in full  settlement  of all claims
against the Company.

     In The Private Lessons  Partnership v. Carnegie Film Group, Inc.,  Monogram
Pictures Corp.,  Filmways  Entertainment  Corp., ATC, Inc., Krishna Shah, Lonnie
Romati,  Gerald Muller,  Jerry Minsky and Does 1-100 (California Superior Court,
Los Angeles County, Case No. BC091840), the plaintiff asserted claims for breach
of oral contract,  fraud in the inducement and fraudulent conveyance against Mr.
Shah,  seeking  damages  in the amount of  $315,000,  plus  further  unspecified
compensatory  damages and punitive  damages.  In August  1995,  Mr. Shah filed a
cross-complaint  against the Company,  Double Helix Films and Norman  Muller for
indemnification,  apportionment of fault and declaratory  relief. In addition to
compensatory  damages,  he  seeks  punitive  and  exemplary  damages,  emotional
distress   damages  and   attorney's   fees.   The  Company  has   answered  the
cross-complaint.

     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

                                       11
<PAGE>
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. Interest on the installments (at the rate of LIBOR plus 1% per
annum) will be waived provided the Company remains in compliance with the agreed
upon payment schedule.  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
receipt of a demand  letter  dated May 4,  1998.  The  letter  demands  that the
company  Cure the  non-payment  of a $30,000  installment  due  April 15,  1998.
According to the agreement between the Company and Generale, the Company had ten
days after  receipt of the letter to cure the  default.  The default has not yet
been  cured.  The  consequences  of not  curing  the  default  is 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 subsidiary of the Company.

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

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

     In September,  1995,  the agent for the landlord for the premises  formerly
occupied by the Company at 800 Third Avenue, New York, New York, filed a Summons
and Verified  Complaint against the Company in the Supreme Court of the State of
New  York,  County  of  New  York,  entitled  Joseph  P.  Day  Realty  Corp.  v.
Communications  and  Entertainment  Corp. The plaintiff  alleged that it was due
$66,694 from the Company  (plus  interest)  for rent  allegedly  owed during the
period from April through September,  1995. The Company had vacated the premises
on April 12, 1995. Summary judgment was awarded to the plaintiff on May 22, 1996
and a judgment  was entered  for $74,142 on May 31,  1996.  In July,  1996,  the
landlord  commenced a second action for $121,000 for rent  allegedly owed during
the period from October 1995 through July 1996. The Company reached a settlement
in these  cases,  pursuant to which the  Company  delivered  177,500  registered
shares of the  Company's  common  stock to each of the landlord and its agent in
full settlement of both actions.

     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  plaintiff's  motion for summary  judgment has been
denied by the Court. 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.

                                       12
<PAGE>
     In  January,  1996,  an action was filed  against  the Company in which the
plaintiff sought damages in the amount of $33,849 for legal services rendered to
the  Company  and its  subsidiaries.  In  June,  1997,  the  parties  reached  a
settlement in the matter,  pursuant to which the Company agreed to pay $7,000 to
plaintiff, deliver 40,000 freely tradeable shares of the Company's common stock,
and deliver an additional  cash amount to the extent the aggregate  market value
of the  shares on the date of  delivery  was less than  $40,000.  Payment of the
additional cash amount of $13,000 was completed in December 1997.

     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.

     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
Tenato  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 lower court's dismissal of
this action was upheld on appeal by the Ninth Circuit. Messrs. Muller, Smith and
Mortman,   former   directors  of  the  Company,   have   asserted   claims  for
indemnification  against the Company. The Company has advised the claimants that
it will not provide such  indemnification  based upon their wrongful actions and
failure to comply with various obligations to the Company.  The case was refiled
in California state court in August 1998 and the Company has retained counsel to
represent itself.

     In September, 1996, Film Bridge International, Inc. ("Film Bridge") filed a
complaint  in  Los  Angeles  County   Superior   Court,   entitled  Film  Bridge
International v. Communications and Entertainment  Corp., and Does 1 through 50,
Inclusive,  contending  that the  Company had  breached  the terms of an alleged
joint venture agreement between the parties regarding the distribution rights to
certain  films.  On December 19, 1996,  the Company filed a cross-claim  against
Film Bridge  alleging that,  since the end of June,  1996, Film Bridge failed to
furnish the Company  with a proper  accounting  of its  revenues and expenses in
connection  with the sale of  foreign  licenses  of  various  films in which the
Company had an interest and had failed to make  payment of at least  $450,000 to
the Company for monies due and owing to the  Company  from the foreign  sales of
such films.  An agreement  was reached  between the parties in May,  1997,  as a
result of which the Company  received  $336,000 of the monies being held by Film
Bridge,  with the balance being retained by Film Bridge as sales commissions and
in full settlement of the litigation.

     On November 21, 1996, the law firm of Halperin,  Klein & Halperin  (counsel
to Mr. Silva)  commenced an action against the Company in the Civil Court of the
State of New York on a returned check in the amount of $5,000 for legal services
allegedly rendered to the Company.  The check was originally issued to plaintiff
in April,  1995 in connection  with the change of control of the Company at that
time.  The  Company  has filed an Answer in the action and intends to defend the
matter on the basis of a failure of consideration.

                                       13
<PAGE>

     In December,  1997,  the  Directors  Guild of America  ("DGA")  obtained an
arbitration  award  against  Down  Range  Productions,   Inc.,  a  wholly  owned
subsidiary  of Odyssey,  on behalf of Kahn  Brothers  Pictures fso Michael Kahn,
Charles  Skouras,  and  Scott C.  Harris.  Down  Range was  ordered  to pay Kahn
Brothers Pictures the total sum of $155,041; Charles Skouras the sum of $32,360;
and Scott C. Harris the total sum of $8,868;  plus  interest at 18% per annum on
each of these amounts from April 1, 1997. Down Range was also ordered to pay the
DGA $2,500. Down Range was also ordered to assign to the DGA all of Down Range's
right,  title and interest in the motion  picture  "Down  Range,"  including the
screenplay  for the motion  picture,  and Down Range was enjoined from licensing
the motion picture or the screenplay to any third party other than the DGA. Down
Range was also ordered to pay the arbitrator $2,250.

     Kahn  Brothers  Pictures fso Michael  Kahn also filed a claim  against Down
Range  Productions,  Inc. and the Company with the Writers Guild of America West
(WGA) for unpaid  writing  services on "Down Range." That claim has been settled
by the current management in July 1998 for the amount of $15,000.

     The Screen  Actors  Guild  (SAG) has also  asserted  that there are amounts
owing to four actors (Dale Dye, John Philbin, Tegan West, and Kiljoy Productions
fso Kathleen  Wilhoite),  arising out of "Down Range." The company believes that
SAG has never  instigated any arbitration or other  proceeding to try to collect
on these claims.  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 have not been resolved.

     In April,  1998, the Company  reached a settlement with Mr. Jerry Silva ( a
former  director of the Company),  regarding his actions  against the Company in
the Civil Court and Supreme Court of the State of New York. In the Supreme Court
action,  Mr. Silva was seeking money damages based on his claim that the Company
interfered  with his right to sell his shares in the  Company.  The Civil  Court
matter is an action to collect on a  promissory  note in the amount of  $22,500.
Mr. Silva will  discontinue both actions and the Company will authorize the sale
of Mr.  Silva's  shares in the Company under Rule 144, up to a maximum of 30,000
shares per month.

     In April,  1998,  an action was  commenced  against the Company by Siegel &
Gale,  a provider of  brochure  materials  for the  Company.  The lawsuit  seeks
payment of $48,695,  plus  costs,  related to work done by Siegel & Gale for the
Company.  The  Company  has not yet filed an Answer in this action and is in the
process of  consulting  with its  counsel on the best course of  resolving  this
matter.


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.








                                       14
<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 SmallCap 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.

     On March 6, 1996, the Company  declared a reverse  one-for-six  stock split
(the  "Reverse  Split") of its Common  Stock,  effective on March 18, 1996.  The
share prices  reflected  below for all periods  prior to the Reverse  Split have
been adjusted  upward (by a multiple of six) to give effect to the Reverse Split
for such prior periods on a pro forma basis.

     The bid quotations represent  inter-dealer prices and do not include retail
mark-ups,  mark-downs or commissions  and may not necessarily  represent  actual
transactions.

                                  Common Stock

Fiscal 1997                High                        Low
-----------                ----                        ---
First Quarter             $ .87                      $ .50
Second Quarter             1.37                        .43
Third Quarter              1.07                        .62
Fourth Quarter              .81                        .37


Fiscal 1998
First Quarter              $.44                       $.19
Second Quarter              .22                        .08
Third Quarter               .88                        .06
Fourth Quarter              .82                        .19



     As of December 15, 1998,  there were  approximately  4576 record holders of
the Company's Common Stock.








                                       15
<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,         

                                      1998     1997     1996     1995     1994
Income Statement Data

Revenues.............................  $41     $141   $1,011    $1,521  $14,797
Income(loss) from continuing 
     operations......................(1,119)     69   (4,960)   (6,852)  (7,607)
Income(loss) from discontinued 
     operations......................   --       --       --      (458)    (766)
Net income (loss)....................(1,119)     69   (4,960)   (7,310)  (8,373)


Per Share Data*


Income(loss) from continuing 
     operations...................... (.25)     .02    (2.17)    (2.94)   (3.18)
Income(loss) from discontinued
     operations......................   --       --       --     (0.20)   (0.32)
Net income (loss).................... (.25)     .02    (2.17)    (3.14)   (3.50)
Cash dividends.......................   --       --       --        --       --
Weighted average shares.............. 4,403   2,294    2,284     2,332    2,392



Balance Sheet Data

Film costs...........................   110     120    1,001    10,656   13,127
Total assets.........................   675     740    2,448    15,078   27,949
Indebtedness......................... 1,079     962      562       249      179
Shareholders' equity.................(2,083) (2,226)  (2,749)    1,979    9,796





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

* 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.






                                       16
<PAGE>
Item 7.  Management's Discussion and Analysis of Financial Condition 
         and Results of Operation.

Results of Operations

     Years Ended June 30, 1998 and 1997

     Net loss  for the year  ended  June 30,  1998 was due to the fact  that the
Company did not release any new films and did not enter into any new  agreements
for the  release of existing  rights in films.  Revenues  for the twelve  months
ended June 30, 1998  decreased  to $42,630  compared to $141,202  for the twelve
months ended June 30, 1997. No new films became  available  for delivery  during
either period.

     Costs related to revenues  decreased to $19,519 for the twelve months ended
June 30, 1998 as compared to $565,610 for the twelve months ended June 30, 1997.
The  decrease  is  primarily  related  to the fact that  there  were  lower film
revenues in the current year. Additionally,  during the twelve months ended June
30, 1997,  development and festival costs in the amount of $249,544 were written
off,  litigation and settlement  costs related to the Film Bridge  settlement in
the amount of $148,174 were expensed, and $435,102 in inventory costs related to
the picture Downrange were written off. This was primarily offset by a write-off
of $449,163 in participation  liabilities  related to the Kinnevik library which
were settled subsequent to the Kinnevik sale.

     Selling,  general  and  administrative  expense  decreased  by  $613,316 to
$1,065,134  for the twelve month period ended June 30, 1998 from  $1,678,450 for
the  comparable  period  ending June 30, 1997.  The decrease is primarily due to
decreases in personnel and related expenses.

     There was no other income  recognized in the twelve month period ended June
30, 1998.  Other income for the twelve months ended June 30, 1997 consisted of a
$818,776 gain from the sale of certain  distribution and subdistribution  rights
in certain  films to a third party,  recognition  of a $1,245,758  gain from the
cancellation of a contractual  obligation related to the Company's  distribution
rights in "Wuthering Heights," and recognition of gain in the amount of $198,567
from the  settlement of an outstanding  litigation  with Generale Bank (formerly
known as Credit  Lyonnais Bank  Nederland N.V) and Cinecom  Entertainment  Group
Inc.

     Since the change in management  control in March 1998,  new  management has
embarked  on a program  to reverse  the  unfavorable  results  by  significantly
reducing overhead, taking steps to recapitalize the Company, acquiring interests
in new  pictures in  development  or  pre-production,  and by  acquiring  equity
interests  in two  corporations,  one of  which is the  owner of a  professional
soccer team, and the other of which is a media production company.

     Years Ended June 30, 1997 and 1996

     Operations for the fiscal year ended June 30, 1997 ("fiscal 1997") resulted
in net income of $68,808,  compared with a net loss of $4,959,716 for the fiscal
year ended June 30,  1996  ("fiscal  1996").  The net income for fiscal  1997 is
primarily  due to a gain of $818,776 from the sale of certain  distribution  and
subdistribution  rights in certain films to a third party and  recognition  of a
$1,245,758  gain from  cancellation of a contractual  obligation  related to the
Company's  distribution rights in a motion picture which was partially offset by
a  write-off  of  festival  costs in the  amount  of  $249,544,  litigation  and
settlement  costs of $148,174  and a write-down  in inventory  costs of $435,102
relating to one motion  picture.  These  write-offs  were partially  offset by a
write-off of $449,163 in participation liabilities related to a library that was
sold. The loss for fiscal 1996 is primarily the result of a $3,262,4798  loss on
the sale of interests in joint ventures  relating to four theatrical  films, and
from the continued decline in film distribution revenue.

     Revenues  declined to $141,202 for fiscal 1997 compared to  $1,010,826  for
fiscal 1996.  There were no new films which became available for delivery to the
Company in either period.

     Costs related to revenues decreased to $565,610 for fiscal 1997 as compared
to  $1,046,299  for fiscal 1996.  The decrease is primarily  related to the fact

                                       17
<PAGE>
that there were lower film revenues in the current year and from the  write-offs
explained above.

     Selling,  general and  administration  expenses increased to $1,678,450 for
fiscal 1997 from  $1,565,307 for fiscal 1996. The increase is primarily  related
to higher salaries and professional fees during fiscal 1997.

     As of  June  30,  1997,  the  Company  had a  federal  net  operating  loss
carryforward,  for tax purposes,  of approximately  $27,000,000 expiring through
2011,  available to be used to reduce future tax  liability.  Due to limitations
imposed by the  Internal  Revenue  Service,  the  utilization  of  approximately
$4,900,000 of these operating losses will be limited to  approximately  $350,000
per year.

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.

     At June 30, 1998, the Company held approximately $4,331 of cash.

     New management has taken  significant  steps to  recapitalize  and fund the
Company's operations.

     The company signed an agreement with Kimon on July 14, 1998 to purchase the
assets of Kimon, valued at $4,500,000,  in exchange for 4,500,000 Odyssey shares
of subordinated  convertible  preferred stock, Series B, having a value of $1.00
per share for  conversion  purposes.  Kimon  shall be able 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  Scandanavian  distribution  rights and Scandanavian  video  distribution
rights to certain Hallmark Entertainment products.

     In June,  1998, the company  applied for, and was accepted for,  trading on
the Berlin Stock Exchange,  under the symbol "ODY." The German company  Berliner
Freiverkehr  (Atkien)  assisted  the  Company in the  application  and signed an
agreement  with the Company to serve as a market  maker/coordinator  in exchange
for 200,000  warrants  having an exercise price of $1.55 per share,  exercisable
during the two-year period commencing June 23, 1998.

     The Company  received  $150,000 in funding from the Augustine  Fund L.P. in
July 1998. In exchange for the financing, the Augustine Fund received a $150,000
convertible note as well as up to 150,000 transferable warrants,  exercisable at
$1.60 per share for a three year period.  Augustine can convert into  restricted
shares of the  Company's  common  stock at a discount to the market price of the
common  stock at the time of the  conversion  (i.e.,  at the lower of the market
price on the closing  date,  or 80% of the market  price  prior to  conversion).
Augustine and certain Augustine  associated  parties were also issued a total of
45,000 shares of restricted common stock in connection with the transaction.

     In August,  1998, three  unaffiliated  investors  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).

     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.

     In  November   1998,  the  Company  issued  200,000  common  shares  to  an
unaffiliated party in exchange for $88,000 of barter credits.

     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.
                                       18
<PAGE>
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.


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.


                                    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

Johan Schotte                  37                     Chairman of the Board
                                                      & Chief Executive Officer


Pierre Koshakji                36                     President & Director


Stephen R. Greenwald           58                     Managing Director &
                                                      Director

Robert E. Miller, Jr.          51                     Director


Ian Jessel                     53                     Director 
                                                      (As of January 1, 1999)


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


Johan  Schotte is Founder and  Chairman of Media  Trust S.A.  and  Entertainment
Education  Enterprises  Corporation.  Mr. Schotte has an extensive background in
banking and management, and holds an M.B.A. degree from the University of Dallas
in Irving, Texas. Before joining Odyssey in 1998, he served as Managing Director
of Rocket Pictures,  an international film production and distribution  company,
for whom he produced the satirical comedy "Cannes Man" in 1996.


                                       19
<PAGE>

Pierre  R.  Koshakji  is   co-founder,   and  was  President  and  director  of,
Entertainment   Education   Enterprises   Corporation   (E3   Corporation),   an
international  sports,  entertainment,  and investment group. E3 Corporation has
offices in Dallas, Luxembourg and Los Angeles and has a professional affiliation
with the Lamar Hunt group of companies, Unity Hunt. Prior to E3 Corporation, Mr.
Koshakji served as Director of Business  Development with Unity Hunt/Hunt Sports
Enterprises   where  he  evaluated,   negotiated,   and   implemented   targeted
acquisitions and projects.  He played a development  role in establishing  major
league soccer (MLS) and in establishing the two Hunt MLS teams in Columbus, Ohio
and in Kansas City, Missouri,  and served as Senior  Vice-President of Marketing
on the Las Vegas domed  Stadium  project as well as marketing  consultant to the
San Francisco  Giants new ball park at China Basin.  Other  positions and titles
Mr. Koshakji has held during his  professional  career include Deputy  Executive
Director of the 1994 World Cup, Dallas Venue,  including the  responsibility  of
liaison with the European  Broadcast Union and  International  Broadcast Center,
the position of Director at KMPG Management Consulting in the country of Kuwait,
and electrical engineer at Chrysler  Technologies Airborne Systems. Mr. Koshakji
graduated from  Vanderbilt  University BSEE with honors and received his Masters
of Business Administration at Southern Methodist University.


Stephen R. Greenwald  served as Chief  Executive  officer and Co-Chairman in the
Office of the Chairman of Odyssey from  September,  1995  through  March,  1998.
Since 1990,  Mr.  Greenwald  has been a consultant to banks and other clients in
the media and film  business,  most recently  having  served as chief  executive
officer of Vision  International,  an international  film  distribution  company
based in Los Angeles,  from February,1994  through June,1996.  Mr. Greenwald has
also been involved in financing and distributing  independently  produced motion
pictures  including,  among  others,  "Blue  Velvet,"  "Dune," "King of Comedy,"
"Ragtime,"   "Crimes  of  the  Heart,"  and   "Manhunter."  Mr.  Greenwald  also
co-produced the film "Amityville II: the Possession."


Robert E. Miller,  Jr. is a private  investor and principal  shareholder of Word
Power  Incorporated   d/b/a  Hollywood  North   Productions,   a  privately-held
development company for feature films and movies-of-the-week. Mr. Miller is also
Associate Director of Trade Task Group,  Inc., a strategic  planning  consulting
firm where he has served as manager of client development since 1984. He is also
a board member emeritus of the International Standards Institute and a member of
the board of advisors of the World Film Institute,  sponsors of "The Family Film
Awards."


     Ian Jessel is an experienced  film and  television  executive who served as
President of Miramax  International  during the period from 1992 to 1995, and as
President of Spelling Films International for the two-year period prior thereto.
During  the  1980's,  Mr.  Jessel  also  held  top  executive  positions  at CBS
Theatrical Films, I.T.C. International, and Nelson Entertainment. Films released
during  his  presidency  at  Miramax   International   include  Robert  Altman's
"Pret-A-Porter," Chen Kaige's "Farewell My Concubine," Quentin Tarantino's "Pulp
Fiction," and Woody Allen's "Bullets Over Broadway." Mr. Jessel currently serves
as President and CEO of Condor  Communications LLC, a company he founded in 1995
to co-finance,  co-produce,  and supervise the  international  distribution  of,
quality motion pictures. (Mr. Jessel will join the Board of Directors on January
1, 1999).

Meetings and Committees of the Board of Directors

     For the fiscal  year ended June 30,  1998,  there were 12  meetings  and/or
written  consents in lieu of meetings of the Board of  Directors.  All Directors
attended or consented to each of the meetings (and consents in lieu of meetings)
of the Board of directors  during said fiscal year.  The Board of Directors does
not presently have any standing  nominating,  audit or compensation  committees,
the customary  functions of such committees  being performed by the entire Board
of Directors. The Board of Directors intends to form such committees in the near
future.


                                       20
<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, 1998,  the  Company's  officers,  directors  and greater than 10%
stockholders  complied with all filing  requirements  under section 16(a) except
that (i) Messrs.  Schotte  and  Koshakji  each filed a Form 3 in  October,  1998
reflecting their  appointments to the Board of Directors in March 1998, and (ii)
Mr. Schotte filed a Form 4 in October,  1998 reflecting the conversion of a note
into shares of common stock of the Company,  and the  acquisition  of shares and
warrants of the Company,  in each case by an affiliate of Mr.  Schotte in April,
1998.


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  and the  four  most  highly  compensated  executive  officers  who were
executive officers as of June 30, 1998.
<TABLE>
<CAPTION>

                           Summary Compensation Table
<S>                 <C>         <C>           <C>           <C>             <C>           <C>
                                                 Annual Compensation         Long-Term 
                                                                             Securities
Name and             Fiscal                                  Other Annual    Underlying    All Other
Position              Year       Salary        Bonus         Compensation     Options    Compensation
--------              ----       ------        -----         ------------     -------    ------------
Johan Schotte         1998         5,000        --                --             --       43,000(3)
Chief Executive
Officer; Chairman



Pierre Koshakji       1998         5,000        --                --             --       43,000(3)
President



Stephen Greenwald     1998        83,000        --                --             --       96,000(1)(2)
Chief Executive       1997       127,500        --                --         100,000(2)   97,500(1)(2)
Officer; Co-Chairman  1996        60,000        --                --         216,667(2)   75,000(1)(2)



Ira N. Smith          1998        79,626         --               --             --      111,374(1)
President             1997       130,875         --               --         100,000      94,125(1)
Co-Chairman           1996        60,000         --               --         216,667      75,000(1)



Lawrence Schneider    1998          --           --               --             --         --
Co-Chairman           1997        89,167         --               --         100,000     135,833(1)
                      1996        60,000         --               --         216,667      75,000(1)

</TABLE>

                                       21
<PAGE>

     (1) Messrs.  Greenwald,  Smith and Schneider each deferred $75,000 of their
annual  compensation  during the fiscal year ended June 30, 1996 pursuant to the
terms of their respective  compensation  agreements with the Company. During the
fiscal year ended June 30, 1997, Messrs. Greenwald, Smith and Schneider deferred
$97,500,  $94,125,  and  $135,833,  respectively,  of their annual  compensation
pursuant to their compensation agreements. During the fiscal year ended June 30,
1998, Messrs. Greenwald,  Smith and Schneider deferred an additional $96,000 and
$111,374,  respectively,  of their annual  compensation.  (Mr. Schneider did not
receive  any  compensation  during  the  1998  fiscal  year).  Pursuant  to such
agreements,  Messrs.  Greenwald,  Smith and  Schneider  were issued  convertible
promissory notes for the amount of such deferred  compensation,  payable in full
within twelve months from the date of issue with interest at 2% over prime. Such
notes were  converted  into shares of common stock of the Company on June 10 and
June 30,  1996 at the average  closing bid price in effect for the common  stock
for the 10-day trading period immediately  preceding the date of each respective
election. On June 10, $60,000 of each note (plus accrued interest) was converted
into 83,120 shares of common stock at a price of $.75 per share, and on June 30,
$15,000 of each note was converted into 19,231 shares of common stock at a price
of $.78  per  share.  On  September  30,  1996,  they  each  converted  deferred
compensation  notes of $15,000 for the quarter then ended into a total of 26,316
shares  of  common  stock  at  a  conversion   price  of  $.57  per  share.  See
"Compensation  Arrangements,  Termination  of Employment  and  Change-in-Control
Arrangements"  for a more detailed  explanation of the terms of the compensation
agreements  between  the  Company  and  each of  Messrs.  Greenwald,  Smith  and
Schneider, and for a discussion of the conversion of deferred compensation notes
by Mr.  Greenwald  and  Mr.  Schneider  in  November,  1998.  Such  compensation
agreements  became  effective on October 1, 1995, but were  terminated in March,
1998 in connection with a change in control of the Company.

(2)   The cash  compensation  and stock  options  reflected  as being paid to or
      received by Mr.  Greenwald in the foregoing table were actually paid to or
      received by G & H Media, Ltd., a consulting firm of which Mr. Greenwald is
      a principal and controlling  party. The compensation to Mr. Greenwald does
      not include  compensation  paid to a law firm of which Mr.  Greenwald is a
      member.
      See "Certain Relationships and Related Transactions."

(3)   Represent deferred compensation which accrued during the fiscal year ended
      June 30, 1998.


                                       22
<PAGE>

Options/Stock Appreciation Rights

     No stock options or stock appreciation  rights ("SARs") were granted to the
named executive officers during the fiscal year ended June 30, 1998.

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

<TABLE>
<CAPTION>


                                                      Number of Securities
                                                    Underlying Unexercised        Value of Unexercised
                                                     Options at Year End          In-the-Money Options

<S>                  <C>           <C>         <C>          <C>               <C>         <C>
                         Shares
                         Acquired    Value
Name                   On Exercise   Realized   Exercisable  Unexercisable    Exercisable Unexercisable



Johan Schotte              __          __         125,000          __              0             __

Pierre Koshakji            __          __           __             __             __             __

Stephen Greenwald(1)       __          __         366,667          __              0             __

Ira Smith                  __          __           __             __             __             __
  
Lawrence Schneider(1)      __          __         350,000          __              0             __

</TABLE>


(1)   The chart  includes  50,000 stock  options for Mr.  Greenwald,  and 25,000
      stock options for  Mr.Schneider,  in each case issued in  connection  with
      short term loans  made to the  Company.  See  "Certain  Relationships  and
      Related  Transactions."  For the fiscal year ending June 30, 1999 (through
      December 15, 1998),  Mr.  Greenwald was issued an additional  25,000 stock
      options  in  consideration  of a  rollover  of his short term loans to the
      Company,  and Messrs.  Schotte and Koshakji were each issued 103,385 stock
      options as additional incentive compensation.



Repricing of Options

     On December 2, 1996,  the Board of  Directors  voted to lower the  exercise
price of the following  warrants to $1.00 per share to create further incentives
for management of the Company and to bring the warrant  exercise price into line
with warrants granted to other parties performing services for the Company: With
respect to  Lawrence  Schneider,  8,333  warrants  granted in April,  1995 at an
exercise price of $3.91 per share;  16,667 warrants granted in October,  1995 at
an exercise  price of $2.83 per share;  and 200,000  warrants  granted in March,
1996 at an exercise  price of $1.87 per share;  with  respect to Robert  Miller,
8,333 warrants  granted in April,  1995 at an exercise price of $3.91 per share;
33,333  warrants  granted in  October,  1995 at an  exercise  price of $2.83 per
share; and 25,000 warrants granted in March,  1996 at an exercise price of $1.87
per  share;  with  respect  to each of Ira  Smith  and G & H  Media.,  Ltd.  (an
affiliate of Stephen R. Greenwald),  16,667 warrants granted in October, 1995 at
an exercise  price of $2.83 per share;  and 200,000  warrants  granted in March,
1996 at an  exercise  price of $1.87 per  share.  The  closing  bid price of the
Company's common stock on December 2, 1996 was $.69 per share.


                                       23
<PAGE>
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.


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

     On  October  1,  1995,  Messrs.  Greenwald,  Smith and  Schneider  executed
compensation  agreements with the Company (the "Agreements"),  pursuant to which
the named  parties  agreed to render  management  services  to the company for a
three year period ending October 1, 1998. Pursuant to these Agreements,  each of
the parties  agreed to serve as a  Co-Chairman  in the Office of the Chairman of
the Company and, in addition,  Mr.Greenwald  agreed to serve as Chief  Executive
Officer.  (In March,  1996,  Mr.  Smith also agreed to serve as President of the
Company).  The  Agreements  were  superseded by agreements  executed on March 6,
1996.  The  subsequent  agreements  (also  defined  as  the  "Agreements")  were
substantially identical to the original Agreements in all material respects with
respect to cash compensation but modified the provisions  regarding the issuance
of stock options.  (In the subsequent  Agreement with Mr.  Greenwald,  the named
party is G & H Media, Ltd., rather than Mr. Greenwald individually; G & H Media,
Ltd. is a consulting firm of which Mr.  Greenwald is a principal and controlling
party).

     The  Agreements  provided  for  compensation  at a the rate of $15,000  per
month,  $20,000  per month and $25,000  per month  during the first,  second and
third years of the respective terms of the Agreements.  In September,  1997, the
terms of the Agreements were extended for an additional two-year period.

     Each of Messrs. Greenwald,  Smith and Schneider agreed that with respect to
each calendar quarter during the term of his respective Agreement, the following
percentage  of his  compensation  would be paid:  (i) no payment if the  current
assets of the Company as of the end of the  previous  calendar  quarter are less
than $500,000; (ii) one-third if the current assets of the Company as of the end
of  the  previous  calendar  quarter  are  more  than  $500,000  but  less  than
$1,000,000; (iii) two-thirds if the current assets as of the end of the previous
calendar  quarter are more than  $1,000,000 but less than  $1,500,000;  and (iv)
full  payment  if the  current  assets  as of the end of the  previous  calendar
quarter are more than $1,500,000. Any portion of the compensation not paid would
be  deferred  and would be paid in twelve  months  with  interest  pursuant to a
promissory note issued by the Company, provided that the note could be converted
into  common  stock of the  Company  at any time prior to payment in full at the
average  closing bid price in effect for the common stock for the 10-day trading
period immediately preceding the date of the conversion election.

     During the quarter  ended  December  31, 1995,  each of Messrs.  Greenwald,
Smith and Schneider  deferred  100% of their  compensation  for the quarter,  or
$45,000 each. During each of the next two quarters,  they deferred  one-third of
their  compensation,  or a total of $30,000  each. On June 10 and June 30, 1996,
each  of  Messrs.  Greenwald,  Smith  and  Schneider  converted  their  deferred
compensation  notes of $75,000 (plus accrued  interest)  into a total of 102,351
shares of common stock at prices of $.75 and $.789 per share,  respectively.  On
September 30, 1996, they each converted  deferred  compensation notes of $15,000
for the quarter  then ended into a total of 26,316  shares of common  stock at a
conversion price of $.57 per share. In November,  1998, Mr. Greenwald  converted
$44,968 of deferred  compensation notes into 145,058 shares of common stock at a
conversion  price of $.31 per share,  and Mr.  Schneider  converted  $157,774 of
deferred  compensation notes into 508,947 shares of common stock at a conversion
price of $.31 per share

     The  Agreements  also provided for the issuance of 200,000 stock options to
each of Messrs. Greenwald, Smith and Schneider, exercisable during the five-year
period  commencing  March  6,  1996 at an  exercise  price of  $1.87  per  share
(subsequently  lowered to $1.00 per share by action of the Board of Directors in
December 1996). See "Options/Stock Appreciation Rights."

                                       24
<PAGE>
     On December 2, 1996,  the Board of Directors  granted  100,000 common stock
purchase  warrants  to each of  Stephen  R.  Greenwald,  Ira Smith and  Lawrence
Schneider in  consideration  of services  rendered to the Company.  The warrants
were granted for a five-year  period and are  exercisable at a purchase price of
$1.00 per share.

     In April,  1997,  the Company  granted  additional  common  stock  purchase
warrants to Stephen R.  Greenwald  (or his  designee),  Lawrence  Schneider  and
Robert Miller,  Jr. in consideration of providing  certain interim  financing to
the Company. See "Certain Relationships and Related Transactions."

     Lawrence  Schneider  resigned his executive  position in September 1997. In
March,  1998,  Messrs.  Greenwald and Smith stepped down as CEO and President of
the Company,  and Messrs.  Johan Schotte and Pierre Koshakji were elected as CEO
and President in their stead.

     In  connection  with the  change  of  management  in March,  1998,  Messrs.
Greenwald and Smith terminated their existing employment  agreements and entered
into new  compensation  arrangements  with the Company.  Mr. Greenwald agreed to
serve as managing  director of the Company  through  December 31,  1999,  and is
entitled 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 is entitled to receive an additional  $130,000,  also
payable in varying  monthly  amounts during the two-year  period ending December
31, 1999. The Company is currently in default under Mr.  Greenwald's  agreement,
entitling Mr. Greenwald to re-instate his former employment agreement.

     Mr. Smith (through S.F.H. Associates, Inc.) agreed to serve in a consulting
capacity to the Company  through  December 31, 1999,  and is entitled to receive
the sum of $160,000 during such period, payable at the rate of $8,000 per month,
commencing May, 1998. In adition,  in  consideration of terminating his existing
employment  agreement,  Mr. Smith is entitled to receive an additional $100,000,
payable in varying  monthly  amounts during the two-year  period ending December
31, 1999. The Company is in default under the agreements with S.F.H  Associates,
Inc.  and Mr.  Smith,  as a result of which such parties  have  exercised  their
contractual rights to double the payments due to them under such agreements. 

     Mr. Ian Jessel  entered  into a three year  employment  agreement  with the
Company, commencing November 9, 1998 and continuing through November 9, 2001. Mr
Jessel's compensation is 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. Jessel shall be entitled yearly to a 10% bonus of the net profits of
the film  division and to a 5% bonus,  paid in the Company's  stock,  of the net
profits of the Company  provided that the film division is  responsible  for one
half of such net profits or Jessel's bonus shall be proportionately reduced down
to a floor of 1% of 100% of the Company's net profits.

     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 is set 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.  As of September  30,  1998,  a  substantial
portion  of the  compensation  due to Messrs.  Smith and  Koshakji  under  their
respective agreements is past due.

     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 balance of these notes
were converted into 176,050 shares of common stock in October, 1998.

                                       25
<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).

    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.

     III)         Market Cap Bonus:  At the end of each fiscal  year,  beginning
                  with the fiscal year ending June 30,  1999,  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.

Compensation  Committee Report and Compensation Committee Interlocks and Insider
Participation

     Executive  officer  compensation  is  determined  by the  entire  Board  of
Directors.  The Board has not  appointed or  designated a separate  compensation
committee to  determine or set  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.


Item 12. Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth information  concerning  ownership of common
stock,  as of December 15,  1998,  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.


                                       26
<PAGE>

Name & Address of                           Shares                Percentage of
Beneficial Owner           Status        Beneficially Owned           Class

Lawrence Schneider          __              944,631(1)                 12.9%
116 E. 30th Street 
New York, NY 

Robert Miller, Jr.         Director         214,833(2)                  3.0%
900 4th Avenue
Seattle, WA

S.F.H. Associates Inc.      __              428,564(3)                  5.9%
49 Woodland Drive
Oyster Bay, NY

Stephen R. Greenwald       Managing         648,622(4)                  8.8%
380 Lexington Avenue       Director;
New York, NY               Director

Johan Schotte              CEO and          353,385(5)                  4.9%
1601 Elm Street            Chairman
Dallas, TX

Pierre Koshakji            President &      103,385(6)                  1.5%
1601 Elm Street            Director
Dallas, TX

Ian Jessel                 Director          50,000                      .7%
1601 Elm Street            (As of 1/1/1999)
Dallas, TX

Lecoutere Finance S.A.      __            1,870,298(7)                 25.3%
39 route de Remich
L-5650 Mondorf-les-Bains
Grand Duchy of Luxembourg

All Executive
Officers &                  __
Directors As
A Group (6 Persons)                       1,370,225(8)                 17.5%

(1)   Includes  presently  exercisable options  to  purchase  333,333  shares of
      common stock.
(2)   Includes  presently  exercisable  options to  purchase  144,166  shares of
      common stock;  also includes  61,167 shares held jointly with Mr. Miller's
      wife,  and 9,500 shares held in an individual  retirement  account for Mr.
      Miller's wife, as to which latter shares Mr. Miller  disclaims  beneficial
      ownership.
(3)   Includes  presently exercisable  options  to  purchase  300,000  shares of
      common stock.
(4)   Includes  presently  exercisable  options  to  purchase  375,000 shares of
      common stock.
(5)   Includes  presently  exercisable  options to  purchase  228,385  shares of
      common  stock;  does not  include  1,468,698  shares of  common  stock and
      401,600  common stock purchase  warrants held by a corporate  affiliate of
      Mr.  Schotte,  Lecoutere  Finance S.A.;  also does not include 2660 common
      stock  purchase  warrants  held by E3  Capital,  and 29,537  common  stock
      purchase  warrants held by Media Trust S.A., both corporate  affiliates of
      Mr. Schotte. (Mr. Schotte disclaims beneficial ownership of all shares and
      warrants held by affiliated entities, although based on Mr.Schotte's close
      business  relationship  with the  other  principal  shareholders  of these
      entities,  there exists the possibility that these shareholders may act in
      concert with Mr. Schotte with respect to the voting of these shares in the
      Company).
(6)   Includes  presently  exercisable  options  to  purchase  103,385 shares of
      common stock. 
(7)   Includes presently  exercisable   options  to  purchase  401,600 shares of
      common  stock.  See note (5).  
(8)   Includes  presently   exercisable  options to purchase  850,936  shares of
      common stock.

                                       27
<PAGE>


Item 13. Certain Relationships and Related Transactions.

     On August 1,  1996,  the  Board of  Directors  of the  Company  offered  to
reimburse  members of the CECO  Shareholders  Committee in kind for all expenses
incurred by such members in connection with the change of management  control of
the Company  effected  in April,  1995.  (See  "Change of  Control").  The Board
offered to reimburse  such  expenses by issuing  stock  options to the committee
members  in an  amount  equal to one and  one-third  times  the  amount  of such
expenses.  Robert Miller, a director of the Company, agreed to accept options to
purchase  40,000  shares  of the  Company's  common  stock,  exercisable  over a
five-year  period at an exercise price of $.75 per share,  representing the then
current  market price of the  Company's  common  stock on the date of grant.  In
exchange,   Mr.  Miller  agreed  to  release  his  claim  for  reimbursement  of
approximately  $30,000 of expenses incurred by Mr. Miller in connection with the
change of control. Lawrence Schneider, then a director of the Company and also a
member of the CECO  Shareholders  Committee,  did not agree to accept options in
lieu of his claim for reimbursement of expenses in connection with the change of
control.

     During  the fiscal  years  ended  June 30,  1997 and 1998,  the law firm of
Herbst & Greenwald,  of which Mr.  Greenwald,  a director of the  Company,  is a
member,  received fees for legal services rendered to the Company in the amounts
of $21,563 and $5,000, respectively.

     In April, 1997,  Stephen R. Greenwald,  Lawrence Schneider (then a director
of the  Company),  and Robert E.  Miller,  Jr.  made loans to the Company in the
amounts of $50,000, $25,000 and $25,000, respectively.  Each 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 such
loans,  the lenders  received  five-year  warrants to purchase  shares of common
stock of the Company,  exercisable  at $1.00 per share.  Messrs.  Schneider  and
Miller each  received  25,000  warrants  in  consideration  of their  respective
$25,000  loans to the Company,  and Mr.  Greenwald  (or his  designee)  received
50,000  warrants  in  consideration  of his  $50,000  loan to the  Company.  Mr.
Schneider's  loan was  repaid  in  April,  1998  from the  Kinnevik  receivable.
However,  Messrs. Greenwald and Miller agreed to a rollover of their loans to be
paid from the proceeds of a second Kinnevik  receivable due in September,  1998.
In consideration of the rollover, Mr. Greenwald will receive 25,000 warrants and
Mr.  Miller  will  receive  12,500  warrants,  in each case  exercisable  over a
five-year  period  at $1.00  per  share.  Mr.  Greenwald's  loan was  repaid  in
September,  1998; Mr. Miller's loan was rolled over for a six month period on an
unsecured basis with interest at the rate of 10% per annum.

     In March, 1998, Ira Smith and Stephen Greenwald stepped down as Co-Chairmen
in the Office of the Chairman of the Company, and Johan Schotte was appointed as
Chairman and CEO of the Company. In connection with the change in management, an
affiliate of Mr. Schotte purchased $230,000 face value of deferred  compensation
notes  from  Messrs.  Smith  and  Greenwald,   and  in  April,  1998,  converted
approximately  75% of those notes into 667,648  shares of the  Company's  common
stock.  The balance of these notes were  converted into 176,050 shares of common
stock in October,  1998. In addition,  at the time of the change in  management,
the  Company  purchased  an 18%  equity  interest  in each  of two  corporations
affiliated  with Mr.  Schotte,  one of which is the  owner of a second  division
professional  soccer  team in New  Mexico,  and the  other  of  which is a media
production  company in  Luxembourg.  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.

                                       28
<PAGE>

     In  connection  with  Mr.Schotte's  appointment  as CEO and Chairman of the
Board, Mr. Greenwald agreed to terminate his existing employment  agreement with
the Company and to enter into a new, two-year employment agreement, effective as
of January 1, 1998.  Mr. Smith also agreed to terminate his existing  employment
agreement.  The Company entered into a new, two-year  consulting  agreement with
S.F.H.  Associates,  Inc.,  pursuant to which the  consultant  would provide the
consulting  services  of Mr.  Smith  for the two year  period  commencing  as of
January 1, 1998. The Company also entered into a two-year  contract with each of
Mr.  Schotte and Mr.  Koshakji,  effective as of January 1, 1998, at the rate of
$150,000 per annum. (See "Executive Compensation").

     In June,  1998, the Company entered into a sublease for office space in Los
Angeles  with an  affiliate  of the CEO of the  Company.  The  sublease  is on a
month-to-month  basis at the rate of $1,500 per month.  The  Company  intends to
utilize the premises for the months of June thru December, 1998.

     In November,  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  (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
E3 Sports new Mexico, Inc.).

      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  will be issued to Media Trust,  S.A.  with exercise
prices ranging from $.38 per share to $.98 per share.

         In December,  1998, Lecoutere Finance, S.A., an affiliate of the CEO of
the Company,  purchased  625,000  shares of common stock from the Company for an
aggregate consideration of $187,500 ($.30 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  per  share),  less a 20%  discount  due to the
restricted nature of the shares purchased.  (See "Security  Ownership of Certain
Beneficial Owners and Management").


                                       29
<PAGE>
                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

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


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


(a)(3)   Exhibits

3.1      Articles of Incorporation, as amended through June 30, 1995(1)

3.2      Amendments to Articles of Incorporation filed in March and June,1996(8)

3.3      Amendment to Articles of Incorporation filed in January, 1997 (9)

3.4      By-laws(1)

4.1      Indenture  between  Odyssey and  Continental  Stock Transfer and Trust
           Company  ("Continental")  dated as of July 15, 1987(1)

4.2      Form of Supplemental Indenture between Continental and the Company(1)

4.3      Form of Common Stock Certificate(1)

4.4      Form of options granted of officers, directors and 5% stockholders(2)

4.5      Form of Warrant issued to purchasers parties to the 1995 Private 
          Placement completed September 30, 1995(5)

4.6      Form of 12% Unsecured  Promissory Note issued to purchasers parties 
          to the 1995 Private Placement completed September 30, 1995(5)

4.7      Form of Stock  Option  Agreement by and between the Company and  
          officers and directors of the Company, for stock options issued 
          in April 1995(5)

4.8      Form of Common Stock Purchase Warrant by and between the Company and 
          officers,  directors,  employees and consultants of the Company for
          warrants issued during the fiscal year ended June 30, 1996(8)

4.9      Common Stock Purchase Warrant, dated March 6, 1996, between the 
          Company and G & H Media, Ltd. (assignee of Stephen R. Greenwald)(7)

4.10     Common Stock Purchase Warrant, dated March 6, 1996, between the 
          Company and Lawrence I. Schneider(7)

4.11     Common Stock Purchase Warrant, dated March 6, 1996, between the 
          Company and Ira N. Smith(7)

4.12     Form of Common Stock Purchase Warrant by and between the Company 
          and officers, directors, employees and consultants of the Company
          for warrants issued during the fiscal year ended June 30, 1997 (9)

4.13     Preferred Stock Certificate, Series A, issued to Kinnevik Media 
          Properties, Ltd. in September, 1997 (10)

4.14     Convertible Note issued to Augustine Fund L.P. in July, 1998 (12)

4.15     Preferred Stock Certificate, Series B, issued to Kimon, Inc. in 
          September, 1998 (10)

10.1     1989 Long Term Incentive Plan(1)

10.2     Agreement of Settlement and Release, dated October 2, 1995, by 
          and between Home Box Office, Inc. and Odyssey(5)

                                       30
<PAGE>
10.3     Private Placement Memorandum used in connection with 1995 Private
           Placement (the "1995 Private Placement Memorandum")(5)

10.4     Supplement to the 1995 Private Placement Memorandum(5)

10.5     Supplement No. 2 to the 1995 Private Placement Memorandum(5)

10.6     Supplement No. 3 to the 1995 Private Placement Memorandum(5)

10.7     Settlement  Agreement,  dated as of  March  31,  1995,  by and
          between the Company,  Odyssey,  Global  Intellicom,  Inc.,  N.
          Norman Muller, Thomas W. Smith, David Mortman, Robert Ferraro,
          the CECO Shareholders Committee, Lawrence Schneider, Robert E.
          Miller, Henry Schneider,  Robert Hesse, Shane O'Neil,  Patrick
          Haynes,  Russell T. Stern,  Jr.,  Thurston  Group,  Inc.,  The
          Insight Fund, L.P. and Lois Muller(3)

10.8     Memorandum of Agreement, dated as of August 24, 1995 between the
          Company and Multipix Communications, Inc.(4)

10.9     Termination Agreement, dated as of January 2, 1996, between Regency
          International Pictures, B.V. and Odyssey Distributors B.V.(6)

10.10    Employment Agreement dated October 1, 1995, between the Company
          and Stephen R. Greenwald(6)

10.11    Employment Agreement dated October 1, 1995, between the Company
          and Lawrence I. Schneider(6)

10.12    Employment Agreement dated October 1, 1995, between the Company 
          and Ira N. Smith (6)

10.13    Agreement, dated March 6, 1996, between Communications and 
          Entertainment Corp. and its wholly-owned subsidiary, Odyssey 
          Distributors, Ltd.(7)

10.14    Severance and Consulting Agreement, dated March 26, 1996, between
          the Company and Shane O'Neil, and related  modifying agreement 
          dated March 28, 1996(7)

10.15    Management Agreement between the Company and Stephen R. Greenwald,
          dated March 6, 1996, superseding the Employment Agreement dated
          October 1, 1995(8)

10.16    Management Agreement between the Company and Lawrence I. Schneider,
          dated March 6, 1996, superseding the Employment Agreement dated 
          October 1, 1995(8)

10.17    Management Agreement between the Company and Ira N. Smith, dated
          March 6, 1996, superseding the Employment Agreement dated 
          October 1, 1995(8)

10.18    Addendum to Management Agreements of Messrs. Schneider, Greenwald
          and Smith(8)

10.19    Joint Venture Letter between the Company and Film Bridge 
          International, Inc., dated March 11, 1996(8)

10.20    Lease for office premises at 1875 Century Park East, Suite 2130, 
          Los Angeles, California, dated May 9, 1996(8)

10.21    Agreement dated August 29, 1996, between the Company and Kinnevik 
          Media Properties, Ltd.(8)

10.22    Agreement dated September 6, 1996 between the Company and Mr. David
           Somerstein(8)

10.23    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)

                                       31
<PAGE>
10.24    Form of Settlement Agreement with Generale bank Nederland, N.V.,
          dated as of December 18, 1996 (9)

10.25    Stock Purchase Agreement between the Company and Kinnevik Media
          Properties, Ltd., dated September 1997 (10)

10.26    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)

10.27    Termination /Employment Agreement with Stephen R. Greenwald, dated
          March 2, 1998 (10)

10.28    Termination Agreement with Ira Smith dated March 2, 1998 (10)

10.29    Consulting Agreement with S.F.H. Associates, Inc. for the services 
          of Ira Smith, dated March 2, 1998 (10)

10.30    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 Mediabright 
          KB, a Swedish limited partnership,  dated July 14, 1998 (10)

10.33    Employment Agreement with Pierre Koshakji, dated March 2, 1998 (11)

21.1     Subsidiaries of the Registrant(3)

(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)Filed herewith.


(b)      Reports on Form 8-K

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

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

(d)      None.


                                       32
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                                   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: December 30, 1998            By:  /s/ Johan Schotte 
                                       -------------------        
                                         Johan Schotte,
                                         CEO and Chairman



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




Signature                   Title                                      Date


/s/ Johan Schotte           CEO and Chairman                            12/30/98
    Johan Schotte           (Principal Executive & Financial Officer)


/s/ Pierre Koshakji         President; Director                         12/30/98
    Pierre Koshakji



/s/ Stephen R. Greenwald    Managing Director;                          12/30/98
    Stephen R. Greenwald    Director



/s/ Robert E. Miller, Jr.   Director                                    12/30/98
    Robert E. Miller, Jr.

                                       33
<PAGE>