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

**Form 10-KSB**

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

**For the fiscal year ended June 30, 2004**** or**** [  ]      Transitional Report under Section 13 or 15(d) of the**** Securities Exchange Act of 1934**

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

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

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

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

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

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

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

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

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

Indicate  by check  mark if there  is no  disclosure  of  delinquent  filers  in response to Item 405 of  Regulation  S-B is not  contained in this form,  and no disclosure  will  be  contained,  to the  best  of  Registrant's  knowledge,  in definitive proxy or information statements incorporated by reference in Part III of this form 10-KSB or any amendment to this Form 10-KSB. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the Registrant as of June 30, 2004 was  approximately  $2,358,020 (based on the mean between  the  closing  bid and asked  prices of the Common  Stock on such date), which value,  solely for the purposes of this calculation,  excludes shares held by Registrant's  officers and directors.  Such exclusion  should not be deemed a determination by Registrant that all such  individuals are, in fact,  affiliates of the Registrant.

As of June 30, 2004 there were outstanding 37,919,846 shares of Odyssey Pictures Corporation's common stock, par value $.01 per share (the "Common Stock").

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**ODYSSEY PICTURES CORPORATION**

Form 10-KSB

Report for the Fiscal Year    Ended June 30, 2004
| PART I

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

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

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

PART IV

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

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a) General Development of Business

Odyssey  Pictures  Corporation  ("Odyssey" or the "Company"),  formerly known as Communications and Entertainment Corp., was formed in December 1989 as a holding company.    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").   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.

(b) Narrative Description  Business

The distribution of films involves two principal activities - the acquisition of rights from the  licensor or the seller,  usually the  producer or writer of the film, and the licensing of the distribution  rights to  subdistributors in their respective markets. In general,  the rights obtained from the producer relate to all media, including theatrical distribution, video and all forms of television. In some cases,  the licensing of rights to  subdistributors  may exclude certain territories and/or media. With respect to any particular film, the Company  typically enters into exclusive  distributorship  arrangements,  thereby  precluding  others from competing  with the  Company  with  respect to that film.  Moreover,  in certain circumstances,  the  Company  may also  provide  a  financing  function  for the production  of a film,  which a  subdistributor  would  generally  be  unable to provide. See "Terms of Distribution Agreements."

Terms of Distribution Agreements.

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

The film distribution business breaks down into two broad categories:

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

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

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

1)   First to the payment of commissions due to the Company,    2)   Then second to the recovery of certain distribution expenses,    3)   Then  to  the  reimbursement  of  the  Company  for  its  minimum guarantee or advance, if any,    4) Then finally to the producer. The Company and the producer  according  to the  percentages  negotiated  in the agreement  between  the  company  and the  producer,  if any,  share  additional distribution receipts.  Independent Film Production and Product Acquisition Film distribution  companies  such as the  Company  primarily  represent  independent producers of motion pictures (rather than motion picture studios) in all related markets  and all  media,  including  theatrical  release,  television  and  home video/DVD distribution, and cable or satellite-distributed media. Producers seek to be  independent  producers  of  motion  pictures  for a variety  of  reasons, including  greater creative control of a project and potentially  greater profit participation  through the retention of the copyright or the ability to sell the film directly in particular  markets.  Often, young, new directors and producers have no choice  but to  independently  produce  their  projects,  and the motion picture  industry has a long history of  "breakthrough"  films produced at a low cost  by  first-time   producers  and  directors  which   subsequently   achieve considerable revenues. The Company has generally obtained its product from among these  independently  produced  films  rather  than from  major  motion  picture studios,   which  typically  have  their  own  in-house  distribution  networks.

Nevertheless, from time to time, the Company has entered into "split rights", or shared,  arrangements  with studios to represent a film in certain markets.  The Company's  management seeks to identify  attractive projects very early in their development,  either through relationships with producers,  directors and agents or other known suppliers of product,  or through  industry  announcements of new productions.  In addition,  the Company attends  independent  festivals and film markets,  such as the Sundance  Film  Festival,  The New York  Independent  Film Festival and the Cannes Film Festival, in order to locate new product.

Business Strategy

The Company's  strategy is to package, produce and distribute independent feature filmsand expand its growth and  infrastructure  through  acquiring or partnering with other entities.  The execution of the Company's  strategy comes from operating the following  activities  within each  service it  provides  which,  in turn,  will generate revenues from both fees and commissions.

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

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

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

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

Competition

The entertainment industry generally,  and the film industry in particular,  are highly competitive.  The Company's  competition includes the smaller independent producers as well as motion picture studios.  Many of the Company's  competitors have financial and other resources,  which are significantly  greater than those available to the Company.  The Company faces  competition  in all aspects of the business  and  cannot  give  the  assurance  that it  will  be  able to  compete effectively.  New  markets  require the  Company to compete  for  licensees  and sub-distributors  (as further defined herein) of Filmed/Video content with other Internet-based  Filmed/Video  distributors  through  cassette  tape  and/or DVD.

Although our Joint Venture relationship assists us greatly in not seeking others and compete for relationships  with manufacturers and developers of transmission services  with playback and  broadcast  capabilities.  The business of providing content over the Internet is experiencing  rapid growth and is  characterized by substantial  technological  changes,  and there are new and varying  established companies entering into the same fields. Many of these companies have financial, technological,  promotional and other resources that are much greater than those available  to us and  could  use or adapt  their  current  technology,  or could purchase technology, to provide a service directly competitive with the Company.

Operations

The  Company's  operations  have  been  greatly  reduced  as  a  result  of  the restructuring of the Company by new management.  The Company's  principal office is located in Dallas,  Texas (see  "Properties")  and, as of June 30, 2004,  the Company had three full-time  employees,  consisting of Mr. John Foster,  the CEO and President of the Company,  along with two  administrative  assistants in the Dallas office.

ITEM 2. PROPERTIES

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

                                  June 30, 2004         $42,957                                      -------------------- ------------                                      June 30, 2003         $44,398                                      -------------------- ------------

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

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

ITEM 3. LEGAL PROCEEDINGS

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

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

In August 1995, G.P. Productions,  Inc. ("GP") and Greenwich Subject Films, Inc. ("Greenwich") commenced an action entitled G.P. Productions,  Inc. and Greenwich Studios,  Inc. v. Double Helix Films,  Inc.,  Communications  and Entertainment, Inc.,  Krishna  Shaw,  Gerald  Muller  and Norman  Muller in the  United  States District Court, Southern District of Florida (Case No. 95-1188).  Mr. Muller has demanded  that the Company  indemnify  him against any  expenses,  judgments and amounts paid in settlement of the action.  The Company  contends that, by virtue of Mr.  Muller's  breaches of fiduciary duty and violation of his obligations to the Company, it is not required to provide indemnification. Thomas Smith and Norman Muller  ("Muller-Smith") former directors of the Company and  co-defendants in the Pfannebecker  matter,  filed an action against the Company in the Los Angeles Superior Court seeking  indemnification  from the Company  in  connection  with their  status as  defendants  in the  Pfannebecker matter.  In April of 2003,  the  California Court upheld the indemnification  claim for Muller-Smith and entered a judgment against  Odyssey  in the  amount  of  $360,000 plus $95,000 in attorneys fees,  which  has been  filed  in California  and  domesticated  in New York and in Texas.

Mr. Ian Jessel ("Jessel")  entered into a three-year  employment  agreement with the Company,  commencing  November 9, 1998 and  continuing  through  November 9, 2001.  Jessel's  responsibilities  included  management of the Company's  Motion Picture & Television Division.  Jessel's compensation was set at a rate equal to$300,000  per annum for the first year,  $350,000 per annum for the second year, and $400,000 per annum for the third year.  The  agreement  also  provided for a yearly bonus based upon the net profits of the film division and the Company. The  Company  paid the sum of  $50,000  to Jessel in  fiscal  1999 and  deferred payment of the  balance of the  compensation  due to him.  In June 1999,  Jessel notified the Company that he was suspending  services to the Company for failure to pay his compensation on a timely basis. The Company believes it was justified in deferring certain payments due to Jessel.  Jessel commenced an action against the Company in  November  1999 in the Los Angeles  Superior  Court,  seeking the salary  and other  benefits  he claims he is  entitled  to under his  three-year employment  agreement.    A  settlement  had been  reached and had been voted as accepted by the Board.  All  settlement  discussion and offers have been reserved and are within the reserved  amount(s).  The matter remains pending as of June 30, 2004.

Mr.  Dennis  Morgan  ("Morgan")  commenced  an action  against  the  Company  in December, 1999 in the Los Angeles Superior Court alleging that he was promised a position as head of a music  division to be  established by the Company and that such oral  agreement  was  intended  to be  confirmed  in writing but never was. Morgan brought claims against the Company and others for the purported breach of an  oral  agreement,  purported  breach  of  an  implied  agreement,  fraud  and fraudulent conveyances. The Company has served written discovery and is awaiting responses  to  interrogatories  and the  production  of  documents.  The Company contends  that  there was no  employment  relationship  with,  nor any  monetary commitments to, Morgan, and that it committed no breach or wrongdoing.  A trial; date was set for this matter.  The parties began discussing  settlement terms in order to alleviate the costs of ongoing litigation. As of the end of June, 2001, the  Company  entered  into  preliminary  settlement.   In April of 2003, a judgment was filed in the State of  California  in favor of Morgan.  The amount  of  this  judgment  is  $225,000  plus  accrued  interest. An action  was filed in the State of New York  Watson,  Farley and  Williams  v. Odyssey Pictures Corp., Gold Leaf Pictures,  Belgium, Johan Schotte,  Chardonnay Enterprise  Ltd, and A Hero From Zero N.V.  Complaint  filed April 30, 2001, New York Supreme Court,  New York County.  The complaint  states a balance owing for services  rendered from the period  beginning 1997 through to April of 2000. The notice of complaint  was  received on August 10, 2001.  The Company has answered this  complaint  denying  its  position  in the named  defendants.  The  Company contends that it did, in fact, pay any and all  outstanding  related legal bills related to the Plaintiff's corporate  involvement.  The Company did hire counsel in New York and has made an  attempt  to offer a  settlement  on  behalf  of the remaining  defendants.  No  response  has been made from the  Plaintiff  on this matter as of the close of business on June 30, 2004. There is a pending litigation  from  another law firm in Los  Angeles,  Arter & Hadden LLP,  which is from  representation  in the above suits prior to specific counsel  moving to  another  firm  currently  representing  the  Company in some matters.   a default  judgment  was  entered in the matter and the Company is making arrangements  to  make  payments  over  a  period  of  time.  The  judgment  was domesticated in Texas.  The party has accepted a monthly payment  arrangement to be made, yet the Company had not made any payments as of the end of June 30, 2004.

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

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

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

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PART II

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

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

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

Common Stock
| Fiscal 2003    |   | High  |   | Low  |
|----------------|--------|-------|--------|------|
|                |   |       |   |      |
| First Quarter  |   | $.215 |   | $.05 |
| Second Quarter |   | .165  |   | .04  |
| Third Quarter  |   | .10   |   | .06  |
| Fourth Quarter |   | .12   |   | .12  |
| Fiscal 2004    |   | High  |   | Low   |
|----------------|--------|-------|--------|-------|
|                |   |       |   |       |
| First Quarter  |   | $ .17 |        | $ .07 |
| Second Quarter |   | .08   |        | .03   |
| Third Quarter  |   | .11   |        | .037  |
| Fourth Quarter |   | .09   |        | .04   |

As of June 30,  2004,  there were  approximately  4,333  record  holders of the Company's  Common  Stock. 

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

Results of Operations for the Years Ended June 30, 2003 and 2004 were Net losses of $5,874,422 and 1,413,723 respectively due to extremely limited operations as well as the Company’s decision to impair significant assets in the Fiscal Year ended June 30, 2003.

Revenues for the twelve months ended June 30, 2004 decreased to $22,297  compared to $65,540 for the twelve  months ended June 30, 2003 due to increasingly limited operations.  Because of lack of revenues associated with them, the Company has determined that $4,896,504 in long lived assets are impaired and the Company has taken a charge in this amount as of June 30, 2003.

Liquidity and Capital Resources

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

At June 30, 2004, the Company held no cash.

In the past  fiscal  year,  management  has  taken  steps to fund the  Company's operations  primarily  through private  placements of the Company's common stock including: a $45,000 six month loan on June 4, 2004 payable with interest at the rate of %8 per annum and convertible to common stock at the rate of $.05 per share; a $15,000 one year loan on June 25, 2004 payable with interest at the rate of %8 per annum and convertible to common stock at the rate of $.05 per share and $5,000 payable in 90 days with interest at the rate of 12% per annum.  In addition, the Company received  financial  support from JL Media  Services LLC, an affiliate of an officer,  John Foster in offsets to  overhead  and  interim  loans,  which are secured by the Company's  assets. 

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

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

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

None

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

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

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

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

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

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

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

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

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to the chief executive officer of the Company, the only  compensated  executive  officer- as of June 30,  2003.  Other  significant employees would not be required to be included in the table due to the fact that such employees were not executive officers of the Company at the end of the most recently completed fiscal year:      
|   | **Summary Compensation Table**                             |
|--------|------------------------------------------------------------|
|   |                                                       |   |   | **Annual Compensation** |   |   | **Payouts** |   |   |
|   |                                                       |   |   |  |   |   |  |   |   |
|   | **Name and            Principal Position**                 |   | **Fiscal            Year** |   | **Salary** |   | **Bonus** |   | **Other Annual****Compensation** |   |   |   | **Underlying             Options** |   | **All Other**** Compensation** |
|   |                                                            |   |  |   |  |   |  |   |  |   |   |   |  |   |  |
|   | John W. Foster,               President/CEO |   | 2003 |  | 185,220 |   | -- |   | -- |   |   |   | -- |  |                                    -- |
|   |                                                       | 2004 |  |   |   |   |   |   |   |   |   |   |   |   |
|   |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

Options/Stock Appreciation Rights:

There were no issues with respect to stock options and stock appreciation rights ("SARs")  granted to  executive  officers  during the fiscal year ended June 30, 2003 or in 2004.

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

Note: No bonus has been paid or  distributed in the past four quarters of fiscal 2003 or fiscal 2004.

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.    There  have  been no distributions  of Stock to the Board Members as of the end of June 30, 2003 and the same periods ending June 30, 2004.

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

As of July of  2001,  Mr.  Foster  served as President  and was  voted as  Chairman  and CEO by the  Board of  Directors.  He received a pay  increase  to $14,700  per month and his  contract  was  extended through June 30, 2002, with a 5% increase beginning July 1, 2002 through to June 30,  2003.  A  significant  amount of Mr.  Foster's  salary has gone  unpaid and remains payable by the Company as of the end of June 30, 2004.

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

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

 

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

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

PART IV

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

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

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

(a)(3) Exhibits

3.1  Articles of Incorporation, as amended through June 30, 1995  (1)    3.2  Amendments to Articles of Incorporation filed in March and June, 1996 (8)    3.3  Amendment to Articles of Incorporation filed in January, 1997 (9)    3.4  By-laws  (1)    4.1  Indenture  between Odyssey and Continental Stock Transfer and Trust Company ("Continental") dated as of July 15, 1987 (1)    4.2  Form of Supplemental Indenture between Continental and the Company  (1)    4.3  Form of Common Stock Certificate  (1)    4.4  Form of options granted of officers, directors and 5% stockholders  (2)    4.5  Form of Warrant issued to purchasers  parties to the 1995 Private Placement completed September 30, 1995  (5)    4.6  Form of 12% Unsecured  Promissory Note issued to purchasers  parties to the 1995 Private Placement completed September 30, 1995   )5)    4.7  Form of Stock Option  Agreement by and between the Company and officers and directors of the Company, for stock options issued in April 1995  (5)    4.8  Form of Common  Stock  Purchase  Warrant by and  between  the  Company  and officers, directors,  employees and consultants of the Company for warrants issued during the fiscal year ended June 30, 1996    (8)    4.9  Common Stock Purchase Warrant, dated March 6, 1996, between the Company and G & H Media, Ltd. (assignee of Stephen R. Greenwald) (7)    4.10 Common Stock Purchase Warrant, dated March 6, 1996, between the Company and Lawrence I. Schneider   (7)    4.11 Common Stock Purchase Warrant, dated March 6, 1996, between the Company and Ira N. Smith   (7)    4.12 Form of Common  Stock  Purchase  Warrant by and  between  the  Company  and officers, directors,  employees and consultants of the Company for warrants issued during the fiscal year ended June 30, 1997  (9)    4.13 Preferred Stock Certificate, Series A, issued to Kinnevik Media Properties, Ltd. in September, 1997  (10)    4.14 Convertible Note issued to Augustine Fund L.P. in July, 1998  (12)    4.15 Preferred Stock Certificate,  Series B, issued to Kimon, Inc. in September, 1998  (10)    10.01 1989 Long Term Incentive Plan  (1)    10.02 Sub-Lease for office  premises at 16910 Dallas  Parkway, Suite 104, Dallas Texas dated February 1, 2001   (8)    10.03 Settlement Agreement and Release between  Paramount  Pictures  Corporation and Odyssey Distributors,  Ltd. (a wholly owned subsidiary of the Company),and Guarantee agreement of the Company, each dated as of September 26, 1996 (9)    10.04 Stock  Purchase  Agreement  between the  Company  and  Flanders  Film S.A. relating to purchase  of minority  stock  interest in E3 Sports New Mexico, Inc. and Media Trust S.A.,  and related  promissory  notes for $135,000 and $315,000, dated March 2, 1998   (10)    10.05 Employment Agreement with Johan Schotte, dated March 2, 1998  (10)    10.31 Convertible Note issued to Augustine Fund, L.P. in July, 1998  (12)    10.32 Asset  Purchase  Agreement  between the Company and Kimon  Mediaright KB,a Swedish limited partnership, dated July 14, 1998 (10)    10.33 Employment Agreement with Pierre Koshakji, dated March 2, 1998  (11)    10.34 Employment Agreement with Ian Jessel, dated December, 1998  (13)    10.35 Settlement Agreement with Stephen Greenwald, dated September, 1999  (13)    21.1 Subsidiaries of the Registrant  (3)    31.1 Officer's Certification Pursuant to Section 302 (14)    32.1 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (14)    (1)  Incorporated herein by reference to the Company's Registration Statement on Form S-4, File No. 33-34627.    (2)  Incorporated herein by reference to the Company's Registration Statement on Form S-1, File No. 33-43371.    (3)  Incorporated  herein by reference to the Company's  Current  Report on Form 8-K filed April 12, 1995, File No. 0-18954.    (4)  Incorporated  herein by reference to the Company's  Current  Report on Form 8-K filed August 30, 1995, File No. 0-18954.    (5)  Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the fiscal year ended June 30, 1995, File No. 0-18954.    (6)  Incorporated  herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1995, File No. 0-18954.    (7)  Incorporated  herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, File No. 0-18954.    (8)  Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1996, File No. 0-18954.    (9)  Incorporated herein by reference to the Company's Registration Statement on Form S-1, File No. 333-20701.    (10) Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1997, File No. 0-18954    (11) Incorporated herein by reference to Amendment No. 1 to the Company's Annual Report on Form 10-K for the  Fiscal  Year  Ended  June 30,  1997,  File No. 0-18954    (12) Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1998, File No. 0-18954    (13) Incorporated  herein by reference to the  Company's  Annual  Report on Form 10-K for the Fiscal Year Ended June 30, 1999, File No. 0-18954    (14) Provided herewith.

(b)  Reports on Form 8-K

     The  Company  filed an Form 8-K dated April 10, 2004.

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

(d) None

ITEM 14. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the  participation of our  management,  including  the  chief  executive  officer,  or CEO,  and chief financial  officer,  or CFO, of the effectiveness of the design and operation of our disclosure procedures.  Based on that evaluation, our management,  including the CEO and CFO,  concluded  that our disclosure  controls and  procedures  were not effective as of June 30,  2004.  There have been no  significant  changes in our internal  control over  financial  reporting  during the 2004 calendar year that have materially  affected,  or are reasonably likely to materially  affect,  our internal control over financial reporting.

----

 

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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

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

I have audited the accompanying balance sheets of Odyssey Pictures Corp. as of June 30 2004 and 2003 and the related statements of operations, stockholders' deficiency and cash flows for the years then ended. The financial statements are the responsibility of the directors. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board *(United States)*. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Odyssey Pictures Corp. as of June 30, 2004 and 2003 and the results of its operations, its cash flows and changes in stockholders' deficiency for the years then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in financial statement notes, the Company has incurred a $1,700,000 loss from operations and consumed $115,000 of cash due to its operating activities.  The Company may not have adequate readily available resources to fund operations through June 30, 2005. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in the Notes. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

November 10 2008
| /s/ Michael F. Cronin       |
|-----------------------------|
|                             |
| Michael F. Cronin           |
| Certified Public Accountant |
| NY, FL                      |

----

| Odyssey Pictures Corporation                             |
|----------------------------------------------------------|
| Balance Sheet                                            |
|                                                     |   |   |   |
| Assets                                                   | **June 30, 2004** |   | **June 30, 2003** |
|                                                     |  |   |  |
| Current Assets                                           |   |   |   |
| Cash & cash equivalent's                             | $0 |   | $0 |
| Accounts receivable                                      | (0) |   | 0 |
|                                                     |  |   |  |
|   Total current assets                              | (0) |   | 0 |
|                                                     |   |   |   |
| Amortizable intangible assets, net                       | 6,500 |   | 6,500 |
|                                                     |  |   |  |
| Total assets                                             | $6,500 |   | $6,500 |
|                                                     |   |   |   |
| *Liabilities and Stockholders' Deficiency*               |   |   |   |
|                                                     |   |   |   |
| Current Liabilities:                                     |   |   |   |
| Accounts payable                                         | 1,632,228 |   | 1,519,120 |
| Accounts payable-relayed parties                         | 216,477 |   | 71,734 |
| Accrued interest                                         | 392,608 |   | 240,821 |
| Other accrued expenses                                   | 958,580 |   | 858,256 |
| Legal settlements & judgments                        | 1,045,435 |   | 544,922 |
| Convertible Debt, net of discount                        | 250,000 |   | 0 |
| Debt obligations in default                              | 1,472,302 |   | 1,302,412 |
|                                                     |  |   |  |
|   Total current liabilities                         | 5,967,631 |   | $4,537,265 |
|                                                     |   |   |   |
| Derivative liability                                     | 118,971 |   | 68,971 |
| Related parties                                          | 156,110 |   | 143,413 |
|                                                     |   |   |   |
| Stockholders' Deficiency:                                |   |   |   |
| common stock-40,000,000 authorized $0.01 par value       |   |   |   |
| 37,919,846 issued & outstanding (32,982,039 in 2003) | 379,198 |   | 329,820 |
| Additional paid in capital                               | 36,977,351 |   | 36,776,252 |
| Accumulated deficit                                      | (43,592,760) |   | (41,849,221) |
|                                                     |  |   |  |
| Total Stockholders' Deficiency                           | (6,236,211) |   | (4,743,149) |
|                                                     |  |   |  |
| Total Liabilities and Stockholders' Deficiency           | $6,500 |   | $6,500 |
|                                                     |

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

----

| Odyssey Pictures Corporation                         |
|------------------------------------------------------|
| Statement of Operations                              |
|                                                 |   |   |   |
|                                                 | Years Ended June 30, |
|                                                 | **2004** |   | **2003** |
|                                                 |  |   |  |
|                                                 |   |   |   |
| Net Sales                                            | $22,297 |   | $65,540 |
| Costs Applicable to Sales & Revenue              | 22,144 |   | 107,383 |
|                                                 |  |   |  |
| Gross Profit                                         | 153 |   | (41,843) |
|                                                 | 0.7% |   | -63.8% |
|                                                 |   |   |   |
| Selling, General & Administrative Expenses       | 782,005 |   | 936,075 |
| Settlements                                          | 631,872 |   | 0 |
| Permanent Impairment of Long Lived Assets            | 0 |   | 4,896,504 |
| Depreciation and Amortization                        | 0 |   | 0 |
|                                                 |  |   |  |
|   Total Operating Expenses                      | 1,413,877 |   | 5,832,579 |
|                                                 |  |   |  |
| Income (Loss) Before Other Income & Income Taxes | (1,413,723) |   | (5,874,422) |
|                                                 |   |   |   |
| *Other Income (Expense)*                             |   |   |   |
| Interest (Expense)                                   | (329,816) |   | (274,256) |
| Income (Loss) Before Income Taxes                    | (1,743,539) |   | (6,148,678) |
|                                                 |  |   |  |
| Income Taxes                                         | 0 |   | 259 |
|                                                 |   |   |   |
|   Net Loss available to common shareholders     | ($1,743,539) |   | ($6,148,937) |
|                                                 |  |   |  |
| Basic and Diluted Net Loss Per Common Share          | ($0.05) |   | ($0.19) |
|                                                 |  |   |  |
| Weighted Average Common Shares Outstanding (Basic)   | 36,104,862 |   | 31,687,039 |
|                                                 |  |   |  |
|                                                 |

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

----

| Odyssey Pictures Corporation                             |                 |
|----------------------------------------------------------|----------------------|
| Statement of cash Flows                                  |                 |
|                                                     | Years Ended June 30, |   |
|                                                     | **2004**             |   | **2003** |   |
|                                                     |                      |   |  |   |
| *Cash Flows from Operating Activities:*                  |                 |   |   |   |
| Net Loss                                                 | ($1,743,539)         |   | ($6,148,937) |   |
| Adjustments required to reconcile net loss to cash flows |                 |   |   |   |
| from operating activities:                               |                 |   |   |   |
|    Impairment                                  | (0)                  |   | 4,896,504 |   |
|    Stock Issued for Services                   | 158,178              |   | 0 |   |
|    Options Issued for Services                 | 0                    |   | 76,262 |   |
|    Change in value of derivatives              | 50,000               |   | 0 |   |
| Changes in Operating Assets & Liabilities:           |                 |   |   |   |
|    Accounts Receivable                         | 0                    |   | 9,100 |   |
|    Prepaid Expenses                            | 0                    |   | 5,001 |   |
|    Accounts Payable & Other                | 1,420,400            |   | 885,293 |   |
|                                                     |                      |   |  |   |
|   Net cash used by operating activities             | (114,961)            |   | (276,777) |   |
|                                                     |                 |   |   |   |
|                                                     |                 |   |   |   |
| *Cash Flows from Financing Activities:*                  |                 |   |   |   |
|   Proceeds from Sale of Common Stock                | 0                    |   | 103,000 |   |
|   Loan Proceeds                                     | 114,961              |   | 170,102 |   |
|                                                     |                      |   |  |   |
|   Net cash generated by financing activities        | 114,961              |   | 273,102 |   |
|                                                     |                 |   |   |   |
| Net Change In Cash                                       | 0                    |   | (3,675) |   |
| Cash-Beginning                                           | 0                    |   | 3,675 |   |
|                                                     |                      |   |  |   |
| Cash-Ending                                              | $0                   |   | $0 |   |
|                                                     |                 |

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

----

| Odyssey Pictures Corporation                                        |
|---------------------------------------------------------------------|
| Consolidated Statements of Stockholders' Deficiency                 |
|                                                                |   |   |   |   |   |   |   |   |   |   |
|                                                                | Stockholders' Deficiency |   |
|                                                                |  |   |
|                                                                | Common Stock |   |   |   |   |
|                                                                |  |   |   |   |   |
|                                                                | Shares |   | Common            Stock            Amount |   | Additional            Paid-In            Capital |   | Accumulated            Deficit |   | Total |   |
|                                                                |  |   |  |   |  |   |  |   |  |   |
| Balance at June 30, 2002                                            | 30,392,039 |   | 303,920 |   | 36,565,920 |   | (35,700,287) |   | 1,169,553 |   |
|                                                                |  |   |  |   |  |   |  |   |  |   |
| Shares issued for cash                                              | 2,590,000 |   | 25,900 |   | 102,741 |   |   |   | 128,641 |   |
| Fair value of stock based compensation, net of unvested forfeitures |   |   |   |   | 76,262 |   |   |   | 76,262 |   |
| Warrants issued as loan inducement                                  |   |   |   |   | 31,029 |   |   |   | 31,029 |   |
| Net Loss                                                            |   |   |   |   |   |   | (6,148,936) |   | (6,148,936) |   |
|                                                                |  |   |  |   |  |   |  |   |  |   |
| Balance at June 30, 2003                                            | 32,982,039 |   | $329,820 |   | $36,775,952 |   | ($41,849,223) |   | ($4,743,451) |   |
|                                                                |  |   |  |   |  |   |  |   |  |   |
| Shares issued for cash                                              | 0 |   | 0 |   | 0 |   |   |   | 0 |   |
| Stock issued for services                                           | 1,937,807 |   | 19,378 |   | 138,800 |   |   |   | 158,178 |   |
| Stock issued upon conversion of debt                                | 3,000,000 |   | 30,000 |   | 62,599 |   |   |   | 92,599 |   |
| Net Loss                                                            |   |   |   |   |   |   | (1,743,539) |   | (1,743,539) |   |
|                                                                |  |   |  |   |  |   |  |   |  |   |
| Balance at June 30, 2004                                            | 37,919,846 |   | $379,198 |   | $36,977,351 |   | ($43,592,762) |   | ($6,236,213) |   |
|                                                                |  |   |  |   |  |   |  |   |  |   |
|                                                                |   |   |   |

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

----

**ODYSSEY PICTURES CORPORATION**

BACKGROUND AND    Significant Accounting Policies     June 30, 2004

**The Company**

*Organizational Background:* 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. The Company has been engaged to operate in the entertainment industry, specifically, in connection with the development, production, marketing and distribution of films and DVD’s.

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

**Significant Accounting Policies**

*Use of Estimates* The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

*Cash and Cash Equivalents**:* For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents.

*Property and Equipment*  New property and equipment are recorded at cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

*Valuation of Long-Lived Assets**:* We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

*Stock Based Compensation:* Stock-based awards to non-employees are accounted for using the fair value method in accordance with SFAS No. 123R, *Accounting for Stock-Based Compensation*, and EITF Issue No. 96-18, *Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services*.

On January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards ("SFAS") 123R, "Share-Based Payment" ("SFAS 123(R)"), which requires that companies measure and recognize compensation expense at an amount equal to the fair value of share-based payments granted under compensation arrangements. Prior to January 1, 2006, we accounted for our stock-based compensation plans under the recognition and measurement principles of Accounting Principles Board ("APB") Opinion 25, "Accounting for Stock Issued to Employees," and related interpretations, and would typically recognize no compensation expense for stock option grants if options granted had an exercise price equal to the market value of the underlying common stock on the date of grant.

We adopted SFAS 123(R) using the "modified prospective" method, which results in no restatement of prior period amounts. Under this method, the provisions of SFAS 123(R) apply to all awards granted or modified after the date of adoption. In addition, compensation expense must be recognized for any unvested stock option awards outstanding as of the date of adoption on a straight-line basis over the remaining vesting period. We calculate the fair value of options using a Black-Scholes option pricing model. We do not currently have any outstanding options subject to future vesting therefore no charge is required for the years ended June 30, 2004 or 2003. SFAS 123(R) also requires the benefits of tax deductions in excess of recognized compensation expense to be reported in the Statement of Cash Flows as a financing cash inflow rather than an operating cash inflow. In addition, SFAS 123(R) required a modification to the Company’s calculation of the dilutive effect of stock option awards on earnings per share. For companies that adopt SFAS 123(R) using the "modified prospective" method, disclosure of pro forma information for periods prior to adoption must continue to be made.

*Accounting For Obligations And Instruments Potentially To Be Settled In The Company’s Own Stock*: We account for obligations and instruments potentially to be settled in the Company’s stock in accordance with EITF Issue No. 00-19, *Accounting for Derivative Financial Instruments Indexed To, and Potentially Settled In a Company’s Own Stock*. This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company’s own stock.

*Fair Value of Financial Instruments**:* Statements of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30 2004. The respective carrying value of certain on-balance sheet financial instruments approximated their fair values.

These financial instruments include cash and cash equivalents, accounts payable and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand.

*Revenue Recognition:* The Company recognizes revenue in accordance with the provisions of Statement of Financial Accounting Standards No. 139 and American Institute of Certified Public Accountants Statement of Position 00-2 (collectively referred to as "SOP 00-2"). Revenues from foreign  theatrical,  home video,  television  and pay  television licensing  contracts are recognized when the film is available for exhibition by the licensee and when certain other  conditions are met.  Revenues from domestic theatrical distribution of films are  recognized  as the films are  exhibited.  All  revenues for the periods presented were derived from  foreign  distribution  rights  and  continuing  ancillary revenues,  such  as  foreign  income  from  soundtracks  or  other  revenue  not previously accounted for (known as "residuals") relating thereto.

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

*Capitalized Film Costs:* Capitalized film costs consist of investments in films which include the unamortized costs of completed films which have been produced by the Company. Capitalized costs include all direct production and financing costs, and production overhead. Costs of acquiring and producing films are amortized using the individual-film-forecast method, whereby these costs are amortized and participation and residual costs are accrued in the proportion that current year's revenue bears to management's estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the films.

Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release.

Capitalized film costs are stated at the lower of amortized cost or estimated fair value on an individual film basis. The valuation of investment in films is reviewed on a title-by-title basis, when an event or changes in circumstances indicated that the fair value of a film is less than its unamortized cost. The fair value of the film is determined using management's future revenue and cost estimates. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film.  Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in management's future revenue estimates. 

*Earnings per Common Share**:* Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using the weighted average number of common and dilutive equivalent shares outstanding during the period. Dilutive common equivalent shares consist of options to purchase common stock (only if those options are exercisable and at prices below the average share price for the period) and shares issueable upon the conversion of our Preferred Stock. Due to the net losses reported, dilutive common equivalent shares were excluded from the computation of diluted loss per share, as inclusion would be anti-dilutive for the periods presented.

*Income Taxes:* We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

Deferred income taxes are recorded in accordance with SFAS No. 109, "*Accounting for Income Taxes*," or SFAS 109. Under SFAS No. 109, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. SFAS 109 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset. Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," ("SFAS 109") which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

**Recent Accounting Pronouncements**

In December 2004, the FASB issued SFAS No. 123 (revised 2004) "Share-Based Payment," or SFAS No. 123(R). SFAS No. 123(R) revises FASB Statement No. 123 "Accounting for Stock-Based Compensation," and supersedes APB Opinion No. 25, and its related implementation guidance. This Statement eliminates the ability to account for share-based compensation using the intrinsic value method under APB Opinion No. 25. SFAS No. 123(R) focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123(R) requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award, known as the requisite service period, which is usually the vesting period. SFAS No. 123(R) is effective for companies filing under Regulation SB as of the beginning of the first interim or annual reporting period that begins after December 15, 2005, which for the Company will be the first quarter of the year ending December 31, 2006. The Company anticipates dopting SFAS No. 123(R) beginning in the quarter ending March 31, 2006. Accordingly, the provisions of SFAS No. 123(R) will apply to new awards and to awards modified, repurchased, or cancelled after the required effective date. Additionally, compensation cost for the portion of awards for which the requisite service has not been rendered that are outstanding as of the required effective date must be recognized as the requisite service is rendered on or after the required effective date. These new accounting rules will lead to a decrease in reported earnings. Although the adoption of SFAS No. 123(R) could have a material impact on the Company’s financial position and results of operations, the potential impact from adopting this statement is being evaluated.

In December 2003, the FASB released a revised version of Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46") called FIN 46R, which clarifies certain aspects of FIN 46 and provides certain entities with exemptions from requirements of FIN 46. FIN 46R only slightly modified the variable interest model from that contained in FIN 46 and did change guidance in many other areas. FIN 46R has been adopted by the Company.

In September 2004, the EITF reached a consensus regarding Issue No. 04-1, "Accounting for Preexisting Relationships Between the Parties to a Business Combination" ("EITF 04-1"). EITF 04-1 requires an acquirer in a business combination to evaluate any preexisting relationship with the acquiree to determine if the business combination in effect contains a settlement of the preexisting relationship. A business combination between parties with a preexisting relationship should be viewed as a multiple element transaction. EITF 04-1 is effective for business combinations after October 13, 2004, but requires goodwill resulting from prior business combinations involving parties with a preexisting relationship to be tested for impairment by applying the guidance in the consensus. The Company will apply EITF 04-1 to acquisitions subsequent to the effective date and in its future goodwill impairment testing.

Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

----

**ODYSSEY PICTURES CORPORATION**

NOTES TO FINANCIAL STATEMENTS     June 30, 2004

**1. Notes and Loans Payable:**

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

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

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

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

***Convertible Debt***

In June and August, 2003, we issued a total of $250,000 convertible promissory Notes. The Notes bear interest at 8% per annum until paid or converted. Interest is payable monthly commencing July, 2003. The initial conversion rate is $0.25 per share (subject to standard anti-dilution and certain re-set provisions). The convertible Notes matures on June, 2005.

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

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

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

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

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

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

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

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

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

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

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

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

| Face amount of Notes            | $           250,000            |
|---------------------------------|----------------------------------------------------------------------------------|
| Less unamortized discount       |              0       |
| Carrying value at June 30, 2004 | $             250,00 |

**2. Income Taxes:**

We have adopted SFAS 109 which provides for the recognition of a deferred tax asset based upon the value the loss carry-forwards will have to reduce future income taxes and management's estimate of the probability of the realization of these tax benefits.

We have a current operating loss carry-forward of $ 43,000,000. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all our net deferred tax asset.

Future utilization of currently generated federal and state NOL and tax credit carry forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of NOL and tax credit carry forwards before full utilization.

**3. Commitments:**

The Company leases its office space on a month-to-month basis. Rent expense was $42,955 and $44,398 for the years ended June 30, 2004 and 2003 respectively.

**4. Stockholders' Equity:*** *

*         Common Stock*

We are currently authorized to issue up to 40,000,000 shares of $ 0.01 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis.

**5. Stock Options and Warrants:**

**Summary of Warrant Activity**

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

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

| Year | Interest Rate | Dividend Yield | Expected Volatility | Expected Life |
|------|---------------|----------------|---------------------|---------------|
| 2003 | 6.0%          | 0.0%           | 100.0%              | 60 mos.       |
| 2004 | 6.0%          | 0.0%           | 100.0%              | 60 mos.       |

The following table provides summary information on the various warrants issued by us in private placement transactions; the warrants exercised to date; the warrants that are presently exercisable and the current weighted average exercise prices of such warrants.
|                                 |   |      |   |        |   | Weighted          average          exercise          price |   | Weighted          average          remaining          contractual          term          (years) |   | Aggregate          intrinsic          value* |
|--------------------------------------|--------|-----------|--------|-------------|--------|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
|                                 |   |      |   |        |
|                                 |   |      |   | Shares      |
|                                      |   |           |   |             |   |                                                            |   |                                                                                                  |
| Options outstanding at June 30, 2002 |   | 2,882,326 |   | $0.42       |   |                                                       |   |                                                                                             |
| Granted                              |   | 2,600,000 |   | $0.65       |   |                                                       |   |                                                                                             |
| Exercised                            |   | 0         |   | $0.00       |   |                                                       |   |                                                                                             |
| Lapsed                               |   | 0         |   | $0.63       |   |                                                       |   |                                                                                             |
| Options outstanding at June 30, 2003 |   | 5,482,326 |   | $0.30       |   | 4.0                                                        |   | $0                                                                                               |
| Granted                              |   |      |   | 0           |   | $0.00                                                      |   |                                                                                             |   |                                         |
| Exercised                            |   |      |   | 0           |   | $0.00                                                      |   |                                                                                             |   |                                         |
| Lapsed                               |   |      |   | (1,531,390) |   | $0.29                                                      |   |                                                                                             |   |                                         |
| Options outstanding at June 30, 2004 |   | 3,950,936 |   | $0.24       |   | 2.1                                                        |   | $260,000                                                                                         |
| Options exercisable at June 30, 2004 |   | 3,950,936 |   | $0.24       |   | 2.1                                                        |   | $260,000                                                                                         |

The following table summarizes the status of the Company's aggregate warrants as of June 30, 2004:
|                                |
|-------------------------------------|
|                                |   | *Warrants Outstanding* |   |   | *Warrants Exercisable* |
| Range of            exercise prices |   | Shares |   | Weighted            average            exercise            price |   | Weighted            average            remaining            life in            months |   | Shares |   | weighted            average            exercise            price |
|                                     |   |  |   |  |   |  |   |  |   |  |
| $ 0.01-$ 0.50                       |   | 3,062,500 |   | $0.03 |   | 19.5 |   | 3,062,500 |   | $0.03 |
| $ 0.51-$ 1.00                       |   | 888,436 |   | $0.96 |   | 45.6 |   | 888,436 |   | $0.96 |
| *Total Shares*                      |   | 3,950,936 |   |   |   |   |   | 3,950,936 |   |   |

**Equity Instruments Classified as Derivatives**

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

Per the guidance of EITF No. 00-19 and EITF No. 05-2, the re-set features of the 2003 convertible Notes did not meet the required tests Therefore, the conversion feature of the 2003 Notes was considered an embedded derivative in accordance with SFAS No. 133. Accordingly, we bifurcated the derivative from the  host contract and recorded the liability at its fair value of $68,971. The fair value of the derivative liability was determined using the Black-Scholes option pricing model. The key inputs for the valuation analysis at June 30, 2004 were a volatility of 100%, common stock value of $0..05 and a risk free interest rate of 6.0%.

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

**6. Impairment:**

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

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

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

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

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

**7. Related Party Transactions not Disclosed Elsewhere:**

*Due Related Parties:* Amounts due related parties consist of corporate operating expenses and advances paid by affiliates. Such items totaled $156,110 and $143,413 at June 30, 2004 and 2003 respectively.

**8. Results of Operations and Management's Plans:**

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

The  Company's  operations  have  been  greatly  reduced  as  a  result  of  the restructuring of the Company by new management.  The Company's  principal office is located in  Plano,  Texas and as of June 30,  2004,  the  Company  had three full-time  employees,  consisting  of Mr.  Foster,  the  CEO and   resident,  an administrative secretary, and a production-administrative assistant. The Company also engaged  Kjell  Larsson to direct sales and marketing on a full time basis. The Company also hires on occasion, several professionals in sales on a contract and commission basis. These professionals are located in our major market areas of Los Angeles and Europe. Additional staff is planned in the administrative and sales areas, the latter of whom may be commission or contract basis.

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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 2, 2008              by: /s/ John W. Foster                                                    ------------------------------                                                    John W. Foster,                                                    President

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

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